Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1216.00 up $7.60 (comex closing time)
Silver: $16.39 up 4 cents (comex closing time)
In the access market 5:15 pm
The gold comex today had a poor delivery day, registering 0 notices served for nil oz. Silver comex registered 0 notices for nil oz.
Three months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 247.23 tonnes for a loss of 56 tonnes over that period.
In silver, the open interest rose by 624 contracts even though yesterday’s silver price fell by 16 cents. The total silver OI continues to remains relatively high with today’s reading at 154,525 contracts. However the bankers are still loathe to supply much of the non backed silver paper.The January silver OI contract remains at 15 contracts.
In gold we had a small decrease in OI with the fall in price of gold yesterday to the tune of $2.20. The total comex gold OI rests tonight at 391,482 for a loss of 1,403 contracts. The January gold contract remains at 124 contracts.
TRADING OF GOLD AND SILVER TODAY
you have more important things to read instead of how gold/silver traded today.
Today, we had a huge addition in tonnage at the GLD to the tune of 2.99 tonnes/ tonnes of gold/Inventory 707.82 tonnes
In silver, a huge addition of 1.437 million oz silver inventory/
SLV’s inventory rests tonight at 329.894 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:
All rates moved in the positive direction . Now the one month GOFO rate left backwardation and it is now in contango along with the other GOFO rates
Sometime in January the LBMA will officially stop providing the GOFO rates.
Jan 9 2015
+.045% +057% +.072% +.0975 .165%
Jan 8 2014:
+.025% +.0425% +.06 % +.09% +.15%
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest fell today by 1,403 contracts from 392,885 down to 391,482 with gold down by $2.20 yesterday (at the comex close). We are now onto the January contract month. The non active January contract month saw it’s OI contracts remain at 124 for a loss of 0. We had 0 contracts served yesterday. Thus we neither lost nor gained any gold contracts standing for delivery in this January contract month. The next big delivery month is February and here the OI fell by 13,594 contracts to 202,844 contracts with many moving to April. The estimated volume today was poor at 67,656. The confirmed volume yesterday was also poor at 149,306 contracts, even though the high frequency traders gave some help with respect to volume. Today we had 0 notices filed for nil oz .
And now for the wild silver comex results. Silver OI rose by 624 contracts from 153,901 up to 154,525 despite the fact that silver was down by 16 cents yesterday. The front January contract month saw its OI remain at 15 contracts for a loss of 0 contracts. We had 0 notices filed yesterday, so we neither gained nor lost any silver contracts standing for silver in the January contract month. The next big contract month is March and here the OI rose by 270 contracts up to 103,948. The estimated volume today was simply awful at 17,688. The confirmed volume yesterday was fair at 30,998. We had 0 notices filed for nil oz today. it sure looks like the bankers have scared away all investors wishing to play the comex. Leverage has completely disintegrated.
January initial standings
|Withdrawals from Dealers Inventory in oz||nil oz|
|Withdrawals from Customer Inventory in oz||nil|
|Deposits to the Dealer Inventory in oz||nil oz|
|Deposits to the Customer Inventory, in oz||nil|
|No of oz served (contracts) today||0 contracts(nil oz)|
|No of oz to be served (notices)||124 contracts (12,400 oz)|
|Total monthly oz gold served (contracts) so far this month||8 contracts(800 oz)|
|Total accumulative withdrawals of gold from the Dealers inventory this month|
Total accumulative withdrawal of gold from the Customer inventory this month
Today, we had 0 dealer transactions
total dealer withdrawal: nil oz
we had 0 dealer deposit:
total dealer deposit: nil oz
we had 0 customer withdrawal
total customer withdrawal: nil oz
we had 0 customer deposits:
total customer deposits; nil oz
We had 0 adjustments
Today, 0 notice was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account.
To calculate the total number of gold ounces standing for the December contract month, we take the total number of notices filed for the month (8) x 100 oz or 800 oz to which we add the difference between the January OI (124) minus the number of notices served upon today (0) x 100 oz =13,200 the amount of gold oz standing for the January contract month. (.4100 tonnes of gold)
Thus the initial standings:
8 (notices filed for the month x 100 oz) +OI for January (124) – 0(no. of notices served upon today) =13,200 oz (.41 tonnes)
we neither gained nor lost any gold contracts standing for delivery
Total dealer inventory: 770,487.09 oz or 23.96 tonnes
Total gold inventory (dealer and customer) = 7.948 million oz. (247.23) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 56 tonnes have been net transferred out. We will be watching this closely!
This initializes the month of January for gold.
And now for silver
Jan 9 2015:
January silver: initial standings
|Withdrawals from Dealers Inventory||nil oz|
|Withdrawals from Customer Inventory||730,754.321 (Delaware,Brinks,Scotia) oz|
|Deposits to the Dealer Inventory||nil|
|Deposits to the Customer Inventory||nil|
|No of oz served (contracts)||0 contracts (380,000 oz)|
|No of oz to be served (notices)||15 contracts (455,000 oz)|
|Total monthly oz silver served (contracts)||104 contracts (520,000 oz)|
|Total accumulative withdrawal of silver from the Dealers inventory this month|
|Total accumulative withdrawal of silver from the Customer inventory this month||3,652,799.5 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 0 customer deposits:
total customer deposit nil oz
We had 3 customer withdrawals:
i) Out of Delaware: 5,974.01 oz
ii) Out of Brinks: 3059.000 oz (exact weight??)
iii) Out of Scotia: 721,720.62 oz
total customer withdrawal: 730,754.321 oz
we had 0 adjustments
Total dealer inventory: 65.037 million oz
Total of all silver inventory (dealer and customer) 173.591 million oz.
The total number of notices filed today is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in December, we take the total number of notices filed for the month (104) x 5,000 oz to which we add the difference between the OI for the front month of January (15) – the Number of notices served upon today (0) x 5,000 oz = 595,000 oz the number of ounces standing so far for the January delivery month.
Initial standings for silver for the January contract month:
104 contracts x 5000 oz= 520,000 oz +OI standing so far in January (15)- no. of notices served upon today(0) x 5,000 oz = 595,000 oz
we neither gained nor lost silver ounces standing for the January contract month.
for those wishing to see the rest of data today see:
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:
January 9.2015: an addition of 2.99 tonnes of gold/Inventory 707.82 tonnes
Jan 8.2014: no change/inventory 704.83 tonnes
Jan 7.2015: we lost another exact 2.99 tonnes of gold inventory at the GLD/Inventory at 704.83 tonnes
Jan 6.2014: we lost 2.99 tonnes of gold inventory at the GLD//inventory 707.82 tonnes
Jan 5/2015 we gained 1.49 tonnes of gold inventory into the GLD/Inventory tonight: 710.81 tonnes
Jan 2 2015: inventory remained constant/inventory 709.02 tonnes
Dec 31.2014: we lost another 1.79 tonnes of gold at the GLD today/Inventory 709.02 tonnes
Dec 30.2014/ we lost 1.49 tonnes of gold at the GLD today/inventory 710.81 tonnes
Dec 29.2014 no change in gold inventory at the GLD/inventory 712.30 tonnes
Dec 26.2013/ a small loss of .6 tonnes of gold. Inventory tonight at 712.30 tonnes
Dec 24.2014: wow!! somebody robbed the cookie jar/ we had a huge withdrawal of 11.65 tonnes from the GLD inventory/inventory at 712.90 tonnes. England must be bleeding badly!
Today, Jan 9/2015 / an addition of 2.99 tonnes of gold inventory at the GLD /Inventory rests tonight at 707.82 tonnes
inventory: 707.82 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 : 707.82 tonnes.
And now for silver (SLV):
Jan 9.2015: we had a huge addition of 1.437 million oz at the SLV/Inventory 329.894 million oz
Jan 8.2015: no change in silver inventory/inventory at 328.457 million oz.
Jan 7.2015: we had another loss of 958,000 oz of silver from the SLV/Inventory 328.457 million oz
jAN 6.2015: we had a small loss of 149,000 oz/inventory 329.415 million oz
Jan 5 no change in silver inventory/Inventory at 329.564 million oz
jan 2.2015: no change in silver inventory/ Inventory 329.564 million oz
Dec 31.2014: we had no change in silver inventory at the SLV./Inventory
at 329.564 million oz
Dec 30.2014: we lost another 574,000 oz of silver from the SLV/Inventory at 329.564 million oz/
Dec 29.2014 we had a small loss of 431,000 oz at the SLV to probably pay for fees/inventory 330.138 million oz.
Dec 26/ no change in silver inventory at the SLV/inventory 330.569
Dec 24.2014: we had a huge loss of 7.566 million oz/inventory 330.569 million oz
Dec 23.2014: no change in silver inventory/338.135 million oz
Jan 9/2015 / a huge addition of 1.437 million oz of silver inventory at the SLV
registers: 329.894 million oz
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative 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 7.4% percent to NAV in usa funds and Negative 7.4 % to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 62.0%
Percentage of fund in silver:37.5.%
( Jan 9/2015)
2. Sprott silver fund (PSLV): Premium to NAV rises to + 1.12%!!!!! NAV (Jan 9/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to negative -0.61% to NAV(Jan 9/2015)
Note: Sprott silver trust back into positive territory at +1.12%.
Sprott physical gold trust is back in negative territory at -0.61%
Central fund of Canada’s is still in jail.
Today we CME released its COT report.
First let us head over and see the Gold COT
|Gold COT Report – Futures|
|Change from Prior Reporting Period|
|non reportable positions||Change from the previous reporting period|
|COT Gold Report – Positions as of||Tuesday, January 06, 2015|
Our large specs:
Those large speculators that have been long in gold added another 4808 contracts to their long side
Those large specs that have been short in gold covered 1533 contracts from their short side
Those commercials that have been long in gold added 4609 contracts to their long side.
Those commercials that have been short in gold added a whopping 14,147 contracts to their short side.
Our small specs;
Those small specs that have been long in gold added 382 contracts to their long side
Those small specs that have been short in gold covered 2815 contracts to their short side.
And now for silver:
|Silver COT Report: Futures|
|Small Speculators||Open Interest||Total|
|non reportable positions||Positions as of:||132||127|
|Tuesday, January 06, 2015||© SilverSeek.com|
Our large specs;
Those large specs that have been long in silver added a smallish 785 contracts to their long side
Those large specs that have been short in silver covered 1232 contracts from their short side
Those commercials that have been long in silver added 1843 contracts to their long side
Those commercials that have been short in silver added another 2816 contracts to their short side
Our small specs;
Those small specs that have been long in silver pitched a tiny 254 contracts from their long side
Those small specs that have been short in silver added another 790 contracts to their short side.
And now for your most important physical stories on gold and silver today:
Early gold trading from Europe early Friday morning:
(courtesy Mark O’Byrne)
OUTLOOK 2015 – Uncertainty, Volatility, Possible Reset – DIVERSIFY
2015 is upon us and the turbulence has already begun.
2014 was another year of an uneasy calm interrupted by sudden bouts of abrupt market volatility. We were surprised how risk appetite remained so high despite emerging and a high level of risk especially from the geopolitical sphere. These we covered in our Review of 2014.
This irrationally exuberant, risk appetite may continue in 2015 but we suspect that it is as likely to come to a shuddering halt with renewed volatility on global financial markets.
The sharp falls seen in stock markets in recent days may be a taste of what may transpire in 2015. As may be the tragic events in Paris.
There are many unresolved risks which were present in 2014 and indeed in recent years which did not come to the fore and impact markets. As Greece has shown again in recent days – the Eurozone debt crisis is far from resolved and there remains an underappreciated risk of sovereign crises in other major industrial nations.
Other unresolved risks that are being ignored for now – due to the panacea of cheap money and elevating asset prices – include the Eurozone debt crisis, the appalling fiscal position of Japan, the U.S. and the UK, the risk of an Ebola pandemic, risks posed by terrorism, the events in Syria and the Middle East, Ukraine and geopolitical tensions with Russia.
Gold – Positives and Negatives
As ever, there are positives and negatives for gold. Indeed, one could say there are as many negatives as there are positives – and most do. However, on balance we believe that the positives outweigh the negatives significantly.
- Continuing ultra loose monetary policies
- Currency wars and the risk of bail-ins
- Risk of sovereign and banking debt crises and the risk of systemic contagion
- Increasingly uncertain political and military situation globally and the threat of terrorism and war
- Continuing record demand for gold from China and India
- Continuing robust demand from central banks such as the People’s Bank of China (PBOC) and Central Bank of the Russian Federation
- Sentiment, both in the western media and among the public, remains extremely poor. This is bullish from a contrarian perspective
- Gold in dollar terms is weak technically after a second consecutive year of lower prices
- The massive fall in the oil price, should it continue, will benefit gold miners and lower their cost of production which should lead to a lower cost of gold production
- ETF demand remains weak and liquidations very high – holdings in SPDR Gold Trust, the world’s gold ETF, fell 0.42 percent to 704.83 tonnes on Wednesday, their lowest since late 2008
- Gold bullion demand while robust in Germany, Turkey, the Middle East and Asia remains lackluster in western markets as seen in the fall in demand from the U.S. Mint and other mints
- Sentiment, both in the western media and among the public, remains extremely poor
Ultra Loose Monetary Policies Globally
Ultra loose monetary policies are set to continue for the foreseeable future. Major central banks have all kept interest rates at or close to zero
The narrative that the U.S. is tightening continues to be a false one – one heard for many years now. Any meaningful increase in U.S. interest rates would likely severely impact already stretched and stressed asset markets and plunge the U.S. and the world into a depression.
Since 1694 and the ensuing three centuries’ of Bank of England history, the base rate has never been this low. Interests rates in the western world have never been this low.
A reversion to to the mean average – at around 5% to 6% – would create a collapse in property and stock markets. Even the merest hint of a rate rise has led to sharp market falls in recent months.
ZIRP or zero percent interest rates have arrived and there is now the incredible, previously unheard of scenario of negative interest rates. Already, certain banks in the U.S. and Europe are charging customers interest just to have a deposit account with them.
This turns upon its head the basic tenet of capitalism in terms of a return on capital.
While America’s massive bond buying programme has been discontinued for now, it continues in the UK, has intensified to a very significant degree in Japan and we may see Mario Draghi’s QE ‘bazooka’ in the Eurozone in the New Year.
The battle between Goldman banker Draghi and German monetary conservatives is a titanic one and the outcome will have ramifications not just for the Eurozone but for the world.
Draghi has won many battles regarding pushing interest rates to zero. However, further money printing will likely be ‘verboten’ and a step too far for the Germans. I am not a betting man but if forced to bet, I think that Draghi may win the immediate battle on further money printing but that the Germans will win the war.
Germany has learned the lessons of the past and will not allow their currency to be printed into oblivion.
Since the 2008 crash, the Federal Reserve has created more than $4.3 trillion to prop up banks and the wider economy. While the Fed finished its bond buying programme in 2014, its balance sheet has been destroyed and it is unable to sell the bonds bought for fear of interest rates moving higher again.
The U.S. economic recovery is weak and there is the strong possibility of a recession. The massive levels of debt at all levels of U.S. and indeed western society make any meaningful recovery highly unlikely.
This possibility is also heightened by the recent collapse of the oil price and falls in other key commodities such as copper. Deflation is in the air. A reversion back to debt monetisation programme seems likely.
America, and indeed the world, is now dangerously addicted to cheap money and the attendant debasement of the dollar and all paper currencies. Yellen will continue pushing the drug of cheap money, much of which ends up on Wall Street and in frothy global markets.
Indeed, she may be even more generous in doling out wads of electronic currency than her predecessor Bernanke. Irrationally exuberant, liquidity-driven stock markets and manipulated bond markets are giving false signals.
We may need one last and vicious deflationary spiral, further currency printing and then the Ludwig Von Mises’ “crack up boom”. Irrational exuberance and levitating asset prices are early warning signals of a classic cheap money crack up boom:
“‘This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.’
“But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against ‘real’ goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.
“It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.”
Central banks are attempting to inflate their way out of the present crisis rather than the more prudent option which is to avoid a deflationary collapse by downsizing the massively oversized and over leveraged banking and financial system.
This could be done, with grave difficulty admittedly, but could be done nevertheless through a multi month or year process of downsizing, debt write offs and write downs, deleveraging and consolidation.
With the Federal Reserve’s balance sheet having deteriorated significantly, at some stage this will lead the dollar having a sustained period of weakness. A monetary crisis centering on the dollar remains likely. A frightening vista that most cannot bring themselves to consider, let alone comprehend.
Currency debasement will end in financial tears as they have done throughout history. The question is not if, rather when.
Precious metals will only be threatened if currency debasement ends and if there is a sustained period of rising interest rates which lead to positive real interest rates – as happened in the 1970s.
That is not going to happen anytime soon.
Currency and Gold Wars
Currency wars, gold wars, currency devaluations and currency debasement are set to continue globally which remains possibly the most bullish factor for gold.
Currency wars look set to heat up again in 2015. The latest salvo is Japan’s radical, or reckless, decision to further debase its currency through an intensification of already significant monetary easing.
A new “all-out” currency war is possible in 2015 as nations seek to maintain exports and jobs through currency devaluation. China and Japan – as two of the world’s largest exporting countries – may be set to be the most aggressive in this regard.
Japan is devaluing the yen and China will be reluctant to allow that to happen. China is likely to devalue the yuan in order to maintain export competitiveness.
If Draghi is allowed to get his ‘Euro Bazooka’ out – we may see further weakness of the euro – especially versus the dollar. At the same time, the U.S. cannot afford to have the dollar strengthen much more against the euro as it will impact exports to one of its largest trading partners.
The second aspect of currency wars is the continuing accumulation of gold reserves by nations for diversification purposes and in the case of China, in order to position the yuan as an alternative global reserve currency.
Risk of Bail-Ins in 2015 and Beyond
Bail-ins remain one of the least covered and most unappreciated risks for 2015 and in the coming years. As we have documented, most western nations have put or are putting in place the architecture for bail-in regimes.
Preparations have been or are being put in place by the international monetary and financial authorities, including the Federal Reserve, ECB and Bank of England for bail-ins. The EU, UK, the U.S., Canada, Australia and New Zealand all have plans in place for bail-ins in the event of banks and other large financial institutions getting into difficulty.
Now in the event of bank failure, deposits of individuals and companies can be confiscated.
Just last month, credit rating agencies warned that Europe’s banks are vulnerable in 2015 due to weak macroeconomic conditions, unfinished regulatory hurdles and the risk of bail-ins.
Assessing counterparty risk and sovereign risk remains important. Do not have all your savings or company’s capital in a vulnerable bank in a vulnerable sovereign. A diversification into allocated gold outside the banking system remains an important way to hedge the real risk of bail-ins.
Eurozone Debt Crisis Again – Greece, ‘Grexit’ and ‘PIIGS’
In the early days of 2015, the Eurozone debt crisis raised its ugly head again as concerns about the ‘Grexit’ – Greece leaving the monetary union and reverting to the drachma, led to sharp falls in stock markets and indeed the euro.