Latest Shanghai Gold Withdrawals Cross the 10,000 Tonne Mark - 2013 a Pivotal Year

In the first chart we see that there were about 57 tonnes of gold bullion withdrawn from the SGE into China in the latest week.  This is not 'official reserves' but all gold without regard to the receiving party.

This pushes the cumulative withdrawals of Shanghai gold over the 10,000 tonne mark.  Not bad for less than seven years in the business.

This does not include gold that flows through Hong Kong, or through any other non-exchange means purported to be used by the People's Bank of China.

On the second chart you can see that Year-To-Date Shanghai has released 2,119 tonnes into China.  Compared to prior years 2015 is clearly going to be a new record if the withdrawals maintain this pace.

One thing that struck me on that second chart tonight is that Shanghai withdrawals took a definite leg up in 2013.

This is also the same year that the price of gold in Dollars was smacked lower, and the ratio of potential claims to registered gold on the Comex began to climb, and eventually start to go parabolic this year.

Perhaps the bullion bank apologists and shills are right, and this is all just meaningless, an optical illusion, or some fantasy.  Gold is just like pet rocks,  and the majority of the people in the world, and throughout recorded history for that matter,  are just confused and demented.

As I mentioned earlier this evening, the tails risks look rather fat.  One might wonder that even a dingy gray swan with a weak wing could trigger a fairly impressive set of 'unforeseeable incidents.'

They'll never learn.  Why should they?  Winning....

But perhaps we are much closer to the end of this than most people might imagine.  Given the explosive ingredients in place it may be hard to miss.


Related: LBMA Apparently Altered Its Gold Flow By 2,200 Tonnes


These charts are from Nick Laird at Goldchartsrus.com.

Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Next Week - Tail Risk Warning

Gold just will not give us a signal to buy for the short term here yet.  So I remain sitting tight on all my long term positions.  Same with silver.

I did buy a little short side on stocks themselves today.

The action in the precious metals the past few days seemed exceptionally artificial, and that is saying a lot in these markets.

I suspect some of this was end-of-month shenanigans.

The December gold contract is a fairly significant force, and we should start feeling its effects sometime in November.

The Bucket Shop warehouses showed a little more gold passing to the house account at JPM,  and the usual slow leakage out of the silver stores.

The 'nested W' bottom formation is off the table, and now we are in the uptrending range trade, if that can hold as shown on the first chart below.

It has been a long time since we have seen any kind of chart formation working.  This is not a surprise given the obvious price manipulation in gold and silver, similar to what we have seen in so many other markets including the forex which is a cousin to the metals trade.

A Russian bank has joined the Shanghai Gold Exchange, which continues to move impressive amounts of gold bullion from various sources, especially Switzerland and London, into China.

As I have noted previously, the completely new phenomenon of spiking leverage with paper over physical gold in New York and London coincides with the attempt to take the price down after its increase in the most recent leg of the bull market.

I am inclined by what I can see to think that unless the exchanges and the regulators get their act together and rein in the big bullion traders and the mispricing of risk that they are going to have a real mess on their hands if these high levels of leverage get forcibly unwound.

I think the facts bear this out, despite the 'down your nose' scoffing at any risks by apologists and insiders.  But that's just my own opinion, and I doubt anyone involved in the money flows from this trade will care.  And if it does fall apart, 'no one could have seen it coming.'

As Kyle Bass pointed out, no one with a fiduciary (or regulatory) responsibility can ignore what has happened in the gold market since 2013.  But some are, and with an almost reckless disregard.

Let me be clear, since one of the tactics that the apologists use is to purposely misconstrue any warnings.   I am not concerned about a 'default' on the exchange, in the form of a failure to deliver.

Rather, I am saying that the factors that effect tail risks are now so extended in the gold market that even a relatively small imbalance or exogenously driven spike in demand can result in a market dislocation in price that will bring the exchange and perhaps some participants to their knees, and result in a global cascade of grossly mispriced counter-party risks.

Non-Farm Payrolls for October will be reported next week.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Roll Over Rover

Stocks were weak throughout the session, and the futures started sliding a bit into the close.

This looked quite a bit like the effort to mark an 'end of month print' after a sharp rally higher that looks increasingly shaky.

Let's see if stocks start rolling over next week.

Non Farm payrolls coming on Thursday.

All in all the economic numbers are not good, and the real economy shows signs of slipping into recession. That is if you cut through some of the numbers massaging and spin. We might already be in a new recession. The leadership both in terms of economic and political thought is pretty thin, if not sad.

Happy Halloween everyone.

Have a pleasant economy. Not with these results. lol

Gold Daily and Silver Weekly Charts - Bread and Circuses - Get Ready

"When a candidate for public office faces the voters he does not face men of sense; he faces a mob of men whose chief distinguishing mark is the fact that they are quite incapable of weighing ideas, or even of comprehending any save the most elemental — men whose whole thinking is done in terms of emotion, and whose dominant emotion is dread of what they cannot understand.

So confronted, the candidate must either bark with the pack or be lost. All the odds are on the man who is, intrinsically, the most devious and mediocre — the man who can most adeptly disperse the notion that his mind is a virtual vacuum.

The Presidency tends, year by year, to go to such men. As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron."

H. L. Mencken

I thought we had already been there and done that, several times perhaps, but I suppose it could always get worse.

The US GDP number for the third quarter was pretty bad coming in at only 1.5%. And that number is likely to be revised lower.

The Atlanta Fed is forecasting about the same or lower for Q4.

What is even worse, if you peel back the headline number, the big growth driver in that GDP number was healthcare costs. Talk about an unproductive was of capital in paying too much for healthcare.

Gold and silver were hit by a rather orderly bear raid today with the price declining throughout the day on a steady program of selling. It was most likely a follow up to the FOMC trying to knock down the open interest a bit more ahead of the key month of December.  The Dollar was drifting lower today, so that provided no support for the metals bears.

There was the usual slow bleed of silver out of The Bucket Shop warehouses, and a little more gold passed from the house account of HSBC to JPM. I notice that a little more gold was marked deliverable in the Nova warehouse, and one might speculate that this is some of the recently acquired gold by JPM still held in Nova's warehouse.

Can't prove it without a warrant and a couple hairy-knuckled Federal lawmen to back it up, but I think it fits the model of JPM taking on the role of the bullion provider of last resort for physical bullion demands on the Comex.

The amounts of physical gold moving around in Asia dwarf the action in NY, and accounting for the musical chairs paper flows, provide a stark comparison to London as well.

I hope to put something more out about London and the leverage being used there, in addition to the leverage in New York.

Last night's GOP political debate was embarrassing.  And not all of it was the fault of CNBC but they get an A++ for pandering.  And since that is what they do on their financial broadcasts and commentary every day, it is not surprising.

Is this what we have come to at long last, this clown show?

Have a pleasant evening.