June 15/GLD loses another 2.08 tonnes/SLV remains constant/No deal in Greece and they expect capital controls by this weekend/Peripheral European bonds rise in yield/stock markets tank/Huge demand for silver coming from both China and India, mfgers of solar panels/Record silver open interest on the comex despite Friday’s drop in price/Huge number of OI still standing for July silver.

Good evening Ladies and Gentlemen:

Here are the following closes for gold and silver today:

 

Gold:  $1185.30 up $6.50 (comex closing time)

Silver $16.08 up 28 cents.

 

In the access market 5:15 pm

Gold $1185.80

Silver: $16.08

 

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 1 notice serviced for 100 oz.  Silver comex filed with 0 notices for nil oz.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 249.13 tonnes for a loss of 54 tonnes over that period.

 

In silver, the open interest rose by another 864 contracts even though Friday’s silver price was down by 13 cents.   The total silver OI continues to remain extremely high with today’s reading at 192,527 contracts now at multi-year highs despite a record low price. In ounces, the OI is represented by 962 million oz or 137% of annual global silver production (ex Russia ex China). This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end as they continue to raid as basically they have no other alternative.

 

In silver we had 0 notices served upon for nil oz.

 

In gold,  the total comex gold OI rests tonight at 407,147 for a gain of 2778 contracts as gold was down  $1.10 yesterday. We had 1 notice filed for 100 oz.

 

we had another withdrawal, (although this time it is quite large )in gold inventory at the GLD to the tune of 2.08 tonnes. Thus the inventory rests tonight at 701.98 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.

In silver, /we had another huge addition of 1.126 million oz in silver inventory at the SLV/Inventory rests at 326.918 million oz

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

1. Today, we had the open interest in silver rise by 864   contracts to 192,527 despite the fact that silver was down by 13 cents on Friday..  The OI for gold fell by 2778 contracts up to 407,147 contracts despite the fact that the price of gold was down by $11.20 on Friday.

(report Harvey)

2. Today, 6 important commentaries on Greece

zero hedge, Bloomberg)

3. Dave Kranzler discusses the huge demand for silver coming from China and India

(Dave Kranzler/IRD)

4. Gold trading overnight

(Goldcore/Mark O’Byrne)

5. Trading from Asia and Europe overnight

(zero hedge)

6. Trading of equities/ New York

(zero hedge)

7. 2 Commentaries re Russia and the Ukraine
(/zero hedge)
8. Dollars are leaving emerging nations by the bucketful/huge problems will ensue
(Ambrose Pritchard Evans/UKTelegraph)
9. China has a war of words with the USA
(zero hedge)
10 Poor results in USA data from the NY Empire manufacturing survey and also it falters in their numbers for industrial production
(zero hedge)
11, After the market closed, GAP announced store closings and huge layoffs
(zero hedge)
12. Texas to repatriate 26 tonnes of gold from Federal Reserve Bank of Ny to Texas.
(zero hedge)
13, Koos Jansen debunks data from western consulting firms.
(courtesy Koos Jansen)

we have these plus other stories to bring your way tonight. But first……..

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 2778 contracts from 404,169 up to 407,147 as gold was down $1.10 on Friday (at the comex close).  We are now in the big active delivery contract month of June.  Here the OI fell by 96 contracts down to 652. We had 6 notices served upon yesterday.  Thus we lost 90 contracts or an additional 9,000 oz will not stand for delivery.  No doubt, again, we had a huge number of cash settlements and the farce continues.  The next contract month is July and here the OI rose by 11 contracts up to 680.  The next big delivery month after June will be August and here the OI rose by 2,778 contracts  to 267,333.  No doubt that the cash settled June contracts, having been bought out for fiat, rolled into August. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 67,823. The confirmed volume on Friday (which includes the volume during regular business hours + access market sales the previous day) was poor at 96,344 contracts. Today we had 1 notice filed for 100 oz.

And now for the wild silver comex results.  Silver OI rose by  contracts from 191,663 up to 192,527 despite the fact that the price of silver was down 13 cents, with respect to Friday’s trading.  The front non active  delivery month of June saw it’s OI fall by 1 contract and remaining at 27. We had 2 contracts delivered upon on Friday.  Thus we  gained 1 contract or an additional 5,000  silver ounces that will stand for delivery in this non active June contract month.The next delivery month is July and here the OI surprisingly rose by 578 contracts up to 91,328. We have only two weeks left to go before first day notice. The OI for the July contract month is absolutely huge as nobody is leaving quite yet. The estimated volume today was poor at 18,575 contracts (just comex sales during regular business hours. The confirmed volume on day (regular plus access market) came in at 47,240 contracts which is very good in volume. We had 0 notices filed for nil oz today.

June initial standing

June 15.2015

Gold

Ounces

Withdrawals from Dealers Inventory in oz    nil
Withdrawals from Customer Inventory in oz 63,686.016 oz (Scotia,Manfra)
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz nil
No of oz served (contracts) today 1 contracts (100 oz)
No of oz to be served (notices) 651 contracts (65,100 oz)
Total monthly oz gold served (contracts) so far this month 2632 contracts(263,200 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month nil
Total accumulative withdrawal of gold from the Customer inventory this month  198,136.3  oz

Today, we had 0 dealer transaction

total Dealer withdrawals: nil oz

we had 0 dealer deposit

total dealer deposit: nil oz
we had 2 customer withdrawals

i) Out of Scotia: 63,686.016 oz

ii) Out of Manfra: 104.458

total customer withdrawal: 63,686.016 oz

We had 0 customer deposits:

 

Total customer deposit: nil oz

We had 0  adjustments:

Today, 0 notices was issued from JPMorgan dealer account and 10 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1 contract 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 June contract month, we take the total number of notices filed so far for the month (2632) x 100 oz  or 263,200 oz , to which we add the difference between the open interest for the front month of June (652) and the number of notices served upon today (1) x 100 oz equals the number of ounces standing.

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

No of notices served so far (2632) x 100 oz  or ounces + {OI for the front month (652) – the number of  notices served upon today (1) x 100 oz which equals 328,300 oz standing so far in this month of June (10.21 tonnes of gold).  Thus we have 10.21 tonnes of gold standing and only 17.07 tonnes of registered or for sale gold is available:

Total dealer inventory 548,644.134 or 17.06 tonnes

Total gold inventory (dealer and customer) = 8,072,671.523 (251.09 tonnes)

Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 249.13 tonnes for a loss of 54 tonnes over that period.

end

And now for silver

June silver initial standings

June 15 2015:

Silver

Ounces

Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 2006.10 oz (Brinks)
Deposits to the Dealer Inventory  nil
Deposits to the Customer Inventory  384,751.85 oz (Delaware,JPM)
No of oz served (contracts) 0 contracts  (nil oz)
No of oz to be served (notices) 27 contracts(135,000 oz)
Total monthly oz silver served (contracts) 222 contracts (11,010,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month 526,732.4  oz
Total accumulative withdrawal  of silver from the Customer inventory this month 4,407,871.8 oz

Today, we had 0 deposits into the dealer account:

total dealer deposit: nil   oz

we had 0 dealer withdrawals:

total dealer withdrawal: nil oz

 

We had 2 customer deposits:

i) Into CNT:  1997.200 oz

ii) Into JPMorgan: 382,754.65 oz*** (8th straight day of an above 300,000 oz silver deposit)

total customer deposit: 384,751.850  oz

 

We had 1 customer withdrawals:

i) Out of Brinks: 2006.10 oz

 

total withdrawals from customer; 2006.10 oz

 

we had 0 adjustment

Total dealer inventory: 57.845 million oz

Total of all silver inventory (dealer and customer) 179.855 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 June, we take the total number of notices filed for the month so far at (222) x 5,000 oz  = 11,100,000 oz to which we add the difference between the open interest for the front month of June (27) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing.

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

222 (notices served so far) + { OI for front month of June (27) -number of notices served upon today (0} x 5000 oz ,= 11,235,000 oz of silver standing for the June contract month.

we neither gained nor lost any silver ounces standing for this no active  delivery month of June.

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:

June 15/we lost a huge 2.08 tonnes of gold from the GLD/Inventor rests tonight at 701.90 tonnes

June 12/we had a small withdrawal of .24 tonnes of gold from the GLD/Inventory rests this weekend at 703.98 tonnes.

June 11/we had another huge withdrawal of 1.5 tonnes of gold from the GLD/Inventory rests tonight at 704.22 tonnes

June 10/ we had a huge withdrawal of 2.98 tonnes of gold from the GLD/inventory rests at 705.72

June 9/ no change in gold inventory at the GLD/Inventory rests at 708.70 tonnes

June 8/ a big withdrawal of 1.19 tonnes of gold from the GLD/Inventory rests at 708.70 tonnes

June 5/no change in gold inventory at the GLD/Inventory rests at 709.89 tonnes

June 4/ no change in gold inventory at the GLD/Inventory rests at 709.89 tonnes

June 3/late last night: a huge withdrawal of 4.18 tonnes. Tonight’s inventory rests at 709.89

June 2/no change in gold inventory at the GLD/Inventory rests at 714.07 tonnes

June 15 GLD : 701.90  tonnes.

end

And now for silver (SLV) Please note the difference between GLD and SLV.  GLD has been depleting of gold/SLV has been adding to its inventory.

June 15/we had no change in silver inventory/327.874 million oz

June 12/we had another addition to the tune of 956,000 oz/Inventory rests this weekend at 327.874.  Please note that there has been an addition on each of the past 5 days.

June 11.2015: we had another monster of an addition to the tune of 2.791 million oz/Inventory rests at 326.918

June 10/another monster of an addition to the tune of 1.126 million oz/Inventory rests at 324.127

June 9/ a monster of an addition to the tune of 3.393 million oz/inventory rests at 323.001 million oz.

June 8/no change in inventory/SLV inventory rests at 319.608 milion oz.

June 5 a huge addition of 1.433 million oz of silver added to the SLV/Inventory at 319.608 million oz

June 4/no change in silver inventory/rests tonight at 318.175 million oz

June 3/ we had a small withdrawal of 138,000 oz of silver inventory/Inventory rests at 318.175 million oz

June 2/ we had a huge addition of 1.243 million oz of silver inventory at the SLV./Inventory rests at 318.313 million oz

June 1/no change in inventory at the SLV/Inventory rests at 317.07 million oz

May 29/no changes in inventory at the SLV/Inventory rests at 317.07 million oz

June 15/2015: no change in silver inventory/SLV inventory rests tonight at 327.894 million oz

 

end

 

 

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

Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)

1. Central Fund of Canada: traded at Negative 7.5% percent to NAV in usa funds and Negative 7.5% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 61.8%

Percentage of fund in silver:37.8%

cash .4%

( June 15/2015)

2. Sprott silver fund (PSLV): Premium to NAV rises to +.46%!!!!! NAV (June 15/2015)

3. Sprott gold fund (PHYS): premium to NAV rises to – .28% to NAV(June 15/2015

Note: Sprott silver trust back  into positive territory at +.46%.

Sprott physical gold trust is back into negative territory at -.28%

Central fund of Canada’s is still in jail.

Sprott formally launches its offer for Central Trust gold and Silver Bullion trust:

SII.CN Sprott formally launches previously announced offers to Central GoldTrust (GTU.UT.CN) and Silver Bullion Trust (SBT.UT.CN) unitholders (C$2.64)
Sprott Asset Management has formally commenced its offers to acquire all of the outstanding units of Central GoldTrust and Silver Bullion Trust, respectively, on a NAV to NAV exchange basis.
Note company announced its intent to make the offer on 23-Apr-15 Based on the NAV per unit of Sprott Physical Gold Trust $9.98 and Central GoldTrust $44.36 on 22-May, a unitholder would receive 4.45 Sprott Physical Gold Trust units for each Central GoldTrust unit tendered in the Offer.
Based on the NAV per unit of Sprott Physical Silver Trust $6.66 and Silver Bullion Trust $10.00 on 22-May, a unitholder would receive 1.50 Sprott Physical Silver Trust units for each Silver Bullion Trust unit tendered in the Offer.
* * * * *

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)

 

Financial System “Will Implode” … “Hold Precious Metals” – Faber

– “Whole Financial System Will One Day Implode” – Marc Faber
– “I feel like I’m on the Titanic …”
– Arguing over the best assets akin to re-arranging deck chairs on Titanic
– Investors need escape plan and “safety boat”
– Forget Fed rate hike, Fed QE 4 is coming
– Diversify and hold “commodities, precious metals”

goldcore_chart1_15-06-15
The highly regarded editor of the Gloom, Doom and Boom report, Dr. Marc Faber has warned that “the whole financial system will one day implode”.

Speaking on CNBC’s Squawk Box, he likened the global economy to the Titanic.

Dr. Faber believes that arguing over which assets are best in the current environment is akin to re-arranging deck chairs on the ill-fated Titanic. Only last month, Stephen King – chief economist with HSBC – made the same analogy.

“When I look at the whole financial sector … I feel like on the Titanic. We’re fighting about deck chairs -which assets are performing best and we’re fighting over the best tables in the ballroom – but I think it’s worthwhile to have your own safety boat and have your own ladder that will lead you to your safety boat because I think the problem is that the whole financial system one day will implode.”

goldcore_chart3_15-06-15
Faber believes that the Fed and central banks will have no choice but to wade back into another QE program rather than raise rates in an attempt to avert the iceberg.

Such a move would likely have negative consequences for confidence in central banks and paper currencies across the globe. Then, people may come to realise that the central banks are not omnipotent after all and that currency debasement is set to continue and even intensify.

Investors and savers need an escape plan. The safety boat which Dr. Faber has in mind entails a highly diversified portfolio.

Among the basket of assets he proposes are a 25% allocation to stocks, a 25% allocation to property, 30-year U.S. Treasuries and precious metals.

“I have advised my investors and also on this program that you have to have a diversification and that you should hold around 25% in stocks, 25% in real estate” …  “And I would also hold some commodities, precious metals.”

Faber remains long gold – but he prefers physical gold coins and bars and opts for storage in Singapore.

Marc Faber on Storing Gold in Singapore
Essential Guide To Storing Gold In Singapore

MARKET UPDATE

Today’s AM LBMA Gold Price was USD 1,178.25, EUR 1,049.57 and GBP 760.01 per ounce.
Friday’s AM LBMA Gold Price was USD 1,179.25, EUR 1,055.68 and GBP 761.27 per ounce.

Gold fell $0.50 or 0.04 percent Friday to $1,181.00 an ounce. Silver slipped $0.10 or 0.62 percent to $15.94 an ounce. Gold rose 0.86 percent for the week, while silver fell 0.99 percent over the 5 trading days.

Gold in U.S. dollars

Gold in Singapore for immediate delivery was up 0.3 percent to $1,184.28 an ounce  near the end of the day,  while gold bullion in Switzerland came under pressure and fell 0.6% to $1,177.40 an ounce.

Gold in Asian trading saw safe haven bids push gold higher after Greece failed to agree to a deal with its creditors. However, prices then came under pressure despite falling stock markets and declining risk appetite.

U.S. Fed officials are still undecided as to when to raise interest rates. At the Fed’s previous meeting they removed all date references in its forward guidance and noted that the economic weakness may be “transitory” in nature. By alluding to this the Fed is now dependent on published economic data and a rate increase could happen at any future meeting. The wording of the policy statement released this Wednesday will be interesting.

Greece left last minute crisis talks with its creditors after 45 minutes of negotiations. Prime Minister Alexis Tsipras arrived with no new initiatives to the talks. nor did Greece’s creditors. Greece’s latest payment is 1.6 billion euros to the IMF by the end of June.

In late morning European trading gold is down 0.59 percent at  $1,174.13 an ounce. Silver is off 0.40 percent at $15.88 an ounce, and platinum is also down 0.87 percent at $1,082.68 an ounce.

Breaking News and Research Here

 

end

 

Koos continues to debunk Western calculations on gold demand from China

(courtesy Koos Jansen)

 

Posted on 13 Jun 2015 by

Western Consultancy Firms Continue Making Up False Arguments In An Attempt To Debunk SGE Withdrawals

More false arguments – that should explain the difference between Shanghai Gold Exchange (SGE) withdrawals and Chinese gold demand as disclosed by the World Gold Council – are being spread in the gold space. The most recent argument is gold export from China. 

Since 2013 I’ve been writing the World Gold Council (WGC) is grossly understating Chinese gold demand. The aggregated difference between SGE withdrawals and WGC demand from 2007 until 2014 is 3,354 tonnes. Though many arguments have been tested the Western consultancy firms have not been able to elucidate the difference – illustrated by the fact many new arguments keep appearing.

Please make sure you’ve read The Mechanics Of The Chinese Gold Market.

Chinese Gold Export Has Got Nothing To Do With SGE Withdrawals

Against all odds, the ‘export’ argument was presented by Phillip Klapwijk, former Executive Chairman of GFMS, currently Managing Director of Precious Metals Insights Limited (PMI), at the Bloomberg Intelligence Forum in London May 22, 2015, where Klapwijk talked specifically about the ‘supply surplus’ (the difference) in the Chinese gold market. I wouldn’t be writing this post if I would agree with Klapwijk. (PMI is nowadays the main data provider for WGC demand figures.)

In a previous post I’ve expanded on Chinese gold trade rules (click this link to read a detailed analysis). All we have to do now is refresh our memory and have a look at what Klapwijk said in London. There is no transcript of his speech, but Lawrie Williams from Mineweb.com has written an article  about Klapwijk’s argument regarding gold export, I assume Williams has reported accurately or Klapwijk wouldn’t have tweeted a link to the article.

The slides from the presentation can be found on the PMI website.

Klapwijk’s argument: gold is exported from China mainland, which explains the difference between SGE withdrawals and WGC demand.

Williams wrote:

Chinese do export gold – to Hong Kong

…Indeed he [Klapwijk] asserts that this [gold export] has been happening in sufficient quantity to cover virtually all the imbalance between SGE figures and those of the Western analysts over the past two years.

I have a few reasons to believe this is not true:

1) Chinese gold export has got nothing to do with SGE withdrawals as gold is only allowed to be exported from Free Trade Zones, which are separated from the Chinese domestic gold market (the SGE system). It’s prohibited by the PBOC to export gold from the Chinese domestic gold market. 

Gold export from China to Hong Kong is nothing new, in contrast to Williams’ headline. Since I’ve been publishing data and charts on gold trade between Hong Kong and China I’ve always included gross import and export.

Hong Kong - CN monthly gold trade January 2009 - March 2015

Not only are these figures well known, it’s also well known gross gold trade between Hong Kong and China has got nothing to do with the Chinese domestic gold market and the SGE system. Gold can only flow in and out of the mainland through processing trade in Free Trade Zones, such as Shenzhen right across the border with Hong Kong. What is net imported into the mainland is done through general trade; this gold is required to be sold first through the SGE. The PBOC does not allow gold to be exported from the Chinese domestic gold market.

Gold that is exported from China is always processing trade from FTZs, it’s not gold from the SGE and therefor can’t have anything to do with the difference we’re after.

Screen Shot 2015-06-12 at 6.53.39 PM
Slide 1 by Klapwijk.
Screen Shot 2015-06-12 at 6.54.11 PM
Slide 2 by Klapwijk. Total supply is compounded by gross import, mine output and scrap supply. 

It’s pointless to measure total Chinese gold supply by Chinese gross import like Klapwijk does. Gross import has got nothing to do with the Chinese domestic gold market and Chinese gold demand.

Additionally, Round tripping inflates gross gold trade. Round tripping is always done through processing trade; speculators import and export gold from FTZs (usually between Hong Kong and Shenzhen). Because gold used in round tripping can make more than one round – the same batch of gold is imported and exported over and over again – Hong Kong/China gross trade data captures far more gold than is used for genuine processing trade (jewelry fabrication). For example, if 50 tonnes are round tripped 6 times, gross import and export are inflated by 300 tonnes, though nothing has been net imported into the Chinese domestic gold market.

China net imported 1,540 tonnes in 2013. The exact number for 2014 has not yet been published, my estimate is 1,250 tonnes.

2) Gold is smuggled from Hong Kong to China, not the other way around as Klapwijk states. From Williams’ article we can read:

…the China/Hong Kong border has been pretty porous, with very big movements of gold bullion, much in the form of very low mark-up jewellery and artefacts, from Mainland China into Hong Kong.

The low mark-up artefacts are just round trip products in my opinion. They certainly are not smuggled SGE bars.

Let me describe an example of how gold between Hong Kong and the mainland flows: gold bullion is exported from Hong Kong to Shenzhen, then the bullion is manufactured into jewelry and exported back to Hong Kong where thousands of jewelry shops are located (genuine processing trade). In Hong Kong consumer prices for jewelry are significantly lower than in the mainland because of tax rules, as we can see in the next slide from Chow Sang Sang Jewelry.