Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1183.10 down $1.70 (comex closing time)
Silver: $16.58 down 8 cents (comex closing time)
In the access market 5:15 pm
Gold $1183.00
Silver: $16.62
Gold/silver trading: see kitco charts on the right side of the commentary.
Following is a brief outline on gold and silver comex figures for today:
The gold comex today, on first day delivery notice, we surprisingly had a poor delivery day, registering only 3 notices served for 300 oz. Silver comex registered 0 notices for nil oz .
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 249.165 tonnes for a loss of 54 tonnes over that period. Lately the removals have been rising!
I checked last night the gold inventory levels of foreign deposits at the FRBNY. The account shows that 9.577 tonnes of gold left its vaults and no doubt that this gold belongs to Germany as they are the only official country so far that has asked for it back and has not already received what was wished.
Here are those results:
As of Feb 28.2015 official foreign gold leaving the vaults of FRBNY:
$8,143 million MINUS $8130 million = 13 MILLION DOLLARS WORTH OF GOLD AT $42.22/oz
number of oz then becomes 307,910.00 oz, which
in tonnes: 9.577 tonnes
Then this is gold leaving the FRBNY for Germany.
end
In silver, the open interest fell by only 358 contracts, even though Monday’s silver price was down by 40 cents. The total silver OI continues to remain extremely high with today’s reading at 170,257 contracts. The front month of March is now off the board. The front April month has an OI of 110 contracts. We are still close to multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.
We had 0 notices served upon for nil oz.
In gold we again have a total collapse of OI as we enter the next active delivery month of April . The total comex gold OI rests tonight at 387,881 for another loss of 4772 contracts. With June gold almost equal to April gold in price, it just does not make sense why so many would liquidate their positions. Today is options expiry for gold/silver contracts on the OTC market.We had 3 notices served upon for 300 oz.
Today, we had no changes in gold inventory at the GLD/ Gold Inventory rests at 737.24 tonnes
In silver, /SLV we had no changes with respect to silver inventory / the SLV/Inventory, at 323.888 million oz
We have a few important stories to bring to your attention today…
1, Today we again had some short covering in the silver comex with the silver OI falling by only 358 contracts. Gold OI fell again by 4772 contracts. We also have a report on gold leaving the FRBNY
(report Harvey/zero hedge)
2. Greece will likely default in two weeks
(James Turk/Kingworldnews)
3. Early this morning, we got word that Japan is contemplating joining the Chinese initiate AIIB. If that was not surprising then the next news on who will join certainly caused shock waves through the world; Taiwan said it will submit to become a member
(zero hedge/Bloomberg)
4. Turkey this morning had a huge blackout for most of the nation. Then a Marxist group takes a Turkish prosecutor hostage.
(Bloomberg/zero hedge)
5. Yemeni rebels are close to taking the Bab al Mandeb straight. Saudi Arabia is reading to invade.
(zero hedge)
we have these and other stories for you tonight
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest fell by another 4772 contracts from 392,653 down to 387,881 as gold was down by $15.00 yesterday (at the comex close). As I mentioned above, the complete collapse of OI as we enter an active delivery month makes no sense.The fact that we have a middle eastern war, troubles in Ukraine and in Greece and then to have a complete collapse in OI is beyond comprehension. We are off contract month of March. We are now in the active delivery month of April and here the OI fell by 13,597 contracts down to 7,347. The next non active delivery month is May and here the OI rose by 56 contracts up to 498. The next big active delivery contract month is June and here the OI rose by 9813 up to 261,720. June is the second biggest delivery month on the comex gold calender. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 66,940. (Where on earth are the high frequency boys?). The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 177,367 contracts. Today we had 3 notices filed for 300 oz which is most unusual for a first day delivery notice.
And now for the wild silver comex results. Silver OI fell by only 358 contracts from 170,615 down to 170,257 despite the fact that silver was down by 40 cents, with respect to Monday’s trading . It certainly seems that we have some resolute longs who refuse to part with their silver contracts. We are off the active contract month of March. We are now in the non active delivery month of April and here the OI remained constant at 110. The next big active delivery month is May and here the OI dropped by 1447 contracts down to 100,534. The estimated volume today was poor at 20,998 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 36,241 contracts which is good in volume. We had 0 notices filed for nil oz today.
April initial standings
March 31.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
2411.25 oz (Scotia)75 kilobars
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
32,150.000 oz (Scotia)1000 kilobars)
No of oz served (contracts) today
3 contracts (300 oz)
No of oz to be served (notices)
7345 contracts(734,500) oz
Total monthly oz gold served (contracts) so far this month
3 contracts(300 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
oz
Total accumulative withdrawal of gold from the Customer inventory this month
2411.25 oz
Today, we had 0 dealer transaction
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil
And the farce on kilobars continues!!
we had 1 customer withdrawals
i) Out of Scotia: 2411.25 oz (75 kilobars)
total customer withdrawal: 2411.25 oz (75 kilobars)
we had 1 customer deposit:
i) Into Scotia: 32,150.000 oz (1000 kilobars)
total customer deposit: 32,150.000 oz (1000 kilobars)
We had 1 adjustment
a removal of 1/2 oz as an accounting error at Delaware.
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 3 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account
To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (3) x 100 oz or 300 oz , to which we add the difference between the open interest for the front month of April (7345) and the number of notices served upon today (3) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the April contract month:
No of notices served so far (3) x 100 oz or ounces + {OI for the front month (7345) – the number of notices served upon today (3) x 100 oz} = 734,800 oz or 22.855 tonnes
This is very good, but as always we will see this number contract as the month proceeds.
Total dealer inventory: 658,833.604 oz or 20.49 tonnes
Total gold inventory (dealer and customer) = 8,010,674.044 oz. (249.16) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 54.0 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real. I cannot see continual additions of strictly kilobars.
end
And now for silver
April silver initial standings
March 31 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
429,177.29 oz (HSBC,Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
nil
No of oz served (contracts)
0 contracts (nil oz)
No of oz to be served (notices)
110 contracts(550,000 oz)
Total monthly oz silver served (contracts)
0 contracts (nil oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
429,177.29 oz
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 0 customer deposits:
total customer deposits: nil oz
We had 2 customer withdrawals:
i) Out of HSBC: 318,115.730 oz
ii) Out of Scotia; 90, 286.420 oz
total withdrawals; 429,177.290 oz
we had 1 adjustments:
Out of HSBC:
5,069.25 oz was adjusted out of the dealer at HSBC into the customer account of HSBC
Total dealer inventory: 70.569 million oz
Total of all silver inventory (dealer and customer) 176.65 million oz
.
The total number of notices filed today is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in March, we take the total number of notices filed for the month so far at (0) x 5,000 oz = 0 oz to which we add the difference between the open interest for the front month of April (110) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the April contract month:
0 (notices served so far) + { OI for front month of April(110) -number of notices served upon today (0} x 5000 oz = 550,000 oz standing for the April contract month.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com orhttp://www.harveyorganblog.com
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
march 31.2015/ no changes in gold inventory at the GLD/Inventory at 737.24 tonnes
March 30/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes.
March 27/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes
March 26 we had another huge withdrawal of 5.97 tonnes of gold. This gold is heading straight to the vaults of Shanghai, China/GLD inventory 737.24 tonnes
March 25.2015 we had a withdrawal of 1.19 tonnes of gold from the GLD/Inventory at 743.21 tonnes
March 24/ no changes in gold inventory at the GLD/Inventory 744.40 tonnes
March 23/we had a huge withdrawal of 5.37 tonnes of gold from the GLD vaults/Inventory 744.40 tonnes
march 20/we had no changes in inventory at the GLD/Inventory at 749.77 tonnes
March 19/we had no changes in inventory at the GLD/Inventory 749.77 tonnes
March 18/ we had a withdrawal of .9 tonnes of gold from the GLD/Inventory at 749.77 tonnes
March 17.2015: no change in gold inventory at the GLD/Inventory 750.67 tonnes
March 16/no change in gold inventory at the GLD/Inventory 750.67 tonnes
March 31/2015 / we had no changes in gold/Inventory at 737.24 tonnes
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 737.24 tonnes.
end
And now for silver (SLV):
March 31.2015: no changes in inventory at the SLV/Inventory at 323.88 million oz
March 30.2015: no changes in inventory at the SLV/inventory at 323.888 million oz.
March 27. we had a huge withdrawal of 1.439 million oz leave the SLV/Inventory rests this weekend at 323.888 million oz
March 26.2015; no change in silver inventory/SLV inventory 325.323 million oz
March 25.2015:no change in silver inventory/SLV inventory 325.323 million oz
March 24.2015/ we had another withdrawal of 835,000 oz of silver from the SLV/Inventory rests tonight at 325.323 million oz
March 23./we had a huge withdrawal of 1.174 million oz of silver from the SLV vaults/Inventory 326.158 million oz
March 20/ no changes in silver inventory/327.332 million oz
March 19/ no change in silver inventory/327.332 million oz
March 18/ no change in silver inventory/327.332 million oz
March 17/ no change in silver inventory/327.332 million oz
March 16/no change in silver inventory/327.332 million oz
March 31/2015 we had no changes in silver inventory at the SLV/inventory rests at 323.888 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 8.1% percent to NAV in usa funds and Negative 8.3% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 60.9%
Percentage of fund in silver:38.7%
cash .4%
( March 31/2015)
Sprott gold fund finally rising in NAV
2. Sprott silver fund (PSLV): Premium to NAV falls to + 0.35%!!!!! NAV (March 31/2015)
3. Sprott gold fund (PHYS): premium to NAV rises -.40% to NAV(March 31 /2015)
Note: Sprott silver trust back into positive territory at +0.35%.
Sprott physical gold trust is back into negative territory at -.40%
Central fund of Canada’s is still in jail.
end
And now for your more important physical gold/silver stories:
Gold and silver trading early this morning
(courtesy Goldcore/Mark O’Byrne)
$100 Trillion Global Bond Bubble Poses “Systemic Risk” To Financial System
By Mark O’Byrne March 31, 2015 No Comments
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Global bond bubble poses systemic risk to financial system
FT warns that a June rate hike could put fixed-income funds under severe pressure
Fed’s Bullard warns of “dire consequences” of developing asset price bubbles
UK fund managers worried about “inflated value of bonds”
Regulators talk tough but have wavered since 2011
Mutual fund markets have “ballooned” since 2008
“Gates” or capital controls that limit investor withdrawals in troubled times are likely
The Financial Times warned today about the growing global ‘bond bubble’ and potential severe problems in the bond markets and ‘systemic risk’ which may come to a head in June if the Federal Reserve raises interest rates.
In an article entitled “Time to find out hard way if asset management is systemic risk“, it quotes James Bullard from the Fed warning of “dire consequences” due to developing asset price bubbles if the Fed does not raise rates soon.
It refers to fact that “80 per cent of fund managers surveyed by CFA UK, a financial standards body, signalled worries about the inflated value of bonds.” It discusses how plans have been in the making to manage risks posed by certain funds by “boosting supervision of asset managers.”
For example, earlier this month “the Financial Stability Board and the International Organisation of Securities Commissions promised a plan to identify systemically important funds and contain their risks.”
The FT explains that such regulation was requested by the G20 at the end of 2011. The FT warns that the plan to make a plan – which will not be operational until early next year – will come too late to deal with the expected Fed rate hike.
A report published this month by Morgan Stanley and consultants at Oliver Wyman argues that “the closest parallel to today’s scenario occurred in 1994, when an increase in Fed rates was followed by a 5 per cent outflow from fixed-income funds.”
Today such funds are holding roughly 7 per cent of their assets in cash with which to weather potential outflows. However, the article warns that “many bond watchers are nervous that the fundamental changes in the financial world make historical parallels misleading”, particularly the “scale of the market”.
U.S. mutual funds which make up half of the global total have doubled to $15 trillion since 2008.
“Since that 1994 Fed rate rise, the US’s bond-invested mutual funds have grown sixfold to more than $3 trillion today.”
Since 2000, the global bond markets size has nearly tripled in size. Today it is worth more than $100 trillion and it is backed by and intertwined with the gargantuan $550 trillion plus derivatives market.
It continues
“Expanded markets might normally be more liquid, but not this one. Thanks to the crisis and post-crisis regulation, investment banks no longer fulfil the same kind of market-making role they used to. At a time of volatility and potential large-scale selling, the absence of such a buffer is likely to add to the downward pressure on prices.”
Downward pressure on prices will mean higher interest rates – potentially sharply and rapidly higher.
This perceived weakness has caused what the FT describes as “global policy makers” to designate some larger funds and the companies that run them as “Systemically Important Financial Institutions” – SIFIs – along with some banks and insurers.
“So bank-style capital charges for asset managers now look unlikely.”
“Gates” that limit investor withdrawals from a fund in troubled times are a possibility. Stress tests, focused on funds’ liquidity positions, seem probable. And standardised disclosures of cash and hidden leverage (through derivatives exposures) are also expected.”The developing bail-in regime also poses risks to investors in bonds who could find their investment “bailed in.”
“Gates” are capital controls that would make bond funds less liquid and pose risks to investors and pensioners.
The FT suggests that these measures will come too late:
“With a Fed rate rise expected as early as June, the world will soon find out the hard way whether the asset management industry is a systemic risk or not.”
Investment managers are now over allocated to bonds due to their perceived safe haven status. Conversely, gold remains under allocated to in investment and pension portfolios globally. The majority of investment and pension funds having no allocation to gold whatsoever.
Gold will again act as a hedging instrument when safe havenbonds come under pressure in the coming months and the global bond bubble bursts.
Must read research on developing bail-in regimes including world’s top 50 banks here:
Protecting Your Savings In The Coming Bail-In Era
From Bail-Outs to Bail-Ins: Risks and Ramifications
MARKET UPDATE
Today’s AM fix was USD 1,179.25, EUR 1,098.84 and GBP 797.95 per ounce.
Yesterday’s AM fix was USD 1,187.40, EUR 1,095.01 and GBP 800.36 per ounce.
Gold in USD – Q1, 2015 – (Thomson Reuters)
Gold dropped 1.1 percent or $13.20 and closed at $1,185.50 an ounce yesterday, while silver lost 1.42 percent or $0.24, closing at $16.71 an ounce. Overnight in Singapore, gold prices fell marginally to touch a low of $1,179 per ounce but in London gold prices have eked out small gains.
Gold looks set for a third quarterly decline, though as it is only down by $2 since the close on December 31st 2014 and it will be interesting to see if it closes lower. Bullion banks may wish to “paint the tape” and ensure a lower quarterly close to keep animal spirits in the gold market muted and encourage momentum traders to go short.
Silver prices are again outperforming and are up by over 5% in dollar terms, from $15.66 to $16.60 per ounce, and more in sterling and euro terms.
Platinum is down 6.6% and palladium is this quarter’s biggest faller among the precious metals, down 7.1%.
Gold prices in sterling and particularly euros has seen strong gains in the quarter and we believe that this is a forerunner to higher gold prices in dollar terms this year.
Updates and Award Winning Research Here
end
James Turk lays out perfectly for us the dangers of a collapse of Greece. He states correctly that a default will rock markets and send contagion throughout the globe.
(courtesy James Turk/Kingworldnews/Eric King)
Greece likely to default within two weeks, Turk tells KWN
Submitted by cpowell on Tue, 2015-03-31 00:30. Section: Daily Dispatches
8:30a PHT Tuesday, March 30, 2015
Dear Friend of GATA and Gold:
Greece likely will default on its debts to the European Central Bank, the International Monetary Fund, and other bondholders within the next two weeks as a run on Greek banks continues, GoldMoney founder and GATA consultant James Turk tells King World News today, adding that this will probably rock the markets. An excerpt from the interview is posted at the KWN blog here:
http://kingworldnews.com/ecb-to-steal-greek-bank-deposits-as-greece-to-d…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Zero hedge discusses the 10 tonnes of gold leaving the FRBNY.
(In my opinion, the 30 tonnes of gold that zero hedge talks about is really the Ukrainian gold that never entered USA soil ( the FRBNY) but was deposited at Frankfurt after being airlifted from the UKraine in late 2014. However it was credited against what the USA owes Germany)
(courtesy zero hedge)
Gold In Fed Vault Drops Under 6,000 Tons For The First Time, After 10th Consecutive Month Of Redemptions
Two months ago, when looking at the most recent physical gold withdrawal numbers reported by the Fed, we observed something peculiar: between the publicly reported surprise redemption by the Netherlands (122 tons) and the just as surprise redemption by the Bundesbank (85 tons), at least 207 tons of gold should have vacated the NY Fed’s gold vault. Instead, the Fed reported that in all of 2014 “only” 177 tons of gold were shipped out of the massive gold vault located 90 feet below 33 Liberty Street. Somehow the delta between what we “shipped” and what was “received” in the past year was a whopping 30 tons, or about 15% of the total – a gap that is big enough to make even China’s outright fraudulent trade numbers seems sterling by comparison.
This prompted us to ask:
“what happened? Did an intern input the Fed’s gold redemptions figures for December, supposedly a different intern than the one who works at the IMF and who caused a stir earlier this week when the IMF, allegedly erroneously, reported that the Dutch – after secretly repatriating 122 tons of gold – had also bought 10 tons of gold in the open market for the first time in nearly a decade.
Or perhaps some “other” bank, central or commercial, decided to offset the redemptions by the Netherlands and Germany, and inexplicably added 30 tons of gold in December? The question then becomes: “who” deposited said gold, especially when one considers that even the adjoining JPM vault which is allegedly connected to the NY Fed by a tunnel, only contains some 740K ounces of gold, or about 23 tonnes.
Or is it simply that when it comes to accurately reporting the flows of physical gold, classical math is incapable of keeping track of the New Normal gold moves, and the Fed has decided that even when dealing with physical gold there is a “settlement” period?
We still don’t know the answer, and while the Fed has not revised its vault gold data, one thing is clear: the slow, stealthy and steady withdrawal of gold from the NY Fed continues.
According to the most recent earmarked gold data reported by the Fed, in the month of February another 10 tons of gold departed the NY Fed, following 20 tons in the month before – the tenth consecutive month of redemptions – which if one assumes is merely the delayed relocation of gold previously demanded for delivery, has crossed the Atlantic and is now to be found in Frankfurt.
This means that after 177 tons of gold were withdrawn in 2014 – the largest year of gold redemptions since 2008 when 230 tons of gold departed the NY Fed vault – another 30 tons of parked gold has been recalled to their native lands so far in 2015.
This also means that for the first time in the 21st centurythe total gold tonnage held at the NY Fed is now under 6000 tons, or 5,989.5 to be precise.
But most importantly it means that all of the 207 tons in Dutch and German withdrawals are now accounted for with a matched and offsetting “departure” at the Fed. Which is why the next monthly update of the Fed’s earmarked gold will be especially interesting: if March data shows that the withdrawals continue, it will mean that either Germany, or some other sovereign, has continued to redeem their gold which for some reason they no longer trust is safe lying nearly 100 feet below street level on the Manhattan bedrock.
end
Lawrence Williams discusses the true gold flows as he uses the brilliant work of Koos Jansen:
(courtesy Lawrence Williams/Mineweb)
China gold flows to hit Q1 record
Chinese gold flows as represented by withdrawals from the SGE will hit record levels for Q1 this year.
Lawrence Williams | 30 March 2015 11:27
Withdrawals from the Shanghai Gold Exchange (SGE) remain exceptionally high despite being expected to drop following the Chinese New Year holiday. In the three weeks of trading since the holiday’s end, withdrawals from the exchange have totalled 149 tonnes which would seem to belie other reports that demand is slipping.
The latest figure from the SGE is for the movement of 53 tonnes out of the Exchange during week 11 (ended March 20), following 51 tonnes a week earlier and 45 tonnes in week 9. Total to March 20 is thus already 561 tonnes. So withdrawals from the SGE appear to be rising week on week at a time when they would normally expect to be falling back after the holiday buying spree has ended. Should the gold flows out of the exchange continue at this kind of rate, then the Q1 total figure will be of the order of 620-630 tonnes – comfortably a new Q1 record.
Even at the lower end of the likely Q1 flow level this would be 10% up on the previous highest Q1 withdrawal amount, which was 564 tonnes (this has almost been reached already with flows for seven working days yet to be announced) recorded a year ago when the full year figure was 2,102 tonnes. QI withdrawals will thus undoubtedly set a new record.
If this increase figure is indicative of the year ahead the China gold flows, as represented by SGE withdrawals, could this year reach a new record 2,300 tonnes or more – getting on for 75% of new mined supply assuming this is flat this year – CPM suggests, though, it will actually be 4.6% higher as recent new projects and expansions reach full capacity.
See: Further downside on gold prices limited – CPM
There are reports, though, that Asian demand has slipped back in the past week as the gold price rose with premiums dropping significantly in India and China. It remains to be seen as to how much this affects gold flows for the past week and in the weeks ahead.
As we noted in the recent article on the CPM Gold Yearbook findings, there is some disagreement over whether the SGE figures represent an accurate picture of total Chinese wholesale demand. CPM reckons there is a significant element of double, or even triple, counting in movements of gold from fabricators in and out of the exchange. But Koos Jansen, who probably follows the SGE figures more closely than anyone and also is something of an expert on the SGE’s rules and regulations, feels that this is incorrect, at least as far as significance is concerned. He does say though that the launch of the international section of the SGE – the SGEI – which can represent gold flows in and out of China without them landing in the domestic market, could distort the figures a little, but reckons this level is very small as his investigations have revealed that most SGEI handled gold is ending up in China in any case.
Indian demand is also said to have surged in the month following the February budget when, contrary to expectations, the import duty on gold was not relaxed from its 10% level. There are also reports that the real Indian flows are much higher as gold smugglers become more adept in getting quantities of gold into the country to take advantage of the duty-induced premiums prevailing on the open market. But again, Indian demand also looks as though it may have slipped as the gold price rose. But with the Akshaya Tritya festival coming up next month, when it is seen as auspicious to buy gold, and with prices falling back below the $1200 level on Friday, this demand could pick up again.
end
This is interesting: not only the Euro has never been this short but also gold. It looks like the boat is about to spring a leak;
(courtesy zero hedge)
Crowded Trade 2.0: Specs Have Never Been More Short Gold Or The Euro
The Long US Dollar, Short US Treasuries trades were the ‘most crowded’ earlier this year and while both have derisked modestly from record highs, this week saw the net speculative position in EURUSD futures surge more negative and has never been shorter. Along similar ‘strong dollar’ lines, as Bloomberg reports, net long positions in Gold have dropped to their lowest since Dec 2013 and outright Gold short positions rose for the seventh week in a row to the highest since data began in 2006.
Specs have never been more short The Euro against the US Dollar…
And gold shorts have never been higher…
So everyone on one side of the Strong Dollar boat… apart from The Fed…
Charts: Bloomberg
end
Bill Holter delves into the mess inside the Middle East:
(courtesy Bill Holter/Miles Franklin)
Duck and cover …what could possibly go wrong?
I can still remember being in elementary school and the alarm going off in the middle of class, it was time to practice “duck and cover”. Another practice drill was when all six grades would march to the basement of the building and huddle in the boiler room, a potential nuclear war at any time was very real to us in the old days. It’s different today, everyone “knows” a nuclear war can nor will ever happen. It can’t happen because our leaders driving the bus are too smart to ever go down that road …right?
In case you have only been watching mainstream media, you may not be aware another “little war” has broken out in the Middle East between Saudi Arabia and Yemen. I mentioned “mainstream media” above because …there is almost NO MENTION of this. More coverage has been given to an airliner crashed by a depressed pilot and Mr. Obama’s recent golf trip. What is happening is so complicated it boggles the mind. http://www.theguardian.com/world/2015/mar/26/iran-saudi-proxy-war-yemen-crisis The underlying cause can be said to be religious, between the Sunnis and Shiites but this line is quite blurred because of other alliances.
To bring you up to speed, Saudi Arabia is predominantly Sunni, Iran is predominantly Shiite. This pits the two against each other. Yemen had a Shiite president until 2012 and he was replaced by a Sunni. The country is split, mostly Shiite in the north and Sunni in the south. A new name (Al Qaeda, ISIL, ISIS etc.), the Shiite (Iranian backed) “Houthi” have sprung up from the north and forced the president out of the capital, his whereabouts are unknown. Yemen has been and is going through a civil war.
The problems as I see them are: first, Yemen controls a choke point of oil transportation from the Red Sea, logistically they can prevent a goodly percentage of oil from reaching world markets. This in my mind is secondary to what potentially could be “drawn in”. If this expands and truly becomes Saudi Arabia versus Iran then assuming our ties with the Saudis remain (remember they just joined China’s competing infrastructure bank against U.S. wishes), it will become the U.S. versus Russia backing Iran. A side oddity is the U.S. providing airstrikes in support of Iranian fighters against the ISIS advance in Iraq. Could we support Iranian troops in one country yet cut them down in another conflict? I suppose yes and should not be surprising given our foreign policy thought process, it could be said it is even probable? This is the danger in the Middle East, it is religious and thus the hardest type of fire to put out.
This is not the only place the U.S. and Russia are facing off, don’t forget Ukraine and other borders to Russia. NATO (the U.S.) has been amassing hardware all around the Russian border and our Congress just overwhelmingly voted 348-48 to supply Ukraine with military hardware. Mr. Putin and Russia have previously said if we arm Ukraine, they will consider it an act of war.
http://sputniknews.com/analysis/20150219/1018508493.html This is insanity! It was reported yesterday the U.S. is sending 50 Abrams class tanks to Ukraine, not smart in my opinion. Sending arms to Ukraine will not work to defeat Russia, it will however get a war started which is exactly what the U.S. has been trying to do over the last several years.
I don’t want to write a book about either the Middle East situation or the direct aggression on the Russian border, rather we should look at “why”. Why is the U.S. pushing so hard for a war which cannot be won and can only go nuclear with all the follow on repercussions. In short, because we “have to”. The game is over and Washington knows it. The game of course is dollar hegemony. The game of “reflation” is lost and gone until we can reset the system with a new currency. You see, each time we had a recession in the past, the Fed would (could) reflate the economy and thus the markets. It did not work this time as you know because we reached “debt saturation” levels in the economy back in 2007 and now finally on the Fed and Treasury levels. Adding more debt no longer works as a medicine, rather, it is lethal.
It is my opinion that war is necessary and will be used to “cover up” what has really been done. Will people even care about their 401K’s in the middle of a world war? Will they care if the dollar implodes in value? Of course they will but, these and any other bad events will be blamed on “the war”. You will hear “our plans would have worked and were working if not for the war”. Will investigations of anything be demanded? No, “it was the war’s fault”!
There are a couple of possibilities still left for the world to avoid war. First, and seemingly possible in light of recent actions, our allies could simply abandon us. They might even join together and demand the U.S. just stop. Europe could turn away and tell us they do not want war with Russia. Until this week I thought it was possible for Saudi Arabia to turn toward China and thus Russia, I may have been wrong as demonstrated with their attacks on Yemen with U.S. support.
Another possibility is somehow the rest of the world makes it financially impossible for the U.S. to wage war. It is possible for our markets to be “crashed” and our ability to borrow denied. This could be a concerted effort or even in the form of some sort of “truth bomb”. Our entire system is a lie. The banking system is a lie where mark to fantasy is the rule, our economic reporting is false and so are all markets. Our rule of law is breaking down. Should the lie of the “American way” be somehow exposed, allies would not back us nor will there be any support internally to aggress further overseas.
The U.S. has worked very hard over the last year(s) to isolate Russia in nearly every way imaginable and to war with them, we have succeeded in isolating ourselves more and more. The question is whether we have isolated ourselves to the point where the entire world will no longer support us and instead stand against us.
As I started this piece with “duck and cover”, it was foolish then and of course still foolish. What we so feared then, and maybe even irrationally, we should absolutely fear today. Our leaders of the past were rational, they also had options and a viable system to live in. Today, our leaders are irrational with no options available in a system which must be changed and cleaned up. If you ask the question, “what could possibly go wrong?”, the answer is, it already has, and unfortunately we will bear the consequences. As good and easy as it was in the past to live as an American, I believe it will be an unpleasant and hard (if not impossible) task from here. Regards, Bill Holter
end
And now for the important paper stories for today:
Early Tuesday morning trading from Europe/Asia
1. Stocks generally lower on major Chinese bourses /yen rises to 119.89
1b Chinese yuan vs USA dollar/yuan slightly strengthens to 6.1996
2 Nikkei down by 204.41 or 1.05%
3. Europe stocks in the red/USA dollar index up to 98.42/Euro falls to 1.0752
3b Japan 10 year bond yield .39% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.89/Maintains rise in Japanese 10 yr bond yield/Japan losing control over their huge bubble of a bond market/
3c Nikkei still barely above 19,000
3d USA/Yen rate now just below the 120 barrier this morning
3e WTI 47.61 Brent 54.99
3f Gold par/Yen up
3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil down for WTI and down for Brent this morning despite the fact a proxy civil war continues in Yemen
3i European bond buying continues to push yields lower on all fronts in the EMU
Except Greece which sees its 2 year rate slightly rises to 21.64%/Greek stocks up by .54% today/ still expect continual bank runs on Greek banks.
3j Greek 10 year bond yield: 11.19% (up by 20 basis point in yield)
3k Gold at 1184.00 dollars/silver $16.65
3l USA vs Russian rouble; (Russian rouble down 1/4 rouble/dollar in value) 58.17 , falling with the lower brent oil price
3m oil into the 47 dollar handle for WTI and 54 handle for Brent
3n Higher foreign deposits out of China sees hugh risk of outflows and a currency depreciation. This scan spell financial disaster for the rest of the world/China may be forced to do QE!!
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF
3p Britain’s serious fraud squad investigating the Bank of England/ the British pound is suffering
3r the 7 year German bund still is in negative territory/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.
3s Eurogroup reject Greece’s bid for more euros of bailout funds as proposal is to vague. The ECB increases ELA by 1.5 billion euros up to 71.3 billion euros. This money is used to replace fleeing depositors.
3t Bloomberg calculates Greece’s shortfall in March at 3.5 billion euros.
4. USA 10 year treasury bond at 1.95% early this morning. Thirty year rate well below 3% at 2.55%/yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy zero hedge/Jim Reid Deutsche bank)
Futures, Oil Slide As Surging Dollar Now Takes Window Dressing Stage
Did stocks window dressing come one day early in this volatile, bipolar, stop-hunting, HFT-infested market? Looking at futures this morning, which are down about 12 points already on yet another surge in the USD which has sent the EURUSD just above 1.07, the lowest since March 20 , and the USDJPY back under 120 now that the “strong dollar is bad for stocks after all” algo seems to be back from vacation, all those hedge funds who chased risk higher yesterday because their peers did the same, may find they are all selling on the way down. It will be oddly ironic if all of yesterday’s widely touted gains evaporate comparably in the first 10 minutes of trading today, and lead to an end in the longest streak of quarterly increases in two decades.
To be sure, China already did, with another early surge in the SHCOMP seeing a 1% pull back in late trading, driven by reports of foreigners getting out ahead of the inevitable tsunami of local high schoolers selling. Japan did not fare much better and the Nikkei also dropped 1% as the last day of the month across Asia has seen broad based selling. For now Europe is buckling the trend with Eurostoxx up modestly, however with newsflow out of Greek negotiations hardly favorable, the question is will the weakness in the EUR be enough to offset yet another day of fundamental insecurity about the future of the Eurozone. As a reminder, every day that Greece remains without a deal is one day closer to a bankruptcy and/or bank run that tips its banks over the edge leading tot he same outcome.
Crude likewise has seen a bout of weakness driven by the drop in the EURUSD, as well as reports from ISNA that a draft agreement was being written up between western powers and Iran over the country’s nuclear enrichment program. As a result Brent extends its drop into the 3rd day, falls below $56 with WTI under $48 as Iran nuclear talks move into final day of high-level diplomacy. Events in Yemen, outcome of Nigeria elections also watched. “The main thing the mkt is looking at is the headlines out of Lausanne, where it looks like at least they will reach a political agreement ahead of today’s deadline,” Petromatrix oil analyst Olivier Jakob told Bloomberg. “There is still a bit of a question mark on sanctions and the pace of returning oil, but it is heading too that and more supply on the mkt and that is not good in terms of price.” Keep an eye on flashing red Iran headlines which will likely led to even more jagged and stop-hunting WTI trading this morning.
Crude futures and metal prices trade lower this morning alongside another climb higher in the USD which has caused WTI and Brent to fall over USD 1 and Brent edging back towards USD 55 amid a de-escalation of concerns over Yemen.
On the macro front there has been little news this morning or overnight, which means equity indices in Europe trade only marginally higher although the FTSE 100 is underperforming alongside lower crude and metals prices. On the subject of UK asset classes, GBP saw a small lift following a slightly higher than expected revision for Q4 GDP at 0.6% vs. Exp. 0.5% Q/Q, however this failed to dictate medium-term price action. Tobacco names in the UK are underperforming in early trade after early reports from the NY Post that FTC staff are recommending a suit to block the USD 27bln merger of Reynolds American (RAI) and Lorillard (LO). Although today sees the final trading day this month and quarter, markets are relatively quiet heading into the Easter weekend and market closes on Friday. This means fixed income markets have seen little price action this morning and trade largely range-bound. European equities then trimmed their gains following disappointing Eurozone CPI and unemployment figures, the unemployment rate coming in higher-than-expected and January’s reading also revised higher.
Regarding Greece, EU’s Tusk said that a deal for Greece could still get completed by end of April but does not expect anything before Easter. Greek press TVXS then reported that officials have said an agreement is very close for Greece and could come within the next 1 or 2 days, however, officials from Greece said a deal had not been agreed with the Troika and talks could continue into next week.
Eurozone CPI Estimate (Mar) Y/Y -0.1% vs. Exp. -0.1% (Prev. -0.3%)
Eurozone CPI Core (Mar A) Y/Y 0.6% vs. Exp. 0.7% (Prev. 0.7%)
Eurozone Unemployment Rate (Feb) M/M 11.3% vs. Exp. 11.2% (Prev. 11.2%, Rev. 11.4%)
The USD index has extended on gains this morning and trades higher by 0.6% after an earlier break above the 50% Fib retracement of the pre-FOMC high to recent low, and a further slide in EUR evident after a break below Friday’s low. Commodity-linked currencies have also seen selling pressure, most notably in AUD & NZD as commodities trade lower across the board in reaction to a stronger USD and traders also noting quarter-end rebalancing is driving sales in AUD/USD & NZD/USD into the London fix. Analysts also note that moves in equities today could lead to selling pressure in CAD, EUR and GBP in Q-end, whereas USD/JPY could see a small bid as >USD 500mln is expected to be bought in the pair.
Bulletin headline summary from Bloomberg and RanSquawk
Month and quarter-end demand for USD sees the index extend on gains although equity markets drift with little macro news to drive prices
FTSE 100 underperforms peers as commodities slide alongside a stronger USD and tobacco names weigh on the index
Looking ahead focus will turn to data from the US with the latest Chicago PMI due for release, API inventories after-market, and GDP from Canada
Treasuries steady, headed for fifth consecutive quarterly gain amid weak eco data. dovish Fed, USD strength, lower energy prices; volumes expected to be light before payrolls report on Good Friday.
Greek PM Tsipras sought to rally a consensus in parliament for his effort to secure bailout funds after his proposals to bolster the nation’s finances failed to satisfy his European creditors
Germany’s jobless rate fell to 6.4% in March, lowest on record, as number of people out of work declined 15k to 2.8m
Euro-area’s inflation rate rose to minus 0.1% in March from -0.3% the previous month, the fourth consecutive reading below zero and in line with median estimate in a Bloomberg survey
China said an insurance system for bank deposits will start on May 1, a step toward scrapping remaining controls on interest rates and allowing lenders to fail in a more market-driven economy
Iron ore is headed for the biggest quarterly loss since at least 2009 as surging low-cost supplies from Australia and Brazil swamp the global market, spurring a glut as demand from China slows
The near-collapse of Duesseldorfer Hypothekenbank AG, the German lender hit by Heta Asset Resolution AG’s debt moratorium, was prompted in part by a margin call from Eurex, people familiar with the matter said
Iran and world powers are weighing compromises in order to overcome a deadlock in nuclear talks with little more than 12 hours to reach an agreement
Obama will face a leviathan task selling any deal to a skeptical Congress; if no deal is reached, he will face an equally daunting challenge of holding off congressional moves to impose new sanctions on Iran
Sovereign 10Y yields mixed, Greece 10Y +22bps to 11.36%. Asian stocks mixed, with Nikkei lower, Shanghai higher. European stocks, U.S. equity-index futures decline. Crude, gold and copper fall
DB’s Jim Reid summarizes the main overnight events
Back to markets yesterday, US equities kicked off the week on a firmer footing as the S&P 500 (+1.22%) recorded its first back-to-back gains in 28 trading days, remarkably the longest such stretch in 21 years. Treasuries were a touch tighter across the curve yesterday, with the 10y benchmark in particular closing 1.4bps tighter at 1.948%. The Dollar had a better day also as the broader DXY closed +0.67%, bucking a recent trend of the Dollar and equity