JP Morgan Saves the Day With a 275,000 Ounce Gold Fill On the Comex

When I saw the CME gold report from yesterday I was a little surprised to see that over 300,000 ounces of gold in futures contracts were stopped, or taken for delivery, so far in August.  And there was a total request for 282,000 ounces just yesterday.

Since there were only 362,000 ounces offered, I was wondering how they would manage this.  Claims to deliverable ounces were still running over 120:1.

 

And just for grins, where were the biggest requests for gold coming from?  None other than the house accounts of Goldman and HSBC.  What's up with that?

Have no fear, JP Morgan stepped up and moved 276,000 ounces into the 'deliverable' category as show in the second chart. 

 

And they filled 275,000 ounces of that futures delivery request out of their 'house account' as shown in the first.

 

Just in the nick of time!

 

The dirty little secret is that this market is a tiny tail wagging an elephant of global physical demand.   And the tail waggers seem to be slowly, but surely, losing their grip.

 

Gold Daily and Silver Weekly Charts - Meh

 

Gold and silver were drifting higher most of the day.

 

Dennis Lockhart of the Atlanta Fed felt the urge to declare that barring the wheels falling off the economy, he was inclined to raise rates at the September meeting.

 

That sounds familiar.  Oh, this is what I have been saying for most of the year.

 

Wow, what a revelation.

 

Traders in stocks and short term rates, and their associated algos, bounced their pricing to generate some activity, and more 'vig' for the HFT programs and the brokers.

 

Other than that this was a nothing day. 

 

The most important development I am watching, besides the stagnant economy and the kabuki theater of the Fed-centered propeller heads, is the decline in AAPL.

 

This is a danger, very narrow market that has been driven to an extreme based on a handful of 'new era stocks.'

 

Where have we seen this scenario before?

 

Nothing much happened in The Bucket Shop. 

 

Someone at Scotia decided to move 10,000 ounces from eligible to deliverable which will give the guys who track these things breathlessly the change to recalculate that 124:1 ratio of paper to bullion a bit lower.

 

I'll keep an eye on it, but it does not matter much if it is 116:1, or 120:1, or even 130:1.   If you don't have it, you don't have it.  And so they go to plan B, the artful dodge, which they have been hitting like a crack pipe in the VIP room at a 10th avenue 'nightclub' on a Friday night.

 

Have a pleasant evening.

 

 

 

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - Janet Jett and the Blackhearts

"I think there is a high bar right now to not acting, speaking for myself. It will take a significant deterioration in the economic picture for me to be disinclined to move ahead."

Dennis Lockhart, Atlanta Fed President, 4 August 2015

This statement and the continuing decline in AAPL today were the primary movers in the market.

Apple cracked its 200 DMA and closed below it, for the first time in a very long while. This has technical market watchers spooked.

And in this highly narrowed market with just a few of the big tech fliers pulling the rally behind them, the potential for further declines in a behemoth like Apple has traders a little worried.

Let's see if Apple confirms this by continuing to close below the 200 DMA and can go out on the week, and then it might be a serious decline underway.

As for Lockhart, he is Yellen's buddy, and is continuing to give her cover for a rate increase that has nothing to do with the real economy, as I have said here many times. The Fed wants to pull the trigger before we get closer to the election because they do not want to provide a topic for the debates.

This market is dodgy.

Have a pleasant evening.