Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1178.50 up $5.60 (comex closing time)
Silver $15.66 down 7 cents
In the access market 5:15 pm
Gold $1180.00
Silver: $15.76
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a good delivery day, registering 39 notices serviced for 3900 oz. Silver comex filed with 2 notices for 10,000 oz. Remember we are entering options expiry tomorrow with respect to gold/silver LBMA contracts and the OTC contracts. So gold and silver will be subdued in price until tomorrow night.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 245.52 tonnes for a loss of 57 tonnes over that period.
In silver, the open interest fell by 1167 contracts as Friday’s price was down 11 cents. The total silver OI continues to remain extremely high, with today’s reading at 196,164 contracts now at decade highs despite a record low price. In ounces, the OI is represented by .980 billion oz or 140% 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. There can only be one answer as to how the OI of comex silver is now just under 1 billion oz coupled with a low price under 16.00 dollars: sovereign China through proxies are the long and they have extremely deep pockets.
In silver we had 2 notices served upon for 10,000 oz.
In gold, the total comex gold OI rests tonight at 442,007 for a gain 415 contracts as gold was down $0.10 on Friday. We had 39 notices filed for 3900 oz.
we had no change in tonnage at the gold inventory at the GLD; thus the inventory rests tonight at 711.44 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. I am sure that 700 tonnes is the rock bottom inventory in gold. Anything below this level is just paper and the bankers know that they cannot retrieve “paper gold” to send it onwards to China .In silver, again, we had a huge withdrawal in inventory at the SLV to the tune of 4,777,000 oz/ Inventory now rests at 324.339 million oz. Somebody was in need of silver badly.
We have a few important stories to bring to your attention today…
1. Today, we had the open interest in silver fall by 1247 contracts to 196,164 as silver was down 11 cents on Friday. The OI for gold rose by another 415 contracts up to 442,007 contracts as the price of gold was down $0.10 on Friday.
(report Harvey)
2. Today, 30 important commentaries on Greece
Due to the importance of the impending default on Greece, I have provided a chronological order of events from Saturday morning until tonight.
(zero hedge, Reuters/Bloomberg/)
3.the impending default for Puerto Rico
(2 stories)
(zero hedge)
4. China crashes
(2 stories/zero hedge)
5. Gold trading overnight
(Goldcore/Mark O’Byrne)
6. Trading from Asia and Europe overnight
(zero hedge)
7. Trading of equities/ New York
(zero hedge)
8. Dave Kranzler/IRD on Blackrock telling investors to get out of all mutual funds
(Dave Kranzler IRD)
let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest rose appreciably by 415 contracts from 441,592 up to 442,007 as gold was down 10 cents in price on Friday (at the comex close). We are off the big active delivery contract month of June. The next contract month is July and here the OI fell by 110 contracts to 445. The next big delivery month after June will be August and here the OI rose by only 40 contracts up to 286,230. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was fair at 147,049. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was poor at 114,515 contracts. Today we had 39 notices filed for 3900 oz.
And now for the wild silver comex results. Silver OI fell by a small 1247 contracts from 197,411, down to 196,164 as the price of silver was down 11 cents in price with respect to Friday’s trading. We continue to have our bankers pulling their hair out with respect to the continued high silver OI. The front non active delivery month of June is now off the board. The next delivery month is July and here the OI fell by a considerable 18,655 contracts down to 12,724. We have just 1 trading days left before first day notice tomorrow. The next major active delivery month is September and here the OI rose by a huge 17,161 contracts to 128,411. So far, for the first time we did not witness the collapse of OI in an active delivery month. However all of the longs rolled into September.. The estimated volume today was excellent at 70,751 contracts (just comex sales during regular business hours. The confirmed volume on yesterday (regular plus access market) came in at 106,943 contracts which is excellent in volume. We had 2 notices filed for 10,000 oz today.
June initial standing
June 29.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
2,925.65 oz (SCOTIA)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
37,986.327 oz (Scotia)
No of oz served (contracts) today
39 contracts (3900 oz)
No of oz to be served (notices)
off the board
Total monthly oz gold served (contracts) so far this month
2958 contracts(295,800 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
99.93 oz
Total accumulative withdrawal of gold from the Customer inventory this month
567,930.4 oz
Today, we had 0 dealer transactions
we had zero dealer withdrawals
total Dealer withdrawals: nil oz
we had 0 dealer deposits
total dealer deposit: zero
we had 1 customer withdrawal
i) Out of Scotia: 2925.65 (91 kilobars???)
total customer withdrawal:2,925.65 oz
We had 1 customer deposit:
i) Into Scotia: 37,986.327 oz
Total customer deposit: 37,986.327 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 39 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 39 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 (2958) x 100 oz or 295,800 oz , to which we add the difference between the open interest for the front month of June (39) and the number of notices served upon today (39) 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 (2958) x 100 oz or ounces + {OI for the front month (39) – the number of notices served upon today (39) x 100 oz which equals 295,800 oz standing so far in this month of June (9.198 tonnes of gold). Thus we have 9.20 tonnes of gold standing and only 16.07 tonnes of registered or for sale gold is available.
Total dealer inventory 517,216.902 or 16.08 tonnes
Total gold inventory (dealer and customer) = 7,893,642.14 oz or 245.52 tonnes
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 245.52 tonnes for a loss of 57 tonnes over that period.
end
And now for silver
June silver initial standings
June 29 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
460,199.430 oz (Delaware,CNT,Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
3,073.584 oz (Delaware)
No of oz served (contracts)
2 contracts (10,000 oz)
No of oz to be served (notices)
off the board
Total monthly oz silver served (contracts)
298 contracts (1,490,000 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
6,056,121.4 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 1 customer deposit:
i) Into Delaware
total customer deposit: 3073.584 oz
We had 3 customer withdrawal:
i) Out of Delaware: 19,898.73 oz
ii) Out of CNT: 190,159.100 oz
iii) Out of Scotia: 250,141.6 oz
total withdrawals from customer; 460,199.43 oz
we had 0 adjustments
Total dealer inventory: 57.866 million oz
Total of all silver inventory (dealer and customer) 182.412 million oz
The total number of notices filed today is represented by 2 contracts for 10,000 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 (298) x 5,000 oz = 1,490,000 oz to which we add the difference between the open interest for the front month of June (2) and the number of notices served upon today (2) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the June contract month:
298 (notices served so far) + { OI for front month of June (2) -number of notices served upon today (2} x 5000 oz ,= 1,490,000 oz of silver standing for the June contract month.
this should be the final standings. We must wait until tonight to see if anybody else serves notices.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.comorhttp://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 29/no change in inventory/rests tonight at 711.44 tonnes
June 26./it did not take our bankers long to raid the GLD. Yesterday they added 6.86 tonnes and today, 1.75 tonnes of that was withdrawn/Inventory tonight rests at 711.44 tonnes.
June 25/a huge addition of 6.86 tones of inventory at the GLD/Inventory rests tonight at 713..23 tonnes
June 24/ a good addition of.900 tonnes of gold into the GLD/Inventory rests at 706.37 tonnes
June 23/no change in gold inventory/rests tonight at 705.47 tonnes
June 22/ a huge increase of 3.27 tonnes of gold into GLD/Inventory tonight: 705.47 tonnes
June 19.2015: no change in gold inventory/rests tonight at 701.90 tonnes.
June 18/no change in gold inventory/rests tonight at 701.90 tonnes
June 17/no change in gold inventory/rests tonight at 701.90 tonnes
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 29 GLD : 711.44 tonnes
end
And now for silver (SLV)
June 29/ a monstrous loss of 4.777 million oz of silver from the SLV/Inventory rests tonight at 324.339 million oz
June 26/today we had another addition of 198,000 of silver/Inventory rests at 329.116 million oz
June 25/ a huge increase of 1.242 million oz of silver into the SLV inventory/Inventory rests at 128.918 million oz
June 24/no change in inventory/rests tonight at 326.918 million oz
June 23/we had a small withdrawal of 956,000 oz/Inventory tonight rests at 326.918 million oz
June 22/ no change in silver inventory/327.874 million oz
June 19/no change in silver inventory/327.874 million oz
June 18 no change in silver inventory/327.874 million oz
June 17/no change in silver inventory/327.874 million oz
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 29/2015: we had a huge withdrawal of 4.777 million oz of silver inventory/SLV inventory rests tonight at 324.339 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 7.8 percent to NAV 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 29/2015)
2. Sprott silver fund (PSLV): Premium to NAV rises to 0.78%!!!! NAV (June 29/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to – .58% toNAV(June29/2015
Note: Sprott silver trust back into positive territory at +0.78%
Sprott physical gold trust is back into negative territory at -.58%
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 CentralGoldTrust (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
And now overnight trading in gold/silver from Europe and Asia/plus physical stories that might interest you:
First: Goldcore’s Mark O’Byrne
(courtesy Goldcore/Mark O’Byrne)
Grexit?, BIS Warning, Chinese Market Crash & Systemic Risk Shake the Global Economy
By Mark O’ByrneJune 29, 20150 Comments
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– Persistent low rates leave central banks with no ammunition to fight next crisis
– BIS says short-sighted central banks and governments contributed to current weaknesses
– Lack of policy options have forced some central banks to stretch “boundaries of the unthinkable”
– Bust in developed economies the main risk facing global economy
– Greece prepares to default
– China markets routed overnight
– Gold will be last man standing when currencies collapse
Greece embarked on capital controls as talks over the weekend between Tsipras’ leftist government and foreign lenders fell apart.
All banks and the Greek stock exchange are closed today. Greek citizens cued in long lines at ATMs or cash machines over the weekend and a run on the banks left most ATMs empty. There is a €60 limit on withdrawals from cash machines under strict capital controls. The ATMs will reopen tomorrow. Citizens are also lining up for petrol and food.
Central banks have run out of options to deal with the next global financial crisis the Bank of International Settlements (BIS) has warned in its annual report. Failure to make difficult policy decisions and raise rates throughout the “recovery” have left central banks with no stimulus options with which to juice the economy when the next downturn arrives.
The BIS, which is central bank of the central banks based in Basel, Switzerland, points to the short-sighted policies of governments and national central banks over the past few years who preferred to try keep their economies afloat using excessive debt rather than take unpopular steps to reform their economies.
The Telegraph puts it thus:
“The BIS claimed that central banks have backed themselves into a corner after repeatedly cutting interest rates to shore up their economies. These low interest rates have in turn fuelled economic booms, encouraging excessive risk taking. Booms have then turned to busts, which policymakers have responded to with even lower rates.”
“Rather than just reflecting the current weakness, they may in part have contributed to it by fuelling costly financial booms and busts and delaying adjustment. The result is too much debt, too little growth and too low interest rates…In short, low rates beget lower rates,” according to Claudio Borio, who heads the monetary and economic department at the BIS.
The BIS is critical of the low interest rate environment and is, apparently, appalled by the actions of some central banks – namely, those of Switzerland, Sweden and Denmark – who have introduced negative interest rates which it describes as “stretching the boundaries of the unthinkable”.
The organisation rejects the argument that the current status quo of very low rates is some kind of “equilibrium”. Jaime Caruana, General manager of the BIS says:
“True, there may be secular forces that put downward pressure on equilibrium interest rates … [but] we argue that the current configuration of very low rates is neither inevitable, nor does it represent a new equilibrium”.
Low rates are gradually whittling away the balance sheet of banks as low rates are a disincentive to savers, particularly when the cost of many necessities is rising.
The greatest threat facing the global economy today is another bust in developed economies according to the bank. Persistent low rates may “inflict serious damage on the financial system”.
Economies driven by excessive debt, rather than productivity, has caused labour to migrate into less productive sectors of the economy which would not have survived the bust had authorities not intervened. Productivity in the west is therefore weaker than it should be in a recovery.
The report cites Greece as an example of this type of mismanagement where a “toxic mix” of “private and public debt being used as a solution to economic problems, rather than making the proper commitment ‘to badly needed’ structural reforms” as the Telegraph puts it.
The release of the report coincides with Greece preparing to default and a major stock market correction in China. Indeed the crisis to which the BIS says the central banks have no solutions may already be upon us.
An acknowledged default of Greece will trigger credit default swaps in the opaque derivatives market. If a major bank – such as Deutsche Bank, with its enormous derivatives exposure that dwarfs the GDP of Germany – were caught on the wrong side of a trade, we would be immediately in the midst of a truly unprecedented global crisis.
At the same time China is experiencing major difficulties as its stock markets have doubled in the past year and now has shed over 21% of its value in recent days.
It seems certain that a new crisis is imminent. When the public finally lose faith in central banks and the money they print, currencies will rapidly devalue. Holding an allocation of physical gold outside the financial system will prove to be valuable insurance.
Please Review: Gold Is a Safe Haven Asset
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,176.50 , EUR 1,060.82 and GBP 749.10 per ounce.
Friday’s AM LBMA Gold Price was USD 1,174.40, EUR 1 ,048.38 and GBP 745.89 per ounce.
Gold rose $1.00 or 0.09% percent Friday to $1,174.10 an ounce. Silver slipped $0.07 or 0.44 percent to $15.80 an ounce. Gold and silver both fell last week at 2.22% and 1.92 percent respectively.
Gold in Singapore for immediate delivery climbed 0.7 percent to $1,183.18 an ounce near the end of the day.
The yellow metal rose today as investors piled into safe haven assets as the Greek debt crisis took a turn for the worse over the weekend and a Grexit appear imminent.
U.S. gold futures also climbed 1 percent to a session high of $1,187 before capping gains. Silver rose nearly 1 percent along with gold.
Riskier assets fell such as U.S. equity futures, Asian stock markets and the euro fell as investors made a beeline into safe-haven assets like gold and silver.
Friday’s U.S.CFTC data showed speculators upped bullish bets in COMEX gold futures and options and switched to a net short position in silver for the week ending June 23.
In Asia, the People’s Bank of China slashed its one-year lending rate by 25 basis points to 4.85 percent, and lowered the amount of reserves certain banks are required to hold by 50 basis points. This has been its fourth cusince November. The central bank also decreased its one-year deposit rate rate by 25 basis points to 2.0 percent.
In late morning European trading gold is up 0.09% or $1,176.38 an ounce. Silver is up 0.05 percent at $15.80 an ounce, while platinum is off 0.94 percent at $1,067.88 an ounce.
end
Huge withdrawals from SGE equal to 54.2 tonnes.
this should equate to gold demand from China
(courtesy Jessie/Amercan cafe)
Shanghai Gold Exchange 54.2 Tonnes of Bullion Withdrawn – Total More Than All Official Gold of US
During the latest week there were 54.2 tonnes of gold withdrawn from the Shanghai Gold Exchange.
Since the beginning of 2009 there have been 9,030 tonnes of gold taken out of the Shanghai Exchange into China.
That is more than 290,320,000 troy ounces of fine gold in bars.
Just for the sake of comparison, as shown in the last chart below, the total official holdings of the United States are about 261,498,926 ounces of gold.
So it does seem that since 2009 more gold has been withdrawn from the Shanghai Exchange than is in all the official holdings, vaults, forts, mints and Federal Reserve Banks of the United States.
Related: Why Shanghai Gold Withdrawals Equal Chinese Gold Demand
***
end
(courtesy GATA)
China Challenges Gold Price-Setting Regime; Confirms Launch Of Yuan-Denominated Fix
“They want to be on the top table in all areas of international trade and this is no different,” Sharps Pixley CEO told Bloomberg earlier this month, tying China’s move to participate in the twice-daily auction that determines London gold prices to Beijing’s efforts to embed the yuan more deeply in international investment and trade.
As a reminder, the auction has its roots in efforts to deter manipulation. Here’s what we said last month:
A long time ago, in a financial galaxy far, far away, a “fringe” blog raised the topic of gold market manipulation during the London AM fix. Several years later (which, incidentally, is about average in terms of the lag time between when something is actually going on and when the mainstream financial media finally figures it out and reports on it), it was revealed that in fact, shenanigans were likely afoot and indeed, regulators are still trying to sort out what happened. The ‘fix’ for the ‘fixed’ gold fix (only in the world of corrupt high finance is such a hilariously absurd passage possible) is supposedly a new system whereby the fixings are derived electronically.
On June 16, the LBMA announced that Bank of China would become the first Chinese bank to participate. Earlier this week, ICBC said it may also join the electronic auction process. From the press release introducing Bank of China’s participation:
“We are proud to become the first Chinese and Asian bank to participate in the gold auction.” said Yu SUN, General Manager, Bank of China London Branch & CEO, Bank of China (UK) Limited. “Bank of China joined LBMA as an initial member in 1987, and has been actively participating in the gold trading business in London for over forty years. Although being the world’s largest gold producer and consumer, China has never played a major role in the global gold fixing. Bank of China’s direct participation in the IBA gold auction will reinforce the connection between the Chinese domestic market and overseas markets, make the international gold price better reflect the supply and demand in China, and help to promote the internationalization of the Chinese gold market.”
“We are delighted to welcome Bank of China to the gold auction,” said Finbarr Hutcheson, President, ICE Benchmark Administration. “The growth in daily volumes coupled with the increase in participation from around the globe, demonstrates strong market support for the independent governance and oversight we have implemented to bring transparency and trust to the gold auction.”
“Participation in the gold auction will increase the link between China and international markets, and make the gold price better reflect the nation’s supply and demand,” Bank of China said, while on Thursday, ICBC’s general manager of precious metals Zhou Ming told an audience in Shanghai that “Chinese banks want to expand [their] reputation and brand influence in the Western market.”
Indeed, China isn’t stopping with the LBMA when it comes to increasing its influence on gold pricing. As tipped herelast month, the country is set to launch a yuan-denominated gold fix later this year. Now, we have the first public confirmation from the Shanghai Gold Exchange that the fix will be introduced by the end of 2015. Reuters has the story:
“We will be introducing a renminbi-denominated fix at the right moment, we are hoping to introduce by the end of the year,” Shen Gang, SGE’s vice president, said at the LBMA Bullion Market Forum in Shanghai on Thursday.
“We have policy support for development (of the gold market),” she added.
While Shen did not give more details, sources familiar with the matter have said that China is expected to receive central bank approval for the fix soon.
Pan Gongsheng, a deputy governor of the People’s Bank of China (PBOC), said the central bank would continue to support “speedy and healthy growth of the China gold market” and its internationalization.
Given its leading role in gold, China feels it is entitled to be a price-setter for bullion and is asserting itself at a time when the global benchmark, the century-old London fix, is under scrutiny for alleged price-manipulation.
If the yuan fix takes off, China could compel local buyers and foreign suppliers to pay the domestic yuan price, making the dollar-denominated London fix less relevant in the world’s biggest bullion market.
While details of the fix are yet to be revealed, sources say it would be derived from a contract traded on the bourse for a few minutes, with the SGE acting as the central counterparty. That could make the process transparent – addressing one of the big concerns about the London fix.
The yuan fix is the most recent effort by SGE to boost China’s position in the global gold market. The exchange opened an international bourse in September 2014, allowing foreigners to trade yuan-denominated contracts for the first time.
Between Chinese banks’ participation in the London auction and the advent of the yuan fix, China is now in a position not only to exert its influence on the dollar-denominated benchmark, but to establish its own price setting mechanism that may well serve to challenge and ultimately supplant the Western fix which the market will likely always view as subject to manipulation.
end
(courtesy Brien Lundin/GATA)
Brien Lundin: Proof of gold market manipulation
Submitted by cpowell on Sun, 2015-06-28 15:20. Section: Daily Dispatches
By Brien Lundin, Editor
Gold Newsletter, Metairie, Louisiana
Thursday, June 25, 2015
https://jeffersoncompanies.com/gold-newsletter/about-gold-newsletter
As long-time readers know, I’ve been skeptical that the anyone in the U.S. government is manipulating the gold market on a daily basis. That skepticism is rooted in my confidence that the government would screw up any attempts at active, high-tech manipulation. Just look at their inability to prevent the Chinese from obtaining confidential personnel files on tens of millions of Americans — after having already seen them hack into the system once without downloading the files.
To quote the great 20th-century philosopher Ringo Starr, “Everything the government touches turns to crap.”
No, a minute-by-minute manipulation of the gold market isn’t within the capabilities of the Washington bureaucracy. But somebody is doing it — of that there is no longer any doubt — and they’re doing it by the millisecond.
That’s the conclusion of a number of comprehensive analyses by Nanex (www.nanex.net), a company that offers software and data that tracks quotes and trades on the major U.S. equity exchanges sequentially. In other words, quote by quote, trade by trade, by the millisecond. That alone is a great service. But under the direction of CEO Eric Hunsader, Nanex has also conducted investigations of many anomalous trading events in the markets and has tracked the rise and impact of high-frequency trading. Their research site —
http://nanex.net/NxResearch
— deserves browsing by anyone interested in shenanigans now being perpetrated on a daily basis by HFTs and their algo trading software.
Of particular interest to us, Nanex has identified and examined some “flash crashes” that occurred last year and this year in gold. This Zero Hedge post —
http://www.zerohedge.com/news/2015-06-24/gold-silver-slammed-mini-flash-…?
— describes Nanex’s study of the most recent such event, on Tuesday, June 25, when “15 minutes after GDP data was released — showing Q1 was indeed as weak as expected and inventories suggesting Q2 will be just as weak — someone decided it was an appropriate time to dump over half a billion dollars of notional gold on the futures market. …” (Emphasis by Zero Hedge.)
The Nanex studies can get a bit technical but they are fascinating. For instance, their examination of a flash crash that occurred on January 6, 2014, showed how gold was forced down over $30 in less than 100 milliseconds. By breaking the groups of trades into jumps in the exchange sequence numbers, they were able to identify nine groups where the sum of the trade sizes was precisely 338 contracts.
At the time of this flash crash, blame was placed on someone’s “fat finger” trade. As Nanex concluded, “This was not the result of a fat finger, but rather the work of a high-frequency trading algorithm that paused and (probably) tested the market before continuing. A fat finger would not have such distinguishing features. What is disturbing about this algorithm is that it carefully waited so as not to trip the CME’s stop logic and halt the stock. The halt was from the more lenient volatility circuit breaker after the price declined $30 in less than a second. This algo appears to have been more concerned about preventing an immediate halt rather than getting the best prices. Since the value of the trades was close to $500 million, there aren’t a lot of suspects.”
To me this is ironclad evidence that someone is manipulating the market in a very sophisticated way, and not necessarily for profit-driven reasons. And as
Nanex observed, the list of actors who can employ $500 million in what was essentially a single trade is short.
In this case, the evidence was even convincing enough to prompt the CME into action, whereupon it recently fined Mirus Futures LLC $200,000 for failing “to adequately monitor the operation of its trading platform (Zenfire) and the connectivity of its trading system (Zenfire) with Globex. This failure resulted in unusually large and atypical trading activity by several of the firm’s customers and caused the mass entry of order messages by Zenfire, which resulted in a disruptive and rapid price movement in the February 2014 gold futures market and prompted a Velocity Logic event.”
As Zero Hedge notes, Mirus was sold to Ninja Trader about a year ago and all the people behind the scheme have probably now scattered to different HFT enclaves.
So, yes, the manipulation of gold and silver is ongoing. But don’t count on any sweeping regulatory action to rein in HFTs or their backers until they trip up the more important markets that Wall Street is involved in.
end
(courtesy GATA)
BIS scolds its own central bank members: You’ve made a mess of everything
Claudio Borio, head of the organisation’s monetary and economic department, said: “Persistent exceptionally low rates reflect the central banks’ and market participants’ response to the unusually weak post-crisis recovery as they fumble in the dark in search of new certainties.””Rather than just reflecting the current weakness, they may in part have contributed to it by fuelling costly financial booms and busts and delaying adjustment. The result is too much debt, too little growth and too low interest rates.”In short, low rates beget lower rates.”The BIS warned that interest rates have now been so low for so long that central banks are unequipped to fight the next crises.”In some jurisdictions, monetary policy is already testing its outer limits, to the point of stretching the boundaries of the unthinkable,” the BIS said.Policymakers in the eurozone, Denmark, Sweden and Switzerland have taken their interest rates below zero in an attempt to support their economies, contributing to a decline in bond yields.Extraordinarily low interest rates are not a “new equilibrium” said Jaime Caruana, general manager of the BIS, rejecting the theory of so-called “secular stagnation” which some economists blame for the continued decline in global lending rates.”True, there may be secular forces that put downward pressure on equilibrium interest rates … [but] we argue that the current configuration of very low rates is neither inevitable, nor does it represent a new equilibrium,” he said.Mr Caruana said that interest rate hikes “should be welcomed,” as global economies have started to grow at close to their historical averages, and a slump in oil prices has provided the global economy with a boost.The BIS report described the threat of a new bust in advanced economies as a “main risk,” with many reaching the top of the economic cycle.The economies worst hit by the last crisis are now suffering the costs of persistent ultra-low rates, the organisation said, which could “inflict serious damage on the financial system”, sapping banks and weakening their balance sheets and their ability to lend.And the continued misallocation of resources during busts prompted by central banks’s rock-bottom interest rates has also hammered productivity growth, the BIS said, as a prolonged reliance on debt had been used in its place.This problem is compounded as the world’s populations continue to age, the organisation warned, making debt burdens harder to bear. Yet politicians have relied too much on temporary growth boosts by using debt, rather than making painful choices, said the BIS.Mr Caruana said that during booms, workers and capital are shifted to slow-growing sectors, with a “long-lasting negative” impact on productivity growth. “Misallocated labour needs to move from these sectors to other parts of the economy,” he said.The BIS said that the current turmoil in Greece typified the kind of “toxic mix” of private and public debt being used as a solution to economic problems, rather than making the proper commitment “to badly needed” structural reforms.Mr Caruana said that policymakers must now focus on the supply side of the economy, introducing the right reforms, rather than continue to lean on debt which will inevitably undermine growth.
* * *
Submitted by cpowell on Sun, 2015-06-28 16:26. Section: Daily Dispatches
World Is Defenseless Against Next Financial Crisis, BIS Warns
By Peter Spence
The Telegraph, London
Sunday, June 28, 2015
http://www.telegraph.co.uk/finance/economics/11704051/The-world-is-defen…
The world will be unable to fight the next global financial crash as central banks have used up their ammunition trying to tackle the last crises, the Bank of International Settlements has warned.
The so-called central bank of central banks launched a scatching critique of global monetary policy in its annual report:
http://www.bis.org/publ/arpdf/ar2015e.htm
The BIS claimed that central banks have backed themselves into a corner after repeatedly cutting interest rates to shore up their economies.
These low interest rates have in turn fuelled economic booms, encouraging excessive risk taking. Booms have then turned to busts, which policymakers have responded to with even lower rates.
end
(courtesy Craig Hemke/TFMetals/GATA)
TF Metals Report: The criminality of the Comex
Submitted by cpowell on Sun, 2015-06-28 23:01. Section: Daily Dispatches
7p ET Sunday, June 28, 2015
Dear Friend of GATA and Gold:
The TF Metals Report’s Turd Ferguson tonight powerfully echoes a point long made by silver market rigging whistleblower Ted Butler: that the monetary metals futures markets have been captured by naked short-selling speculators and completely perverted to destroy price discovery in the markets they are supposed to be serving.
Ferguson asks why this is allowed to continue. GATA answers that question with extensive documentation here:
http://www.gata.org/node/14839
But back in 2001 the British economist Peter Warburton figured it all out in principle long before anybody else did:
http://www.gata.org/node/8303
Where does it all end?
In his novel “1984,” written in 1949, George Orwell wrote that it wouldn’t end. “If you want a picture of the future,” Orwell wrote, “imagine a boot stamping on a human face — forever.”
But somehow much of the world has held on for three decades longer than Orwell thought possible. Dissent survives, and Ferguson’s — headlined “The Criminality of the Comex” — is posted at the TF Metals Report here:
http://www.tfmetalsreport.com/blog/6952/criminality-comex
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Europeans rush to buy gold sovereigns. They are now sold out!!
(courtesy zero hedge)
Gold Tumbles Despite UK Mint Seeing Europeans Rush To Buy Bullion
European investors are increasing purchases of gold as Bloomberg reports, Greece’s turmoil boosts the appeal for an alternative to the euro. Demand from Greek customers for Sovereign gold coins was double the five-month average in June, the U.K. Royal Mint said in an e-mailed statement.As one Frankfurt-based bullion dealer noted, “most of our common gold coins are sold out, when people learned that the Greek banks will be closed, they started to think that itmay not be such a bad idea to have some money in gold.”
Emailed statement from UK Mint…
“During June, we experienced twice the expected demand for Sovereign bullion coins from our customers based in Greece,” accord. to e-mailed statment from U.K. Royal Mint.
* * *
As Bloomberg reports,
CoinInvest.com, an online retailer, said sales on Saturday and Sunday were the highest since Cyprus limited cash withdrawals in 2013, driven by a jump in German, French and Greek buyers.
Investors are searching for a safe haven after Greece imposed capital controls, closed banks and stopped selling gold coins to the public until at least July 6. German Chancellor Angela Merkel and French President Francois Hollande have signaled they’ve reached the limits of their ability to safeguard Greece, offering the government no further concessions to step back from the brink.
“Most of our common gold coins are sold out,” Daniel Marburger, a director of Frankfurt-based CoinInvest.com, said by phone. “When people learned that the Greek banks will be closed, they started to think that it may not be such a bad idea to have some money in gold.”
GoldCore, which buys and sells bullion, reported coin and bar demand increased “significantly” on Monday.Sales to U.K. and Ireland today are about three times the average level for the past three Mondays, according to an e-mailed statement from the Dublin-based firm.
BullionVault, which operates the largest online physical gold trading platform, reported a jump in sales during the first half of this year, a sign of a broader increase.
Customers globally added 1.4 metric tons of gold to their account, the biggest increase since 2012, the London-based company wrote in a press release. More clients want their gold stored in Switzerland, a country that isn’t in the European Union, Adrian Ash, head of research at BullionVault, said by telephone.
But despite this demand, gold “prices” are gettiung hammered after an initial spike…
How is this possible? Simple – Thank Benoit!
end
And now for a very important message to us all from Bill Holter
(courtesy Bill Holter/Holter-Sinclair collaberation)
The Beginning of “the Ending Sequence”!
This coming week could be very telling. China just ended a disastrous week and finished just whiskers away from entering bear market (-20%) territory http://www.zerohedge.com/news/2015-06-27/chinas-370-billion-margin-call . Credit markets all over the world are weakening and yields are rising. Greece will not make theirJune 30 payment(s) and probably go through a referendum to decide whether or not to flip their creditors the bird in a meaningless vote. In fact, Greece will probably “go boom” this week. Their banks and stock markets may not open Monday morning http://www.zerohedge.com/news/2015-06-27/greek-stock-market-may-not-open-monday-greek-officials-warn . Two days later, some sort of plan will need to be concocted to classify their bankruptcy as not a “DEFAULT”, otherwise a $3 trillion fuse to a $1.4 quadrillion bomb will be lit! These and more will be very important “mid-term exams”, any failure will bleed over into derivatives and become “final and terminal exams” with zero chance of a passing grade!
We have all heard about the Greenspan, Bernanke and now the Yellen “put”.
It has been believed (and for good reason), the Fed wo