Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1208.90 up $2.00 (comex closing time)
Silver $17.09 up 4 cents (comex closing time)
In the access market 5:15 pm
Gold $1209.50
Silver: $17.13
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 8 notice serviced for 800 oz. Silver comex filed with 1 notices for 5,000 oz
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 243.60 tonnes for a loss of 59 tonnes over that period.
In silver, the open interest fell considerably by 3,517 contracts as Tuesday’s silver price was down by 66 cents as more bankers covered their silver shortfall. The total silver OI continues to remain extremely high with today’s reading at 174,337 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 1 notice served upon for 5,000 oz.
In gold, the total comex gold OI rests tonight at 428,597 for a loss of 2,077 contracts as gold was down by $20.90 yesterday. We had 8 notices served upon for 800 oz.
Today, we had another big changes in inventory at the GLD. We had another withdrawal of 2.98 tonnes and thus the new inventory rests tonight at 715.26 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold.
In silver, /we had no change in silver inventory at the SLV/Inventory rests at 317.930 million oz
We have a few important stories to bring to your attention today…
1. Today we had the open interest in silver fall able 3517 contracts as silver was down in price yesterday by 66 cents. The OI for gold fell by 2077 contracts down to 428,597 contracts as the price of gold was down by $20.90 yesterday.
(report Harvey)
2,Today we had 3 major commentary on Greece:
(zero hedge and Michael Snyder)
3.Greg Hunter interviews Rob Kirby on what would happen if China tells the world it has 30,000 tonnes of gold.
4. China has a major dilemma as each passing month more and more investment dollars are leaving the country
(zero hedge)
5. FOMC minutes (Beige book) released/
(Beige book/Hilsenrath)
6. Dave Kranzler on the train wreck of the USA economy
(Dave Kranzler/IRD)
7. Caterpiller/continues to falter and thus a bellwether for the global economy.
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 2077 contracts from 430,674 down to 428,597 as gold was down by $20.90 yesterday (at the comex close). We are in our next non active delivery month of May and here the OI fell by 2 contracts falling to 139. We had 0 notices filed yesterday. Thus we lost 2 gold contracts or an additional 200 oz will not stand for delivery in May. The next big active delivery contract month is June and here the OI fell by 11,784 contracts down to 175,921. 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 67,828. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day) was good at 208,737 contracts as the bankers continued to use non backed paper against all of that demand as they knocked off a few speculators. Today we had 8 notices filed for 800 oz.
And now for the wild silver comex results. Silver OI fell by 3,517 contracts from 177,854 down to 174,337 as the price of silver was down in price by 66 cents, with respect to Tuesday’s trading. We are into the active delivery month of May where the OI fell by 127 contracts down to 297. We had 124 contracts filed upon with respect Tuesday’s trading. So we lost 3 contracts or an additional 15,000 oz will not stand for delivery in this May delivery month. The estimated volume today was poor at 15,356 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 63,541 contracts which is excellent in volume with mucho help from the high frequency boys.. We had 1 notice filed for 5,000 oz today.
May initial standings
May 20.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
nil
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
4600.19 HSBC, Scotia)
No of oz served (contracts) today
8 contracts (800 oz)
No of oz to be served (notices)
131 contracts(13,100) oz
Total monthly oz gold served (contracts) so far this month
15 contracts(1500 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
164,151.8 oz
Total accumulative withdrawal of gold from the Customer inventory this month
53,054.3 oz
Today, we had 0 dealer transactions
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil oz
we had 0 customer withdrawals
total customer withdrawal: nil oz
We had 2 customer deposits:
i) Into HSBC: 4500.000 oz ???? (not divisible by 32.15
ii) Into Scotia: 100.19
Total customer deposit: 4600.19 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 8 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 (15) x 100 oz or 1500 oz , to which we add the difference between the open interest for the front month of May (xxx) and the number of notices served upon today (8) 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 (15) x 100 oz or ounces + {OI for the front month (139) – the number of notices served upon today (8) x 100 oz which equals 14,600 oz standing so far in this month of May. (.458 tonnes of gold)
we lost 200 oz of gold standing in this May delivery month.
Total dealer inventory: 372,835.022 or 11.596 tonnes
Total gold inventory (dealer and customer) = 7,831,817.010. (243.60) tonnes)
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 243.60 tonnes for a loss of 59 tonnes over that period. Lately the removals have been rising!
end
And now for silver
May silver initial standings
May 20 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
6250.21 (CNT,Delaware)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
783,763.410 oz (CNT,Scotia)
No of oz served (contracts)
1 contract (5,000 oz)
No of oz to be served (notices)
296 contracts (1,480,000 oz)
Total monthly oz silver served (contracts)
2673 contracts (13,365,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
126,359.680 oz
Total accumulative withdrawal of silver from the Customer inventory this month
3,706,175.7 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 2 customer deposits:
i) Into CNT: 594.716.100 oz
ii Into Scotia; 189,047.310 oz
total customer deposit: 783,763.410 oz
We had 2 customer withdrawals:
i) Out of CNT: 5252.1100 oz
ii Out of Delaware; 998.100
total withdrawals from customer; 6250.21 oz
we had 0 adjustments
Total dealer inventory: 60.711 million oz
Total of all silver inventory (dealer and customer) 178.131 million oz
The total number of notices filed today is represented by 1 contract for 5,000 oz. To calculate the number of silver ounces that will stand for delivery in May, we take the total number of notices filed for the month so far at (2673) x 5,000 oz = 13,365,000 oz to which we add the difference between the open interest for the front month of April (xxx) and the number of notices served upon today (1) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the May contract month:
2673 (notices served so far) + { OI for front month of April (2) -number of notices served upon today (1} x 5000 oz = 14,845,000 oz of silver standing for the May contract month.
We lost 3 contracts or an additional 15,000 oz. will not stand for delivery in this active May delivery 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:
May 20./we had another withdrawal of 2.98 tonnes of gold leaving the GLD. Inventory rests tonight at 715.26 tonnes
May 19/no changes in gold inventory at the GLD/Inventory at 718.24 tonnes
May 18/we lost another 5.67 tonnes of gold inventory at the GLD/Inventory rests at 718.24 tonnes
May 15./no change in gold inventory at the GLD/Inventory rests at 723.91 tonnes
May 14./ a huge withdrawal of 4.41 tonnes of gold/Inventory rests at 723.91 tonnes
May 13.2015: no change in inventory at the GLD/Inventory rests at 728.32 tonnes
May 12/no change in inventory at the GLD/inventory rests at 728.32 tonnes
May 11/ no changes at the GLD/Inventory rests at 728.32 tonnes
May 8/ they should call in the Serious Fraud squad as the owners of the GLD just saw 13.43 tonnes of gold leave its vaults heading for China:
Inventory tonight: 728.32 tonnes
May 7. no change in gold inventory at the GLD/741.75 tonnes
May 6/no change in gold inventory at the GLD/741.75 tonnes
may 5/no change in gold inventory at the GLD/741.75 tonnes
may 4/no change in gold inventory at the GLD./741.75 tonnes
May 20 GLD : 715.26 tonnes.
end
And now for silver (SLV)
May 20/no changes at the SLV. Inventory rests at 317.93 million oz/
May 19.2015: we lost another 1.195 million oz of inventory at the SLV/Inventory rests at 317.93 million oz/
May 18.2015: we lost another 1.625 million oz of inventory at the SLV/Inventory rests tonight at 719.125 million oz
May 15./no change in silver inventory at the SLV/inventory rests tonight at 320.75 million oz
May 14/ a huge withdrawal of 1.912 million oz from the SLV/Inventory at 320.75 million oz.
May 13.2015: no changes at the SLV/Inventory rests at 322.662 million oz
May 12/no changes at the SLV/Inventory rests at 322.662 million oz
May 11/no changes at the SLV/Inventory rest at 322.662 million oz
May 8/ today we lost a huge 2.87 million oz of silver from the SLV/Inventory 322.662
May 7/no change in silver inventory/325.53 million oz
May 6/we had a huge withdrawal of 2.143 million oz of silver from the SLV/325.53 million oz
May 5/no change in silver inventory at the SLV/327.673 million oz
May 20/2015 no change in inventory/SLV inventory 317.930 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 7.7% percent to NAV in usa funds and Negative 7.9% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 60.7%
Percentage of fund in silver:38.9%
cash .4%
( May 20/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to-0.18%!!!!! NAV (May 20/2015)
3. Sprott gold fund (PHYS): premium to NAV rises to -14% to NAV(May 20/2015
Note: Sprott silver trust back into negative territory at -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)
It’s Time to Hold More Cash and Buy Gold
By Mark O’ByrneMay 20, 2015No Comments
Share on facebookShare on twitterShare on linkedinMore Sharing Services
– Bank of America advises owning gold
– Markets in “Twilight Zone” transition period
– Fed policy normalisation poses risks
– Own gold and cash to protect against “cleansing drop in asset prices”
– Data show markets disconnected from reality
– Fragile system vulnerable to shock
– Gold is hedge against systemic risks
Gold is a regarded as a hedge against market turbulence by Bank of America who, in a note to clients, advised holding gold and paper currency at this time.
Bloomberg report that Bank of America Merrill Lynch describe the markets as being in a “Twilight Zone” – the zone between the end of QE and the Fed beginning to raise rates to try to bring normality back into the markets.
The note highlights two problems with raising rates which are prolonging this sojourn in the Twilight Zone. The first is that the real economy in the U.S. is not currently strong enough to withstand a rise in interest rates.
The second is that raising rates could cause a shock to the markets and the economy as the practically free money juicing the markets comes at a more realistic cost and some government, corporate and household debts become unserviceable.
For these reasons, Bank of America believe that the Fed is far from taking action to return the markets to normality and “the investment backdrop will likely continue to be cursed by mediocre returns, volatile trading rotation, correlation breakdowns and flash crashes.”
To deal with this they advocate adding gold to one’s portfolio along with higher levels of cash. Citing factors such as liquidity, profits, technological disruption, regulation, and income inequality they say there exists a potential for a “cleansing drop in asset prices.”
The note also indicates that data shows that the stock markets in the U.S. are somewhat disconnected from reality. While investors are apparently optimistic there is a large amount of cash “on the sidelines”. Their chart shows that the high levels of cash currently in reserve actually correspond to periods of extreme pessimism in recent years.
They note the anomaly of near record high stock prices while equity funds haemorrhage cash. “U.S. equity funds have suffered $100 billion of outflows in 2015 while the S&P 500 is near all-time highs”. They put the outflow down to U.S. investors putting cash into European and Japanese equities.
On the other hand, “buying from those not captured in flow data (sovereign wealth funds, pension funds and central banks) could be what’s giving U.S. equity indices a boost.”
The note concludes that the outlook for the markets over the summer is not favourable,
“The summer months offer a lose-lose proposition for risk assets: either the macro improves and the Fed gets to hike, which will at least temporarily cause volatility; or more ominously for consensus positioning, the macro does not recover, in which case EPS downgrades drag risk-assets lower.”
For a host of disparate reasons we cover here consistently – ranging from geopolitical tensions and currency wars to gargantuan unpayable debt and other macro-economic fundamentals – we believe the entire interconnected global economic, financial and monetary systems to be extremely fragile.
As policy makers lurch from crisis to crisis it seems certain that, at some point, their ability to control the outcome of a particular shock will be wanting. History shows that crises usually spring from seemingly minor events. A correction in the stock markets – should it occur – may turn out to be a “cleansing”. But it may precipitate a larger, unforeseen crisis given the fragile state of the system.
In the event of such a crisis – and given the insane levels of debt now extant across the globe there is potential for a serious crisis – physical gold stored outside of the banking system will perform its time-honoured function of protecting wealth.
We offer clients fully, segregated accounts with the most reliable vaults in the world in safe jurisdictions such as Switzerland and Singapore.
Read the storage guides below:
Essential Guide to Gold Storage in Switzerland
Essential Guide to Gold Storage in Singapore
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,206.75, EUR 1,085.33 and GBP 777.57 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,219.65, EUR 1,090.24 and GBP 785.31 per ounce.
Gold fell $17.40 or 1.4 percent to $$1,208.20 an ounce on yesterday, and silver slid $0.56 or 3.17 percent to $17.12 an ounce.
Yesterday, the gold price slipped for the first time in five days after an upside surprise in US housing data bolstered the U.S. dollar.
April building permits came in at 1.14 million surpassing the estimate 1.06 million and housing starts also beat expectations at 1.135 million versus the analyst forecast of 1.02 million. In addition to the housing data the U.S. dollar was also strengthened on the news that the EU is going to ramp up their QE to buy more bonds in the next two months.
The U.S. FOMC meeting minutes from the April 28-29 meeting will be released this evening at 1800 GMT. Investors will be looking for any clues on the timing of the Fed’s first interest rate hike in nearly ten years.
Gold in Singapore near the end of trading fell 0.3 percent to $1,204 an ounce.
Greece’s next deadline is June 5th for a 305 million payment due to the IMF. They will not be able to meet the deadline without a cash for reform deal with their European Union counterparts and the IMF.
In late morning European trading gold is at $1,208.30 an ounce down 0.10%. Silver is off slightly 0.01 percent at $17.12, an ounce, while platinum is up 0.10 percent at $1,154.50 an ounce.
end
Indian citizens are too smart to fall for this scheme:
(courtesy First Post/India/GATA)
Why India’s latest gold paperization scheme will fail like the last one
Submitted by cpowell on Wed, 2015-05-20 04:15. Section: Daily Dispatches
Gold Monetization: Tax-free Interest on Deposits Is Good but Scheme May Fall Short on Many Counts
By S. Murlidharan
Firstpost, Noida, India
Wednesday, May 20, 2015
http://www.firstpost.com/business/gold-monetisation-tax-free-interest-on…
From a forbidding level, except for temples and rich persons, of 500 grams, the just released draft paper allows one to deposit gold as low as 30 grams with banks and earn interest reckoned also in gold.
To wit, if a bank offers to pay 1 percent interest and you have deposited 100 grams, at the end of the year, which is the minimum term for which a lot of 30 grams and more has to be deposited, your gold account would have grown to 101 grams.
There will not be any tax on the monetary value of one gram of gold earned as interest. Nor would there be any capital gains tax on the redemption amount or gold received.In other words, if you had deposited 100 grams valued at Rs 2,500 a gram for one year at the end of which you get back the same gold valued now at Rs 2,600 a gram either in gold or in cash, the extra Rs 100 per gram will not attract capital gains tax.
While exemption from capital gains tax is a continuation of the same policy, the exemption proposed on interest is new, and could be the much-needed sweetener to an extent.
Banks are free to choose the rate of interest which is good for competition and depositors. So far so good.
The moot question is will the inhibitions that marred the earlier gold deposit scheme vanish. The answer sadly is in the negative.
The metal would be melted as hitherto much to the dismay and chagrin of women folk, to whom melting mangal sutra for example is abshagun, inauspicious and a strict no-no. That our ladies routinely lose out to the wicked jewelers on account of wastage but are finicky about melting on sentimental grounds need not detain us.
The tax exemptions mean a lot for those in the 30% income tax bracket as it would heighten the post-tax return on investments but temples and shrines like Tirumala Tirupati Dewastanam (TTD), Shirdi Sai Baba Trust, Mata Vaishneo Devi trust etc. are in any case tax-exempt.
And there is no guarantee that tax sleuths will not come calling hot on deposit, asking for the source, the irritant that bedeviled the earlier schemes as well.
Black money in this country finds sanctuary in real estate and gold. Gold has never come tumbling out of cupboards, lofts, and lockers enticed by interest, which pales before the tax consequences.
It is not also clear why an account holder should state upfront at the time of deposit what he wants on redemption — cash or gold. In all fairness, she should have been allowed this choice at the point of redemption.
There could be other avoidable troubles as well when the process is initiated. First, one has to find the nearest BIS-approved hallmark assaying center for valuation.
The valuation certificate along with KYC norms fulfillment at the bank would lead to the next step — melting. It is not clear if bank branches operating the scheme would all have melting facilities. It would have been better if assaying centres did the job of melting as well.
In any case, it is heartening to note from the draft that melting will not take more than 3 to 4 hours which is a vast improvement over the huge time taken in sending jewelry and gold to smelters in Italy, France, etc. earlier.
All in all it’s old wine in new bottle except that the bottle is a more conveniently sized 30-gram container. But it is unlikely that even a minuscule part of the guessstimated 20,000 metric tonnes of gold the country has is going to come into circulation and apply the brakes on gold imports that accentuate our current account deficit.
Under the extant scheme, hardly 4,000 kilograms have reportedly been mobilised, a drop in the ocean. Would higher interest engendered by competition do the trick?
But banks would be skating on thin ice, with wafer-thin margins that additionally depend on the price of the yellow metal in the interregnum between deposit and redemption when banks get freedom to play around with depositors’ gold.
end
(courtesy Chris Powell/GATA)
Correspondence: How do the market riggers rationalize what they do?
Submitted by cpowell on Wed, 2015-05-20 02:18. Section: Daily Dispatches
Tuesday, May 19, 2015
Dear GATA:
I just listened to GATA Secretary/Treasurer Chris Powell’s interview with Dave Kranzler and Rory Hall on last week’s “Shadow of Truth” program —
http://www.gata.org/node/15341
— in which, at the end, Powell gave reasons for what GATA is doing: free markets, democracy, and transparency in central banking, rather than just making money on a currency reset.
I must admit that I would like to make some money with my gold and silver but agree with those higher reasons.
My question: Why are the guys on the other side so evil and how do they rationalize what they are doing? And are there people who are just as powerful as “the boyz” who can fix this mess? Have we just lost our way? Do we care anymore?
I care and so does GATA, so thanks for all you do.
— T.W.
* * *
Dear T.W.:
Thanks for your kind note. GATA’s people also are hoping to make some money as a result of doing the right thing, though of course lately it has not been very successful.
As for the people on the other side, it would be odd if they were consciously evil. Maybe they sincerely believe that countries and the entire world should be ruled by a secret and unaccountable elite. Since they are the elite, it may be easier for them to believe this, and, after all, with so much social disintegration around us, democracy isn’t as persuasive as it once was.
I’m sure that for the people at the Federal Reserve and Treasury Department it’s also their conception of patriotism, though I think they confuse it with imperialism. If we as Americans are true to our national principles, those principles will be enough for us to lead the world and we won’t need currency market rigging, which corrupts us as badly as it oppresses others.
Who has the power to set things right? I think the great mass of the people always has the power. See the reflection by Orwell’s Winston Smith in “1984” at the beginning of the chapter here:
http://www.george-orwell.org/1984/6.html
But more likely things will be set right, or at least set in a different direction, as the result of strife among almost equally unattractive governments.
Weak as we in the middle are, we may be able to exploit this division. In any case we do what we can and will press on in the morning.
Thanks again for your support.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Turd Ferguson reports on the acceleration in the physical gold drain at the GLD of which I report on everyday.
(courtesy TF Metals/Turd Ferguson/GATA)
TF Metals Report: GLD drain accelerates again
Submitted by cpowell on Tue, 2015-05-19 17:00. Section: Daily Dispatches
1p ET Tuesday, May 19, 2015
Dear Friend of GATA and Gold:
Reported gold inventory in the exchange-traded fund GLD continues to seem like a clue to stress in the gold market, the TF Metals Report’s Turd Ferguson writes today, with that inventory possibly being raided by bullion banks to quell rallies in the gold price. Ferguson’s commentary is headlined “GLD Drain Accelerates Again” and it’s posted at the TF Metals Report here:
http://www.tfmetalsreport.com/blog/6855/gld-drain-accelerates-again
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Dave Kranzler on gold and silver:
(courtesy Dave Kranzler/ iRD)
Silver – And Gold – Are Both Acting Very Bullish
May 20, 2015Financial Markets, Gold, Market Manipulation, Precious Metalsanti-gold terrorism, GLD, Harry Dent, silver eagles, silver miners, SLV
Reader tesitmonial: You’ve written a great report about the “Emerging Silver Producer.” The key is higher silver price but i am concerned about the price of silver though.
I hold my accounts with Sprott and as you know they are super bullish on silver. You have written a couple articles about silver with a positive outlook yourself. I still see the forces who is in control of the prices as too powerful, look what happened yesterday. The ability to drive prices down within one trading (below 17) and extremely negative corresponding move in the mining shares. Its hard to see how silver can be fairly traded in the current system. If you are a producer, you are completely helpless, their fate lies in the goodwill of a view entities who can destroy the business if it suits them.
This person just read my “Emerging Silver Producer” research report but is concerned about the market manipulation of the precious metals. This apprehension is very understandable.
However, after 14 years of full-time involvement in the precious metals sector, I believe the next big move – the second leg of the bull market, if you will – is in its nascence. This was my reply:
The key to yesterday’s price action was that silver held above $17 going into the Comex close. Gold, and especially silver, are behaving differently right now (click to enlarge).
Whereas since their respective peaks in 2011, the market action was characterized by “short all moves higher and cover manipulated price smashings,” now it appears and “feels” like smacks are being bought and and rallies traded but not shorted (other than by the bullion banks feeding paper into the market to cap rallies).
Also, many of us believe that there is a supply issue with silver and gold. 12.7 million ounces of silver have been removed from the SLV vaults since April 27th. 55 tonnes of gold have been removed from GLD since Feb 5th. This is despite the fact that both metals have moved higher in the time period.
The metals have been moving higher in that time period and the GLD/SLV inventories should have, worst case, remained flat. The Comex gold o/i has shot up 107 tonnes since Feb 5. This means there’s investor/trader demand. It also means that GLD more than likely should have been adding gold.
For the last 4 years, the financial media has made a point of broadcasting “investor selling” in precious metals by pointing at the metal decline in GLD. Why is the price going up, investor demand going up, yet the metal stock in GLD is going down? Where is the media on this?
This is not supposed to happen. Higher prices mean more investor demand. More investor demand means that the inventories of SLV and GLD should be at best flat, but more likely increasing – not being liquidated. Someone wants/needs that physical metal.
Yes, the bullion banks are still somewhat in control of the price of gold/silver using paper derivatives. But it appears as if they are losing their ability to cap the prices. I was chatting with john Embry yesterday and we both agree on that. We can’t figure out where the silver is coming from to make deliveries other than from SLV. The massive withdrawals from SLV in the last 3 weeks would confirm that.
Is the next leg about to start? Who knows…BUT, I vividly recall back in 2003 or thereabouts, right before gold was ready to launch over $400 and start an 8 year rally to $1900, Robert Prechter was overtly vociferous about calling for gold to fall to $50.
Currently, Harry Dent – who for reasons unbeknownst to me has an avid following – is loudly proclaiming that gold’s next move is down to $700. “The lady doth protests too much, methinks.” Harry Dent, like Robert Prechter, is a scam artist who’s sole purpose is to sell research. By the way, where has Prechter been lately on gold…
end
Rob Kirby discusses what would happen if China states that they have 30,000 tonnes of gold:
(courtesy Rob Kirby/Greg Hunter/USAWatchdog)
China Gold Could Cause Tsunami of Dollars in US-Rob Kirby
By Greg Hunter On May 20, 2015 In Market Analysis 57 Comments
By Greg Hunter’s USAWatchdog.com
Gold expert Rob Kirby arranges deliveries of the yellow metal to his clients measured by the ton. Kirby says news that China may disclose it has 30,000 tons of gold will be devastating for the West. Kirby contends, “We could be fast approaching the moment when the tide is going to turn and go out, and we are going to find out who’s wearing a bathing suit. I think that time is fast approaching, if it is not here already.” Kirby also says, “I think the implied message is we are going to show you how much we have, and then you are going to have to show us how much you have. . . . America, very likely doesn’t have, in my view, doesn’t have the gold they claim to have. They also probably spent a lot of other people’s gold in safe keeping.”
What would happen to the U.S. dollar if China revealed a vast holding of physical gold? Kirby contends, “If this would destabilize the dollar enough . . . it could cause a sudden drop in the U.S. dollar, which could signal a tsunami of dollars coming back to America and could set off a very, very ugly, ugly bout of inflation, which could build into a hyperinflation in America. This would bring social unrest in America. This is the social unrest the U.S. military and the Pentagon have been saying is inevitable and is coming to America. This is exactly the kind of backdrop you would expect to have before this would occur.”
Kirby points out, “The problem is our global capital markets have become criminal cesspools. Our global capital markets right now are crime scenes. The regulatory regime installed by the leadership of America to prevent this all from happening has been vacant. They are derelict, and they are part of the problem. It starts with the repeal of the Glass Steagall Act back in the late 1990’s. You got to look back to see the context of where this train left the tracks. This is not a derailment. The derailment occurred a long time ago. Right now, the engine of the train is in the middle of a corn field, and it’s still moving.”
On Secretary of State John Kerry’s recent meeting with Russian President Vladimir Putin, Kirby says, “I think increasingly the West is trying to finesse a very bad card hand. When you know you are playing a weakened hand . . . your bets are going to become less aggressive, and you are going to adopt more of a defensive posture and possibly a pleading, and it might get to a begging posture at some point in time. . . . I feel they may want to find some sort of diplomatic track other than what the neocons have been prescribing all along. I think this bellicose belligerent track leads us down the road to nothing but war. I think maybe it’s beginning to hit home . . . how real and palpable the possibilities of war are becoming. If we get war, it will be total war. This is the track the neocons have put America on and the rest of the world. Maybe they are having a come-to-Jesus moment.”
On the timing of the next financial calamity, Kirby says, “It wouldn’t have shocked me if it happened last fall. The only thing I can say empirically is we have been kicking the can down the road for a long time, and when you kick cans down roads . . . none of them go forever, and it comes to a point you run out of road to kick the can, that is assuming that nobody comes in and takes the can away.”
Kirby warns, “People who have their net worth solely in financial assets, paper instruments, are going to witness, at some point, an extreme reduction in their standard of living. That is a fait accompli. It is going to happen. I don’t know what day that is going to happen, but that is a guaranteed outcome from where we are today from the trajectory we are on right now.”
Join Greg Hunter as he goes One-on-One with Rob Kirby who gives what he calls “proprietary macroeconomic research” on KirbyAnalytics.com.
(There is much more in the video interview.)
After the Interview:
Kirby says anyone who is not aware and prepared for what is coming is going to feel like they have been “hit by a train.” Kirby has a newsletter by subscription for a fee of $145 per year. If you are interested in subscribing please click here.
end
And now overnight trading in stocks and currency in Europe and Asia
1 Chinese yuan vs USA dollar/yuan strengthens to 6.2063/Shanghai bourse green and Hang Sang: red
2 Nikkei closed up by 170.18 points or .85%
3. Europe stocks mixed/USA dollar index up to 95.55/Euro falls to 1.1098/
3b Japan 10 year bond yield: slight rises to .40% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 120.96/
3c Nikkei still just above 20,000
3d USA/Yen rate now well above the 120 barrier this morning
3e WTI 58.63 and Brent: 64.92
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 falls to 60 basis points. German bunds in negative yields from 4 years out.
Except Greece which sees its 2 year rate fall slightly to 22.78%/Greek stocks up 0.65%/ still expect continual bank runs on Greek banks./Greek default inevitable/
3j Greek 10 year bond yield rises to: 11.02%
3k Gold at 1208.60 dollars/silver $17.15
3l USA vs Russian rouble; (Russian rouble down 1/4 rouble/dollar in value) 50.03 , the rouble is still the best acting currency this year!!
3m oil into the 59 dollar handle for WTI and 65 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!!
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9390 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0424 well below the floor set by the Swiss Finance Minister.
3p Britain’s serious fraud squad investigating the Bank of England/
3r the 4 year German bund remains in negative territory with the 10 year moving further away from negativity at +.60/
3s Last week the ECB increased the ELA to Greece by another large 2.0 billion euros.This week, they raised it another 1.1 billion and thus at this point the new maximum was 80 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 Greece paid the 700 million plus payment to the IMF last Wednesday but with IMF reserve funds. It must be paid back in 24 days.
3 u. If the ECB cuts off Greece’s ELA they would have very little money left to function. So far, they have decided not to cut the ELA
4. USA 10 year treasury bond at 2.26% early this morning. Thirty year rate well above 3% at 3.05% / yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy zero hedge/Jim Reid Deutsche bank)
Futures Flat With Greece In Spotlight; UBS Reveals Rigging Settlement; Inventory Surge Grows Japan GDP
The only remarkable macroeconomic news overnight was out of Japan where we got the Q1 GDP print of 2.4% coming in well above consensus of 1.6%, and higher than the 1.1% in Q4. Did it not snow in Japan this winter? Does Japan already use double, and maybe triple, “seasonally-adjusted” data? We don’t know, but we do know that both Japan and Europe have grown far faster than the US in the first quarter.
And yet after briefly sliding on this “better than expected” news, the USDJPY ramped up to a multi-month high as the algos seemingly smelled a rat. And indeed, even a cursory look behind the numbers revealed that just like in the US, well over 80% of the “growth” was as a result of a massive inventory restocking, which contributed to 2.0% of the final 2.4% print, suggesting that Q2 GDP may once again be negative if imports continue to be a substantial detractor to growth.
Aside from Japan, it has been a quiet session, with an odd plunge in the EURUSD right around the time the ECB released its delayed press release from the Coeure private meeting with hedge funds the day before. One wonders what the ECB may have leaked to asset managers this time. We will never know, of course, until the “people’s” central bank decides to advise its non-hedge fund clients.
Volumes remain depressingly low which as even the dumbest algo by now know is a green light to resume levitation, and sure enough, after treading water overnight, the ES is now starting its gradual, daily climb higher.
On the key news front, we finally got the terms of the latest and greatest UBS as a “recidivist” settlement with the US government, over Libor, Gold, FX rigging, this time paying $545 million, getting slapped with a 3 year probation this time – one which the bank will promptly flaunt – and not getting criminal charged. In other words, business as usual.
The main other newsflow continues to revolve around Greece, which again reiterated it will not make its June 5 payment to the IMF without more aid (from the IMF) and where the ECB’s Governing Council is set to meet today to debate whether to tighten rules on Greek access to Emergency Liquidity Assistance as the country veers toward default. As Bloomberg reports, the ECB may “imminently” raise discount it applies to collateral Greek banks pledge in exchange for Emergency Liquidity Assistance, Kathimerini newspaper reports, without citing anyone; ECB will, at the same time, expand pool of assets it accepts as collateral.
According to an MNI leak, which lately have been 100% wrong as they serve merely some conflicted hedge fund “source” to exit positions, the Bank of Greece has been said to accept an extra €6 billion in ELA, with the ECB somehow agreeing to accept government-guaranteed bank bonds as collateral. Somehow we very much doubt this.
Far more notable was a note by Moodys, which offloaded on Greek banks and said there is a high likelihood of a deposit freeze for Greek banks. Now even the rating agencies are desperate to accelerate the Greek bank run in hopes of overthrowing the government.
The key event looking ahead will be the FOMC Minutes for the April 28-29 meeting. Look for any instance of “double seasonal adjustment” which will be codeword that the Fed will raise rates oblivious of what the actual data represents.
Asian equities traded mixed following a lacklustre Wall Street close (S&P: -0.06%), as investors squared positions ahead of the FOMC minutes release. Shanghai Comp (+0.65%) continued to outperform, as participants eye the April 28th highs (4,572.39), this time lifted by IT, while the Hang Seng (-0.39%) was dragged lower by energy stocks. Nikkei 225 (+0.85%) touched a fresh 15yr high underpinned by Japanese Q1 Prelim GDP data, which showed the fastest quarterly growth in a year (0.6% vs. Exp. 0.4%, Prev. 0.4%). The ASX 200 (-0.09%) briefly broke below its 200 DMA in volatile trade, after a technical break below long-term support at 5,600.
Ahead of tomorrow’s Eurogroup two-day showdown on Greece, reports this morning in Greek press suggested raising haircuts and widening the asset pool accepted by the ECB are to be discussed at today’s ECB non-monetary policy meeting. This, as well as comments from the Greek Parliamentary Speaker that if a deal is not reached, Greece will not pay its June 5th debt obligation to the IMF weighed on equities, while bolstering Bunds.
Major European equity indices all now trade in the red (Euro Stoxx: -0.35%) after opening in mixed territory as news surrounding Greece guides sentiment, with the European calendar fairly light with the exception of this news and BoE minutes. US earnings today include Target and Lowe’s premarket and Salesforce.com aftermarket.
In fixed income markets, Bunds (+16 ticks) continue to outperform their US equivalent with USTs (-3 ticks) remaining weighed on by the large corporate issuance this month. Any source comments regarding Greece throughout the session could prove significant as the ECB are not expected to make any official statement, with any potential decisions to make their way to the market via source comments.
EUR/USD broke below its May low this morning after falling 90 pips on the aforementioned headline regarding Greece, however pared some of these losses throughout the session helped by corporate demand following the news that Altice (+7.5%