04 June 2013

Gold Daily and Silver Weekly Charts - Comex Disclaimer On Its Precious Metals Warehouse

It was a dull day in the metals trade.

Early this morning a friend sent me a note saying that the CFTC had put a disclaimer on its warehouse inventory report.  At first I though it was a joke or some hoax. He sent me the links to their site, and I saw that it was true.
"The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only."
My reaction to this from earlier today is here.

While I might agree that Comex is not a primary source of bullion purchasing, it is the gold and silver bullion they hold that is the basis of their trade. It is not supposed to be a pure exercise in paper pricing.

And the timing of this is a definite eyebrow-raiser given all that is happening with regard to the opaque short positions, the record lows in inventory that is reported, overall tightness in global physical supply, and the recent decision by the Hong Kong Exchange to force settle in cash and fold up its trading table.

The US Comex is the major price setting mechanism for gold and silver in the world.  

Shocking to say the least, especially since this looks like the kind of statement that an attorney might suggest to an organization that was concerned about their ability to deliver on contracts out of existing inventory according to the terms of their agreements.  It drops any pretense to inventory controls and audits.