Gold Daily and Silver Weekly Charts - Appearance Versus Reality

As you know I have commented previously about the large drawdowns in gold bullion inventory from the COMEX and GLD among other things. And there is no similar decrease in silver bullion despite an even greater price decline YTD. There is intraday commentary on this here.

I have not yet figured out what is causing this, and I may never find it out. But it does seem to suggest that if gold should break out and run higher there is going to be a grabasstic rush to stake out all the deliverable and allocated bullion that you can find. YTD the gold bullion inventories are down in excess of 700 tonnes, but we see no decline in silver, platinum or palladium inventories across a broad spectrum of publicly disclosing entities.

So capping gold and silver makes a lot of sense here. Let's see how this impasse between supply and demand of real goods plays out into the end of December.

As you may recall we saw big takedowns in the price of gold and silver the past two Decembers. You can click on the two December Manipulation labels at the bottom of this post to see prior comments from last year.

So, one cannot predict what will happen again, but it will most likely be interesting.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - No Recovery, No Exit for Now

Twitter says it is going to make its IPO filing public as soon as it can, with some delays possible because of the government shutdown.

It looks as though the Non-Farm Payrolls data will not show up tomorrow. The data that came out the past two days did not show any recovery in employment or business activity.

Volatility ticked up again today as it appears more certain that the current government shutdown may drag into the debt ceiling discussion. I think that Senator Cruz goaded the House Tea Party Republicans into the shutdown without a real plan, and has left them dog paddling in deep waters.

One needs to remember that the reason that there has been no vote on a 'clean resolution' in the House is because the House Leader Boehner is following a rule that says if a majority of your own party does not approve, a bill cannot come to the floor for a vote, even if the combined Democrats and Republicans would pass it in a simple majority.

But this is politics and there is lots of preening and posturing from both sides, but it does bring to mind the old aphorism about not leaping until you look.

Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds - The Odd Situation in Gold Bullion Inventories

NAV premiums remain very thin, with the only real enthusiasm showing up in the Sprott Silver Trust.

The capping on the metals is hard to miss, and the miners are in a ditch.

I picked up some mining positions today for the first time in a while. As you know my major bias is to have a claim on bullion more directly.  And as is shown in the second chart below, the miners have been performing rather poorly to say the least, underperforming bullion for quite some time.

I have been studying the enormous decline in gold bullion from the world's ETFs and funds this year. What is remarkable about it is that there is no decline in silver, platinum or palladium, and in fact they have increased slightly.

It is not clear to anyone I speak with as to the cause of this, except for some off hand speculation along the lines of Ted Butler who thinks that those who like silver are more persistent, and some others thought that funds (John Paulson) were liquidating big positions and that GLD was disgorging in the process. That could be but it does not speak to the COMEX. That would be easier to accept if silver had not declined in price YTD even moreso than gold.

I will continue to look at it. The biggest declines are on just a few vehicles including the COMEX and in GLD, on the order of over 700 tonnes or so. The short interest on GLD is in the 9+ percent of float, if that number is accurate.

If gold does break and run, given the known shortness of available gold bullion supply, I suspect that we might see a wild ride as supply dries up and the ETFs and COMEX have trouble buying back what they have disgorged this year.

If anyone has a nice chart of the units outstanding for GLD and SLV for the year I would not mind seeing them.    Otherwise I am going to have to extrapolate the authorized shares from the GLD spreadsheets and then try and estimate the short interest addition to it.

GLD management seems to have a target amount of gold bullion ounce per unit that they seek to maintain.   That number has declined steadily since inception which I would imagine is how they account for the funds expenses.

I have a number of hypotheses about what could be causing this odd asymmetry in bullion holdings and lease rates and forwards. But I would rather continue to give this some thought and continue to look more deeply into some of the spreadsheets before saying anything more.  I was at the GLD spreadsheet and one that showed the bullion levels for about twenty five major sources for the past year for hours yesterday.  I keep thinking I am missing something.  But I am in good company.

One thing I do know is if gold does break out and runs higher its going to be like the Wild West in the scramble for deliverable supply.  No wonder the wiseguys are capping it so assiduously.

Gold Daily and Silver Weekly Charts - Pop Goes the Weasel

Gold and silver rebounded today from the artificial smackdown yesterday.  It seems likely that this was a raid designed to flush out amateurs who had taken safe haven positions ahead of the government shutdown, both in downside stock protection and precious metals. 

There was intraday commentary on financial journalism and the Banks here.

Someone brought 31,000 or so ounces of bullion into customer storage at HSBC yesterday, otherwise there was no activity for the first day of October.

As I mentioned in the stock commentary, barring a deal, the Street has its eye on the October 17 debt ceiling discussion, moreso that the shutdown which they really don't care about. I suspect that trade will be 'unsettled' until then.

There is an interesting movie on Netflix streaming called Surviving Hitler: A Love Story.  It is fascinating to see a well done documentary of how ordinary human lives separate and come back together again in a time of momentous and dark historical events.  I won't give away the ending, but if this was not a true story it would be hard to believe.