13 November 2013

Comex Claims Per Deliverable Ounce Up Again To 62

The setup for this year end looks interesting.  Open interest for December itself has declined somewhat from last year, but the availability of gold for delivery at these prices has fallen quite precipitously.  Rik Green has some things to say about this here.

The standard manipulation play has been to hit the prices hard, and hope to shake out weak hands as well as pry more bullion from the ETFs which the bullion banks manage.   This was done in early December 2011, and prices recovered their level by the end of January.  In December 2012 the great price decline of 2013 was already underway, in a reaction to the denial of Germany's request for the return of their nation's gold.

A conventional pricing action this December would set up a potential short squeeze into the new year that could prove to be impressive once it got going.  And it might become uncontrollable should a run develop since it would also presumably increase the physical offtake in the broader markets.   Wiser therefore to take some of the dirtier money off the table now, and let the market regain some of its equilibrium before the end of year.

This is of interest only for those who look at markets in greater than two week increments, which is not one of Wall Street's stronger suits.  One should not underestimate the brazen audacity of the TBTF gang.  They have been said to sell their customers very bad advice and deadly poisoned deals with near impunity, or haven't you heard?

So it is hard to say exactly how these things will be resolved since the greater physical market, the dog that is being wagged by the Comex tail, is still too opaque for reliable forecasting.  But I do not see how this can end any way but messily, unless cooler heads prevail fairly soon.

Let's see what happens.