Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1169.50 down $2.50 (comex closing time)
Silver $15.55 unchanged
In the access market 5:15 pm
Gold $1168.60
Silver: $15.57
Before we head into the body of the commentary, I would like to point out that tomorrow, we will have the jobs report and as you know, gold and silver are generally very volatile. So expect an interesting day tomorrow in the precious metals.
As far as Greece is concerned, you must look at the big picture to try and get an understanding as to what is happening.
The key for Greece is to stay in the euro zone similar to England whereby UK uses the pound even though they are in the eurozone. Greece will still keep its huge free trade zone. However it also will join the BRICS and by doing so, it will have a huge free trade zone with Russia and China and also it will be a gateway to the west for the huge Chinese SILK ROAD project.
The Western bankers truly want to get rid of Greece and hope that the damage from their defaults could be contained. The west believes that the containment would be better served if Greece was out of the Euro and out of the EU. The ECB can then increase QE as interest rates on all the EU will rise. The ECB has a major problem in that they cannot undergo QE due to the huge shortage of available bonds.
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a poor delivery day, registering zero notices for zero ounces . Silver saw 330 notices filed for 1,650,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 250.01 tonnes for a loss of 53 tonnes over that period.
In silver, the open interest rose by 526 contracts despite the fact that Tuesday’s price was down 7 cents. The total silver OI continues to remain extremely high, with today’s reading at 196,724 contracts now at decade highs despite a record low price. In ounces, the OI is represented by .984 billion oz or 141% 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. This is the first time in almost two years that the open interest in an active delivery month did not collapse in number.
In silver we had 330 notices served upon for 1,650,000 oz. for July
In gold, the total comex gold OI rests tonight at 442,301 for a loss of 922 contracts as gold was down $7.00 yesterday. We had zero notices filed for today.
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 addition in inventory at the SLV to the tune of 1,624,000 oz/ Inventory now rests at 325.342 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 526 contracts to 196,724 as silver was down 7 cents yesterday. The OI for gold fell by another 922 contracts down to 442,301 contracts as the price of gold was down by $7.00 yesterday.
(report Harvey)
2. Today, 13 important commentaries on Greece
(zero hedge, Reuters/Bloomberg/)
3.Michael Synder talks about the impending collapse of the shadown banking sector throughout the globe:
(Michael Snyder/EconomicCollapseBlog)
4.USA data tonight; i) ADP numbers
ii) ISM manufacturing
iii) PMI manufacturing
iv) domestic auto sales.
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: topic the USA housing sector
(Dave Kranzler IRD)
plus other important topics….
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 a tiny 922 contracts from 443,223 down to 442,301 as gold was down $7.00 in price yesterday (at the comex close). We are now in next contract month of July and here the OI surprisingly rose by 10 contracts to 421.We had 0 notices filed yesterday and thus we gained 10 contracts or an additional 1000 ounces will stand in this non active delivery month of July. The next big delivery month is August and here the OI fell by 2,541 contracts down to 283,573. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was horrendous at 48,766. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was poor at 159,001 contracts. Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI rose by a small 526 contracts from 196,198 up to 196,724 despite the fact that the price of silver was down 7 cents in price with respect to Tuesday’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 only 611 contracts down to 2,077. We had 746 notices served upon yesterday and thus we gained 135 contracts or an additional 675,000 ounces of silver will stand for delivery in this active month of July.This is the first time in quite some time that we have not lost any silver ounces standing immediately the day after first day notice. (Also notice above that gold oz standing increased).The August contract month saw it’s OI fall by 7 contracts. The next major active delivery month is September and here the OI rose by a small 4800 contracts to 138,181. This is the first time we did not witness the collapse of OI in an active delivery month. All of the longs that stayed to the end in July rolled into September. The estimated volume today was horrendous at 15,259 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 65,817 contracts which is excellent in volume. We had 330 notices filed for 1,650,000 oz
July initial standing
July 1.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
302.217 oz (JPMorgan)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
0 contracts (nil oz)
No of oz to be served (notices)
421 contracts 42,100 oz
Total monthly oz gold served (contracts) so far this month
0 contracts
Total accumulative withdrawals of gold from the Dealers inventory this month
nil oz
Total accumulative withdrawal of gold from the Customer inventory this month
13,994.554 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 JPM: 302.217 oz
total customer withdrawal: 302.217 oz
We had 0 customer deposits:
Total customer deposit:0 ounces
We had 1 adjustment:
i) Out of Brinks; 5,066.84 oz was adjusted out of the customer account and this landed into the dealer account of Brinks;
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 0 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account
To calculate the total number of gold ounces standing for the July contract month, we take the total number of notices filed so far for the month (0) x 100 oz or 0 oz , to which we add the difference between the open interest for the front month of June (421) and the number of notices served upon today (0) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the July contract month:
No of notices served so far (0) x 100 oz or ounces + {OI for the front month (421) – the number of notices served upon today (0) x 100 oz which equals 42,100 oz standing so far in this month of July (1.309 tonnes of gold). .
Total dealer inventory 522,283. or 16.24 tonnes
Total gold inventory (dealer and customer) = 8,043,291.086 oz or 250.01 tonnes
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 245.02 tonnes for a loss of 53 tonnes over that period.
end
And now for silver
July silver initial standings
July 1 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
630,432.89 oz (Delaware,Brinks,Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
601,703.118 oz (HSBC,CNT)
No of oz served (contracts)
330 contracts (1,650,000 oz)
No of oz to be served (notices)
1747 contracts (8,735,000 oz)
Total monthly oz silver served (contracts)
1076 contracts (5,380,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
nil
Total accumulative withdrawal of silver from the Customer inventory this month
630,432.89 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 JPMorgan: 599,862.500 oz
total customer deposit: 599,862.500 oz
We had 3 customer withdrawals:
i) Out of Delaware: 7703.700 oz
ii) Out of HSBC: 120,000.700 oz
iii) Out of Scotia: 60,770.110 oz
total withdrawals from customer: 188,474.510 oz
we had 1 gigantic adjustment and it is a dilly!!
out of the Scotia vault:
We have a counting error of 1,201,077.02 oz which must be added to the customer account. I guess with all of that phantom silver around this is possible!!
Total dealer inventory: 59.689 million oz
Total of all silver inventory (dealer and customer) 183.996 million oz
The total number of notices filed today for the July contract month is represented by 330 contracts for 5,380,000 oz. To calculate the number of silver ounces that will stand for delivery in July, we take the total number of notices filed for the month so far at (1076) x 5,000 oz = 5,380,000 oz to which we add the difference between the open interest for the front month of July (2077) and the number of notices served upon today (330) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the July contract month:
1076 (notices served so far) + { OI for front month of June (2077) -number of notices served upon today (330} x 5000 oz ,= 14,115,000 oz of silver standing for the July contract month.
we gained a monstrous 135 contracts or an additional 675,000 oz will stand in this active delivery month of July.
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:
July 1.2015; no change in inventory/rests tonight at 711.44 tonnes
June 30/no change in inventory/rests tonight at 711.44 tonnes
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
July 1 GLD : 711.44 tonnes
end
And now for silver (SLV)
July 1/ we had an addition of 1,624,000 oz into the SLV inventory/rests tonight at 725.342 million oz
June 30/we lost another 621,000 oz of silver from the SLV/Inventory rests at 323.718 oz (somebody must be in great need of physical silver)
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
July 1/2015: we had a deposit of 1,624,000 oz of silver inventory/SLV inventory rests tonight at 325.342 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 7.4 percent to NAV usa funds and Negative 7.4% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.9%
Percentage of fund in silver:37.7%
cash .4%
( June 30/2015) no data tonight: Cdn holiday.
2. Sprott silver fund (PSLV): Premium to NAV rises to 1.66%!!!! NAV (July 1/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to – .57% toNAV(July 1/2015
Note: Sprott silver trust back into positive territory at +1.40%
Sprott physical gold trust is back into negative territory at -.57%
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)
Global Debt Time Bomb Ticks – Puerto Rico Is Next
By Stephen FloodJuly 1, 20150 Comments
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– Puerto Rico Governor says island cannot pay its $72 billion debt
– Puerto Rico debt 15 times per capita median debt of the 50 U.S. states
– Complicated arrangements misled bond investors to believe their funds were secure
– Share price of bond insurer exposed to Puerto Rican debt plummeting, possibly on inside information
With all eyes on Greece it would seem another crisis relating to unpayable debt is brewing in the Caribbean. The governor of Puerto Rico, Alejandro García Padilla, has warned that the island is unable to pay its debts of $72 billion.
Puerto Rico has managed to rack up an astounding level of debt relative to the size of its economy. Moody’s estimates the small U.S. territory to have bond debts fifteen times greater than the median bond debt of the 50 U.S. states.
Padilla has warned that by 2025 the island could have bond debt of up to $40,000 for every man, woman and child – in a territory with high unemployment and where the average annual wage is less than $20,000.
The debt was amassed by offering too-good-to-be-true terms to U.S. investors wishing to avoid paying high taxes at home. Interest paid on Puerto Rico’s bonds are tax exempt in the U.S.
A complicated set of arrangements lulled investors into a false sense of security with regards to Puerto Rican bonds. For a start, the constitution “contains an unusual clause that requires general-obligation bonds to be paid ahead of virtually any other government expense,” according to the New York Times.The government then promised specific revenue streams to different groups of bondholders.
The 2008 crisis hurt the economy badly and the government continued to promise more and more revenue streams in order to issue more and more bonds, the funds from which were used to finance current expenditure. Now there is simply not enough cash to finance debt and public services.
The governor did not specifically say that debts would be restructured. He did, however, say that he was “guaranteeing our citizens essential services and our pensioners a just income.”
Now, bondholders are at risk as are the funds which hold Puerto Rican bonds and, more importantly, those who insure them in the derivatives market.
Dave Kranzler, from Investment Research Dynamics has warned that there are signs that the Puerto Rico situation may not remain a local crisis for much longer.
He points out that share prices of MBIA, the bond insurers have been plummeting. MBIA are valued at $3.9 billion whereas their exposure to Puerto Rican debt is around $4.5 billion. Kranzler reckons their exposure could even be multiples of that figure. A default could wipe them out.
He also points out that the firm’s largest shareholders are Warburg Pincus, the firm to which Timothy Geithner went after his stint as Treasury Secretary, when he helped paper over the chasms opening up in the financial system.
Geithner is, therefore, better placed than most to estimate the risks posed by various bond issuers. If it is Warburg Pincus who are shedding their MBIA stock it is likely that more trouble is brewing in Puerto Rico.
Essential Guides:
Protecting Your Savings In The Coming Bail-In Era
rom Bail-Outs To Bail-Ins: Risks and Ramifications
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,171.70, EUR 1,053.26 and GBP 748.38 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,175.00, EUR 1,053.01 and GBP 747.08 per ounce.
Gold slipped $6.70 or 0.57 percent yesterday to $1,172.50 an ounce. Silver remained unchanged at $15.72 an ounce.
Gold in Singapore for immediate delivery inched up 0.2 percent to $1,174.25 an ounce near the end of the day.
In spite of the Greek drama, the yellow metal has failed to see an influx of safe haven bids, as investors are still focussed on a potential U.S. interest rate hike. Greece has now become the first developed economy to miss a payment to the International Money Fund.
The market was affected by comments from a top central central bank member who said that The Federal Reserve is on track to raise interest rates this year, with September still “in play”, despite growing market volatility and anxiety in the wake of Greece’s debt default.
James Bullard, St. Louis Fed President, shrugged off the impact of Greece’s economic problems and said the Fed will remain data dependent on its view about when to raise rates. However, Mr. Bullard, does not currently hold a voting role on the monetary-policy setting Federal Open Market Committee and therefore his bark is worse than his bite.
In late morning European trading gold is up 0.04 percent at $1,172.70 an ounce. Silver is off 0.45 percent at $15.63 an ounce and platinum is up 0.56 percent at $1,081.00 an ounce. Palladium rose over 3 percent to a session high of $700 an ounce.
Breaking News and Research Here
end
Interesting development:
(courtesy Bloomberg)
Barrick’s cyanide breakthrough on gold solves a puzzle for gain
The new technique will let the company recover about 2.25 million ounces of gold worth $2.6bn over five years.
David Stringer (Bloomberg) | 1 July 2015 03:23
Barrick Gold has pioneered a way to produce gold without having to depend on cyanide’s chemical ability to separate the precious metal from ore.
As much as 60% of the planet’s gold is currently produced using cyanide, a 120-year-old practice that carries environmental risks of groundwater contamination.
The new technique, used by Barrick to get gold from cyanide-resistant ore at its Goldstrike mine in Nevada, will let the world’s largest producer recover about 2.25 million ounces of gold worth $2.6 billion over five years. The technology could also spur other companies to consider new ways to limit the use of cyanide in mining.
“Now there’s a plant up and running it takes away some of the risk,” said Paul Breuer, a Perth-based principal research scientist at Australia’s Commonwealth Scientific and Industrial Research Organization, which worked with Barrick on the process. “People will be very seriously looking at it.”
Barrick and the CSIRO developed a way to use non-toxic thiosulfate to process so-called double refractory ore. The research group has also worked with companies including Newcrest Mining Ltd., Australia’s biggest producer, on techniques to limit cyanide use.
50 Biggest Miners
Researchers have been working on the thiosulfate technique since the 1970s. Breuer stressed that it’s not suitable for all mines and may add to production costs.
“We know that cyanide is a concern for some stakeholders,” Barrick spokesman Andy Lloyd said in an e-mail. “The potential to use alternatives to cyanide at certain operations in the future may help to address those concerns.”
About 50 large gold producers have adopted a voluntary policy on the use and disposal of the chemical. The International Cyanide Management Code was drafted after an accident in 2000 polluted rivers in eastern Europe, cutting off drinking water supplies to about 2.5 million people in Hungary and Serbia and killing 1,500 tons of fish.
The spill from a mine near Baia Mare in Romania, which let loose a torrent of waste water laced with 120 metric tons of cyanide, was caused when a tailings dam — used to store mine waste — overflowed.
A similar breach affected a mine in Mexico in January, though the operator Penmont S. de R.L. was able to contain the spill within the boundaries of the site, the country’s environmental prosecution agency said.
Stockpiled Gold
There haven’t been any incidents involving major producers resulting in deaths or significant environmental damage in at least a decade, said Norm Greenwald, executive vice president of the International Cyanide Management Institute, which oversees the gold industry’s code.
Barrick’s development of the new technique, which included a $620 million commitment for a new processing plant, was done primarily to help the company more quickly recover stockpiled gold rather than as an effort to limit environmental risks, according to Lloyd. Cyanide is safe when properly managed, he said in an e-mail.
The toxic legacy of cyanide is much more keenly felt in illegal mining. In February, China’s official news agency reported three people were killed after being poisoned by cyanide gas at an illegal gold mining operation in Henan Province.
Aquatic Life
Cyanide in high concentrations is toxic to aquatic life, especially fish, which are 1,000 times more sensitive to the chemical than humans. Birds and other wildlife are also at risk if they use tailings ponds for drinking or swimming.
“The biggest issue with cyanide is its toxicity to the environment and that’s the number one driver to try and get away from using it,” said CSIRO’s Breuer.
Use of the chemical in gold mining is restricted or banned in Montana, parts of Argentina, Hungary, Slovakia and the Czech Republic, according to the Cyanide Management Institute.
“You can’t really invest in gold without having some exposure to cyanide,” said David Coates, a Sydney-based analyst at Bell Potter Securities Ltd. “Though wherever you can see community or environmental benefits or risk reduction, that’s always a positive.”
©2015 Bloomberg News
end
(courtesy The London’s Telegraph/Fraser/GATA)
How do you change a currency fast?
Submitted by cpowell on Wed, 2015-07-01 00:33. Section: Daily Dispatches
By Isabelle Fraser
The Telegraph, London
Tuesday, June 30, 2015
The drachma was the world’s oldest existing currency before it was replaced by the euro on January 1, 2001. And it may be about to make a comeback. This Sunday’s referendum is described by European leaders as a vote for or against the euro. If Greece votes “oxi,” the country may soon be looking for a new currency.
Haris Theoharis, a politician in the centrist party To Potami, said: “There’s already a team within the prime minister’s office, with staff from the general accounting office, right now working on the drachma.”
But how? Has anything like this ever been done before?
Not really. The last time a currency union broke up was the Austro-Hungarian empire in 1918. …
… For the remainder of the report:
http://www.telegraph.co.uk/finance/economics/11708576/How-do-you-change-…
end
(courtesy Koos Jansen/GATA)
Koos Jansen: Former U.S. Mint director clueless on gold in Fort Knox
Submitted by cpowell on Wed, 2015-07-01 17:17. Section: Daily Dispatches
1:17p ET Wednesday, July 1, 2015
Dear Friend of GATA and Gold:
Gold researcher and GATA consultant Koos Jansen today disputes in great detail assurances that have been given over the years by the former director of the U.S. Mint, Edmund C. Moy, about the U.S. gold reserves at Fort Knox. Jansen’s commentary is headlined “Former US Mint Director Clueless on Gold in Fort Knox” and it’s posted at Bullion Star here:
https://www.bullionstar.com/blogs/koos-jansen/former-us-mint-director-cl…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy Reuters/GATA)
China targets counterweight in gold trade with yuan fix
Submitted by cpowell on Wed, 2015-07-01 17:03. Section: Daily Dispatches
By A. Ananthalakshmi and Jan Harvey
Reuters
Wednesday, July 1, 2015
A decade after China kicked off a series of gold market reforms, plans to establish a yuan price fix mark one of Beijing’s biggest step so far to capitalise on the country’s position as the world’s top producer and a leading consumer.
While no immediate threat to the gold pricing dominance of London and New York, the benchmark could ultimately give Asia more power over bullion trade, particularly if the yuan becomes fully convertible, industry sources say.
The yuan fix is due to launch by the end of 2015 via the Shanghai Gold Exchange, which last year allowed foreign players to trade gold using offshore yuan.
“Across the commodity markets as a whole, we’re seeing some very significant initiatives by the Chinese authorities,” said Nic Brown, head of commodities research at Natixis. …
… For the remainder of the report:
http://www.reuters.com/article/2015/07/01/china-gold-fix-idUSL3N0ZH03O20..
end
And now overnight trading in equities, currencies interest rates and major stories from Asia and Europe:
1 Chinese yuan vs USA dollar/yuan weakens to 6.2012/Shanghai bourse red and Hang Sang: green
2 Nikkei closed up by 93.59 points or 0.46%
3. Europe stocks all in the green /USA dollar index up to 95.87/Euro falls to 1.1108
3b Japan 10 year bond yield: rises to .49% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 122.91/ominous to
3c Nikkei still just above 20,000
3d USA/Yen rate now well below the 123 barrier this morning
3e WTI 58.57 and Brent: 62.86
3f Gold up/Yen down
3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
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 .78 per cent. German bunds in negative yields from 4 years out.
Except Greece which sees its 2 year rate rise to 37.43%/Greek stocks this morning: stock exchange closed again/ still expect continual bank runs on Greek banks /Greek default to the IMF in full force/
3j Greek 10 year bond yield rise to: 15.43%
3k Gold at 1172.66 dollars/silver $15.65
3l USA vs Russian rouble; (Russian rouble up 1/5 in roubles/dollar in value) 55.35,
3m oil into the 58 dollar handle for WTI and 62 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 .9415 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0459 well below the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
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 from negativity at +.78%
3s The ELA is frozen now at 88.6 billion euros. The bank withdrawals were causing massive hardship to the Greek banks.
4. USA 10 year treasury bond at 2.40% early this morning. Thirty year rate well above 3% at 3.17% / yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Market Wrap: Greek “Capitulation” Optimism Sends Global Risk Higher After China Re-crashes
Before we focus on the Greek drama which this morning has soared to new highs, a quick look at China which after trading largely unchanged for most of the day, saw a bout of late day selling, which brought the Shanghai Composite 5.2% lower, wiping out all Tuesday rebound gains, and back to the Monday post-PBOC crash level.One thing that was clear: nobody cared about the Chinese PMI data, where both the official PMI and HSBC Mfg PMI missed expectations and printed at 50.2 (exp. 50.4) and 49.4 (Exp. 49.6), respectively.
Other Asian equities mostly rose following renewed negotiations between Greece and its creditors with the Nikkei 225 up +0.5% following a strong BoJ Tankan survey if not so strong real wages which are now down for a record 25 consecutive months, with capex expectations at the highest level since 2004. JGBs fell 20 ticks despite the BoJ conducting its JGB purchase program while participants also look ahead towards tomorrow’s 10-year JGB auction. Hang Seng was closed today due to a public holiday.
So now a quick recap on the state of play in Greece courtesy of RanSquawk:
FT writes citing leaked letter that Greek PM is prepared to accept bailout conditions
ECB’s Nowotny says that the ECB have kept the Greek ELA unchanged at EUR 88.6bIn. (BBG) These comments come amid reports that the ECB is poised to impose tougher haircuts on the collateral that Greek lenders place in exchange for the emergency loans, according to the FT. Nowotny also added that the threat posed by Greece to the EUR is below what it was previously. According to sources, German finance minister Schaeuble informed conservative lawmakers that he would request that the ECB does not increase the ELA for Greek banks. (RTRS)
Eurogroup will hold a call again at 1630BST/1030CDT today in regards to Greece, according to an EU official. (BBG)
Greece may suspend the referendum (July 5th) if talks restart and there was an offer and agreement on required prior actions, according to the Maltese PM, with these comments later echoed by the Greek government. (BBG/Times of Malta)
Austrian Finance Minister Schelling stated Greek Finance Minister Varoufakis announced new proposals, adding that Greece should not accept loans without conditions. (BBG)
Eurogroup chief Dijsselbloem says institutions will debate the request for a further bailout program only following the referendum, this was also reiterated by German Chancellor Merkel. (BBG)
ECB’s Praet says that the central bank will implement further policy measures if required, he also says that the ECB stimulus will remain as long as it is required. (BBG)
According to the Prorata poll, before the bank closures the `No’ camp for accepting the terms of the bailout was on 57% with the ‘Yes’ vote at 30%. After the banks closed this changed to `No’ 46% and `Yes’ 37%. Note that polls reported yesterday all showed varying results.
Despite the downbeat view the market has taken on Greece throughout the week, stocks in Europe trade higher this morning with fixed income products lower in a reversal of recent moves as participants respond to the latest developments surrounding the troubled nation. Heading into the US open, European equities have been provided a further lift from their opening gains by reports in the FT that Greek PM Tsipras is prepared to accept bailout conditions, according to a leaked letter. Sentiment was already supported by news that the Eurogroup will be holding a teleconference call at 1630BST on the latest state of play with Greece, which could see a formal announcement by the group on the latest set of proposals.
This could subsequently lead to a suspension of the July 5th referendum, according to the Greek government although Eurogroup chief Dijsselbloem says institutions will debate the request for a further bailout program only following the referendum, this was also reiterated by German Chancellor Merkel.
Fed’s Bullard (Non-voter, Hawk) said that a Fed rate lift off is “very much in play” for September but also will be on the table for July, while also reiterating that every FOMC meeting is in play and is data dependent. (BBG)
Despite initially trading in a more subdued manner, EUR has erased its initial losses heading into the US open amid the aforementioned reports regarding Tsipras’ willingness to accept the demands of Greek creditors, news which has subsequently pressured the USD-index back into negative territory.
Elsewhere, antipodean currencies traded higher overnight amid upbeat Australian building approvals data, with supported also lent to AUD and other commodity related currencies from a resurgence in energy prices. Finally, GBP/USD has broken to a fresh session lows in recent trade in the wake of disappointing UK manufacturing PMI data with the pair tripping stops through the earlier weekly low of 1.5664.
In the commodity complex, price action for energy markets was initially swayed by the latest API inventory report which showed the first build in a month in crude stockpiles. (-1.9mln vs. Prey. -3.2mIn). Furthermore, participants also continue to assess the ramifications of Iranian nuclear talks which could lead the nation to provide yet more supply to the market with OPEC seemingly unwilling to cull existing production levels. However, some of the downside in prices was erased by the latest Greek developments which weighed on the USD-index.
Elsewhere, precious metals markets traded in a relatively rangebound manner throughout the session with the data overnight from China failing to weigh on spot gold and silver, although some of the recent safe-haven bid for prices was unwound alongside improved sentiment surrounding Greece. Elsewhere, copper prices were weighed on overnight by the PMI data with Nickel extending recent losses to a fresh 6yr low.
In summary: European shares rise with the basic resources and oil & gas sectors underperforming and autos, technology outperforming. Greece offers to accept proposals from creditors, subject to certain conditions. U.K. manufacturing grows at slowest pace in over 2 yrs. The French and Italian markets are the best-performing larger bourses, Swiss the worst. The euro is weaker against the dollar. Greek 10yr bond yields rise; German yields increase. Commodities decline, with nickel, Brent crude underperforming and copper outperforming. U.S. Markit U.S. manufacturing PMI, ISM manufacturing, construction spending, vehicle sales, mortgage applications, ADP employment change, Challenger job cuts due later.
Market Wrap
S&P 500 futures up 1% to 2074
Stoxx 600 up 1.8% to 388.2
US 10Yr yield up 4bps to 2.4%
German 10Yr yield up 5bps to 0.82%
MSCI Asia Pacific up 0.2% to 146.7
Gold spot little changed at $1172.4/oz
All 19 Stoxx 600 sectors rise; basic resources, oil & gas underperform, autos, tech stocks outperform
Asian stocks rise with the Kospi outperforming and the Shanghai Composite underperforming.
MSCI Asia Pacific up 0.2% to 146.7
Nikkei 225 up 0.5%, Kospi up 1.1%, Shanghai Composite down 5.2%, ASX up 1%, Sensex up 1%
6 out of 10 sectors rise with telcos, utilities outperforming and tech, financials underperforming
Euro down 0.18% to $1.1127
Dollar Index up 0.23% to 95.71
Italian 10Yr yield down 10bps to 2.23%
Spanish 10Yr yield down 10bps to 2.21%
French 10Yr yield up 3bps to 1.23%
S&P GSCI Index down 0.5% to 438.6
Brent Futures down 0.7% to $63.1/bbl, WTI Futures down 1.3% to $58.7/bbl
LME 3m Copper up 0.1% to $5768/MT
LME 3m Nickel up 0.3% to $12020/MT
Wheat futures down 0.8% to 611 USd/bu
Overnight Headline Bulletin from Bloomberg and RanSquawk
Sentiment in Europe has been supported by reports that the Greek PM is prepared to accept bailout conditions
Further
clarity on the progress of discussions should be provided by the
outcome of discussions from the Eurogroup teleconference at
1630BST/1030CDT
Looking ahead, today sees the release of US
ADP employment change, manufacturing PMI. Construction spending, ISM
manufacturing and DoE inventories
Treasuries decline after Greece accepted creditors’ proposals as basis for compromise to end standoff over bailout; however, PM Tsipras signaled sticking points remain on pensions, tax discounts to Greek islands.
Creditors still view the Greek referendum, planned for July 5, as an issue for reaching an aid accord, according to an EU official; institutions are now analyzing amendments before submitting analysis to the Eurogroup which will hold call at 5.30pm local time
While about a third of Greece’s depleted banks cracked open their doors after being closed for three days, all they did was ration pension payments, hours after the country became the first advanced economy to miss a payment to IMF
Greece’s capital controls are beginning to bite, from standing in line for hours to withdraw maximum daily allowed EU60 to not be able to buy Apple Store apps
A Chinese factory gauge remained sluggish last month, suggesting a tepid response from manufacturers to loosened monetary policy settings and efforts to shore up local government finances
China’s $8.1t equity market now has more than 90m individual investors, according to China Securities Depository and Clearing Co, more than the 87.8m Communist Party members at the end of last year, according to Xinhua
Markit’s U.K. PMI dropped to 51.4 in June, less than forecast, from 51.9 in May; while total new orders rose, export orders fell for a third month
Sovereign 10Y bond yields mostly higher; Greece 10Y yields approach 16%. Asian stocks mixed; Shanghai plunges over 5%. European stocks higher, U.S. equity-index futures rise. Crude oil lower, copper higher, gold little changed
DB’s Jim Reid fills what gaps we may have left:
The tensions are heating up in Greece with lots of headlines and rhetoric but little incremental developments to the story over the last 24 hours. Interestingly I got a couple of emails from travel companies yesterday offering very cheap packages to Greece. That probably reflects the damage this impasse is having on the tourist industry during this peak season period. In terms of news, overnight we got the confirmation that Greece failed to make the €1.6bn payment due to the IMF which came as no surprise following the events of the last few days. A confirmation email from IMF spokesman Gerry Rice confirmed that Greece is now in arrears to the Fund. So with that, Greece now joins the historical ranks of countries including Cuba, Zimbabwe and Sudan as nations who’ve fallen into arrears with the fund. We’ve highlighted previously the various technicalities that now follow a non-payment and the cross-default implications on other EFSF loans, GGB’s and Greek CDS. However its unlikely that the Europeans are going to accelerate anything with regards to the EFSF before the referendum.
Before we got the non-payment confirmation, headlines yesterday were dominated by various reports of extension requests. Greece again made a request for a short-term extension of the existing program – which was swiftly rejected – while we also got the news that Athens submitted a request for a 2-year loan from the ESM. Although Eurozone finance ministers are set to discuss the request today (expected 10.30am GMT), the tone from Europe is one of pushback with German Chancellor Merkel in particular saying that there will be no new negotiations until after Sunday’s referendum. Eurogroup President Dijsselbloem, although acknowledging that the request will get looked at, also highlighted that ‘a new program takes time and will have to contain tough measures and payments’, while ‘the situation will unfortunately further deteriorate and the only way to solve this quickly is when the government will take another political position’. Certainly the bulk of the commentary on the wires was one of the offer being something of a non-starter in any case.
There’s been little in the way of much negative reaction in equity markets in Asia this morning to the non-payment. Aside from a more mixed performance in China where the Shenzhen is +1.15% and the Shanghai Comp -0.27%, most major bourses are firmer with the Nikkei (+0.30%), Kospi (+1.12%) and ASX (+0.52%) all up. Asia credit markets are around a basis point tighter while sovereign bond yields in the region are around 2-3bps wider.
It’s been a busy morning for data meanwhile. In Japan we saw the Q2 Tankan survey which showed a rise of 3pts to 15 in the large manufacturer’s index, and 4pts to 23 for large non-manufacturing companies, while small manufacturer’s declined 1pt to 0 for the quarter, although small non-manufacturer’s rose 1pt to 4. Our colleagues in Japan noted that the most important development in the survey was a large upward revision in the FY15 capex plan across all industries and companies. The plan was revised upward to 5.6% yoy which is up 5ppt from the Q1 survey. Meanwhile over in China, the June PMI readings made for slightly more mixed reading. There were contrasting figures from the official and non-official manufacturing PMI readings. The former showed no change to the 50.2 print, while the latter HSBC print was revised down to 49.4 from 49.6 previously, the fourth straight sub-50 reading. The details still point to overall sluggishness in the economy. The official non-manufacturing print made for slightly better reading however, with the print up 0.6pts to 53.8, a four-month high.
Back to markets yesterday, European equities again remained under controlled pressure for most of the session, although not without plenty of intra-day volatility in reaction to the various Greece headlines which came out over the day. Indeed the Stoxx 600 (-1.26%), DAX (-1.25%) and CAC (-1.63%) all ended the quarter on a weak note, while peripheral bourses actually outperformed with the IBEX and FTSE MIB -0.78% and -0.48% respectively. There we