Deliverable Gold Falls To a New Low Of 725,000 Ounces

There was a transfer of 43,575 ounces out of the deliverable (registered) category to eligible storage with the JP Morgan warehouse, bringing the total gold in the registered category to 725,030 ounces.

Friday will be the last day for August delivery. The next delivery month will be October.

Total gold in the COMEX warehouses remained steady at about 7 million ounces.

Without higher prices it does not seem realistic to expect those with their gold stored in the warehouses to move it to registered and to offer it for delivery.

As I have said, I do not expect the problems with gold and silver to reach a climactic resolution at the COMEX in the form of a default.  That is more likely to be a secondary effect of a greater scandal or failure that will begin with the physical market, and probably overseas. 

What will trigger this reckoning?  Perhaps some large owner or even a central bank will not accept that their gold is missing as readily as the Bundesbank has done, with their gold apparently having been rehypothecated away for the profit of the private bullion banks.

Be that as it may, the leverage within the paper market is obviously at elevated levels, providing a risk factor that sets the bar for counterparty risk rather low.  This could facilitate a rather energetic short squeeze at some point.  I hear that at least one very significant market participant is positioned to benefit from such an eventuality.

Weighed, and found wanting.

Stand and deliver.

Gold Daily and Silver Weekly Charts - Though the Heavens May Fall

"When a man takes an oath, he's holding his own self in his own hands, like water. And, if he opens his fingers then, he need not hope to find himself again...If we lived in a state where virtue was profitable, common sense would make us saintly. But since we see that abhorrence, anger, pride, and stupidity commonly profit far beyond charity, modesty, justice, and thought, perhaps we must stand fast a little, even at the risk of being heroes."

Thomas More

Silver was quite volatile as the new holders of September contracts were given a wild ride last night and today, with gold largely riding on the silver surfer's wave.

The drums are playing a martial tune, and the markets wait with some anxiety.

The bears had all they could manage to keep the price of gold and silver in check today given the importance, in the short term, of the outcome of this week to them. For if they lose control now, they have little hope of making it into the year's end. 

The action around 1420 tends to confirm the neckline. This is all endgame, and delay.  And so there is less doubt in my own mind now that, for the long run, the tide has turned.

This market distortion will not stand, until those who stand entrapped within a tangled web of their own lies and misdirections, finally stand and deliver. And so we will find, at long last, that justice is satisfied.

SP 500 and NDX Futures Daily Charts - The Gathering Storm