Comex Warehouse Potential Claims Per Deliverable Ounce Rises to Historical High 112 to 1

"The false man is more false to himself than to any one else.  He may despoil others, but himself is the chief loser. The world's scorn he might sometimes forget, but the knowledge of his own perfidy is undying."

Horace Mann

An almost shocking decline in deliverable (registered) gold has taken the ratio of open interest to deliverable gold to 112 to 1.

This is not a default scenario since the supply of eligible gold in the warehouses remains adequate and at historically manageable levels as shown in the last chart below.

Rather, it suggests that higher prices will be required to persuade more bullion owners to place their inventory up for delivery.

That higher price, of course depends on who those owners are, and how motivated they might be by profits from their metals trades.  For some interested parties it is enough to be the very close friends of the Central Banks, with benefits that make them incredibly rich, self-satisfied, and occasionally audacious to the point of over-reaching.

But of course, it is well to remember that the Comex has become the tail wagging the dog, as the gold bullion markets have shifted to the East.

February may be an interesting month, in an interesting year.

Weighed, and found wanting.

Stand and deliver.

Gold Daily and Silver Weekly Charts - JPM Holds the Whip Hand on the Comex - Buy Signal

About 89,757 ounces of gold bullion left the deliverable category at Brinks, and a similar amount showed up in the eligible inventory at JPM yesterday. 

I do not know who owns the registered gold, since title can be transferred fairly easily.  But it remains fairly clear that JPM was in the driver's seat in stopping most of the deliveries, and now likely holds the 'whip hand' on the Comex in terms of gold.

This brings the overall number of deliverable gold ounces down to 370,137 which is a shockingly low number considering that we are coming into the normally heavy delivery month of February in a few weeks. 

Along with a few other indicators this triggers a 'buy signal' for gold in the intermediate term.  This is the first buy signal that I have issued since gold broke out of its cup and handle and ran to its all time high.  This is a 'structural' buy signal that must be confirmed by price and the chart formation.   The price signal will remain active unless gold sets a lower low on price.

I will post something about potential claims per ounce later tonight. 

There is sufficient gold in the eligible categories at the bullion banks, and while we do not know who actually 'owns it,' there is a high probability that it will take higher prices to pry that gold into the delivery process in February, at least from profit motivated holders. 

Take a look at the distribution of all categories of gold on the Comex.   Brinks and Manfreda have been 'cleaned out,' and the three bullion banks, JPM, HSBC and Scotia Mocatta are the big holders.  This market is now made up of big holders and bag holders.

There is some strong overhead resistance at 1260 which any number of analysts have noted, and there does seem to be an effort to hold the line on price here.

I have marked the most important resistance level, at least from my charting perspective, on the chart in red, just under 1,350 dollars per ounce.  A breakout through 1350 will confirm the buy signal.

February is shaping up to be an interesting month.   The various indicators have come together to signal a buy here but one might wish to wait for confirmation if you wish.  After all, it is a manipulated market.  There might be a rocky road before the precious metals finally break out.

I am now holding a full allocation of trading account gold and am considering adding more on pullbacks.    There are likely to be some vicious pullbacks since the Banks will not wish to have small spec company during the initial leg of this bull market move.  They are just like that. 

If the specs jump on the metals here with leverage they are going to get their teeth knocked out.   I was of two minds in writing this, because I do not wish to see amateur traders throwing themselves to the sharks.  But on the other hand sentiment is so bad that perhaps now they will stand aside and take a more measured approach to investing rather than speculating.

It's been a long time coming.  But change is going to come.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - SP 500 Back to December Record Close - Dog Tease

Stocks continued their move higher today as the SP regained the ground it had given up from the end of year tape painting, closing around the record high it set in December.

VIX has fallen back to relatively complacent levels. The economic news is just peachy.

The Fed is completely culpable for the bubble in financial assets, along with the compliant regulatory climate under Obama and his Wall Street friendly Congress. This will not end well, but there is no telling when it will end, so be careful about fighting the monied interests with money by shorting the market.

I hold no short positions here, except for longs in precious metals, which in some ways are a short on the appearance of recovery versus the reality of financial malpractice and policy errors.

Have a pleasant evening.