NAV Premiums of Certain Precious Metal Trusts and Funds - 'Someone Will Be Bleeding'

As a reminder the US will have a three day weekend, with the observance of Martin Luther King Day on Monday.

The rest of the world must try and carry on without its guidance.

There was some commentary about the thinness of gold available for delivery on the Comex on the Business News Network today.  There was an interesting discussion of the divergence between 'paper gold' and 'physical gold' as well.

As the news anchor noted, 'someone will be bleeding' if too many people stand for delivery in February, and prices do not incent the addition of more gold to the market.   I have no doubt that the gold cartel and the Comex will actively prevent any such pain to their own.  Assuming of course, one knows who 'their own' are these days.

This market structure seems to be dominated by big holders and bag holders.

And as a reminder, those who held their gold and silver in third party and unallocated claims through MF Global learned a lesson about fiduciary trust, guarantees, and the rule of law the hard way. 

Gold Daily and Silver Weekly Charts - What Goes Around

"The people of England have been led in Mesopotamia into a trap from which it will be hard to escape with dignity and honor.  They have been tricked into it by a steady withholding of information."

T. E. Lawrence

A top German regulator, Elke Koenig, said today that the price rigging in currencies and precious metals is 'worse than LIBOR.'  

China has supposedly disclosed that they are now have the third largest gold holdings in the world, having surpassed Italy and France.  This is a subject of controversy because China has been notoriously reluctant to disclose its central bank gold dealings.  

There was no movement of gold bullion in or out of the Comex warehouses yesterday.  Deliverable gold is at lows we have not seen in many years, representing a 112 to 1 ratio compared to open interest, which I suspect is an all time record.   This would indicate higher prices ahead in a normal market.

Change is coming.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Wobbles

Equities were a bit wobbly today, pulling back from yesterday's new high, despite the 'better than expected' economic news this morning with a strong Philly Fed.

Let's see if the bulls can dip into their pockets and push the markets a little higher.

Top German Regulator Says Currency and Precious Metal Rigging 'Worse Than LIBOR'

The 'free markets' are permeated by frauds, many of them perpetrated by the Banks, which affect the price of transactions in liquid markets.  

What a surprise.

Did someone forget to offer Frau Koenig a post-government job in Private Equity?

In fairness, I can definitely see this managed as a 'limited hang out' public relations operation with some fines put forward for front running the London fix, but the great bulk of the abusive price rigging in the futures markets left untouched for confidence and the 'good of the system.'

I think the real issue will be the unfolding inventory scandals if they lose control of the great shell game.

Bloomberg
Metals, Currency Rigging Worse Than Libor, Bafin Chief Says
By Karin Matussek and Oliver Suess
Jan 16, 2014 2:04 PM ET

Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal, which has already led to fines of about $6 billion.

The allegations about the currency and precious metals markets are “particularly serious, because such reference values are based -- unlike Libor and Euribor -- typically on transactions in liquid markets and not on estimates of the banks,” Elke Koenig, the president of Bafin, said in a speech in Frankfurt today.

Koenig is the first global finance regulator to comment publicly on the investigations as probes into the London interbank offered rate, or Libor, expand into other benchmarks. Joaquin Almunia, the European Union’s antitrust chief, said yesterday that its preliminary probe into possible foreign-exchange manipulation covers similar practices as in the regulator’s probe into Libor-rigging...

Bafin interviewed employees of Deutsche Bank AG as part of a probe of potential manipulation of gold and silver prices, a person with knowledge of the matter has said in December. The U.K. finance regulator, the Financial Conduct Authority, is also reviewing gold benchmarks as part of its wider investigation into how rates are set...

Read the original article here.