Gold Daily and Silver Weekly Charts

Derivative: A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.

If collateral collected to protect against the risk of counterparty default has been rehypothecated, then it may not be readily available in the event of a default. This, in turn, may increase system interconnectedness and procyclicality, and could amplify market stresses. Therefore, when collateral is rehypothecated, it is important to understand under what circumstances and the extent to which the rehypothecation has occurred; or in other words, how long the collateral chain is.

The gold that left HSBC yesterday turned up in the storage vaults of Scotia Mocatta today.

There were no reports of deliveries or other movement in the warehouses.

The US markets, including the Comex, are almost like a showcase now I think, a kind of Potemkin village of value, a child of the corporate financial state.

Look at all the pretty bullion, see it trade. Look at the prices. But if you wish to buy some, go to Asia and be sure to take delivery.

Even with stocks, it seems to be a web of paper bets, of interconnecting obligations to deliver.  It is an exchange traded, derivative world.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Wanna Take You Higher

With low volatility and not much in the way of volume or selling pressure it is a relatively trivial exercise for the big trading desks to keep floating prices higher on the technicals.

Not much is expected in the way of economic news until the end of the week.

Have a pleasant evening.

 

NAV Premiums of Certain Precious Metal Trusts and Funds

Very modest premiums to say the least.

I have taken a modest position in Silver Wheaton last week which is not normally commented upon here.

I am still anticipating another shelf offering in PSLV at some point to raise their cash levels back to more comfortable levels. But they are under no duress to do the deal given their existing levels which are adequate for their cash requirements, but are still a bit historically low.

Gold Daily and Silver Weeky Charts - Better Call Saul

It is hard to miss the price capping and manipulation on the metals market at the Comex, unless one does willfully so. And there are certainly those who do, and I suspect you know who they are.

There was little action on the metals front last Friday as the clearing and warehouse reports below demonstrate. The action has shifted to the East.

I expect the markets to unravel their story about the future somewhat slowly over the summer. This goes for stocks, bonds and commodities. We are seeing a great reckoning between reality and the will to power.

If anyone is near to a fiduciary responsibility for the obligations for gold and silver bullion delivery, or even large positions of naked shorts in stocks, and they do not personally have title and possession of the metal or the equities, I would probably suggest that they get out or start lawyering up now, with a well thought out Plan B involving offshore accounts and domiciles.  You can always try for a Presidential pardon later on.   I suspect it will become the fashionable thing to do.

If this convoluted system of asset rehypothecation starts breaking bad it is going to make MF Global look like a church picnic.  'Everyone was doing it' is not an unassailable defense, and 'I had no idea what was going on'' only works for those with very lofty connections and office.

Have a pleasant evening.