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Showing posts with label comex. Show all posts
Showing posts with label comex. Show all posts

Tuesday, May 9, 2017

China to challenge both the LBMA and Comex through the creation of a new gold and silver futures trading platform

The London Metals Exchange, which is a Hong Kong owned subsidiary out of London, is ready to take on the Western futures markets by introducing their own gold and silver trading platform starting on July 10.

This new program by the LME will function on the London markets and provide a fully functional futures trading market in which investors can settle for both cash, or physical gold and silver delivery.

London Metal Exchange, a subsidiary of Hong Kong Exchanges and Clearing, will launch gold and silver spot and futures trading in London on July 10 in a bid to capture the increasing demand for trading of precious metals in London, the exchange said on Monday. 
The LME gold and silver product will launch at a time when HKEX is planning to introduce gold futures in the third quarter of this year should it secure approval from the Securities and Futures Commission. The trading in the two markets however, would remain separate, and there will be no cross trading. 
“The HKEX and the LME gold products would be traded in different markets and different time zone,” said Kate Eded, LME head of precious metals who was speaking at a workshop in Hong Kong on Monday. 
The gold and silver contracts to be launched at the LME would be traded in US dollar which will include spot trading and trading of future contracts with a maturity of up to five years. Investors could choose cash or physical settlement. Five banks including Morgan Stanley and Goldman Sachs would help quote prices to maintain liquidity of the markets. - South China Morning Post
Unlike the LBMA, and especially with the U.S. based Comex, these markets are primarily used for derivative paper trading and rarely perform any actual metal deliveries.  And with the LME being tied to both Hong Kong and London, the potential for China to eventually usurp control over the global price for gold and silver from the LBMA and the Comex moves another step closer as true metals investors will find it more favorable to migrate to an exchange that deals with physical deliveries of actual metals.

Wednesday, May 3, 2017

Schizophrenic gold market has highest level of long open interest since November while price continues to drop

Despite the fact that naked short contracts for gold (and silver) in the future's market continue to be dumped by a combination of bullion banks, hft algorithms, and perhaps even the Federal Reserve's own trading desk, open interest on the long side of the monetary metals continue to increase as well.  And while this buying has not been enough to keep the price from falling close to $50 over the past three weeks, geo-political events coupled with what appears to be a declining economy are leading investors to rush into gold at levels not seen since last November and following the Presidential election.

Investors continue to pour their money into the safe haven of gold, pushing net long positions of the precious metal to their highest level in five months. 
Amid rising tensions over the nuclear issue on the Korean Peninsula, surprise missile strikes in Syria and the first round of the French presidential election, investors have felt little need to pull out their assets out of the precious metal. Instead, a series of events have led net long positions of gold to reach 200,677 contracts, or 624.2 tons, as of April 25, up 2.5% from a week before, according to the U.S. Commodity Futures Trading Commission. The position marks the highest level since early November last year. 
Meanwhile tensions on the Korean Peninsula remain, as North Korea on Monday suggested that it would continue its nuclear weapons tests despite repeated warnings from U.S. President Donald Trump. 
While some concerns are lingering, other political risks are looming too. The latest one is the tax reduction plan proposed by Trump last week. The proposal, which would cut corporate tax to 15% from 35%, is seen as unlikely to win support, and "investors are questioning its viability," said Koichiro Kamei, a financial and precious-metals analyst. "Uncertainty is spreading over the Trump administration's ability to deliver on its promises, and it is making investors reluctant to let go of gold." - Asia Nikkei

Saturday, April 22, 2017

Gold and silver price diverges even more last week as ratio is now over 71:1

While there were at least two distinct attacks on gold by the bullion banks last week as the amount of paper short contracts on the Comex has reached record levels, the price was able to stay relatively stable as it ended the week around $1285.

But unfortunately the same cannot be said for silver as it was hit much harder than its more valuable monetary brother, and by the end of the week the ratio between gold and silver prices reached over 71:1.


Silver has always carried much greater volatility since the metals were removed from the U.S.'s monetary system, however this extreme divergence in price is primarily due to the amount of manipulation allowed in the futures markets where unlimited amounts of shorting are accepted to help protect the dollar and reserve currency.

Historically, the price ratio between gold and silver was at best 5:1 at times, and on average between 10:1 and 16:1.  And when you take into consideration the fact that silver is now an intrinsic necessity for most of the electronics and technology we rely upon to run our daily lives, then at some point even the manipulation will cease as demand for the metal will override even the central bank's ability to control its price.


When gold and silver ratio's reach extreme levels on either side, then it is very profitable to conduct a swap of one metal for the other dependent upon how big or small that ratio is.  And at 71:1, exchanging gold for silver is a great way to make future profits without having to spend a great deal more than the premium costs that might be required by local and online coin shops who can easily do this exchange.

Tuesday, April 18, 2017

Another day, another manipulation as gold slammed with naked short contracts after dollar falls below 100 on index

As we at The Daily Economist have continued to say over and over in the investment space, there are no markets, only manipulations.  And whether it is the Fed offering trillions in cheap money for insiders to buy back their stocks, the Exchange Stabilization Fund buying S&P future and the Yen to trigger algo traders, or the bullion banks naked shorting the precious metal markets, the only way to trade in today's world is to go with the manipulators and not use technicals or fundamentals.

Thus it should have come as no surprise on April 18 when in a matter of seconds, a bullion bank dumped over $3 billion in naked short contracts at the same time the dollar fell below 100 on the index, and where gold was working its way towards $1300 per ounce.

While the dollar index tumbles to its lowest level since days after the electiom, someone decided this morning was an opportune time to dump over 22,000 gold futures contracts (almost $3 billion notional) sparking a quick plunge in the precious metal. - Zerohedge
Interestingly, the short position at the Comex had actually fallen to its lowest levels since the elections as gold and silver crossing over their 200 day moving average spelled a strong buy signal for the commodities.  But with today's dumping, short contracts are back up to over 68,000.


(and add 22,000 to the April 11 number)

Sunday, April 16, 2017

Ted Butler wants metals owners to join in mail campaign to the Comex to end silver manipulation once and for all

Long time precious metals analyst Ted Butler has started a campaign to try to end price manipulation in the silver markets by asking everyone to copy and paste a letter he wrote to two new top executives taking over at the U.S. Commodities Futures Trading Commission (CFTC).

In the letter, Mr. Butler points out the years of allowed fraud and price manipulation that has gone on in the futures markets of precious metals, and in particular silver, and cites information from the Comex and CFTC's own websites that validate the manipulation going back more than a decade.

So, for anyone with an interest in higher silver prices or who is a believer that free markets, not controlled by large traders gaming the system, is the right way, then there is something you might consider doing. Now is an ideal time to raise these very important issues about concentration and manipulation in COMEX silver. The two officials most responsible for uncovering manipulation at the CFTC just started in this capacity on Monday and should be more open to the facts than otherwise. I can understand how many might feel that contacting these officials and others might be a waste of time, given the agency’s failed record over the years in this regard. Still, I’m not talking about any burdensome effort, just sending a few emails or letters to get straight answers to some very good questions. 
I’ve already written to the two new officials (both by email and hard copy) and feel free to use what I sent. I would ask you not to improvise and include other issues, such as gold manipulation. Besides, nothing would impact gold prices more than having the silver manipulation terminated. The best approach is in being as specific and factual as possible so as to pin the agency down. They may refuse to answer and one way of insuring maximum pressure is to write to them through your elected officials. Here’s the letter I wrote that you are free to copy. I’ll include pertinent emails address at the end. - Silver Seek
And here is the letter to copy, paste, and email to the addresses and commissioners below.

April 10, 2017

Andrew B. Busch via Email
Chief Market Intelligence Officer

James McDonald
Director - Enforcement Division

Commodity Futures Trading Commission

1155 21st Street NW
Washington, DC 20581

Dear Sirs,

Congratulations and best wishes on your appointments to key positions at the Commission at this critical time in market history.
I’m writing concerning a matter that the Commission has considered on a number of past occasions - allegations of a silver price manipulation on the Commodity Exchange, Inc. (COMEX). The reason the Commission has considered the issue of a silver price manipulation several times in the past is because the agency’s own public data and guidelines point strongly to such a manipulation. Never have the data been more convincing than what was just published Friday, in the Commission’s release of its weekly Commitments of Traders (COT) Report, for positions held as of April 4, 2017.

That report indicates that the concentrated net short position held by the four largest traders in COMEX silver futures hit an all-time extreme in numbers of contracts of 78,021, the equivalent of 390 million oz. of silver. The concentrated net short position of the eight largest traders was indicated at 104,978 contracts or the equivalent of nearly 525 million oz., or more than 60% of world annual mine production. No other commodity comes close to COMEX silver futures in terms of a larger concentrated short position when compared to real world production. On its face, the large concentrated short position in COMEX silver futures would appear to be an artificial price depressant.

As you know, the Commission monitors and publishes concentration data in all regulated futures markets as the prime front line defense against price manipulation. After all, it would be nearly impossible to manipulate any market without a concentrated position. But not only do COMEX silver futures stand out as having the largest concentrated short position of any commodity, in terms relative to real world production, consumption and existing inventories, the concentrated short position in COMEX silver futures is notable for other reasons.
For one reason, the big short traders do not appear to be engaged in any sort of legitimate hedging, since there are no signs they represent actual producers or hedgers of physical holdings. Separate agency data, contained in the monthly Bank Participation Report, indicate that the largest shorts are mostly domestic and foreign banks essentially operating as speculators, in a pseudo-market making capacity against other speculators. Publicly-owned mining companies are required to disclose any hedge activity and few, if any have disclosed any hedging in silver. The big short sellers in COMEX silver futures are financial firms, mostly banks, speculating against other big speculators and have no legitimate economic or hedging purpose in dealing in COMEX silver in the first place. As I’m sure you know, Congress allows futures trading for the purpose of encouraging legitimate hedging, not to encourage excessive speculation.

The largest COMEX silver short seller for the past nine years is JPMorgan. That has been the case ever since it acquired the failing investment bank Bear Stearns, the former largest COMEX silver short seller, according to Commission data and its correspondence with lawmakers. The special manipulative twist here is that since 2011, JPMorgan has engaged in an epic accumulation of physical silver at prices much lower than would have existed if the bank had not also been the largest silver short seller on the COMEX. In the recently completed COMEX March silver futures delivery period, JPMorgan stopped (accepted) 2689 contracts in its own proprietary trading account, plus another 739 contracts on behalf of a client(s), considerably more than the 1500 contracts allowed according to exchange regulations. This while JPMorgan was the largest short holder in COMEX silver futures. It is not possible to imagine a more compelling motive or intent for manipulation than to acquire a massive amount of any commodity at depressed prices, where the acquirer is responsible for the depressed prices.

Almost without fail, on every past occasion where the concentrated short position in COMEX silver futures reached extreme levels, it was only a matter of time before the price of silver gets rigged lower by these big shorts to induce speculative selling from traders operating on technical price signals. In fact, COT report data indicate that JPMorgan has never taken a loss, only profits on every silver short position it has added over the past nine years. Such results would not be possible in a market that wasn’t manipulated in price. In essence, speculators have taken over the price discovery process in silver because there are so few real hedgers trading on the COMEX, only speculating banks betting against other speculative traders. Even assuming the current extreme concentrated short position leads yet again to a sharp selloff in silver, there is another issue that goes to the core of regulatory concern.
In addition to the clear agency data pointing to a silver price manipulation, the presence of such a large and non-economic short position necessarily enhances the likelihood of disorderly market conditions once it becomes clear to enough market participants that unbacked concentrated short positions on the COMEX have been the reason why silver prices are so depressed.

I have communicated all this to the Commission, JPMorgan and the CME Group (owner-operator of the COMEX) for many years, with hardly any acknowledgement or rebuttal. I am hoping you will consider this matter differently and act to finally end the manipulation. I’m sure how you handle this matter will define your tenure. If I can be of any further assistance, please do not hesitate to call on me.
Sincerely yours,

Ted Butler

Andrew B. Busch - [email protected]
James McDonald - [email protected]
Acting Chairman J. Christopher Giancarlo - [email protected]
Commissioner Sharon Y. Bowen - [email protected]

Let me close by telling you that I am very thankful for the unique opportunity created by the new senior appointments at the CFTC, along with the simultaneous publication of the most concentrated data in silver shorting in history. I assure you that I am not holding my breath waiting for the CFTC to finally step up to the plate and do the right thing; not after 30 years of denial and obfuscation. I know full well that the agency’s denials up through today have only hardened it to maintain the façade that nothing is wrong in COMEX silver, despite glaring and growing evidence to the contrary. Still, it would be a waste not take advantage of an unexpected opportunity.

Ted Butler
April 12, 2017

www.butlerresearch.com

Friday, February 17, 2017

Silver could be the greatest potential investment of all time as paper sales of metal in Comex and LBMA are close to 3000 to 1

While China is currently in the process of trying to wrench price determination for gold from the Comex and LBMA, these futures markets still have absolute control over how the price of silver is determined in the spot markets.

And in a couple of recent podcast interviews, precious metal and bitcoin analyst Bix Weir announced that from his research he has discovered that the amount of derivatives being sold in relation to the amount of physical silver actually held in both the Comex and LBMA is close to 3000 to 1, with over 100 billion ounces being traded in 2016 for a registered inventory of only 30 million physical ounces.

Crush the Street: I'd like to start off with your latest publication named $10,000 ounce silver if Donald Trump drains the silver swamp.  $10,000 per ounce silver, not gold?  And silver is sitting at around $17 per ounce... that's a pretty high price and I'd love to get the details on this analysis. 
Bix Weir: It goes back to silver and the price suppression scheme that's been in place for close to 150 years... going back to the Opium Wars in the 19th century.  And then it got kicked into high gear when computers were invented in the 1960's.  I do alot of work on the computer rigging side of the world and that's what Roota (in Road to Roota) stands for (Root A) and was a term created by Alan Greenspan in the 1960's when he helped create the computerized banking system. 
What we see in the silver price today is not a silver market anywhere in the world that trades freely.  What we have in the Comex and LBMA is a market that trades electronically futures and options contracts (derivatives).  The Comex and LBMA are supposed to be a physical market, but it's not, and you can tell by the volumes.  Every year they 'supposedly' transfer over 100 billion ounces of silver, and there hasn't even been 100 billion of ounces of silver dug up in the history of the world. - Crush The Street
The key for this of course is when the manipulation ends, or is forced to end, it will suddenly cause a volatility spike unseen outside of a hyper-inflationary event as price discovery reverts back to a supply and demand model versus a rigged manipulated one.  And this has already begun with the Deutsche Bank testimony in which they, and several other bullion banks, admitted to have been rigging the price of silver for decades.

An end to the manipulation will see silver rise in a two-fold fashion.  First, the banks will need to cover their short positions that are currently active in helping to suppress the price in the derivative paper markets.  And second, once the price climbs in relation to the buying OR insolvency of these banks in defaulting on their derivative positions, the reality of how small supplies really are in the silver market will cause another massive spike due to its absolutely vital requirement to support the global technology sphere.

The gold to silver ratio is hovering around 68:1 right now, and nearly all analysts see silver as more depressed in price than its yellow metal sister gold.  And just as the discovery of oil made petroleum the most important global commodity for use in agriculture, industry, and energy, silver is well on its way to taking over this mantle as the world rushes forward in needing the metal for electronics, alternative energies, and all future technology to come in the 21st century.

Tuesday, December 27, 2016

China's gold market now being used to back the expansion of the Yuan

The antiquated 'gold standard' now appears to not be the only way to back one's currency with a precious metal as a new program instituted by the Shanghai Gold Exchange (SGE) will soon aid in the expansion and internationalization of the Chinese Yuan.

Just prior to the Christmas break, the SGE launched a new English language website that has the primary purpose of allowing foreigners to access products and purchase gold in RMB.  And since the SGE is the world's largest physical gold market, this move has the two-fold effect of first allowing individuals to bypass London and the Comex if they have no interest in paper gold trading, and secondly to aid in the expansion and internationalization of the Yuan in global trade.

Last week the Shanghai Gold Exchange (SGE) launched a new English website to offer international customers more information and tools on trading gold in renminbi through its subsidiary in the Shanghai Free Trade Zone the Shanghai International Gold Exchange (SGEI). BullionStar took the opportunity to translate a speech by a Teng Wei, Deputy General Manager of the SGEI, named “How China’s Gold Market Can Help The RMB Achieve International Status” that was held at the Renminbi World summit in Beijing on the 29th and 30th of November 2016. In the speech Teng Wei outlined his vision for the SGEI going forward regarding renmibi (RMB) internationalization, connecting the onshore and offshore renminbi market and increasing gold market share. - Bullionstar via Zerohedge
weekly-sgei-sge

Graphic courtesy of Bullionstar

Over the past 45 days the Shanghai Gold Exchange has begun to disconnect itself from the global price standard set twice a day in London and New York by adding premiums of between $30 - $50 to their designated 'fix price'.  And by having a price spread of this magnitude so far above that of the Western paper gold markets, opening up a new portal for U.S. and European traders to buy gold, even in the Yuan currency, will lead to a massive increase in their market share of the global gold market and an ever expanding increase in transactions being done in the Chinese RMB.

Tuesday, December 20, 2016

Growing spreads between London and Shanghai means that very soon China will take control over gold pricing

Two weeks ago, Deutsche Bank publicly admitted that they and several other banks have been manipulating the price of both gold and silver for several years now.  And yet despite these admissions, both London and the Comex have been smashing down the price of each to the point now where the markets can no longer even facilitate a break even cost for companies producing the metals.

“The analysis of FCF breakeven price suggests that 50% of the gold miners generate free cash flow below $1,150/oz gold with an average FCF breakeven gold price of US$1,135/oz for 2016E,” BMO said. “Excluding dividends, the FCF breakeven gold price for the miners declines to $1,070/oz in 2016E. 
Silver miners may be “less prepared,” however, after enduring a deeper correction in the price of silver relative to gold, BMO said. Three out of 11 companies report FCF breakeven costs for 2016 that are estimated below $15 an ounce, BMO said. - Kitco
As of Dec. 20, the current spot price for gold in London was $11.25, which according to the above study means that the manipulated 'fix' price at the Comex is now $10 below the average cost necessary for 50% of the miners just to break even.

However, as noted in an article published over the weekend here, spot prices out of Shanghai are at least $50 more than what is set in either London or New York, and premiums for metals are even higher than this when purchased in large quantities by investors, stackers, or speculators.

This dislocation in prices between Eastern and Western markets is now creating a nexus point where according to long-time bullion analyst Jim Sinclair, as well as by the CEO of Matterhorn Capital out of Switzerland, China is growing ever closer to being the primary market for determining gold and silver prices, and leaving London and New York with little metal to back their paper contracts.
For those distraught over the COMEX paper futures price of gold plunging towards $1,000/oz, Switzerland’s Egon von Greyerz has some information for you: 
I am not upset because I know one day, COMEX will default. The futures market will default. The banks will not be able to deliver the paper gold they have issued. One day people will come in and try to get their gold, and there won’t be any gold when they ask for it. How can you be nervous (holding gold)? The truth will eventually come out, and that truth will be very painful for all the paper holders of gold.” - Greg Hunter via Silver Doctors

Thursday, December 15, 2016

Following the Fed rate hike and spike in the dollar, the gold price spread between London and China soars to $50

Gold prices were once again beaten down in the United States following the Federal Reserves decision on Dec. 14 to raise rates by .25 bps in only the second move by the central bank in the last decade.  And while gold was sold off on Wednesday as well as early Thursday morning in New York, markets in Shanghai have not followed the same path as those in London and the Comex.

In fact with the London AM Fix coming out just a few hours ago, the price spread between the physical and paper markets have now spiked to a record $50 difference.

Shanghai Price Fix


London Price Fix


As mentioned earlier this week in another article, the divergence in official prices are also being expanded by record amounts of premiums placed upon gold by the market makers in China.  In fact, according to analyst and statistician Dr. Jim Willie, the premiums necessary to purchase large quantities of gold have forced prices right now to exceed $2000 per ounce in the physical markets.

As the dollar continues to strengthen the price of gold in nearly all other currencies and markets will continue to rise, and in some cases break through record levels.  And what we are seeing right now in the price of gold out of both London and the Comex is not indicative of the record demand being created all across the world which is the primary basis between the spreads in price we are seeing between the London fix and the one coming out of Shanghai.

Sunday, November 27, 2016

Spread between London paper gold price and Shanghai physical price now at $15

Over the past 35 days the spread between the daily AM and PM gold price fixes set in London and in Shanghai have steadily moved apart as the physical markets in China break away from the prices set in the Western paper markets.

Back in late October we began to see the difference in price grow to around $5, with the spread then moving to a difference of $7 just two weeks later.  But with the London and Comex paper markets crushing the paper spot price back under $1200 per ounce since the Presidential elections on Nov. 8, the physical markets in Shanghai have not seen fit to accept these prices based on the actual rising demand in their own exchanges, and are reflecting it in price as the spread on Nov. 25 is now a whopping $15 difference.

The gold premium on the Shanghai Gold Exchange soared as high as $30 Thursday before easing back to a still historically high level of around $15 on Friday, reports MKS (Switzerland) S.A. On Thursday, the “feature of the day was the SGE premium, which rose to an amazing $30 over the loco London gold price, the loftiest levels seen since 2013,” says Sam Laughlin, precious-metals trader with MKS. “The difference between then and now, however, is now the high premium seems to be more a factor of a supply shortage in mainland China as opposed to outright demand. As a result, despite the high premiums this week, the turnover has not been anything enormous.” The premium fell by roughly half on Friday, he continues. “While still elevated, we did some fatigue creeping into the Shanghai premium today, 'easing' to around $15 relative to loco London gold.” - Kitco
London Gold Fix, November 25, 2016

Shanghai Gold Exchange Gold Fix, November 25, 2016

As central and bullion banks in the West continue to beat down the price of gold in their paper derivative markets, the spread between the Asian physical and Western paper gold prices will continue to widen.  And at a certain point, producers of gold will find it much more profitable to simply ship their metals directly to China rather than to continue to supply the Comex or LBMA, who's manipulation of the spot price using 100's of naked short contracts no longer reflects the true price of the precious metal.

Saturday, November 12, 2016

Gold price spread between Shanghai and London now up to $7 as recent price slam sends more buyers to China

Following the Presidential election on Nov. 8, the gold cartel dumped extraordinary amounts of paper gold contracts which not only reversed the $61 gains that occurred when it appeared that Donald Trump was going to win, but they also ended up slamming down the price by an additional $50 over the next two trading sessions.

Part of this was due to a massive rise in the dollar, which went from 96 to over 99 on the dollar index, and the deflationary scare that crept into the markets that many now believe will quash the Fed from raising rates in December.

In the meantime, the takedown of the gold price by the bullion banks through their dumping of 85,000 paper contracts, or over $10 billion in gold derivatives, was the equivalent of 12% of the global gold mining output annually.


Yet the chaos in the gold price had limited effects over in China, where the Shanghai Gold Exchange functions as the world's largest physical gold market.  And in one of the more interesting notes over the past days was that the spread between the London/Comex gold fix and the Shanghai daily fix is now $7, which is up $2 from just one month ago.

Shanghai morning fix Nov 11 (10:15 pm est last night): $  1265.29 
NY ACCESS PRICE: $1260.00 (AT THE EXACT SAME TIME) 
Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1267.47 
NY ACCESS PRICE: 1260.60 (AT THE EXACT SAME TIME/2:15 am) 
HUGE SPREAD TODAY!!  7.00 dollars - Harvey Organ

Monday, October 31, 2016

Shanghai Gold Exchange expands reach into Dubai as the DGCX will now use Yuan benchmark instead of London or Comex

On Oct. 31 China's Shanghai Gold Exchange (SGE) signed an agreement with the Dubai Gold and Commodities Exchange to begin using their Yuan denominated price benchmark instead of the long-standing London and New York gold fix price.

In addition, this new agreement is just the first that the SGE is undertaking with commodity exchanges around the globe as the world's largest physical gold market begins to takeover pricing of metals in more markets.

SGE, world largest physical bullion exchange, says in other talks about similar cooperation 
Shanghai Gold Exchange and Dubai Gold and Commodities Exchange signed an agreement on Friday in Shanghai which makes the DGCX the first foreign exchange to use the SGE's renminbi-denominated gold benchmark. 
The SGE is in talks with other exchanges about similar cooperation, according to an SGE circular. 
SGE is the world's largest physical bullion exchange. The renminbi-denominated gold benchmark, also known as Shanghai Gold was launched in April this year. It is one of China's efforts to earn more say over pricing of the precious metal and increase its influence in the global gold market. 
China is among the world's largest producers, consumers and importers of gold, and it deserves pricing power that matches its position. It should have more say in an industry long dominated by London, which sets global spot prices, said analysts. - China Daily

Thursday, October 27, 2016

What should the real price of gold and silver be with all the paper contracts sold for each bullion ounce

With the rise of the Shanghai Gold Exchange over in Asia, there are now three primary gold markets functioning globally.  But only one is an actual physical gold market since both London (LBMA) and New York (Comex) are paper gold based derivative markets.

For years organizations like GATA have sought to prove price manipulation and the use of bullion banks by the Fed and the U.S. Treasury to keep down the paper spot price to protect these derivative contracts.  And this proof of manipulation was finally validated earlier this year with a public mia culpa by Deutsche Bank that they and others have been purposely manipulating gold prices through the use of naked shorts dumped periodically onto the gold markets.

So even with these new disclosures of price fixing and illegal market trades, one has to ask why are the central banks and government finance agencies still continuing to manipulate markets without a care that they would be prosecuted, and most importantly, is there an underlying purpose behind such mechanisms?

The answer may lie in a new interview discussing data derived from GATA analyst Adrian Douglas who suggests that the real gold price should be well over $50,000 per ounce to backstop the $14 trillion in foreign held debt, and that the 40 -100:1 paper contract to physical gold ratio currently used in the Comex is a means to keep the paper price down while protecting the debt held by foreigners, which are using held gold as collateral denominated at its true value.

Silver Doctors: GATA's Adrian Douglas has done extensive research into the paper manipulation of gold and silver.  But the precious metals world changed overnight when Jeffrey Christian from CPM Group made this startling admission at the CFTC hearing in March. 
Jeffrey Christian: And you've heard people out there saying it today, that there is just not that much physical metal out there.  There isn't.  But as the physical market uses that term, there is much more metal that that... there is a 100 times more metal (paper metal).
Precious metals are financial assets, and like currencies and T-Bills and T-Bonds, they trade in multiples of 100 times the underlying physical. 
Silver Doctors:  Adrian Douglas's research leads him to conclude that the outstanding paper metals manipulation in gold is 45:1.  Meaning there are 45 paper ounces of gold sold for every one ounce of physical gold in the vault.
Which multiplies the 'apparent' gold supply 45 times.  Therefore suppressing price to what we see today. 
Adrian Douglas:  The Supply of gold is artificially increased by this paper gold about 45 times the actual supply.  So that means when that is exposed, and people are asking for gold that isn't there, the potential is that gold's purchasing power will be multiplied by 45 times. 
Silver Doctors:  There are 45 times the amount of gold sold as there is in the bullion banks, so what is the price of gold for the bullion banker?  $56,000 an ounce.
That is because they sold 45 ounces total (at approx. $1245 per ounce) for every physical ounce they owned.  In essence, they received $56,000 for every physical ounce sold.
Now the U.S. government claims they have 261.5 million ounces of gold held in reserves, so let's take them at face value and assume the gold isn't encumbered.  People say the dollar is backed by nothing, but it actually is backed by the gold reserves they claim they have. 
Now let's consider the dollar.  We've issued $14 trillion in (debt held by foreigners) against 261.5 million ounces.  If you do the division ($14 trillion / 261.5 million) the price comes out to... 
Approximately between $53,500 - $56,000 per ounce.  The exact same amount as the LBMA and Comex selling 45 times in paper gold the number of actual physical gold held in their vaults.
It appears that the paper gold manipulation is purposely being done to protect the dollar during this era of massive money expansion, and increase in debt.  And they are using the paper derivatives markets of the Comex and LBMA to suppress the TRUE VALUE of physical gold since if it were to run free to achieve its actual value it would collapse the dollar as well as the rest of the world's fiat currency mechanisms.

Saturday, October 22, 2016

Gold price difference out of China now up to $5 more than in London or Comex

On Oct. 18 the spread in gold price between the Shanghai Gold Exchange (SGE) and the London/Comex gold fix was a record $5 as the Eastern physical markets continue to ever so slowly pull away from the Western paper gold markets.

The SGE is the largest physical gold market in the world, and commenced declaration of its own gold price back in April of this year.  And over the course of 2016 they have intermittently increased the spread between themselves and the purely paper markets run out of London and New York.

Shanghai Gold Exchange fix times: 10:15pm est and 2:15am est 
London gold fix times: is at 5:30am est and 10am est 
Shanghai morning fix OCT 18 (10:15 pm est last night):  $1276.80 
NY ACCESS PRICE:   $1271.50 (AT THE EXACT SAME TIME) 
Shanghai afternoon fix:  2: 15am est:  $1274.31 
NY ACCESS PRICE:   $1269.70 (AT THE EXACT SAME TIME) 
Spread between each market at both fix times:  $5 difference - Silver Doctors
As this difference in price continues to expand, it will eventually create an price evaluation where gold miners will stop selling their products to the Comex or LBMA, and find it more affordable and profitable to ship their gold to Chinese markets..  Likewise, it will also eventually lead to an arbitrage where traders will buy all the gold up in both London and New York, and then sell it to Shanghai causing an asset flight from West to East.

Saturday, October 8, 2016

Recent gold take down may be part of a gambit involving China seeking to buy Deutsche Bank's gold derivative book

Last week while China's financial infrastructure was primarily closed for their annual Golden Week holiday, one or more entities slammed the gold price down by dumping billions of dollars worth of contracts on at least three separate occasions.  And without opposing buy pressure from the usual counter-parties in Asia, the price was pushed down from a high of $1317 on Oct. 3 to an inter-day low of $1246 on Friday.


However, most of the trades that created the drop of $70 over the course of four days occurred almost instantaneously, with billions in contracts being dumped onto the market in less than a minute each time.

So what was the cause and reason for this attack on the gold price, especially since there was no news or events at all during the week that would spur traders to divest their holdings in such quantities?  Speculation has been rampant in the alternative media, but nothing conclusive as to why...

until now.

On Oct. 6, well known and respected statistician and analyst Dr. Jim Willie gave an interview with Perpetual Assets to discuss the current state of the economy, and in particular events such as Deutsche Bank's insolvency and the recent takedown in gold.  And during his over two hour interview, Dr. Willie laid out a scenario regarding China's desire to buy Deutsche Bank's gold derivative book, and the pressure put on the German bank by London and the U.S. to counter the move by forcing them to sell their contracts onto the market, even at a loss.
Dr, Jim Willie: What is Deutsche Bank's biggest problem right now, outside the law? 
Will Lehr:  Their derivatives book? 
JW: It's cash.  I don't mean where they are in trouble, but rather what is their challenge.  Cash.  They are having liquidity nightmares.
So what I am hearing is that the Chinese are coming forward, and remember they are off all week for some holiday, and that's one reason that gold got slammed.  But the Chinese have offered cash... I've heard they've offered something on the order of $100 billion.   
And I go WHAT?  Just for Deutsche Bank?  And my source said no, no no, they aren't interested in the whole bank... they are interested in their gold derivatives book. 
Because what we're hearing in the buzz among bankers... you know, New York, London, and European centers is that indeed China is looking to buy their gold derivative book, and the word has it that the derivative book involves more gold than is in the Comex.   
More than what's traded in the Comex in a year. 
It's bigger than the Comex by an order of magnitude. 
Ok, so Deutsche Bank is interested in the Chinese deal, but what they're experiencing from what I'm hearing, is that the Deutsche Bank officials are being forced by London and Wall Street, to dump their derivative book.  And I don't know if it's at a loss, and I have the feeling the Wall Street and Londoners don't care whether it's at a loss, they just want this derivative book to slowly be dissolved and sold off so that the Chinese don't get it.
Fast forward to 31:20 in the video below to hear the entire story behind the Chinese gambit, and the pressure by the Western gold consortium to force Deutsche Bank to dump their derivatives onto the market to keep it out of China's hands.

Tuesday, October 4, 2016

Comex uses Chinese bank holiday to crush gold below $1300 and silver below $18

In recent history the West has used bank holidays, or low volume periods in Asia, to dump futures contracts worth millions and sometimes billions of ounces despite the fact that these bullion banks never provide the physical metals to support their trades.  And it is through this mechanism that the central banks often use bullion banks, and the shorting of paper contracts, to prop up the dollar when it comes under pressure.

However, it is this week in particular, from Oct, 2 - 7, that the Comex and London Gold markets can get their biggest bang for their buck in driving down gold prices thanks to little opposition from Asian buyers.

Live New York Gold Chart [Kitco Inc.]

Live 24 hours silver chart [Kitco Inc.]

With several black swans hanging over both the economy and the markets, central banks are using every measure possible to protect the dollar, especially in light of the fact that the Chinese Yuan has now become a global currency that is in direct competition with the U.S. reserve.  And unless something significant occurs between now and the end of this trading week, look for the precious metals to fall under even more extreme pressure, and be beaten down for no particular reason other than through the manipulations imposed by the bullion banks.

Friday, September 9, 2016

Anti-Wall Street group seeks to create a new transparent gold exchange using blockchain technologies

In his now famous book, Flash Boys, author Michael Lewis took real Wall Street individuals and fictionalized them to paint a picture of just how manipulated the paper trading markets really are,

Now those who were represented in Lewis's book are seeking to go head to head against the fraudulent banks and exchanges by creating a new gold exchange that would run with full transparency, and use blockchain technology to accomplish this.

IEX Group, which rose to prominence with its bid to shake up stock trading in the United States, now aims to do the same in the more than $5 trillion-a-year gold market with a new exchange being created by its spinoff TradeWind Markets, a board member of the new venture said on Tuesday. 
The protagonists of Michael Lewis's book, "Flash Boys: A Wall Street Revolt," are planning a gold exchange that would use elements of blockchain technology to improve transparency and the clearing and settling of trades, said Matt Harris, a managing director at Bain Capital Ventures. Bain has an investment in IEX. 
Blockchain is a tamper-proof shared ledger that can automatically process and settle transactions using computer algorithms. 
TradeWind Markets began as an internal project of IEX and was spun off as a separate firm earlier this year. In June, the startup raised $9 million, according to a regulatory filing with the U.S. Securities and Exchange Commission. A person familiar with the operation who asked not to be identified because the plans are not public, said the funding came from IEX and Sprott Inc, a Canada-based investment firm that manages physical bullion funds. A lack of transparency is one of the problems that makes the gold market ripe for change, said Harris, who is on TradeWind's board. - Reuters
The introduction of the Shanghai Gold Exchange in Chain last year changed the game for physical gold trading, and created a crack in the long-standing Western control over the gold price.  And with the advent of a new and trusted gold exchange being built that would be outside the controls of the banks that run them now, and functioning on blockchain technology, it could cause miners, refiners, and producers to move away from contracts and delivery with London and the Comex and instead sell metals directly on this new exchange, allowing prices to rise and fall according to the free market, not price manipulations.

Thursday, September 1, 2016

China's gold market may be making move on Comex as prices in Asian market go higher than London spot

The one big fear that both London and the U.S. Comex have in their long-standing control over the world's gold price may soon be coming to pass as prices at the Shanghai Gold Exchange (SGE) are climbing higher than the London fix, opening the markets up to a potential arbitrage that could wipe out the West's supply of the precious metal.

On Sept. 1, the day that China began selling M SDR bonds on the open market, the price of gold at the SGE opened $9 above the London fix price, making it more profitable for both miners and sellers to participate in the Chinese market over both London and New York.

Shanghai morning fix (10:15 pm est last night) 
$1319.72   (price in NY on access at the exact same time:  $1310.94) 
Shanghai afternoon fix:  2: 15 am est (second fix/early this morning) 
$1315.99    (New York price at the same time: $1313.30) 
The two London fixes:
Aug 31 2016 am:$1314.45  (2 am est)
pm:$1309.25 (10 am est) 
Take a look at the Shanghai fix.  Their early morning fix (our late at night time zone) saw the fix at $1319.72.  The exact NY price at the time was 1310.94 for a difference of almost 9 dollars. 
The second fix has:  Shanghai at 1315.99 with NY at 1313.30 an the exact same time/the London fix came in at 1314.45 with timing 15 minutes later 
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. - Silver Doctors

Tuesday, June 14, 2016

Potential for gold shortages expanding as miners decide to hold 20-30% of output off the markets

Besides the historic accumulation of gold by countries such as Russia, China, and India over the past four years, and increased speculation in the precious metal by billionaires and well known hedge fund managers, there is another element to add the to the mix that could soon be tightening supplies and driving up prices.

In an interview with SGTReport on June 12, the CFO of MX Gold Corp is joining in with others in the mining industry to hold back between 20 and 30% of their gold output from the market, and stockpile it until prices rise to a more equitable fair value in or out of the Comex.

For years, the Commodities Exchange (Comex) and the London Gold Fix have manipulated and suppressed prices in order to protect paper currencies in the U.S. and Europe, and this has led to an environment where it actually costs mining operations more to take it out of the ground than the price they receive from mints or refiners.

MX Gold Corp CEO Akash Patel and CFO Kenneth Phillippe say that they are positioning their company to stockpile between 20% to 30% of their physical gold production in coming months, noting that prices are nowhere near where they should be at current supply and demand levels. In an interview with SGT Report, Phillipe appears to be taking the stance of many precious metals investors, which is to stockpile the physical asset in anticipation of any number of potentially cataclysmic economic and monetary events like the hyperinflation we are witnessing in Venezuela. 
We want to pull out the physical gold… We want to take this gold and we want to store it. We believe that having the physical gold in the vault makes a lot more sense than selling it at these prices. Gold is ready to move. We believe it’s going to continue to rise… we’re going to be storing our gold and holding it for the long-term. - Shtfplan.com

Tuesday, June 7, 2016

China may finally be making its move to clean out the physical gold from the U.S. Comex

One of the more interesting dichotomies regarding the U.S. Commodities Exchange (Comex) is that for several years now, the institution has been selling futures contracts on precious metals like gold and silver and rarely ever delivering anything when the monthly expirations came due.  In fact, according to statistician and financial analyst Dr. Jim Willie, the Comex had only performed cash settlements for gold futures contracts and hasn't actually delivered any metal for more than two years.

But this may be changing.

Entering into the June delivery month, Chinese gold contracts at the Comex have suddenly shifted into the deliverable category, rather than simply being rolled over at the time of expiration like they have for the past few years, and it could very well mean that the time for China to drain the Comex of all its gold is finally at hand.

The June gold contract is an active contract and the second biggest delivery month of the year following December. Friday night, the bankers first day delivery issuance to our longs to be settled on June 1 was huge: the number was  3,508 gold notices for 350,800 oz or 10.9 tonnes of gold. On day two, we had another huge number of gold notices filed at 2281 for 228100 oz or 7.09 tonnes of gold. 
On day 3,THURSDAY, we had another whopper of 1969 notices for 196,900 oz or 6.12 tonnes. 
FRIDAY, saw another huge 1026 notices filed for 102600 oz (3.19 tonnes). Then on 
Friday night we had a whopping 2981 notices filed for Monday totaling 2981 contracts for 298,100 oz. 
Thus in 5 days a total of 11,765 notices have been filed for 1,176,500 oz or 36.59 tonnes. WHAT IS MORE FASCINATING WAS THE FRONT JUNE MONTH  INCREASED IN NET OI BY 678  CONTRACTS ON THURSDAY(67,800 OZ).  ON FRIDAY IT INCREASED BY 78 CONTRACTS OR 7800 OZ AND TODAY IT INCREASED BY 264 CONTRACTS OR 26400 OZ. THE ENTITY STANDING DOES NOT WANT FIAT AND IT SURE LOOKS LIKE A SOVEREIGN (CHINA) IS STANDING FOR GOLD. - Silver Doctors
The significance of this move is that according to the Comex, there are demands for delivery of 48 tons where the registered total available inside the exchange is only 50 tons.
We thus have 48.11 tonnes of gold standing for JUNE and 50.61 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.
Does this sudden demand for delivery after years of rolling over gold contracts now signal a move by China to drain the Comex and begin the transition to Shanghai to control the pricing of the precious metal?  I believe we shall soon find out.