COMEX Registered Gold Inventory Drops to New Lows

Bullion offered as deliverable inventories at the COMEX has dropped to new lows.

As a reminder, tomorrow is option expiration for gold and silver.

This evening Harvey Organ notes that:

"Tonight, the Comex registered or dealer gold lowers in inventory to 1.359 million oz or 42.27 tonnes. This is still dangerously low. The total of all gold at the Comex rose sightly to 7.681 million oz or 238.9 tonnes of gold.

JPMorgan's customer inventory remains constant tonight at 141,197.86 oz or 4.39 tonnes. Its dealer inventory also remains constant at 408,709.033 oz but it still must settle upon contracts issued in the June delivery month which far exceeds its inventory.

The total of the three major gold bullion dealers (Scotia , HSBC and JPMorgan) in their  gold Comex dealer account registers only 27.76 tonnes of gold."

The Wall

"The best weapon of a dictatorship is secrecy, but the best weapon of a democracy should be the weapon of openness."

Niels Bohr


"Every thing secret degenerates, even the administration of justice; nothing is safe that does not show how it can bear discussion and publicity."

John Dalberg Lord Acton

Gold Daily and Silver Weekly Charts - Option Expiration Tomorrow on the Comex

For those of you who are familiar with George Orwell's 1984, the histrionics about the search for arch-villain and espionage agent Edward Snowden reminds one of the search for the mythical enemy of the state in that book, Emmanuel Goldstein.

I will be curious to see what the equity market does, and how gold and silver go forward into the last few days of this delivery period with the existing inventory levels near record lows. 

As you know, when registered gold inventory has gotten to these record lows, it has marked an intermediate trend change within a month or so.

Speaking of contrary indicators, Dennis Gartman came out today and made some grunting noises about those unfortunates who own gold.  Dennis should know unfortunate, given the awesomely awful performance of the Gartman ETF (HAG.TO) which earlier this year went 'tits up' as they used to say in WW II.

For your convenience I have included the Comex calendar for the futures and for options below. 

SP 500 and NDX Futures Daily Charts - A Fibonacci Cha-Chi

Intraday commentary on stocks here.

Richard Fisher made some remarks about 'feral hogs' testing the Fed's will in the market, and stocks rallied from there.

I thought it was a nice touch that he did so when stocks were almost precisely at the first key Fibonacci retracement level. Nice technical precision.

Stocks are appearing to try and find a footing after last weeks quadruple witching option expiration.

SP 500 Futures Intraday - You Can't Follow the Opera Without a Libretto

This is from my post earlier today at 11:17 AM.

"I may adjust my outlook if the September SP 500 futures do not hold at 1518 which is the 50% Fibonacci retracement level. Right now we are at 1553 which is about a 38.2% retracement from the highly controlled, almost straight line rally that began at the beginning of the year."

Here is what the futures market looks like now in the chart below.   This market is trading on the technicals. 

Technicals is sometimes a euphemism for calculated insider manipulation, as in a 'wash and rinse.' You convince the small investor to get in despite their fears at some higher price, and then one pulls the rug out from under them since the entire rally has been manufactured, and buy the same paper back on the cheap, thereby skinning them once again.

Some of this is herd instinct with the smaller traders, but the big dogs at the Banks and funds are setting the tone in this trade with all the passion of a McCormick reaper.

This is the norm for deregulated or under-regulated markets, a far cry from the 'efficient markets theory' which is a canard. This was standard operating procedure in the 1920's before reforms were introduced.

If you do not believe this happens, if you do not believe that traders signal each other of their intentions, if you do not know that the big trading desks watch the structure of the market as in who is holding what and then act on it,  if you do not understand that the financial sector is being recapitalized by looting the real economy,  then you may be either a shill for the house, witting or not, or one of the suckers at the table.

"It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Upton Sinclair

We may have more downside to the 50% retracement, and it could be more IF something real happens.  That means something real, something fundamental, and not a manufactured event off some mild Fed jawboning. 

But in my opinion everything that has occurred since Bernanke's non-statement last week has been the second act in this opera buffo known as the US financial markets. 

NAV Premiums of Certain Precious Metal Trusts and Funds

The disparity in premiums, albeit both still negative, between the Central trusts and the Sprott trusts is remarkable.

I think it can be attributed to the difference in their 'redeemability' for bullion.

The gold/silver ratio is now a bit over 65, showing that the markets are under some obvious and general liquidity stress, and as such, gold tends to offer a bit more 'safety.'

I am tending to view the selling in the equity markets as the effect of the Fed jawboning to let some of the air out of a growing asset bubble that was becoming overleveraged.

The professionals are using this as an opportunity to take the public and the real economy out for an old fashioned 'wash and rinse' in which they frighten people out of positions that up until recently they had been urging them to take.

There is money to be made in shorting, and then one buys the same assets all over again on the cheap. This is the fallacy of efficient market theory and the benefits of financialisation. It becomes, at its extremes of deregulation and moral hazard, little more than a wealth transferal scheme, which is a fancy word for a con game. And it can rise to and corrupt the highest levels of a society.

I may adjust my outlook if the September SP 500 futures do not hold at 1518 which is the 50% Fibonacci retracement level.  Right now we are at 1553 which is about a 38.2% retracement from the highly controlled, almost straight line rally that began at the beginning of the year.