May 18/Greece ready to default by June 5/Euro whacked/Peripheral bond yields rise/gold silver rise/

Good evening Ladies and Gentlemen:

 

 

Here are the following closes for gold and silver today:

Gold:  $1227.80 up $2.30 (comex closing time)

Silver $17.71 up 17 cents (comex closing time)

 

In the access market 5:15 pm

Gold $1225.40

Silver: $17.73

 

 

Gold/Silver trading: see kitco charts on the right side of the commentary

Following is a brief outline on gold and silver comex figures for today:

 

At the gold comex today, we had a poor delivery day, registering 0 notice serviced for nil oz.  Silver comex filed with 2 notices for 10,000 oz

 

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 242.39 tonnes for a loss of 61 tonnes over that period. Looks to me like the comex is bleeding profusely!!

 

In silver, the open interest fell slightly by 1781 contracts as Friday’s silver price was up by 9 cents as some of the bankers covered their silver shortfall.  The total silver OI continues to remain extremely high with today’s reading at 178,529 contracts maintaining itself near multi-year highs despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.

 

In silver we had 2 notices served upon for 10,000 oz.

 

In gold,  the total comex gold OI rests tonight at 428,757 for a gain of 5,566 contracts as gold was up by $0.10 on Friday. We had 0 notices served upon for nil oz.

 

Today, we had another huge withdrawal of 5.67 tonnes of  gold Inventory at the GLD. It rests tonight at 718.24  tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. Last Tuesday  Koos Jansen informed me that last week 38 tonnes of gold was demanded by the Chinese.On Friday, another 38 tonnes of gold was demanded. India reported that 110 tonnes of gold was imported into the country in the month of March. ( That does not include the smuggled gold) .

 

In silver, /we lost another 1.625 million oz of  silver inventory at the SLV / and thus the inventory tonight remains at 319.125 million oz

 

We have a few important stories to bring to your attention today…

 

1. Today we had the open interest in silver fall by a tiny 1781 contracts as  silver was up in price yesterday by 14 cents.  The OI for gold rose by 5,475 contracts up to 423,191 contracts as the price of gold was up  by $7.00 yesterday. GLD had SLV had no changes to their inventory levels.

(report Harvey)

2,Today we had 3 major commentary on Greece today:

(zero hedge,Kaltesy)

3.  Koos Jansen reports on another 38 tonnes of gold demand this week emanating from China

(Koos Jansen)

4. Andrew Maguire and Turd Ferguson discuss the new Alternative Bullion exchange coming up which will challenge the LBMA and the comex.

(Andrew Maguire/Ted Ferguson)

5. Ukraine issues ultimatum to bondholders that they must allow a haircut on debt they hold

(Reuters)

 6. Gold rises, peripheral bond yields rise/Euro falls/

(various)

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 5566 contracts from 423,191, up to 428,757 as gold was up by $0.10 yesterday (at the comex close).  We are in our next non active delivery month of May and here the OI fell by 0 contracts remaining at  141. We had 0 notices filed on Friday.  Thus we neither lost nor gained any  gold contracts  standing for delivery in May. The next big active delivery contract month is June and here the OI fell by 1,784 contracts down to 192,868. June is the second biggest delivery month on the comex gold calendar. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 84,652. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day) was fair at 149,720 contracts as the bankers continued to use non backed paper against all of that demand. Today we had 0 notices filed for nil oz.

 

And now for the wild silver comex results.  Silver OI fell by 1781 contracts from 180,310  down to 178,529 as the price of silver was up  in price by 9 cents, with respect to Friday’s trading. We no doubt had some considerable short covering by the banks. We are into the active delivery month of May where the OI fell by 4 contracts down to 340. We had 14 contracts filed upon with respect Friday’s trading.  So we gained 10 contracts or an additional 50,000 oz will stand for delivery in this May delivery month. The estimated volume today was poor at 23,231 contracts (just comex sales during regular business hours. The confirmed volume  yesterday (regular plus access market) came in at 49,544 contracts which is excellent  in volume. We had 2 notices filed for 10,000 oz today.

 

May initial standings

May 18.2015

Gold

Ounces

Withdrawals from Dealers Inventory in oz    nil
Withdrawals from Customer Inventory in oz   nil
Deposits to the Dealer Inventory in oz 4500.000 oz (HSBC)
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)  141 contracts(14,100) oz
Total monthly oz gold served (contracts) so far this month 7 contracts(700 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month 164,151.8 oz
Total accumulative withdrawal of gold from the Customer inventory this month  53,054.3 oz

 

Today, we had 0 dealer transactions

 

 

total Dealer withdrawals: nil oz

 

we had 0 dealer deposit

total dealer deposit: nil oz
we had 0 customer withdrawals

 

total customer withdrawal: nil  oz

 

We had 1 customer deposit: and the farce continues

 

ii) Into HSBC: 4,500.000 oz ???how is this exact weight possible

total customer deposit: 4500.00  oz

 

(on Friday we had an exact 4,000.00 oz deposit.) 

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 May contract month, we take the total number of notices filed so far for the month (7) x 100 oz  or 700 oz , to which we add the difference between the open interest for the front month of May (141) and the number of notices served upon today (0) x 100 oz equals the number of ounces standing.

 

Thus the initial standings for gold for the May contract month:

 

No of notices served so far (7) x 100 oz  or ounces + {OI for the front month (141) – the number of  notices served upon today (0) x 100 oz which equals 14,800 oz standing so far in this month of May. (.46 tonnes of gold)

we neither gained nor lost any gold ounces standing in the May delivery month.

 

Total dealer inventory: 372,835.022 or 11.596 tonnes

Total gold inventory (dealer and customer) = 7,792,944. (242.39) tonnes)

Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 242.25 tonnes for a loss of 61 tonnes over that period. Lately the removals  have been rising!

 

end

And now for silver

 

May silver initial standings

May 18 2015:

Silver

Ounces

Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 600,439.32 oz ( Scotia)
Deposits to the Dealer Inventory  nil
Deposits to the Customer Inventory  300,442.98 oz (CNT,Delaware)
No of oz served (contracts) 2 contracts  (10,000 oz)
No of oz to be served (notices) 338 contracts (1,690,000 oz)
Total monthly oz silver served (contracts) 2548 contracts (12,740,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  126,359.680 oz
Total accumulative withdrawal  of silver from the Customer inventory this month 3,699,925.5  oz

Today, we had 0 deposits into the dealer account:

total dealer deposit: nil   oz

 

we had 0 dealer withdrawal:

total dealer withdrawal: nil oz

 

We had 2 customer deposit:

i) Into Delaware: 975.500 oz

ii) Into CNT: 299,467.48 oz

total customer deposits;  300,442.98 oz

 

We had 1 customer withdrawals:

i) Out of Scotia:  600,439.32 oz

total withdrawals;  600,439.32 oz

 

we had 0 adjustments

 

Total dealer inventory: 60.162 million oz

Total of all silver inventory (dealer and customer) 177.185 million oz

 

The total number of notices filed today is represented by 2 contracts for 10,000 oz. To calculate the number of silver ounces that will stand for delivery in May, we take the total number of notices filed for the month so far at (2548) x 5,000 oz  = 12,740,000 oz to which we add the difference between the open interest for the front month of April (340) and the number of notices served upon today (2) x 5000 oz equals the number of ounces standing.

Thus the initial standings for silver for the May contract month:

2548 (notices served so far) + { OI for front month of April (340) -number of notices served upon today (2} x 5000 oz = 14,430,000 oz of silver standing for the May contract month.

we gained 10 contracts or an additional 50,000 silver ounces will stand for delivery in this active May delivery month.

for those wishing to see the rest of data today see:

http://www.harveyorgan.wordpress.com orhttp://www.harveyorganblog.com

end

 

The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.

There is now evidence that the GLD and SLV are paper settling on the comex.

***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:

i) demand from paper gold shareholders

ii) demand from the bankers who then redeem for gold to send this gold onto China

vs no sellers of GLD paper.

And now the Gold inventory at the GLD:

May 18/we lost another 5.67 tonnes of gold inventory at the GLD/Inventory rests at 718.24 tonnes

May 15./no change in gold inventory at the GLD/Inventory rests at 723.91 tonnes

May 14./ a huge withdrawal of 4.41 tonnes of gold/Inventory rests at 723.91 tonnes

May 13.2015: no change in inventory at the GLD/Inventory rests at 728.32 tonnes

May 12/no change in inventory at the GLD/inventory rests at 728.32 tonnes

May 11/ no changes at the GLD/Inventory rests at 728.32 tonnes

May 8/ they should call in the Serious Fraud squad as the owners of the GLD just saw 13.43 tonnes of gold leave its vaults heading for China:

Inventory tonight:  728.32 tonnes

May 7. no change in gold inventory at the GLD/741.75 tonnes

May 6/no change in gold inventory at the GLD/741.75 tonnes

may 5/no change in gold inventory at the GLD/741.75 tonnes

may 4/no change in gold inventory at the GLD./741.75 tonnes

May 1/ we had a huge addition of 2.69 tonnes of gold into the GLD/Inventory rests tonight at 741.75 tonnes

April 30/ no change in gold inventory/739.06 tonnes of gold at the GLD

April 29/no change in gold inventory/739.06 tonnes of gold at the GLD

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).

May 18 GLD : 718.24  tonnes.

 

end

 

And now for silver (SLV)

May 18.2015: we lost another 1.625 million oz of inventory at the SLV/Inventory rests tonight at 719.125 million oz

May 15./no change in silver inventory at the SLV/inventory rests tonight at 320.75 million oz

May 14/ a huge withdrawal of 1.912 million oz from the SLV/Inventory at 320.75 million oz.

May 13.2015: no changes at the SLV/Inventory rests at 322.662 million oz

May 12/no changes at the SLV/Inventory rests at 322.662 million oz

May 11/no changes at the SLV/Inventory rest at 322.662 million oz

May 8/ today we lost a huge 2.87 million oz of silver from the SLV/Inventory 322.662

May 7/no change in silver inventory/325.53 million oz

May 6/we had a huge withdrawal of 2.143 million oz of silver from the SLV/325.53 million oz

May 5/no change in silver inventory at the SLV/327.673 million oz

May 4/ no change in silver inventory at the SLV/327.673 million oz

May 1/no change in silver inventory at the SLV/327.673 million oz

April 30/no change in silver inventory at the SLV/327.673 million oz

April 29/ we lost 2.963 million oz of silver inventory from the SLV/inventory tonight 327.673 million oz

May 18/2015  a withdrawal of 1.625 million oz from the SLV/ inventory rests at 319.125 million oz

 

end

 

And now for our premiums to NAV for the funds I follow:

Central fund of Canada data not available today/Canadian holiday

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 7.0% percent to NAV in usa funds and Negative 6.9% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 60.7%

Percentage of fund in silver:37.9%

cash .4%

( May 15/2015)

2. Sprott silver fund (PSLV): Premium to NAV falls to-0.76%!!!!! NAV (May 18/2015)

3. Sprott gold fund (PHYS): premium to NAV falls to -.27% to NAV(May 18/2015

Note: Sprott silver trust back  into negative territory at -0.76%.

Sprott physical gold trust is back into negative territory at -.27%

Central fund of Canada’s is still in jail.

 

end

 

 

Early morning trading from Asia and Europe last night:

 

Gold and silver trading from Europe overnight/and important physical

stories

(courtesy Mark O’Byrne/Goldcore)

Eurozone Banks ‘As Vulnerable Today’ As Before 2008 Crisis – Bail-ins?

 

– Euro banks no more stable now than in run-up to 2008 crash
– Banks in France, Spain and Italy are “highly vulnerable to failure”
– Low quality bank equity not sufficient to withstand shock
– Risk to system “enormously underestimated”
– Investor deposits at risk of “bail-ins”

goldcore_chart1_18-05-15
New research shows that European banks are as likely to fail today as they were preceding the global economic crash seven years ago.

Leading economists say that the European banking system is still highly vulnerable to financial and economic shocks despite the various policies which have been put in place to protect against such events since the collapse in 2008.

According to research by the University of Portsmouth Business School which was published in the Journal of Banking and Finance European banks are as vulnerable today as they were in the run up to the crisis of 2008.

The research suggests that southern European banks – particularly those of France, Italy and Spain – are “highly vulnerable to failure.”

goldcore_chart2_18-05-15

The economists modelled a range of interconnected, dynamic economic shocks on 170 Eurozone banks in 16 countries, and the spread of that effect to other countries from 2005-2013.

The research focussed on threats emerging from three independent sources of risk – the interbank loan market, the sovereign credit risk market and the asset-backed loan market.

The models sought to determine the resilience of various systemically important European banks and “to track how shocks spread between domestic and international banks.”

Researchers found that “the European banking system remains highly vulnerable and conducive to financial contagion” and that speed of contagion and bank failures in southern Europe were “markedly more prominent”.

France, Spain and Italy appear to be dramatically more exposed to failing compared to their neighbours in one of the models. This showed France losing 73 billion euro compared to Belgium’s 6 billion euro after the same economic shock from the same source.

Dr Nikos Paltalidis, who led the research, is skeptical of the conclusions of stress tests which claim that banks could withstand a 10% drop in the value of their equity or that the banking system in the euro area is solvent.

He believes that the quality of the assets held by some key banks is of poor quality and in the event of a shock to the system they would cause the value of bank capital to below the required regulatory minimum.

“In theory, the new capital rules adopted by ‘systemically important’ banks should be able to endure a 10 per cent fall in the value of their assets before placing panicky calls to the central bank. Also, the euro area banking system seems to be fundamentally solvent, according to several stress tests.”

“However, our study provides ample evidence that this hypothesis does not hold in practice, indicating that similar to the pre-2009 period systemic risk is enormously underestimated once again.”

Dr. Paltalidis states the following:

“Our findings indicate that despite all the efforts to improve the resilience of banking, some banks are as vulnerable today as they were before the last banking crisis, they are just as likely to fail.”

Frequent readers of our blog will be well aware of the risks posed to bank deposits by a bank failure.

While governments have sought to assure the public that their savings are safe due to bank deposit guarantee schemes they have been working behind the scenes to extricate themselves from that responsibility.

We reported last month on how the Austrian government was pushing through an EU law earlier than scheduled which removes all responsibility of the government for the bank deposits of its citizens. This legislation is due to be rolled out across Europe this year.

Long time readers will be aware that Irish Finance Minister Michael Noonan is on record as saying “bail-ins” are now the rule.

goldcore_chart3_18-05-15
Bank deposits are increasingly vulnerable given the risks to the banking system and the likelihood of government reneging of deposit guarantees and of bank bail-ins in the event of a crisis.

Allocated and segregated gold bullion coins and bars held out-side of the banking system in stable jurisdictions like Switzerland,Hong Kong and Singapore will again protect in the likely event of another financial or economic crisis.

Must-read guide and research on bail-ins here:
Protecting Your Savings In The Coming Bail-In Era


MARKET UPDATE

Today’s AM LBMA Gold Price was USD 1,228.15, EUR 1,079.41 and GBP 784.12 per ounce.
Friday’s AM LBMA Gold Price was USD 1,216.30, EUR 1,071.23 and GBP 772.95 per ounce.

Gold in USD - 1 Week

Gold  climbed $3.10 or 0.25 percent to $1,224.90 an ounce on Friday, and silver rose $0.10 or 0.57 percent to $17.53 an ounce.

Gold and silver both performed strongly for the week – gold gained 3 percent and silver outperformed once again and surged 6.4 percent.

Gold in Singapore rose to $1,232.20 an ounce near the end of day trading – its highest price since February. In London, gold climbed for its fifth consecutive session making it the longest winning streak since March.