Gold Daily and Silver Weekly Charts - The Decline and Fall of the Gold Trade on the Comex

Not at the Comex.  Look up the area code for Shanghai.

Bloomberg, the print news and not The View division, had an article this morning noting that the stiff decline in trading and volatility in gold shows a lack of interest in it.

The flaw in their reasoning is that they consider the Comex to be 'the gold market.'

I had a little fun with that with an intraday commentary which you may read here.

I know. Be kind and understanding. No one can expect a global news organization that generally reports all of the world's markets to bother to look at a simple chart of the Shanghai gold trading volume which continues to climb every month.

Or any of the other reports about the volume of bullion going into India, and the swelling river of bullion flowing through the refineries of Switzerland from West to East.

We are all aboard the gold negativity express here, doing our part for the cause. Of whom and for whom, let's allow time to answer that one conclusively as I am sure that it will.  Maybe.

As they like to say, 'who could have seen it coming?!'

JP Morgan's stick save 276,000 ounce supply of bullion yesterday took the paper to gold ratio down to 62 to 1 or thereabouts. I told you that expecting anything market-like from The Bucket Shop was probably a vain desire. LOL.

But it can be diverting, even a little fun, to watch.  But I would not trade it, not on a bet.  Anyone who looks at the intraday activity with volumes closely would not touch it unless they were fans of grifting.

Silver is a little different, because CNT is obviously using it to manage their wholesale deliveries to the US government.  But it is also waning in relevancy on the Comex.

This is nothing new.  I have said this for the past couple of years.  But since it has not blown up yet, why worry about tomorrow, right?  Keep on keeping on.  Winning....

And on the political front, you can almost hear, if you listen for it, the people sharpening their pitchforks and cleaning their torches.  The next scripted presidential election may be subject to a rewrite and some plot twists.

They never see it coming.   Because they don't care and aren't looking.

Speaking of not looking the Atlanta Fed is now projecting 3Q GDP at 1%.  And their president Lockhart just came out and said he will push for a September rate increase unless he sees 'significant deterioration.'

Non-Farm Payrolls tomorrow.  That could be another knee-slapper.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Non-Farm Payrolls Tomorrow

The market is expecting about 229,000 new jobs tomorrow in the July Non-Farm Payrolls report.

A number below 200,000 will probably shake the Street up a bit, and get them thinking about the Fed holding off on raising rates, as the Bank of England's Mark Carney today did, deferring to 2016 because of the weak economy. But since the Fed is not particularly interested in the real economy these days, except as an impediment to their model driven ride, I think it will have to be a lot worse than that to keep them from their appointed rounds.

It was like a waking nightmare on Bloomberg TV today. They first had John Thain, the CEO who presided over the meltdown of Merrill Lynch and now the head at CIT, giving forth economic wisdom. And not to be outdone, in the afternoon we saw none other than Abby Joseph Cohen of Goldman Sachs giving advice to grads on how to get a good job in a lousy economy.

Holy cow. I could almost see the images of Jack Grubman, Henry Blodget, and Mary Meeker hovering behind the scenery like some torturish flashback, the ghosts of bubbles past.

Let's see how the jobs report comes out of the Washington statistics extruder tomorrow morning.

Have a pleasant evening.

How Microsoft Lost the Browser Wars and the Comex is Losing the Precious Metals Trade

I am sure that some of us remember the first 'browser war' from the mid-1990s when the Mosaic enabled 'world wide web' became increasing popular, and the highly popular and user friendlier Netscape Navigator broke on the scene.

And after a bloody battle with Microsoft, which created its first incarnations of Explorer.  At first they just gave it away for free, and then they firmly embedded it with their monopoly positioned operating system.

Netscape faded into Mozila, and was later reborn as Firefox.

And then there was Google Chrome and the Apple Safari.

With the advent of 'Windows 10' as the latest in a series of operating systems du jour from aging Microsoft, a new browser is born called 'Edge.'

Having the pleasure of still running a couple of PCs using Microsoft 7, I recently upgraded them to Windows 10.    Before you think I am stuck in an MS world, I have other PCs running Linux and Apple's OS X. Microsoft is a legacy thing for certain purposes.

I have always put together high performance work stations for family and a few friends to use, and they typically work best with Windows and Linux.  And a lot of non-tech users don't care for Linux.

My son is picking up the baton on this sort of thing, since I seem these days to have a limited distance sweet spot about 12 inches from my face for reading the fine print and seeing the pins on the motherboard.  As my old mentor used to say, starość nie radość (old age is no joke).

Edge is much faster and more reliable than Explorer. But that said, the performance of Explorer had become so unreliable, slow and problematic that I had pretty much stopped using it in favor of Chrome and Firefox.

And apparently I am not alone in this.  At some point bad performance overcomes the momentum of the familiar underpinned by a dominant market share.

The chart below shows a sample of the last thirty days traffic on my site. It certainly is a small drop in the big ocean of the internet traffic, but with 450,000 views or so per month, (with no comment section to drive multiple clicks) and about thirty-five or more percent of the traffic coming from non-US sources, I think it is at least statistically significant.

And it seems that Microsoft has blown it again. After struggling with Edge for a day or so, trying to get it to do searches on the address bar using Google, rather than Bing, I gave up. I will not use it.

Yes it is fast. And it is obtuse, in the manner that Microsoft always seems to take with its inward focused, non-user oriented systems engineering choices.

It is funny how these behemoths, which one thinks can never falter, can slide slowly but surely into failure and then a kind of oblivion.

I remember as a boy engineer in the 1970's how AT&T dominated communications and IBM ruled computer processing with a big blue iron fist. AT&T went bankrupt under a series of very bad management choices, to be reborn as a rebranded Baby Bell, and IBM is now just a service-oriented accounting shadow of its former expansive self.

And I can see quite a few other commercial behemoths staggering their way down the same trail of arrogant disregard for their customers,  trying to squeeze very last dollar out of their profit stream with an inward focus and a failure to innovate.

I was thinking the same thing today when John Thain, the former CEO of Merrill Lynch, was speaking about another financial crisis looming today on financial television. As he noted drily about the last crisis, hopefully the financiers in Europe have learned not to buy things that they do not understand.   Yes, they are learning that the Wall Street Banks and their rating agencies are not to be trusted.   And that is a two edged sword, John.

I also noticed an article today on Bloomberg that traders seem to be deserting the gold futures trade on the Comex. Bloomberg attributed this to 'a lack of interest in gold.'

"As gold continues to languish near its lowest price in five years, one element seems to be missing: traders.

Volume so far in August, already a slow time of year, has dropped about 8 percent from 2014. On Thursday, trading was about 40 percent below the 100-day average. With fewer participants, the metal’s volatility has tumbled to the lowest in nine months."

Yes, if you are willfully blind to what is happening in the rest of the world, I imagine that is what that is what it would seem to be.  Especially if you consider the Comex to be 'the gold market.'

It could certainly not be a lack of interest in trading on what has become The Bucket Shop run by insiders for insiders, with flagrant abuse of the market in quiet hours and obvious price manipulation.

The trade in precious metals has already moved East to more transparent, efficient, and balanced markets.  And it is not clear what could ever make it return without a thorough and far-reaching reform of the markets and the exchanges.  Bulls make money, and bears make money.  But pigs get swept into the dustbin of history.

Oh how the mighty are fallen, and falling.

Gold Leasing Rates Suggest Tightness in the New York Physical Markets

Gold rarely sees a pronounced backwardation in the futures markets, as we have seen in other commodities.   Even a slight backwardation over a period of time is unusual.

This might be related to the lack of heavy physical delivery coming out (being withdrawn)  from the Comex complex, especially in recent times where the number of potential claims are much greater than the ounces of physical bullion actually available for delivery.

Why would you pay a premium for physical within a system that deals in physical at ratios of 120 to 1?   It would seem to be a 'sink' for physical supply, rather than a source.  And the more I look at it the more that The Bucket Shop appears to be a clubby little arrangement amongst cronies.

Does this seem all that hard to believe?  Eric Hunsader says he can now prove that the US Stock Exchanges favor of class of trader over all others.  And the tighter world of NY and London commodity dealing dominated by a few big trading houses is different?

The higher rates to lease gold suggest a tightness in supply to satisfy short term demand.  We saw something like this in December 2013 when gold put in a short term bottom.

The gold is used to satisfy commitments in the market, and then replaced at a later date if the lease is not renewed and rolled over.

I do not know of a reliable source to show how much gold is actuall being leased to satisfy market demands.   But price is at least some indication of the upward pressure that implies some scarcity.

Thanks to the data wrangler Nick Laird at sharelynx.com.

Gold Daily and Silver Weekly Charts - Zombie-nomics and Corporate Welfare - Gettin' Paid

There was intraday commentary here about a large number of ounces of gold taken in delivery yesterday, and JP Morgan's heroic attempt to fill the gap between paper and physical bullion at the last minute.

And yet these numbers are barely rounding errors compared to the global physical markets centered in Europe, the Mideast and Asia.  That is what seems so insane about this 'pricing discovery.'

The US financial system looks like an accident waiting to happen--  again

We bailed out the perpetrators who crashed the financial system, quickly made them even larger, and then stood by while they continued to commit serial financial frauds and  market manipulation, politely referred to as 'rigging,' in most of the global markets. 

See: Citigroup's Unchecked Crime Wave

How nuts is that?  How would you explain the reason for something like this?

Eric Hunsader of Nanex says that he can now prove that the US exchanges favor one class of trader over the others.  Why would the stock market be any different than all the other arrangments we see in our crony capitalist society amongst the pigmen.

Speaking of favoring a special class, want to end a corporate welfare tax loophole and subsidies that would save the US billions and help rebuild the national infrastructure?  Read this.

Have a pleasant evening.

Time for a demagogue break?  Too bad this time we do not have a chance for a 'New Deal.' 

SP 500 and NDX Futures Daily Charts - Breakout Attempt Fails

Stocks made an heroic attempt to break out this morning.

VIX plummeted to below 11.

And yet it failed in the afternoon.

This market looks tired, and very, very fully priced.

Have a pleasant evening.