Nov 16/ A monstrous 320,434.236 oz leaves the comex vaults which includes 160,750.000 oz from JPMorgan/Shanghai fix premium over $12.00 higher than NY/Japanese bond yields rise above zero creates a new headache for Bank of Japan: will they purchase huge amounts of bonds to keep the rate at zero?/Chinese yuan collapses: CNY 6.8790 while offshore CNH: 6.8992/Huge amounts of USA dollars leave Chinese shores/As mortgage rates rise to almost 4%, mortgage applicators collapse in the uSA/Chaos in India as there is no liquidity and goods are not moving: lineups to buy physical gold/

Gold closed at $1223.60 DOWN $0.60

silver closed at $16.92:  DOWN $0.11

Access market prices:

Gold: 1225.20

Silver: 16.99

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 16 (10:15 pm est last night): $  1240.41

NY ACCESS PRICE: $1231.65 (AT THE EXACT SAME TIME)/premium$8.76 

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1241.65

NY ACCESS PRICE: 1229.65 (AT THE EXACT SAME TIME/2:15 am)

HUGE SPREAD 2ND FIX TODAY!!  12.00 dollars

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Nov 16: 5:30 am est:  $1225.70   (NY: same time:  $1226.40    5:30AM)???

London Second fix Nov 16: 10 am est:  $1229.20 (NY same time: $1227.30,    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

For comex gold: 

 NOTICES FILINGS FOR NOVEMBER CONTRACT MONTH:  5 NOTICES FOR 500 OZ  TONNES

For silver:

 NOTICES FOR NOVEMBER CONTRACT MONTH FOR SILVER: 1 NOTICE OR 5,000 OZ

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Let us have a look at the data for today

.

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In silver, the total open interest FELL by 1388 contracts DOWN to 174,831 with yesterday’s trading.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .874 BILLION TO BE EXACT or 124% of annual global silver production (ex Russia & ex China).

In November, in silver, 1 notice(s) filings: FOR 5,000 OZ

In gold, the total comex gold FELL by 9,537 contracts DESPITE THE RISE IN THE PRICE OF GOLD ($2.80 yesterday ).The total gold OI stands at 479,237 contracts.

In gold: we had 5 notices filed for 500 oz

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

GLD:  

a big change in the gold inventory at the GLD/another withdrawal of 1.19 tonnes

Inventory rests tonight: 926.26 tonnes

.

 

SLV

we had a small withdrawal at the SLV equal to 474,000 oz.

THE SLV Inventory rests at: 356.253million oz

.

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

1. Today, we had the open interest in silver FELL by 1388 contracts DOWN to 174,831 despite the fact that the price of silver ROSE by $0.15 with YESTERDAY’S trading.  The gold open interest FELL by 9537 contracts DOWN to 479,237 as the price of gold ROSE BY  $2.80 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  TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 1.93 POINTS OR 0.06%/ /Hang Sang closed DOWN 43.38  OR 0.19%. The Nikkei closed UP 194.06 points or 1.10%/Australia’s all ordinaires  CLOSED DOWN 0.02% /Chinese yuan (ONSHORE) closed DOWN at 6.8790/Oil FELL to 45.23 dollars per barrel for WTI and 46.39 for Brent. Stocks in Europe: ALL IN THE RED      Offshore yuan trades  6.8937 yuan to the dollar vs 6.8790  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS CONSIDERABLY AS MORE USA DOLLARS   LEAVE CHINA’S SHORES / CHINA SENDS A CLEAR MESSAGE TO THE USA AND JANET  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

All eyes will be on Japan as the 10 year yield on Japanese bonds climbs above zero for the 2nd day in a row.  Eight weeks ago when Japan’s new policy was unleashed, Japan was threatening to taper its purchases to keep the rate near zero.  Now as bond prices fall badly (yields rise) will Japan abandon their new policy.  With Trump read to supply fiscal stimulus will the world see helicopter money throughout the globe?

(courtesy zero hedge)

c) REPORT ON CHINA

Yuan falters again and lands into the 6.87 barrier for onshore and 6.89 for offshore

( zero hedge)

4 EUROPEAN AFFAIRS

GREECE

Obama faces violent clashes in Greece as demonstrators are protesting his visit

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

CHINA/SAUDI ARABIA/USA TREASURIES

Late in the session: a must read..

 

This is huge:  both Saudi and China are dumping massive quantities of USA treasuries. In September a total of $76 billion were sold.  Up until last month only private investors were buying the stuff and they seemed to have gorged on the stuff.  And now yields are rising!! And Trump is going on a fiscal spending spree of which the Fed cannot monetize?

Janet may not raise rates in December.

(courtesy zero hedge)

7.OIL ISSUES

i)Another spurious OPEC headline as oil rebounds into the 46 dollar handle despite huge inventory builds

( zero hedge)

ii)So much for the rise in oil today: Iraq, Iran and Nigeria’s oil ministers all decided to skip that important OPEC meeting in DOHA

( zero hedge)

8.EMERGING MARKETS

none today

9.PHYSICAL STORIES

i)Quite a story:  after paying $3,500.00 for the Fort Knox audits, two months ago, Koos Jansen still does not have the papers. he outlines to us his troubles in getting those documents.

( Koos Jansen Bullionstar)

ii)A very important paper from Craig Hemke on the Chinese yuan. The lower the yuan value will be a huge benefit for us in the price of gold and silver.

( Craig Hemke/TFMetals report)

iii)A must read two parter.  James Turk states that Trump will want sound money  (and he has picked two biggies in that dept (Judy Shelton, and David Malpass).  Maybe Trump will rescind Nixon’s convertibility into gold and then the USA will revalue gold to say 10,000 dollars per oz.  Then gold will flow back into the uSA and spending can once again continue

( James Turk/Kingworld news/2 parts)

10.USA STORIES

i)Interesting:  producer prices remain at zero and disappoints.  The real stumbling block was asset management fees which tumbled 5.7% as well as food deflation taking a grip in the USA.  In a nutshell goods higher, and services lower.

( zero hedge)

ii)Industrial production continues to contract in the USA.  We have now had 14 consecutive months showing contraction;

( Industrial Production/zero hedge)

iii)Not good:  Boeing shuttering two plants after United delays 5 billion dollars worth of 737 orders:

Let us head over to the comex:

The total gold comex open interest FELL by 9,537 CONTRACTS to an OI level of 479,237 DESPITE THE FACT THAT GOLD ROSE $2.80 with YESTERDAY’S trading. In the front month of November we had 29 notices standing for a LOSS of 49 contracts.  We had 51 notices served on yesterday so we GAINED 2 contracts or 200 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 decrease of 11,594 contracts down to 237,109. The December contract month is still highly elevated compared to a year ago.  On Tuesday Nov 17/2015 comex reading day, we had a total of 194,026 contracts standing ( a gain of 2,483 contracts from Nov 16/2015) It certainly emphasizes the huge demand for physical gold. THIS SHOULD EXPLAIN TO YOU WHY THE BANKERS ARE CONSTANTLY WHACKING OF GOLD (AND SILVER): THE HIGH OI FOR DECEMBER  AND THE HIGH PROBABILITY THAT MANY WILL TAKE DELIVERY.

Today, we had 5 notice(s) filed for 500 oz of gold.
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And now for the wild silver comex results.  Total silver OI FELL by 1388 contracts from 176,219 DOWN TO 174,831 as the price of silver ROSE BY $0.15 with yesterday’s trading. 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 1 and thus a loss of 111 contracts. We had 112 notices filed yesterday so we gained 1 contract or an additional 5,000 oz will stand for delivery in this non active month of November.  The next major delivery month is December and here it FELL BY 2,263 contracts DOWN to 86,293. The December contract month is also highly elevated compared to a year ago.  On Nov 17/2015 reporting day, we had a level of 71,593 contracts having gained 1278 contracts on the day).

 

In silver had 1 notice filed for 5,000 oz

Eventually at the end of December 2015: 6.4512 tonnes of gold stood for delivery

Eventually at the end of December 2015: 18.84 million oz of silver stood for delivery.

VOLUMES: for the gold comex

Today the estimated volume was 219.101  contracts which is good.

Friday’s confirmed volume was 259,975 contracts  which is very good

INITIAL standings for NOVEMBER
 Nov 16.
Gold Ounces
Withdrawals from Dealers Inventory in oz  NIL
Withdrawals from Customer Inventory in oz  nil
 320,434.236 OZ
BRINKS
SCOTIA
JPMORGAN
INCLUDES 5000 KILOBAR REMOVAL JPM
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 1059.140 oz
Brinks
No of oz served (contracts) today
5 notices 
500 oz
No of oz to be served (notices)
24 contracts
 2400
oz
Total monthly oz gold served (contracts) so far this month
1596 contracts
159,600 oz
4.9642 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     549,896.2 oz
Today we had 1 kilobar transaction  (and it was a dandy) and massive gold continues to depart from the comex
Today we had 0 deposit into the dealer:
total dealer deposits:  nil  oz
We had zero dealer withdrawals:
total dealer withdrawals:  nil oz
.
We had 1 customer deposit;
 i) Into Brinks: 1059.140 oz
total customer deposits; 1059.140  oz
We had 3 customer withdrawal(s)
i) Out of Brinks:  96,482.15 oz (real gold)
ii) out of Scotia; 63,202.086 oz  (real gold)
iii) 160,750.000 oz (JPMorgan)  5,000 kilobars/probably paper gold removal
total customer withdrawal: 320,484.236   oz
We had 2  adjustment(s)
 i) Out of Brinks: 13,737.05 oz leaves the dealer and this lands into the customer account of Brinks
ii) Out of Malca:  37,230.858 oz leaves the dealer and this enters the customer account of Malca.  Malca dealer is left with only 1,000 oz
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Total dealer inventor 2,032.392.916 or 63.215 tonnes (this level is coming down)
Total gold inventory (dealer and customer) =9,945,684.961 or 309.35 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 309.35 tonnes for a  gain of 6  tonnes over that period.  Since August 8 we have lost 45 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.(like today’s JPMorgan: 160,750.000 oz or 5,000 kilobars)
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 5 contracts  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 (1596) x 100 oz or 159,600 oz, to which we add the difference between the open interest for the front month of NOV (29 contracts) minus the number of notices served upon today (5) x 100 oz per contract equals 162,000 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 (1596) x 100 oz  or ounces + {OI for the front month (185) minus the number of  notices served upon today (5) x 100 oz which equals 162,000 oz standing in this non active delivery month of Nov  (5.038 tonnes).
we GAINED 2 contracts or an additional 200 oz will  stand for delivery.
Last yr at the conclusion of November we had .6656 tonnes of gold eventually stand
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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.    5.038 tonnes.
total for the 11 months;  188.48 tonnes
average 17.134 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: 165,62 tonnes per the 7 months or 23.660 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.
Just take a look at Nov 2016 deliveries at 5.038 tonnes compared to last yr 0.6656 tonnes
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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  45 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
 
NOV INITIAL standings
 Nov 16. 2016
Silver Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
358,238.040 oz
brinks
Deposits to the Dealer Inventory
nil  OZ
Deposits to the Customer Inventory 
 271,370.000  oz
Brinks
No of oz served today (contracts)
1 CONTRACT(S)
(5,000 OZ)
No of oz to be served (notices)
0 contracts
(nil  oz)
Total monthly oz silver served (contracts) 465 contracts (2,325,000 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  5,415,036.2 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(s):
 i) out of Brinks:  358,238.040 oz
Total customer withdrawals: 358.238.04  oz
 We had one customer deposit:
i)Into Brinks: 271,370.000 oz??? exact weight
total customer deposits; 271,370.000  oz
 
 
 we had 1 adjustment(s)
i) Out of CNT: 558,046.03 oz was adjusted out of the customer and this landed isnto the dealer account of CNT
.
Volumes: for silver comex
Today the estimated volume was 71.622 which is huge
YESTERDAY’S  confirmed volume was 77.941 contracts  which is also huge
yesterday’s volume in oz = 389 MILLION oz or 56% of annual global production of silver.
(EX CHINA/EX RUSSIA)
The total number of notices filed today for the Nov. contract month is represented by 1 contracts for 5,000 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  465 x 5,000 oz  = 2,325,000 oz to which we add the difference between the open interest for the front month of NOV (1) and the number of notices served upon today (1) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the NOV contract month:  465(notices served so far)x 5000 oz +(1) OI for front month of NOV. ) -number of notices served upon today (1)x 5000 oz  equals  2,325,000 oz  of silver standing for the NOV contract month.
we gained 1 contract or 5000 additional ounces  that will stand for delivery in this non active month of November..
Last yr at the conclusion of November 2015, we had only 405,000 oz of silver stand for delivery.
 
Total dealer silver:  30.905 million (close to record low inventory  
Total number of dealer and customer silver:   177.082 million oz
The total open interest on silver is NOW moving away from  its all time high with the record of 224,540 being set AUGUST 3.2016.

end

And now the Gold inventory at the GLD
Nov 16/another big changes in gold inventory at the GLD/ a withdrawal of 1.19 tonnes/Inventory rests at 926.26 tonnes
NOV 15/  we had 2 monstrous withdrawal of 5.63 tonnes of gold from the GLD in the morning and another 1.48 tonnes this afternoon/Inventory rests at 927.45 tonnes
Nov 14/another monstrous withdrawal of 7.12 tonnes of gold from the GLD/Inventory rests at 934.56 tonnes
Nov 11/A  MONSTROUS WITHDRAWAL OF 13.35 TONNES OF PAPER GOLD AND THIS GOLD WAS USED IN THE COMEX WHACKING TODAY.
Nov 10/ A HUGE ADDITION OF 5.34 TONNES OF GOLD  (WITH GOLD WHACKED??)/INVENTORY RESTS AT 955.03 TONES
Nov 9/no change in gold inventory at the GLD/Inventory rests tonight at 949.69 tonnes
Nov 8/no change in gold inventory at the GLD/Inventory rests tonight at 949.69 tonnes
Nov 7/no changes in the gold inventory at the GLD/Inventory rests  tonight at 949.69 tonnes.
Nov 4/NO CHANGES IN THE GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 949.69 TONNES/
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
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Nov 16/ Inventory rests tonight at 926.26 tonnes
*IN LAST 33 DAYS: 23.93 TONNES REMOVED FROM THE GLD

end

Now the SLV Inventory
Nov 16.no change in silver inventory at the SLV/Inventory rests at 356.253 million oz/
NOV 15/a withdrawal of 474,000 oz (.474 million oz) from the SLV inventory/inventory rests at 356.253
Nov 14/a withdrawal of 1.329 million oz from the SLV/Inventory rests at 356.727 million oz
Nov 11/a withdrawal of 1.379 million oz from the SLV/Inventory rests at 358.056 million oz
Nov 10/an addition of 949,000 oz added into the SLV/Inventory rests at 359.435 million oz
Nov 9/no change in silver inventory at the SLV/Inventory rests at 359.435 million oz/
Nov 8/no changes in silver inventory at the SLV/inventory rests at 358.435 million oz
Nov 7/no changes in silver inventory at the SLV/Inventory rests at 358.435 million oz
Nov 4/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 358.435 MILLION OZ
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???)
.
Nov 16.2016: Inventory 356.253 million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.4 percent to NAV usa funds and Negative 7.2% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.2%
Percentage of fund in silver:38.1%
cash .+0.7%( Nov 16/2016)
.
2. Sprott silver fund (PSLV): Premium FALLS to -0.35%!!!! NAV (Nov 16/2016) 
3. Sprott gold fund (PHYS): premium to NAV falls TO – 0.26% to NAV  ( Nov 16/2016)
Note: Sprott silver trust back  into NEGATIVE territory at 0-.35% /Sprott physical gold trust is back into NEGATIVE territory at -0.26%/Central fund of Canada’s is still in jail.
 

END

Major gold/silver stories for WEDNESDAY

Early morning gold/silver trading/Goldcore

Peak Gold Globally – “Bullish For Gold”

Gold mine production is peaking globally and this is “bullish for gold” according to a slowly emerging group in the gold industry. It is great to see the reality of peak gold production slowly be acknowledged in the mainstream as it is an important fundamental factor in the market which has been continuously ignored.

As reported by Bloomberg in ‘Decade of Gold Mine Declines Poised to Spur Deals, Prices’ today:

Gold’s dwindling pipeline of new mines is poised to usher in a decade-long output slump, spurring prices and delivering a new impetus for dealmaking and industry consolidation, according to Goldcorp Inc., the third-largest gold producer.

Mine supply may fall about a third in the 10 years to 2025, according to Bloomberg calculations based on forecasts from BMO Capital Markets and Randgold Resources Ltd. The number of newly discovered primary gold deposits fell to three in 2014, from a peak of 37 in 1987, according to Melbourne-based industry adviser MinEx Consulting Pty.

Gold production may peak in the next three years as miners fail to replace their reserves, Randgold’s Chief Executive Officer Mark Bristow said in September. And, according to Goldcorp’s Telfer, producers have limited scope to raise output in response to higher prices. “We are having a heck of a time finding gold,” he said.

The metal is up 16 percent this year, rebounding from three straight annual declines. Gold may average $1,500 an ounce by 2020, according to an August note from BMI Research.

“Once supply from mines starts to decline and people start to realize the impact that’s going to have, I think it’s going to be incredibly bullish for gold,” Telfer said in the interview last week in Melbourne. “If gold went to $2,500 an ounce tomorrow, Goldcorp’s production wouldn’t change for the next four years. It can’t react to a change.”

‘Peak Gold’ is happening which has important ramifications for gold prices and is why we were one of the first analysts in the industry to consider the peak gold phenomenon back in 2007 and 2008. Even Goldman Sachs now acknowledges the importance of peak gold to the gold market. It is another long term positive fundamental for the market and will support prices and could contribute to much higher prices in the coming volatile and uncertain years.

Gold and Silver Bullion – News and Commentary

Gold rises as U.S. dollar pares gains (Reuters.com)

Gold prices log first gain in 7 sessions (MarketWatch.com)

Gold rebounds on Trump policy uncertainty (CNBC.com)

Global bonds slump as Trump prompts inflation fears (TheGuardian.com)

Demonetisation impact: $1 billion worth of gold imported so far since Nov 9 (Business-Standard.com)

Hugh Hendry is betting on an EU breakup and a ‘very high’ probability Marine Le Pen will be French president (BusinessInsider.com)

Trump carnage in bonds spells trouble for stocks (MarketWatch.com)

Why interest rates will likely rise faster than inflation (CBSNews.com)

James Turk – What Donald Trump Faces Is Very Different From What Ronald Reagan Faced, Expect Major Market Moves… (KingWorldNews.com)

President Trump: How America Got It So Wrong (RollingStone.com)

7RealRisksBlogBanner

Gold Prices (LBMA AM)

16 Nov: USD 1,225.70, GBP 9,984.36 & EUR 1,144.68 per ounce
15 Nov: USD 1,228.90, GBP 998.86 & EUR 1,138.70 per ounce
14 Nov: USD 1,222.60, GBP 997.80 & EUR 1,136.53 per ounce
11 Nov: USD 1,255.65, GBP 999.19 & EUR 1,154.45 per ounce
10 Nov: USD 1,280.90, GBP 1,034.07 & EUR 1,175.48 per ounce
09 Nov: USD 1,304.55, GBP 1,050.42 & EUR 1,176.84 per ounce
08 Nov: USD 1,284.00, GBP 1,034.26 & EUR 1,162.02 per ounce

Silver Prices (LBMA)

16 Nov: USD 16.95, GBP 13.64 & EUR 15.85 per ounce
15 Nov: USD 17.00, GBP 13.68 & EUR 15.80 per ounce
14 Nov: USD 17.20, GBP 13.73 & EUR 15.95 per ounce
11 Nov: USD 18.59, GBP 14.73 & EUR 17.09 per ounce
10 Nov: USD 18.75, GBP 15.11 & EUR 17.20 per ounce
09 Nov: USD 18.81, GBP 15.12 & EUR 16.96 per ounce
08 Nov: USD 18.26, GBP 14.72 & EUR 16.54 per ounce


Recent Market Updates

– Gold Price Should Go Higher On Global Risks and Trump – Capital Economics
– President Trump – Why Market Loves Him and Experts Wrong
– ‘Helicopter Money President’ Trump To Create Inflation and Gold Will Rise
– Central Bank Gold Demand continues in Q3
– Trump Victory Sends Gold Surging 5%
– An uncertain election outcome looks good for gold
– Ignore past elections, this one’s too uncertain
– Gold may be the only winner in US elections
– The London Gold Market – ripe for take-over by China?
– 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

 

end.

 

Quite a story:  after paying $3,500.00 for the Fort Knox audits, two months ago, Koos Jansen still does not have the papers. he outlines to us his troubles in getting those documents.

(courtesy Koos Jansen Bullionstar)

 

Koos Jansen: We paid for a copy of the Fort Knox audit report, so where is it?

Section:

11:15a ET Tuesday, November 15, 2016

Dear Friend of GATA and Gold:

Gold researcher Koos Jansen reports today how the U.S. Mint has failed to produce a copy of a gold audit report for which he paid more than $3,100 back in September. Why, in the digital age, anyone should have to pay that kind of money for a government report is hard to understand — unless, of course, the report contains information whose disclosure might be inconvenient to the U.S. government’s longstanding policy of gold price suppression. Jansen’s report is headlined “Dear US Mint, We Gave You the FOIA Funds, Now Give Us the Fort Knox Audit Documents” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/koos-jansen/dear-us-mint-we-gave-you-t…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

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A very important paper from Craig Hemke on the Chinese yuan. The lower the yuan value will be a huge benefit for us in the price of gold and silver.

(courtesy Craig Hemke/TFMetals report)

Watching The Yuan

The recent surge in the US dollar has again brought massive selling in the emerging market currencies, most notably the Chinese yuan. This has occurred twice before in the past 15 months and each prior instance has foreshadowed a 10% drop in the S&P 500. Therefore, are we on the verge of another stock market correction?

We’ve been alluding to this in the podcasts of late and I’ve been meaning to write about it with some illustrative charts. However, the metals have been so volatile that I haven’t had the opportunity. Today, with both gold and silver mostly flat on the session, I thought I’d seize the moment.

The problem for the Chinese is that the yuan is pegged to the US dollar. So, when the dollar strengthens…as it has for the past 60 days or so…the yuan strengthens, as well. The PBoC doesn’t like this very much as it makes their exports more “expensive”. It also creates a whole host of other issues, many of which are summed up in this excellent article I found at ZH last evening:

So, anyway, it’s the ripple effect of the Chinese yuan devaluation that has my interest. First of all, here’s a chart USDCNY chart that covers the last five years. Just like when the Japanese yen is portrayed by the USDJPY, a rising USDCNY means that the yuan is getting weaker versus the US dollar. Note that, even with the “peg” in place, the yuan has weakened by over 10% in the past three years.

Now let’s drill in a little closer so that you can see where we’re headed with this. On this weekly chart of the USDCNY, you can see four, specific periods of PBoC action to weaken the yuan in response to a surging dollar.

  • A 3% devaluation in week of August 9, 2015
  • A 3% devaluation between late November 2015 and early January 2016
  • A 2% devaluation in June of 2016
  • This current 2.7% devaluation that began the week of October 9

OK, so this is where it gets interesting. Check this weekly chart of the S&P 500. Be sure to note:

  • the 10% decline in mid-late August of 2015
  • the 10% drop in early January of this year
  • the 5% drop in June of this year

As you can see, there is a distinct, lagging correlation between devaluations in the yuan and corrections in the S&P. Perhaps, since the S&P was falling sharply before the US election, this yuan-related correction has already occurred?  Perhaps the huge rally in stocks over the past five days will preclude any further decline? Perhaps.

However, if history is any guide, a soaring US dollar seems to put extreme stress on China and all emerging market currencies. In the past, this has led to liquidity shortages which have eventually bled into the US stock market. And the PBoC doesn’t appear to be finished with this latest round of yuan devaluation. Below are the changes over just the past few days and check this new “warning” about all of this from the BIS: http://www.zerohedge.com/news/2016-11-15/vix-dead-according-bis-new-fear-indicator

Finally, as this site is dedicated to the precious metals and gold is often well-bid as a “safe haven” during periods of stock market selloffs, check this one last chart. Be sure to note the timing of the surges in the paper derivative gold price and note how they neatly coincide with the weakening yuan and falling equity markets.

With stock market bullishness at extreme levels and the gold permabears out in force, a sharp rally in gold from here would certainly catch almost everyone by surprise. So, could a rally be coming on the days ahead? Perhaps you should just keep your eyes focused upon the yuan. It may once again be foreshadowing what is to come next.

Just something to consider on what is otherwise an uneventful Tuesday.

TF

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A must read two parter.  James Turk states that Trump will want sound money  (and he has picked two biggies in that dept (Judy Shelton, and David Malpass).  Maybe Trump will rescind Nixon’s convertibility into gold and then the USA will revalue gold to say 10,000 dollars per oz.  Then gold will flow back into the uSA and spending can once again continue

(courtesy James Turk/Kingworld news/2 parts)

Trump’s deficits will wreck dollar without a gold standard, Turk tells KWN

Section:

1:04p ET Tuesday, November 15, 2016

Dear Friend of GATA and Gold:

In a two-part interview with King World News, GoldMoney founder and GATA consultant James Turk predicts that a Trump administration in the United States will be forced into running more big deficits financed by money printing and that this will damage the dollar but that returning to a gold standard with a much higher gold price would restore prosperity and stability. The interview’s two parts can be found at King World News here:

http://kingworldnews.com/james-turk-what-donald-trump-faces-is-very-diff…

http://kingworldnews.com/is-president-trump-really-going-to-revalue-gold…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

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Meanwhile in India, panic as gold skyrockets in India after its currency ban

(courtesyBhandari/ActingMan.com)

Scenes Of Panic As Gold Price Skyrockets In India After Currency Ban

Submitted by Jayant Bhandari via Acting-Man.com,

Chaos in the Wake of the Ban

Here is a link to Part 1, about what happened in the first two days after India’s government made Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes illegal. They can now only be converted to Rs 100 (~$1.50) or lower denomination notes, at bank branches or post offices. Banks were closed the first day after the decision. What follows is the crux of what has happened over the subsequent four days.

modi

India’s prime minister Nahendra Modi, author of the recent overnight currency ban

 

Today India is on the verge of a major social-political crisis, unless either the government backs off from the decision of banning the currency or some real magic happens. There is chaos in the streets and daily life is slowly but surely coming to a full halt.

What Modi did was not only heavy-handed, hugely arrogant, and of no value, it has been very badly implemented to boot — as everything in India always is — and carries the real potential of escalating and snowballing into something horrific. They could have seen that this was not going to end well by simply using primary school math.

Modi, Nationalism, and the Public School-Indoctrinated Middle Class

India today is like a cult under the influence of Narendra Modi — in which unlike in the past, not the poorest or uneducated citizens, but mostly members of the so-called educated middle class participate. Over the last two decades, people have been exposed to mass education, TV and nationalistic propaganda without being taught an iota of critical thinking skills.

In a society in which the concept of reason does not exist, this has made these people receptive to any kind of propaganda with a nationalistic or Hindutva bent. (Hindutva = fanatical Hinduism, which is rapidly metastasizing).

To aggrandize his position, Modi ordered a lot of military-hardware that India cannot afford, escalated tensions with Pakistan, and conducted what was very likely a fake surgical strike inside Pakistan. This united Indians under the flag.

Now, the demonetization of the Rs 500 and Rs 1000 banknotes was tagged with nationalism, anti-corruption, and anti-terrorism. Simple-minded, slogan-susceptible persons were hardwired to accept an erroneous causality. Those who did not go along were made to be afraid of being called pro-terrorist elements.

Those in the middle class have taken what they deem to be the higher moral ground, for they have mostly avoided suffering from the demonetization. Lacking moral instincts — which is unfortunately the case with much of Indian society, given its deep-rooted irrationality and superstitions — they cannot see or feel the pain of those who are suffering, even if that suffering stares into their faces.

But events are in motion that will likely very soon lead to these salaried members of the middle class starting to feel the pain as well. Their instinctive trust in Modi is likely within weeks of coming crashing down, not because of reasoned argument, but because they will be facing similar problems as the ones the common man is now facing.

Conversion to the New Currency

I went to convert my banned banknotes into new ones. The largest amount one can have converted is Rs 4,000 ($60), until further notice. There was a huge rush of people at the bank. Arguments were erupting, as people refused to stand in queues and the banks gave no explanation of what needed to be done. Fights were breaking out.

Amid the chaos I finally learned that there were three queues I had to go through in a sequence. I had to get a form from one counter, which I had  to fill in with my name and address, my ID card details, the serial numbers of all the bills I wanted to exchange, and my cell-phone number.

At the second counter, I then had to present the completed form along with a photocopy of my ID card. I had to sign on the photocopy which an official then stamped. With my banknotes, the form and the photocopy of my ID card, I then went to the next queue to get my currency converted at a third counter. The whole process took about two hours. For most people in the busier parts of the cities, it took much longer.

Day 1 of the banks opening. Poor, desperate people, whom the government treats like slaves or perhaps insects. Somehow these people have been brainwashed into thinking they live in a free country. My granddad kept photographs of British royalty on the walls of his office until his final days, for he had realized that the British had treated him much better.

Anyone who thinks that a country which wastes two hours of every citizen’s life to convert his own $60 can ever hope to be an economic power is drinking too much Kool-Aid and cannot do primary level math. Forget any possibility of removing unaccounted for money or reducing corruption, what Modi is doing is a recipe for the destruction of whatever legitimate economy there is.

That same afternoon, I went to the post office with a friend who wanted to get his money converted. After waiting a long time there, we found out that the post office had run out of cash. Since then most ATMs have had limited amounts of cash available and banks keep running out of cash as well.

The queues have continued to grow. People start lining up late into the night waiting for banks to open and still have to go back home with no cash. What started with two hours of queuing is becoming an endless slog now.

An endless queue to convert Rs 4,000 (USD 60). Will they actually go home with their new cash?

The Problems Go Much Deeper

Half of India’s citizens do not have a bank account and around 25% do not even have an ID card. These are the country’s poorest people, who have no way of converting their money – even if they learn how to do it, which is already a nigh insurmountable hurdle. Also, those who are old, disabled or sick have no choice but to suffer, for without personally visiting a bank branch office, one cannot convert one’s banknotes.

old-woman

An old disabled woman struggling to get her money converted. One has to be utterly heartless not to feel angry about the situation.

97% of the Indian economy is cash-based. With 88% of all outstanding currency no longer usable, the economy is coming to a standstill. The daily-wage laborer, who leads a hand-to-mouth existence in a country with GDP per capita of a mere $1,600, no longer has work, as his employer has no cash to pay his wages. His life is in utter chaos. He is not as smart as Modi —  despite the fact that Modi has no real life experience except as a bully and perhaps in his early days as a tea-seller at a train-station. He has no clue where his life is headed from here.

These people are going hungry, and some have begun to raid food shops. People are dying for lack of treatment at hospitals. Old people are dying in the endless queues. Some are killing themselves, as they are unable to comprehend the situation and simply don’t know what to do. There are now hundreds of such stories in the media.

Small businesses are in shambles, and many will probably never recover. The Hindu wedding season has just started and people are left with unusable banknotes. Their personal and family lives are now an utter disaster.

Desperate people raiding a supermarket

Lacking moral and rational anchors, and hence compassion, members of the salaried middle class are unperturbed. Their salaries get taxed and most of the bribes they are getting end up in gold or property investments. In their minds, poor people and small businesses don’t matter. In the hypocritical culture of India, as long as the middle class is not suffering — for the time being — they prefer to take what they believe to be the higher moral ground.

Why This Problem Will Get Much Worse

Let us do a few simple numbers… What has been made illegal comprises 88% of the monetary value of all currency notes in circulation. In an economy based primarily on cash, the liquidity of cash is the lifeline of the economy. This requires that 88% of the new currency be rapidly dispersed into the market.

The Indian government has absolutely no history of being able to entertain a project of this type or magnitude ever and after the British left, India’s institutions have continued to deteriorate, so hope is not an option. If they fail to issue enough new bills, the very limited supply of Rs 100 notes will disappear within a few days.

As any rational person has a tendency to store good money while using bad money in transactions, people will hide all newly released currency as well as Rs 100 banknotes until full liquidity is restored. The rich and the well-connected have already done what was needed.

A reminder of Gresham’s law for Modi:  “Bad money drives out good money.

Those who have no need to convert their money as all their cash is already in the banking system (as is the case with the salaried middle class), which they think is making them look like a heroes in the eyes of Modi and is giving them a sense of moral superiority –  they are nothing but turkeys being groomed.

Banks are giving out a mere Rs 20,000 ($300) a week at best. Their lives will suffer and for all intents and purposes, their accounts are frozen. This is Cyprus ten times over –  they just haven’t realized it yet.

Whichever way one looks at the above numbers, India’s economy is going to start suffocating, within weeks, if not within days. And a serious political and social crisis will take place, which will eventually acquire a life of its own. That is when the as of yet unperturbed salaried middle class wakes up with pain.

As in any irrational system, it is not reason and morality that will have convinced them to scuttle their hypocrisy and limited vision, but the violence and pain that they themselves will suffer.

Corruption

Politicians and bureaucrats of course cannot be seen queuing at the banks. Many bank branches apparently had their cash secretly replaced by the now-illegal bills before the first day of reopening. While no more than two bills of Rs 2000 each should have been collected, those better connected apparently haven’t had a problem with this and have been shown showing off packets of the new currency they have. All this cash will do nothing but end up under mattresses, as it has in the past.