Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1180.40 down $4.80 (comex closing time)
Silver $15.96 down 12 cents.
In the access market 5:15 pm
Gold $1181.70
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 17 notice serviced for 1700 oz. Silver comex filed with 0 notices for nil oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 244.29 tonnes for a loss of 59 tonnes over that period.
In silver, the open interest fell by 3557 contracts even though Monday’s silver price was up by 28 cents. The total silver OI continues to remain extremely high with today’s reading at 188,970 contracts now at multi-year highs despite a record low price. In ounces, the OI is represented by 945 million oz or 135% 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 406,870 for a loss of 277 contracts as gold was up by $6.50 yesterday. We had 17 notices filed for 1700 oz.
we had no change in gold inventory at the GLD; thus the inventory rests tonight at 701.90 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/327.874 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 3557 contracts to 188970 despite the fact that silver was up by 28 cents on Monday.. The OI for gold fell by 277 contracts down to 406,870 contracts despite the fact that the price of gold was up by $6.50 yesterday.
(report Harvey)
2. Today, 6 important commentaries on Greece
zero hedge, Craig Roberts)
3. Dave Kranzler discusses the collapse in housing starts in the USA
(Dave Kranzler/IRD)
4. Gold trading overnight
(Goldcore/Mark O’Byrne)
5. Trading from Asia and Europe overnight
(zero hedge)
6. Trading of equities/ New York
(zero hedge)
7. A commentary on the escalation of the cold war
(zero hedge)
8. Phoenix Capital Research discusses the huge 9 trillion USA short and what it means
(Phoenix Capital Research/Graham Summers)
9. Brazil sees its retail sales plummet as emerging markets are witnessing much exits of capital.
(zero hedge)
10 the decision by the European Court of Justice approving the ECB’s OMT will put the ECB on a collision course with the Bundesbank
(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 277 contracts from 407,147 up to 406,870 as gold was up $6.50 on Monday (at the comex close). We are now in the big active delivery contract month of June. Here the OI fell by 9 contracts down to 643. We had 1 notice served upon yesterday. Thus we lost 8 contracts or an additional 800 oz will not stand for delivery. No doubt, again, we had this contract number of cash settlements (8) and the farce continues. The next contract month is July and here the OI fell by 56 contracts down to 626. The next big delivery month after June will be August and here the OI fell by 782 contracts to 266,551. 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 54,343. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day) was poor at 133,980 contracts. Today we had 17 notices filed for 1700 oz.
And now for the wild silver comex results. Silver OI fell by 3,557 contracts from 192,527 down to 188970 despite the fact that the price of silver was up 28 cents, with respect to Monday’s trading. We must have had some bank short covering. The front non active delivery month of June saw it’s OI fall by 0 contracts and remaining at 27. We had 0 contracts delivered upon yesterday. Thus we neither gained nor lost any silver contracts that will stand for delivery in this non active June contract month.The next delivery month is July and here the OI surprisingly fell by 7740 contracts down to 83,588. We have only two weeks left to go before first day notice. The estimated volume today was poor at 21,081 contracts (just comex sales during regular business hours. The confirmed volume on day (regular plus access market) came in at 62,780 contracts which is very good in volume. We had 0 notices filed for nil oz today.
June initial standing
June 16.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
154,929.676 oz (Scotia,Manfra)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
17 contracts (1700 oz)
No of oz to be served (notices)
626 contracts (62,600 oz)
Total monthly oz gold served (contracts) so far this month
2649 contracts(264,900 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
nil
Total accumulative withdrawal of gold from the Customer inventory this month
353,066.0 oz
Today, we had 0 dealer transaction
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil oz
we had 2 customer withdrawals
i) Out of Scotia: 154,833.226 oz
ii) Out of Manfra: 96.45 (3 kilobars)
total customer withdrawal: 154,929.676 oz
We had 1 customer deposits:
i) Into Brinks: 100.02 oz
Total customer deposit: 100.02 oz
We had 1 adjustment:
i) Out of Scotia: 200.735 oz was adjusted out of the customer and this landed into the dealer account of Scotia
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 17 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 7 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 (2649) x 100 oz or 264,900 oz , to which we add the difference between the open interest for the front month of June (643) and the number of notices served upon today (17) 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 (2649) x 100 oz or ounces + {OI for the front month (643) – the number of notices served upon today (17) x 100 oz which equals 327,500 oz standing so far in this month of June (10.18 tonnes of gold). Thus we have 10.18 tonnes of gold standing and only 17.07 tonnes of registered or for sale gold is available:
Total dealer inventory 548,844.869 or 17.07 tonnes
Total gold inventory (dealer and customer) = 7,854,155.851 (244.29 tonnes)
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 244.29 tonnes for a loss of 59 tonnes over that period.
end
And now for silver
June silver initial standings
June 16 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
660,730.800 oz (Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
599,614.220 oz (CNT)
No of oz served (contracts)
0 contracts (nil oz)
No of oz to be served (notices)
27 contracts(135,000 oz)
Total monthly oz silver served (contracts)
222 contracts (11,010,000 oz)
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
5,068,602.6 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 1 customer deposits:
i) Into CNT: 599,614.220 oz
total customer deposit: 599,614.220 oz
We had 1 customer withdrawals:
i) Out of Scotia: 660,730.800 oz
total withdrawals from customer; 600,730.800 oz
we had 0 adjustment
Total dealer inventory: 57.845 million oz
Total of all silver inventory (dealer and customer) 180.176 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 (222) x 5,000 oz = 11,100,000 oz to which we add the difference between the open interest for the front month of June (27) 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:
222 (notices served so far) + { OI for front month of June (27) -number of notices served upon today (0} x 5000 oz ,= 11,235,000 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 16./no change in gold inventory/Rests tonight at 701.90 tonnes.
June 15/we lost a huge 2.08 tonnes of gold from the GLD/Inventor rests tonight at 701.90 tonnes
June 12/we had a small withdrawal of .24 tonnes of gold from the GLD/Inventory rests this weekend at 703.98 tonnes.
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 16 GLD : 701.90 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 16./no change in silver inventory/327.874 million oz
June 15/we had no change in silver inventory/327.874 million oz
June 12/we had another addition to the tune of 956,000 oz/Inventory rests this weekend at 327.874. Please note that there has been an addition on each of the past 5 days.
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 16/2015: no change in silver inventory/SLV inventory rests tonight at 327.874 million oz
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 8.0% percent to NAV in usa funds and Negative 8.1% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.6%
Percentage of fund in silver:38.1%
cash .3%
( June 16/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to +.24%!!!!! NAV (June 16/2015)
3. Sprott gold fund (PHYS): premium to NAV rises to – .33% to NAV(June 16/2015
Note: Sprott silver trust back into positive territory at +.24%.
Sprott physical gold trust is back into negative territory at -.33%
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/ Steve Flood/Goldcore)
Gold Bullion Worth $1 Billion To Be “Repatriated” From NY Fed To New Texas Bullion Depository
By Stephen FloodJune 16, 2015No Comments
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– Texas creates state gold depository – bringing gold home from New York Fed
– Move to remove gold from Federal Reserve highlights distrust
– Follows repatriation moves by Germany, Netherlands, Austria and others
– Legislation will prevent Federal government from confiscating gold
– Includes provisions that may lead to return to using gold as currency in the U.S.
– New gold electronic payments system protect from “national financial or currency crisis”
– European, UK and Irish governments could learn from prudent monetary move
The state of Texas has just passed legislation to build its own gold bullion depository, to repatriate $1 billion dollars worth of gold currently stored by the Federal Reserve in New York and to create a new gold electronic payments system to protect from “national financial or currency crisis”.
The move is being widely perceived as a vote of no confidence in the privately owned, bank owned central bank and the federal government.
Governor Abbott said that establishing this Depository means Texas will be, “increasing the security and stability of our gold reserves and keeping taxpayer funds from leaving Texas to pay for frees to store gold in facilities outside our state.” (seeGovernor Abbott Signs Legislation To Establish State Bullion Depository )
The law will go into effect immediately and the new Texas Bullion Depository – soon to be built- will cater to businesses, state agencies and citizens.
Representative Giovanni Capriglione who introduced the bill was reported by the Star-Telegram as saying:
“People have this image of Texas as big and powerful … so for a lot of people, this is exactly where they would want to go with their gold,” leading some commentators to puzzle over whether New York was not “big and powerful”.
Heretofore, it has been Venezuela and European countries that have been repatriating gold – Germany, the Netherlands and Austria have sought to bring their sovereign gold home from New York amid fears that the Fed – whose gold stocks have not been publicly audited since 1953 – may not be in possession of the gold it claims to hold.
It is highly significant therefore that a powerful state from within the U.S., such as Texas, should display such apparent distrust of the Federal Reserve.
Two of Texas’ largest public pension funds from the University of Texas (UoT) and the Teacher Retirement System (TRS) showed similar concerns in 2011 when they took delivery of $1 billion worth of gold bars out of storage with HSBC in New York.
The asset had been held in an ETF but the pension funds were apparently uneasy about not actually owning the physical gold. ETFs track the price of gold and ETF speculators or investors are merely creditors of the ETF and therefore, are very vulnerable to counter-party risk and exposure to the many banks, who are custodians and indeed sub custodians.
The legislation even seeks to protect the state’s gold from confiscation by the Federal government. Section A2116.023 of the bill states: “A purported confiscation, requisition, seizure, or other attempt to control the ownership … is void ab initio and of no force or effect.”
Under the Tenth Amendment the rights of the state trumps any order from the federal government.
Also significant is a provision which may lead to a return to sound money as proposed by Article 1, section 10 the constitution, i.e. gold and silver. In one section the bill states: “depository account holder may transfer any portion of the balance of the holder’s depository account by check, draft, or digital electronic instruction to another depository account holder or [to a person who at the time the transfer is initiated is not a depository account holder.]” [underline]
The man who initially drafted this legislation is Rick Cunningham of the Texas Center for Economics, Law, and Policy. Mr. Cunningham is respected and is the Executive Director of the Center, but he is also a magna cum laude graduate of Texas A&M with a degree in Economics, as well as a graduate of the University of Chicago Law School, where he served as associate editor of the Law Review journal.
According to Mr. Cunningham
“this proposal consists of two parts – the “depository” part and the “system” part. The “depository” part … provides simply for hedging the state’s investment risk by allocating a recommended portion of state and local investment assets to physical gold and other precious metals, and housing those metals in a state-operated facility…”
“But the truly game-changing aspect of this proposal … lies in the “system” part. This would be an advanced, state-owned and operated system of electronic payments and settlements, denominated in ounces of precious metals, barred from engaging in lending, leasing, speculative or derivative transactions, and always maintaining a 100% ratio of bullion reserves to account balances. At full scale, not only could it sustain state and local government operations, it could potentially sustain large swaths of the Texas economy, even in the face of a national financial or currency crisis.”
If gold and silver were to become widely circulating currencies in Texas, the Federal Reserve issued and continuously devaluing dollar may slowly fall out of favour. Not maintaining a currency monopoly could ultimately lead to a return to using gold and silver as currency in the U.S.
In the coming months and years it is likely that the Federal Reserve and the Federal government of the U.S. will come under increasing pressure from Russia and China to back the dollar with something of intrinsic value rather than simply increasingly empty promises.
If either of those two countries chose to back their currencies with gold bullion, of which they have been accumulating vast volumes in recent years, the U.S. would be forced to follow suit in order to prevent sharp falls in the value of the dollar and in an attempt to preserve reserve currency status.
Now, it would seem, the Federal Reserve note – the dollar bill as issued by a private central bank in defiance of the Constitution – may face pressure from within the U.S. as ‘Lone Star’ state Texas begins to bring gold back into the monetary system.
The days of paper and electronic currencies – backed by little more than faith in governments that the public increasingly do not trust – are numbered. Texas is preparing for this as are European nations such as Germany, Austria and the Netherlands.
Preserve your wealth by acquiring an allocation to history’s only enduring money – gold.
Must Read Guide:7 Key Gold Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,182.10, EUR 1,050.06 and GBP 759.36 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,178.25, EUR 1,049.57 and GBP 760.01 per ounce.
Gold climbed $5.20 or 0.44 percent yesterday to $1,186.20 an ounce. Silver rose $0.17 or 1.07 percent to $16.11 an ounce.
Gold in Singapore for immediate delivery was marginally lower at $1,185.6 an ounce towards the end of the day, while bullion in Switzerland fell a dollar.
Gold inched down this morning but stayed in lock down in a very narrow range. The yellow metal looks well supported at these levels with safe haven bids increasing due to the unresolved Greek debt crises as the time runs out before the deadline at the end of the month.
Some investors wait for more guidance from the U.S. Federal Reserve during its meeting that begins today. Fed Chair Jane Yellen’s comments and wording of the Fed policy statement tomorrow will be closely watched.
U.S. economic data is still weak. Yesterday’s data from industrial production was poor underlining concerns about the U.S. economy.
The Bank of China has joined the ICE Benchmark Administration (IBA) gold price benchmarking process. This increases the number of participants to eight including – JPMorgan Chase Bank, Scotiabank, HSBC, Société Générale, UBS, Barclays and Goldman Sachs in the LBMA Gold Price, which formally replaced the London Gold Fix this spring.
In late morning European trading gold is down 0.16 percent at $1,184.87 an ounce. Silver is off 0.38 percent at $16.01 an ounce and platinum is also down 0.15 percent at $1,086.56 an ounce.
Breaking News and Research Here
Stephen Flood
Chief Executive Officer
I am the CEO of GoldCore. We help investors buy and store gold and silver easily and cost effectively. We work with clients of every variety from wealth family offices to everyday people. We provide the very best market data and client service and we care deeply for our clients interests.
Published in Daily Market Update
end
An interesting commentary from Saxobank’s Steen Jakobsen who believes that gold will be the best perfomring commodity come the fall:
(courtesy Saxobank/Steen Jakobsen/GATA)
Saxobank CIO: Credit Cycle Has Peaked, Gold Will Be Best-Performing Commodity
Submitted by Saxobank CIO Steen Jakobsen via TradingFloor.com,
Forget the 1930s. Inflation is different this time.
Real rates are finally coming off in the US
More and more pundits see inflation ticking higher
A summer of European growth – and hell afterwards
ECB’s balance sheet as % of GDP little changed despite QE
The credit cycle has clearly peaked
It’ll be a sweet summer but a hellish autumn in Europe. Photo: iStock
The overall position:
Our major allocation shift is working on fixed income, but commodities and gold still need the all clear regarding a Fed hike….
Here’s a reminder of the main points of my major strategy change as detailed in an article on May 18:
The headlines for the next 6-7 months say:
US, German and EU core government bonds will be 100 bps higher by and in Q4 before making its final new low in H1 2016. US 10-year yield will trade above 3.0% and bunds above 1.25%
Energy: WTI crude will hit US $70-80/barrel, setting up excellent energy returns.
US dollar will weaken to EUR1.18/1.20 before retest of lows and then start multi-year weakness.
Gold will be the best performer in commodity-led rally. We see 1425/35 by year-end.
We need to stop talking about deflation and using 1930s comparison about a Fed hike:
Source. InflationData.com
Real rates are finally coming off in the US: Positive Gold and negative US$?
Wow – inflation expectations are rising and rising fast….
European “cost advantage” is disappearing fast and furiously – enjoy the summer of growth – afterwards, you can expect: zero growth, zero reform and higher inflation “expectations”…..
Excuse me? Didn’t the European Central Bank start quantitative easing. In a world of madness it’s hard even to see change in the ECB balance sheet. Japan is just not real, indeed, nothing is!
This is a poorly constructed chart… but clearly… thecredit cycle has peaked……
Source: Bloomberg
Compare this to the commodity cycle:
Source: Bloomberg
And, just to remind you… when the Fed hikes it’s a margin call. There is no basis in the bank’s mandate to do so, but its need to normalise policy will have data support over the summer as the CESI (Citigroup Economic Surprise Index) will mean revert.
Source: Bloomberg
end
This is huge as China now wants a bigger role in the pricing of gold.
(courtesy Eddie Van der Walt/Bloomberg/GATA)
Bank of China joins auction setting gold prices in London
Submitted by cpowell on Tue, 2015-06-16 12:24. Section: Daily Dispatches
By Eddie van der Walt
Bloomberg News
Tuesday, June 16, 2015
Bank of China Ltd. will become the first Chinese bank to join the auction process that sets gold prices in the London market.
The bank, along with seven other lenders, will start participating in the twice-daily electronic auction, according to a statement from the London Bullion Market Association on Tuesday. While China is the world’s largest bullion buyer, it has never directly played a role in determining London gold prices.
The addition of a Chinese bank is another sign that China is increasing its influence in gold and currency markets worldwide as the country seeks to make the yuan a viable competitor to the dollar. The Bank of China’s part in the gold auction shows the nation is stepping into the global market, the lender wrote in a press release today. …
… For the remainder of the report:
http://www.bloomberg.com/news/articles/2015-06-16/bank-of-china-to-parti..
end
This will be great for miners and for the environment:
(courtesy GATA)
Australian researchers producing cyanide-free gold with Barrick in Nevada
Submitted by cpowell on Tue, 2015-06-16 17:15. Section: Daily Dispatches
Eureka! A Solid-Gold Solution to Make Archimedes Proud
By Roger Nicoll
Commonwealth Scientific and Industrial Research Organization
Canberra, Australia
Tuesday, June 16, 2015
“Eureka!” cried the ancient Greek scholar Archimedes as he (allegedly) ran naked through the streets of Syracuse. He’d just discovered a method to prove the purity of gold by measuring its density, and was decidedly proud of his finding.
Thankfully, these days we favor blog posts to running naked through the streets when we make important new discoveries… but it doesn’t mean we can’t still give a good shout:
“Eureka! We’ve found a way to produce cyanide-free gold!”
We’ve been working with an American company, Barrick, at their Goldstrike plant in Nevada to produce the first gold bar that doesn’t involve cyanide extraction. Cyanide is, of course, highly toxic and an environmental hazard. The new process we’re so excited about uses a chemical called thioshulphate, which will greatly reduce the environmental risks and costs associated with gold production.
Thiosulphate has long been seen as a potential alternative to cyanide for liberating gold from ores, but it has proved difficult to master — until now. Thanks to the new process, which incorporates patented technology we’ve developed with Barrick, the company will be able to process and profit from 4 million tonnes of stockpiled ore that was uneconomic to process by traditional methods. …
… For the remainder of the report:
http://csironewsblog.com/2015/06/16/eureka-a-solid-gold-solution-to-make.
end
A must read…James Turk is one smart cookie and he believes (as do I) that Greece has a much stronger position than the creditors:
(courtesy James Turk/Kingworldnews/Eric King/GATA)
Greece has stronger position than its creditors, Turk tells KWN
Submitted by cpowell on Tue, 2015-06-16 00:13. Section: Daily Dispatches
8:13p ET Monday, June 15, 2015
Dear Friend of GATA and Gold:
Greece has the stronger position in its confrontation with the European Union, the European Central Bank, and the International Monetary Fund over its unpayable debt, GoldMoney founder and GATA consultant James Turk tells King World News today.
“The Athens government has asked all cities and other governmental bodies to move their available cash into accounts at the central bank,” Turk says, “This is being reported in the mainstream media as a way for the central government to get its hands on more cash, but that is not correct. It is to prevent the European Central Bank from taking this cash of governmental bodies when the ECB finally bails in the private Greek banks.”
Turk’s interview is excerpt at the KWN blog here:
http://kingworldnews.com/turbulence-in-major-markets-to-be-sparked-by-gr…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Koos comments on demand for the past week: 32 tonnes. He comments on rectification of Chinese gold trading rules
(courtesy Koos Jansen)
Posted on 15 Jun 2015 by Koos Jansen
Rectification Chinese Gold Trading Rules
I’ve found more detailed rules on the workings of the Chinese gold market regarding, (i) the use of onshore renminbi for contracts traded on the Shanghai International Gold Exchange (SGEI), (ii) gold sales of Chinese domestic gold mines. Previously I’ve written posts on these subjects that contained inaccurate information that I would like to correct. (My previous posts are already corrected.)
First, let’s have a quick look at the latest Shanghai Gold Exchange (SGE) withdrawal numbers. In week 22 (June 1 – 5) withdrawals came down 12 % from the week before at 32 metric tonnes. Year to date 1,015 tonnes have been withdrawn. The current downtrend is completely normal as seasonally the summer months are quiet in the Chinese gold market, as opposed to the months around new year.
SGE Customers Can Use Onshore Renminbi For SGEI Contracts
Chinese citizens in the mainland that have an SGE account are allowed to use onshore renminbi to buy physical gold contracts on the Shanghai International Gold Exchange (also referred to as the International Board or SGEI).On May 30, 2015, I published a post on the current status of trading rules at the SGEI regarding the use of onshore renminbi by domestic traders. From a source at the SGE I was told domestic SGE members (banks, refineries, etc) can trade SGEI contracts using onshore renminbi, but domestic SGE customers (citizens, corporations) cannot. Afterwards I came in contact with an employee of the SGEI who told me this is incorrect, in reality both SGE members and SGE customers can use onshore renminbi to trade International Board contracts. I checked with a source at ICBC and he confirmed SGE customers can use onshore renminbi to trade SGEI contracts.
Related posts on this complicated subject are the ‘Chinese gold market essentials’ posts, The Mechanics Of The Chinese Domestic Gold Market, Chinese Gold Trade Rules And Financing Deals Explained and Workings Of The Shanghai International Gold Exchange | Part One.
Important to understand is that if SGE customers buy SGEI contracts they own gold stored in the Shanghai Free Trade Zone (offshore), but they’re not allowed to withdraw this gold and/or transport. Likewise if SGEI members purchase SGE contracts (in the mainland) they’re not allowed to withdrawal and/or transport.
This is the corrected segment from my post May 30, 2015:
Since September 2014 international traders can use offshore renminbi to trade all contracts on the International Board and most contracts on the Main Board (they can only withdraw gold from International Board contracts stored in the Shanghai FTZ). Domestic traders can trade all Main Board contracts and International Board contracts. Although, only a few Chinese banks – to my knowledge ICBC and China Industrial Bank – offer domestic clients SGEI brokerage to use onshore renminbi to trade International Board contracts.
Have a look at the next table for an overview. Kindly note, delivery is not the same as withdrawals (/load-out).
In my previous post I quoted Wang Lixing (also known as Roland Wang, Managing Director China for the World Gold Council) saying:
China’s domestic investors still cannot conveniently participate in trading on the International Board. Key reason is control on foreign exchange, which the International Board requires the use of the offshore renminbi.
Now I know SGE customers can also use onshore renminbi on the International Board I disagree with Wang even more.
Not All Chinese Domestic Mining Ouput Is Required To Be Sold Through The SGE
A few years ago I’ve written, “all output from Chinese mines is required to be sold though the SGE”, based on the rule:
All PRC [People’s Republic of China] gold producers are … required to sell their standard gold bullion through the Shanghai Gold Exchange…
Later I found out what standard gold bullion encompasses in the Chinese gold market; gold bars of 50g, 100g, 1Kg, 3Kg or 12.5Kg, with a purity of Au9999, Au9995, Au999 or Au995. Meaning, not all output from Chinese mines is required to be sold through the SGE, only when doré/ore is refined into standard gold bullion it’s required to be sold through the SGE.
In my opinion this rectification is not a game changer. Because the SGE has the best liquidity in the Chinese domestic gold market miners want to sell through the SGE, so they mostly cast standard gold bars to sell.
Mining output and scrap supply can be refined into standard gold bullion or non-standard god bullion, if standard gold is traded over the SGE or SHFE it’s exempt from VAT. Standard gold traded off-SGE is not exempt from VAT. Non-standard gold (for example jewelry) traded off-SGE is exempt from VAT (if there is value added, the value added would enjoy VAT), but many buyers and sellers like to trade standard gold bullion over the SGE for the liquidity and because this gold is granted of the highest quality.
Imported gold can be standard gold bullion or non-standard gold bullion (like doré). Imported standard gold is required to be sold though the SGE. I’m not sure at this stage what the rules are for imported doré/ore, though I know much of it is refined into standard gold and sold through the SGE. (It’s likely the rules for imported gold are the same for domestically mined gold.)
In short, there are many incentives that drive supply in the Chinese domestic gold market to be sold through the SGE. Hence, SGE withdrawals (the demand side) is such significant data.
The author of this post would like to have lunch some time with the architect of the Chinese domestic gold market, but doesn’t yet know who this person(s) is.
Koos Jansen
E-mail Koos Jansen on: koos.jansen@bullionstar.com
end
And now overnight trading in stocks and currency in Europe and Asia
1 Chinese yuan vs USA dollar/yuan strengthens to 6.2084/Shanghai bourse red and Hang Sang: red
2 Nikkei closed by 129.85 points or 0.64%
3. Europe stocks all in the red/USA dollar index up to 94.94/Euro falls to 1.1261
3b Japan 10 year bond yield: slightly falls .50% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 123.48/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 59.82 and Brent: 63.93
3f Gold down/Yen down
3gJapan is to buy the equivalent