Gold and Silver ETF Inventory Changes For 2013 - 942 Tonnes of Western Gold Gone

The drain of gold from the Western ETFs and Funds is apparent.  About 942 net tonnes have been removed.  This compares to the 856 tonnes that had been removed as of mid-December.   That is quite a bit of bullion moving out in just a few weeks.

But even more notably, this is in sharp contrast to silver, which has had about 992 net tonnes added.   On a percentage basis silver has had a worse price performance this year compared to gold, so ascribing this to investor preference seems a bit thin. 

This is certainly an interesting phenomenon.  It will be worth remembering I suspect.

There seems to be little question that the gold market is being manipulated by some big players.   And there is certainly quite a bit of precedent for this manipulation.  The bigger questions are the motives, and the course of the endgame, this time.   All manipulations end, eventually. 

As an aside, I would like to address a recurring pet peeve of mine.  The financial spokesmodels will often look at the drawdowns in the GLD inventory and say, 'investors were dumping gold today.'  

Where were they dumping it, into the ocean? 

All this gold, that no one seemingly wants, and yet the New York Fed cannot find enough bullion to return Germany's gold, and for seven years.  What about the gold they hold that no one has yet asked about?

No, the gold has been moving from the custody of GLD as Authorized Participants, aka the usual suspects, redeem bullion from the ETF, and send it elsewhere. 

Where does this all lead?  Follow the yellow brick road, or more appropriately, the river of gold.  Judging from the overall import and export numbers, it is quite the golden river, flowing from west to east. 

It is caught in the tide of history, as are we all. 

These figures are from 12/31/2012 through 12/30/2013 and are courtesy of Nick Laird at Sharelynx.com.

Gold Daily and Silver Weekly Charts - Year End

Very light volumes and a bit of 'profit taking' although I would tend to say this is painting the short positions up for the year end close.

I include a chart below that shows the 20 biggest stock short positions on the Toronto Stock Exchange. You can see how the miners fit into this picture.

There was no meaningful inventory movement in the Comex warehouses on Friday last.

January is a non-active month, whereas February may once again stress the ability of the Comex to maintain its vestiges of actual precious metals delivery.

This 'feels' like a bottom action here.  But in times of 'currency wars' I will tend to wait for confirmation before getting too excited about anything.

But with the fiat meisters of the status quo DeLong and Krugman chirping so loudly, it may not be as good as a fat lady singing, but it might be close.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Year's End

Perhaps a little more paint on the tape for the sake of bonuses, and then we are done.

Little volume today and even less tomorrow. Mostly squaring of portfolios.

Have a pleasant evening. VIX did tick up a bit as I thought it might but nothing of significance yet.

 

Gold Daily and Silver Weekly Charts - Tottering Into Year End

"Oh what a tangled web we weave,
When first we practise to deceive!"

Sir Walter Scott, Marmion


“The arrogance and brutality of empire are not repealed when they temporarily get deployed in a just cause.”

Michael Kazin

When governments intervene in markets, other than occasionally and transparently in currency and interest rate markets in pursuit of clear policy, I do not see how they can expect investors to maintain the confidence in their policies and actions.

It is understandable that such actions in commodity markets may be occasionally necessary to help to manage the impact of some exogenous crisis.  This is the right and proper role of a government in responding to the needs of their people in the face of natural disasters, wars, and other exceptional events.

But when interventions become a routine and necessary component of central bank policy, there should be no question that the economy is being maintained in an unstable and untenable equilibrium, and that forces of imbalance are being allowed to accumulate that will result eventually in a market dislocation and a further crisis, that often will be worse. 

When the temporary becomes permanent, and the discretionary becomes required, then the winds of great change will begin to blow, and what has been hidden, however long, will be revealed.