Gold Daily and Silver Weekly Charts - Claims Per Ounce at 69 to 1

Nothing much of note in the metals today as they continued to bump into overheard resistance.

There was little movement of gold bullion in or out of the Comex warehouses.

I had asked Nick Laird of Sharelynx to check his figures and it turns out that the 'claims per ounce' from yesterday were a bit light at 63.  That did seem very little for a 51,000 ounce change in registered inventory.

A corrected chart is shown below. 

We are at an all time record of 69 potential claims for each ounce of deliverable gold.

Koosjansen has a new update on 'West To East Gold Distribution'

Have a nice weekend.

 

SP 500 and NDX Futures Daily Charts - Up Up Up

This was the sixth week of gains on the SP 500 as VIX slumped near the yearly low.

The perception is set that Janet Yellen will maintain an exceptionally accommodative policy at the FOMC.

Have a pleasant weekend.

Comex Registered Gold Falls To 587,235 Ounces - Claims at 63 to 1 - The Karma of Buddha's Palm

There was a rather large adjustment into eligible gold storage at the HSBC warehouse as 51,617 ounces left the deliverable 'registered' category.

This is not such a big short term issue since November is a' non-active delivery month' for the Comex precious metals futures markets.

But in fact there is so little actual physical delivery activity taking place there anymore, even in an 'active month,' that one might argue that the New York metals market is approaching practical insignificance, long before it can reach the storied permanent backwardation.

However, one must keep up appearances, since the Comex still effectively sets the metals price for much of the free world, if only aspirationally these days for Asia.

More charts will be added as they are updated later this evening.

Earlier today in a piece about price premiums in India I included a link to the online section of Charles Mackay's Extraordinary Popular Delusions and the Madness of Crowds.

You might want to have a quick glance over the chapter regarding John Law's highly innovative dalliance into the théorie monétaire moderne that was adopted by the nation of France, almost to the point of its demise.  It is a useful reminder that truly, there is nothing new under the sun.

As theoretical as all these pricing antics and market manipulations might seem, exercises in price setting for personal greed or policy considerations have real world consequences, especially when they are applied over long periods of time, and with some resort to coercion.

The longer that valuations are maintained against the market, the stronger the coercion to sutain them must become, to the demise of freedom, and the point of exhaustion and collapse.   The Soviet ruble is a possible case study for what happens when the unsustainable meets the inevitable, even with a hairy knuckled police state backing it up. 

We might start thinking about 2014 as the year of financial consequences.

Weighed, and found wanting.

Stand and deliver.

Gold Daily and Silver Weekly Charts - 修羅の花 'The Flower of Carnage'

“I recently made fairly detailed presentations to two Asian central banks... I was struck by the fact that one of the central bankers did volunteer to me that most central bankers are aware of the fractional reserve nature of the Western gold banking system, and its vulnerabilities.

He clearly acknowledged their understanding that gold does not back all of the claims to gold that are floating around the world financial system, particularly when it comes to the West. You would probably never get a central banker to acknowledge that publicly, but that is precisely what he said to me off the record.”

Chris Powell, KWN

There was a fairly substantial adjustment of gold bullion from registered to eligible in the HSBC vaults yesterday. It brings the inventory of deliverable gold down to a new record low. I will post something about that later this evening.

Intraday commentary touched on the 21% premium being paid for physical gold bullion in India now, and equates it to a US dollar price of $1,565 just to give you an idea of the divergence between paper and physical in the world today.

Someone sent me a rather insipid piece on gold demand in the FT. The only excuse for it is that the author unquestioningly accepts the data and quotes from the World Gold Council at face value.

The reason for this disillusionment and investor bearishness for gold is slack demand from India.  This is the same India that is willing to pay a 21% premium for any physical gold they can get through the very obtuse and restrictive government controls.  QED, right? 

Since the WGC is jointly responsible for setting up GLD, I can see where they might wish to go out of their way to put a dreary, downcast outlook on their own members' products. 

The action in the gold market since last October has been nothing short of remarkable.  I suspect it was a trading ploy gone badly for the reasons which I have stated before, with semi-official sanctions. 

But it takes a special sort of insular arrogance to keep doubling down on a bad trade, and hope that it finally turns your way.   If these jokers do not wise up fairly quickly, this one could make the London whale look like the Canary Wharf carp.

Have a pleasant evening.