Who Is Interested in the Price of Gold Today?

Someone who has seen the writing on the wall, and wonders...

A lunchtime vignette at Le Café.

COMEX Eligible Gold Is Holding At Record Low Levels Even At These Higher Prices

"It is not in human nature to deceive others for any long time, without in a measure deceiving ourselves also."

John Henry Newman

The bullion banks are struggling through this August delivery period, and the end next week is in sight.

But who will provide the gold to get the Banks through the important October delivery period?  And then December? Winter is coming.   

Weighed, and found wanting.

Stand and deliver.

"The Most High God gave your father Nebuchadnezzar sovereignty and greatness, and glory and splendour.   Because of the high position he gave him, all the nations and peoples of every language dreaded and feared him. Those the king wanted to put to death, he put to death; those he wanted to spare, he spared; those he wanted to promote, he promoted; and those he wanted to humble, he humbled.

But when his heart became arrogant and hardened with pride, he was deposed from his royal throne and stripped of his glory. He was driven away from people and given the mind of an animal; he lived with the wild donkeys and ate grass like the ox; and his body was drenched with the dew of heaven, until he acknowledged that the Most High God is sovereign over all kingdoms on earth and sets over them anyone he wishes.

But you, Belshazzar, his heir, have not humbled yourself, though you knew all this. Instead, you have set yourself up against the Lord of heaven. You had the riches of His temple brought to you, and you and your nobles, your wives and your concubines, despoiled them.

You worshipped the gods of money and power, which cannot see or hear or understand. But you did not honour the God who holds in his hand your life and all your ways. Therefore He sends the hand that wrote this inscription on your wall."

Daniel 5:18-24

Gold Daily and Silver Weekly Charts - When Exchanges Crash Do They Dream of Electronic Sheep

When the Exchanges crash and burn, do they dream of electronic sheep?

Well, I cannot say if they dream or not, but you may as well be dreaming of electronic money,  if that is where you keep your wealth, and it is lost somewhere in an electronic storm. You are reliant on the integrity of the exchanges and their owners for restitution. Often it works out well, and things go on as normal.  But as the dominoes of counterparty risk start falling, it is 'might makes right' as we saw in the mysterious case of MF Global.

I hear that Obama was 'informed' of the problems on the NASDAQ today. I assume that is a symbolic gesture designed to inspire confidence.   And it is as practically futile as giving the Princes of Wall Street a big pile of the public's money to keep their doors open in a collapse of their own causing, and expecting them to 'do the right thing' for the sake of the country.

Gold and silver held their ground today, and are very obviously coiling. You can see it more clearly on the gold daily chart. The odds are it will break to the upside, but there seems to be a determined effort not to allow the metals to break and run, but to keep them well leashed.

I have included two charts of gold in grams priced in Indian Rupees to show the remarkable recovery gold has made from the lows despite the extraordinary efforts being made by the Reserve Bank of India and that government to stop the flow of gold into the hands of ordinary Indian people who are seeking their traditional safe haven for their wealth.

At some point the leash that is holding gold back is likely to break, and then the price will find its own level, though the heavens may fall.  Or at least a few of those demigods that think they are doing God's work.

As a reminder, next Tuesday 27 August is option expiration for gold and silver on the COMEX.  And Friday 30 August is the last delivery day for August. 

There could  be some interesting cross currents next week.

SP 500 and NDX Futures Daily Charts - Gaming the Gaming

Stocks were slumping overnight in the aftermath of the Hewlett-Packard miss after the bell yesterday.

The SP 500 futures made a dead hit on the 50 percent retracement level today, and then took off like a scalded cat in light volumes. I posted on this intraday here.

About 12:23 the Nasdaq exchange went down for the count, and quite a few stocks were no longer able to be traded, although the futures remained opened for business. Trading resumed at 3:25 PM although quotes were available before that.

I hear that trading could have occurred on the NYSE although no quotes would have been available. There is no real backup arrangement, and I suspect there will be more talk of this.

No one is talking about what was going on in the 'dark pools' during this hiatus.

I imagine that some day soon the mavens from the Nasdaq will reveal what went wrong, and the SEC will make the appropriate harrumphing noises, and point to Regulation SCI which they have open for comments on this matter, which was recently extended for even more comments. The regulation deals with system compliance and integrity.

I hate to say it but the level of discussion on Bloomberg TV this afternoon was taking the part of Wall Street and Jamie Dimon so vigorously that they made Andrew Ross Sorkin look like the Savonarola of big finance.

Have a pleasant evening.