Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1091.40 down $12.00 (comex closing time)
Silver $14.72 down 5 cents.
In the access market 5:15 pm
Gold $1094.25
Silver: $14.80
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a poor delivery day, registering 2 notices for 200 ounces . Silver saw 0 notices filed for nil oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 242.46 tonnes for a loss of 61 tonnes over that period.
In silver, the open interest fell by a tiny 15 contracts despite the fact that yesterday’s price was up by 2 cents and the gold price was pummeled. The total silver OI continues to remain extremely high, with today’s reading at 190,226 contracts now at decade highs despite a record low price. In ounces, the OI is represented by .951 billion oz or 135% of annual global silver production (ex Russia ex China). This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end as they continue to raid as basically they have no other alternative. Today again, we must have had bankers contemplating falling off the roof due to silver’s refusal to buckle with respect to open interest.
In silver we had 0 notices served upon for nil oz.
In gold, the total comex gold OI rests tonight at 459,760 for a loss of 7912 contracts as gold was down $3.30 yesterday. We had 2 notices filed for 200 oz today.
We had another withdrawal in gold tonnage at the GLD to the tune of 2.38 tonnes/ thus the inventory rests tonight at 687.31 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 thought that 700 tonnes is the rock bottom inventory in GLD gold, but I guess I was wrong. However we must be coming pretty close to a level of only paper gold and the GLD being totally void of physical gold. In silver, we had no change in inventory at the SLV / Inventory rests at 328.834 million oz.
We have a few important stories to bring to your attention today…
1. Today, we had the open interest in silver fall by a tiny 15 contracts to 190,226 despite the fact that silver was up by 2 cents yesterday in another massive bear raid. We again must have had some shortcovering by the bankers as they feared something was brewing in the silver arena. The OI for gold fell by 7912 contracts down to 459,760 contracts as the price of gold was down by $3.30 yesterday. The bigger liquidation in gold OI but not silver as something big is going on behind the scenes.
(report Harvey)
2 Today, 5 important commentaries on Greece
(zero hedge, Bloomberg/Reuters/)
3. A huge story on 500 billion USA treasuries have been liquidated by China.
(zero hedge)
4. Gold trading overnight
Russia adds a whopping 25 tonnes in its latest month/triple from their average of 7-9 tonnnes
(Goldcore/Mark O’Byrne/)
(zero hedge)
5. Caterpillar states we are not in a recession but a depression
Sales in Latin American down a whopping 50%
(zero hedge)
6 Trading of equities/ New York
(zero hedge)
7 USA stories: Hedge funds with huge positions in Caesar’s are burned tonight
(zero hedge)
8. Copper and oil plunge
(two stories/zero hedge)
9. Global bond market have zero liquidity. Claims another victim today Bondcube which opened only 3 months ago
(zero hedge)
plus other topics…
Here are today’s comex results:
The total gold comex open interest fell by 7,912 contracts from 467,672 down to 459,760 as gold was down $3.30 in price yesterday (at the comex close). The bankers got their much bigger liquidation. We are now in the next contract month of July and here the OI fell by 194 contracts to 121 contracts. We had 193 notices filed yesterday and thus we lost 1 contract or an additional 100 ounces will not stand in this non active delivery month of July. The next big delivery month is August and here the OI decreased by 18,602 contracts down to 196,180. We have a little over one week before first day notice for the big August active gold contract. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was good at 236,361.However today’s volume was aided by HFT traders. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was good at 219,445 contracts. Today we had 2 notices filed for 200 oz.
And now for the wild silver comex results. Silver OI rose by 15 contracts from 190,241 down to 190,226 despite the fact that the price of silver was up by 2 cents with respect to yesterday’s mulling of gold. We continue to have our bankers pulling their hair out with respect to the continued high silver OI as the world senses something is brewing in the silver arena. We are in the delivery month of July and here the OI rose by 22 contracts up to 154. We had 25 notices served upon yesterday and thus we gained 47 contracts or an additional 235,000 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 3 contracts up to 186. The next major active delivery month is September and here the OI rose by 98 contracts to 129,935. The estimated volume today was fair at 31,707 contracts (just comex sales during regular business hours). The confirmed volume yesterday (regular plus access market) came in at 33,989 contracts which is also fair in volume. We had 0 notices filed for 125,000 oz.
July initial standing
July 22.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
257.20 (Manfra) 8 kilobars
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
2 contracts (200 oz)
No of oz to be served (notices)
119 contracts (11,900 oz)
Total monthly oz gold served (contracts) so far this month
607 contracts(60,700 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
203.60 oz
Total accumulative withdrawal of gold from the Customer inventory this month
288,420.6 oz
Today, we had 0 dealer transactions
total Dealer withdrawals: nil oz
we had 0 dealer deposits
total dealer deposit: zero
and the farce with respect to kilobars continues…
we had 1 customer withdrawal
i) Out of Manfra: 257.20 oz (8 kilobars)
total customer withdrawal: 257.20 oz
We had 0 customer deposit:
Total customer deposit: nil ounces
We had 0 adjustments.
Today, 0 notices was issued from JPMorgan dealer account and 102 notices were issued from their client or customer account. The total of all issuance by all participants equates to 2 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 (607) x 100 oz or 60,700 oz , to which we add the difference between the open interest for the front month of July (121) and the number of notices served upon today (2) 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 (607) x 100 oz or ounces + {OI for the front month (121) – the number of notices served upon today (2) x 100 oz which equals 72,600 oz standing so far in this month of July (2.258 tonnes of gold).
we lost 1 contract or an additional 100 oz will not stand in this non active delivery month of JULY.
Total dealer inventory 482,778.738 or 15.016 tonnes
Total gold inventory (dealer and customer) = 7,795,091.837 oz or 242.46 tonnes
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 242.46 tonnes for a loss of 61 tonnes over that period.
end
And now for silver
July silver initial standings
July 22 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
1,230,279.798 oz (Scotia )
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
599,205.527 oz (Brinks, Delaware)
No of oz served (contracts)
0 contracts (nil oz)
No of oz to be served (notices)
154 contracts (770,000 oz)
Total monthly oz silver served (contracts)
3329 contracts (16,645,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
nil
Total accumulative withdrawal of silver from the Customer inventory this month
8,184,613.5 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 deposits:
i) Into Brinks: 598,171.72 oz
ii) Into Delaware: 1033.807 oz
total customer deposit: 599,205.527 oz
We had 1 customer withdrawals:
i)Out of Scotia: 1,230,279.798 oz
total withdrawals from customer: 1,230,279.798 oz
we had 0 adjustments
Total dealer inventory: 58.107 million oz
Total of all silver inventory (dealer and customer) 177.899 million oz
The total number of notices filed today for the July contract month is represented by 0 contracts for nil 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 (3329) x 5,000 oz = 16,645,000 oz to which we add the difference between the open interest for the front month of July (154) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the July contract month:
3329 (notices served so far) + { OI for front month of July (154) -number of notices served upon today (0} x 5000 oz ,= 17,415,000 oz of silver standing for the July contract month.
We gained 47 contracts or an additional 235,000 ounces will stand in this active delivery month of July. Again, somebody was in great need of 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 22/another withdrawal of 2.38 tonnes of gold from the GLD/Inventory rests at 687.31
July 21.2015: a massive withdrawal of 6.56 tonnes of gold from the GLD.
Inventory rests at 689.69 tonnes. China and Russia need their physical gold badly and they are drawing their physical from this facility.
July 2o.2015: no change in inventory
July 17./a massive withdrawal of 11.63 tonnes in gold tonnage tonight from the GLD/Inventory rests at 696.25 tonnes
July 16./we lost 1.19 tonnes of gold tonight/Inventory rests at 707.88 tonnes
July 15/no change in inventory/gold inventory rests tonight at 709.07 tonnes.
July 14.2015:no change in inventory/gold inventory rests at 709.07 tonnes
July 13.2015: a big inventory gain of 1.49 tonnes/Inventory rests tonight at 709.07 tonnes
July 10/ we had a big withdrawal of 2.07 tonnes of gold from the GLD/Inventory rests this weekend at 707.58 tonnes
July 9/ no change in gold inventory at the GLD/Inventory at 709.65 tonnes
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 22 GLD : 687.31 tonnes
end
And now for silver (SLV)
july 22/no change in silver inventory/inventory rests at 328.834 million oz.
July 21.we had a massive addition of 1.241 million oz into the SLV/Inventory rests tonight at 328.834 million oz.
Please note the difference between gold and silver (GLD and SLV). In GLD gold is being depleted and sent to the east. In silver: no depletions, as I guess this vehicle cannot supply physical metal.
July 20/no change
july 17.2015/no change in silver inventory tonight/inventory at 327.593 million oz
July 16./no change in silver inventory/rests tonight at 327.593 million oz
July 15./no change in silver inventory/rests tonight at 327.593 million oz/
July 14.2015: no change in silver inventory/rests tonight at 327.593 million oz.
July 13./an inventory gain of 1.051 million oz/Inventory rests at 327.593 million oz
july 10/no change in silver inventory at the SLV tonight/inventory 326.542 million oz/
July 9/ a huge increase in inventory at the SLV of 1.337 million oz. Inventory rests tonight at 326.542 million oz
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 22/2015: tonight inventory rests at 328.834 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 10.3 percent to NAV usa funds and Negative 10.50% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.6%
Percentage of fund in silver:38.0%
cash .4%
( July 22/2015)
2. Sprott silver fund (PSLV): Premium to NAV rises to 0.54%!!!! NAV (July 22/2015) (silver must be in short supply)
3. Sprott gold fund (PHYS): premium to NAV rises to – .73% toNAV(July 22/2015
Note: Sprott silver trust back into positive territory at 0.54%
Sprott physical gold trust is back into negative territory at -.73%
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.
* * * * *
>
And now for your overnight trading in gold and silver plus stories
on gold and silver issues:
(courtesy/Mark O’Byrne/Goldcore)
Russians Buy Gold Again In June – Another 25 Tonnes
By Mark O’ByrneJuly 22, 20150 Comments
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– Russia adds another 800,000 ounces or 25 tonnes to gold reserves in June
– Russia’s has sixth largest gold reserves in the world
– Allocates 13% of FX reserves to gold
– Central bank buys all Russian gold production
– Other Russian gold demand imported
– If billionaire oligarchs diversify into gold, prices will rise sharply
– Russia views gold bullion as “100% guarantee from legal and political risks”
With all the focus on the Chinese lowballing their total institutional gold holdings, combined CIC, SAFE and PBOC, this week and the continuing attacks and manipulation of the gold market on Sunday night, the latest large increase in Russia’s gold reserves has gone largely unnoticed and barely covered by commentators – especially the more vocal bearish ones.
Russia continues to add to its gold reserves and added another 800,000 ounces in June or another 25 metric tonnes, and analysts believe this buying will continue in the coming months.
Its total gold reserves now amount to 41 million ounces or around 1,275 metric tonnes, with a current value of just $48 billion. Russia’s total FX reserves are $362 billion and their gold allocation is now 13% of their total reserves.
In contrast, the U.S. is believed to have over 8,400 metric tonnes of gold and no foreign exchange reserves. The share of gold in foreign exchange reserves is much lower than in many other countries such as the U.S., Italy and France.
This ranks Russia in sixth place globally in terms of gold reserves behind the U.S., Germany, Italy, France and China after their PBOC announcement last Friday.
In 2014, Russia bought more gold in than in any year since the break-up of the Soviet Union. The country acquired over 173 metric tonnes according to World Gold Council figures. Reserve diversification intensified after April — averaging almost 20 tonnes per month.
Much of the gold bought may have come from Russian gold production which is currently at about 25 metric tonnes per month. In 2014, Russia was the third largest gold miner in the world at 266.2 tonnes, just six tonnes short of Australia in second place and China in first place.
Thus, the Russian central bank is generally consuming all of Russian gold production and sometimes having to import gold. Therefore, all domestic demand for gold and Russia is an increasingly wealthy nation with thousands of millionaires and hundreds of billionaires including mega rich oligarchs.
If any of these oligarchs decide to begin accumulating gold, then the already delicate supply balance in the physical gold market will be impacted and we will see much higher prices.
Data show that throughout the last year’s financial crisis Russia continued to add to its gold reserves. In December – when the rouble had crashed to 68.5 roubles to the dollar, down from 43 roubles six weeks previously – the Russian central bank intervened by selling $2 billion of currency reserves to support the rouble.
Despite the magnitude of the crisis in Russia – or perhaps because of it – the Russian central bank did not sell any gold. Indeed, since early 2007 has only sold gold on two occasions – both in 2012 and both times for relatively small amounts.
As the pressurised economy began to stabilise the central bank refrained from adding to its reserves buying no gold in January and February. In March it compensated by reentering the market with its second largest purchase in almost five years.
Clearly, Russia puts great strategic importance on its gold reserves. Both President Putin and Prime Minister Medvedev have been photographed on numerous occasions holding gold bars and coins as a display of economic stability and strength.
The successful stewardship of Russia’s economy out of crisis by its government in spite of sanctions has even led many investors surveyed by Bloomberg to view Russia as a good destination for investment.
While its gold reserves may not be on a par with western nations it is worth noting that neither is Russia’s debt. It’s Government Debt to GDP ratio is less than 18% whereas that of the U.S. and the UK are 101% and 82% respectively. Many European nations have much higher debt levels.
In the event of a new global debt crisis and an international monetary crisis, Russia is less fragile than many debt-laden western economies.
Investors would be wise to follow Russia’s example by reducing their exposure to debt and having an allocation to physical gold.
Must-read guide: Gold and Silver Storage Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,096.80, EUR 1002.468 and GBP 702.38 per ounce.
Yesterday’s AM LBMA Gold Price was 1,108.00, EUR 1,021.15 and GBP 711.47per ounce.
Gold fell a marginal $3 to $1100.20 per ounce and silver rose 0.6% or 10 cents to $14.81 per ounce yesterday.
Today, gold in Singapore ticked lower, prior to gold bullion in Zurich moving sideways..
Silver for immediate delivery fell 0.6% to $14.86 an ounce. Spot platinum rose 1% percent to $973 an ounce, while palladium fell 1.2 percent to $622 an ounce.
Breaking News and Research Here.
end
A very important commentary from Lawrence Williams of Mineweb
He basically is stating that miners are mining gold at close to their costs:
(courtesy Lawrence Williams/Mineweb)
Gold majors skating close to the precipice
The latest gold price declines are putting even the majors close to loss-making territory, and the industry’s long-term future could be seriously damaged.
| 22 July 2015 12:10
LONDON – Let’s face it, in the light of the latest gold price falls, the gold mining sector now desperately needs something that can set it back on a positive track. Gold stocks are sitting at multi-year lows and for even the gold mining majors their 2015 AISC predictions are now getting perilously close to the levels where gold is currently trading.
Here’s a list of the World’s top 5 gold miners and their announced Q1 AISCs and AISC guidance for the current year.
Rank
Company
Q1 2015 AISC
2015 AISC costs guidance
1.
Barrick Gold (ABX)
$927
$860-895
2.
Newmont Mining (NEM)
$849
$960-1020
3.
AngloGold Ashanti (AU or ANG)
$926
$1000 – $1050
4.
Goldcorp (GG)
$895
$875-950
5.
Kinross Gold (KGC)
$964
$1000-1100
Source: Company reports.
As can be seen from the above, three of the top 5 are already probably looking to an AISC level of close to $1000 an ounce or more this year. But perhaps what is even more worrying for gold stock investors in the companies is that some analysts don’t believe even AISC are a sufficient indicator of the real cost of keeping the company on track, as the figure ignores some capital, permitting, and social costs. In terms of achieved Free Cash Flow, this means that many gold miners will be falling short. Sometimes it is hard for investors to get to grips with the fact that a mining company can report what appear to be profitable mining activities, yet will end up making an overall loss and may even need to dip into financial reserves or sell assets to retain dividend levels.
The World Gold Council also suggests another more rigorous metric – All In Costs (AIC) – which sets the bar a little higher by taking into account costs incurred by a mining company but not necessarily directly relating to current operations, but nonetheless have an impact on overall profit and cash flow figures.
(Additional costs categories in AIC over and above the AISC ones, as set out by the WGC are as follows: Community Costs not related to current operations; Permitting Costs not related to current operations; Reclamation and remediation costs not related to current operations; Exploration and study costs (non-sustaining); Capital exploration (non-sustaining); Capitalised stripping & underground mine development (non-sustaining); and non-sustaining Capital expenditure). Some companies do also report AIC data – notably some of the South African gold miners that mostly report this as a matter of course, but these levels are largely ignored by analysts as they can’t be used for comparisons given the majority of gold mining companies don’t provide comparable figures.
South African Gold Stocks
A couple of months ago Mineweb published an article speculating that South Africa – once the world’s major gold producer by a mile – might have no gold mining industry left to speak of by the end of the decade: Could SA’s gold mining industry be gone by 2020? The country’s gold miners are currently in the throes of wage negotiations with unions which could result in raising their costs base even higher (quite substantially so if the unions don’t moderate their positions and the miners are forced to accede) and in AISC terms the country’s miners are mostly marginal already due to the cost of mining gold at huge depths by world standards and at ever declining grades. AIC metrics reduces the margins even more (if indeed there are any margins to be reduced for most mines), so the earlier article was a particularly prescient one should the gold price remain at current levels – or even fall further.
In AngloGold, the AIC figure is around $100/ounce higher than its already high plus $1000/ounce AISC guidance level. For Gold Fields, which falls just outside the Top 5 noted world gold miners above, the AIC figure is only around $20 higher than AISC – but guidance for the year on the latter comes out at a troubling $1055 an ounce. But these have substantial non-South African operations that are mostly performing better costs-wise than their domestic mines.
Gold Fields spin-off, Sibanye Gold – which is also in the top 10, but with all its mines in South Africa, guides at AISC for the year at $1055-$1100/ounce and AIC $10-15 higher. Thus seemingly marginal at current prices although it may well be currently the most profitable of the South African majors!
Harmony – nowadays no longer in the world’s top 10 gold miners in production terms – reported March quarter AISC of $1258 an ounce which would put it well under water at the current gold price, but it is continuing to make progress in trimming costs and was looking for a better June quarter. The latest gold price collapse will undoubtedly focus management even more on making further costs inroads – and could lead to closures.
All these miners have been helped to an extent by the rising US dollar against the Rand in respect of their South African operations – it currently stands at $1=R12.4 – an 18% rise in the past year – with revenues in dollars and most costs in Rands which gives a little breathing space. But inflation tends eventually to erode these advantages over time.
All these companies do have options that can lower their overall costs levels and keep them operating, but these mostly involve shuttering the most costly operations that may bring them into direct conflict with the nation’s government concerned about the already unacceptably high unemployment situation and, of course with the seemingly increasingly militant mining unions.
The South African situation has in part been mirrored elsewhere with cost pressures increasing, and many mid-tier and junior miners will now be operating close to, or at, break-even levels or worse on their current AISC figures. Most have already been making inroads into their costs structures – so much so that there are few further savings to be made. Gold exploration which has accounted for a perhaps ridiculously high proportion of global exploration expenditures in relation to global mined output value (iron ore, coal, and copper rate far higher in this latter respect) has been trimmed and trimmed. Most of the majors are only conducting exploration drilling in and around existing operations, and the juniors’ capabilities of financing greenfield exploration has been heavily curtailed.
Unless there is a major price turnaround, and soon, gold mining is set for a very severe downturn and the long term damage to the industry’s future will be severe. The industry will be desperately hoping that just perhaps gold has bottomed, and there are better things ahead but there’s little sign of this as yet.
end
(courtesy Seth Lipsky/the Wall Street Journal)
Seth Lipsky in The Wall Street Journal: Fifty years of debasing money
Submitted by cpowell on Wed, 2015-07-22 14:39. Section: Daily Dispatches
By Seth Lipsky
The Wall Street Journal
Wednesday, July 22, 2105
July 23 marks the 50th anniversary of the Coinage Act of 1965, which stripped U.S. coins of silver and made legal tender out of base metal slugs. It’s an anniversary that comes at an apt time, as Congress considers monetary reform.
This discussion has been quietly taking place in recent months, in the Senate Banking and House Financial Services committees. Rep. Kevin Brady (.-Texas), vice chairman of the Joint Economic Committee, recently reintroduced a proposal for a Centennial Monetary Commission as the Federal Reserve starts its second century.
The anniversary of the 1965 Coinage Act is a reminder of why reform is needed. Speaking from the White House Rose Garden, President Lyndon B. Johnson called the law he signed a “very rare and historic occasion.” It certainly was; it superseded the coinage act drafted by Alexander Hamilton and passed by Congress in 1792. …
… For the remainder of the commentary:
http://www.wsj.com/articles/fifty-years-of-debasing-money-1437522237
end
(courtesy Wall Street Journal/GATA)
Gold’s plunge sparks retail demand in China, India
Submitted by cpowell on Wed, 2015-07-22 12:29. Section: Daily Dispatches
By Biman Mukherji, Alice Kantor, and Rhiannon Hoyle
The Wall Street Journal
Wednesday, July 22, 2015
HONG KONG — Gold’s plunge to five-year lows this week has prompted a swift rise in demand from jewelry retailers in China and India, the world’s top consumers of gold, leading to a doubling of premiums paid on physical gold.
At the same time, sales of gold coins from Australia’s biggest bullion mint have been rising sharply, likely thanks to some bargain hunting.
The increase in demand is expected to provide a cushion to the battering that gold has taken this week, although it may not be enough to offset the bearish outlook on the yellow metal amid growing expectations of a rise in U.S. interest rates and a lack of safe-haven demand. India, together with China, accounts for around half of the global demand. …
… For the remainder of the report:
http://www.wsj.com/articles/golds-plunge-sparks-retail-demand-in-china-i…
And now your overnight trading in bourses, currencies, and interest rates from Europe and Asia:
1 Chinese yuan vs USA dollar/yuan strengthens to 6.2093/Shanghai bourse green and Hang Sang: red
2 Nikkei down 248.30 or 1.19%
3. Europe stocks mostly in the red /USA dollar index up to 97.42/Euro down to 1.0922
3b Japan 10 year bond yield: lowers to 41% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 123.80
3c Nikkei still just above 20,000
3d USA/Yen rate now just below the 124 barrier this morning
3e WTI 50.32 and Brent: 56.69
3f Gold down /Yen up
3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil down for WTI and down for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund falls to .76 per cent. German bunds in negative yields from 4 years out.
Except Greece which sees its 2 year rate rises to 21.83%/Greek stocks this morning: still expect continual bank runs on Greek banks /
3j Greek 10 year bond yield falls to: 11.43%
3k Gold at $1093.30 /silver $14.77
3l USA vs Russian rouble; (Russian rouble down 1/5 in roubles/dollar in value) 57.09,
3m oil into the 50 dollar handle for WTI and 56 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 .9586 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0481 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 4 year German bund remains in negative territory with the 10 year moving closer to negativity at +.76%
3s The ELA is still frozen today at 88.6 billion euros. The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Greece votes and agrees to more austerity even though 79% of the populace are against.
4. USA 10 year treasury bond at 2.33% early this morning. Thirty year rate above 3% at 3.07% / yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Apple, Microsoft Plunge Drags Global Markets Lower, Oil Resumes Slide
While this week has been, and continues to be, devoid of macro updates, yesterday’s flurry of mostly disappointing earnings releases both before and after the open, including some of the biggest DJIA companies as well as the current and previously biggest and most important companies in the world, AAPL and MSFT, both of which came crashing down following earnings and forecasts that were well short of market expectations, came as a jolt to a market that was artificially priced by central bank liquidity and HFT momo algos beyond perfection. Add to that yesterday’s downward revision to historical industrial production which confirmed the US economy is a step away from recession, as well as last night’s Crude API inventory build which is once again pressuring WTI lower and on the verge of a 49 handle, and perhaps the biggest question is why are futures not much lower.
Stocks in Europe traded mixed, with information tech and energy sectors underperforming, following less than impressive earnings by Apple and Microsoft after the closing bell on Wall Street, as well as lower energy prices. Of note, Apple’s German listed shares traded lower by as much as 7%, with ARM Holdings down 4% after failing to meet revenue expectations.
Fixed income markets have seen light news flow during the European session, with Bunds opening higher amid soft equities before paring these gains throughout the morning.
Asian equities tracked the weakness seen on Wall Street, after Apple (AAPL) shares declined by 9.1% after-market following their iPhone sales missing expectations (47.5mln vs. Exp. 48.8mIn) and Microsoft posted a record quarterly net loss. Nikkei 225 (-1.2%) was dragged lower by softness in IT, firmer JPY and declines among Apple suppliers. ASX 200 (-1.6%) traded in negative territory amid losses sustained in large banks, following analysts revising their profit forecast downwards, while Chinese markets fluctuated between gains and losses with the Shanghai Comp. consolidating around the 4000 level.
In FX, EUR/GBP continued to trend lower, moving below the 0.7000 in the process, driven by hawkish comments by BoE’s Miles who said that he expects inflation to converge towards the 2% target at the end of 2015. The release of the most recent BoE minutes revealed a 9-0 vote and while a number of MPC members see increasing inflation risks which are skewed to the upside, the minutes also warned that GBP strength could suppress inflation . The rhetoric released in the minutes are more or less a reiteration of the most recent MPC comments and as such proved to be somewhat uneventful.
AUD/USD saw volatile trade as it initially fell after the latest Australian headline CPI figure missed expectations (0.7% vs. Exp. 0.8%). However, AUD then pared some of its losses as RBA’s preferred trimmed mean figure beat expectations (2.2% vs Exp. 2.1%). Later conflicting comments from RBA Governor Stevens also provided a catalyst for price action, as he stated that rate cuts are still on the table but hinted concern of risks from lower rates and that policy was appropriate for the time being.
WTI and Brent Crude futures trended lower overnight and in Europe this morning, weighed on by the ongoing concerns over the slowdown in China, as well as the latest API data release which showed that stockpiles increased by 2.3mln (Prey. -7.3mIn). Elsewhere, gold resumed its downward trend, moving below the psychologically important USD 1,100 level.
Looking ahead, sees the release of RBNZ Rate Decision, DoE crude inventories, Existing Home Sales as well as earnings from Coca Cola, Boeing and Qualcomm
In summary: European shares remain lower with the basic resources and oil & gas sectors underperforming and travel & leisure, retail outperforming. Greek lawmakers voting on a second package of bailout condition measures, ECB to discuss Greek ELA. Bank of England says a number of policy makers see rising inflation risks. Apple’s European suppliers fall after co. missed sales estimates. The U.K. and Swiss markets are the worst-performing larger bourses, the Spanish the best. The euro is little changed against the dollar. U.K. 10yr bond yields fall; Greek yields increase. Commodities decline, with corn , copper underperforming and soybeans outperforming. U.S. mortgage applications, FHFA house price index, existing home sales due later.
Market Wrap
S&P 500 futures down 0.4% to 2106.3
Stoxx 600 down 0.4% to 401
US 10Yr yield up 0bps to 2.33%
German 10Yr yield down 1bps to 0.77%
MSCI Asia Pacific down 0.9% to 143.9
Gold spot down 0.5% to $1095.4/oz
3 out of 19 Stoxx 600 sectors rise; travel & leisure, retail outperform, basic resources, oil & gas underperform
32.8% of Stoxx 600 members gain, 65.3% decline
Eurostoxx 50 -0.2%, FTSE 100 -1.1%, CAC 40 -0.4%, DAX -0.4%, IBEX +0.2%, FTSEMIB +0.1%, SMI -0.6%
Asian stocks fall with the Sensex outperforming and the ASX underperforming; MSCI Asia Pacific down 0.9% to 143.9
Nikkei 225 down 1.2%, Hang Seng down 1%, Kospi down 0.9%, Shanghai Composite up 0.2%, ASX down 1.6%, Sensex up 1.1%
Euro down 0.02% to $1.0933
Dollar Index up 0.01% to 97.33
Italian 10Yr yield up 1bps to 1.98%
Spanish 10Yr yield up 3bps to 2.03%
French 10Yr yield down 1bps to 1.07%
S&P GSCI Index down 0.7% to 398.2
Brent Futures down 0.6% to $56.7/bbl, WTI Futures down 1.1% to $50.3/bbl
LME 3m Copper down 1.1% to $5395/MT
LME 3m Nickel down 0.2% to $11650/MT
Wheat futures down 1% to 519.5 USd/bu
Bulletin Headline Summary from Bloomberg and RanSquawk
The BoE minutes showed the MPC undertaking a cautious stance by highlighting that inflation risks may be skewed to the upside, while also warning that GBP strength could suppress inflation
Downbeat earnings from Apple and Microsoft have filtered through to European stocks with underperformance observed in the IT sector
Looking ahead, sees the release of RBNZ Rate Decision, DoE crude inventories, Existing Home Sales as well as earnings from Coca Cola, Boeing and Qualcomm
Treasury curve little changed overnight before U.S. economic data calendar comes alive again with FHFA home price index slated for release at 9am ET and existing home sales at 10am ET.
BoE said a growing number of policy makers have become concerned about rising inflation pressures, indicating building momentum toward the first rate increase in eight years
The ECB is embarking on a third tour of duty in Athens, with victory less certain than ever as officials will hold a telephone call Wednesday to discuss the Emergency Liquidity Assistance that keeps Greece’s financial system alive
PM Tsipras returns to the Greek parliament today to seek support from the opposition to help him overcome his own party’s rebellion against the terms of a third bailout
The bond market selloff in the second quarter probably dented the capital defenses of many European banks, with lenders in Italy and Spain hit hardest
As a Puerto Rico agency veers toward a default as soon as Aug. 1, federal officials in the nation’s capital have echoed a refrain heard during recent state and local fiscal crises: Fix the problem on your own
The selloff in gold is infecting copper and zinc, which fell more than 1% and tin, which fell as much as 4.9%, the most this month. Gold futures retreated for a 10th day in the longest run of losses since 1996 as Goldman Sachs predicted further declines
Sovereign 10Y bond yields mostly steady with Greek bond +18bps. European and Asian stocks mostly lower; U.S.equity-index futures lower. Crude oil drops, copper and gold drop
DB’s Jim Reid completes the overnight recap
On the subject of Apple, shares dropped nearly 9% in extended trading following the release of their latest quarterly results. Despite a beat at the earnings level and a surge in revenue from China, the market latched onto disappointing overall iPhone shipments relative to street expectations sending the stock tumbling. Combined with a near-4% fall for Microsoft in extended trading after a similarly disappointing report, S&P 500 and NASDAQ futures have fallen -0.4% and -1.2% respectively in Asia this morning.
Indeed yesterday we saw equity markets on both sides of the pond close down as a number of headline names reported disappointing quarterly reports. The S&P 500 (-0.43%) fell from its record high while the DOW (-1.00%) and NASDAQ (-0.21%) also moved lower. Closer to home the Stoxx 600 (-1.02%), DAX (-1.12%) and CAC (-0.70%) also fell once the US session kicked in as earnings reports from IBM, Verizon and United Technologies in particular disappointed the market.
Digging deeper into earnings season so far and taking a look at the beats/miss ratio, despite the softer reports yesterday it’s actually been an OK start to the reporting period. With 89 S&P 500 companies having reported so far, 73% have reported an EPS beat with 26% missing estimates. As per the trend of the last few years, the split is more even at the revenue level with 55% reporting a beat so far. This trend has perhaps been solidified in this reporting period with various companies noting the impact of USD strength on the top line.
Looking at the rest of markets this morning, equity bourses across Asia this morning are broadly weaker. The Nikkei (-1.00%), Hang Seng (-1.12%), Kospi (-0.99%) and ASX (-1.14%) have all fallen while in China the Shanghai Comp (-0.42%), CSI 300 (-0.66%) and Shenzhen (-0.05%) have also declined after an up and down start. Mixed data in China hasn’t helped the lack of direction in markets there. The MNI China Business Indicator for business sentiment slumped 4.7% mom in July to match the YTD low in April of 48.8. The Conference Board Leading Indicator on the other hand rose 1.0% mom during June. Over in Australia a softer than expected headline Q2 CPI print (+0.7% qoq vs. +0.8% expected) has seen the AUD fall 0.5% in early trading. Gold (-0.67%) has taken another leg lower while WTI (-1.40%) is creeping back down closer to the $50/bbl mark. 10y Treasuries are largely unchanged while Asia credit is 2bps wider.
It’s another relatively quiet calendar for data today however Greece is set to step back into focus with the Greek parliament due to vote on a second set of reforms demand by the Creditors, the second such pre-requisite to opening talks on a new bailout package.
In his latest report yesterday, DB’s George Saravelos highlighted the latest on the current political situation in Greece and what his expectations are going forward. George notes that Greece is now in a very unusual political configuration whereby Tsipras has openly stated his disagreement with the effectiveness of the current agreement (although acknowledges that the alternative would be worse), can no longer rely on his own parliamentary group to pass legislation and may no longer control the Syriza party either. Despite this, opposition votes have ensured that the Euro leaders’ agreement and prior actions passed through the Greek parliament with an even larger majority than the first and second Greek programs.
George notes that the current situation could potentially lead to one of three different political outcomes over the next few weeks. The first of these is near-term political instability that would put ESM negotiations on hold and return pressure on the Greek banking system ahead of the August 20th ECB bond redemption. This would likely be provoked by Tsipras tendering his resignation either by losing additional MPs in coming parliament votes or by losing support in the party’s Central Committee although either would not necessarily cause a general election and rather a government of national unity would be more probable until ESM talks concluded. The second possible outcome is a decision from Tsipras to more aggressively position himself against internal party dissent and in favour of program implementation. This move would require the PM to take the risk of more formally splintering the party with potential unpredictable results given his more uncertain influence over the Central Committee. The final outcome and most likely in George’s view is a continuation of the last few days’ status quo with persistent attempts by Tsipras to work through internal party dissent as well as the ESM negotiations, but without precipitating political change meaning Tsipras presides over a de facto minority government.
George ultimately believes that resolution could be led by Tsipras moving Syriza in a more moderate direction followed by an early general election later this year once ESM negotiations have concluded. This would increase the odds of a government with greater commitment to implementation, irrespective of electoral outcome but ri