Gold: Back to the Top of the Cup - Overnight Paper Bear Raids Free Up Bullion from the ETFs

Remember this chart?

This is the cup and handle formation that led to the big breakout and rally in gold, the point from which gold 'slipped the leash.'

And here we are testing that handle again.

Each time they smack down the paper prices of gold and silver, they free up bullion from GLD and SLV.  I wonder who decides where and how that bullion is sold into the market. 

With TOCOM and COMEX scraping the bottom of their deliverable inventory, and big drawdowns on the customer inventory held at JPM,  the release of tonnage from the ETFs matters.

Who is the custodian for GLD again?  Oh yeah. 

If and when gold finds a footing, it will be interesting to see who is holding bullion, and who has had it stripped away by this price operation that started in October of last year. 

I suspect its purpose was 'to save the system' which is another word for the Banks who were caught short on that big run higher.

But this is all for conjecture for now.  Let's see what happens when it happens.

Registered Gold at the Comex Long Term Chart

Someone asked me about this, and while I do not keep a history of it, I found a decent historical chart of the registered gold inventory at the COMEX on the web site Conscience Sociale.

For your reference the number of registered ounces in the COMEX warehouses yesterday was approximately 1,360,000.

Gold Daily and Silver Weekly Charts - Quiet on Option Expiration

The vampire squid (aka Goldman Sachs) came out yesterday and announced that gold is 'overvalued.'

It did not result in a big sell off as perhaps was intended, although the metals were under pressure for their Comex option expiration.

Registered gold held for delivery was down to a new recent low at 1.36 million ounces. Perhaps the Street wants to provoke another paper sell off to justify the release of more bullion from the GLD ETF.

With physical gold in short supply anything that triggers buying could ignite quite the short covering rally. I think the long stocks - short gold cross trade is getting a bit tired.

Let's see what happens.

 

SP 500 and NDX Futures Daily Charts - 'Better Than Expected' For 'Rally Tuesday'

The Consumer Confidence number from the Conference Board came in 'better than expected' as well as the volatile durable goods and new housing prices.

Interesting that good news was not interpreted negatively as it has been of late. Maybe that was because it is 'rally Tuesday' today.

NAV Premiums of Certain Precious Metal Trusts and Funds - Comex Option Expiry - Bazinga

Just another Comex option expiration.

There are two things that are fascinating at the moment.

The first is watching the declining inventory of registered gold at the Comex. Although keep in mind that there is a much larger store of eligible bullion there that could be switched to registered and available for sale at the right price.

And the second is the worldwide manhunt for Edward Snowden. It is fascinating, especially if you can watch it from some objective distance and see the propaganda campaign that goes with it.   Why is the great reformer possessed by an almost Nixonian desperation for secrecy?

Curiouser and curiouser.

The Search for Edward Snowden

The Daily Show Does the US Ratings Agencies

The Daily Show does the ratings agencies, CNBC, and the opera buffo of the financial markets.

The credibility trap doesn't explain everything, but it does cover quite a bit.

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

Upton Sinclair

h/t Matt Taibbi