jUNE 22/Another huge 3.57 tonnes of paper gold enter the GLD/Huge amount of gold standing for July/ Huge amount of silver standing in July as well/Brexit vote tomorrow and momentum swings to the leave side/We now know shy the bookies favour the remain side!/Balance sheet of the ECB is now at record highs/Huge amounts of gold are entering England from Switzerland for the 2nd straight month/England is devoid of gold!!/

Good evening Ladies and Gentlemen:

Gold:  $1,268.00 DOWN $2.50    (comex closing time)

Silver 17.31  unchanged

In the access market 5:15 pm

Gold: 1264.00

Silver: 17.23


The June gold contract is an active contract. Last  night we had a good sized 175 notices filed last night, for 17,500 oz to be served upon today.  The total number of notices filed in the first 15 days is enormous at 15,395 for 1,539,500 oz.  (47.884 tonnes)

ii) in silver we had 0 notices filed for nil oz..  Total number of notices served  in the 15 days: 489 for 2,445,000 oz

Let us have a look at the data for today


Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 274.57 tonnes for a loss of 28 tonnes over that period

In silver, the total open interest FELL by 4648 contracts DOWN to 205,618 as THE  PRICE OF SILVER WAS down  19 cents with respect to YESTERDAY’S trading.We have now a new all time silver oi record and a low price to boot. In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.028 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia &ex China)

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

In gold, the total comex gold OI fell by a HUGE 9,653 contracts down to 571,517 as the price of gold was DOWN $19.50 with YESTERDAY’S trading (at comex closing). The bankers got their wish with a big contraction in OI in gold. 


With respect to our two criminal funds, the GLD and the SLV:


Fascinating!! on a huge whack job the GLD had another huge deposit!


this afternoon: 3.57 tonnes were added into the GLD

Total gold inventory: 915.90 tonnes



.No change in sliv inventory


First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FELL by 4,648 contracts DOWN to 205,618  the AS THE price of silver was DOWN 19 cents with YESTERDAY’S trading. The gold open interest FELL by a CONSIDERABLE 9,653 contracts DOWN to 571,517 asthe price of gold was DOWN $19.50  YESTERDAY.

(report Harvey).


2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/


i)Late  TUESDAY night/ WEDNESDAY morning: Shanghai closed UP 26.98 POINTS OR 0.94% / /Hang Sang closed UP 126.88 OR 0.61%. The Nikkei closed DOWN 103.39 POINTS OR 0.64% Australia’s all ordinaires  CLOSED DOWN 0.07% Chinese yuan (ONSHORE) closed UP at 6.57782 /Oil ROSE to 50.25 dollars per barrel for WTI and 50.81 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5883 yuan to the dollar vs 6.5778 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS 





i)Looks like the banking environment is peachy good:  another 900 workers are being cut by the Royal Bank of Scotland.In the last 4 months they have let go 2700 staff.  They have now reported its 8 consecutive annual loss and from this point on it will get progressively worse;

( zero hedge)

ii)Fear mongering at its greatest! UBS warns its clients that they will not be able to trade if a BREXIT occurs!

iv)The Balance Sheet of the ECB now climbs to a record high of 3.11 trillion euros as stocks hit 18 month lows. The European banks with their high leverage have a real problem on their hands especially the Italian banks with 18% of all loans non performing!

( zero hedge)


This may influence the BREXIT vote:  Cameron fibbed when he stated that Turkey’s EU membership will not occur until the year 3000.  Now, to the surprise of all, the EU will start EU membership this Friday, one day after the referendum

( zero hedge)


Albert Edwards correctly deems the biggest risk to the global economy is the stealth devaluation of the Chines yuan.   The USA/yuan cross has been stable although the Chinese basket of currencies against the yuan has fallen 10% . This will cause further Chinese devaluation.  Unless countries try to lock step devaluation in its own currency, a failure to do so will cause massive deflation in their countries:

( zero hedge/Albert Edwards)


West Texas intermediate falls below 50 dollars after the DOE disappoints.  Production drops.
( zero hedge)



i)Panicked Brits are buying gold bars by the bucketful!

( zero hedge)

ii)Very strange! The Fed’s Powell warns that the USA dollar libor may disappear at a benchmark due to rigging!!

( GATA/London’s Financial Times)

iii)The Belgium based Euroclear is now looking to apply the blockchain to the gold market. Remember the blockchain is used quite nicely with its original inventor for bitcoin.

( London’s Financial times/GATA)

ivAn extremely important commentary from Lawrie Williams. The most important fact is the continual importing of gold into the UK.  The UK is the dominant physical market in the world and they are now out of gold/  The principal supplier of gold to Switzerland was the UAE

( Lawrie Williams/Sharp Pixley)


i) Existing home sales highest since Feb 2007

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL to an OI level of 571,517 for a HUGE LOSS of 9,653 contracts as  THE PRICE OF GOLD WAS DOWN $19.50 with respect to YESTERDAY’S TRADING. .WE HAVE ENTERED THE SECOND BIGGEST DELIVERY MONTH OF THE YEAR THAT IS JUNE, A VERY ACTIVE MONTH. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH. IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . HOWEVER WE HAVE MORE THAN MADE UP FOR THE LOSS AS MORE INVESTORS ENTER THE ARENA TO TAKE ON THE CRIMINAL BANKERS. WE HAD A TINY LOSS IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI fall to 538 for a loss of 68  contracts. We had 64 notices filed YESTERDAY, so we lost 4 contracts or 400 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI rose by a GOOD SIZED 56 contracts up to 4,913.This no doubt will be troublesome for our bankers as the front July contract month is extremely high for a non active month and it also refuses to shrivel. The next big active contract month is August and here the OI FELL by 11,946 contracts DOWN to 412,919. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was POOR at146,878. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was GOOD at 226,698 contracts. The comex is not in backwardation.

Today we had 175 notices filed for 17,500 oz in gold.


And now for the wild silver comex results. Silver OI FELL by 4,648 contracts from 210,266 DOWN to 205,618. The OI FELL IN SYMPATHY TO  the price of silver BEING DOWN BY 19 cents with YESTERDAY’S TRADING. The front month of June saw it’s OI RISE by 40 contracts UP TO  96. We had 0 notices filed YESTERDAY , so we  GAINED 40 contracts or an additional 200,000 oz will stand for metal during non active June contract month. The next big delivery month is July and here the OI fell BY 16,741 contracts down to 67,067. We have a little more than 1  week to go before first day notice on June 30.. The volume on the comex today (just comex) came in at 56,584 which IS EXCELLENT. The confirmed volume YESTERDAY (comex + globex) was HUGE at  109,472. Silver is not in backwardation . London is in backwardation for several months.
We had 0 notices filed for NIL oz.

JUNE contract month:

INITIAL standings for JUNE

June 22.
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil  NIL
Deposits to the Dealer Inventory in oz 3086.400


Deposits to the Customer Inventory, in oz   3599.88 OZ


No of oz served (contracts) today 175 contracts
(17,500 oz)
No of oz to be served (notices) 363 contracts

36,300 oz

Total monthly oz gold served (contracts) so far this month 15,395 contracts (1,539,500 oz)

(47.884 TONNES SO FAR)

Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ
Total accumulative withdrawal of gold from the Customer inventory this month  150,442.8 OZ


Today we had 1 dealer DEPOSIT

i) Into Brinks:  7,000.000 oz

total dealer deposit:  7000.00  0z



Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 0 customer deposits:


Total customer deposits; nil   OZ

Today we had 1 customer withdrawal:

i) into Manfra: 128.60 oz (4 kilobars)

total customer withdrawals:  128.60 oz

Today we had 2 adjustments:

i) Out of Brinks:  11,284.65 oz or 351 kilobars were transferred out of the customer and into the dealer Brinks.  (this is a sham transaction)

ii) Out of Manfra:  15,432.000 oz or (480 kilobars)  were transferred out of the dealer and into the customer.  Against my better judgment I am going to say that this is a settlement:

(.48 tonnes)

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 64 contracts of which 29 notices was stopped (received) by JPMorgan dealer and 34 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (15,395) x 100 oz  or 1,539,500 oz , to which we  add the difference between the open interest for the front month of JUNE (538 CONTRACTS) minus the number of notices served upon today (175) x 100 oz   x 100 oz per contract equals 1,575,800 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED. AND IT SURE LOOKS LIKE IT WILL HAPPEN AGAIN IN JUNE. 
Thus the INITIAL standings for gold for the JUNE. contract month:
No of notices served so far (15,395) x 100 oz  or ounces + {OI for the front month (538) minus the number of  notices served upon today (175) x 100 oz which equals 1,575,800 oz standing in this   active delivery month of JUNE (49.013 tonnes).
WE LOST 4 contracts or an additional 400 oz will not stand for GOLD in this June delivery month. The CME must have been very busy trying to coax some of our remaining longs to accept fiat.
Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you. 
We thus have 49.013 tonnes of gold standing for JUNE and 53.24 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing.
We now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 49.013 TONNES FOR JUNE + 12.3917 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008 and now June 22:0.48 tonnes  = 65.175 tonnes still standing against 53.24 tonnes available.
 Total dealer inventor 1,711,666.742 tonnes or 53.24 tonnes
Total gold inventory (dealer and customer) =8,841,211.501 or 274.99 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 274.99 tonnes for a loss of 28 tonnes over that period. 
JPMorgan has only 25.70 tonnes of gold total (both dealer and customer)
JPMorgan now has only .900 tonnes left in its dealer account.
And now for silver

June initial standings

 June 22.2016

Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory  666,422.175 oz



Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory  602,334.300  oz


No of oz served today (contracts) 0 CONTRACTS 


No of oz to be served (notices) 96 contracts

460,000 oz

Total monthly oz silver served (contracts) 489 contracts (2,445,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month nil oz
Total accumulative withdrawal  of silver from the Customer inventory this month  23,240,402.2 oz

today we had 0 deposit into the dealer account

total dealer deposit:nil oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 1 customer deposit:

i) Into JPMorgan:  602,334.300 oz

Total customer deposits: 602,334.300 oz

everyday for the past few weeks, JPMorgan has been bringing in at least 600,000 oz into the silver comex.


We had 2 customer withdrawals


i) Out of CNT:  605,867.315 oz

ii) Out of Scotia; 60,554.860 oz


total customer withdrawals:  666,422.175  oz



 we had 1 adjustment

i) Out of JPMorgan;  598,688.120 oz was adjusted out of the dealer and into the customer account of JPM

Looks to me like we have our good old fashioned run on silver at the comex/

today 666,422.175 oz leaves the silver comex.

The total number of notices filed today for the JUNE contract month 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 (489) x 5,000 oz  = 2,445,000 oz to which we add the difference between the open interest for the front month of JUNE (96) 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:  489 (notices served so far)x 5000 oz +{96 OI for front month of JUNE ) -number of notices served upon today (0)x 5000 oz  equals  2,925,000 of silver standing for the JUNE contract month.
We gained 40 silver contracts or an additional 200,000 silver ounces will stand in this non active month of June.
Total dealer silver:  23.346 million  (RECORD LOW INVENTORY)
Total number of dealer and customer silver:   149,388 million oz
The total open interest on silver is NOW it close to its all time high with the record of 210,266 being set June 21.2016.  The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver.
And now the Gold inventory at the GLD
June 22/with gold down badly again, we had another huge deposit of 3.57 tonnes into the GLD/Inventory rests at 915.90 tonnes
June 21/ with gold down badly, we had a huge deposit of 3.56 tonnes into the GLD/Inventory rests at 912.33 tonnes
June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory.
rests at 908.77 tonnes.
June 17./we had two huge deposits: last night: 1.782 tonnes and this afternoon: 5.3480 tonnes/Inventory rests at 907.88 tonnes
JUNE 16/no changes in GLD/Inventory rests at 900.75 tonnes.
June 15/the farce continues:  another paper deposit of 2.08 tonnes into the GLD/Inventory rests at 900.75 tonnes. Wait until you see tomorrow’s level!!
June 10/a huge “paper” deposit of 6.54 tonnes of gold into the GLD/Inventory rests at 893.92 tonnes
JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones
June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes
june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes
June 6/no change in gold inventory at the GLD/Inventory rests at 881.44 tonnes
June 3/ We had two big  sized deposits of 4.46 tonnes early this morning and then another 6.24 tonnes late tonight/ new GLD total: 881.44 tonnes  (total: 10.7 tonnes)
June 2/no change in gold inventory at the GLD.Inventory rests at 870.74 tonnes
June 1.2016/ a good sized deposit of 2.08 tonnes/Inventory rests at 870.74 tonnes
june 22

June 21.:  inventory rests tonight at 915.90 tonnes


Now the SLV Inventory
June 22.2016/no change in inventory at the SLV/Inventory rests at 333.069 million oz/
June 21/ we had another 2.67 million oz of silver withdrawn from the SLV.  This no doubt is real silver leaving and heading straight to China/Inventory at 333.069 million oz
June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. Inventory rests at 334.495
June 17/a monstrous 5.418 million oz of silver withdrawn from the SLV.  This may be some real silver and thus it is heading for China which is massively importing silver/inventory rests at 337.347 million oz
JUNE 16./no changes in silver inventory/rests tonight at 342.765 million oz
June 15and the dfarce continues for the SLV/we had a massive 2.376 million oz of a paper deposit into the SLV/Inventory rests at 342.765 million oz
June 10/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz
JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz.
June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz
june 7/ we had a huge addition (deposit) of 1.456 million oz into the SLV/Inventory rests at 338.725 million oz/
June 6/no change at the SLV/Inventory rests at 337.299 million oz/
June 3/ a huge deposit of 1.56 million oz was added to the SLV inventory/new inventory rests at 337.299 million oz
June 2/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz
June 1/no change in silver inventory at hte SLV/inventory rests at 335.739  million oz
June 22.2016: Inventory 333.069 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 2.7 percent to NAV usa funds and Negative 2.8% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 61.1%
Percentage of fund in silver:37.6%
cash .+1.3%( June 22/2016). /
2. Sprott silver fund (PSLV): Premium RISES  to -0.03%!!!! NAV (June 22/2016) 
3. Sprott gold fund (PHYS): premium to NAV  FALLS TO +0.36% to NAV  ( June 22/2016)
Note: Sprott silver trust back  into NEGATIVE territory at -03% /Sprott physical gold trust is back into positive territory at +0.36%/Central fund of Canada’s is still in jail.


And now your overnight trading in gold,WEDNESDAY MORNING and also physical stories that may interest you:

Trading in gold and silver overnight in Asia and Europe
Mark O’Byrne (Goldcore)

Gold Lower Despite “Panic” Due To “Supply Issues” In Inter Bank Gold Market

Gold fell again today to its lowest in a week despite continuing uncertainty about the outcome of the Brexit referendum. This is contributing to very significant high net worth and institutional demand in recent days, particularly in the UK, which is leading to “panic” and “supply issues” in the interbank gold market. Supply issues which respected gold analysts and ourselves have warned in recent years would inevitably take place.

Click chart for more

Increasing speculation that Britain may vote to stay in the European Union and hedge fund liquidations are being blamed for the recent price falls. However, bullion dealers such as GoldCore, mints and refineries that cater to the UK market have seen minimal selling this week and in fact there has been a surge in demand again this week.

We believe the price falls are due to hedge funds and banks liquidating positions and shorting the market. As ever, there is the risk that algo and high frequency trading (HFT) may be manipulating prices lower despite very robust physical demand and increasing liquidity issues in the interbank gold market.

Informed, senior sources at the highest level of the gold bullion industry have told us that there is “panic” in the inter bank or institutional gold market. According to the sources one of whom is from a leading Swiss gold refinery, we are in aunique trading climate” that they have never seen before. This is not just due to Brexit but to “a number of factors” and so is likely to continue even after the Brexit referendum.

The market is subject to absolutely “unprecedented conditions” and a degree of illiquidity and “supply issues” not seen even in the immediate aftermath of September 11th, Lehman Brothers and the height of the Eurozone crisis.

Refineries and mints are being advised that bullion banks may take the unprecedented step of “suspending the trading of physical gold.” Premiums have risen on larger orders creating the situation where spreads are higher on larger orders. An example of this is that a 1,000 ounce order worth $12.66 million at current prices is trading at a premium of $0.33 per ounce over a smaller order of 5,000 ounces.

There is also warnings that stop loss orders above 5,000 ounces may not be filled at agreed prices and could be filled at much lower prices. In addition, a number of large liquidity providers in the gold market, such as Intl FC Stone, have increased margins.

Thus counter intuitively, larger high net worth and institutional orders are costing more than somewhat smaller relative orders. This has the effect of discouraging larger buy orders for physical – whether by accident or by design. “Officialdom” does not want surging gold prices in advance of the referendum due to the risks that this poses to the financial and monetary system and therefore prices may be being “capped” prior to the vote tomorrow.

This bodes well for prices in the aftermath of the vote – whether the UK votes to remain or leave in the EU.

Bullion banks “have been panicking” and advising that soon, they may no longer be able to quote prices on large gold bar orders. This response is previously unheard of and indicates the increasing illiquidity in the large gold bar market due to a recent surge in HNW, UHNW and institutional (wealth managers, hedge funds, banks etc) demand across the world coupled with already robust central bank demand.

The increasingly illiquid physical gold market where supply cannot keep up with demand underlines the importance of owning physical bullion coins and bars – either in your possession or having direct legal title to your individual coins and bars. Bullion should be owned in your name or your company’s name and be stored directly in the safest vaults in the safest jurisdictions in the world – outside the financial, banking system.


Gold Prices (LBMA AM)

22 June: USD 1,265.00, EUR 1,122.31 and GBP 862.98 per ounce
21 June: USD 1,280.80, EUR 1,129.67 and GBP 866.72 per ounce
20 June: USD 1,283.25, EUR 1,132.08 and GBP 877.49 per ounce
17 June: USD 1,284.50, EUR 1,142.05 and GBP 899.41 per ounce
16 June: USD 1,307.00, EUR 1,161.14 and GBP 922.01 per ounce
15 June: USD 1,282.00, EUR 1,141.49 and GBP 903.04 per ounce

Silver Prices (LBMA)
22 June: USD 17.20, EUR 15.23 and GBP 11.72 per ounce
21 June: USD 17.36, EUR 15.34 and GBP 11.78 per ounce
20 June: USD 17.34, EUR 15.30 and GBP 11.85 per ounce
17 June: USD 17.37, EUR 15.43 and GBP 12.19 per ounce
16 June: USD 17.71, EUR 15.79 and GBP 12.54 per ounce
15 June: USD 17.41, EUR 15.51 and GBP 12.26 per ounce
14 June: USD 17.25, EUR 15.37 and GBP 12.17 per ounce

Gold News and Commentary
Gold Holds Two-Day Slump as Investors Count Down to Brexit Vote (Bloomberg)
Fed cautious on rates due to Brexit, hiring slowdown: Yellen (Reuters)
Gold Posts Biggest Loss in Four Weeks as Chances of Brexit Ebb (Bloomberg)
Switzerland gold exports jump 20% to 177.3 mt in May, highest this year (Platts)
Euroclear looks to apply blockchain to gold market (Coin Desk)

Prudent Brits Rush To Buy Gold Bars, Stuff Them In Home Safes (Zero Hedge)
Whatever Britons Decide, Bet on Gold Price Volatility to Profit (Bloomberg)
Why Gold, Why Now? (Holmes via Minyanville)
Economic Anxiety in Divided America (Max Keiser)
A look at the global economic malaise through Deutsche Bank (Marketwatch)
Read More Here

Recent Market Updates
– Gold Surges to $1,313/oz – Fed Concerned Re Outlook, BREXIT and May “Consider Using Helicopter Money”
– Gold Prices Higher For 5th Session On BREXIT and FED
– Gold In Euros Surges 6.5% In June and 17% YTD On BREXIT Concerns
– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

– Silver Price To Surge 800% on Global Industrial and Technological Demand

– BREXIT Gold Diversification As Vote Fuels Market Uncertainty
– Gold Forecasts Revised Higher – Citi Says “Buy the Dip”
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold


Mark O’Byrne
Executive Director



Panicked Brits are buying gold bars by the bucketful!

(courtesy zero hedge)

Panicked Brits Rush To Buy Gold Bars, Stuff Them In Home Safes

While we have to wait two more days to find if the scaremongering behind Brexit’s “Remain” campaign has succeeded in terrifying enough residents to vote against exiting the EU, one group has been delighted by a Breferendum that has been defined by fear, terror and even more fear: sellers of gold and personal safes.

According to the Telegraph, worried British savers (yes, they still exist in this time of QE and age of NIRP) are scrambling to buy gold bars and “stuffing them in safes at home, data suggests, as fears mount that a Brexit-induced financial meltdown could be just around the corner.”

The paper cites Google search data for the term “home safe” which is running 61% higher than the level at which it peaked in November 2008, the point of the financial crisis, and is now higher than at any point since. In other words, whether intended or not, locals are more terrified of the outcome of Thursday’s vote than the near-collapse of the financial system in the aftermath of Lehmans’ failure.

Google searches for “home safes” are at their highest point since the financial crash

Royal Mint, Britain’s official producer of gold and silver coins and bars, said sales have soared by 32% over the past month, with customers rushing to buy sovereign and Britannia bullion coins and signature gold bars in particular. While our readers hardly need an explanation, the Telegraph notes that “in the event of a major meltdown it is common for savers and professional investors buy physical gold and silver to protect their assets, as historically the value of precious metals rises, as the value of stocks and shares falls.”

But it gets better: ever the opportunists, the newspaper cites “experts” who warned that buying gold bars to store them at home is “nonsense” and instead investors who wish to preserve their nest-eggs “would be better off investing in gold investment funds, which offer better value for money.

Ben Yearsley, investment director at Wealth Club, a financial advice firm, said: “Gold bars are very poor value for money and you run the risk of losing them or having them stolen at home. If you’re going to buy precious metal you might as well buy a gold or silver investment fund, where you will get much better value for money due to economies of scale.”

You read that right: the end of British civilization as we know it may be at hand, at least according to David Cameron, and financial advisors are, well, advising to buy not physical gold – which may be “lost” or “stolen” but rather gold buy gold ETFs: supposedly there “you will get much better value due to economies of scale.”

It was not clear what the hell that statement means, but it sure is hilarious. Yes: please invest in paper gold which will be promptly corzined in a worst case scenario, when ETFs suddenly realize there is no actual deliverable, and stay away from evil physical.

Because it could get lost.

Idiots aside, Laith Khalaf, a senior analyst at Hargreaves Lansdown, Britain’s biggest stockbroker said that “gold has been a popular choice recently as markets have been worrying about the prospects of global economy, and gold works as a store of value, and a hedge against catastrophe.” Or just the outcome David Cameron is certain will be unleashed if more people vote to leave the EU on Thursday.

So buy gold if you listen to David Cameron, just please don’t buy physical: it’s not like London vaults have any of it left: “the Royal Mint also recently announced a new service which
allows the purchase of gold bars in personal pensions, which probably
generated some interest in the yellow metal, though a cheaper way to
access the market is through a gold exchange traded fund.”




Very strange! The Fed’s Powell warns that the USA dollar libor may disappear at a benchmark due to rigging!!

(courtesy GATA/London’s Financial Times)

Fed’s Powell warns that dollar-based Libor could disappear


By Jason Lange and Jonathan Spicer
Financial Times, London
Tuesday, June 21, 2016

Financial markets need to consider the risks of relying heavily on the dollar-based London Interbank Offer Rate because this reference rate could stop being published, Federal Reserve Governor Jerome Powell said on Tuesday as a Fed-convened committee continued to zero in on an alternative to the so-called Libor.

“Market participants are not used to thinking about this possibility, but benchmarks sometimes come to a halt,” Powell said in prepared remarks in New York for a roundtable discussion on a report on alternative reference rates.

Libor is one of the world’s most important benchmarks and about $300 trillion in contracts reference it. But Libor has come under scrutiny since traders at several large banks were accused of rigging its daily rates. …

… For the remainder of the report:





The Belgium based Euroclear is now looking to apply the blockchain to the gold market. Remember the blockchain is used quite nicely with its original inventor for bitcoin.

(courtesy London’s Financial times/GATA)

Euroclear looks to apply blockchain to gold market


By Philip Stafford
Financial Times, London
Tuesday, June 21, 2016

Euroclear, one of the world’s largest settlement houses, is to make its first foray into emerging blockchain technology by exploring creating a new settlement system for the London gold market.

The Belgium-based settlement house, which houses more than E27 trillion of bonds, equities, funds, and derivatives for customers, has partnered US start-up itBit to explore ways to modernise trading in the precious metal.

The group will look at ways to harness itBit’s blockchain-based clearing and settlement network Bankchain for gold. …

… For the remainder of the report:



An extremely important commentary from Lawrie Williams. The most important fact is the continual importing of gold into the UK.  The UK is the dominant physical market in the world and they are now out of gold/  The principal supplier of gold to Switzerland was the UAE


(courtesy Lawrie Williams/Sharp Pixley)



More anomalous gold data in latest Swiss import/export figures


June 22, 2016 lawrieongold

The latest gold import and export data from Switzerland, one of the few countries to report these flows in detail, as usual open up some interesting insights into global supply and demand. Overall Swiss gold exports rose by around 20% month on month to 177.3 tonnes making the country a net exporter in May. Generally Swiss gold imports and exports are pretty much in balance given that it mostly imports gold for re-refining and re-export.

While gold exports from Switzerland to China and Hong Kong both picked up in May, its principal country of imports was again the United Arab Emirates normally a recipient of Swiss gold, not a provider. Indeed in another reversal of normal gold flows, the U.K. was again the biggest importer of Swiss gold in May, necessary, we feel, to meet the big demand in London from the principal gold ETFs which vault their gold there. Exports to the U.S. were also unusually high. Again any gold flows to and from the U.S are normally in the eastward direction. We have surmised before that available supplies of physical gold in London are currently tight and this only serves to add weight to that premise and could also suggest that a similar position is arriving in the U.S. too given recent strong investor demand for bullion.

Re China and Hong Kong, exports to the Chinese mainland were 19 tonnes, up from 13.8 tonnes in April, while exports to Hong Kong were up by a very large 14.5 tonnes to 24 tonnes making the percentage of gold shipped to the Chinese mainland against that shipped directly to Hong Kong (which will also subsequently nearly all find its way to mainland China) at around 44%. This again confirms our oft-repeated mantra that Hong Kong gold imports and exports can no longer be taken as a proxy for the Chinese figures with so much gold now going to the Chinese mainland directly. This is a major change from three years ago when the Hong Kong:China ratio was far higher, but still some media outlets ignore this fact.

Prior to the current year, The U.K. was always a significant supplier of gold to the Swiss refineries which have specialised in melting down and re-refining 400 kg good delivery gold bars into the smaller sizes most in demand in the Asian markets. Thus, as we pointed out a month ago when the previous set of Swiss stats were released – See: Swiss gold data raises new doubts on London’s gold stocks these reversals of gold flows, if they continue, could be an indicator of some serious tightness in supply of physical gold to the markets from traditional sources as noted above.

While exports to China and Hong Kong were substantially higher in May, they remained very weak to that other traditional gold market, India, where gold seems to have fallen out of favour in recent months. In May the figure was only 18.5 tonnes, down 16% from an already low April figure. Taken together with reports of substantial discounts in the local gold price, it appears that Indian buyers are nervous of the substantial gold price rise so far this year and may be holding off purchases in expectation of a price fall.

The other big anomaly in the figures was that the two biggest exporters of gold to Switzerland in May were the United Arab Emirates again with 42.1 tonnes and Hong Kong with 11.6 tonnes although the latter was a net importer in May – not the case in April. Neither of these countries/regions are normally exporters of gold to Switzerland in any significant quantities, but are major trading centres, suggesting that the lower demand from what are probably their biggest normal export markets, India and China respectively has led to inventories running higher than traders are happy with, and with the higher prices prevailing there has been perhaps an incentive to return gold to the Swiss refiners and take profits.

We will thus be following this Swiss import/export data to see if these supply/demand anomalies continue in future months.

https://lawrieongold.com/2016/06/22/more-anomalous- gold-data-in-latest-swiss-importexport-figures/

Your early WEDNESDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight




2 Nikkei closed DOWN 103.39 OR 0.64% /USA: YEN FALLS TO 104.62

3. Europe stocks opened ALL IN THE GREEN  /USA dollar index DOWN to 93.77/Euro UP to 1.1295

3b Japan 10 year bond yield: RISES  TO -.135%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.62

3c Nikkei now WELL BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  50.25  and Brent: 50.81

3f Gold DOWN  /Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to +059%   German bunds BASICALLY negative yields from  9 years out

 Greece  sees its 2 year rate FALL to 8.08%/: 

3j Greek 10 year bond yield FALL to  : 7.940%   (YIELD CURVE NOW COMPLETELY FLAT)

3k Gold at $1266.30/silver $17.22(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 9 in  roubles/dollar) 64.00-

3m oil into the 50 dollar handle for WTI and 50 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9582 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0825 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 9 Year German bund now NEGATIVE territory with the 10 year FALLS to  + .059%

/German 9 year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.697% early this morning. Thirty year rate  at 2.506% /POLICY ERROR)

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Eerie Calm Across Markets One Day Before The Main Event: Asia, Europe, US Unchanged

There is an eerie quiet across markets, one day before the year’s main risk event: with the UK referendum vote starting in less than 24 hours and results due out shortly after, it is as if even the algos have stopped frontrunning other algos, in a market so thin and illiquid even the smallest order can result in a gap, either higher or lower. As a result, European, Asian stocks and S&P futures are little changed ahead of Thursday, with the Stoxx Europe 600 Index swinging between gains and losses more than five times so far today.

As Chihiro Ohta, a senior strategist at SMBC Nikko Securities Inc. in Tokyo summarized: “what investors hate the most is uncertainty. Most are just waiting on the sidelines to see what happens.” Apparently Chihiro – as well as Janet Yellen – forgot that there is no such thing as certainty in the market, or least there wasn’t before central bankers took over.

So for now, as “sidelined” investors wait, the MSCI All-Country World Index was little changed following three days of gains as bookmakers’ odds implied there’s only about a one-in-four chance that Britons will opt to leave the EU in Thursday’s referendum, even as the FT poll of polls gives Leave a small advantage. Sterling rose against most of its 16 peers and shares in emerging markets advanced for a fourth day. Crude oil was set to close above $50 a barrel for the first time in almost two weeks following yesterday’s sharp drop in inventories according to API.

As we approach Friday, the first day when Brexit will be in the rearview mirror, the question is how much of a “Remain” vote has been priced in: global stocks have climbed in the past three days as odds of a so-called Brexit fell at betting shops after the murder of a U.K. lawmaker who favored staying in the EU on Thursday. The implied chance of a leave vote dropped to about 25 percent from 43 percent a week ago.

Here is how Deutsche Bank evaluates the market-implied odds:

The shift in opinion poll momentum towards ‘remain’ over the weekend has perhaps reversed a touch over the last 48 hours and the FT poll of polls is still forecasting a close run outcome. The betting market though suggests a much greater bias towards ‘remain’ and is currently predicting a 79.4% chance of success based on the Bloomberg indicator of political odds at bookmakers. That’s at the upper end of what’s been a wide range over the last month or so. Indeed the implied probability peaked at around 85% back at the end of May – where it held for some 10 days or so – before then toughing to a low of 61% intraday on the 16th June. So the probability is now 6% off the highs and 18% up from the lows.Whether this high number has an inbuilt expectation of a late shift towards the status quo (as with Quebec and Scotland referendums) we don’t know.

Some think they do know, and believe there is still some upside should Leave lose tomorrow: “‘Remain’ is not completely priced in as the costs of a ‘Leave’ could be quite large,” said Daniel Murray, head of research at EFG Asset Management in London. “It’s clear that betting odds are skewed towards remain at the moment, which is the main data the market will be moving on until there is a clear outcome.”

In this muted, illiquid environment, there was still some upside, with the MSCI AC World Index adding less than 0.1% as of 10:55 a.m. in London. The Stoxx Europe 600 Index swung between gains and losses more than five times after capping their biggest three-day advance in almost 10 months yesterday. The FTSE 100 Index of U.K. stocks rose for a fourth day in the longest run of gains in two weeks. S&P500 futures rose 0.1 % after the U.S. index closed higher in a zigzag session Tuesday. Adobe Systems Inc. fell 5.2 percent in pre-market New York trading after forecasting revenue in the current quarter that may miss analysts’ estimates amid slowing momentum for its cloud-based products. The MSCI Emerging Market Index rose 0.4 percent, following a 3.2 percent jump over the last three days. Chinese stocks led the advance on Wednesday, with the Shanghai Composite Index climbing 0.9 percent to a two-week high.

The yield on U.S. Treasuries due in a decade retreated from a two-week high, falling two basis points to 1.69 percent. The Fed’s Yellen reiterated on Tuesday that a vote to leave the EU could have “significant economic repercussions,” even as she warned against exaggerating its global impact. She had said on June 15 that Brexit risks played a part in the Federal Open Market Committee’s decision to hold off from raising interest rates. Yellen is scheduled to give a second day of testimony before lawmakers Wednesday.

This is where global markets stood as of this moment:

  • S&P 500 futures down less than 0.1% to 2080
  • Stoxx 600 up less than 0.1% to 340
  • FTSE 100 up 0.2% to 6237
  • DAX up 0.4% to 10059
  • German 10Yr yield down less than 1bp to 0.04%
  • Italian 10Yr yield down 2bps to 1.43%
  • Spanish 10Yr yield down 2bps to 1.49%
  • S&P GSCI Index up 0.5% to 382.2
  • MSCI Asia Pacific down less than 0.1% to 130
  • Nikkei 225 down 0.6% to 16066
  • Hang Seng up 0.6% to 20795
  • Shanghai Composite up 0.9% to 2906
  • S&P/ASX 200 down less than 0.1% to 5271
  • US 10-yr yield down 2bps to 1.69%
  • Dollar Index down 0.1% to 93.93
  • WTI Crude futures up 1% to $50.33
  • Brent Futures up 0.7% to $50.99
  • Gold spot down less than 0.1% to $1,267
  • Silver spot down 0.4% to $17.22

Top Global News:

  • Stocks Trade Near Week High Before Brexit Vote; Commodities Gain: Pound approaches 5-month high, oil rises with copper
  • Yellen Leads Fed in Retreat as Reasons for Rate Hikes Fade: Economists see Fed chair in group calling for one 2016 hike
  • Tesla Takeover of SolarCity Not a ‘No-Brainer’ for Investors: Oppenheimer analyst Colin Rusch downgrades Tesla to perform
  • Gun-Curb Compromise Gaining Bipartisan Support in Senate: Republican Collins would ban gun sales to those on no-fly list
  • FedEx Sees Profit in Line With Estimates on Moderate Economy: Co.’s outlook excludes just-acquired TNT Express
  • Trump Beats Clinton for Investor Confidence in National Poll: Cash, gold top choices for those who plan to alter investments
  • McDonald’s Gets Half Dozen Bids for China, H.K. Sale: Reuters: Co. gets bids from Beijing Tourism Group, Sanpower, ChemChina
  • Fortune Brands to Replace Cablevision in S&P 500: Churchill Downs to join S&P MidCap 400 after close of trading Thursday
  • Oil Explorers Embrace the Sharing Economy to Drill Cheaper Wells: North Sea drillers share warehouse of spare parts, tools
  • Oil Trades Above $50 as U.S. Crude Stockpile Glut Seen Easing: Nationwide inventories decrease by 5.2m barrels: API

Looking at regional markets, Asia equities saw mixed trade with markets tentative as we approach closer towards the UK Referendum with the effects of the Remain momentum slightly waning. Nikkei 225 (-0.6%) underperformed with strength in JPY pressuring stocks and souring sentiment for exporters, while ASX 200 (+0.1%) was supported by Financials and Energy sectors after WTI briefly broke above USD 50/bbl following an API inventory drawdown. Elsewhere, Chinese markets traded higher with the Shanghai Comp (+0.9%) recovering from early pressure after another consecutive firm injection by the PBoC. 10yr JGBs saw flat trade with the risk-averse sentiment in Japan and the BoJ buying operations failing to underpin demand.

Top Asian News

  • China Money Rate Increases Most Since March as Banks Hoard Cash: 14-day repurchase rate climbs 14bps to 2.93%
  • Japan Unilateral Intervention Said Unlikely if Brexit Approved: G-7 statement, currency swaps use seen as options on Friday
  • Powerful Storm Set to Hit Asian Bank Profits, McKinsey Says: Slower growth, weaker balance sheets may cripple ROEs
  • Hong Kong’s Richest Man Calls for Higher Tax Amid Wealth Gap: Li Ka-shing says govt should give city’s youth more options
  • SoftBank’s Arora Steps Down as Son Chooses to Stay in Charge: Co.’s president departs after Supercell purchase closed
  • Mitsubishi Motors Sees First Loss in 8 Years Amid Scandal: Co. sees 205b yen impact from fuel testing fraud

In Europe, equities remain cautious ahead of the key risk event in the EU referendum, as such the Euro Stoxx (-0.06%) has been relatively flat for much of the morning albeit slightly softer. While notable underperformance has been seen in the FTSE MIB with Italian banks leading the way lower. Additionally, price action in credit markets has also been muted with yields near flat across the German curve, while there has been outperformance in peripheral yields.

Top European News

  • H&M Earnings Decline on Weakest Sales Growth in 3 Years: Retailer says dollar’s strength will continue to inflate costs
  • Merkel-Hollande Brexit Plan Said to Amount to Statement of Unity: EU risks months of volatility as key leaders preoccupied
  • Ryanair CEO Says Brexit Vote Could Cause Whole of EU to Unravel: Says ‘Leave’ victory to mark end of European project
  • Volkswagen Seeks to Quell Investor Uprising on Emissions Damages: Co. holds first shareholder meeting since scandal broke
  • Ex-Deutsche Bank Executive in Asia Sues Lender for $17m: Douglas Morton files claims to Hong Kong labor tribunal
  • Debenhams Falls as 3Q Trading Slows, Cut to Hold at Peel Hunt: 3Q update shows constant currency LFL sales down 1.6%

In FX, sterling appreciated 0.05 percent to $1.4659, after reaching a five-month high of $1.4783 on Tuesday. It’s jumped 3.2 percent over the past five sessions. Since British lawmaker Jo Cox’s murder last week “a fair bit of repricing has occurred in the pound on the back of the shift in polls that were earlier clearly favoring Leave,” said Rodrigo Catril, a currency strategist at National Australia Bank Ltd. in Sydney. “The pound will definitely be volatile ahead of the vote.” The Bloomberg Dollar Spot Index fell 0.2 percent, after snapping a four-day losing streak on Tuesday. The yen climbed 0.3 percent to 104.40 versus the greenback, extending this month’s advance to about 6 percent. The Australian and New Zealand dollars appreciated 0.5 percent.

In commodities, crude oil rose 0.9 percent to $50.31 a barrel in New York as U.S. industry data showed crude stockpiles declined, trimming a glut. Inventories fell by 5.2 million barrels last week, the American Petroleum Institute was said to report. Government data Wednesday is forecast to show supplies slid by 1.5 million barrels, slipping for a fifth week while still more than 100 million barrels above the five-year average. “The oil price will probably continue to labor around this $45 to $50 a barrel area for some time,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “Demand is still under question. Inventories are declining, but they’re still large and will cap any significant rally.” Gold slipped 0.1 percent, after sliding 2.4 percent over the last two days.

On the again quiet US calendar, we have the FHFA house price index for April, as well existing home sales for May (which are expected to have risen +1.8% mom). Fed Chair Yellen is due to speak again, this time in front of the House Financial Services Committee at 3pm BST. Prior to this the Fed’s Fischer is due to speak in a panel at a Riksbank conference.

* * *

Bulletin Headline Summary from Bloomberg and RanSquawk

  • European equities remain cautious ahead of the key risk event in the EU referendum
  • Price action in FX markets is somewhat mutes with Cable hovering around the 1.47 level
  • Highlights Include Fed’s Yellen, DoE Crude Oil Inventories and US Existing home sales
  • Treasuries higher in overnight trading as global equities mixed, gold sells off ahead of tomorrow’s Brexit vote; week’s auctions conclude with $28b 7Y notes, WI yield 1.485%, compares with 1.652% awarded in May.
  • Fed Chair Janet Yellen sketched a cautious and uncertain view of the economy in testimony before lawmakers in Washington Tuesday; will appear before the House Financial Services Committee today at 10am ET
  • Britain entered the final day of campaigning before its referendum on European Union membership with opinion polls and financial markets at odds about the outcome
  • Markets in London are bracing for what could be a wild ride in everything from foreign-exchange to stock trading as the U.K. votes on European Union membership
  • The pound climbed toward a five-month high versus the dollar as traders took cues from betting odds that point to the U.K. voting to stay in the European Union, rather than opinion polls showing the referendum is too close to call
  • Japan’s Ministry of Finance views unilateral intervention as an unlikely tool in the event of a surge in the yen on Friday should the U.K. vote to leave the European Union

DB’s Jim Reid concludes the overnight wrap

In markets the last 24 hours has seen activity slow down and calm restored. The polls remain close though with the only one from yesterday being the Survation phone poll in the UK morning session which showed a 45/44% narrow lead for ‘remain’. The shift in opinion poll momentum towards ‘remain’ over the weekend has perhaps reversed a touch over the last 48 hours and the FT poll of polls is still forecasting a close run outcome. The betting market though suggests a much greater bias towards ‘remain’ and is currently predicting a 79.4% chance of success based on the Bloomberg indicator of political odds at bookmakers. That’s at the upper end of what’s been a wide range over the last month or so. Indeed the implied probability peaked at around 85% back at the end of May – where it held for some 10 days or so – before then toughing to a low of 61% intraday on the 16th June. So the probability is now 6% off the highs and 18% up from the lows. Whether this high number has an inbuilt expectation of a late shift towards the status quo (as with Quebec and Scotland referendums) we don’t know.

As mentioned at the top last there was a big live BBC televised debate on Brexit at Wembley Arena last night involving 6000 in the audience. It wasn’t quite as epic as Game of Thrones but it was the biggest event of the campaign. The betting odds were little changed over the course of the program. Meanwhile, in an interview with the Telegraph newspaper, PM David Cameron ‘guaranteed’ that he would use a vote to remain to push for further reforms on rules concerning freedom of movement. The last 24 hours has also seen the Daily Mail confirm that they are backing the ‘leave’ campaign (and so putting it at odds with the Mail on Sunday) and influential football icon (to some) David Beckham confirm his backing for ‘remain’.

Sterling traded as high as 1.478 yesterday (roughly +0.6% on the day) which is actually the highest since January, before weakening from lunchtime onwards to eventually close at 1.466 (-0.31% on the day) following that close outcome from the Survation poll. It’s up about +0.25% this morning. It’s worth noting that since the intraday lows of last Thursday however, the Pound is up an impressive +4.6%. Meanwhile, European equities advanced again although gains were a lot more modest compared to Monday with markets seemingly in more of a consolidation mode. The Stoxx 600 closed +0.70% which puts the three day gain at an impressive +5.84% and the most in ten months. The FTSE 100 was up a lesser +0.36% as that early rally for Sterling created a bit of a headwind. European credit indices ran out of steam a bit meanwhile and finished a touch wider by the close of play.

Across the pond markets were in a similar consolidation mode. The S&P 500 ended up +0.27% with credit indices performing a little better (CDX IG -1.5bps). Fed Chair Yellen’s semi-annual testimony comments were a bit of a sideshow given the overriding focus on the referendum although in truth there was little new or interesting to come out of them. She reiterated further the need for ‘proceeding cautiously’ in raising the federal funds rate to ‘keep the monetary support to economic growth in place while we assess whether growth is returning at a moderate pace’ and whether ‘inflation will continue to make progress toward our two percent objective’. As expected she downplayed reading too much into one or two employment reports while also making mention of other timely indicators of the labour market as looking favourable. Yellen also confirmed ahead of Thursday’s vote in the UK that the Fed will closely monitor what the ‘economic consequences will be and are prepared to act in light of that assessment’.

As we refresh our screens overnight, most Asian bourses are following the lead from Europe and Wall Street yesterday and trading with modest gains. The Hang Seng (+0.35%), Shanghai Comp (+0.45%), Kospi (+0.47%) and ASX (+0.42%) in particular are all up a touch, although markets have moved in lower in Japan (Nikkei -0.44%) with that perhaps reflecting a slightly stronger session for the Yen (+0.30%) this morning. Gold is flat following two days of consecutive heavy falls, while Oil markets are up about half a percent.

Moving on and taking some brief respite from all things Brexit. Yesterday in Germany the Constitutional Court delivered a positive verdict on the constitutionality of the ECB’s OMT by ruling that the complaints have been partly inadmissible and could therefore not be challenged before the GCC. Our European economists noted that the GCC reiterated the conditions mentioned by the ECJ and stated that the German Bundesbank may only participate in the implementation of OMT if these prerequisites are met (for example, limits set at the outset, bonds to be held to maturity only in exceptional cases, etc). Our economists disagree with the view that the German court capitulated. Instead, they saw the conclusion as more constructive given that the two most important constitutional courts in the EU exchanged arguments from a national and European point of view and in the end came up with a consistent opinion on the mandate and actions of a major EU institution.

While we’re on the subject of the ECB, yesterday President Draghi confirmed that the Bank is ‘ready for all contingencies following the UK’s EU referendum’. Draghi added that while it was ‘very difficult’ to predict how the vote could impact markets, he confirmed that ‘we’ve done all the preparations that are necessary now’ and that the Bank stands ready to act if needed.

Changing tack, yesterday we published another Credit Bites (Rating trends still firm but deteriorating) where we tried (for a short while at least) to think of something non-Brexit related to write about. In it we showed how credit fundamentals – as reflected by rating trends – remain in reasonable shape. That said in Europe they have certainly been moving in the wrong direction in recent months. In the US we have seen a more notable downward trend in ratings although this has largely been driven by the energy and natural resources sectors. See the report from yesterday afternoon or emailNick.Burns@db.com if you haven’t got a copy.

Wrapping up the data flow yesterday which was focused solely in Europe, the German ZEW survey for June was the biggest highlight. The data exceeded expectations with the headline current situations print rising 1.4pts to 54.5 (vs. 53.0 expected). Even more impressive was the 12.8pt rise in the expectations component to 19.2 (vs. 4.8 expected) which is the highest level since August last year. Given Thursday’s impending event, the data looks surprisingly upbeat.



i)Late  TUESDAY night/ WEDNESDAY morning: Shanghai closed UP 26.98 POINTS OR 0.94% / /Hang Sang closed UP 126.88 OR 0.61%. The Nikkei closed DOWN 103.39 POINTS OR 0.64% Australia’s all ordinaires  CLOSED DOWN 0.07% Chinese yuan (ONSHORE) closed UP at 6.57782 /Oil ROSE to 50.25 dollars per barrel for WTI and 50.81 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5883 yuan to the dollar vs 6.5778 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS 





Looks like the banking environment is peachy good:  another 900 workers are being cut by the Royal Bank of Scotland.In the last 4 months they have let go 2700 staff.  They have now reported its 8 consecutive annual loss and from this point on it will get progressively worse;

(courtesy zero hedge)

More Banker Layoffs: RBS To Cut Another 900 Jobs

Bank layoffs are now coming at a rapid pace in what is a clear sign of desperation by the firms to cut costs enough to keep shareholders happy as NIRP continues to hammer bank profits.

On the heels of Bank of America announcing that 8,000 employees would be fired last week, we now learn that RBS will be cutting 900 jobs as well, in areas such as IT and other back office positions that support the commercial, retail and private bank will be cut in Britain. The latest round of cuts takes the total number of layoffs in the last four months to roughly 5% of the bank’s british workforce, as at least 2,700 staff across the country have been let go since the beginning of March according toReuters.

As we noted earlier this year, RBS reported its eighth consecutive annual loss in 2015, and the bank which is 73% state owned after a $64 billion bailout, is trying desperately to restructure itself in order to return to profitability.

Sources tell Reuters that more layoffs are expected to be announced in the coming months as well.

“We understand how difficult this is for our staff and will be offering as much support as we can including redeploying to other roles where possible” the bank said in a statement.

* * *

In summary, even after the massive amount of bank layoffs that have taken place we can expect even more in the future as growth strategies have clearly turned to cost cutting strategies in order to conserve any type of profit in this healthy global economy.

ECB Balance Sheet Hits Record High (With Stocks At 18-Month Lows)


This may influence the BREXIT vote:  Cameron fibbed when he stated that Turkey’s EU membership will not occur until the year 3000.  Now, to the surprise of all, the EU will start EU membership this Friday, one day after the referendum

(courtesy zero hedge)

In Surprise Twist, EU Will Resume Turkey EU Membership Talks Just Days After Brexit Referendum

It appears that David Cameron may have fibbed a bit when he said that one of the most contentious issues behind the Brexit campaign, namely the treatment of Turkish EU membership, won’t be a topic for “decades” and that Turkey won’t join the EU until the year 3000. As AFP reports, “The EU will open new membership talks with Turkey as planned in a few days, EU diplomatic sources said Wednesday, just as Ankara’s accession becomes a hot-button issue in Britain’s vote on its future in the bloc.” Citing a source, who asked not to be named, AFP said that EU member states will meet June 30 to agree to open a new negotiating chapter with Turkey.

This means that just days after the Leave campaign may end up winning the Brexit referendum based on the PM’s promise that a Turkish admission into the EU is off the table, the topic of Turkish ascension will once again be front and center, and as we explain below, Turkey will likely end up getting what it wants.

As UK’s Express writes, “the latest announcement will fuel fears EU officials are trying to keep any visa deal with Turkey secret until after the historic referendum.  Turkey’s membership of the bloc has been a hot topic of the Brexit debate as critics press Mr Cameron on whether he would use Britain’s right to veto their entry or not. Brexit supporters have said the UK faces the arrival of millions of Turks if it chose to stay in the EU.”

However, the Prime Minister said there is no prospect of Turkey becoming a member anytime soon.  His comments came after audience member Michael Tindale asked Mr Cameron if he would “veto the accession of Turkey into the EU”.

The Prime Minister, who has been a long-time supporter of Turkey joining the union, brushed off concerns, replying: “I don’t think it’s going to happen for decades, so as far as I’m concerned the question doesn’t arise.”

Turkey has been negotiating for membership for more than a decade.  The EU promised to allow Turks visa-free travel for stays lasting up to three months to the bloc’s Schengen area, of which the UK is not a member.  It comes as Turkey’s foreign minister waded into the debate head first saying Britain must stay in the bloc “under any circumstances”.

Meanwhile, Mevlut Cavusoglu said Turkey “desires Britain to stay in the EU under any circumstances. He added: “Britain’s exit would certainly have a negative impact.” Cameron has previously been a strong supporter of Ankara’s struggles to join the EU. Just two years ago, Mr Cameron himself, said: “In terms of Turkish membership of the EU, I very much support that.”

And in 2010 the Prime Minister urged France and Germany not to shut them “out of the club” in 2010. Turkey applied for membership in 1987 and began accession talks with Brussels in 2005.

For Turkey to qualify it will have to fulfil the criteria set out in the accession treaty between Turkey and the European Commission.  The accession treaty sets conditions Turkey must meet before member states vote to decided on its entry. All 28 member states must agree unanimously.

And since Turkey continues to hold the trump card over Merkel, namely the threat of once again releasing millions of refugees into central Europe where they will promptly gravitate toward Germany, jeopardising Merkel’s polls, Turkey will almost surely end up getting what it wants. Sadly for UK voters, however, the referendum will be long gone.



Albert Edwards correctly deems the biggest risk to the global economy is the stealth devaluation of the Chines yuan.   The USA/yuan cross has been stable although the Chinese basket of currencies against the yuan has fallen 10% . This will cause further Chinese devaluation.  Unless countries try to lock step devaluation in its own currency, a failure to do so will cause massive deflation in their countries:

(courtesy zero hedge/Albert Edwards)

Forget Brexit: According To Albert Edwards, There Is A Far Bigger Risk To The Global Economy

While SocGen’s Albert Edwards has opined previously on the topic of Brexit (with an apparent interest in a “leave” outcome), overnight he once again revisits the only thing that matters to markets over the next 24 hours, and looks at the possible outcome of a second “Black Wednesday”, an event that could send the sterling plunging, from the prism of George Soros’ recent op-ed predicting doom and gloom should the British currency rapidly devalue, and concluding that he disagrees:

“thinking about this from the point of view of my Ice Age thesis, where interest rates cannot be normalised because of economic weakness and deflation pressures persisting throughout this recovery, I would have thought a 20% sterling devaluation is exactly the antidote needed in the current circumstances.

We will have more to say on Edwards’ comparison of Brexit to Black Wednesday and how the potential outcome, like back in 1992, may actually end up being a blessing in disguise for the UK economy, should Leave end up winning. Ultimate outcome for the UK aside, however – and Edwards believes that the pound will “fall with or without Brexit” – In this we will focus on what according to the SocGen strategist is a far bigger risk to the global economy – the same risk that defined risk for the entire second half of 2016: China’s devaluation, which has returned, only this time it is far more strealthy which may explain why the market has largely ignored it for now.

Here is Albert:

The UK referendum is neck and neck. Commentators think it so close that the deciding factor could be whether it rains on Thursday – with rain seen reducing the Remain vote. How mad is that? One year ago we wrote that the UK economy was a ticking time bomb. The ticking has got even louder. The UK economy is a mess and that has nothing to do with Brexit – it has everything to do with economic mismanagement. We studiously take no view on the outcome of the vote; we simply discuss the possible implications of a sharp decline in sterling in the event of Brexit. But there is an argument that global investors have overly focused on Brexit at the expense of other more important macro events. We believe China’s ongoing stealth devaluation of the renminbi is far more important for the global economy.

* * *

The UK economy is a mess ? see ?The UK is a ticking time bomb?. I think sterling will end up falling substantially whether the UK stays or leaves the EU – it is just a matter of timing.

That’s the “good news” (and we will have more shortly). Here is the bad news:

Meanwhile, our attention has been diverted. China has embarked on a stealth devaluation of the renminbi. Its new trade-weighted currency basket has fallen 10% since just before its initial August 2015 devaluation (white line in chart below) and it has continued to decline since January even as the Rmb/dollar has stabilised. The Wall Street Journal has reported that this is a deliberate shift in policy ?- link. China is now exporting its deflation, and my goodness it has a lot of deflation to export. In the Ice Age world, countries need to devalue to avoid deflation. So if sterling slumps in the aftermath of a Brexit vote there may be at least one silver lining outside the EU if the UK economy manages to avoid the quagmire of outright deflation.

And what better cover for China to continue implementing what in 2015 was seen as the “biggest risk” than the one event that has been dubbed as the “biggest risk of 2016.”

West Texas intermediate falls below 50 dollars after the DOE disappoints.  Production drops.
(courtesy zero hedge)

WTI Slides Below $50 After DOE Data Disappointment Despite Production Drop

Following last night’s major inventory draws across the board (via API), which sent WTI surging back above $50, this morning’s DOE data was markedly different. Both Gasoline and Distillates saw inventory builds and Crude saw notably smaller inventory draws (DOE -917k vs API -5.22mm). US crude production fell 0.44% (having fallen for 21 of the last 22 weeks) to the lowest since Sept 2014. Notably, Genscape additionally reported EU crude storage saw a notable build to the highest inventory in 3 years (suggesting US shifting stock to Europe). WTI crude has slide back below $50 erasing API’s spike.


  • Crude -5.22m (-1.7m exp.)
  • Cushing -1.311m (-50k exp.)
  • Gasoline -1.47m (-300k exp.)
  • Distillates -1.699m (+300k exp.)


  • Crude -917k (-1.5m exp.)
  • Cushing -1.28m
  • Gasoline +627k
  • Distillates +151k

DOE data notably less exuberant than API…

Production fell for the 21st week of the last 22…

Crude slid back below $50, erasing API gains…


Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings/WEDNESDAY morning 7:00 am




USA/CAN 1.2775 DOWN .0031

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 46 basis points, trading now WELL above the important 1.08 level FALLING to 1.1295; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED UP 26.98 POINTS OR 0.94%   / Hang Sang CLOSED UP 126.88 POINTS  OR 0.61%   AUSTRALIA IS LOWER BY 0.07%/ EUROPEAN BOURSES ARE ALL IN THE GREEN  as they start their morning/

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this WEDNESDAY morning: closed DOWN 103.39 POINTS OR 0.64% 

Trading from Europe and Asia:

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 126.88 POINTS OR 0.61% . ,Shanghai CLOSED UP 26.98 POINTS OR 0.94% / Australia BOURSE IN THE RED: (RESOURCES UP)/Nikkei (Japan) CLOSED IN THE RED/India’s Sensex IN THE GREEN

Gold very early morning trading: $1165.10


Early WEDNESDAY morning USA 10 year bond yield: 1.697% !!! DOWN 1 in basis points from TUESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.506 DOWN 1 in basis points from TUESDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early WEDNESDAY morning: 93.77 DOWN 31 CENTS from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING


And now your closing WEDNESDAY NUMBERS


Portuguese 10 year bond yield:  3.14% DOWN 3 in basis points from TUESDAY

JAPANESE BOND YIELD: -0.140% PAR  in   basis points from TUESDAY

SPANISH 10 YR BOND YIELD:1.50%  DOWN 1 IN basis points from TUESDAY

ITALIAN 10 YR BOND YIELD: 1.44  DOWN 1 IN basis points from TUESDAY

the Italian 10 yr bond yield is trading 6 points lower than Spain.





Closing currency crosses for WEDNESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM


Euro/USA 1.1306 UP .0058 (Euro =UP 58 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 104.49 DOWN .218 (Yen UP 22 basis points )

Great Britain/USA 1.4696 UP.0035 ( Pound UP 35 basis points/(MORE BREXIT CONCERN)

USA/Canada 1.2826- UP 0.0021 (Canadian dollar DOWN 21 basis points  AS OIL FELL  (WTI AT $49.12).


This afternoon, the Euro was UP by 58 basis points to trade at 1.1306

The Yen ROSE to 104.49 for a GAIN of 22 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was UP 35 basis points, trading at 1.4696 

The Canadian dollar FELL by 21 basis points to 1.2826, WITH WTI OIL AT:  $49.10

The USA/Yuan closed at 6.5752/

the 10 yr Japanese bond yield closed at -.140% PAR  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 2 IN basis points from TUESDAY at 1.685% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.497 DOWN 2 in basis points on the day ( HUGE POLICY ERROR)


Your closing USA dollar index, 93.72 DOWN 35 CENTS  ON THE DAY/4 PM

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for WEDNESDAY

London:  CLOSED UP 34.64 OR 0.56%
German Dax :CLOSED UP 55.52 OR  0.55%
Paris Cac  CLOSED UP 12.79  OR 0.29%
Spain IBEX CLOSED UP 34.20 OR 0.40%
Italian MIB: CLOSED DOWN 107.90 OR 0.62%

The Dow was down 48.90  points or 0.27%

NASDAQ down 8.67 points or 0.20%
WTI Oil price; 49.12 at 4:30 pm;

Brent Oil: 49.87




This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:


BRENT: 49.90

USA 10 YR BOND YIELD: 1.685% 

USA DOLLAR INDEX: 93.56 DOWN 52 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.4760 UP .0109  or 109 basis pts.

German 10 yr bond yield at 5 pm: +.061%



And now your more important USA stories which will influence the price of gold/silver


Hedges Soar, Markets Snore As Traders Brace For Big Brexit Day

Some nostalgia… “some poeple are on the pitch, they think [Brexit]’s all over… it is now!!”

Although we suspect, by this time tomorrow, the sounds from trading floors around the world may be more like this…


Polls point to “Leave” and Bookies’ money-flows tipped towards “Leave” today…


Volume cratered…


Black swan bets soared…


And Short-term VIX soared to 26.5 today, highest since mid-Feb…


Stocks ended the day modestly lower…


Once again the machines tried to run the S&P to 2,100…but as soon as VIX dipped below 18, that was over…and VIX ended above 21


Hedges are bid…




Treasury yields ended the day around 2bps lower, helped by a strong auction…


The USDollar Index slid today (4th time in last 6 days)…


As Cable ended the day higher but jerked lower on polls and weather (after an algo meltup at the US open)


Despite a slide in the USDollar, commodities largely trod water with only crude the big mover…


Lower than expected inventory draws and brexit derisking sent crude sharply lower…


Charts: Bloomberg

Bonus Clip: The Countdown has begun…


Existing home sales highest since Feb 2007

(courtesy zero hedge)

Existing Home Sales Highest Since Feb 2007 As Prices Hit Record High


Well that is all for today

I will see you tomorrow night


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