Tuesday, December 16, 2014

Gold Report ( December 16 , 2014 ) - Gunvor exits physical gold due to concerns of fraudulently documented gold ( Gunvor exiting before the ponzi comes apart ) ...... Will Russia sell its gold due to the financial squeeze play...... India to examine its present gold policy after big spurt in imports for November ......Manipulations by Central Bankers examined ....... Austria planning to repatriate its gold from London.... China gold demand underestimated ( naturally ) ........ Jesse covers today's interesting day !


Commodity Trading Giant Exits Physical Gold Due To "Lack Of Physical With A Documented Origin"

Tyler Durden's picture

Back in March, otherwise very under-the-radar Swiss commodities trading giant Gunvor and the fifth largest oil trader in the world, made headlines in the press when one of its then-Russian owners, billionaire Gennady Timchenko (estimated net worth of $8.5 billion), sold his entire 44% stake in the company to his partner in the firm, Torbjorn Tonqvist, just a day before the US revealed its first round of sanctions against individuals affiliated with the Putin regime. Timchenko was among them. As a result of the sale, however, Gunvor avoided falling on the US sanctions list and a Treasury official said that "Gunvor Group Ltd. isn’t subject to automatic blocking from dealing with U.S. persons under Russian sanctions because co-founder Gennady Timchenko owns less than 50 percent of the company."
Since then the Geneva-based company rarely appeared in the media which is how the nondescript company lliked it. Until last week, that is, when Bloomberg reported that the company was giving up trading physical precious metals, read gold, less than a year after the commodity house started a business dedicated to buying and selling gold. Gunvor is, or rather was, one of the few large commodity firms that handles precious metals. The move into gold was part of an expansion into non-oil businesses that now include iron ore, industrial metals and natural gas. Gold trading was done by a handful of people in Singapore and Geneva.
Gunvor's move away from physical commodities trading in itself is not surprising: recall that first it was Germany banking titan Deutsche Bank which announced it would no longer trade physical precious metals last month.
According to Bloomberg at least two traders are leaving the company in Geneva and Singapore: Francois Beuzelin, hired in 2012 as head of metals in Geneva, and Cedric Chanu, who started in Singapore in January as a precious-metals trader. Chanu declined to comment by phone and Beuzelin didn’t answer calls to his office nor an e-mail sent via his LinkedIn account.
But the biggest surprise in this story was the reason why Gunvor chose to discontinues its gold trading. Per Bloomberg"executives decided to abandon the precious metals trading business partly because of difficulties in finding steady supplies of gold where the origin could be well documented, one of the people said."
And while we would certainly love to learn more about this problem of "undocumented" physical gold, just like that we have the most definitive confirmation yet that the story surrounding China's rehypothecated commodities scandal in the port of Qingdao which as previously reported included copper and aluminum and which mysteriously disappeared just as abruptly as it first appeared, not only also involved the precious yellow metal but never really went away, and instead what appears to have happened is that "robosigned" physical gold - or gold whose ownership traders are unable to validate - has now flooded into the global trading infrastructure.
Because if the world's fifth largest trader of commodities has chosen to outright not trade gold, and thus not generate value for its shareholders over risks and fears that another, or two, or three, or a countless number of other prior "owners" may come knocking one day and demanding delivery of gold whose origin could not be documented by its trading intermediaries, and whose ownership link Gunvor is unable to trace, then just what on earth is really going on with the world's physical gold inventory (here's looking at you, Chinese gold-backed Commodity Funding Deals), and just what is the catalyst that will unleash what is essentially the infamous US mortgage robosigning scandal onto the gold arena, at which point owners of gold realize the gold they thought they owned, even if held safely in a deposit box deep in a gold vault in a safe offshore location, in reality "belongs" to someone else?


Traders betting Russia's next move will be to sell gold

By Debarati Roy
Bloomberg News
Tuesday, December 16, 2014
NEW YORK -- Russia's surprise interest-rate increase failed to stop the plummeting ruble. The next weapon available to repair economic havoc caused by sanctions and falling oil prices: selling gold.
Russia holds about 1,169.5 metric tons of the precious metal, the central bank said last month. That's about 10 percent of its foreign reserves, according to the London-based World Gold Council. The country added 150 tons this year through Nov. 18, central bank Governor Elvira Nabiullina told lawmakers.
Russia's cash pile has dropped to a five-year low as its central bank spent more than $80 billion trying to slow the ruble's retreat. The currency's collapse combined with more than a 40 percent tumble in oil prices this year is robbing Russia of the hard currency it needs in the face of sanctions imposed after President Vladimir Putin's annexation of Crimea. A fall in gold prices signals that traders are betting that the country will tap its reserves. ...
... For the remainder of the report:

India to weigh gold policy impact after 38% spurt in November imports

By Suvashree Choudhury and Meenakshi Sharma
Tuesday, December 16, 2014
India will weigh the impact of last month's easing of gold import rules after inbound shipments jumped 38 percent in November to push its trade deficit to an 18-month high, Trade Secretary Rajeev Kher said today.
In a surprise move, the world's second-biggest gold consumer scrapped a rule for traders to export 20 percent of all gold imports, belying expectations for tighter curbs instead.
After the change, gold imports surged to 151.58 tonnes in November, an increase of 38 percent from 109.55 tonnes a month earlier, trade ministry data showed today. ...
... For the remainder of the report:

Secret central bank interventions are the worst market disruptions, Turk says

5:08p ET Monday, December 15, 2014
Dear Friend of GATA and Gold:
Secret central bank interventions are the reason for the withdrawal of a big commodity trading company from the gold market, GoldMoney founder and GATA consultant James Turk tells King World News today.
The trading company, Turk notes, said it was getting out of the gold business because it could not confirm the origin of the gold it was trading, but the gold likely was central bank gold.
"Central planners claim that secrecy is essential so that markets are not disrupted, which is not only misleading but totally spurious," Turk says. "The disruption to the market process that arises from the interventions of central planners is far worse than what would occur by disclosing to the public what central banks are doing and when they are doing it."
Turk's interview is excepted at the KWN blog here:
Also at King World News, Canadian market analyst John Ing sees oil's price decline as a double boost to gold and gold miners:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Koos Jansen: Why Austria is likely to repatriate its gold from London

10:46a ET Saturday, December 13, 2014
Dear Friend of GATA and Gold:
Bullion Star market analyst and GATA consultant Koos Jansen writes today that the Austrian central bank's gradual reduction of the unallocated portion of its gold reserves at the Bank of England in London indicates that Austria is serious about repatriating its foreign-vaulted gold. Jansen's commentary is headlined "Why Austria Is Likely to Repatriate Its Gold from London" and it's posted at Bullion Star here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

GATA secretary interviewed about secret futures trading by central banks

8:12a ET Saturday, December 13, 2014
Dear Friend of GATA and Gold:
Your secretary/treasurer, interviewed by Nick Hodge of the Outsider Club at the New Orleans Investment Conference in October, discussed U.S. government records showing that central banks are secretly trading all major futures markets in the United States:
Since central banks are able to create infinite money, your secretary/treasurer argues, no ordinary investor can trade against them and there are really no markets anymore, just interventions. The interview is not quite 8 minutes long and video of it is posted at the Outsider Club's Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Koos Jansen: Shanghai Gold Exchange chief's data disputes WGC's China demand estimates

11:50p ET Friday, December 12, 2014
Dear Friend of GATA and Gold:
Data from the chairman of the Shanghai Gold Exchange shows that the World Gold Council's estimates of China's gold demand are very understated, Bullion Star market analyst and GATA consultant Koos Jansen reports today:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


16 DECEMBER 2014

Gold Daily and Silver Weekly Charts - Once We Were Good

"Do not imagine that these most difficult problems can be thoroughly understood by any one of us. This is not the case. At times the truth shines so brilliantly that we perceive it as clear as day.

Our nature and habit then draw a veil over our perception, and we return to a darkness almost as dense as before. We are like those who, though beholding frequent flashes of lightning, still find themselves in the thickest darkness of the night."

Today was a volatile day in the markets to say the least.  And gold and silver in particular had been taken out and beaten over the last two days by the triumphant US dollar.
US equities are probably the best example of this volatile market.  Stocks plunged on the open, rallied back to triple digit gains in the Industrials, and then sold off again into the close.
The continuing drop in Oil is creating quite a few concerns with funds, companies, and even nations. 
There is almost no doubt in my mind that this is the result of a gameplay with the US and Saudi Arabia, coupled with slack demand from emerging economies like China.  Saudi Arabia is more than happen to maintain high supply levels to spank Putin for the US, and they are also cleaning out the investments in oil production in the more marginal explorations and fracking that depend on higher prices.
The big news all day was the plunging Russian rouble, which is under assault on the forex markets by the Western banks, assisting with plunging oil revenues.   Reminders of the Russian default in 1998 were being broadcast, although given that Russia has about 10% debt to GDP that is not much of a sovereign threat. 
More likely we would see Russian investments fail and corporate bonds default in emerging market portfolios.  In other words a commercial rather than a sovereign failure which we saw the last time in 1998 when the rouble failed and was reissued.  In contravention to the theories of MMT I might add, as short and selective as their memories seem to be.
Jeb Bush is apparently going to be running for President in 2016.  Oh joy, Bush v. Clinton.  Come mister tally man, tally me bananas.
FOMC tomorrow.  With the dollar this strong I seriously doubt the Fed will be raising rates anytime soon.  But they might make some noises.
This is a currency war.  Never forget it when you are attempting to find sense and surety in this. And we are not necessarily the good guys this time. 
I am not sure what is more disheartening.  The shamelessness of the neoliberal thugs, or the pettiness and selfish grasping of the so called intellectual class,  utterly lacking in any moral compass or principle except their own howling in subjective wells of dwindling power, as visions of progressive reform swirl down the sink of forgotten dreams, into the maw of the Beast.
Have a pleasant evening.