Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1163.30 up $10.90 (comex closing time)
Silver $15.15 up 20 cents.
In the access market 5:15 pm
Gold $1158.00
Silver: $15.15
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a good delivery day, registering 100 notices for 10,000 ounces . Silver saw 294 notices filed for 1,470,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 248.19 tonnes for a loss of 55 tonnes over that period.
In silver, the open interest rose by 1071 contracts despite the fact that Tuesday’s price was down by 78 cents. The total silver OI continues to remain extremely high, with today’s reading at 197,092 contracts now at decade highs despite a record low price. In ounces, the OI is represented by .985 billion oz or 139% 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 247 notices served upon for 1,470,000 oz.
In gold, the total comex gold OI rests tonight at 452,145 for a gain of 5480 contracts despite the fact that gold was down $20.50 yesterday. We had 100 notices filed for 10,000 oz today.
We had no change in tonnage at the gold inventory at the GLD; thus the inventory rests tonight at 709.65 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, we had no change in inventory at the SLV/ Inventory now rests at 325.205 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 1071 contracts to 197,092 despite the fact that silver was down by 78 cents yesterday. The OI for gold rose by another 5480 contracts up to 452, contracts as the price of gold was down by $20.50 yesterday.
(report Harvey)
2 Today, 10 important commentaries on Greece
(zero hedge, Reuters/Bloomberg,Bershidsky / Graham Summers/Ambrose Evans Pritchard)
3. One commentaries on the collapse in the stock market in China
(zero hedge)
4.USA data tonight; Beige book minutes
(3 commentaries)
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. Oil retreats again as inventories rise
(zero hedge)
plus other important topics….
Just in case you missed this from yesterday, I am repeating it for you:
Before we begin, I just retrieved the data from the FRBNY for gold leaving this depository for safe havens abroad.
Data for May:
8103 – 8089 = 14 million dollars worth of gold left NY at a value of 42.22 per oz.
Thus 331,596.4 oz leaves or 10.314 tonnes
This is approximately what left last month. Since Germany is the only nation that have officially asked for repatriation, I am quite sure that the destination of this gold is Germany.
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 by a whopping 5480 contracts from 446,665 up to 452,145 as gold was down $20.50 in price yesterday (at the comex close). We are now in the next contract month of July and here the OI surprisingly rose by 78 contracts to 241 contracts. We had 2 notices filed yesterday and thus we gained 80 contracts or an additional 8000 ounces will stand in this non active delivery month of July. The next big delivery month is August and here the OI rose by 500 contracts up to 279,397. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was fair at 173,142. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was good at 213,590 contracts. Today we had 100 notices filed for 10,000 oz.
And now for the wild silver comex results. Silver OI rose by a huge 1071 contracts from 196,022 up to 197,092 despite the fact that the price of silver was down by 78 cents in price with respect to yesterday’s trading. We continue to have our bankers pulling their hair out with respect to the continued high silver OI. The next delivery month is July and here the OI rose by 387 contracts up to 903. We had 5 notices served upon yesterday and thus we gained 382 contracts or an additional 1,910,000 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 after first day notice. The August contract month saw it’s OI rise by 76 contracts up to 263. The next major active delivery month is September and here the OI rise by a small 106 contracts to 137,. The estimated volume today was excellent at 84,540 contracts (just comex sales during regular business hours) with mucho help from the HFT traders. The confirmed volume yesterday (regular plus access market) came in at 107,181 contracts which is huge in volume. We had 247 notices filed for 1,470,000 oz
July initial standing
July 8.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
96.45 (3 kilobars)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
2502.12 oz (Delaware,JPM)
No of oz served (contracts) today
100 contracts (10,000 oz)
No of oz to be served (notices)
141 contracts 14,100 oz
Total monthly oz gold served (contracts) so far this month
410 contracts(41,000 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
nil oz
Total accumulative withdrawal of gold from the Customer inventory this month
80,455.1 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 Manfra; 96.45 oz (3 kilobars)
total customer withdrawal: 96.45 oz
We had 0 customer deposits:
Total customer deposit: nil ounces
We had 1 adjustment.
i) today we had 29,078.008 oz leave the dealer account of JPMorgan and this entered into the customer account of JPM.
*JPMorgan has only 230,183.398 oz left in its dealer account or 7.15 tonnes)
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 100 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 (410) x 100 oz or 41,000 oz , to which we add the difference between the open interest for the front month of July (241) and the number of notices served upon today (100) 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 (410) x 100 oz or ounces + {OI for the front month (241) – the number of notices served upon today (100) x 100 oz which equals 47,100 oz standing so far in this month of July (1.7138 tonnes of gold).
we gained an additional 8000 oz of gold standing in this non active delivery month of July. somebody was badly in need of physical gold today.
Total dealer inventory 493,204.734 or 15.34 tonnes
Total gold inventory (dealer and customer) = 7,979,322.770 oz or 248.19 tonnes
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 248.19 tonnes for a loss of 55 tonnes over that period.
end
And now for silver
July silver initial standings
July 8 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
1,205,309.790 oz (HSBC,Brinks,Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
35,124.815 oz (Brinks, Delaware)
No of oz served (contracts)
247 contracts (1,470,000 oz)
No of oz to be served (notices)
609 contracts (3,045,000 oz)
Total monthly oz silver served (contracts)
2707 contracts (13,535,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
nil
Total accumulative withdrawal of silver from the Customer inventory this month
2,712,779.2 oz
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 2 customer deposit:
i) Into Brinks: 30,059.800 oz
ii) Into Delaware: 5065.015 oz
total customer deposit: 35,124.815 oz
We had 2 customer withdrawals:
i) Out of CNT: 5201.89 oz
ii) Out of Scotia: 1,200,107.900 oz
total withdrawals from customer: 1,205,309.79 oz
we had 0 adjustments
Total dealer inventory: 60.146 million oz
Total of all silver inventory (dealer and customer) 180.972 million oz
The total number of notices filed today for the July contract month is represented by 247 contracts for 1,470,000 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 (2707) x 5,000 oz = 13,535,000 oz to which we add the difference between the open interest for the front month of July (903) and the number of notices served upon today (247) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the July contract month:
2707 (notices served so far) + { OI for front month of July (903) -number of notices served upon today (247} x 5000 oz ,= 16,580,000 oz of silver standing for the July contract month.
we gained a whopping 1,910,000 ounces standing in this active delivery month of July. Somebody was in great need of physical silver today.
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 8/no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 7/ no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 6/no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 2/we had a huge withdrawal of inventory to the tune of 1.79 tonnes/rests tonight at 709.65 tonnes
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
July 8 GLD : 709.65 tonnes
end
And now for silver (SLV)
July 8/no change in inventory at the SLV/rests at 325.205
July 7/no change in inventory at the SLV/rests at 325.205 tonnes
July 6/we have a slight inventory withdrawal which no doubt paid fees. we lost 137,000 oz/Inventory rests tonight at 325.205 million oz
July 2/ no change in inventory at the SLV/rests tonight at 325.342 million oz
July 1/ we had an addition of 1,624,000 oz into the SLV inventory/rests tonight at 325.342 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
July 8/2015: tonight inventory rests at 325.205 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 8.3 percent to NAV usa funds and Negative 8.1% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 62.8%
Percentage of fund in silver:36.9%
cash .3%
( July 8/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to 2.49%!!!! NAV (July 8/2015) (silver must be in short supply)
3. Sprott gold fund (PHYS): premium to NAV rises to – .51% toNAV(July 7/2015
Note: Sprott silver trust back into positive territory at +2.49%
Sprott physical gold trust is back into negative territory at -.51%
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)
Leveraged Chinese “Investors” Learning Painful Lesson
By Stephen FloodJuly 8, 20150 Comments
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– Shanghai Composite has lost over 32% of its value in less than month
– Investors selling on “panic sentiment”
– Persistent intervention by government agencies has failed to support market
– Market has doubled over past year while real economy struggles
– Chinese Market had been boosted by participation of market-illiterate savers
– May morph into wider crisis
China’s stock markets continued their decline overnight with the Shanghai SE Composite falling another 4.64% and down of 32% since June 12. Markets have begun seizing up as sellers overwhelm the system.
The Chinese regulator, the China Securities Regulatory Commission, has described market participants as being “irrationally” driven by “panic sentiment” despite there having been no rational basis for the run up in Chinese markets before they peaked last month.
Indeed, in these past two weeks the government itself has taken a series of panic measures to prop up the system but, thus far, to no avail. These measure include cuts in reserve requirements, and a rate cut to boost lending for the purpose of further speculation, easing regulations on margin financing, reduction on transaction fees and providing liquidity to brokerage firms to prop up shares. Which is more or less what western agencies have done to prop up their markets. They have even directed state companies to not sell public companies stock that they might own.
The Shanghai Composite had surged to 5,166 on June 12 from just over 2,000 a year previously. In the same period China’s official GDP growth rate has declined from 1.9% to 1.3%. Commodity prices have been languishing as the economy of the world’s largest importer of raw materials has slowed down.
The past year has seen an influx of unsophisticated and inexperienced investors pouring into the market with the active encouragement of the Chinese government. Many are trading on leverage – borrowed cash – and few have the the capacity to weather margin calls as their positions nosedive.
The internet abounds with anecdotes from China reminiscent of those stories told about the atmosphere in the run up to the 1929 Wall Street crash where shoe-shine boys were giving investment advice to their customers.
The failure of the government to successfully intervene may have profound psychological consequences across the nation. China’s gargantuan property bubble, propped up by confidence in the power of the state, is yet to burst. The effect on China’s banking system of the evaporation of all this borrowed cash remains to be seen.
“Only when the tide goes out do you discover who’s been swimming naked” – Buffett
Some analysts view the crisis brewing in China to be of more significance globally than the on-going Greek crisis.
Why, well because contagion is now a real risk. You have far more connections with the Chinese economy then you do with the Greek one. For Europeans, Greece is in our currency boat and they are causing it to sink. The Chinese though own a big part of our boat and what we have in it, so a crisis in China very quickly becomes a big problem here.
Chinese consumer demand is becoming increasingly important to the global economy. As 1.5 billion people move up the food chain to the middle class they become a driver for global economic growth far into the future. Should the average Chinese household balance sheet take a bath in this market sell off it will have a significant effect on consumer sentiment and thus Global GDP growth.
Furthermore, this could be just the beginning. The Chinese government has not really been tested. They have enjoyed a massive year on year growth for over a decade. How will they manage a sharp downturn in their economy, discontentment on the streets, a perception that they may not have the skills to manage the crisis? How will they react to popular protests? Time will tell, but this crisis may be their greatest test yet and without an institutional memory of crisis management to rely on they will have to find their way through.
We believe that China stock crash is symptom of dangerous debt dynamics sweeping the world. The western markets are equally positioned. Investors should consider diversification strategies if they haven’t already done so. Call our office today to discuss.
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,154.25, EUR 1,045.61 and GBP 749.46 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,166.25, EUR 1,063.22 and GBP 752.10 per ounce.
Gold fell $13.10 or 1.12 percent yesterday to $1,155.80 an ounce. Silver slid $0.59 or 3.76 percent to $15.10 an ounce.
Gold in Singapore for immediate delivery inched down 0.6 percent to $1,147.75 an ounce near the end of the day.
As Europe called an emergency summit on Greece, the dollar rallied and gold dipped to a four month low. Silver slipped almost 7 percent and platinum fell to a 2009 low.
For the second time in the past year the U.S. Mint has run out of its popular 2015 American Eagle silver bullion coins due to a “significant” increase in demand. A signal that there are bargain hunters out there who want to buy on the dip.
In a statement sent to its biggest U.S. wholesalers, the Mint said its facility in West Point, New York, continues to manufacture coins and expects to resume sales in about two weeks.
In late morning European trading gold is up 0.08 percent at $1,155.40 an ounce. Silver is down 0.56 percent at $15.00 an ounce and platinum is also off 0.88 percent at $1,020.00 an ounce.
Breaking News and Research Here
end
(courtesy Bron Suchecki/GATA)
Bron Suchecki: Conspiracy, complacency, and the death spiral phase
Submitted by cpowell on Wed, 2015-07-08 02:10. Section: Daily Dispatches
10:14p ET Tuesday, July 7, 2015
Dear Friend of GATA and Gold:
Central banks aren’t the only ones with potentially a lot of money to deploy trading gold, Perth Mint analyst Bron Suchecki writes tonight, adding that some major investment houses lately have expressed negative sentiment about the monetary metal.
While Suchecki acknowledges that some central banks are active in the gold market, his suggestion that investment houses might influence the market to an equal extent seems improbable. After all, central banks, unlike investment houses, are authorized to create not a few billion or even tens of billions but actually infinitemoney and to apply it in secret, even through some of the investment houses Suchecki cites. And while investment houses, if they are truly acting on their own, ordinarily care only about making money regardless of a market’s direction, central banks have a longstanding policy interest, overwhelmingly documented —
http://www.gata.org/node/14839
— of wanting to hold the gold price down to protect their own currencies, bonds, and interest rates.
Further, of course, the financial market maxim is not “Don’t fight Bessemer Trust” but rather “Don’t fight the Fed,” though lately it might be amended as “Don’t fight JPMorganChase when it is trading for the Fed.”
But Suchecki finds it “interesting” that Bloomberg View columnist Barry Ritholtz, disparaging gold as an investment last week and inviting critics to e-mail him, did not respond to the specific questions GATA put to him about surreptitious central bank intervention in the gold market, and “interesting” may be close enough to “telling.”
Suchecki’s commentary is headlined “Conspiracy, Complacency, and the Death Spiral Phase” and it’s posted at the Perth Mint’s research page here:
http://research.perthmint.com.au/2015/07/07/conspiracy-complacency-and-t…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy Reuters/GATA)
U.S. Mint sold out of silver coins due to strong demand
Submitted by cpowell on Wed, 2015-07-08 01:07. Section: Daily Dispatches
From Reuters
Tuesday, July 7, 2015
The U.S. Mint said on Tuesday it temporarily sold out of its popular 2015 American Eagle silver bullion coins due to a “significant” increase in demand, the latest sign that plunging prices have spurred a resurgence of retail buying.
In a statement sent to its biggest U.S. wholesalers, the Mint said its facility in West Point, New York, continues to produce coins and expects to resume sales in about two weeks.
This is the second time the mint has sold out of silver coins in the past nine months. It ran out of 2014-dated American Eagles in November last year.
In 2013 the historic drop in precious metals prices unleashed a surge in global demand for coins, forcing the mint to ration silver coin sales for 18 months. …
… For the remainder of the report:
http://www.reuters.com/article/2015/07/07/usmint-coins-sales-idUSL1N0ZN1..
end
gee! I wonder who???
(courtesy GATA/Arabian Money.com)
Somebody big’s sitting on the gold price says Sharps Pixley CEO Ross Norman
Posted on 08 July 2015 with no comments from readers
Somebody big is sitting on the gold price and a relief rally when the Fed raises interest rates is ‘a distinct possibility’, Ross Norman, CEO of Sharps Pixley and London Bullion Market Association’s top forecaster of the past 15 years, told ArabianMoney today.
‘Gold is looking like the dog that just did not bark – but not uniquely so,’ he commented. ‘Most safe haven assets are looking distinctly lacklustre, including the VIX index.
Safe haven
‘Either 5,000 years of safe haven buying has just become bunk, or there is a desire to portray what it is evidently a financial and economic crisis as nothing to be concerned about.’
However, things look very different to eurozone gold holders whose currency has depreciated around 15 per cent against the US dollar.
‘European gold investors saw a 10 per cent gain last year and are up eight per cent year-to-date,’ pointed out Mr. Norman. ‘So again gold is doing what it should do, and that is to provide a means of hedging ones exposure to a currency crisis.’
Will an interest rate hike by the Federal Reserve really be bad for gold as Goldman Sachs predicts, if or when it happens?
Mr. Norman noted: ‘I think a rate hike must rate as the most telegraphed move in the history of financial markets and as such it must be fully factored into the price. When it does eventually come, say in Q1 2016, I could see a relief rally in gold as a distinct possibility.
‘Gold is looking rather like the late 1990’s when it became horribly price elastic – with selling on price strength and buy on dips with volatility falling dramatically as the market reverted to the mean.’
$1,450 an ounce?
In January Mr. Norman forecast a peak gold price of $1,450 an ounce for the year (click here). That’s looking a bit on the optimistic side with gold trapped in a trading range.
But if the Chinese stock market crash, or the Greek exit from the euro, overspills into global financial markets then all bets are off, and if past performance is any guide then gold will fulfill its historic role as a safe have when markets are really in serious distress.
Gold is always the ultimate bubble in global financial cycles but we are not there yet.
end
(courtesy Peter Cooper/Arabian Money)
Precious metal trading surges in China as equities crash
Posted on 08 July 2015 with no comments from readers
China recently saw trades of precious metals hit new highs as brokers introduced new investment products that are more accessible to average investors, reported the Guangzhou Daily.
The paper noted that the Shanghai Gold Exchange posted a record trading volume of 48.33 million grams in a single day in late June, even though global gold prices remained low.
Gold price angst
Today gold prices logged a four-month low close to $1,150 an ounce despite uncertainty created by the Greek debt crisis and crashing Chinese equity prices. Still this is clear evidence that Chinese investors are shifting out of stocks and into gold.
Several precious metals trading platforms in China have also witnessed a rebound and record trading volumes since mid-May, the newspaper said. The Guangdong Precious Metals Exchange reported that it had tripled institutional investors from a year earlier, while trading volume in June almost doubled from last year.
Meanwhile, the SGE, which has led markets in gold trading volume for the past eight years, is seeking greater price-setting power and will launch the Shanghai-Hong Kong Gold Connect program on July 10th.
New investment products for precious metals were among the highlights at this year’s China International Finance Expo in Guangzhou from June 26-28th, the newspaper reported. A total of 43 precious metal brokers showcased products created for mobile devices or popular instant messaging service WeChat.
Some of these new products lowered the minimum investment requirement from a few thousand yuan to as low as 8 yuan $1.30, making investing in precious metals more accessible to investors new to the market.
Bear growling
So far this source of new investors has not been enough to counter the bearish trend in the gold market which is being pushed down by strong intervention by the global central banks now facing a major financial crisis in the making.
But physical demand may well underpin the gold price at current levels, while as the crisis worsens the central banks are likely to lose control of gold as they did in 2009.
Besides for Chinese investors losing their shirts on stocks a shift into gold is an obvious safe haven move, and they have little alternative in the other investments open to them.
Posted on 08 July 2015
end
And now overnight trading in equities, currencies interest rates and major stories from Asia and Europe:
1 Chinese yuan vs USA dollar/yuan strengthens to 6.2089/Shanghai bourse red and Hang Sang: red
2 Nikkei closed down by 638.95 points or 3.14%
3. Europe stocks all in the green /USA dollar index up to 96.68/Euro up to 1.1012
3b Japan 10 year bond yield: falls to 44% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 121.56
3c Nikkei still just above 20,000
3d USA/Yen rate now just below the 122 barrier this morning
3e WTI 52.70 and Brent: 57.35
3f Gold up /Yen up
3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil up for WTI and up for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund falls to .64 per cent. German bunds in negative yields from 4 years out.
Except Greece which sees its 2 year rate rise to 57.42%/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 rises to: 18.38%
3k Gold at 1154.50 dollars/silver $14.98
3l USA vs Russian rouble; (Russian rouble up 1/2 in roubles/dollar in value) 57.04,
3m oil into the 52 dollar handle for WTI and 57 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 .9503 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0467 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 closer to negativity at +.63%
3s The ELA is frozen now at 88.6 billion euros. The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.
4. USA 10 year treasury bond at 2.21% early this morning. Thirty year rate just at 3% at 3.00% / yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Will Greek “Hope” Offset “Limit Down” Contagion From The “Frozen” China Crash
Today’s market battle will be between those (central banks) “hoping” that a Greek deal over the weekend is finally imminent (which on one hand looks possible after a major backpedaling by Tsipras – who may never have wanted to win the Greferendum in the first place – yesterday in Brussels and today during his speech in the Euro Parliament, but on the other will be a nearly impossible sell to Greece as any deal terms will be far harsher than the deal offered by the Troika 2 weeks ago and will have no debt reduction), and those who finally noticed that the Chinese central planners have effectively lost control.
For those who may have missed the overnight fireworks, here are some more indicative Bloomberg headlines about China:
China’s Stocks Plunge as State Intervention Fails to Stop Rout
China Freezes Trading in 1,300 Companies as Stock Market Tumbles
China’s State-Owned Firms Ordered Not to Cut Share Holdings
China’s Market Rescue Makes Matters Worse as Prices Lose Meaning
China Ramps Up Policy Response as Panic Grips Stock Market
While pundits have been eager to downplay what is now a historic rout in Chinese risk assets, one that is matched by the depression of 2008 and which has sent the SHCOMP from up 60% for the year 3 weeks ago to barely greenlosing some 15 Greeces in market cap since mid-June…
… the same pundits to whom neither the oil crash nor a Grexit nor the imminent collapse in Q2 corporate revenues and GAAP EPS, or anything else matters, the reality is that the Chinese stock rout is very clearly starting to have contagion effects on the rest of the economy, crashing commodities such as crude, gold, copper, iron and virtually everything else where China has been a marginal source of demand, but leading to forced selling of anything that is not nailed down.
As Bloomberg reported, raw materials from silver to lead and sugar to eggs fell to daily trading limits as the Shanghai Composite Index crashed to a three-month low Wednesday. A raft of measures to stabilize equities is failing to stop the bear-market rout in the country’s stock market, which had lured a record number of amateur investors and grown to become the world’s second-largest outside the U.S.
“People are selling everything in sight to get their hands on cash,” Liu Xu, a trader at private asset-management company Guoyun Investment Co in Beijing, said by phone. “Some need to cover their margin calls in the stock market while others are gripped by fear that the Chinese economy will be affected by this crisis.”
Metals including copper, nickel and silver in Shanghai fell to their daily down limits, while rubber entered a bear market. Steel rebar and iron ore, as well as eggs, sugar and soybean meal dropped to the lowest level allowed by their exchanges.
“Agricultural products in my view are collateral damage in this sell off,” said Liang Ruian, a fund manager at Shanghai-based Jianfeng Asset Management Co. “Pigs are still going to eat, so what does this stock market stampede have to do with soybean meal?”
The problem with the Chinese plunge is that the value of collateral is dropping faster than the amount of outstanding maring debt, thus perpetuating a vicious circle of selling.
Worse, with well over half of the Chinese market frozen and not trading, the real extent of the selloff won’t be known until such time as all stocks resume trading, which like the Greek capital controls, will take a while.
Incidentally, it was almost exactly one year ago when we wrote “How The Market Is Like CYNK.” For those who still don’t get it, China is a perfect example of how the next monster crash will play out: stock trading or rather selling will be halted, first gradually then completely. To those needing liquidity, better luck next time.
As for the S&P which is now tractored to the 200DMA, the NY Fed and the BOJ will do everything in their power to offset the impotence of the PBOC. If the 200 DMA in the S&P is solidly breached, and if suddenly the Greek “hope” turns to despair again, 1-handle in the S&P500 here we come. Which is why expect some very dramatic central bank BTFD of E-minis via the CME’s Central Bank Incentive Program, because if there is one thing the Chinese crisis has shown it is that central banks now openly and without prejudice buy stocks, and quite desperately at that.
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Looking around other markets, Asian equities were dragged lower by Chinese markets, where the Shanghai Comp (-5.9%) began the session with its largest decline since 2007, with losses of 8% as ‘panic selling’ continued with nearly half of Chinese stocks halted for trade, while margin trading fell by the most on record. Stocks initially recovered over half its losses after the PBoC vowed to support the market, however this was not sustained, with the Hang Seng (-5.8%) being dragged lower in tandem to see its largest drop since 2008. On a sector specific basis, Financials are the worst performers in the Hang Seng Index with HSBC and Standard Chartered both ending the session lower in Hong Kong. Furthermore, Bank of China which is one of the largest companies globally and boasts a market cap of USD 234BN, ended the session down 6.9%.
Nikkei 225 (-3.1%) broke below 20,000 to hit a 2-month low, while the ASX 200 (-1.8%) fell amid a slump in basic materials. Finally, JGBs rose 32 ticks amid safe haven buying in fixed income markets coupled with weakness in stocks.
European equities trade in positive territory today (Euro Stoxx +0.7%) as the latest update on Greece appears more upbeat after the sell-off seen in the last couple of days. On a sector specific note, this morning has seen a substantial amount of news regarding the banking sector after the sacking of Barclays chairman Antony Jenkins, seeing the Co. shares among the best performers in Europe (+3.3%). Meanwhile, HSBC (-1.5%) were impacted by the aforementioned weakness in China overnight, while many will be looking ahead to the UK Budget expected at 1230BST/0630CDT, with many anticipating the scrapping of the proposed banking levy.
Elsewhere, UK retailers and pension names may also be in the limelight during the budget with the possibility of the loosening of Sunday trading hour restrictions and UK press suggesting that in order for the government to hit their deficit targets they may need to cull some of the tax reliefs that pensions currently enjoy. Market participants will also be watching earnings from Alcoa aftermarket today, with the company unofficially kicking off this quarter’s earnings season. Meanwhile T-Notes trade higher heading into the North American crossover, with a USD 21Bn 10yr Note auction scheduled for 1800BST/1200CDT.
The latest update from Greece suggests that a proposal will be offered in writing by Friday morning at the latest, with a Eurogroup meeting and EU leaders’ summit scheduled for Saturday and Sunday respectively in order to potentially approve any short-term deal. The news strikes a more conciliatory tone than has been noted in recent days and as such has seen a period of respite for the EUR, which resides in positive territory this morning back above the 1.1000 handle.
Elsewhere, USD/JPY has fallen throughout the Asian session and into the European morning as risk off sentiment bolsters JPY amid concerns regarding the aforementioned ongoing volatility in Chinese equities. This has seen the USD dragged lower, currently residing down 0.3% on the day ahead of this afternoon’s FOMC minutes and with comments expected from Fed’s Williams.
The metals markets have been weighed upon heavily with copper at its lowest level since 2009 and spot gold at its lowest level since March 18th on the back of aforementioned dampened Chinese sentiment. The energy complex has seen weakness this morning on demand fears despite yesterday API drawdown (-958K vs. Prey. 1900K) and EIA increasing their forecast for 2015 and 2016 oil demand growth by 20k bpd and 60k bpd respectively. Of note for the energy complex, DoE Crude Oil Inventories are expected at 0k.
Bulletin headline summary from RanSquawk and Bloomberg
Greece are set to offer a written proposal by Friday morning at the latest, with a Eurogroup meeting and EU leaders’ summit scheduled for Saturday and Sunday respectively in order to potentially approve any short-term deal.
Asian equities was dragged lower by Chinese markets, with Shanghai Comp (-5.9%) seeing its largest decline since 2007 and the Hang Seng (-5.8%) seeing its largest drop since 2008.
Today sees FOMC minutes, comments expected from Fed’s Williams and earnings from Alcoa.
Treasuries gain for a fourth day, curves flatten as Greece, China stocks spur flight-to-quality flows; supply continues with $21b 10Y, WI 2.205% vs. 2.461% in June.
Rout in China shares continued, Shanghai falls 5.9%; with at least 1,331 companies halted on mainland exchanges and another 747 falling by the 10% daily limit, sellers were locked out of 72% of Chinese market
Goldman says China’s large-cap CSI 300 index will rally 27% over next 12 months as government support measures boost investor confidence, monetary easing spurs growth
Greece has requested a 3Y loan facility from ESM, according to documents obtained by Bloomberg; proposes to implement reform measures from next week, commites to tax/pension reforms, will set out details by July 9
European leaders talked openly about a Greek exit from the euro ahead of a weekend summit on the country’s economic future, breaking dramatically with years of denial about the possibility
EU set Sunday deadline to reach deal; Merkel said in briefing last night that she “isn’t especially optimistic” about Greece, rules out debt haircut
EC President Juncker said Tuesday Europe has “a Grexit scenario prepared in detail,” hours before Austrian Chancellor Faymann said Greece’s Plan B is “another currency”
ECB is set to confer on how to keep Greek banks alive long enough for political leaders to craft a last-ditch deal and stop the country spinning out of the euro area
ECB’s Noyer says “we’re starting to be very worried”; ECB will stop its support to Greece if “there is no more political accord in sight for a program”
Travel bookings to Greece from Germany plunged 39% in the week through July 5 from a year ago, according to Amadeus IT Holding SA, a co. that processes flight reservations for airlines
Japanese investors sold net 4.09t yen ($33.6b) of overseas bonds in June, most on record, according to finance ministry data going back to Jan. 2005
Sovereign 10Y bond yields higher; Greek 10Y yields 19.381%. Asian stocks plunge; Hang Seng -5.8%. European stocks post modest gains. U.S. equity-index futures fall. Crude oil gains, WTI and Brent remain below $60/bbl; gold lower, copper higher
DB’s Jim Reid completes the overnight recap
There’s been many ‘deadlines’ and countless meetings of politicians and finance ministers throughout this Greece saga but this Sunday now looks set to be the most important yet. Late last night and post the US close, German Chancellor Merkel confirmed that an emergency EU summit has been scheduled for Sunday in what is being branded as a last chance saloon to reach a new bailout deal and to avoid Grexit. A barrage of stern rhetoric from European officials accompanied the headlines and was summed up by EU Council Head Donald Tusk stating tha