My website is now ready but we still have to add a little stuff to it. You can find my site at the following url:
harveyorganblog.com or harveyorgan.wordpress.com
I will continue to send the comex data down to my good friends at the Doctorsilvers website on a continual basis.
They provide the comex data. I also provide other pertinent data that may interest you. So if you wish you can view that part on my website.
I would like to thank you for your patience and I would like to thank my son, Stephen for his invaluable assistance in setting my website up. We are confident that it will not be shut down.
Gold: $1183.50 down $2.00
Silver: $16.05 down 26 cents
In the access market 5:15 pm
Gold and silver did not have a great day price wise.
I reminded everyone on Friday that:
“The bankers will regroup and will try and forcefully send gold and silver back down on Monday. Of course the problem that the bankers have is this:
every time they orchestrate a huge raid, some strong entities (a sovereign??) are in there gobbling up much of the naked offering of our bankers. The bankers risk that many of the longs purchased will end up on the delivery table.”
And sure enough, the bankers started their raids once the comex session got under way. Gold and silver were doing just fine in the Asian/European time zone with gold reaching its zenith at $1194.00 at 4 am est and silver lagging behind, hitting its zenith at $16.39 at around 2 am est. Silver started to swoon at that point which is a sure sign that an attack was imminent. Gold hit its nadir at $1182.50 around noon time, and finished as indicated above.
However in the access market, gold and silver rose to that indicated above.
The gold comex today had a humongous delivery day, registering 462 notices served for 46,200 oz. Somebody was in great need of gold in a hurry. This may portend a huge number of gold ounces that will stand in December.
Silver comex registered 1 notices for 5,000 oz.
A few months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 255.02 tonnes for a loss of 48 tonnes over that period. .
In silver, the open interest rose considerably despite Friday’s gain in price ( 70 cents). It looks like we have a few nervous shorts in silver racing against the clock to cover some of their shortfall!! The total silver OI remains extremely high with today’s reading at 172,725 contracts. The big December silver OI contract marginally lowered to 79,997 contracts.
In gold we had a huge gain in OI with Friday’s rise in price of gold to the tune of $24.10 . The total comex gold OI rests tonight quite elevated at 453,974 for a gain of a 3,611 contracts. The December gold OI rests tonight at 213,140 contracts which had a smallish contraction of 5,863 contracts. We lost some of the paper longs into February .
Today, we had a huge addition of 2.39 tonnes in gold Inventory at the GLD / inventory rests tonight at 723.02 tonnes.
In silver, the SLV inventory remained constant tonight
SLV’s inventory rests tonight at 346.900 million oz.
We have a few important stories to bring to your attention today…
Let’s head immediately to see the major data points for today.
First: GOFO rates: move again deeper in backwardation!!
All months basically moved deeper into backwardation
Now, the first 4 months of GOFO rates( one, two, three and six month GOFO) moved deeply into the negative with the 6th month GOFO now negative again and in backwardation. On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates.
It looks to me like these rates even though negative are still fully manipulated.
London good delivery bars are still quite scarce.
The backwardation in gold is incompatible with the raid on gold . It does not make any economic sense.
Nov 17 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
-.22% -0.16% -0.1075% – .0075% + .1150%
Nov 13 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
–.2175% + -.1575% -.097500% -.0075 % + .1150%
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 wide margin of 3611 contracts from 450,363 up to 453,974 with gold up $24.10 on Friday. The front delivery month is November and here the OI fell by 466 contracts. We had 920 delivery notices filed on Friday so we gained 454 contracts or a whopping 45,400 additional gold ounces will stand for the November contact delivery month. The big December contract month saw it’s Oi fall by a smallish 5,863 contracts down to 213.140. Most of the selling December longs rolled into February. The estimated volume today was fair at 164,588. The confirmed volume on Friday was very good at 332,271. (with mucho help from our HFT traders.) Strangely on this 13th day of notices, we had another monster notice of 462 notices filed for 46,200 oz. We had only 22 notices outstanding Friday night, so again somebody was in urgent need of gold.
And now for the silver comex results. The total OI fell slightly by 2,538 contracts from 175,263 down to 172,725 as silver was up 70 cents on Friday. It seems that judging from silver’s OI, our banker friends are still very nervous as they try to cover their massive shortfall in silver. In ounces, this represents a total of 863 million oz or 123.3% of annual global supply. We are now in the non active silver contract month of November and here the OI remained constant at 89. We had 0 notices filed on Friday so we neither gained nor lost any silver contracts oz that will stand for the November contract month. The big December active contract month saw it’s OI fall by only 4085 contracts down to 79,997. A normal contraction is around 5,000 contracts per day on a roll. The December contract month remains highly elevated for this time in the delivery cycle. In ounces the December contract is represented by 400 million oz or 57.1% of annual global production (production = 700 million oz – China). The estimated volume today was good at 39,154. The confirmed volume on Friday was huge at 94,313. We also had 1 notices filed today for 5,000 oz.
If I am reading the comex first day notice properly, first day notice is Nov 26.2014 the day before Thanksgiving. We thus have 7 more comex sessions.
Data for the November delivery month.
November initial standings
|Withdrawals from Dealers Inventory in oz||nil|
|Withdrawals from Customer Inventory in oz||nil|
|Deposits to the Dealer Inventory in oz||nil|
|Deposits to the Customer Inventory, in oz||9,645.000 oz (300 Kilobars???)|
|No of oz served (contracts) today||462 contracts(46,200 oz)|
|No of oz to be served (notices)||14 contracts (1400 oz)|
|Total monthly oz gold served (contracts) so far this month||1392 contracts (139,200 oz)|
|Total accumulative withdrawals of gold from the Dealers inventory this month||80,623.1 oz|
Total accumulative withdrawal of gold from the Customer inventory this month
Today, we had 0 dealer transactions
total dealer withdrawal: nil oz
total dealer deposit: nil oz
we had 0 customer withdrawals:
total customer withdrawals : nil oz
we had 1 customer deposits:
Into Scotia: 9,450.000 oz or another of our famous 300 kilobars.
total customer deposits : 9450.000 oz
We had 0 adjustments:
Total Dealer inventory: 868,910.561 oz or 27.02 tonnes
Total gold inventory (dealer and customer) = 8.205 million oz. (255.22) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 48 tonnes have been net transferred out. We will be watching this closely!
Today, 0 notices was issued from JPMorgan dealer account and 385 notices were issued from their client or customer account. The total of all issuance by all participants equates to 462 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account.
The stopper again today was Scotia with 456 contracts stopped out of the 462. On Friday, Scotia stopped 833 of the 920 issued. JPMorgan customer account on Friday was the issuer of all 920 contracts.
To calculate the total number of gold ounces standing for the November contract month, we take the total number of notices filed for the month (1392) x 100 oz to which we add the difference between the OI for the front month of November (476) – the number of gold notices filed today (462) x 100 oz = the amount of gold oz standing for the November contract month.
Thus the initial standings:
139,200 (notices filed today x 100 oz + ( 476) OI for November – 462 (no of notices filed today) 140,600 oz or 4.373 tonnes.
We gained 45,400 oz of gold standing for the November contract month.
November silver: initial standings
|Withdrawals from Dealers Inventory||251,546.400 oz|
|Withdrawals from Customer Inventory||658,189.790 oz
|Deposits to the Dealer Inventory||nil|
|Deposits to the Customer Inventory||536,933.670 oz (Delaware)|
|No of oz served (contracts)||1 contracts (5,000 oz)|
|No of oz to be served (notices)||88 contracts (440,000 oz)|
|Total monthly oz silver served (contracts)||156 contracts 780,000 oz)|
|Total accumulative withdrawal of silver from the Dealers inventory this month||781,023.9 oz|
|Total accumulative withdrawal of silver from the Customer inventory this month||5,196,526.6 oz|
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 1 dealer withdrawal:
i) out of Delaware: 251,546.400 oz
total dealer withdrawal: 251,546.400 oz
We had 4 customer withdrawals:
i) Out of CNT: 27,355.600 oz
ii) Out of Delaware: 4,444.800 oz
iii) Out of Scotia: 600,316.120 oz
iv) Out of Brinks; 19,073.27 oz
total customer withdrawal 658,189.79 oz
We had 1 customer deposits:
total customer deposits: 536,933.67 oz
we had 1 adjustment
i Addition of 127.768 oz into Delaware (adding error)
Total dealer inventory: 65.350 million oz
Total of all silver inventory (dealer and customer) 177.715 million oz.
The total number of notices filed today is represented by 1 contract or 5,000 oz. To calculate the number of silver ounces that will stand for delivery in November, we take the total number of notices filed for the month (156 ) x 5,000 oz to which we add the difference between the total OI for the front month of November(89) minus (the number of notices filed today (1) x 5,000 oz = the total number of silver oz standing so far in November.
Thus: 156 contracts x 5000 oz + (89) OI for the November contract month – 1 (the number of notices filed today) = amount standing or 1,220,000 oz of silver standing.
we neither gained nor lost any silver ounces standing today.
It looks like China is still in a holding pattern ready to pounce when needed.
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:
Nov 17.2014; we had a huge addition of 2.39 tonnes of gold added to the GLF inventory/inventory rests tonight at 723.01 tonnes. They may be running out of metal to give China!!!
Nov 14. we had no change in gold inventory at the GLD/inventory 720.62 tonnes
nov 13. we lost another 2.05 tonnes of gold at the GLD/Inventory at 720.62 tonnes
Nov 12.2014; we lost another 1.79 tonnes of gold at the GLD/Inventory at 722.67 tonnes
This gold left the shores of England and landed in Shanghai.
Nov 11.2014: we lost another 0.900 tonnes of gold at the GLD/Inventory 724.46 tonnes
Nov 10. we lost another 1.79 tonnes of gold at the GLD/Inventory 725.36 tonnes
Nov 7 wow!! we lost another huge 5.68 tonnes of gold at the GLD/inventory 727.15 tonnes
Nov 6.2014: we had another huge withdrawal of 2.99 tonnes of gold. Inventory 732.83 tonnes
This gold is also heading to Shanghai. If I was a shareholder of GLD I would be quite concerned as there will be no real gold inventory left per outstanding shares.
Nov 5 we had another huge withdrawal of 3.000 tonnes of gold. This gold will be heading to Shanghai/GLD inventory 735.82 tonnes
Nov 4.2014: a huge withdrawal of 2.39 tonnes of gold/GLD inventory/738.82 tonnes
Nov 3.2014: no change in gold inventory at the GLD/741.21 tonnes
Oct 31.2014: no change in gold inventory at the GLD despite the raid/inventory at 741.21 tonnes
October 30.2014: we had another 1.2 tonnes of gold leave the GLD and heading to Shanghai/Inventory 741.21 tonnes
October 29.2014: we had another .99 tonnes of gold removed from the GLD/inventory 742.40 tonnes
Today, Nov 17. a huge addition of 2.89 tonnes of gold inventory.
inventory: 723.01 tonnes.
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 723.01 tonnes.
And now for silver:
Nov 17.2014 .SLV inventories remain constant tonight at 346.90 million oz
Nov 14.2014; wow!! we had an addition of 2.012 million oz into the SLV/inventory at 346.900 million oz
Nov 13. no change in silver inventory at the SLV/344.888 million oz.
Nov 12.2014: no change in silver inventory at the SLV/inventory rests tonight at 344.888 million oz. And please note that gold leaves GLD/silver does not. Why? there is no physical silver at the SLV..just paper obligations.
Nov 11.2014: no change in silver inventory at the SLV/inventory rests tonight at 344.888 million oz.
Nov 10/ we had an addition of 1.438 million oz of silver into inventory at the SLV/Inventory 344.888 million oz (again note the difference between gold and silver)
Nov 7/ 2014/no change in silver inventory/inventory rests at 343.45 million oz. (please note the difference between silver (SLV) and gold (GLD)
Nov 6.2014: no change in silver inventory/(as of 6 pm est) inventory rests at 343.45 million oz.
Nov 5 today, the total silver inventory drops of 2.074 million oz/SLV inventory: 343.45 million oz
Nov 4.2014: wow!! we had another addition of 1.151 million oz of silver inventory/SLV inventory rises to 345.524
Please note the difference between GLD and SLV. The GLD has physical gold to send on its way to Shanghai/SLV has no silver to offer to the participants to give to various players..
Nov 3.2014: this is good news: the “actual silver inventory” rose by 958,000 oz to 344.373 oz
(I guess there is no physical silver to raid from the SLV vaults:)
October 31.2014: despite the huge raids yesterday and today: no change in silver inventory at the SLV/inventory at 343.415 million oz
Nov 17.2014 no change in silver inventory at the SLV
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now deeply into the positive to NAV
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 9.6% percent to NAV in usa funds and Negative 9.7% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.3%
Percentage of fund in silver:38.10%
( Nov 17/2014)
2. Sprott silver fund (PSLV): Premium to NAV rises to positive 4.10% NAV (Nov 17/2014)
3. Sprott gold fund (PHYS): premium to NAV falls to negative -0.37% to NAV(Nov 17/2014)
Note: Sprott silver trust back hugely into positive territory at 4.10%.
Sprott physical gold trust is back in negative territory at -0.37%
Central fund of Canada’s is still in jail.
And now for your most important physical stories on gold and silver today:
Early gold trading form Europe early Monday morning:
(courtesy Goldcore/Mark O’Byrne)
Cameron Says Second Global Crash Looming – Russian Relations Worsen at G20, Japan in Recession
David Cameron warned last night that the global economy risked another crash and said in an article that ‘red warning lights’ were ‘flashing on the dashboard of the global economy’ and the eurozone was ‘teetering on the brink’ of another recession.
The warning came at the same time that the world’s largest economy, Japan, fell into another recession. Japan shrank by an annualised 1.6% in the third quarter. This followed a huge 7.3% contraction in the previous quarter caused by a rise in the national sales tax and ran counter to economists forecasts for a 2.1 percent rebound.
Mr Cameron’s warning follows a claim by Bank of England governor Mark Carney that a ‘spectre’ of economic stagnation was haunting Europe. Christine Lagarde, managing director of the International Monetary Fund, has also expressed fears that a diet of high debt, low growth and unemployment may yet become ‘the new normal in Europe’.
Writing in the Guardian at the close of the G20 summit in Brisbane, Cameron says there is now “a dangerous backdrop of instability and uncertainty” that presents a real risk to the UK recovery, adding that the eurozone slowdown is already having an impact on British exports and manufacturing.
Mr Cameron said global instability such as the continued eurozone crisis and the ebola outbreak threatened the UK’s recovery.
The G20 summit in Brisbane seems to have been a highly entertaining affair. Albeit for all the wrong reasons.
The 20 richest countries in the world pledged to magic up 2.1% of economic growth over the next five years. How this is suddenly possible after six years of failure is unclear but it makes for good PR. Climate change was also high on the agenda.
But it was the brow-beating of Vladimir Putin by the leaders of the increasingly repressive free world that got most of the media attention. Canada’s Harper reluctantly shook Putin’s hand while demanding Russia pull out of Ukraine or face the might of Canada.
Australia’s assistant secretary of defense was sent to greet him. Merkel said the EU is considering further sanctions even as protests by farmers across Europe are erupting due to the loss of the Russian export market.
Obama assured the G20 that the US, who have waged a series of bloody and costly wars since 2002 would lead the charge against Russia’s aggression against Ukraine, “which is a threat to the world, as we saw with the appalling shoot-down of MH17” – the Malaysian Airlines flight which was shot down over Ukraine in July.
Australia’s Abbott had threatened to “shirt front” – that is to physically confront – Putin over the atrocity which claimed 28 Australian lives.
Perhaps he was restrained from doing so due to the lack of evidence of Russian involvement in the attack on the plane which had been diverted from it’s regular flight path and directed over rebel held territory by Ukrainian air traffic control.
While the Western media try to present Vladimir Putin as being a pariah in the “global community,” it is important to remember that Putin was treated as the guest of honour at the APEC conference in Beijing. The official photograph of that event made it clear that the US are now regarded as less important in the conduct of East-Asian affairs.
This week it was Putin’s turn to be humiliated as the official photo placed him out at the very edge of the picture. No such disrespect was shown to China’s Xi Jinping who appeared in the centre, indicating Australia’s reliance on China. The close relations between Russia and China indicate that Putin is not as isolated as the media would make it seem.
Tensions between Russia and the West are escalating. The West are threatening even more sanctions unless Russia stop aiding pro-Russian rebels in Ukraine. Putin insists that Russia is not involved in Ukraine and so there is no resolution in sight.
The damage being inflicted on Russia’s economy by sanctions have caused Russian figures to openly discuss dethroning the petrodollar. Sergey Glasyev, economic advisor to Putin, recently said that while “all freely convertible currencies are today under American control,” the dishonest monetary policies of the US is leading towards the “end of the American financial empire.”
“It will give us a chance to be among the first to suggest a new configuration for the world financial system in which the role of national currencies would be significantly higher,” he said.
When that time comes what Russia will propose will almost certainly involve gold-backed currencies. In Q3 Russia bought more gold than the combined buying of all other central banks. Russia imported 55 tonnes of gold in that period.
Russia have increased their gold stocks three-fold since 2004. This is happening against a backdrop of central banks being net buyers since 2009.
Currency wars look set to rapidly escalate as Russia look to dethrone the dollar in response to onerous sanctions being placed on it by the west. Russia’s official gold holdings have surpassed those of China with a dramatic upsurge in imports since sanctions began.
It is certain that currencies will come under increasing pressure over the next few months. The countries who have consistently improved their standards of living over the past two decades are also the countries who are consistently accumulating gold. The countries who have seen a steady decline over the same period appear to have little or no gold reserves.
It would be wise to act as ones own central bank and add some gold to one’s portfolio.
Get Breaking News and Updates on the Gold Market Here
Today’s AM fix was USD 1,187.00, EUR 950.36 and GBP 759.49 per ounce.
Friday’s AM fix was USD 1,154.00, EUR 926.31 and GBP 736.20 per ounce.
Gold climbed $28.90 or 2.49% to $1,190.70/oz Friday. Silver surged $0.69 or 4.42% to $16.30/oz.
Gold in U.S. Dollars – 5 Days (Thomson Reuters)
Gold hovered at two week highs on Monday, after a short covering rally and gold buying Friday.
Spot gold was at $1,187.20 an ounce by 0724 GMT, after earlier rising to a two-week high of $1,193.95. Friday’s jump over 2% allowed the metal to break out of a key technical level of $1,180.
Bearish bets on gold futures and options by hedge funds are near a record, according to CFTC data. Trading today on the Shanghai Gold Exchange’s benchmark bullion spot contract was the highest since April 2013.
Despite hugely negative sentiment towards gold, it is worth bearing in mind that gold is down just 1.3% this year.
Asian demand and particularly Chinese and Indian demand continues to be very robust.
India’s October gold imports surged 280% year on year to $4.18 billion, the trade ministry said today
Ongoing softness in global gold prices is prompting more buying in the United Arab Emirates and in the Middle East. As jewellery buyers and store of wealth gold coin and bar buyers snap up gold in its various forms. There are estimates from the local jewellery trade showing that retail offtake for the full year in the UAE could be up by 15-20% in volume terms (in kilograms) on 2013, according to Gulf News.
and gold did not react to this???
(courtesy zero hedge)
ECB Says May Buy Gold, Stocks Next, Admits “Not Sure If Japan’s QE Has Worked”
While it remains to be seen if a majority of the Swiss population want their central bank to purchase a whopping 1,500 tons of gold in the coming years, perhaps the most notable event for gold overnight (aside from news that while India exports fell 5% in October, gold and silver imports soared by 280% and 136% Y/Y, respectively), came from ECB Executive Board member Yves Mersch who in a speech in Frankfurt said that the ECB balance-sheet expansion is “neither an end in itself nor a fetish.” As quoted by Bloomberg, the ECB member said that “the effect on rates that comes along with it is at best a collateral benefit.”
Nothing new here: we have discussed why unlike Japan and the US, the biggest gating factor for Europe is the presence of freely-available, unencumbered collateral that could, at least in theory, be purchased by the ECB. Which brings us to the Mersch punchline: “Theoretically the ECB could purchase other assets such as gold, shares, ETFs to fulfill its promise of adopting further unconventional measures to counter a longer period of low inflation.”
In other words, for the first time ever, the ECB revealed just what the endgame for the Eurozone would looke like: full-blown monetization of virtually everything that is not nailed down. Including gold.
More from Mersch via Bloomberg: “The ECB should allow current stimulus measures to take effect first, then potential new measures must be analyzed in advance for effectiveness and conformity to ECB mandate.” He concluded by saying that “Monetary-policy easing can bring no positive effect if Europe’s economy isn’t structurally well-positioned” through reforms.
Which is ironic because in the same speech the same Mersch also opened a whole new can of worms when he admitted that he is not sure if the BOJ’s QE has worked.
“I’m not so sure it has worked, considering that this morning we saw that Japan has officially slid into recession again.”
Well, it has if one is long of the Nikkei (in Yen or USD terms). For everyone else, it has been an absolute disaster as we previewed early this summer in Abenomics’ Legacy: Japan’s Greatest “Misery” In 33 Years.
But back to gold. Here is the Telegraph’s take:
Gold, shares, and exchange-traded funds (ETFs) – the European Central Bank (ECB) may turn to buying any or all of these in an attempt to boost inflation in the currency bloc.
Yves Mersch, a member of the ECB’s executive board, said that the purchase of these assets was “theoretically” an option for the central bank, which earlier this year resolved to “take further unconventional measures to counteract a lengthy period of lower inflation”.
His speech, delivered in German, came as official statistics published on Friday showed inflation of just 0.4pc in the year to October.
Very low levels of inflation were characterised by Mr Mersch as “abnormally low”, as price growth remained well below the ECB’s target of close to 2pc.
“Every purchase of a security – or precious metal or foreign currency – naturally increases the credit risk of the buyer”, he added, noting that the ECB may lack a mandate to increase the risk of its balance sheet.
Mr Mersch, a Luxembourgian, is often seen as leaning towards the position of the ECB’s German members – hesitant to pursue monetary stimulus in an attempt to revive the eurozone.
So yes: in “theory” the ECB can buy pretty much anything, up to and including gold. And before all is said and done it most likely will, especially if one looks at today’s GOFO update, where the 6-Month rate remained at a negative -0.0075%, while the 1 Month rate just dropped to a fresh 13 year low, of -0.22%, a fresh low since 2001, suggesting concerns that institutional demand is (and will continue) soaking up all physical for a long, long time. This is how DB carfeully tiptoed around this topic late last week:
It is interesting to note that benchmark gold-dollar swap rates have recently traded negative, meaning investors are paying to borrow gold. This is unusual as gold is traditionally used as a source of collateral for cash financing. While a number of factors may play a role, such as excess dollar liquidity or an increased demand for collateral on the back of the global regulatory developments, it is possible that anticipation of an affirmative vote in the gold referendum has played a role.
In other words, if Switzerland “returns the favor” to the US, whose president recently crushed the legacy banking secrecy prevalent in Switzerland for centuries, and votes to force the purchases of massive amounts of gold in the open, or not so open market, watch as the entire GOFO curve trades negative for the first time ever.
Gerald Celente talks about gold’s importance to Russian in its defense against sanctions and the run on its rouble:
(courtesy Gerald Celente/Kingworldnews/Eric King)
Gold is part of Russia’s defense against U.S., Celente tells KWN
8:37p ET Friday, November 14, 2014
Dear Friend of GATA and Gold:
Russia’s steady acquisition of gold is part of the nation’s defense in the international currency war, where, in the Russian view, “all freely convertible currencies are today under American control.” That’s the outlook of trends forecaster Gerald Celente’s new interview with King World News, posted at the KWN blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
a must view/David Stockman talks about confidence fading across the globe as deflation is rearing its ugly head
(courtesy David Stockman/Kingworldnews)
Confidence in central banks is fading and markets will rediscover gold, Stockman says
10:28p ET Friday, November 14, 2014
Dear Friend of GATA and Gold:
Former U.S. budget director David Stockman tells King World News tonight that central banks are losing the confidence of the markets and eventually the markets will rediscover a currency more reliable than anything printed by central banks — gold. An excerpt from the interview is posted at the KWN blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Iran said to open refinery as ‘resistance,’ doubling annual gold production
From The Associated Press
via ABC News, New York
Saturday, November 15, 2014
Iranian state television is reporting that the country has inaugurated a new gold-processing plant that will double the country’s annual production to 6 tons.
The report says First Vice President Ishaq Jahangiri attended the inauguration Saturday of the plant near Takab in northwestern Iran.
It says the new processing facility, built next to Iran’s Zarshouran gold mine, also will produce an estimated 2.5 tons of silver and 1 ton of mercury a year.
State television says Iran previously produced an estimated 3 tons of gold a year.
This is part of Iran’s “economy of resistance” to counter sanctions imposed over Tehran’s contested nuclear program. The Islamic Republic is currently negotiating a final deal over its atomic program with world powers.
Swiss central bank could nullify gold initiative with overnight gold swaps
12:58p ET Saturday, November 15, 2014
Dear Friend of GATA and Gold:
Zero Hedge reports today that a market analyst for Deutsche Bank has figured out an easy way for the Swiss National Bank to nullify the Swiss Gold Initiative if it is approved at Switzerland’s national referendum on November 30.
The referendum would require the central bank to increase its gold reserves, and the Deutsche Bank analyst, Robin Winkler, writes that rather than purchase more reserves, the bank could just pretend to have them for one day each month, the day of the bank’s monthly report, a bookkeeping pretense accomplished with an overnight gold swap, reversed the following day.
Of course such evasion and deception would be perfectly in the spirit of central banking, though it might tend to remind people that central banking has become worse than the disease it purports to cure.
As was confirmed by the secret March 1999 report of the staff of the International Monetary Fund, gold swaps and loans are primary mechanisms of surreptitious manipulation of markets by central banks:
Zero Hedge’s report is headlined “How Central Banks Use Gold Swaps To ‘Boost’ Their Gold Holdings” and it’s posted here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Turk says mining shares have never been been cheaper, mining executives are clueless
1:45p ET Saturday, November 15, 2014
Dear Friend of GATA and Gold:
In an hour-long interview with the TF Metals Report’s Turd Ferguson, GoldMoney founder and GATA consultant James Turk says, among other things:
— Shares of monetary metals mining companies have never been cheaper.
— Gold backwardation has never been as severe, indicating massive intervention by central banks against gold.
— The World Gold Council and most monetary metals mining companies are not defending gold’s role as money, nor defending the industry itself, as most mining company executives are clueless about the nature of the monetary metals.
— Central banks are destroying the world’s market economies.
— And the Swiss Gold Initiative has a chance.
The interview is an hour long and can be heard at the TF Metals Report here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Low gold prices set off buying surge in UAE
By Manoj Nair
Gulf News, Dubai, United Arab Emirates
Sunday, November 16, 2014
DUBAI, United Arab Emirates — Shoppers of gold and jewellery in the UAE have never been in need of a reason or an excuse to buy. There would always be an occasion coming along to indulge in purchases at various times through an year, and if any incentive was needed it would be provided by the generous seasonal promotions such as daily raffles and 1 kilogram of gold as takeaways.
But the ongoing softness in global gold prices is prompting more shoppers to snap up more of the metal in its various forms. According to estimates from the local jewellery trade, retail offtake for the full year in the UAE could be up by 15-20 percent in volume terms (in kilograms) compared with 2013. If only the second half of the year is taken into account, which was when prices started to show real weakness, volume gains could even be in the 40-percent range. …
… For the remainder of the report:
Another very strong week for Chinese wholesale gold demand, measured by withdrawals from the Shanghai Gold Exchange. In week 45 (November 2 – 7) physical withdrawals from the vaults accounted for 54 tonnes. My basic equation tells me more than 40 tonnes had to be imported to meet this demand. Year to date 1708 tonnes have been withdrawn from the vaults and this number will likely surpass 2,000 tonnes by year end as December and January are seasonally the strongest months.
As we can see in the chart above, the Chinese are quite eager to buy gold on the dips. SGE premiums were again pushed upwards last week by the new lows in the price of gold. The inverse relation is demonstrated in the next chart.
I would like to share a thought: The SGE premium chart illustrates the largest physical gold buyer on the planet has an increasing interest in buying gold, rising premiums, over the interest of the seller when prices decline. What we’re seeing is increasing demand from the largest physical buyer and falling prices concurrently. I wonder if this would be possible without a paper market.
The Shanghai International Gold Exchange
The Volumes on the Shanghai International Gold Exchange (SGEI) are weakening in recent weeks. On November 6 only 2 Kg were traded, the total for the week ended at 801.5 Kg. Low SGEI volumes are improving our estimates of Chinese wholesale gold demand. On October 30, I wrote:
Chinese law dictates all gold bullion imported into the mainland (in general trade) by commercial banks is required to be sold first through the SGE. If gold is imported into the Shanghai FTZ it’s officially not imported into the mainland. The thing I’m not sure about at this stage is, if Chinese banks buy gold on the SGEI, withdrawal this from the vaults in the FTZ and import it into the mainland, is this required to be sold through the SGE again (?). My common sense would say no, but I need to have it confirmed by the SGE.
This week the SGE confirmed to me gold bought by domestic banks on the SGEI and withdrawn from the “International Board” Certified Vault in the Shanghai Free Trade Zone (FTZ) to be imported into the mainland is not required to go through the “Main Board”/SGE (click here for an introduction on the SGE, SGEI, IB, MB, FTZ, etc). Meaning: the volume traded on the SGEI can distort Chinese wholesale gold demand measured by SGE withdrawals numbers. This is because we simply don’t know who the SGEI traders are; domestic banks from the mainland that buy and withdrawal gold to import – in this case withdrawals would count as Chinese demand – or for example buyers from Singapore – in this case withdrawals would be exported to Singapore?
If the SGE and SGEI would separate withdrawal numbers in the future (as I have requested) it would still be a guess how much Chinese wholesale gold demand is measured by SGE withdrawals, as domestic banks can withdrawal from the SGE and SGEI vaults for the domestic gold market. It would be better than the current situation as SGEI withdrawal numbers could be either foreign or domestic demand, making SGE withdrawals the bottom limit representing Chinese wholesale gold demand.
However, SGEI volume is very low at this point, so we can safely measure Chinese gold demand by SGE withdrawals.
The Chinese Silver Market
Silver on the Shanghai Futures Exchange (SHFE) has been trading in backwardation for over two months. Physical silver supply remains tight in my opinion.
SHFE silver inventory has stabilized at 125 tonnes.
SGE silver premiums (discount) bounced up on -8 %.
There was interesting article from Bloomberg last week about China’s ambition to increase it’s solar power supply in local rooftop projects to fight its pollution problem. As you may know solar panel fabrication requires silver. From Bloomberg:
China Hunger for Clean Energy to Leave No Rooftop Behind
China expects to install as much as 8 gigawatts of small solar systems this year, more than 10 times what was built last year.
The push to promote wider use of rooftop solar comes amid growing health concerns tied to smog within its own population and from foreign companies. It also adds to the nation’s push to be a leader within the global climate community.
China’s National Energy Administration introduced policies in September aimed at boosting the use of distributed solar power.
The agency asked local authorities to identify potential sites for rooftop plants and smaller, ground-mounted projects. These would include industrial and commercial companies with large rooftops, and public buildings such as railway stations and airport terminals. China has set a goal of installing 8 gigawatts of small systems this year and 6 gigawatts for larger projects.
SHFE vs COMEX
Silver volume on the SHFE was strong in week 46 (November 10 – 14) at 88,370 tonnes, up 7.9 % from the previous week. The Open Interest (OI) fell 6 % to 6,183 tonnes.
Silver volume on the COMEX was 51,473 tonnes, up 1.4 % from the week before. The OI closed at 27,000 tonnes.
Gold volume on the SHFE was also up in week 46 at 832 tonnes, up 9.2 % from the previous week. The OI marginally increased to 141 tonnes.
Gold volume on the COMEX was 3,909 tonnes, up 14 % from the week before. The OI closed at 1,418 tonnes – which is ten times the gold OI on the SHFE.
As Chinese wholesale gold demand, measured by withdrawals from the Shanghai Gold Exchange, has been strong over the first three quarters of this year we will have a close look in this post at how this demand was supplied. Total Chinese wholesale demand Q1 to Q3 2014 was 1,453 tonnes, down 13 % y/y. In comparison, the World Gold Council (WGC) states Chinese consumer demand in the first three quarters was 638 tonnes, which is not even half of SGE withdrawals – more about this difference in a future post.
Domestic mine supply is a certainty in China, this year 451 tonnes will be mined domestically (37.6 tonnes a month), which leaves import and scrap to fill the gap.
In 2013 most supply of total Chinese wholesale demand was originally sourced form the UK – the London Bullion Market, transferred through Switzerland and Hong Kong, eventually reaching China mainland. The bulk of Chinese import in 2013 came in through Hong Kong.
This year the Chinese have started to import more gold directly into the mainland, circumventing Hong Kong. Unfortunately China itself doesn’t publish gold trade data – as they prefer to keep the world uninformed about their gold hunger not to influence the price. China openly changed import policy in April (from 1:14):
China’s shift in import policy has been made possible as China developed it’s refining capacity significantly in recent years, hence not all gold across the globe that is headed for the Chinese market has to go through Switzerland. Additionally the Shanghai Free Trade Zone will take over Hong Kong’s transit point. The result being, this year it’s harder to track gold import into China as all countries around the world can ship directly to the mainland.
Based on my basic equation for Chinese gold import (Import = SGE withdrawals – scrap – mine) I was able to make an accurate prediction for Chinese gold import for 2013. In March 2014 I said in a interview it was 1,500 tonnes, a few months later the China Gold Association confirmed it was a little over 1,500 tonnes.