NOV 3/Fox news last night: the FBI are moving toward an indictment on the Clinton Foundation stuff plus others/Turf war between the FBI and the Dept of Justice escalates/Egypt devalues its pound and they are close to heading into hyperinflation/CME raises margins which temporarily puts a damper on the gold/silver price today/Russia again purchases over 16 tonnes of gold last month/GLD RISES BY 4.43 TONNES/SLV FALLS BY 2.807 MILLION OZ/CENTRAL FUND OF CANADA FINALLY SEES ITS NAV COME CLOSER TO ZERO!/

Gold closed at $1302.10 down $4.70

silver closed at $18.38 or down 28 cents.

Access market prices:

Gold: 1302.50

Silver: 18.36

THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON

.

The Shanghai fix is at 10:15 pm est and 2:15 am est

The fix for London is at 5:30  am est (first fix) and 10 am est (second fix)

Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.

And now the fix recordings:

Shanghai morning fix Nov 3 (10:15 pm est last night): $  1303.24

NY ACCESS PRICE: $1299.20 (AT THE EXACT SAME TIME)

Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1306.66

NY ACCESS PRICE: 1301.25.70 (AT THE EXACT SAME TIME/2:15 am)

HUGE SPREAD TODAY!!  5 dollars

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Nov 3: 5:30 am est:  $1293.00   (NY: same time:  $1292.90:    5:30AM)

London Second fix Nov 3: 10 am est:  $1301.00 (NY same time: $12.95 ,    10 AM) ??

It seems that Shanghai pricing is higher than the other  two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.

Also why would mining companies hand in their gold to the comex and receive constantly lower prices.  They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

end

No wonder gold and silver were hit:  The  CME raises maintenance margins

the bankers must be in deep trouble

(courtesy CME)

.BRIEF-CME raises Gold, Silver maintenance margins

* CME raises COMEX 100 Gold futures (GC) maintenance margins by 11.1 percent to $6,000 per contract from $5,400 for Nov. and Dec. 2016

* CME raises COMEX 5000 Silver futures (SI) maintenance margins by 10.5 percent to $5,800 per contract from $5,250 for Nov. and Dec. 2016

* CME says the rates will be effective after the close of business on Nov. 3

-END-

For comex gold: 

 NOTICES FILINGS FOR NOVEMBER CONTRACT MONTH:  26 NOTICES FOR 2600 OZ  TONES

For silver:

 NOTICES FOR NOVEMBER CONTRACT MONTH FOR SILVER: 0 NOTICES OR nil OZ

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Tomorrow is the jobs report and you all know what that means.  The bankers generally try to raid as soon as the report is released.  Pay no attention to these crooks.

Let us have a look at the data for today

.

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In silver, the total open interest FELL by 1599 contracts DOWN to 195,313. The open interest ROSE AS the silver price was UP 47 cents in yesterday’s trading .In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .965 BILLION TO BE EXACT or 138% of annual global silver production (ex Russia &ex China).

In November, in silver, 0 notice(s) filings: FOR nil OZ

I

In gold, the total comex gold ROSE by 12,602 contracts WITH THE RISE in price of gold ($20.40 YESTERDAY) . The total gold OI stands at 534,108 contracts. The bankers supplied the necessary non backed paper trying to quell gold’s advance.

In gold for November: we had 26 notices filed for 2600 oz

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

GLD

TODAY WE HAD  A BIG CHANGE AT THE GLD OUT OF THE GLD/A DEPOSIT OF 4.43 TONNES OF GOLD INTO THE GLD

Total gold inventory rests tonight at: 949.69 tonnes of gold

SLV

we had ANOTHER BIG CHANGE at the SLV/

A WITHDRAWAL  OF 2.807 MILLION OZ

THE SLV Inventory rests at: 358.435 million oz

SOMEBODY MUST HAVE BEEN IN URGENT NEED OF SILVER SO THE SLV WAS ROBBED.

.

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

1. Today, we had the open interest in silver FELL by 1,599 contracts DOWN to 195,213 despite the fact that the price of silver rose by 47 cents with yesterday’s trading.The gold open interest ROSE by 12,602 contracts UP to 534,108 as the price of gold ROSE $20.40 in YESTERDAY’S TRADING.

(report Harvey).

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

 

3. ASIAN AFFAIRS

i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 26.20POINTS OR 0.84%/ /Hang Sang closed DOWN 126.99  OR 0.56%. The Nikkei closed FOR HOLIDAY/ Australia’s all ordinaires  CLOSED DOWN 0.04% /Chinese yuan (ONSHORE) closed DOWN at 6.7631/Oil FELL to 45.66 dollars per barrel for WTI and 47.30 for Brent. Stocks in Europe: ALL IN THE GREEN EXCEPT LONDON   Offshore yuan trades  6.7706 yuan to the dollar vs 6.7631  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS QUITE A  BIT AS MORE USA DOLLARS   LEAVE CHINA’S SHORES / CHINA SENDS A MESSAGE TO THE USA TO NOT RAISE RATES IN DECEMBER.

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

none today

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

We have been pointing out to you that massive amounts of USA dollars are leaving China despite capital controls.  One way to circumvent this is the use of Bitcoins.  Now China is imposing curbs on its use moving money from within China to outside

( zero hedge)

4 EUROPEAN AFFAIRS

UK

i)The Government of the UK loses and must hold a parliamentary vote/the pound rises

( zero hedge)

ii)Rates are kept unchanged and now the B. of E drops its guidance for further rate cuts as they say rates can go up or down from here:  the pound rises:

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Egypt just devalued their currency to 14 pounds per dollar.  The market was anticipating 11 to one.  Bonds soared and their stock market also went higher but if you adjust the currency it is in utter collapse.  This will be the next nation to hyperinflate as over 30 million citizens in Egypt are below the poverty line.

( zero hedge)

6.GLOBAL ISSUES

none today

7.OIL ISSUES

WTI plunges back into the 44 dollar handle. Spread btw Brent and WTI widens are that worries our bankers;

( zero hedge)

8.EMERGING MARKETS

none today

9.PHYSICAL STORIES

i)What gold will do if trump might actually win:

( John Rubino/DollarCollapse.com)

ii)

The real story behind the premiums in silver in Shanghai vs London

(courtesy Koos Jansen)

iii)How China wishes to overtake London with their daily fixes:

( China Daily)

iv)Russia added 16.55 tonnes to its arsenal last month.  So much for the story that they may unload some of their precious bullion

( Jonathan Garber/Business insider)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)Unbelievable: the FBI according to Fox is moving to a likely indictment of the Clinton Foundation as it’s “Play for Pay” formula is without a doubt criminal.  However we have a civil war with the two warring factions:  the Dept of Justice and the FBI

( Fox news/zero hedge)

 

ii)Last night:  Wikileaks exposes collusion between the Clinton campaign, the state dept. and the New York times:

iv)This is fascinating:  Emails reveal that the real contributor to HIV/Aids relief  is not the Clinton Foundation but the independent Clinton Health Initiative( zero hedge)

v)Secret recordings by the FBI on the Clinton Foundation revealed the crooked nature of this “charitable” organization.  Instead of proceeding, the FBI was ordered to “stand down” to which mutinous revelations starting to appear:

( zero hedge)

vi)After all of this news:  Clinton regains a 2 point lead in the election: go figure!

Let us head over to the comex:

The total gold comex open interest ROSE BY 12,602 CONTRACTS to an OI level of 534,108 as the price of gold ROSE $20.40 with YESTERDAY’S trading.The bankers were on full alert supplying the necessary non backed gold paper keeping the gold price contained.In the front month of November we had 118 notices standing for a LOSS of 376 contracts.  We had 381 notices served upon yesterday so we GAINED 5 contracts or 500 ADDITIONAL oz will  stand for delivery in November. The next contract month and the biggest of the year is December and here this month showed a increase of 5,434 contracts up to 375,079.

 

Today, we had 26 notice(s) filed for 2600 oz of gold.
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And now for the wild silver comex results.  Total silver OI fell by 1,599 contracts from 196,912 up to 195,313 despite the fact that  the  price of silver ROSE to the tune of 47 cents  yesterday.I guess we had considerable shortcovering by the bankers.  We are moving  further from the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). The front month of November had an OI of 46 and thus a loss of 5 contracts. We had 12 notices filed upon yesterday so we gained 7 contracts or an additional 35,000 oz will stand for delivery.  The next major delivery month is December and here it FELL BY 4,917 contracts DOWN to 134,747.

In silver had 0 notices filed for nil oz

VOLUMES: for the gold comex

Today the estimated volume was 229,256  contracts which is good.

Yesterday’s confirmed volume was 263,312  which is very  good

today we had 20 notices filed for 2000 oz of gold:

INITIAL standings for NOVEMBER
 Nov 3.
Gold Ounces
Withdrawals from Dealers Inventory in oz  NIL
Withdrawals from Customer Inventory in oz  nil
9,227.167 oz
Brinks
Malca(170 kilobars)
Deposits to the Dealer Inventory in oz 1199.99 oz

Brinks

Deposits to the Customer Inventory, in oz 
 96.45 oz
Manfra
3 kilobars
No of oz served (contracts) today
26 notices 
2600 oz
No of oz to be served (notices)
92 contracts
 9200
oz
Total monthly oz gold served (contracts) so far this month
1295 contracts
129,500 oz
4.02799 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil oz
Total accumulative withdrawal of gold from the Customer inventory this month     35,678.3 oz
Today we had 3 kilobar transactions and more gold leaves the comex
Today we had 1 deposit into the dealer:
i) Into Brinks:  1199.99 oz
total dealer deposits:  1199.99  oz
We had zero dealer withdrawals:
total dealer withdrawals:  nil oz
.
We had 1 customer deposit;
 i) Into Manfra:  96.45 oz
3 kilobars
total customer deposits; 96.45 oz
We had 2 customer withdrawal(s)
 i) out of Manfra:  3761.667 oz
ii) out of Malca  5,465.500 oz (170 kilobars)
total customer withdrawal:9,227.167   oz
We had 2 whopping adjustment(s)
i) Out of Brinks:  78,484.870 oz was adjusted out of the dealer and this landed into the customer account of Brinks
ii) Out of Manfra:  13,695.900 oz was adjusted out of the dealer and this landed into the customer account of Manfra.(426 kilobars)
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Total dealer inventor 2,167290.724 or 67/417 tonnes
Total gold inventory (dealer and customer) =10,573,115.227 or 328.880 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 328.880 tonnes for a  gain of 26  tonnes over that period.  Since August 8 we have lost 25 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.
For November:

Today, 0 notices were 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 26 contract  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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To calculate the initial total number of gold ounces standing for the NOV. contract month, we take the total number of notices filed so far for the month (1295) x 100 oz or 129,500 oz, to which we add the difference between the open interest for the front month of NOV (118 contracts) minus the number of notices served upon today (26) x 100 oz per contract equals 138,700 oz, the number of ounces standing in this non  active month of November.
 
Thus the INITIAL standings for gold for the Nov contract month:
No of notices served so far (1295) x 100 oz  or ounces + {OI for the front month (118) minus the number of  notices served upon today (26) x 100 oz which equals 138,200 oz standing in this non active delivery month of Nov  (4.3141 tonnes).
we gained 32 contracts or an additional 3200 oz will stand for delivery.
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I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 12 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for 2016:
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2015:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2015: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov. 4.2986 tonnes.
total for the 11 months;  187.7055 tonnes
average 17.064 tonnes per month vs last yr 51 tonnes total for 12 months or 4.25 tonnes average per month. From May 2016 until Nov 2016 we have had: 164.469 tonnes per the 7 months or 23.495 tonnes per month (which includes the non delivery months of May, June and Sept).  In essence the demand for gold is skyrocketing.
Something big is going on inside the gold comex.
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The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST TWO MONTHS  24 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
 
NOV INITIAL standings
 Nov 3. 2016
Silver Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
30,386.500 oz
Scotia
Deposits to the Dealer Inventory
nil  OZ
Deposits to the Customer Inventory 
 nil oz
No of oz served today (contracts)
0 CONTRACT(S)
(nil OZ)
No of oz to be served (notices)
46 contracts
(230,000 oz)
Total monthly oz silver served (contracts) 350 contracts (1,750,000 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  1,612,941.3 oz
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawals:
 total dealer withdrawals: nil oz
we had 1 customer withdrawal:
i) Out of Scotia:  30,386.500 oz
Total customer withdrawals: 30,386.500  oz
We had 0 customer deposit(s):
total customer deposits;  nil oz
 
 
 we had 0 adjustment(s)
.
Volumes: for silver comex
Today the estimated volume was 83,459 which is excellent.
YESTERDAY’S  confirmed volume was 89,953 which is also excellent
The total number of notices filed today for the Nov. contract month is represented by 0 contracts for 60,000 oz. To calculate the number of silver ounces that will stand for delivery in Nov., we take the total number of notices filed for the month so far at  350 x 5,000 oz  = 1,750,000 oz to which we add the difference between the open interest for the front month of NOV (46) 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 NOV contract month:  350(notices served so far)x 5000 oz +(46) OI for front month of NOV. ) -number of notices served upon today (0)x 5000 oz  equals  1,980,000 oz  of silver standing for the NOV contract month.
we gained 7 contracts or an additional 35,000 oz will stand for delivery in this non active month of November..
 
Total dealer silver:  30.460 million (close to record low inventory  
Total number of dealer and customer silver:   173.544 million oz
The total open interest on silver is NOW close to its all time high with the record of 224,540 being set AUGUST 3.2016.  The registered silver (dealer silver) is NOW NEAR  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.
end
And now the Gold inventory at the GLD
NOV 3/ a huge deposit of 4.43 tonnes of gold into the GLD/Inventory rests at 949.69 tonnes
NOV 2/ A DEPOSIT OF 2.67 TONNES OF GOLD INTO GLD/INVENTORY RESTS AT 945.26 TONNES
Nov 1/no change in gold inventory at the GLD/inventory rests at 942.59 tonnes
Oct 31/no changes at the GLD/Inventory rests at 942.59 tonnes
Oct 28/no changes at the GLD/Inventory remains at 942.59 tonnes
OCT 27/NO CHANGES AT THE GLD/INVENTORY REMAINS AT 942.59 TONNES
Oct 26/a massive 14.24 tonnes of gold leave the GLD and I am sure this is a paper transaction/this “paper gold” was used in the whacking of gold today/Inventory rests at 942.59 tonnes
OCT 25/A HUGE ADDITION OF 3.27 TONNES INTO THE GLD/INVENTORY RESTS AT 956.83 TONNES
OCT 24/NO CHANGES AT THE GLD/INVENTORY RESTS AT 953.56 TONNES
OCT 21/A MONSTROUS CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 16.61 TONNES FROM THE GLD/INVENTORY RESTS AT 953.56 TONNES
OCT 20/A HUGE CHANGE IN GOLD INVENTORY AT THE GLD OF 2.94 TONNES/INVENTORY RESTS AT 970.17 TONNES
OCT 19/no change in gold inventory at the GLD inventory/inventory rests at 967.21 tonnes
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Nov 3/ Inventory rests tonight at 949.69 tonnes
*IN LAST 23 DAYS: 0.5 TONNES REMOVED FROM THE GLD

end

Now the SLV Inventory
NOV 3/ a huge withdrawal of 2.807 million oz leaves the SLV: somebody was badly in need of silver/inventory rests at 358.435 million oz
NOV 2/ A DEPOSIT OF 569,000 OZ INTO THE SLV/INVENTORY RESTS AT 361.242
Nov 1/no change in silver inventory at the SLV/inventory rests at 360.673 million oz/
Oct 31/no change in silver inventory at the SLV/Inventory rests at 360.673 million oz/
Oct 28/NO CHANGE IN SILVER INVENTORY AT THE SLV/iNVENTORY RESTS AT 360.673 MILLION OZ
OCT 27/A MONSTROUS WITHDRAWAL OF 5.987 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 360.673 MILLION OZ  (AND YET NO CHANGE IN THE SILVER PRICE???)
Oct 26/NO CHANGES AT THE SLV/INVENTORY RESTS AT 366.366 MILLION OZ/
OCT 25/NO CHANGES AT THE SLV INVENTORY/INVENTORY RESTS AT 366.366 MILLION OZ
OCT 24/NO CHANGES AT THE SLV INVENTORY/INVENTORY RESTS AT 366.366 MILLION OZ
OCT 21/A HUGE CHANGES IN SILVER INVENTORY AT THE SLV/: A DEPOSIT OF 3.226 MILLION OZ INTO THE SLV/INVENTORY RESTS AT 366.366 MILLION OZ
oCT 20/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 363.140 MILLION OZ
oCT 19/a good sized change at the SLV inventory: a deposit of 855,000 oz/rests at 363.140 million oz/
.
Nov 3.2016: Inventory 358.435 million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 1.8 percent to NAV usa funds and Negative 1.6% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.9%
Percentage of fund in silver:38.3%
cash .+0.8%( Nov 3/2016)
Note:  this is the first time in over 3 years that we have seen the NAV enter the one% column having been punished by the bankers with an NAV of -6 to 8%
.
2. Sprott silver fund (PSLV): Premium RISES to +0.76%!!!! NAV (Nov 3/2016) 
3. Sprott gold fund (PHYS): premium to NAV  FALLS TO  0.24% to NAV  ( Nov 3/2016)
Note: Sprott silver trust back  into POSITIVE territory at 0.76% /Sprott physical gold trust is back into positive territory at 0.24%/Central fund of Canada’s is still in jail.
 
 
 

END

Major gold/silver stories for Thursday

Early morning physical stories/Goldcore

The London Gold Market – ripe for take-over by China?

Will the London Gold Market Self Destruct?

  • London Gold Market has been unchallenged for nearly 100 years
  • So opaque that quotes of its $5 trillion size are estimates
  • Five new offerings are set to appear in the market in the next six months
  • Increased fragmentation set to reduce liquidity
  • A share of gold price discovery is ripe to be taken by China
  • Disruption in the London Gold Market gives opportunity to the East to take more control of the market.

As markets go the London Gold Market has to be one of the oldest and most unchallenged markets there is. With its roots in the 17th century it has been through a series of makeovers but for much of the last century the OTC market has hardly changed.

But now it is having an identity crisis. In the last year we have seen a barrage of news about changes that are coming, and the last few weeks seem to have been busier than ever.

explosion-422301_960_720

For some the $5 trillion London Gold Market is under serious threat and there are a number of reasons as to why including regulation, gold price discovery and a lack of transparency all items that have haunted players in the London gold market.

Now, the threats that face it are driving many to address these problems and attempt to disrupt the market. We take a quick look at the new offerings set to arrive in the coming months, and ask if they will weaken, rather than strengthen, the London Gold Market and thereby open up an opportunity for China.

The LBMA, a fintech start-up and transparency

Right now there is no data on how much gold is traded each day. The LBMA who currently runs the joint have accepted that this lack of transparency has long been a major criticism, by both market participants and the regulators.

With this in mind it has seen the light that ‘fintech’ offers and has opened itself up to disruption before it is disrupted. Earlier this year it announced Boat Services Ltd. and Autilla Inc. had been chosen to create transparency in the market by building a trading platform.

The 149 LBMA members will report their trades to the new platform.

When the LBMA announced the initiative with Boat Services, it was made clear that the new arrangement would “go beyond UK and global regulators’ demands for data on derivatives trading [and showed] a commitment to transparency.”

London Metals Exchange, World Gold Council, ICE, CME and blockchain all want in

  • The LME along with the World Gold Council has launched ‘LME Precious’ as their route to the highly attractive London Gold Market. For this group it is about clearing for spot and managing risk.

‘The new contracts are designed to complement London’s over-the-counter gold and silver market’ reports Bloomberg.

In the first-half of 2017 centrally cleared gold and silver contracts are set to be introduced. The new contracts will “include contracts for spot, daily and monthly futures, options and calendar spread contracts.”

  • The Intercontinental Exchange took over the London gold auction in 2015, replacing the gold-fixing by phone ritual with an electronic platform. Now it wants to play a further role and announced last month that as of February it would start a new loco London futures contract use this to clear its daily auction.
  • Earlier this week CME Group announced that as of January it will start to offer gold and silver contracts listed on COMEX, “to offer a spread between spot prices and benchmark U.S. futures.”

bullion-big-shot

As you can see from the graph, COMEX and London offer the largest pools of liquidity. The 100 ounces of gold and 5,000 ounces of silver contracts have “the potential to create an even stronger link between the world’s two largest pools of precious metals liquidity,” Miguel Vias, CME’s head of precious metals, stated upon the announcement.

Using transparency to disrupt the gold market

Much of the regulation brought in since the financial crisis has called for increased transparency. The move by many of the players looking at changing things up, has this in mind.

However for all of the projects mentioned above, there are none that are truly disrupting how gold markets currently work. Costs, efficiencies and current practices are not changing that dramatically.  Instead layers are being added either around the sides or on top.

In a financial world that is finding itself upended by disruption and fintech startups one would think there is an opportunity here. And we’re not the only ones who think so.

In the first real attempt at disruption in the gold market, blockchain is coming to the fore. Paxos (formerly itBit) is working with both EY and Euroclear on a projects that will bring “brings instant settlement and true delivery versus payment (DvP) to the gold market for the first time.”

The project between Paxos and Euroclear will  take “Its innovative tokenization process turns physical gold into digital gold tokens, reducing capital charges and opening new opportunities for market participants.” reports the EconoTimes.

With all this fragmentation will London remain a centre of price discovery?

In recent years both London and COMEX’s monopoly of the gold market has come under pressure from the East. And, with all this fragmentation revealing itself in the London Gold Market, one wonders if it can keep its crown.

To us, it seems the role of price maker is becoming increasingly up for grabs. In April the SGE announced a new benchmark price for gold bullion, modelled on the same process currently used in the London gold market. The “base price will fully reflect supply and demand…representing the whole Chinese gold market.”

As we reported at the time, David Marsh as quoted by the official China Daily, Managing Director and Co-Founder of OMFIM, said the yuan-denominated gold benchmark offered by SGE was a necessary addition to the international gold market and should make the pricing of physical gold more open to the play of actual market forces.

Will the London Gold Market self-destruct?

As Mark O’Byrne told Bloomberg earlier this year, “It’s a pretty big moment for London, and it’s time to choose. Everybody wants to bring more players to the table, but there is a risk that through the failure to work together, liquidity is diluted and the market weakened.”

Every industry and marketplace faces challenges from time-to-time, more often than not these things shake-themselves out as the market decides what it does and doesn’t want. No one wishes to see countless liquidity pools and so it is highly likely the majority of users will focus on one exchange.

The question is, in the time it takes for the London gold market to come through its disruptive phase, will the Chinese have taken a bigger piece of the pie for themselves? Without doubt China’s pricing influence will take time, but it seems the timing is right given the fragmented and disjointed efforts of various parties to take advantage of London’s weak moment.

Gold and Silver Bullion – News and Commentary

Gold up on safe-haven buying ahead of U.S. election uncertainty (Reuters.com)

Gold Trades Above $1,300 as Election, Interest Rates Hold Focus (Bloomberg.com)

Buy Gold or Gold Miners if Trump Looks Victorious | (Bloomberg.com)

CME raises Gold, Silver maintenance margins (Reuters.com)

Gold breaks above $1,300/oz on U.S. election worries (Reuters.com)

Far beyond double (HussmanFunds.com)

Hey Fed, enough is enough (Kitco.com)

We risk being collaterial damage in the neocon lust for war (PeakProsperity.com)

In bonds, no one can hear you scream (ETFTrends.com)

How a pillar of German banking lost its way (Spiegel.de)

7RealRisksBlogBanner

Gold Prices (LBMA AM)

03 Nov: USD 1,293.00, GBP 1,040.61 & EUR 1,165.90 per ounce
02 Nov: USD 1,295.85, GBP 1,056.51 & EUR 1,169.76 per ounce
01 Nov: USD 1,284.40, GBP 1,048.58 & EUR 1,167.52 per ounce
31 Oct: USD 1,274.20, GBP 1,046.25 & EUR 1,163.22 per ounce
28 Oct: USD 1,265.90, GBP 1,042.47 & EUR 1,160.96 per ounce
27 Oct: USD 1,269.30, GBP 1,038.29 & EUR 1,162.93 per ounce
26 Oct: USD 1,273.90, GBP 1,043.45 & EUR 1,166.13 per ounce

Silver Prices (LBMA)

03 Nov: USD 18.07, GBP 14.50 & EUR 16.32 per ounce
02 Nov: USD 18.54, GBP 15.05 & EUR 16.70 per ounce
01 Nov: USD 18.24, GBP 14.91 & EUR 16.54 per ounce
31 Oct: USD 17.76, GBP 14.59 & EUR 16.22 per ounce
28 Oct: USD 17.61, GBP 14.51 & EUR 16.13 per ounce
27 Oct: USD 17.66, GBP 14.41 & EUR 16.16 per ounce
26 Oct: USD 17.66, GBP 14.46 & EUR 16.17 per ounce


Recent Market Updates

– Diwali, Gold and India – Is Love Affair Over?
– Silver Krugerrands By South African Mint Coming Soon – Massive Clearance Sale on Gold Krugerrands
– Trump “Will Probably Win” and Gold “May Rise $100” Overnight – Rickards
– World Is Out of Weapons
– Gold Is The “Kardashian of Commodities” – Herbert & Keiser Interview Skoyles
– Value of Gold – Unlike Paper Currency Gold Maintained Value Throughout Ages
– Fed Risks Lehman Crisis As US Recession Storm Gathers
– Silver Eagle Demand ‘Returned with a Vengeance’
– Cashless Society – War On Cash to Benefit Gold?
– “Higher Gold Prices” On Global Trade Slowdown – HSBC
– Euro “Will Collapse” As Is “House of Cards” Warns Architect of Euro
– Property Bubble In Ireland Developing Again
– “Gold Is A Great Hedge Against Politicians” – Goldman

janskoyles

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The real story behind the premiums in silver in Shanghai vs London

(courtesy Koos Jansen)

Posted on 31 Oct 2014 by

The Great Chinese Silver Market Debate

Bloomberg came out on October 28 with an article about Chinese silver hitting a premium of 17 % this month.

Have a look at Bloomberg’s chart on Chinese silver premiums.

Regular readers know I’m one of the few that reports on the pure price of silver in China being cheaper than in London, because all Chinese commodity exchanges quote silver including 17 % VAT. If we subtract 17 % from the quoted prices, the pure price of silver in China is currently trading at a 4 % discount to London, not at a premium like Bloomberg states. As we can see in my chart below the premium is negative.

Shanghai Gold Exchange silver premium

By the way, silver is still trading in backwardation on the Shanghai Futures Exchange (SHFE), since August 6. This has caused the discount to decline to 4 %.