COMEX Gold Inventories - A Towering Citadel of Paper

Lower and lower, to new record lows.

Weighed, and found wanting.

Who is running this sideshow?

And where will it end?

Let's take a closer look at today's gold market action on the COMEX...

Gold Market Structure - Little Red Riding Hood

We have not seen a market structure like this since the beginning of 2009.  It appears to be tilted towards a significant trend change.

Although we have to remember that this structure is on the COMEX, which is becoming a market involved largely in the movement of paper, rather than a mechanism for the efficient discovery of price and the allocation of capital to resources.

These charts are all from Sharelynx.com, the precious metals information place.

Hey there Little Red Riding Hood....

Gold Daily and Silver Weekly Charts - The Dog That Didn't Bark

Gold and silver were rallying in the evening last night, but met some resistance today.

They are being pushed lower as usual in the off hours.

There was intraday commentary here that references some secondary information that seems to support the theory that it is the demand for German gold, rebuffed by the Fed, that is at the heart of this current market operation to loosen bullion from the ETFs.  The gold has been leased to the banks and been sold, and the physical market is so highly leveraged that it cannot be retrieved except through extraordinary market antics.

It certainly is the oddest thing that I have seen in some time, and the lack of serious coverage of this is remarkable in itself.  How can a custodian tell a sovereign people that they may not have their own property back for seven years, too bad, and that's that?   

Is this some new standard for custodial management that has been aped from the likes of MF Global, to be followed now even by the central banks whose most vital asset is an unshakable confidence in their integrity?

Have the expectations of the financial sector been dragged down to the general conduct of conmen and gangsters, so that one expects them to use other people's property as their own, and then brazenly defy the rightful owners to attempt to get it back? And this is not extraordinary or notable?

This whole affair seems so straightforwardly odd that one must return to the same conclusion, over and over, that something has gone terribly, terribly wrong with the financial system.

And no one seems to raise any fuss about it, or even seriously question it?  Indeed, it almost seems to be cloaked in an unusual silence, like the dog that didn't bark.

Stand and deliver.  Either the bullion, or the truth.

SP 500 and NDX Futures Daily Charts - Drift Higher On Continuing Light Volume

It was a day thin on real economic news.

Drift higher on light volume seems to be the order of the day as we wend our way through another earnings season.

Benny speaks tomorrow, Fed minutes as well. That may move the market.