NAV Premiums of Certain Precious Metal Trusts and Funds - Capture and Crash

The gold/silver ratio is about 80 which is historically very high.

I believe that this is attributable to the price leadership of gold because of a flight to safety from economic uncertainty and policy errors such as negative interest rates.

Further, I believe that there is a looming short squeeze in the physical gold market which, if unaddressed by reforms and market pricing, will cause a dislocation in the global bullion markets.

I am obviously less certain about the second reason, but the data lend themselves to this interpretation. And I believe further that failing to address this mispriced risk is a failure of the regulators and the exchanges to rein in the excesses of the 'synthetic gold' derivative trade.

This is not an incidental lapse, but at the heart of their responsibilities in oversight, and further symptomatic of the financial crises which we have been suffering since at least 1999. Indeed, an environment of Too Big To Fail banking entities and captured and complacent regulators is a pernicious influence on the health of the economy and a barrier to a sustainable recovery.

When this trade cracks open, risking collateral damage in the banking system, there will be those who will say that 'no one could have foreseen this coming.' This is nonsense. It is hard to see only because those whose responsibility it is to protect the public against such abuses is standing idly by while it happens, allowing the insiders and perpetrators to hide their actions and its consequences from the rest of the market for the sake of outsized, short term personal profits.

Gold Daily and Silver Weekly Charts - A Spoonfull of Brexit Makes the Pound Go Down

Brexit fears had the British pound on the ropes, with the US dollar index rising commensurately.

Gold and silver were hit in the lightly traded overnight Globex trading, and showed some weakness most of the day.

Wednesday the 24th is the option expiration for the March Comex gold contract.

There was little activity for gold in The Bucket Shop.   The bullion banks keep passing the hot potato around amongst themselves for the most part.

Silver is seeing few deliveries this month, but lots of action in the warehouses as bullion moves in and out.   The difference is that the Comex acts as a physical delivery market for silver, due in large part to CNT's wholesale bullion business.

There is very little physical action in and out with gold, except in Hong Kong.

You can look up the level of the retracement on the chart.

We are looking at 'rescue' dogs, and have an eye on one we like.   This is the first time that we have dealt with this particular group.  (We 'adopted' her this evening.)

This one has had a hard time of it, so much worse than our last one who had merely lost her home and family. This little girl is skin and bones, and her hair was so matted they had to cut almost all of it off.  The way it was sticking out all over the top of her head made her look like Don King.  The shelter gave her a pink 'hoody.'

She is mostly Shih Tzu, and Japanese Chin, and her age is not known.  When their teeth are neglected the vets have trouble estimating age.  Her body is undernourished and it makes her head and eyes look overly large.

I am sure we can address that and her insecurity with time and TLC.   Her last address was a dumpster under a bridge in Elizabeth NJ. Her street name is 'Dolly.'  And she is one of God's creatures.

"Our Lord has no body now but yours,
no hands, no feet on earth but yours.
Yours are the eyes through which He looks
with compassion on this world,
yours are the feet with which He walks to do good.
Yours are the hands,
with which He blesses all the world."

Teresa of Avila

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Bully's Big Adventure

Stocks had a nice bounce rally today on renewed enthusiasm for risk.

It felt like a 'dead cat bounce,' but we'll have to see the next exciting episode of The Big Short Part Deux.

Gamble, gamble.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Venezuela's Gold Heads East - Ubi Caritas

"We suspect that shorting gold has come to seem like a riskless proposition as long as there is confidence in the Fed. Synthetic gold is the perfect substance for a carry trade: an easy borrow with very low carrying cost and little upside basis risk. Such a hypothesis, in our opinion, does much to explain the incongruity of a declining gold price while fundamentals for paper currency, and the U.S. dollar in particular, obviously deteriorate; while demand for physical gold has exceeded new mine supply for several years running; and while above-ground 400-ounce .995-gold bars located in London, New York, and other financial capitals (in cohabitation with speculative trading activity in paper markets) have steadily dwindled and disappeared into Asian financial centers reformulated as .9999 kilo bars."

Tocqueville Gold Newsletter 2Q 2015


"Though justice often moves slowly, it seldom fails to overtake the unjust."

Horace, Odes

Gold and silver held their ground and much of their gains from this week.

Koos Jansen reports that 36 tonnes of Venezuela's gold have been shipped to the refineries in Switzerland, a familiar stop for gold to be recast for the markets of Asia.

Next week we will see the second revision of 4Q GDP which is likely to be a downward revision. They like to sneak these in after the fact. But let's see.

There were no deliveries to speak of in The Bucket Shop yesterday. I have included the current inventories in the Comex licensed warehouses below.

This was a difficult week.  Often the best way to meet misfortune and adversity is to just keep on keeping on, and to bear in mind all of God's many tender mercies for us, which are so easily overlooked and forgotten when things do not go our way.

One cannot help but notice the growing ugliness and harsh bravado that seems to be all too fashionable among many who speak out, both on the internet and among the political and media professional class.

And it is especially appalling when one sees it among those who would otherwise think well of themselves, hold themselves up as examples, and claim to walk with righteousness.   These are our modern Pharisees, the nice looking, whitewashed containers, but full of decay, corruption, and dead bones.

In their self-delusion they think that rudeness and hardness is a sign of strength, and their proud ornamentation with self-importance, mere customs and ceremonies, a proper adornment to hide their violent, hard, and unloving hearts.  Lord, keep all innocents and simple souls safe from such tempters and their snares, even unto the death without end.

Let's see if the gold chart formation can progress next week and tell more about what the markets have in store for us.

Have a pleasant weekend.

Ubi Caritas is a hymn of the Western Church, long used as one of the antiphons for the washing of feet on Maundy Thursday. The text dates from the earliest Christian gatherings before any formal rites were established. This particular melody for this hymn was composed sometime between the fourth and tenth centuries.