Good evening Ladies and Gentlemen:
We are entering options expiry week.
Comex options expiry Tuesday, July 28.
LMBA options expiry: noon London time July 31.2015
OTC options expiry: midnight July 31.2015
we have no chance whatsoever to see gold above 1100.00 or silver above 15.00 dollars until after the entire options expiry. This is how the crooked bankers fleece poor unsuspecting souls.
Here are the following closes for gold and silver today:
Gold: $1094.00 up $2.60 (comex closing time)
Silver $14.68 down 4 cents.
In the access market 5:15 pm
Gold $1090.30
Silver: $14.70
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a poor delivery day, registering 0 notices for 0 ounces . Silver saw 53 notices filed for 265,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 246.35 tonnes for a loss of 57 tonnes over that period.
In silver, the open interest fell by a tiny 629 contracts as yesterday’s price was down by 5 cents and the gold price was pummeled (down $12.00). The total silver OI continues to remain extremely high, with today’s reading at 189,597 contracts now at decade highs despite a record low price. In ounces, the OI is represented by .947 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 53 notices served upon for 265,000 oz.
In gold, the total comex gold OI rests tonight at 451,725 for a loss of 8,035 contracts as gold was down $12.00 yesterday. We had 0 notices filed for nil oz today.
We had another withdrawal in gold tonnage at the GLD to the tune of 2.68 tonnes/ thus the inventory rests tonight at 684.63 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 629 contracts to 189,597 as silver was down by 5 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 8,035 contracts down to 451,725 contracts as the price of gold was down by $12.00 yesterday. We are witnessing bigger liquidation in gold OI but not silver as something big must going on behind the scenes (with respect to silver).
(report Harvey)
2 Today, 2 important commentaries on Greece
(zero hedge, Bloomberg/)
3.Ray Dalio of Bridgewater sounds off on the Chinese markets;
(Ray Dalio/zero hedge)
4. Gold trading overnight
(Goldcore/Mark O’Byrne/)
5.IMF warns that Japanese debt is unsustainable
(zero hedge)
6 Trading of equities/ New York
(zero hedge)
7 USA stories:jobless rate in USA falls
(zero hedge)
8. Copper and oil plunge again
(two stories/zero hedge)
9.Chinese electricity consumption falls
(zero hedge)
10. Global trade suffers huge downturn
(Wolf Richter)
11. Dave Kranzler on Chinese gold demand
(Dave Kranzler.IRD)
12. Alasdair Macleod on Gibson’s Paradox
(Alasdair Macleod)
plus other topics…
Here are today’s comex results:
The total gold comex open interest fell by 8,035 contracts from 459,760 contracts down to 451,725 as gold was down $12.00 in price yesterday (at the comex close). The bankers got their much needed big liquidation. We are now in the next contract month of July and here the OI fell by 2 contracts to 119 contracts. We had 2 notices filed yesterday and thus we neither lost nor gained any gold contracts standing in this non active delivery month of July. The next big delivery month is August and here the OI decreased by 12,388 contracts down to 183,792. 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 excellent at 309,334. 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 220,280 contracts. Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI fell by a tiny 629 contracts from 190,226 down to 189,597 as the price of silver was down by 5 cents with respect to yesterday’s price. 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 fell by 2 contracts down to 152. We had 0 notices served upon yesterday and thus we lost 2 contracts or an additional 10,000 ounces of silver will not 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 189. The next major active delivery month is September and here the OI fell by 873 contracts to 129,062. The estimated volume today was fair at 26,206 contracts (just comex sales during regular business hours). The confirmed volume yesterday (regular plus access market) came in at 38,589 contracts which is also good in volume. We had 53 notices filed for 265,000 oz.
July initial standing
July 23.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
67,560.759 oz (Delaware and Scotia)includes 3 kilobars from Delaware
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
192,803.55 oz (5972 kilobars)
No of oz served (contracts) today
0 contracts (nil 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
355,981.4 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 2 customer withdrawals
i) Out of Delaware: 96.45 oz (3 kilobars)
ii) Out of Scotia: 67,464.309 oz
total customer withdrawal: 67,560.759 oz oz
We had 2 customer deposit:
i) Into JPMorgan: exactly 4,972 kilobars or 159,849.55 oz
ii) Into Scotia: 32,150.000 oz or 1000 kilobars
Total customer deposit: 192,803.55ounces (or exactly 5972 kilobars)
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 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 (607) x 100 oz or 60,700 oz , to which we add the difference between the open interest for the front month of July (119) 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 (607) x 100 oz or ounces + {OI for the front month (119) – the number of notices served upon today (0) 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) = 7,920,334.628 oz or 246.35 tonnes
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 246.35 tonnes for a loss of 57 tonnes over that period.
end
And now for silver
July silver initial standings
July 23 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
15,817.175 oz (Delaware )
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
106,929.162 oz (CNT, Delaware)
No of oz served (contracts)
53 contracts (265,000 oz)
No of oz to be served (notices)
99 contracts (495,000 oz)
Total monthly oz silver served (contracts)
3382 contracts (16,910,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
nil
Total accumulative withdrawal of silver from the Customer inventory this month
8,200,430.7 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 CNT: 6,785.200 oz
ii) Into Delaware: 100,143.962 oz
total customer deposit: 106,929.162 oz
We had 1 customer withdrawals:
i)Out of Delaware: 15,817.175 oz
total withdrawals from customer: 15,817.175 oz
we had 1 adjustment and a strange one:
From Delaware:
+ 26,291.557 oz into Dealer
-28,613.00 oz customer ( they really mean an addition)
and the remainder evaporates.
Total dealer inventory: 58.133 million oz
Total of all silver inventory (dealer and customer) 177.988 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 (3382) x 5,000 oz = 16,910,000 oz to which we add the difference between the open interest for the front month of July (152) and the number of notices served upon today (53) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the July contract month:
3382 (notices served so far) + { OI for front month of July (152) -number of notices served upon today (53} x 5000 oz ,= 17,405,000 oz of silver standing for the July contract month.
We lost 2 contracts or an additional 10,000 ounces will not 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 23.2015: we had another withdrawal of 2.68 tonnes of gold from the GLD/Inventory rests at 684.63 tonnes
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 23 GLD : 684.63 tonnes
end
And now for silver (SLV)
July 23.2015; no change in silver inventory/rests tonight at 328.834 million oz
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 23/2015: 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 12.3 percent to NAV usa funds and Negative 12.20% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.7%
Percentage of fund in silver:38.0%
cash .3%
( July 23/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to 0.04%!!!! NAV (July 23/2015) (silver must be in short supply)
3. Sprott gold fund (PHYS): premium to NAV falls to – .89% to NAV(July 23/2015)
Note: Sprott silver trust back into positive territory at 0.04%
Sprott physical gold trust is back into negative territory at -.89%
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)
Gold Smash Leads to Surge in Demand For Coins, Bars Around World
By Mark O’ByrneJuly 23, 20150 Comments
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– U.S. Mint sees highest monthly gold eagle sales in over two years
– Indians take advantage of low price in a season not typically known for gold buying
– Chinese investors, disillusioned with stock market, are buying gold in large volumes
– Demand for coins from Perth Mint 37% higher in June and even higher for July
The manipulative smash on the gold price on Sunday night has once again led to a surge of buying of gold coins and bars across the globe. Both the Wall Street Journal and Reuters report on how bullion dealers are seeing a spike in demand for gold coins and bars in India and China and indeed Europe, Australia and the U.S.
The U.S. Mint – which ran out of Silver Eagles earlier in the month due to unexpectedly high demand – has sold 110,000 Gold Eagle one ounce coins so far this month according to Reuters. This compares with a mere 21,500 ounces sold in May and 76,000 in June. It represents the highest level of monthly demand in over two years – with more than a week to go till the end of the month.
In India, July is typically a quiet month for gold sales as farmers, who make up the bulk of the population, allocate their cash towards cultivation, according to the WSJ. However, the unusually low price has led to a surge of buying.
“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,” reports the WSJ viaMarketwatch.
The article goes on to quote an Indian jeweller:
“Until now, the gold demand was very low because of the season. Demand has picked up noticeably as the common man thinks prices have bottomed out.”
Meanwhile, Chinese investors have been allocating money to gold following the bursting of China’s equity bubble.
Interest in gold “had waned in recent months as investors flocked to the soaring stock market.” The surge in demand has caused a doubling in the premiums paid for gold. Demand for investment type “gold biscuits” has “shot up” this week according to a Hong Kong based jeweller. “Our sales are up by 20% to 30% compared to average sales in previous months.”
The Perth Mint in Australia has also seen a sharp rise in demand for gold coins. In June, sales were up 37% on the same month last year with the mint clearing 21,962 ounces.
“Sales in July already matched that level earlier this week and appear to be gaining momentum,” said Ron Currie, sales and marketing director.
The Perth Mint sells coins and bars internationally and is seeing strong demand in the U.S. and EU.
With the price of gold being determined by paper contracts – often regardless of the supply and demand fundamentals of the actual metal itself – spot gold prices today are no longer a barometer of perceived risk in the system.
However, It is clear that many investors in the East and West are accumulating physical gold, the main benefit of which is financial insurance. This would suggest that a great many more people are cautious about the health of the financial system and indeed the global economy than the gold price may indicate.
The experience of the Greek people in not being able to access bank accounts and even cash in safety deposit boxes is also making nervous and leading to gold buying and diversification.
The risks posed by the gargantuan unpayable debt choking the financial system and the economies of the world along with simmering geopolitical tensions remain. We advise clients to hope for the best while planning for the worst by owning physical gold – history’s and today’s store of value.
Must-read guide to bail-ins: Protecting Your Deposits From Confiscation
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,101.65, EUR 1003.69 and GBP 705.91 per ounce.
Yesterday’s AM LBMA Gold Price was 1,096.80, EUR 1002.468 and GBP 702.38 per ounce.
Gold fell $6.30 or 0.4% to $1,093.90 per ounce and silver was flat or down 1 cent to $14.80 per ounce yesterday.
Today, gold in Singapore ticked higher, prior to gold bullion in Zurich moved slightly lower.
This morning in European trading, silver for immediate delivery rose 0.6% to $15.00 an ounce. Spot platinum rose 1.1% percent to $995 an ounce, while palladium rose 0.8 percent to $635 an ounce.
Must-read bullion guide: Gold and Silver Storage Must Haves
end
We told you that it was unlikely the Chinese who orchestrated the bear raid. It can only be our same banker crooks:
(courtesy zero hedge)
The Hunt For The “Mystery” Gold “Bear Raid” Leader Begins
In the immediate aftermath of Sunday night’s massive gold slam, which was oddly reminiscent of the great silver crash of 2011 when on May 1 just around 6:25pm, silver plunged by 15%, from $48 to $42 with no news or catalyst…
… marking the all time high price of silver in the current precious metals cycle (that particular ‘malicious seller’ has never been identified) the promptly arranged narrative was that because the gold crash took place in the span of 30 seconds just before Chinese stocks opened and broke the gold futures market not once but twice, that it has to be a China-based seller with Reuters taking the lead and quickly pointing the finger with an article titled “Gold hits five-year low, under $1,100 on Chinese selling.”
Ironically, the very same Reuters last night admitted that it had been wrong and that it was in fact: “New York sell orders in thin trade” that triggered the “Shanghai gold rout”:
In early Asian trading hours on Monday, when typically only tens of contracts of gold are traded, investors dumped more than $500 million worth of bullion in New York in four seconds, triggering the market’s biggest rout in years.
The sell-off began when one or more massive sell orders hit the price of gold on the CME Group’s Comex futures in New York a tenth of a second after 9:29 a.m. in Shanghai, triggering turnover of almost 5,000 lots of gold in a blink of an eye. That equates to 13 tonnes of gold, more than typically trades in hours during this time of day, and the selling knocked the price almost $20 to $1,100 per ounce during those four seconds. It marked the first leg of a dramatic 60-second sell-off that saw prices sink more than 4 percent to five-year lows.
And just like that the narrative shifts again: instead of a Chinese seller, the real culprit appears to have been a US-based entity masking as a Chinese trader, around which the media then conveniently built a further goal-seeked “story” in which the Sunday night selling (by a US entity now) was the result of a PBOC announcement that its gold holdings had risen to “only” 1600 tons… however the problem is that all this had been known since Friday morning.
So, fast forward to this morning when in yet another Reuters piece, we “find” that the narrative has shifted once more and that now, “traders from Hong Kong to New York are pointing the finger at others for being behind the move while struggling to unmask the mystery sellers.”
In other words: the “hunt” for the great gold “bear raid leader” has begun.
Singapore-based futures brokerage Phillip Futures declared “indiscriminate selling by Asian hedge funds at the stroke of the market’s open in Shanghai” as the chief cause of the price fall in a letter to clients.
But the most well known Chinese funds denied involvement, and as futures trading is anonymous, dealers may never know who was buying and selling during those crucial seconds.
Such details often only become available if regulators take action, and amid the regulatory scrutiny following China’s recent equity market tumbles, it’s unlikely any trader or fund will be eager to take credit for setting off another avalanche.
The fact that the selloff occurred while Japan’s markets were closed for a holiday and U.S. and European traders remained on weekend leave served to implicate China-based dealers in the eyes of some market participants.
At this point a Reuters source even dared to use the “M” word:
“That move was aggressive manipulation. Somebody clearly wanted the market lower and timed it very well,” said a gold trader at a bank in Hong Kong, who saw parallels with the way funds have been linked to swings in copper.
Of course it was, but instead of focusing on what truly matters let’s go chasing for red, literally, herrings…
Chinese funds such as Shanghai Chaos Investment Co and Zhejiang Dunhe Investment Co were, according to traders, behind falls in copper, one in March last year when the metal fell more than 8 percent in three days, and again in January this year when copper slid almost 8 percent in two days.
… herrings which however had nothing to do with the actual selling:
Sources familiar with both Zhejiang Dunhe and Chaos, and at similar outfits, say that while China’s status as the dominant copper consumer left that market vulnerable to potential influence, China’s traders have no such sway over bullion.
“Honestly, Chinese hedge funds are not as experienced as the overseas veterans and gold is more connected to U.S. dollar movement and well-dominated by Wall Street,” said a trader with a Shanghai hedge fund.
Then, inexplicably, more truth:
A London-based trader with an investment bank agreed the lead seller might not be from Asia. “The selling was on Comex and could also be a non-Chinese fund just executing in what they thought was an illiquid timezone to get the biggest move,” the trader said.
Others got close to admitting what happened, but were stopped just short, instead falling back to what had already been set up as the false narrative:
Vishnu Varathan, senior economist at Mizuho Bank, added “there’s a good real money presence in centres like Hong Kong and Singapore. But of course, the inside people who knew where the trades were executed probably have their reason for citing Chinese hedge funds, but I don’t think they were alone in this trade.”
“I think one of the triggers was some disappointment with the amount of the buildup in China’s gold reserves so in terms of the proximity of that particular trigger and the markets that were open there was some involvement, I’m sure, but it may not be the full story,” Varathan said.
For the record, here is what we said moments after the “bear raid” took place:
Once again, as in February 2014 and on various prior cases, the fact that someone meant to take out the entire bid stack reveals that this was not a normal order and price discovery was the last thing on the seller’s mind, but an intentional HFT-induced slam with one purpose: force the sell stops.
So what caused it?
The answer is probably irrelevant: it could be another HFT-orchestrated smash a la February 2014, or it could be the BIS’ gold and FX trading desk under Benoit Gilson, or it could be just a massive Chinese commodity financing deal unwind as we schematically showed last March it could be simply Citigroup, which as we showed earlier this month has now captured the precious metals market via derivatives.
We then added: “we won’t know for sure until the CME once again explains who violated exchange rules with last night’s massive orders.”
This is the same CME which took 18 months to admit that the almost identical market halting gold flash crash from January 6, 2014 was the result of potentially premeditated “flawed” algo trading which “resulted in a disruptive and rapid price movement in the February 2014 Gold Futures market and prompted a Velocity Logic event.”
And, anticipating precisely today’s latest development in the great gold crash story, namely the pursuit of the perpetrators we also added: “there are many who do want to know the reason for the gold crash, which just like in January 2014 had a clear algorithmic liquidation component to it. Which means that until the CME opines on precisely who and what caused the latest gold market break, we won’t know with any certainty. That doesn’t mean that some won’t try to “explain” it.'”
Such as Reuters, on several occasions.
But the real answer, which almost certainly once again points to the trading desk of one Benoit Gilson in Basel, will surely never be revealed. Even in the January 2014 case, the CME stopped short of actually identifying precisely who had oredered the gold collapse instead leaving it broad as follows: “this failure resulted in unusually large and atypical trading activity by several of the Firm’s customers.”
Which ones? Or perhaps the $64,000 answer to that question is what the central banks and the BIS, and hence the CME, will guard at all costs.
Finally, as we also noted previously, “while the actual selling reason was irrelevant, the target was clear: to breach the $1080 gold price which also happens to be the multi-decade channel support level.”
So far this has almost succeeded, with gold repeatedly sliding just shy of $1080 but never actually breaching it. We expect this too support level to be taken out as what is now clear and accepted manipulation continues, which in retrospect, will merely afford those who buy gold for its true practical value, as insurance against a systemic collapse which is pretty close to where the Chinese central planners find themselves right now not to mention the imploding European monetary union, to buy more for the same paper price.
As for the “great”, and greatly misdirecting, hunt for the “bear raid” leader, one which will never reveal the true culprit, bring it on – we can always do with some entertainment meant to distract the masses. In fact, we would not be at all surprised if some Indian trader out of his parent’s basement in a London suburb ends up going to prison for this while those guilty of chronic, constant manipulation continue to walk free…
end
(courtesy Dave Kranzler/IRD)
Dave Kranzler: Anti-gold propaganda reaches bubble proportions
Submitted by cpowell on Thu, 2015-07-23 17:03. Section: Daily Dispatches
1:02p ET Thursday, July 23, 2015
Dear Friend of GATA and Gold:
In his new commentary, “Anti-Gold Propaganda Reaches Bubble Proportions,” Dave Kranzler of Investment Research Dynamics argues that there really isn’t any gold “market” now that central banks and governments are rigging it so much. Kranzler’s commentary is posted at the IRD Internet site here:
http://investmentresearchdynamics.com/anti-gold-propaganda-reaches-bubbl…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
end
A great paper from Alasdair Macleon
his subject:
Gold and Gibson’s Paradox,
Gold and Gibson’s Paradox
By Alasdair Macleod
Posted 23 July 2015
There is a myth prevalent today that the gold price always falls when interest rates rise.
The logic is that when interest rates rise it is more expensive to hold gold, which just sits there not earning anything. And since markets discount future expectations, gold will even fall when a rise in interest rates is expected. With the Fed’s Open Market Committee debating the timing of an interest rate rise to take place possibly in September, it is therefore no surprise to market commentators that the gold price continues its bear market. Only the myth is just that: a myth denied by empirical evidence.
The chart below is of a time when the opposite was demonstrably true. From March 1971 to December 1979 the trends in both interest rates and the gold price rose and fell at the same time. It is worth noting that this occurred over more than one business cycle, so it is not a relationship which was cycle-dependant.
The myth is therefore satisfactorily debunked. To understand why this relationship between interest rates and gold is not as simple as commonly believed, we must take the argument further to bring in commodities generally and visit the tricky subject of Gibson’s Paradox. This paradox is based purely on long-run empirical evidence, when gold was transaction money, covering the two centuries between 1730 and 1930. It observes that the level of wholesale prices and interest rates are positively correlated. It is not the price relationship that is consistent with the quantity theory of money, which presupposes that interest rates correlate to the rate of price inflation instead of the price level itself. This maybe a reason why monetarists mistakenly argue, as we also discovered in the seventies, that central banks can manage the rate of inflation through interest rate policy. The common view in markets today about the relationship between interest rates and price inflation is wholly at odds with the longer-run evidence of Gibson’s Paradox and accords with the more fashionable quantity theory instead.
Gibson and his paradox are generally forgotten today, and those who centrally plan our money and markets appear unaware of the challenge it poses to their monetarist preconceptions. Keynes, no less, described Gibson’s Paradox in 1930 as “one of the most completely established empirical facts in the whole field of quantitative economics”, and Irving Fisher also wrote in 1930 that “no problem in economics has been more hotly debated”. Even Milton Friedman agreed in 1976 that “The Gibson Paradox remains an empirical phenomenon without a theoretical explanation”.*
Resolving this paradox can be left to another time; instead we shall consider the implications by looking at price relationships between wholesale prices and interest rates in a post-gold world. The next chart is of producer prices measured in gold compared with one-year Treasury yields.
I have taken the St Louis Fed’s “Producer Price Index by Commodity for Crude Materials for Further Processing” to more closely reflect commodity price trends, and to reduce the additional considerations of changes in processing margins over time. The one-year interest rate is preferred to the original evidence of Gibson’s Paradox, which used the yield on undated British Government Consols stock as being the only continual information on rates available, because we need to more firmly link the evidence to modern interest rate policies.
Looking at the chart, it is hardly surprising that Gibson’s Paradox was quashed from the time of the Nixon Shock in 1971, when the US unlocked a huge rise in the gold price by ending the Bretton Woods Agreement. Instead, the gold price took on a life of its own, driving down wholesale prices priced in gold for the next nine years. The rise in the index from 1980 to 2000 reflected gold’s subsequent bear market when gold fell from $800 to $250, but the influence of Gibson’s Paradox appears to have returned thereafter.
This conclusion might be considered suspect; but the chart tells us that not only are producer prices at their lowest for thirty-five years when measured in sound money, the price level also coincides with zero interest rates. In theory, it accords precisely with Gibson’s Paradox. So where do we go from here?
There is only one way for interest rates to go from the zero bound, it being only a matter of time, time which according to the Fed is now running out. Commodity prices in their role as raw materials therefore seem set to rise with interest rates, if the Paradox is still valid. Furthermore, the evidence from this analysis suggests that wholesale prices are suppressed even more than the price of gold. This being the case, when the interest rate cycle turns the potential for higher raw material prices measured in dollars could be truly spectacular, even more so in the event the gold price rises at the same time, which seems likely in the event that financial markets become destabilised by higher interest rates.
It is worth repeating at this point that the economic consensus, which adheres to the quantity theory of money and has been comforted by the apparent absence of consumer price inflation in the wake of the post-Lehman monetary expansion, takes a diametrically opposite view to that indicated by the Paradox. The prospect of a turn in the interest rate cycle is expected to drive the dollar’s exchange rate higher still, weakening commodity prices and gold even further. In the language of the dealers, everyone is on the same side of the trade, meaning the dollar is technically over-bought and commodities over-sold.
Gibson’s Paradox says it will turn out otherwise, and it could be central to linking the cyclical relationship between interest rates, securities markets, and commodity prices. It becomes much easier to see how these relationships tie together. Rising interest rates would almost certainly be accompanied by a potentially large fall in overpriced bond and stock markets as speculative positions are unwound, the former even undermining bank solvency ratios.
The flight of speculative capital from falling markets has to go somewhere, particularly if cash balances held in the banks are at a growing risk from systemic default. The Paradox tells us that these are the conditions for commodities to become the safe haven of choice for the highest levels of speculative money ever recorded since fiat currencies dispensed with their golden anchor. Ergo, Gibson’s Paradox probably still holds.
*All three quotes are taken from Barsky & Summers, National Bureau of Economic Research Working Paper No. 1680, (August 1985).
end
(courtesy GATA/Reuters)
Now even Reuters acknowledges gold market rigging ….
The sheer scale of order flow across both the Shanghai Gold Exchange and the Shanghai Futures Exchange — where combined volume for the day surpassed the notional equivalent of 250 tonnes — led many market trackers to speculate that fleet-footed Chinese hedge funds were behind the move. …”That move was aggressive manipulation. Somebody clearly wanted the market lower and timed it very well,” said a gold trader at a bank in Hong Kong, who saw parallels with the way funds have been linked to swings in copper. …
A London-based trader with an investment bank agreed the lead seller might not be from Asia. “The selling was on Comex and could also be a non-Chinese fund just executing in what they thought was an illiquid timezone to get the biggest move,” the trader said. …
… For the remainder of the report:
http://www.reuters.com/article/201
Submitted by cpowell on Thu, 2015-07-23 15:34. Section: Daily Dispatches
… but like all news services Reuters may need another few hundred years before it questions any central bank about its surreptitious trading.
* * *
Bullion Dealers Trade Blame in Hunt for ‘Bear Raid’ Leader
By Manolo Serapio Jr. and Ruby Lian
Reuters
Thursday, July 23, 2015
As the global bullion market continues to reel from a dramatic plunge in gold prices on Monday, traders from Hong Kong to New York are pointing the finger at others for being behind the move while struggling to unmask the mystery sellers.
In early Asian trading hours on Monday, investors dumped more than $500 million worth of bullion in New York in four seconds with selling occurring almost simultaneously on Chinese markets.
end
More and more commentaries from the mainstream media on the dysfunctional gold markets
(courtesy Marcia Christoof-Kurapovna/Mises)
Marcia Christoff-Kurapovna: Central banks and our dysfunctional gold markets
Submitted by cpowell on Thu, 2015-07-23 15:21. Section: Daily Dispatches
11:20a ET Thursday, July 23, 2015
Dear Friend of GATA and Gold:
GATA’s account of gold market rigging has made its way to the Mises Institute, thanks to an essay by financial writer Marcia Christoff-Kurapovna, “Central Banks and Our Dysfunctional Gold Markets.” Your secretary/treasurer even gets quoted, which doesn’t happen much on this planet.
Christoff-Kurapovna writes: “Many investors still view gold as a safe-haven investment, but there remains much confusion regarding the extent to which the gold market is vulnerable to manipulation through short-term rigged market trades and long-arm central bank interventions. First, much of the gold that is being sold as shares, in certificates, or for physical hoarding in dubious ‘vaults’ just isn’t there. Second, paper gold can be printed into infinity just like regular currency. Third, new electronic gold pricing — replacing, as of this past February, the traditional five-bank phone call of the London Gold Fix in place since 1919 — has not necessarily proved a more trustworthy model. Fourth, there looms the specter of the central bank, particularly in the form of volume trading discounts that commodity exchanges offer them.”
Her essay is posted at the Mises Institute’s Internet site here:
https://mises.org/library/central-banks-and-our-dysfunctional-gold-marke…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
end
(courtesy Dave Kranzler/IRD)
The last two reporting gold withdrawals (equals citizen gold demand) came to 106.10 tonnes of gold
Last week’s week reporting: 61.8 tonnes
two weeks ago: 44.3 tonnes
Two Week Shanghai Gold Exchange Withdrawals Exceed All 2014 Comex Deliveries
July 23, 2015Financial Markets, Gold, Market Manipulation, Precious MetalsComex, LBMA, paper gold, SGE, Shanghai Gold exchange withdrawals, silver eagles
The Shanghai Gold Exchange is the only major official physical gold trading market in the world. All trades on the exchange are settled with the exchange of ownership on physical gold bullion. Paper future contracts do not trade on the SGE. In contrast, trading occurs on the LBMA and Comex in paper gold. The Comex is de facto a 99.999% paper gold exchange for which the percentage metal backing the paper traded is minuscule. The LBMA has been rapidly “catching up” to the Comex in this regard, although on a percentage basis the LBMA experiences a higher amount physical gold exchanged than the Comex.
Because of the way in which the SGE functions, gold withdrawn from the SGE measures the true demand for gold in China in a given time period. All gold – except for the gold purchased by the Peoples Bank of China – purchased by any form of end user must pass through the SGE by law. It is for this reason that “withdrawals” represent the most accurate measurement of demand for gold in China – except the Central Bank’s demand.
In the past two weeks, 106.1 tonnes of gold were withdrawn from the SGE. As Smaulgld.com has observed:
Gold withdrawals on the Shanghai Gold Exchange the past two weeks were larger than the amount of gold delivered on COMEX during 2014 and greater than the amount of gold Germany has repatriated from the New York Fed since 2013.<a href="https://smaulgld.com/shanghai-gol