Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1186.80 up $12.30 (comex closing time)
Silver $16.42 up 31 cents (comex closing time)
In the access market 5:15 pm
Gold $1188.06
Silver: $16.40
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:
At the gold comex today, we had a poor delivery day, registering 1 notice serviced for 100 oz. Silver comex filed with 143 notices for 715,000 oz
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 241.14 tonnes for a loss of 62 tonnes over that period. Lately the removals have been rising.
In silver, the open interest fell again by 1,049 contracts as Friday’s silver price was down by 2 cents. The total silver OI continues to remain extremely high with today’s reading at 177,810 contracts maintaining itself near multi-year highs 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.
In silver we had 715 notices served upon for 715,000 oz.
In gold, the total comex gold OI rests tonight at 410,701 for a gain of 446 contracts despite the fact gold was down by $7.90 on Friday. We had 1 notice served upon for 100 oz.
Today, we no change in gold inventory at the GLD / Gold Inventory rests at 741.75 tonnes. There is now no question that London is out of gold as London gets deeper into backwardation. China’s major source of gold will now be the FRBNY. China’s demand for gold this week: 51 tonnes.
In silver, / /we had no change in silver inventory to the SLV/ and thus the inventory tonight is 327.673 million oz
We have a few important stories to bring to your attention today…
1. Today we had the open interest in silver fall by 1049 contracts as the silver was down in price on Friday. The OI for gold rose by 446 contracts up to 410,701 contracts as the price of gold was down by $7.90 on Friday. GLD and SLV remained constant with respect to the inventory levels.
(report Harvey)
2,Two important commentaries on Greece today:
i) an official for the European union states that it would be foolish to believe that Greece will not fail
ii) the IMF set to separate from the Troika/expect the ECB to announce haircuts to collateral provided by Greek banks to the Central Bank of Greece to the benefit of the ECB.
(zero hedge)
3. Australia to introduce a tax on savings
(Martin Armstrong)
4. Bill Holter’s commentary tonight on gold backwardation
5, USA factory orders down for 5th straight month
(zero hedge)
6. Dow Chemical fires 1750 workers and the market rejoices???
(zero hedge)
7. Lawrence Williams; gold demand for this week into China: 51 tonnes
(Lawrence Williams/Mineweb)
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 rose by 496 contracts from 410,255 up to 410,701 despite the fact that gold was down by $7.90 on Friday (at the comex close). We are in our next non active delivery month of May and here the OI rose by 1 contract rising to 227. We had zero notices filed on Friday. Thus we gained 1 gold contract or an additional 100 ounces will stand for gold in May. The next big active delivery contract month is June and here the OI fell by 1,967 contracts down to 258,421. June is the second biggest delivery month on the comex gold calendar. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 68,671. The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 134,231 contracts. Today we had 1 notice filed for 100 oz.
And now for the wild silver comex results. Silver OI fell by 1049 contracts from 178,859 down to 177810 as the price of silver was down in price by 2 cents, with respect to Friday’s trading. We are into the active delivery month of May. In our May delivery month the OI fell by 479 contracts down to 1248. We had 302 contracts filed upon with respect to Friday. So we lost 177 contracts or 885,000 oz will not stand for delivery in this May delivery month. The estimated volume today was poor at 24,456 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 35,658 contracts which is fair in volume. We had 143 notices filed for 715,000 oz today.
may initial standings
May 4.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
33,484.181 oz (HsBC. Manfra,Scotia)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
1 contracts (100 oz)
No of oz to be served (notices)
226 contracts(22,600) oz
Total monthly oz gold served (contracts) so far this month
1 contracts(100 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
nil
Total accumulative withdrawal of gold from the Customer inventory this month
33,484.181 oz
Today, we had 0 dealer transaction
Today, we had 0 dealer transaction
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil oz
we had 3 customer withdrawals
i) Out of HSBC; 300.165 oz
ii) Out of Manfra; 32.15 oz
iii) Out of Scotia: 33,151.866 oz
total customer withdrawal: 33,484.181 oz
total customer deposit: nil oz
We had 0 adjustments:
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 1 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 May contract month, we take the total number of notices filed so far for the month (1) x 100 oz or 100 oz , to which we add the difference between the open interest for the front month of May (227) and the number of notices served upon today (1) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the May contract month:
No of notices served so far (1) x 100 oz or ounces + {OI for the front month (227) – the number of notices served upon today (1) x 100 oz which equals 22,700 oz standing so far in this month of May. (.706 tonnes of gold)
Total dealer inventory: 571,168.307 or 17.76 tonnes
Total gold inventory (dealer and customer) = 7,762,270.993. (241.14) tonnes)
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 241.14 tonnes for a loss of 62 tonnes over that period. Lately the removals have been rising!
end
And now for silver
May silver initial standings
May 4 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
60,139.45 oz (Scotia)
Deposits to the Dealer Inventory
33,830.400 (CNT
Deposits to the Customer Inventory
991.35 oz (CNT)
No of oz served (contracts)
143 contracts (715,000 oz)
No of oz to be served (notices)
1105 contracts (5,525,000 oz)
Total monthly oz silver served (contracts)
1926 contracts (9,630,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
nil
Total accumulative withdrawal of silver from the Customer inventory this month
1,293,211.0 oz
Today, we had 1 deposits into the dealer account:
i) Into CNT: 33,830.400 oz
total dealer deposit: 33,830.400 oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 1 customer deposits:
i) Into CNT: 991.35 oz
total customer deposits: 991.35 oz
We had 1 customer withdrawals:
i) Out of Scotia: 60,139.45 oz
total withdrawals; 60,139.45 oz
we had 0 adjustments:
Total dealer inventory: 62.205 million oz
Total of all silver inventory (dealer and customer) 174.654 million oz
.
The total number of notices filed today is represented by 143 contracts for 715,000 oz. To calculate the number of silver ounces that will stand for delivery in April, we take the total number of notices filed for the month so far at (1926) x 5,000 oz = 9,630,000 oz to which we add the difference between the open interest for the front month of April (1248) and the number of notices served upon today (143) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the May contract month:
1926 (notices served so far) + { OI for front month of April(1248) -number of notices served upon today (143} x 5000 oz = 15,155,000 oz of silver standing for the May contract month.
we lost 177 contracts or 885,000 oz will not stand for delivery.
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:
may 4/no change in gold inventory at the GLD./741.75 tonnes
May 1/ we had a huge addition of 2.69 tonnes of gold into the GLD/Inventory rests tonight at 741.75 tonnes
April 30/ no change in gold inventory/739.06 tonnes of gold at the GLD
April 29/no change in gold inventory/739.06 tonnes of gold at the GLD
April 28/ no change in inventory/739.06 tonnes of gold at the GLD
April 27. we lost 3.29 tonnes of gold inventory at the GLD/Inventory rests tonight at 739.06 tonnes
April 24. no changes in gold inventory at the GLD/Inventory at 742.35 tonnes
April 23. no changes in gold inventory at the GLD/inventory at 742.35 tonnes
April 22. no changes in gold inventory at the GLD/inventory at 742.35 tonnes
April 21.2015: a huge addition of 3.26 tonnes of gold inventory at the GLD/Inventory rests at 742.35 tonnes
April 20.2015: no change in gold inventory at the GLD/Inventory rests at 739.06 tonnes
April 17.2015/ we had a huge addition of 3.01 tonnes of gold inventory at the GLD. It looks like the raids at the GLD have stopped.
April 16.2015: no change in inventory at the GLD/total inventory at 736.08 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 : 741.75 tonnes.
end
And now for silver (SLV):
May 4/ no change in silver inventory at the SLV/327.673 million oz
May 1/no change in silver inventory at the SLV/327.673 million oz
April 30/no change in silver inventory at the SLV/327.673 million oz
April 29/ we lost 2.963 million oz of silver inventory from the SLV/inventory tonight 327.673 million oz
April 28/another huge addition of 1.434 million oz to the SLV/Inventory stands tonight at 330.636 million oz
April 27.we had a huge addition of 2.976 million oz to the SLV/Inventory stands tonight at 329.202 million oz
April 24/ we had a small withdrawal of 88,000 oz of silver at the SLV/326.226 million oz
April 23.no changes in silver inventory at the SLV/326.334 million oz of inventory
April 22/no changes in silver inventory at the SLV/326.334 million oz of inventory
April 21.2015/we had another huge addition of 1.434 million oz of silver into the SLV
April 20/ no change in silver inventory tonight/SLV 324.900 million oz.
May 4/2015 we had no change in inventory at the SLV / inventory rests at 327.673 million
end
And now for our premiums to NAV for the funds I follow:
Central fund of Canada data not available today/
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 6.7% percent to NAV in usa funds and Negative 6.8% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.3%
Percentage of fund in silver:38.3%
cash .4%
( May 4/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to-0.18%!!!!! NAV (May 4/2015)
3. Sprott gold fund (PHYS): premium to NAV rises to -.14% to NAV(May 4/2015
Note: Sprott silver trust back into negative territory at -0.18%.
Sprott physical gold trust is back into negative territory at -.14%
Central fund of Canada’s is still in jail.
end
Early morning trading from Asia and Europe last night:
Gold and silver trading from Europe overnight/and important physical stories(courtesy Mark O’Byrne/Goldcore)
A terrific interview of John Embry by Dave Kranzler, IRD (courtesy, Dave Kranzler and John Embry/GATA)
Sprott’s John Embry interviewed by Dave Kranzler of Investment Research Dynamics
Submitted by cpowell on Sat, 2015-05-02 02:19. Section: Daily Dispatches
10:17p ET Friday, May 1, 2015
Dear Friend of GATA and Gold:
Sprott Asset Management’s John Embry was interviewed this week by Dave Kranzler of Investment Research Dynamics, discussing the suppression of the monetary metals markets and the possible triggers for their breakouts. The interview is 40 minutes long and it’s posted at YouTube here:
https://www.youtube.com/watch?v=ednflzAYuHA
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
John Embry slams Kitco as anti gold propaganda plus other goodies:
(courtesy John Embry/Kingworldnews/Eric King/GATA)
Embry, in KWN interview, slams Kitco for anti-gold propaganda
Submitted by cpowell on Mon, 2015-05-04 16:27. Section: Daily Dispatches
12:25p ET Monday, May 4, 2015
Dear Friend of GATA and Gold:
Kitco.com has become an Internet site of anti-gold propaganda, Sprott Asset Management’s John Embry tells King World News today. Embry adds that he fears that Canada’s real-estate bubble is about to pop, devastating recent buyers. An except from the interview is posted at the KWN blog here:
http://kingworldnews.com/50-year-veteran-warns-massive-bubble-is-ready-t…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
China announces a huge 51 tonnes of physical gold flowed into the SGE and out: (Gold withdrawals of 51 tonnes equals gold demand from Chinese citizenry). If this rate continues we will exceed last year’s 2200 tonnes. As a reminder, the world produces from all mines 2200 tonnes per year ex China ex Russia who keep all gold produced.
(courtesy Lawrence Williams/Mineweb)
China’s SGE Gold Flows Still At High Level – 51 tonnes Last Week
Lawrence (Lawrie) Williams
May 4, 2015
Net Chinese gold imports from Hong Kong have slipped, but SGE withdrawals continue very strong.
For the second week in a row, gold withdrawals from China’s Shanghai Gold Exchange (SGE) have been at around 50 tonnes – a high level for the post Chinese New Year period. Withdrawals from the exchange for the first 16 weeks of the year have already reached around 780 tonnes suggesting that if flows out of the SGE are maintained we could be in for a new record year with withdrawals well in excess of those of 2013, which totalled almost 2,200 tonnes. As we have said in these pages before, whether one considers SGE withdrawal figures to equate to Chinese gold demand, which the Peoples Bank of China would seem to suggest, or whether the true consumption figure is actually quite a bit lower as the mainstream gold analysts reckon, they still remain an excellent indicator of demand growth or fall in the world’s biggest market for the yellow metal.
Time was when Chinese mainland net imports from Hong Kong were considered the best proxy for Chinese demand and up until just over a year ago this was very much the case with the majority of Chinese gold imports coming in by this route. But since then the Chinese have opened up the routes by which gold can be imported and we suspect that now at least 40% of gold imports, probably even more so far this year, go directly into the Chinese mainland via ports such as Shanghai and Beijing, thus bypassing Hong Kong altogether.
For example, perhaps the most important route for gold into China is from the UK to Switzerland, where the gold is re-refined into more suitable sizes for the Asian markets, and then on to China. Bloomberg reports that, for example, in March 46.4 tonnes of gold were exported from Switzerland directly into China with only 30 tonnes going to Hong Kong – around a 60:40 ratio. The fact that such a high percentage was thus going directly to the Chinese mainland received little or no comment despite this being such a significant switch in the gold trade route. This compares with figures late last year which had a little over 30% of Swiss gold exports to China and Hong Kong going directly to the mainland with the balance to Hong Kong. It was also noted that US trade statistics for gold exports showed that in early 2014 nearly all the gold exported to China and Hong Kong was directly to the latter, while by late in the year 36% was going directly to the mainland (See: 36% of October U.S. gold exports to China went direct rather than via Hong Kong).
Thus Hong Kong, as a trade route for gold into India, can no longer be considered a proxy for Chinese demand and reports suggesting otherwise should be ignored. Indeed, one of these was the recent Reuters article headed China’s gold imports from Hong Kong dipped to 7-month low, with the article seeming to imply that this meant that Chinese demand was falling off sharply too. The report ended with the sentence “China does not provide official trade data on gold, so the Hong Kong figures serve as a proxy for flows to the mainland”. As noted above, in our view they no longer do and should be totally disregarded as such an important indicator nowadays, although Hong Kong still remains an important gold import route.
China is now reported to be further relaxing its restrictions on import routes in allowing Chinese mining companies with overseas gold mining subsidiaries, to import their gold directly to the mainland too, as well as allowing more banking entities to import directly. All this could make Hong Kong increasingly less relevant as an import route for gold into China.
end
Gold paperization in India won’t be happening any time soon
Submitted by cpowell on Sun, 2015-05-03 20:27. Section: Daily Dispatches
4:30p ET Sunday, May 3, 2015
Dear Friend of GATA and Gold:
Writing today in The Hindu, the second-largest English-language newspaper in India, published in Chennai (formerly Madras), former Indian government official Sutanu Behuria explains why the sort of monetization — paperization, actually — recently proposed by the country’s government for the vast amount of gold held by the Indian public is not going to happen any time soon.
It’s not just because of the centrality of gold in Indian culture and religion, Behuria writes. It’s because the country lacks the infrastructure that would be necessary to standardize and evaluate any gold submitted for monetization.
“Previous gold monetization schemes,” Behuria notes, “have had very little success. The 1999 gold deposit scheme could not achieve even a conservative target of 50 tonnes. A major reason for the failure has been the inherent distrust in the credibility of the valuation process, besides the reluctance on the part of individuals to disclose gold assets for fear of attracting punitive levies. …
“The only way to accurately determine gold content in jewellery is to melt it and then draw a representative sample for testing. Such purity verification infrastructure is almost nonexistent in India. The assaying and hallmarking of handmade gold jewellery is at best a misplaced assurance prone to substantial misinterpretation. Further, given the size of the country and the widespread demand for gold in the form of jewellery, even such infrastructure as is available is woefully inadequate. …
“Successful implementation and operationalization of the gold monetization scheme would necessarily require 1) a national network of purity verification centers, 2) world-class refining and fabrication facilities, and 3) secure storage and distribution facilities. In addition, details of interest to be paid, tenure of the deposit, collateralized lending, and so on will have to be worked out.
“It is likely that it will take considerable time to put the architecture in place.”
Behuria’s commentary is rather misleadingly headlined “All That Glitters Is Not Gold” and it’s posted at The Hindu’s Internet site here:
http://www.thehindubusinessline.com/opinion/columns/all-that-glitters-is…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
LBMA adviser, former Barclays exec will help central banks rig the gold market
Submitted by cpowell on Sun, 2015-05-03 22:01. Section: Documentation
By Ronan Manly
Sunday, May 3, 2015
A few weeks ago, through GATA, I called attention to the assertion by the chief executive of the London Bullion Market Association, Ruth Crowell, that the London gold market can never be fully transparent while central banks remain such big participants:
http://www.gata.org/node/15241
Here is another telling comment by someone connected to the LBMA concerning central banks and the gold market, Jonathan Spall. The comment is found on the Internet site of his precious metals consultancy company, G Cubed Metals Ltd.:
http://gcubedmetals.com/index.html
G Cubed Metals Ltd. was established by Spall last year soon after he left Barclays in London, where he was a product manager in the commodities area and acted as one of Barclays’ directors in the London Gold Market Fixing Ltd. company.
1. Stocks lower on major Chinese bourses as bubblemania is the name of the game in Shanghai (down) and Hong Kong down /Japan bourse up 11.62 or 0.06% /yen falls to 119.80/Shanghai to allow short selling to stop their bubble/China then cuts RRR by 1% and Chinese authorities sooth fears that they want to prick that huge bubble.
Since leaving Barclays, Spall has, he says, conducted an “independent review” of the candidates for the LBMA silver price competition (last June and July), served as an “independent chair” for the LPPM daily platinum and palladium fixings last August until they moved to an automated platform, and last October was appointed “senior adviser” to the LBMA.
Spall provides his credentials at his company’s Internet site here:
http://gcubedmetals.com/credentials.html.
Other people, not identified by G Cubed, are described as the firm’s affiliates, since Spall “has teamed up with a number of other leading authorities in this field” so that “G Cubed Metals will be able to put together the right team for the job”:
http://gcubedmetals.com/affiliates.html
Spall’s telling comment about central banks is on the “Services” page of the G Cubed site. He says:
“All connected with G Cubed Metals are well aware of the need for confidentiality in all financial markets as well as the additional sensitivity that comes from transacting in precious metals — particularly when it involves the ‘official sector’ such as governments, central banks, and sovereign wealth funds.”
See: http://gcubedmetals.com/services.html
And a duplicate in PDF format, just in case:
http://www.gata.org/files/GCubedMetalsServices.pdf
Confidentiality in business is often a given, and in relation to precious metals, if the “additional sensitivity” in precious metals transaction was related to physical security and security of transport and vaulting, this would fall under normal “additional security.” But the context of Spall’s comment suggests that this “additional sensitivity” means market sensitivity. This is supported by the Spall’s next observation, which clarifies that, yes, indeed, there is a need for “additional sensitivity” particularly “when it involves the official sector, such as governments, central banks, and sovereign wealth funds.”
Spall therefore concedes that the London gold market and the LBMA will not provide transparency when dealing with the “official sector” because the “official sector” requires this lack of transparency. Spall’s statements thus also indicate that the commercial sector will gladly give the official sector this “additional sensitivity” — that is, this lack of transparency.
So the question becomes: What transactions in gold are being undertaken by the “official sector” that require such secrecy and sensitivity?
Most likely these official transactions involve the surreptitious rigging of the gold and currency markets, transactions that, in 1999, the staff of the International Monetary Fund found member central banks so determined to conceal:
http://www.gata.org/node/12016
Spall’s advertisement for his new company is more evidence supporting the frequent assertion by GATA Secretary/Treasurer Chris Powell that “the location and disposition of national gold reserves are secrets far more sensitive than the location and disposition of nuclear weapons.”
—–
Ronan Manly is a gold market researcher and consultant to GATA.
end
On Friday, we reported to you that London was again in backwardation in gold and silver. However this time gold has been much deeper in backwardation than before. Bill Holter explains its significance:
(courtesy Bill Holter/Miles Franklin)
Backwardation is a function of supply.
We live in a truly messed up and Orwellian world if you will. In many parts of Europe, interest rates are negative. Savers “pay” for the privilege of banks to hold their money, lenders pay sovereign treasuries to lend, new homeowners who borrow to buy property are paid to borrow. This situation where borrowers get paid and lenders pay also exists between banks which is really strange because you would think bankers understand money and interest …just a little?
As a question to set the foundation, I ask you this; if you could sell something today for $100 and be contractually guaranteed to be ABLE to buy it back 30 days later at $99, would you do it? I hope your answer is not only yes, but you return with “how many times can I do this, it’s free money?!”. In the real world, this is called arbitrage. Rarely does the condition ever exist on a single exchange, normally when it does exist it happens over two or more exchanges and even time zones. The discrepancy can be miniscule as billions of dollars scan the globe 24 hours a day looking for this situation and lock the profit in until there is no more to be had. Arbitrage is a big business and for the most part, RISK FREE. The condition described above is called “backwardation”, the remedy is ALWAYS arbitrage.
Please notice I bold printed three words, “able, risk-free, and always”. Starting with the first word “able”, if we changed that word to either possibly or cannot, the whole equation changes as the trade is no longer risk free and will not ever be done without risk assessment. As I understand it, physical gold is in backwardation in London and silver in Asia. Why has not big money stepped in and arbitraged the “guaranteed” profits out of these markets?
The answer of course is that the profit is not guaranteed. The reason backwardation is persistent is because the fear of not being able to get your metal back 30 days into the future. It is being deemed by the market that gold today (a bird in the hand thing) is more valuable than a “promise” to get it back in 30 days …because promises are made to be broken! The fear obviously exists of a failure to deliver in the future, there can be NO other explanation why physical gold in hand is more expensive than gold 30 days in the future. If you would like to tell me that the situation exists because interest rates are negative then please explain to me how interest rates can be negative and the logic behind it!
Andrew Maguire http://kingworldnews.com/andrew-maguire-we-are-now-seeing-stunning-behind-the-scenes-action-in-gold-and-silver/ spoke of this again last Friday, he also spoke of the new “Allocated Bullion Exchange” (ABX)which was set to begin in late April and has been pushed back a few weeks. I must confess to giving out incorrect information last month, I believed this was an offshoot of the SGE, Shanghai Gold Exchange, it is not. Their homepage http://allocatedbullionexchange.com/ is up but not yet fully functional. ABX intends to arbitrage the differences between the various global gold exchanges …on a PHYSICAL basis. In other words, when one buys they ask for delivery and when one sells they will deliver the real product. We will soon see how willing the shorts are to pummel metals prices with weeks or even months worth of global production “on paper”. I believe it is entirely possible to see LBMA cleaned out and followed by COMEX of their inventories within a very short timespan. An operation as such would not require huge amounts of capital, $10-$20 billion should be more than enough to do the trick!
After writing the above, news has come out the IMF board meeting to discuss China’s inclusion to the SDR has been postponed. A decision and announcement must be done prior to sometime in October. I am still of the mind that China will put their cards on table and include audited numbers. Will they request or even demand an audit from the other players? I don’t think they have to overtly, by auditing their own gold they are “politely” asking the others to provide proof of theirs.
I point this out because of the connection involved between backwardation and whether or not the Western powers really do have the gold. The connection is of course the “supply” and whether it will continue to be forthcoming. The arbitrageurs seem not willing to take the risk it won’t be, not even for 30 days. Otherwise the backwardation would not exist. If the supply has in fact been surreptitiously coming from Western vaults and questions come regarding official numbers, the supply may discontinue and the “I want my gold” moment will be at hand.
As Andrew said, “this will accelerate the process of re set”. I agree and would add, it’s been a long time coming, the tail should never have been allowed to wag the dog but then again, in what world do borrowers get paid to borrow? Regards, Bill Holter
end
And now overnight trading in stocks and currency in Europe and Asia
1b Chinese yuan vs USA dollar/yuan weakens to 6.2093/Poor Chinese HSBC PMI below 50 at 48.4
2 Nikkei closed
3. Europe stocks up/USA dollar index up to 95.55/Euro falls to 1.1136/
3b Japan 10 year bond yield: another jump to .37% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 120.22/
3c Nikkei still above 20,000
3d USA/Yen rate now well above the 120 barrier this morning
3e WTI 59.51 Brent 66.87
3f Gold up/Yen down
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. Last night Japan refused to increase it’s QE
3h Oil up for WTI and up for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund rises to 37.0 basis points. German bunds in negative yields from 4 years out.
Except Greece which sees its 2 year rate rises quite a bit to 20.13%/Greek stocks down .13%/ still expect continual bank runs on Greek banks.
3j Greek 10 year bond yield: 10.55% (up 8 in basis point in yield)
3k Gold at 1182 dollars/silver $16.32
3l USA vs Russian rouble; (Russian rouble down 9/10 rouble/dollar in value) 51.95 , the rouble is still the best acting currency this year!!
3m oil into the 59 dollar handle for WTI and 66 handle for Brent/Saudi Arabia increases production to drive out competition.
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/China may be forced to do QE!! (last Monday they lowered its RRR it is effectively doing QE)
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 93.55 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0416 well below the floor set by the Swiss Finance Minister.
3p Britain’s serious fraud squad investigating the Bank of England/ the British pound is suffering/Poor UK manufacturing report today.
3r the 4 year German bund remains in negative territory with the 10 year close to negativity at +.37/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.
3s Last week the ECB increased the ELA to Greece by another large 1.4 billion euros. The new maximum is 76.9 billion euros. The ELA is used to replace depositors fleeing the Greek banking system. The bank runs are increasing exponentially. The ECB is contemplating cutting off the ELA which would be a death sentence to Greece and they are as well considering a 50% haircut to all Greek sovereign collateral which will totally wipe out the entire Gr. banking and financial sector.
3t
3 u. If the ECB cuts off Greece’s ELA they would have very little money left to function.
4. USA 10 year treasury bond at 2.13% early this morning. Thirty year rate well below 3% at 2.84%/yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy zero hedge/Jim Reid Deutsche bank)
Futures Levitate Following Worst Chinese Mfg PMI In One Year, Brent At 2015 Highs; Bund Slide Continues
The good news for stocks started overnight when the final Chinese HSBC Manufacturing PMI printed well below the 49.4 expected, or at 48.9, the biggest contraction in one year, which meant calls for more easing would be imminent. And naturally, after starting off eark, the Shanghai Composite closed near its highs, up 0.9%. However, the good news (for stock) out of China’s deteriorating economy was partially overshadowed by “bad news” for stocks following the final Eurozone Mfg PMI which rose from 51.9 to 52.0, with Germany rebounding from 51.9 to 52.1 even as France missed expectations and continued contracting at a 48.0 PMI.
Finally, a more positive tone out of the Greek negotiations ahead of the country’s May 6 payment to the IMF, should have pushed the Stoxx into the red (because a “fixed” Greece means less ECB liquidity injections and intervention) but a nearly 100 pip swing lower in the EURUSD on no news and no volume to its day lows at 1.113 appears to have kept the sellers in check.
But the best news is twofold: volumes continue to be lethargic with both the UK (May Day bank holiday) and Japan closed until Thursday (Golden Week), while the bulk of the S&P500 has now exited the stock buyback quiet period. As such, ignore record equity outflows – all the matters is that corporate CFOs, flush with brand news bond issuance cash, will tell their favorite Wall Street trading desk to buy stocks at just the right inflection point sending the market surging just as shorts once again test the downtrend and the 50 DMA.
Meanwhile, the bond (and Bund) rout continues, with the 10Y Bund trading wide of 0.40% at last check as Mario Draghi is delighted that he will be able to continue QE much longer than if the entire German curve was trading at -0.2% and thus no longer eligible for purchases.
A deeper look at global markets shows Asian equities mostly rose with Chinese bourses at the forefront in the wake of disappointing Chinese data, with the final Chinese HSBC Mfg PMI posting its largest contraction in a year at 48.9 vs. Exp. 49.4. Shanghai Comp (+0.9%) and Hang Seng (+0.3%) both trade in the black as the poor data led to speculation the government would add to monetary stimulus. ASX 200 (+0.1%) fluctuated between gains and losses as strength in basic materials offset weakness in financials, after Westpac’s earnings (-3.5%), indexes 2nd largest bank, missed street expectations. Of note, Japanese stock markets are closed for the Golden Week holiday.
With the UK out of the market due to the bank holiday, European equities trade higher in a relatively muted session so far, following on from positive closes in Asia. Meanwhile, Syngenta (+7%) leads the gainers in Europe with US listed company Monsanto said to be an interested party in the Swiss agricultural giant. Separately, Infineon (+3.2%) and Dialog Semiconductor (+5.7%) are among the outperformers in Europe with the latter retracing some of last week’s losses and are said to have been awarded a contract to supply a power management socket for the Apple iWatch. According to a note from Deutsche Bank, Infineon are expected to boost guidance on tomorrow when reporting Q2 numbers.
Focus remains on Greece with talks continuing to gain traction following the shake-up of the Greek cabinet, which has helped the GR/GE spread to be the tightest in Europe. Meanwhile, Bunds play catch-up with UST’s due to the Labour Day holiday in Europe with 10y yields sitting above 0.4% for the first time since the start of the ECB’s bond buying programme. Meanwhile, UST trade relatively range-bound amid a lack of fundamental news driving much price action.
The USD-index bounced back off 2 week lows following hawkish comments on Friday prompting broad-based weakness in the EUR, with Greek optimism not yet filtering through to FX markets as uncertainty behind Greece having adequate funds continues to weigh ahead of their IMF payments due on Wednesday and May 12th. However, GBP/USD remains flat despite the heightened expectations of a hung parliament as Labour and the Conservatives look less likely to gain a sole majority heading into Thursday’s election. Ahead of tomorrow’s RBA rate decision, AUD fell for a 4th consecutive session, as participants continued bringing forward rate cut expectations, with OIS pricing in an 80% chance of a 25bps rate cut.
In the energy complex, spot gold has held onto overnight gains despite the firmer USD after Chinese HSBC Manufacturing
PMI (Apr F) M/M 48.9 vs. Exp. 49.4 which is the biggest contraction seen in a year. Elsewhere, WTI and Brent crude are seen higher with Brent crude reaching its highest level in 2015 with nothing fundamental driving price action.
In summary: European stocks rise as continental bourses reopen after May 1 holiday with Danish, Norwegian shares outperforming and Italian underperforming. U.K., Irish exchanges closed for holiday. Among sectors, basic resources, chemicals outperform while autos, banks underperform. Yields on German, French sovereign notes fall while Italian, Spanish yields rise. Brent crude falls in light trading. Gold, silver, PGMs rise. U.S. equity index futures down slightly. Germany April manufacturing PMI is 52.1 vs flash reading 51.9, while Eurozone April manufacturing PMI is 52 vs flash reading 51.9. U.S. factory orders, ISM New York due later.
Market Wrap:
S&P 500 futures little changed at 2101.2
Stoxx 600 up 0.1% to 394.9
US 10Yr yield down little changed at 2.11%
German 10Yr yield down 1bps to 0.37%
MSCI Asia Pacific up 0.1% to 153
Gold spot up 0.4% to $1183.8/oz
Eurostoxx 50 -0.6%, CAC 40 -0.3%, DAX +0.1%, IBEX -0.5%, FTSEMIB -0.5%, SMI +0.1%
Asian stocks rise with the Shanghai Composite outperforming and the Topix underperforming.
MSCI Asia Pacific up 0.1% to 153; Nikkei 225 up 0.1%, Hang Seng down 0%, Kospi up 0.2%, Shanghai Composite up 0.9%, ASX up 0.2%, Sensex up 1.2%
Guo’s Fosun to Buy Ironshore in $1.84b Insurance Deal
Syngenta Rises 12% Amid Takeover Interest From Monsanto
Myriad ‘Actively Looking’ for Acquisitions: WSJ Cites Capone
Letv Sports Website Said Valued at $450m After Funding
Mubadala, Temasek Unit Said to Plan Sale of Dunia
Euro down 0.31% to $1.1164
Dollar Index up 0.09% to 95.38
Italian 10Yr yield up 3bps to 1.52%
Spanish 10Yr yield down 3bps to 1.51%
French 10Yr yield down 1bps to 0.64%
S&P GSCI Index up 0% to 444
Brent Futures down 0% to $66.5/bbl, WTI Futures up 0.1% to $59.2/bbl
LME 3m Copper closed up 1% to $6400/MT on May 1
LME 3m Nickel closed down 1.4% to $13750/MT on May 1
Wheat futures down 0.4% to 472.3 USd/bu
Bulletin Headline Summary from Bloomberg and RanSquawk
A relatively quiet session with the USD -index (+0.2%) bouncing back off 2 week lows and Greek optimism failing to filter through to FX markets
Bunds (-47 ticks) play catch-up with UST’s, after positive data from the US on Friday spurred a selloff in US Treasuries
Treasuries steady overnight, 10Y and 30Y yields holding near highest since early March, after losses last week that pushed 5Y-30Y yields out of 6-week ranges amid bund- led losses for EGBs.
Greece is still far from an agreement with its international creditors as Prime Minister Alexis Tsipras tries to persuade officials to ease the flow of liquidity to the country
Unemployment data on Wednesday will highlight that more than a quarter of Greeks remain out of work, according to economists; EC will also give latest assessment of country this week, will probably cut its 2015 growth forecast
Asian companies are thinking twice about their dealings with European partners as jitters persist over whether Greece will splinter the euro area, the Asian Development Bank’s chief economist said
HSBC/Markit’s final China PMI was at 48.9, missing the median estimate of 49.4 in a Bloomberg News survey and lower than the preliminary reading of 49.2
Two gunmen were killed Sunday in Texas after opening fire on a security officer outside a provocative contest for cartoon depictions of Prophet Muhammad, and a bomb squad was called in to search their vehicle as a precaution, authorities said: AP
Afghan security forces are suffering record casualties in their first battles against the Taliban since the U.S. combat mission in Afghanistan ended in December after more than 13 years
Sovereign bond yields higher. Asian, European stocks higher; U.S. equity-index futures gain. Crude oil, gold and copper higher
DB’s Jim Reid concludes the overnight recap
This morning China released its final April HSBC manufacturing PMI print and it makes for somewhat subdued reading after the figure was revised down 0.3pts to 48.9, the lowest monthly print in 12 months. Having initially declined over a percent, equity markets in China have recovered with the Shanghai Comp (+0.85%) and CSI 300 (+0.86%) both rebounding and no doubt helped by the hope that the soft print adds to the argument for further stimulus for the region. Elsewhere, with a number of markets closed in Asia for public holidays, the region is fairly low on activity however bourses are mostly in positive territory with the Hang Seng (+0.38%), Kospi (+0.35%) and ASX (+0.12%) higher in particular.
Moving on, Greece continues to generate plenty of headlines. Despite the better tone last week that some sort of deal may be announced on the weekend, as we’d largely expected no agreement was made with reports on various wires now suggesting that Greece is aiming for a deal sometime this month. Despite further commentary that progress is being made, key differences are said to still remain around fiscal assumptions and labour and pension reforms which continue to hold up progress. With talks due to resume this morning, a report in Greek press Ekathimerini has caught our attention with the article suggesting that the Greek government is hopeful enough that a common ground will be found to trigger an emergency Eurogroup meeting before this Wednesday. The article notes that Wednesday is an important date given that the ECB may look to increase the haircuts applied to collateral offered by Greek lenders in exchange for liquidity. We expect that significant progress would need to be made between now and then however in order for this to be true.
We’ll review the week ahead in detail later, however quickly looking at the potential market moving events this week, US payrolls on Friday will be the clear focus. In terms of expectations, our US colleagues are expecting a +225k print which matches the current Bloomberg consensus, while they expect the unemployment rate to drop one-tenth to 5.4%. Elsewhere, Thursday’s UK Election will be closely followed while Greece will once again be front and centre.
In terms of the UK General Election, our economics colleagues noted in the Focus Europe piece published on Friday that opinion polls continue to suggest an uncertain outcome with the conservatives now expected to be the largest party by a narrow margin over Labour. This appeared to be backed up by the YouGov poll for the Sunday Times on the weekend which showed the Conservatives at 34% versus Labour at 33%, with UKIP (13%), Liberal Democrats (8%) and the Scottish National Party (5%) following. With the polls extremely close, our colleagues expect that coalition negotiations could be tense and lengthy. In terms of market impact, they note that a labour win would likely see a slower deficit reduction and possibly (modest) higher interest rate rises, while a Conservative government could rattle markets concerned with the promise of an EU referendum.
Looking back at markets on Friday, it was fairly quiet in the European timezone with most equity markets closed (the UK being the exception with the FTSE closing +0.36%), however over in the US the S&P 500 rebounded +1.09% after two previous days of declines, despite a host of softer data prints and a stronger day for the Dollar. Indeed the Dollar, as measured by the DXY recovered +0.74% after seven previous days of declines, while Treasuries continued their weak stretch as the benchmark 10y widened 8.2bps to close at 2.114% – the highest yield since March 13th.
Despite the weaker set of US data on the whole on Friday, the moves in Treasuries appeared to come about following the ISM manufacturing print in particular. With the April headline reading unchanged at 51.5 (vs. 52.0 expected), markets appeared to latch onto some of the finer details in the print which showed new orders (+1.7pts), new export orders (+4pts) and production (+2.2pts) all rising. The employment (-1.7pts) component made for slightly more subdued reading however. Elsewhere, ISM prices paid rose less than forecast to 40.5 (vs. 42.0 expected) while construction spending for March was weak (-0.6% mom vs. +0.5% expected). The final April prints for manufacturing PMI (revised down one-tenth of a point to 54.1) and the University of Michigan consumer sentiment (unchanged at 95.9) were largely as expected – the latter seeing the 1y inflation expectations reading tick up a touch to 2.6% (from 2.5%). Finally vehicle sales also disappointed with total vehicle sales coming in below market (16.5m saar vs. 16.9m expected) for April. Following Friday’s data, the Atlanta Fed GDPNow model lowered its Q2 GDP expectation to +0.8% from the initial +0.9% estimate.
There was also some focus on Fedspeak on Friday which may have contributed to the move in Treasuries on Friday. The Cleveland Fed’s Mester – the first to comment post last week’s FOMC – hovered on the hawkish side after saying that ‘all meetings are on the table’ in relation to a first rate rise. Mester (non-voter) went on to say that ‘we’re getting close to the point where it’s going to be time to lift off, and now it’s going to be this decision based on the data’. The San Francisco Fed’s Williams somewhat reinforced Mester’s comments later in the day, saying that liftoff may be possible at any time but that ‘it would require the data to be good’.
Elsewhere, in Europe equity markets were closed on Friday as mentioned. Bond markets were open however and Bunds extended their recent weakness as the 10y closed wider (+1bp) for the fifth consecutive day (and eighth in nine sessions) at 0.373%, marking a +22bps move on the week. The move over the course of the week was in fact the largest widening move (in basis points) since the first week of 2013. Peripherals on the other hand outperformed as 10y yields in Spain (-7.2bps), Italy (-6.3bps) and Portugal (-3.3bps) all tightened.
Turning over to this week’s calendar now, we kick off this morning in Europe with the final April manufacturing PMI readings for the Euro area, Germany and France. The May Sentix investor confidence reading for the Euro area is also due today also. Over in the US this afternoon, focus will be on the ISM New York followed closed by factory orders data. Moving to Tuesday, the European Commission Economic Forecasts will be of some interest in the morning session, while data wise it’s fairly quiet in Europe with just Euro-area PPI due. It’s busier in the US however, with trade data, the IBD/TIPP economic optimism survey as well as the final April composite and services PMI’s and preliminary ISM non-manufacturing print due. Wednesday’s early attention will be on the April services and composite PMI readings which are scheduled for China (preliminary) as well as the UK (preliminary), Euro-area, Germany and France (all final). March retail sales for the Euro-area will also be of some focus. Over in the US on Wednesday, the April ADP employment change print will be an important prelude for Friday, while we are also due nonfarm productivity and unit labour costs. It’s fairly quiet data-wise on Thursday, with just French industrial and manufacturing production and German factory orders scheduled, however much focus will be on the UK General Election. We’ve got more employment data due in the US on Thursday meanwhile with Challenger job cuts and initial jobless claims readings expected as well as consumer credit. It’s a busy end to the week on Friday with industrial production and trade data expected for Germany, as well trade data for the UK due. Friday’s focus in the US will of course be on the April payrolls. The usual employment associated readings are also due on Friday including the unemployment rate and average hourly earnings. Aside from the data, earnings season continues with 86 S&P 500 companies due and 108 Euro Stoxx companies. Fedspeak will of course warrant much attention with Evans, Williams, George, Kocherlakota and Lockhart expected to speak while the Fed’s Yellen and IMF’s Lagarde are due to speak on Wednesday.
end
Over the weekend..
(courtesy zero hedge)
“Completely Absurd” To Think Greece Won’t Default In May: Official
Facing a pensioner rebellion and a looming €780 million payment due to the IMF on May 12, Greece’s back is now truly against the wall. Last Tuesday, Athens appears to have run out of cash, triggering an 8 hour delay in pension payments which left some pensioners walking away from ATMs empty-handed. This didn’t sit well with the country’s retirees who reportedly disrupted a state pension fund board meeting and demanded that cash reserves not be transferred to the central government as mandated by a decree that came down last month.
Now, with a reshuffled negotiating team (characterized by less Varoufakis and more negotiating), PM Tsipras is racing to strike a deal on reforms that would allow the country’s creditors to disburse the bailout money Athens needs to pay… well, to pay its creditors (we’ll ignore the circular reasoning there for now).
More from Bloomberg:
While talks have picked up pace in recent days, the two sides are still trying to bridge differences on stalled reforms. It isn’t yet clear that there will be enough progress to clinch a deal in time for the planned May 11 meeting of euro-area finance ministers, some officials warned.
“They’re working hard now and that’s what we’ve gained,” Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem told reporters in the Hague. “But in the end we only look at the results and we’re not that far yet.”
Greek Prime Minister Alexis Tsipras told his cabinet on Thursday he’s confident of closing a deal, even as his government sent conflicting signals on its willingness to agree on reforms required under the 240 billion-euro ($268 billion) bailout. Faced with debt payments totaling about 1 billion euros to the International Monetary Fund on May 6 and May 12, Greece hopes there will be enough progress in the talks by next week to allow the European Central Bank to restore liquidity access for the country’s cash-strapped banks…
Dijsselbloem said it was too early to say whether talks with Greece had reached a turning point. While there has been progress in terms of the process after Tsipras reshuffled the negotiating team, pushing aside Finance Minister Yanis Varoufakis, there is still a long way to go on the substance, a person familiar with the matter said, asking not to be named because the talks are private.
The official said that the Greek government’s economic assumptions are very optimistic, making it difficult to agree on the extent of fiscal adjustment measures the country must adopt to meet goals under its bailout.
Despite attempts by both sides to project an air of optimism, the stark reality seems to be that Greece will attempt, to the bitter end, to stick with its “red line” campaign promises as practicality, reality, and the economic suffering of the Greek populace seem to have taken a permanent back seat to Syriza’s desire to hold on to whatever political legitimacy the party has left. Meanwhile, some officials have now suggested that even if a deal were struck this weekend, there simply is no chance that Athens will make the payment due to the IMF on May 12.
Via Bloomberg:
Even if an agreement between Greece and international creditors reached, it would take weeks for the next aid tranche to be paid, Handelsblatt reports, citing people close to the government.
Greek government hoped to pay ~EU750m to IMF on May 12 with help of international creditors: Handelsblatt
It’s “completely absurd” to think money will be transferred by then, as “prior actions” by Greece would be required, approved by Greek parliament, even in the event of a deal: Handelsblatt
And here is Athens which appears to be re-adopting the now infamous “tax driver” approach:
GREECE NEEDS DEAL WITH CREDITORS AS SOON AS POSSIBLE: SPOKESMAN
GREECE RETAINS RED LINES IN NEGOTIATIONS: GOVT SPOKESMAN
So while things do not look particularly promising in terms of avoiding a Greek default in just 10 days’ time, Athens can always (re)play the war reparations card.
From <a href="http://www.reuters.com/article/2015/05/01/us-eurozone-greece-germany-reparations-i