Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1179.90 down $6.20 (comex closing time)
Silver $15.95 unchanged (comex closing time) **3rd straight day closing unchanged
In the access market 5:15 pm
Gold $1182.00
Silver: $16.03
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 26 notices serviced for 2600 oz. Silver comex filed with 0 notices for 30,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 250.66 tonnes for a loss of 52 tonnes over that period.
In silver, the open interest rose by another 146 contracts even though Wednesday’s silver price was unchanged. The total silver OI continues to remain extremely high with today’s reading at 189,670 contracts now at multi-year highs despite a record low price. In ounces, the OI is represented by 948 million oz or 118% of annual global silver production (ex Russia ex China). 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 as they continue to raid as basically they have no other alternative.
In silver we had 0 notices served upon for nil oz.
In gold, the total comex gold OI rests tonight at 405,851 for a loss of 218 contracts despite the fact that gold was up $8.80 yesterday. We had 26 notices filed for 2600 oz.
Late last night, we had a huge withdrawal in gold inventory at the GLD to the tune of 1.5 tonnes. Thus the inventory rests tonight at 704.22 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 another huge addition of 1.126 million oz in silver inventory at the SLV/Inventory rests at 326.918 million oz
We have a few important stories to bring to your attention today…
1. Today, we had the open interest in silver rise by 146 contracts despite the fact that silver was unchanged in price. The OI for gold fell by 218 contracts down to 405,851 contracts despite the fact that the price of gold was up by $8.80 on Wednesday.
(report Harvey)
2. Today, 6 important commentaries on Greece
zero hedge, Bloomberg, Kathimerini, Raul Meijer)
4. Dave Kranzler of IRD talks about the signs that indicate an economic collapse
(Dave Kranzler iRD)
5. Ukraine debt problems (2 stories)
(zero hedge
6. USA data and commentaries: 4
i) Retail sales rebound
ii) Initial jobless claims rise as does continuous claims
iii) Business inventories rise/also business inventories over sales ratio rises signalling recession.
iv)Channel stuffing in the car industry
7. Precious metals trading overnight from Asia/Europe
(Goldcore)
8. Trading from Asia and Europe overnight
(zero hedge)
9. Trading of equities/ New York
(zero hedge)
we have these plus other stories to bring your way tonight. But first……..
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 218 contracts from 406,069 down to 405,851 despite the fact that gold was up $8.80 yesterday (at the comex close). We are now in the big active delivery contract month of June. Here the OI fell by 177 contracts down to 788. We had 0 notices served upon yesterday. Thus we lost 177 contracts or an additional 17,700 oz will not stand for delivery. No doubt, again, we had a huge number of cash settlements and the farce continues. The next contract month is July and here the OI fell by 82 contracts down to 815. The next big delivery month after June will be August and here the OI fell slightly by 542 contracts to 267,443. No doubt that the cash settled June contracts, having been bought out for fiat, rolled into August. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 78,328. The confirmed volume on Wednesday (which includes the volume during regular business hours + access market sales the previous day) was poor at 134,916 contracts. Today we had 26 notices filed for 2600 oz.
And now for the wild silver comex results. Silver OI rose by 146 contracts from 189,524 up to 189,670 despite the fact that the price of silver was unchanged, with respect to Wednesday’s trading. The front non active delivery month of June saw it’s OI fall by 6 contracts to 28. We had 6 contracts delivered upon yesterday. Thus we neither gained nor lost any silver ounces that will stand for delivery in this non active June contract month. The estimated volume today was poor at 27,203 contracts (just comex sales during regular business hours. The confirmed volume on Wednesday (regular plus access market) came in at 56,196 contracts which is very good in volume. We had 6 notices filed for 30,000 oz today.
June initial standing
June 11.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
4004.539 oz (Scotia)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
171,780.89 oz (Brinks,JPMorgan)includes 5,000 kilobars JPM
No of oz served (contracts) today
26 contracts (2600 oz)
No of oz to be served (notices)
762 contracts (76,200 oz)
Total monthly oz gold served (contracts) so far this month
2625 contracts(262,500 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
nil
Total accumulative withdrawal of gold from the Customer inventory this month
97,169.2 oz
Today, we had 0 dealer transaction
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil oz
we had 1 customer withdrawals
i) Out of Scotia: 4004.539 oz
total customer withdrawal:4004.549 oz
We had 2 customer deposits: and the farce continues
i) Into Brinks: 11,030.89 oz
ii) Into JPMorgan: 160,750.000 oz (5,000 kilobars)????
Total customer deposit: 171,780.89 oz
We had 1 adjustment:
i) Out of the Manfra vault:
104.458 oz was adjusted out of the dealer and this landed into the customer account of Manfra.
Today, 0 notices was issued from JPMorgan dealer account and 10 notices were issued from their client or customer account. The total of all issuance by all participants equates to 26 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 10 notices were stopped (received) by JPMorgan customer account
To calculate the total number of gold ounces standing for the June contract month, we take the total number of notices filed so far for the month (2625) x 100 oz or 262,500 oz , to which we add the difference between the open interest for the front month of June (788) and the number of notices served upon today (26) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the June contract month:
No of notices served so far (2625) x 100 oz or ounces + {OI for the front month (788) – the number of notices served upon today (26) x 100 oz which equals 338,700 oz standing so far in this month of June (10.53 tonnes of gold). Thus we have 10.53 tonnes of gold standing and only 17.07 tonnes of registered or for sale gold is available:
Total dealer inventory 548,644.134 or 17.06 tonnes
Total gold inventory (dealer and customer) = 8,058,891.243 (250.66 tonnes)
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 250.66 tonnes for a loss of 52 tonnes over that period.
end
And now for silver
June silver initial standings
June 11 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
638,586.551 oz (CNT,Brinks,Delaware)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
1,250,209.915 oz (Scotia,JPM)
No of oz served (contracts)
0 contracts (nil oz)
No of oz to be served (notices)
28 contracts(140,000 oz)
Total monthly oz silver served (contracts)
220 contracts (1,100,000)
Total accumulative withdrawal of silver from the Dealers inventory this month
526,732.4 oz
Total accumulative withdrawal of silver from the Customer inventory this month
3,919,695.4 oz
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawals:
total dealer withdrawal: nil oz
We had 2 customer deposits:
i) Into Scotia: 643,616.200 oz
ii) Into JPMorgan: 606,593.715 oz*** (6th straight day of an above 500,000 oz silver deposit)
total customer deposit: 1,250,209.915 oz
We had 3 customer withdrawal:
i) Out of Brinks: 996.800 oz
ii) Out of CNT: 611,318.53 oz
iii) Out of Delaware: 26,271.221 oz
total withdrawals from customer; 638,586.551 oz
we had 0 adjustment
Total dealer inventory: 57.845 million oz
Total of all silver inventory (dealer and customer) 179.712 million oz
The total number of notices filed today is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in June, we take the total number of notices filed for the month so far at (220) x 5,000 oz = 11,000,000 oz to which we add the difference between the open interest for the front month of June (28) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the June contract month:
220 (notices served so far) + { OI for front month of June (28) -number of notices served upon today (0} x 5000 oz ,= 11,140,000 oz of silver standing for the June contract month.
we neither gained nor lost any silver ounces standing for this no active delivery month of June.
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:
June 11/we had another huge withdrawal of 1.5 tonnes of gold from the GLD/Inventory rests tonight at 704.22 tonnes
June 10/ we had a huge withdrawal of 2.98 tonnes of gold from the GLD/inventory rests at 705.72
June 9/ no change in gold inventory at the GLD/Inventory rests at 708.70 tonnes
June 8/ a big withdrawal of 1.19 tonnes of gold from the GLD/Inventory rests at 708.70 tonnes
June 5/no change in gold inventory at the GLD/Inventory rests at 709.89 tonnes
June 4/ no change in gold inventory at the GLD/Inventory rests at 709.89 tonnes
June 3/late last night: a huge withdrawal of 4.18 tonnes. Tonight’s inventory rests at 709.89
June 2/no change in gold inventory at the GLD/Inventory rests at 714.07 tonnes
June 1/ we had a huge withdrawal of 1.79 tonnes of gold from the GLD/Inventory rests tonight at 714.07 tonnes
May 29/ no changes in gold inventory at the GLD/Inventory rests at 715.86 tonnes
June 11 GLD : 704.22 tonnes.
end
And now for silver (SLV) Please note the difference between GLD and SLV. GLD has been depleting of gold/SLV has been adding to its inventory.
June 11.2015: we had another monster of an addition to the tune of 2.791 million oz/Inventory rests at 326.918
June 10/another monster of an addition to the tune of 1.126 million oz/Inventory rests at 324.127
June 9/ a monster of an addition to the tune of 3.393 million oz/inventory rests at 323.001 million oz.
June 8/no change in inventory/SLV inventory rests at 319.608 milion oz.
June 5 a huge addition of 1.433 million oz of silver added to the SLV/Inventory at 319.608 million oz
June 4/no change in silver inventory/rests tonight at 318.175 million oz
June 3/ we had a small withdrawal of 138,000 oz of silver inventory/Inventory rests at 318.175 million oz
June 2/ we had a huge addition of 1.243 million oz of silver inventory at the SLV./Inventory rests at 318.313 million oz
June 1/no change in inventory at the SLV/Inventory rests at 317.07 million oz
May 29/no changes in inventory at the SLV/Inventory rests at 317.07 million oz
June 11/2015:a huge addition of 1.50 million oz of silver/ inventory at the SLV now rests at 326.918 million oz/ lately silver has been rising at the SLV with a constant price of silver!!
end
And now for our premiums to NAV for the funds I follow:
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 7.5% percent to NAV in usa funds and Negative 7.7% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.8%
Percentage of fund in silver:37.8%
cash .4%
( June 11/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to +.06%!!!!! NAV (June 11/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to – .47% to NAV(June 11/2015
Note: Sprott silver trust back into positive territory at +.06%.
Sprott physical gold trust is back into negative territory at -.47%
Central fund of Canada’s is still in jail.
Sprott formally launches its offer for Central Trust gold and Silver Bullion trust:
SII.CN Sprott formally launches previously announced offers to Central GoldTrust (GTU.UT.CN) and Silver Bullion Trust (SBT.UT.CN) unitholders (C$2.64)
Sprott Asset Management has formally commenced its offers to acquire all of the outstanding units of Central GoldTrust and Silver Bullion Trust, respectively, on a NAV to NAV exchange basis.
Note company announced its intent to make the offer on 23-Apr-15 Based on the NAV per unit of Sprott Physical Gold Trust $9.98 and Central GoldTrust $44.36 on 22-May, a unitholder would receive 4.45 Sprott Physical Gold Trust units for each Central GoldTrust unit tendered in the Offer.
Based on the NAV per unit of Sprott Physical Silver Trust $6.66 and Silver Bullion Trust $10.00 on 22-May, a unitholder would receive 1.50 Sprott Physical Silver Trust units for each Silver Bullion Trust unit tendered in the Offer.
* * * * *
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)
Just take a look at silver imports into India. For the first 4 months almost 3,000 metric tonnes were imported (96.4 million oz). If this continues then silver imports for the year will be 289 million oz. The world produces ex China ex Russia around 700 million oz. Thus India will be using over 41% of annual global production.(ex China ex Russia)
Indian Silver Demand Explodes to US Silver Owners’ Delight
By Stephen FloodJune 11, 20150 Comments
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– India may absorb as much as one third of total global silver production this year
– Strong demand for silver steadily increasing year by year
– Indian citizens and solar industry take advantage of current low prices in silver
– U.S. silver imports still enormous despite ostensible decline in demand
The first four months of 2015 saw India import possibly as much as 3,000 tonnes of silver bullion. If the momentum is maintained India is on track to import a staggering 9,000 tonnes over the course of 2015.
This would represent almost one third of total annual mine supply globally. Worldwide mine supply was 877 million troy ounces (27,277 metric tonnes).
It would represent a 27% increase in India’s 2014 silver imports of 7063 tonnes which itself was a 13% increase on the 2013 figure showing a steadily growing demand for physical silver in India with each passing year.
According to srsroccoreport.com, who compiled the data, it is Indian citizens who are the driving force behind the record demand for silver in India. We would speculate that India’s commitment to solar power may also be a factor.
Back in 2009, the Indian government set a target of 20GW of solar power generation by 2020. However, in January of this year the government dramatically reaffirmed its commitment to solar power by setting a new target of generating 100GW by 2022.
Solar power is generated by photovoltaic cells which rely upon silver for their manufacture. While PV cells used in India are predominantly manufactured in China it may be that Indian investors may be accumulating silver in anticipation of growing demand for PV cells – China also has a highly ambitious solar power program – or it may be that the government itself is stockpiling supplies to protect against supply disruptions.
Srsroccoreport.com also point out that silver imports into the U.S. continue to be enormous. They speculate that this is due to a handful of institutions and high net worth individuals buying silver while sentiment among the wider public remains pessimistic – a good contrarian indicator.
Silver is a useful component in any portfolio. While like all markets today, it is quite volatile, an allocation to physical silver compliments gold as a diversification and is a leveraged form of gold due to its tendency to outperform gold and provide higher returns in bull markets.
Many investors store silver in secure safe haven storage vaults, many more store silver with the Perth Mint Certificate Program, which allows investors to store silver at low cost and in the comfort of a government guarantee. At GoldCore, we have long believed that silver is an integral part of a portfolio of precious metals. The percentage of silver, depending on your attitude to risk and advice from your financial planner, should not make up more than 25% of your precious metal allocation.
A Word of Caution When Buying Silver: As a long term investor it is critical that you do not buy from a closed market digital metal provider who may entice you with ultra cheap premiums. For starters you may be limited in how you can sell your silver, should the time come, as the only market available to you will be the one made by the provider and the fees they charge may be subject to change at a moments notice. Short term investors may well be safe in such programs but for those with longer time horizons – safety and flexibility should trump all other considerations.
Webinar: All You Need To Know About Silver In 60 Minutes
Must Read Guide:7 Key Gold and Silver Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,180.50, EUR 1,049.19 and GBP 763.51 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,186.00, EUR 1,049.19 and GBP 767.86 per ounce.
Gold climbed $9.70 or 0.82 percent yesterday to $$1,186.20 an ounce. Silver rose $0.05 or 0.31 percent to $16.03 an ounce.
Gold remained steady today after a three day rally buoyed by safe haven bids because of the Greek debt crisis and a weaker U.S. dollar.
Gold in Singapore for immediate delivery was hovering at $1,185.36 an ounce near the end of the day, and gold in Switzerland also fell.
Gold looks undervalued at these levels and is over due a bounce. Greece should support gold and potentially push it higher before the important June end deadline.
The psychological price level of round number $1,200 per ounce will offer resistance but should gold rise above it, we would expect a move to $1,250.
However, bearish sentiment is still apparent in gold ETF’s as SPDR Gold Trust, the world’s largest, has seen its holdings dip 0.21 percent, its lowest since 2008.
Traders will watch the U.S. retail sales data for any hints on the U.S. economic outlook. Analysts predict a rise in U.S. retail sales of 1.1 percent for May versus 0 percent. Another good number could see an interest rate rise from the U.S. Federal Reserve happen later this year instead of 2016.
In late European trading gold is down 0.57 percent at $1,179.50 an ounce. Silver is off 1.09 percent at $15.86 an ounce, while platinum is down 0.73 percent at $1,106.80 an ounce.
Breaking News and Research Here
end
The justice department looking into collusion in the gold and silver markets?? No it cannot be so!!
(courtesy Bloomberg)
Justice Department looks for rigging in Treasuries, gold, silver, oil
Submitted by cpowell on Thu, 2015-06-11 02:18. Section: Daily Dispatches
Treasuries Collusion Said to Be Hunted in New Wave of Probes
By Keri Geiger and Matthew Leising
Bloomberg News
Wednesday, June 10, 2015
The Justice Department has begun an examination of trading in the U.S. Treasury market, following the outlines of its successful cases against Wall Street’s illegal practices in foreign currencies and other businesses, said three people familiar with the inquiry.
The government is also continuing to look into possible collusion in gold and silver markets and in trading around certain oil benchmarks, the people said.
Though the latest inquiry into Treasury trading is in its earliest stages, investigators are said to be probing whether information is being shared improperly by financial institutions.
Some of the world’s biggest banks and their subsidiaries pleaded guilty after traders were shown to be using chat rooms, which functioned as cartels, to coordinate positions on foreign-exchange markets. These practices violated federal antitrust laws. Some of the same banks were among those that settled fraud and antitrust investigations into manipulating key interest rates. …
… For the remainder of the report:
http://www.bloomberg.com/news/articles/2015-06-10/treasuries-collusion-s…
end
(courtesy Lawrence Williams/Mineweb)
Gold: The US sets the price but Asia does the buying
It seems illogical that gold price movement seems to be dominated by US internal factors while most gold trade is elsewhere.
Lawrence Williams | 11 June 2015 08:57
LONDON – What’s driving the gold price? At the moment it seems to be a succession of knee-jerk reactions to U.S financial data which push the gold price up or down, depending on the perception as to whether the data will likely bring the US Fed’s proposed interest rate rise programme forward or move it backwards. It really isn’t a logical situation – but where’s the logic in the precious metals markets anyway? To many, gold is a relatively underutilised metal which works well as jewellery, but nowadays has little else going for it apart from a long history of monetary usage which nowadays may have had its time. Bankers and economists discount its usefulness as such.
But much of the world still sees gold as the ultimate money and wealth protector and curiously, given the amount of bad press and supposed economic downgrading suggested by much of the financial establishment, the world’s top economic institutions – namely the world’s central banks – are still loath to part with it. The central banks of the US, Germany, France, Italy, Portugal, the Netherlands – even Greece, Venezuela and Cyprus– hold over 50% of their foreign exchange reserves in gold according to IMF official statistical data. Indeed the US holds some 73.7% of its reserves in gold. Meanwhile some central banks which now see themselves deficient in the amount of gold they hold – of which perhaps the most significant is Russia – are buying gold to add to their reserves. Not bad for a metal apparently with no monetary purpose nowadays.
While we note that some central banks are buying, perhaps the biggest buyer of all is China. But it’s not saying. Its official gold reserve is only 1,054 tonnes and has not been added to (or it has not reported any additions to the IMF) for six years, although it is widely believed to be buying gold in quantity and ‘hiding’ it in government accounts it is not reporting to the IMF. Indeed estimates of the amount of gold China really holds vary from the 1,054 tonnes as officially reported through to a massive 30,000 tonnes plus as suggested by Alasdair Macleod, the Head of Research for Gold Money. Macleod’s figure is generally dismissed by other gold analysts and a consensus figure of perhaps 3,500 tonnes for the Chinese holdings seems to be emerging, but as Macleod pointed out in a recent interview, China could report its gold reserve at whatever level it likes, or feels would suit it in the political great game.
Be this as it May, the fact remains though that today the price of gold is set in the US but the vast majority of physical metal is being bought by people in Asia – mostly China and India, the world’s two largest consumers which between them are accounting for most of the world’s newly mined gold on their own. It thus seems strange that the price is being set elsewhere. The Chinese in particular seem happy to go with the flow – it keeps the potential cost of accumulating additional reserves relatively low, if indeed it is so doing. But at the same time there does seem to be an element of price control creeping in. Economists in the West have been almost unanimous in talking the gold price down – perhaps to levels of around $1,000 or less. But every time the gold price falls much below $1180 it seems to falter and recovers back towards the $1,200 level again. This seems to be proving to be a very strong resistance range on the downside. Could it be that the Chinese in particular are loath to let the price fall given that the nation as a whole (i.e. the government) has indirectly pushed its citizens into buying precious metals through advertising the benefits in state-controlled media. Mineweb published an article on this back in 2009 and its still worth reading –China pushes silver and gold investment to the masses as some of the points made in the article have indeed come about since, and it was then we first surmised that China might be looking to move a significant proportion of its foreign reserves into gold. 2009 was the year gold surged upwards through the $1,000 level for the first time and also the year when China last reported an increase in its official gold reserve to the level it is at today.
We also suggested then that the nation was unlikely to ‘pull the rug out from under millions of investors’ hence the suggestion above that it may well be that it is China which is supporting the gold price at current levels every time it looks like falling back much below the $1,180 level.
China is also making a number of moves which in themselves would look to be gold price supportive in the longer term. The latest is the Chinese Silk Road initiative and a related $16 billion Silk Road gold fund – the latter being announced earlier this year. This also ties in with the China-led Asian Infrastructure Investment Bank (AIIB) which will rival the World Bank and the IMF, while Alasdair Macleod comments that the Chinese will likely also set up a rival to the IMF’s Special Drawing Right (SDR) currency basket – and go ahead with this if it is excluded again from its currency becoming a part of the existing SDR when this is due to be reconsidered in October. Macleod reckons this would include an element of gold in its make-up. There are thus a number of initiatives currently under way, largely led by a China-Russia axis, to move the centre of gravity of the global trading system away from its current US domination – and the more the U.S. tries to counter the rise in Chinese influence to protect this the more likely China and its allies (notably Russia) are to develop new alternatives as we are already seeing – and gold may well play a part, although to what extent is still uncertain.
But gold is certainly part of the Chinese agenda. The fact that US interest rates might rise by a quarter of a basis point is of absolutely no significance at all to those who are actually buying gold in China and India and this is likely yet another area where there has to be a medium to long term move to wrest this pricing control away from the US and London. This is already in process with the likelihood of a Shanghai ‘Gold Fix’ possibly coming in to play later this year to rival London and with the rise of precious metals commodities and futures exchanges in Shanghai, Hong Kong and Singapore. The days of gold price dominance by the US markets look to be on their way out. It may take a little time yet but the portents are that financial domination is gradually moving east with little the traditional market makers can do about it, although exactly what this might do to metals prices is also uncertain.
end
Dave Kranzler on various indicators suggesting that the system is collapsing:
(courtesy Dave Kranzler/IRD)
SoT #35: The System Is Collapsing – Time To Get Physical
June 11, 2015Financial Markets, Gold, Market Manipulation, Precious Metals, U.S. Economyeconomic collapse, Shadow of Truth, silver, stock market bubble
The global economic system, including and especially the U.S. economy, is starting to collapse. Negative economic reports have been continuously streaming since late last fall. Even by the Government’s own manipulated numbers, the GDP in the U.S. contracted in Q1. From the majority of the economic reports for April and May – nothwithstanding the absurdly fraudulent U.S. Government non-farm payroll report – it is likely that Q2 GDP will be at least as negative as it was in Q1.
Interestingly, and something which has gone completely unnoticed, there’s been a big rally in the junior mining stock sector, which is up 18% since March 10. The junior mining stock sector of the market has outperformed everything since March. This tells us that the smartest money is expecting a big move in gold and silver (click to enlarge):
That makes sense because of what the other markets are telling us. The Shanghai Containerized Freight Index and the Baltic Dry Index are both telling us in tandem with each other that the global economy is tanking – it’s done – it’s toast. – Rory Hall, Shadow of Truth
Perhaps most puzzling is that, in the face of contracting economic activity, bond yields in the big western economies are spiking higher (see below). This should not be occurring. In our opinion, not only is the system collapsing but the Fed and ECB are losing their ability to control the markets, with spiking bond yields as primary evidence.
In this latest Shadow of Truth market update, we discuss some of the big indicators telling us that the system is collapsing.
Since early April, the yield on the 10yr Treasury has spiked up 38%. This graph below shows the big move lower in the price of the 10yr Treasury (price moves in the opposite direction of yield – Central Banks and big investor – e.g. pension funds – have lost $10s of billions in their Treasury positions since early April – derivatives losses are trebled in magnitude – click to enlarge:
This graph shows the recent big spike up in the German 10yr bund yield:
end
And now overnight trading in stocks and currency in Europe and Asia
1 Chinese yuan vs USA dollar/yuan weakens to 6.2065/Shanghai bourse green and Hang Sang: green
2 Nikkei closed by by 336.61 points or 1.68%
3. Europe stocks all in the green/USA dollar index up to 95.06/Euro falls to 1.1265
3b Japan 10 year bond yield: rises to .53% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 123.64/very ominous to see the Japanese bond yield rise so fast!!
3c Nikkei still just above 20,000
3d USA/Yen rate now well above the 123 barrier this morning
3e WTI 60.65 and Brent: 64.97
3f Gold down/Yen up
3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil down for WTI and down for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund rises to 1.020 per cent. German bunds in negative yields from 3 years out.
Except Greece which sees its 2 year rate fall slightly to 25.51%/Greek stocks up 7%/ still expect continual bank runs on Greek banks /Greek default inevitable/
3j Greek 10 year bond yield rises to: 11.65%
3k Gold at 1179.40 dollars/silver $15.90
3l USA vs Russian rouble; (Russian rouble down 1/3 in roubles/dollar in value) 54.76,
3m oil into the 60 dollar handle for WTI and 64 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 .9347 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0527 just above the floor set by the Swiss Finance Minister.
3p Britain’s serious fraud squad investigating the Bank of England/
3r the 3 year German bund remains in negative territory with the 10 year moving further away from negativity at +.102/
3s Eight weeks ago, the ECB increased the ELA to Greece by another large 2.0 billion euros.Six weeks ago, they raised it another 1.1 billion and then two weeks ago they raised it another tiny 200 million euros to a maximum of 80.2 billion euros. Two weeks ago, the limit was not raised. Last week, the ECB raised the ELA by 1/2 billion euros to 80.7 billion euros. Yesterday, it was raised by a huge 2.3 billion euros to 83.0 billion.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. The funds are deferred to June 30.
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 2.49% early this morning. Thirty year rate well above 3% at 3.21% / yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Futures Flat As Latest Greek Euphoria Questioned; Chinese Economy Bounces In Night Of Rate Cuts
It has been a mostly quiet overnight session with Europe solidly green on another bout of Greek hope even as Bundesbank’s Weidmann warned that Greek insolvency risks are rising and Greece reporting that its unemployment rose once more from 26.1% to 26.6% in Q1, in which we got two more rate cuts by New Zealand(which sent the Kiwi crashing the most since 2011) and South Korea which used the Mers outbreak as a pretext(the Won initially dipped only to rebound) but China stole the stage with its latest report on retail sales, industrial production, and fixed investment all of which showed a modest bounce from multi-year lows suggesting the PBOC’s attempts to shock the economy into growth may be starting to work (which is bad news for the market).
However, while we expect the usual barrage of fake Greek optimistic rumors, today’s main event will be the US retail sales report, which has missed in 4 of the past 5 months, which however will lead to nothing but market pain should it come solidly above the consensus estimate of 1.2%, as it would put a September rate hike further in the cross hairs.
A more detailed take from Goldman on China’s key leading data reported overnight:
May activity data appears mixed but the most important – Industrial Production (IP) data – showed early signs of an acceleration to trend growth level. We believe sequential growth in IP is likely to show more signs of strength in the following months as policy loosening has turned more aggressive since the start of June.
This sequential IP growth rebound happened amid a combination of domestic loosening initiatives (monetary, fiscal and administrative), less seasonal drag from the heightened anti-corruption campaign (2Q seasonally generally has a smaller share of corruption related activities anyway), and stronger exports growth (less drag from RMB effective exchange rate as the USD has weakened modestly since April and the RMB has been very stable against it, and stronger global demand).
Policy makers are likely to view the activity data as mixed as they tend to attach more weight to FAI and retail sales data than we do. A breakdown by sector showed that despite manufacturing, FAI in all sectors decelerated on a ytd yoy basis.
As a result of this latest activity data, and other factors such as slow fiscal expenditure growth data in May (back to low single digit yoy growth), we believe policy makers will retain a clear loosening bias, at least in the near future. The recent release of central government inspection teams and the announced urge to accelerate fiscal expenditure growth have revealed this bias. These measures were key pillars of the “second phase” of more aggressive loosening in 1H 2014, although they occurred earlier in the year (in May instead of June this year) which led to the meaningful acceleration in sequential growth which peaked in June 2014. We expect to see a similar acceleration this year, although it may be less dramatic sequentially but potentially more long lasting as the loosening measures this year are more dependent on local government bond issuance (instead of frontloading of annual fiscal expenditure) and more fundamentally on the way fiscal deposits are managed.
Exhibit 1: Activity data summary
Exhibit 2: Fixed asset investment breakdown
Further proof that China’s unprecedented easing steps are bearing fruit if only for the time being was China’s M2 which rose 10.8% Y/Y in May, up from a multi year low of 10.1% last month, and above expectations of 10.4%.
Additionally total social financing was Rmb 1220 bn in May vs. consensus of Rmb 1132.5 bn and an April print of Rmb 1050 bn.
Should this trend continue, hopes of constant PBOC easing will soon be dashed, which in turn would lead to a huge market correction in China.
A quick look at markets around the globe starts in Asia where stocks mostly rose in tandem with the rebound across global equities which saw the S&P 500 close back above its 50 and 100 DMAs, and the DJIA finish above 18000. Consequently, the ASX 200 (+1.4%) and Nikkei 225 (+1.6%) trade near their best levels, with the latter posting its first gain in 5-days. Shanghai Comp (+0.4) closed higher with support stemming from the strong Industrial Production reading. Chinese Retail Sales (May) Y/Y 10.1% vs. Exp. 10.1% (Prev. 10.0%) Ind. Prod. (May) Y/Y 6.1% vs. Exp. 6.0% (Prev. 5.9%).
European equities take the lead from the strong closes seen across US and Asian equities, with Greek assets outperforming in Europe in the wake of yesterday’s source comments which suggested that Germany may accept one of Greece’s proposals in order to reach a staggered agreement on aid. Greek banks (National Bank of Greece +11.9%, Alphabank +10.5%) are seen outperforming in Europe and seemingly undeterred by the S&P downgrade of Greece’s sovereign credit rating to CCC from CCC+. Despite indications of a breakthrough in negotiations between Greece and its creditors, downbeat comments from ECB’s Weidmann cooled the short lived optimism after warning that time is of the essence and the risk of a default is increasing on a daily basis which sent a bid tone through Bunds.
Officials in Brussels have warned that the ECB could raise collateral requirements for Greek banks, unless Greece comes up w