Another Year of Insubstantial Gold Trading in the New York Market

Looking back, it is evident from the charts below that 2015 was another year of decline for physical gold deliveries in New York.  This is thought to be a benign phenomenon by some.

And one might certainly question how much of that 'stockpile' of gold held in storage is unencumbered, and not subject to multiple hypothecation.

As you know I think that such a decline in the connection to the fundamental flows of a physical commodity creates a potentially dangerous situation, especially in a climate in which most of the major markets have shown themselves to have been systematically rigged by corrupt trading institutions.

The second chart shows how dramatically the physical gold market has moved to the East, leaving both New York and London as influential to price while becoming increasingly insubstantial.

Finally the third chart shows that the New York market still maintains a strong physical delivery function for silver. This is largely thanks to CNT, which is a major supplier of silver to the Mint among other things.

Related:  In China Everyone Can Buy Gold at the Shanghai Gold Exchange - Koos Jansen

Gold Daily and Silver Weekly Charts - Flight To Safety

"Make no mistake about it, just as Lehman Brothers was set up to take the fall for triggering the 2008 collapse, China is being groomed as the new scapegoat for the coming crisis. But China’s economic slump is only a symptom, not the disease...

The reality is that the repeal of Glass-Steagall ushered in the greatest wealth transfer scheme in the history of America, allowing six mega banks in America to control the vast majority of insured deposits, use those taxpayer-backed deposits to gamble for the house, loot the bank from the inside by paying billions of dollars to select employees and customers and then hand the gambling tab to the taxpayer when the casino burns down. This model is a staggering headwind on both U.S. and global growth because it has created the greatest wealth and income inequality since the Great Depression.

Pam and Russ Martens, The Real Reason Global Stocks Are Flashing Red this Morning

The quote above is from last October, but it serves today just as well as it did then.

Gold benefited from a fairly obvious 'flight to safety' today, even though it was clipped a bit in the afternoon as stocks rallied back in what felt like a technical bounce.

Silver had a little upside but not nearly as much. It is not a flight to safety metal in the same manner as gold, in part because of its dual nature as both monetary and industrial.

When things really fall apart you will know it, because gold, real gold, will go to an absolute scarcity that may be shocking.

Sooner or later, everyone sits down to a banquet of consequences.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Consequences Being Served

Stocks sold off very hard today and set some new recent lows.

There was a technical oversold rally into the close led by Big Tech that brought stocks back up to near even or lesser lows, holding support around the prior lows from the end of last year.

So what next?

Clearly we have a major adjustment happening to a chronic mispricing of risk and a financial asset bubble. I mean, how many times have I said this was a bubble, and that there was little strength underpinning it?

I am expecting a short term capitulation low. We *might* have seen that today, or we might have to go back down again and flush the market out and retest today's lows. It depends on how much of the rally back this afternoon was short covering and the resurgence of the mo-mo dip buyers.

But at some point we set a low, and then we should rally back, maybe as much as thirty to fifty percent of the recent declines and then, if nothing much changes on the global scene, we will go back down and retest the lows and set some new ones. I am looking at 1770 on the SP 500 futures chart.

Until there is reform, there will be no recovery. And I see little moral high ground with many people on it still standing.

Have a pleasant evening.