COMEX Registered Inventories - JP Morgan Moves the Shells Again

With regard to metals inventories, the eligible category includes any bullion of a suitable format that is held in one of the COMEX authorized warehouses, which are individually managed by one of the bullion banks.

The second category of metal is called registered, or dealer, bullion inventory. This is bullion of a suitable format that is held in one of the COMEX authorized warehouses, AND has been registered as deliverable into the market by its owner.

Yesterday JP Morgan changed 99,086 ounces of gold bullion in its warehouse from eligible to registered.  Since as you know if you frequent this café, the level of registered gold was at record lows, and so with the advent of the October deliverable month, Morgan thought they would throw a tranche of metal into the breech.

I will put up the graphs of inventory levels as they become available later tonight.

As you know tomorrow begins the active delivery month of October for precious metals on the COMEX.

With a few other minor changes, the total amount of gold bullion at the COMEX, both registered and eligible, now stands at 6,862,816 ounces.  This is a very low level of total inventory.

The total amount of registered, or 'deliverable' gold, is now at 769,837 ounces.  This is better than it has been, and will bring the 'owners per ounce' back down from the stratosphere.   

But it does have the character of 'robbing Peter to pay Paul,' since all the metal comes from the eligible category which seems to be attracting no new bars of high quality 100 oz. bullion.  And so it does nothing to improve the leverage of all paper claims to allocated ounces of real gold bullion.

While October is active, the month of December is the one that will test the resolve of the bullion banks and their masters to continue to cap the precious metals at artificially low prices, before their discretionary horde of bullion becomes too thing to hold the line.

Antics notwithstanding, the flow of gold from West to East is steady, pronounced, and certainly no secular phenomenon, but a great trend change that is being driven by an evolution in world finance.

The metal came from within the warehouse structure, so it resulted in the same amount of metal leaving the 'eligible category.'   They cling to the thin threads of their great shell game that has run past its prime.  

That game will end when someone puts a stop to the motion on the table, and forces the bullion banks to show what they have in both hands.  And then there will be a reckoning of accounts, which is long past overdue.

Weighed, and been found wanting.

Stand and deliver.

Gold Daily and Silver Weekly Charts - Capping For a Non-Farm Payrolls Report

"The war for liberty never ends. One day liberty has to be defended against the power of wealth, on another day against the intrigues of politicians, on another against the dead hand of bureaucrats, on another against the patriot and the militarist, on another against the profiteer, and then against the hysteria and the passions of the mobs, against obscurantism and stupidity, against the criminal and against the overrighteous.

In this campaign every civilized man is enlisted till he dies, and he only has known the full joy of living who somewhere and at some time has struck a decisive blow for the freedom of the human spirit."

Walter Lippmann

It was cap, cap, cap today, as the precious metals were held back in a week of budget crisis, a Non-Farm Payrolls Report, and the beginning tomorrow of the active delivery month of October.

This is likely to be a confusing week with lots of cross currents and volatility as markets overreact to news. Traders love this sort of volatility, especially if they have advantageous access to information both in market structure, timeliness of orders, and economic events.

I put a brief explanation on the two separate political events that are occurring, the new fiscal year budget and the debt ceiling discussions into the stock market commentary this evening, for those who do not understand the US budgeting process and legislative process.  That includes just about everyone, including the politicians, but only if you believe what they are saying. 

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Slouching Towards Stupidity

There are two separate political events that are occurring here for those of you who may be confused about them.

First, there is a funding showdown for the new government fiscal year, which starts at midnight tonight.

What is desired is a 'continuing resolution' or an actual agreement on some sort of budget that funds the existing programs that have already been enacted into law.

The second even is separate, the raising of the debt ceiling. The Congress used to do a perfunctory vote on each debt issuance from the Treasury. That was changed some years ago to a debt ceiling against which the Treasury could issue debt, and which is raised periodically in response to the level of public debt and Treasury issuance. The Secretary of the Treasury Jack Lew has estimated that he will not be able to play any more accounting games beyond 17 October.

So, keep in mind these are two separate events. One is the issuance of a formal or a pro forma budget, known as a Continuing Resolution for the new fiscal year, and the deadline for that is midnight.

And the second event is the debt ceiling, which had no hard date but is estimated to become a problem around 17 October.

Needless to say these events have the extremes of both Left and Right out baying at the moon, with the great middle of ordinary people wondering who these people are, and how we got ourselves into this situation.