31 October 2013

Gold Daily and Silver Weekly Charts - Late FOMC/Expiration Hit For End of Month

"Mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which are employed altogether for their benefit."

Andrew Jackson

We finally saw the inevitable bear raid show up for an option expiration/FOMC week on the Comex.

There was concern in some circles, mostly among the denizens of the Beltway and the City, that the big desk traders were becoming too lazy to steal. That would almost certainly rob the Banks, not to mention the financial interests in New York and London, of much of their remaining competitive advantage.

And where would that leave our political class, as comfortable as they have become to their pandered, primped and pampered situations, sucking in the bounty of contributions and financial largesse from the elite as a reward for doing nothing?

There was no movement in or out of the COMEX gold warehouses yesterday.  As  reminder, I do not think that the Comex is going to default, unless they do something extraordinarily stupid, which does place it in the realm of possibility, but not probability.  They would slither out of a hard default in some way most likely.

Rather, I think we are going to need to see much higher prices to move gold bullion out of storage and into the deliverable category where it remains in rather light supply, with over 56 claims per deliverable ounce.  The Comex is becoming increasingly less relevant to the global precious metal markets.  It is becoming increasingly fictional. 

It has some resonance with Gary Gensler's comments about LIBOR.  It is a shame he could not bring himself to do something about the abuses in price manipulation while it was his duty and responsibility over the metals markets.

This is an interesting read. China's Gold Coup d'Etat

Have a pleasant evening.