Written Jan 19.2015: due to the huge news of the German repatriation, I will provide a short commentary on that plus other news. There will be no data on the comex today.
Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1276.90 up $12.20 (comex closing time)
Silver: $17.74 up 74 cents (comex closing time)
In the access market 5:15 pm
Gold/silver trading: see kitco charts on right side of the commentary.
What a day. Late last night we got word that two brokerage firms are in serious trouble due to these guys being on the wrong side of the Long USA dollar/short Swiss Franc trade. Then today, many more firms stated that they have lost serious money on the trade. What is interesting on the Swiss unpegging of its currency (the peg was 120 Swiss Franc/1 Euro) was this was done in total secrecy. Christine Lagarde was totally unaware that this was forthcoming. Generally the bankers know in advance but this time everyone was in total darkness. Again we are witnessing central banks not trusting one another. You can bet the farm that there will be huge derivative losses on the Swiss unpegging.
Late in the day we got word that all 4 major Greek systemic banks have asked for emergency funding (ELA) as depositors bail out of all banks. I cannot see how Greece can remain in the Euro Monetary Area.
The gold comex today had a poor delivery day, registering 0 notices served for nil oz. Silver comex registered 120 notices for 600,000 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 77 contracts with yesterday’s silver price being up by 11 cents. The total silver OI continues to remains relatively high with today’s reading at 157,013 contracts. However the bankers are still loathe to supply much of the non backed silver paper. The January silver OI contract rose by 74 contracts up to 200.
In gold we had a gigantic increase in OI with the huge rise in price of gold yesterday to the tune of $30.30. The total comex gold OI rests tonight at 421,911 for a gain of 18,889 contracts. The January gold contract remains constant at 87 contracts.
Today we had a huge addition of gold inventory at the GLD to the tune of 9.56 tonnes/ /Inventory 717.15 tonnes
In silver, we had another huge reduction in silver inventory at the SLV of 1.340 million oz
SLV’s inventory rests tonight at 325.011 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 negative direction/ All months are in contango and thus positive in rates.
Sometime in January the LBMA will officially stop providing the GOFO rates.
Jan 16 2015
+.10% +1025% +.105% +.1075 .135%
Jan 15 2014:
+.105% +.1075% +.1075 % +.1175% +.1475%
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 today by 18,829 contracts from 403,082 all the way up to 421,911 with gold up by $30.30 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 constant at 87 for a loss of 0 contracts. 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 rose by 10,762 contracts to 189,258 contracts with few moving to April. The estimated volume today was poor at 121,113. The confirmed volume yesterday was excellent at 323,074 contracts, even though the high frequency traders gave some help with respect to volume. Today we had 0 notices filed for nil oz . The world reacted to the unpegging of the Swiss Franc.
And now for the wild silver comex results. Silver OI rose by 77 contracts from 156,936 up to 157,013 with silver up by 11 cents yesterday. The front January contract month saw its OI rise to 200 contracts for a gain of 74 contracts. We had 0 notices filed yesterday, so we gained 74 silver contracts or an additional 370,000 oz will stand for silver in the January contract month. As I mentioned yesterday, somebody was in great need of physical silver and they seem to be robbing the cookie jar for very valuable silver. The next big contract month is March and here the OI fell by 462 contracts down to 102,432. The estimated volume today was poor at 21,651. The confirmed volume yesterday was excellent at 63,612. We had 0 notices filed for nil oz today. The rise in silver is certainly scaring our bankers from supplying more non backed paper. The OI in silver has seen a slow and steady rise for the past few weeks.
January initial standings
|Withdrawals from Dealers Inventory in oz||nil oz|
|Withdrawals from Customer Inventory in oz||32.15 oz (Brinks) 1 kilobar|
|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)||87 contracts (8700 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 1 customer withdrawal
i) out of Brinks: 32.15 oz
total customer withdrawal: 32.15 oz
we had 0 customer deposits:
total customer deposits; nil oz
We had 0 adjustments
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 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 (87) minus the number of notices served upon today (0) x 100 oz = 9500 oz , the amount of gold oz standing for the January contract month. (.2954 tonnes of gold)
Thus the initial standings:
8 (notices filed for the month x 100 oz) +OI for January (87) – 0(no. of notices served upon today) 9500 oz (.2954 tonnes).
We neither lost nor gained any gold ounces standing for delivery today.
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 16 2015:
January silver: initial standings
|Withdrawals from Dealers Inventory||nil oz|
|Withdrawals from Customer Inventory||686,095.32 oz (BRINKS,SCOTIA,) oz|
|Deposits to the Dealer Inventory||602,440.600 (CNT)|
|Deposits to the Customer Inventory||600,248.170 oz (Scotia)|
|No of oz served (contracts)||120 contracts (600,000 oz)|
|No of oz to be served (notices)||80 contracts (400,,000 oz)|
|Total monthly oz silver served (contracts)||354 contracts (1,770,000 oz)|
|Total accumulative withdrawal of silver from the Dealers inventory this month|
|Total accumulative withdrawal of silver from the Customer inventory this month||5,810,595.4 oz|
Today, we had 1 deposit into the dealer account:
i) Into CNT: 602,440.600 oz (one decimal)
total dealer deposit: 602,440.600 oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 1 customer deposit:
i) Into Scotia: 600,278.170 oz
total customer deposit 600,278.17 oz
We had 2 customer withdrawals:
i) Out of Brinks: 635,713.89 oz
ii) Out of Scotia: 50,381.43 oz
total customer withdrawal: 686,095.32 oz
we had 2 adjustments
i) out of CNT: 1,046.09 oz was adjusted out of the customer and this landed into the dealer account of CNT
ii) Out of Delaware: 156,674.700 oz was adjusted out of the customer and this landed into the dealer account of Delaware.
Total dealer inventory: 66.313 million oz
Total of all silver inventory (dealer and customer) 174.430 million oz.
The total number of notices filed today is represented by 120 contracts for 600,000 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 (354) x 5,000 oz to which we add the difference between the OI for the front month of January (200) – the Number of notices served upon today (120) x 5,000 oz = 2,170,000 oz the number of ounces standing so far for the January delivery month.
Initial standings for silver for the January contract month:
354 contracts x 5000 oz= 1,770,000 oz +OI standing so far in January (200)- no. of notices served upon today(120) x 5,000 oz equals 2,170,000 ounces standing for the January contract month.
we gained 74 contracts or an additional 370,000 oz will stand for the January contract month.
Again somebody was in great need of silver.
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:
Jan 16.2015 we had a huge addition of 9.56 tonnes of gold into the GLD/New inventory 717.15 tonnes. (where on earth did they obtain that quantity of physical gold??)
Jan 15/ no change in inventory at the GLD today/inventory 707.59 tonnes
Jan 14.2015 we had a small withdrawal of .23 tonnes of gold from the GLD/inventory 707.59 tonnes
Jan 13.2015 no change in gold inventory/GLD inventory tonight at 707.82 tonnes
Jan 12 no change in gold inventory/GLD inventory tonight at 707.82 tonnes
January 9.2015: an addition of 2.99 tonnes of gold/Inventory 707.82 tonnes
Jan 8.2015: 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 6.2015: we lost 2.99 tonnes of gold inventory at the GLD//inventory 707.82 tonnes
Today, Jan 16/2015 /a huge addition of 9.56 tonnes of gold inventory at the GLD ) /Inventory rests tonight at 717.15 tonnes
inventory: 717.15 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 : 717.15 tonnes.
And now for silver (SLV):
Jan 16.2015: we had another withdrawal of 1.34 million oz of silver inventory/Inventory 325.011 million oz
(something is up!!)
Jan 15.2015 we had a huge withdrawal of 1.628 million oz/Inventory 326.391 million oz
Jan 15.2015: no change in silver inventory/327.979 million oz
Jan 13.2015 no change in silver inventory/327.979 million oz/
Jan 12.2015 we had a huge withdrawal of 1.915 million at the SLV/inventory at 327.979 million oz.
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 16/2015 / a huge withdrawal of 1.34 million oz of silver from the SLV/ inventory at the SLV
registers: 325.011 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 5.6% percent to NAV in usa funds and Negative 5.9 % to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 62.1%
Percentage of fund in silver:37/4%
( Jan 16/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to + 1.35%!!!!! NAV (Jan 16/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to negative -0.60% to NAV(Jan 16/2015)
Note: Sprott silver trust back into positive territory at +1.35%.
Sprott physical gold trust is back in negative territory at -0.60%
Central fund of Canada’s is still in jail.
At 3:30 pm we receive the COT which lays out positions of our major players:
First 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 13, 2015|
Our large specs:
Those large specs that have been long in gold added a large 5254 contracts to their long side
Those large specs that have been short in gold covered 2794 contracts from their short side.
Those commercials that have been long in gold pitched 991 contracts from their long side
Those commercials that have been short in gold continued to supply the non backed paper to the tune of 14,013.
Those small specs that have been long in gold added another 3994 contracts to their long side
Those small specs that have been short in gold covered 2962 contracted from their short side.
The commercial side is very heavy on its short side.
And now for silver:
|Silver COT Report: Futures|
|Small Speculators||Open Interest||Total|
|non reportable positions||Positions as of:||135||131|
|Tuesday, January 13, 2015||© SilverSeek.c|
Our large specs;
Those large specs that have been long in silver added a rather large 4897 contracts to their long side
Those large specs that have been short in silver covered 3003 contracts from their short side.
Those commercials that have been long in silver pitched 1092 contracts from their long side.
Those commercials that have been short in silver added a whopping 6103 contracts to their short side.
Our small specs:
Those small specs that have been long in silver pitched a tiny 347 contracts from their long side
Those small specs that have been short in silver added a tiny 358 contracts to their short side.
Conclusion: something has got to give on both gold and silver as the commercials continue to hugely into the negative
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)
Ukraine Lurches to Full Scale War as Russia Drastically Reduces Gas Supply to EU
Vladimir Putin has ordered the Russian state energy giant Gazprom to cut natural gas supplies to and through Ukraine to the EU in a little reported move. It took place late on Wednesday and was overshadowed by the Swiss National Bank market turmoil yesterday.
Russia has shut off gas supplies through Ukraine to six EU states, ostensibly due to Ukraine’s alleged illegal siphoning gas from the pipeline. The European Union warned that the sudden cut-off to some of its member countries was ‘completely unacceptable’. The move comes just as winter begins to bite across Europe.
The pipeline crossing Ukraine supplies over 60% of the entire EU’s natural gas. Six countries – Greece, Bulgaria, Macedonia, Croatia, Romania and Turkey – report a complete halt of gas coming in from Russia.
Yesterday, Ukraine confirmed that Russia had completely cut off their supply. Croatia said it was temporarily reducing supplies to industrial customers while Bulgaria said it had enough gas only ‘for a few days’ and was already in a ‘crisis situation’.
There is the risk of an energy crisis and it is worrying that the move comes about at a time of increased maneuverings and posturing by NATO and the Russian army and deepening conflict in Ukraine.
Ukraine lurched back toward full-scale conflict today as troops loyal to the new Ukraine government battled with pro-Russian forces for control of an eastern airport.
Ukraine said yesterday that cease fire violations have surged to a new record, while the nation’s security council warned the unrest may spark a “continental war” and German Chancellor Angela Merkel called for emergency talks.
Russia is planning to divert it’s EU bound natural gas to a pipeline through Turkey opening at the Turkey-Greece border. Bloomberg quotes Valentin Zemlyansky of the Ukrainian gas company Naftogaz, “They [the Russians] have reduced deliveries to 92 million cubic metres per 24 hours compared to the promised 221 million cubic metres without explanation,”
“We do not understand how we will deliver gas to Europe. This means that in a few hours problems with supplies to Europe will begin.”
Russian Energy Minister, Alexander Novak put it bluntly, “The decision has been made. We are diversifying and eliminating the risks of unreliable countries that caused problems in past years, including for European consumers.”
Bloomberg reports, “Gazprom, the world’s biggest natural gas supplier, plans to send 63 billion cubic meters through a proposed link under the Black Sea to Turkey, fully replacing shipments via Ukraine, Chief Executive Officer Alexey Miller said during the discussions.”
“We have informed our European partners, and now it is up to them to put in place the necessary infrastructure starting from the Turkish-Greek border,” Miller said.
Such a project would likely take months to implement. In the mean-time many Europeans may not have access to gas to warm their homes through winter and many industries will also be without gas – effecting production, employment in already struggling economies.
Whether or not Russia is calling Europe’s bluff in a bid to ease sanctions is unclear at this point. It appears that Turkey, an erstwhile NATO member, is warming to Russia, possibly due to the instability that western actions in the Middle East have brought to Turkey’s doorstep.
Earlier this week Turkish President Erdogan made the stunning accusation that “the West” staged the attacks in Paris last week.
The French, also, have been considering a foreign policy independent of the NATO status-quo. France is in the process of completing two battle ships for sale to Russia. Earlier this month President Hollande stated that sanctions against Russia should be lifted.
Tensions and suspicions are escalating even within the Western block. The EU does not have many cards left to play in dealing with Russia.
Tensions in the EU may arise as natural gas required for industry may have to be diverted to households to avoid social upheaval.
Geopolitical tensions are escalating across the world, concurrent with indications of an imminent and severe recession globally.
Gold has played an important role in protecting peoples wealth in uncertain times and will do so again in the coming years.
Today’s AM fix was USD 1,258.25, EUR 1,082.37 and GBP 826.76 per ounce.
Yesterday’s AM fix was USD 1,235.25, EUR 1,055.41 and GBP 811.76 per ounce.
Gold surged in dollars, pounds and especially euros yesterday after the SNB caused turmoil in markets. Spot gold surged $30.50 or 2.48% to $1,258.50 per ounce and gold in euro terms rose by 4 per cent from EUR 1,044 to over EUR 1,085 per ounce, as investors sought safety in the precious metal after Switzerland decoupled the franc from the euro.
Gold is up almost 3.5% this week in dollar terms its largest gain in nearly a year. In euro terms gold is is up 5.3 percent and in sterling terms by 3.6 percent.
2015 year to date, gold is up 5.5 percent in dollar terms, 11.6 per cent in euro terms and almost 8 per cent in sterling terms. Overnight, spot gold in Singapore rose to $1,263.11 prior to determined selling pushed prices a little lower. In London, prices reached a low of $1,255 prior to a bounce to $1,262 per ounce.
There was a pullback in gold futures prices for the first time in six days on speculation that prices had risen too much after the spike to a four-month high. Gold’s rally sent its 14-day relative-strength index (RSI) to close to 70, a level that signals to some traders and analysts that prices may be poised to correct lower.
Traders and analysts surveyed by Bloomberg were bullish on gold for a seventh week, noting the chancel for more QE in Europe and speculation the U.S. Federal Reserve will delay raising interest rates.
Demand in China remains very robust and has got off to another cracking start with withdrawals on the Shanghai Gold Exchange (SGE) at a very robust 61 metric tonnes in the first week of the year (January 4th to 9th). Chinese demand is high ahead of the Chinese Lunar Year as jewelers and bullion dealers stock up on jewelry and gold coins and bars.
Gold continues to flow from West to East as indicated in the continuing very high demand from China and India and the developing architecture for physical gold trading in China.
The Shanghai Gold Exchange and World Gold Council announced this week that they have partnered to develop the Shanghai Free Trade Zone as a global gold market. The Shanghai Gold Exchange is the largest physical gold exchange worldwide and the World Gold Council is the global authority on the gold industry representing mining organizations.
Together, these two organizations are joining hands to support the development of both domestic and international gold buying in China by leveraging the opportunity provided by the internationalisation of the Chinese gold market, through the Shanghai Free Trade Zone (FTZ), to support market expansion. The agreement will support the development of gold investment products and solutions for the industry and investors both regionally and globally.
Sales of U.S. Silver Eagle coins for January have started strong with 3.6 million sold compared to 4.7 million for the entire month of January last year. The U.S. Mint began selling Gold Eagles last week with 51,500 ounces reported on the first day of sales.
2014 sales of American Eagle Silver bullion coins were 44,006,000 ounces. The figure was driven by fourth quarter sales, with December up 104% year-on-year. Based on U.S. mint figures sales of Silver Eagles eclipsed Gold Eagles’ by 59% in 2014.
Today, silver rose 0.4 per cent to $17.10 an ounce. Palladium rose 0.4 percent to $770 an ounce and platinum lost 0.2 percent to $1,260.50 an ounce.
From GoldCore Trading Desk
We have seen surging demand for gold and silver in January. Buy side trades are up 25% and volume is up 85% for same period last year. Buy orders and volume are also higher than the 3 year average for this time of year. The sell side is flat, with no change seen. The ratio of gold buying to silver buying is 60:40 – in favour of gold.
GET BREAKING NEWS and UPDATES HERE
Koos gives a detailed account on how China received all of its gold from various countries
(courtesy Koos Jansen)
Withdrawals from the Shanghai Gold Exchange (SGE), the best indicator for Chinese wholesale demand, have been strong in 2014. In total 2,102 tonnes was loaded out from the SGE vaults. Mid 2014 withdrawals were relatively low, then they ramped up in September.
In this post we’ll examine where this gold was sourced from.
At this moment we don not know exactly what the composition was of the supply side of SGE withdrawals in 2014 – scrap, mine or import, though SGE chairman Xu Luode gave us a hint at the ninth China Gold & Precious Metals Summitthat took place in early December:
As regards the concerns over the Chinese gold demand, chairman of the Shanghai Gold Exchange Xu Luode told the conference that the gold market in 2014 is still a CHINA YEAR. …China has imported over 1,100 tonnes of gold by November this year and the whole year’s bullion import is estimated to reach 1,200 – 1,300 tonnes, a number only next to the year of 2013.
As I have demonstrated before the main feeder for China’s gold hunger is the London Bullion Market (the UK), though in 2013 this was more so than in 2014. Let’s go through the most recent customs data published by the largest suppliers to China mainland: the UK, Switzerland, Hong Kong, Australia and the US.
The great gold exodus from West to East started early 2013; 12.5 Kg London Good Delivery bars (995 purity) from the UK are shipped to Switzerland, where it’s refined into 1 Kg (9999 purity) bars and send forward to the East. The big change since 2014 is that more gold is being send directly to China instead of going via Switzerland and Hong Kong, partially because China has increased its refining capacity.
In total the UK net exported 173 tonnes in November, up 282 % m/m; the biggest outflow since July 2013. Net export to Switzerland also saw a huge spike in November, 118 tonnes, up 179 % m/m, the largest tonnage in 9 months.
In the next chart I have added SGE withdrawals to UK gold trade – since January 2013 we can see a correlation between net export from London and withdrawals in China.