NAV Premiums of Certain Precious Metal Trusts and Funds - Killing Off Cash, Negative Rates

Approximately 11,293 troy ounces (only about .35 tonnes) of gold was redeemed from the Sprott Physical Gold Trust in return for 1,365,920 units since the last time I updated this on October 25th.  That prior chart is included below the current data.

You may make what you will of this, but the fact remains that there is little redemption of units for silver.  And there is a general decline in gold held by Western ETFs and Funds, and heading to Asia. It could also be some sort of arbitrage, but I am struggling with that one, again because it only seems to be happening with gold.

Or perhaps the Chia Pet or Pet Rocks people are diversifying their product offerings.

Business Insider Australia has an interesting article, Killing off Cash, and Imposing Negative Interest Rates.   

Janet Yellen did not rule this out in her congressional testimony today.  No wonder the wealthy are stashing their cash in offshore havens.

The cash balance in the Sprott Physical Silver Trust has gone more negative, as short term payments are most likely delayed, and/or short term operating loans taken.   It appears that another sale of silver bullion to raise cash for the fund may be in the works, pending the outcome of their acquisition proposals perhaps.

There was a marked decline in the cash assets of the Central Fund of Canada.  They paid a 1 cent per Class A Share annual dividend on October 28, which would account for about $2,544,327 of that.

Ratio of Open Interest to Registered (Deliverable) Gold on Comex 298 to 1 New All Time High

"And the great owners, who must lose their land in an upheaval, the great owners with access to history, with eyes to read history and to know the great fact: when property accumulates in too few hands it is taken away...

Repression works only to strengthen and knit the repressed. The great owners ignored the three cries of history. The land fell into fewer hands, the number of dispossessed increased, and every effort of the great owners was directed at repression."

John Steinbeck

The number of potential claims (open interest) to the total amount of gold registered as 'deliverable' into those claims has reached a new high ratio of about 298 to 1.

It appears that JPM has been accumulating physical bullion which, if recent history repeats, it may be prepared to deliver into the demand for gold bullion during the active month of December if required. Some of that gold is being held in the Nova Scotia warehouse, acquired on the October contract, in addition to their own.

There are those who will say that this means nothing.  And yet, we have never seen such high ratios of potential claims to gold marked for delivery before.

A 'New Gold Rush'

Why is this happening now?   It is because those who are holding their gold in the Comex warehouses do not wish to see their bullion swept away in a physical short squeeze that may begin in an overseas market, at these prices.

If a run on the available 'float' of bullion begins in earnest, the unwinding of the high levels of claims per ounce and hypothecation of ownership, especially in unallocated accounts, could provide some serious fireworks.

A determined campaign to control the price of gold, that has been underway since early 2013, led by the new London Gold Pool, is bumping up against shortages in available gold in New York,  London, and Switzerland.  The cause of course is well known, the truly impressive demand for physical bullion in the 'Silk Road' countries of China, India, Russia, and Turkey.

These sorts of things will always end in collapse, as one or two key players begin to withdraw their support and shepherd their national holdings, even repatriating them to their home countries in order to control the integrity of their ownership in an increasingly hypothecated, fragile market.

When the music stops, the rush for available seats may be more disorderly than the money masters will allow themselves to imagine.



Related:  Why Austria Is Repatriating Its Gold From London


These charts are from Nick Laird at goldchartsrus.com.

Gold Daily And Silver Weekly Charts

I am restraining an impulse to create some new intermediate long positions out of trading discipline.  There has been no buy signal yet.

I also wish to see how we fare through the Non-Farm Payrolls Report on Friday.

This smackdown in the metals is starting to look very over-extended.

I don't like to traffic in 'feelings' and 'intuitions' but I must say this is starting to look like something important is developing within the long precious metals and monetary reserves macro trend that has been in place since at least 1999.

And, be still your beating hearts, Facebook will be reporting their numbers after the bell tomorrow.

A nation of virtual shopkeepers, con men, and consumers.

Have a pleasant evening.

SP 500 and NDX Futures Daily Choice - La Vie En Rose

"If at the start this cancerous growth in the nation was not particularly noticeable, it was only because there were still enough forces at work that operated for the good, so that it was kept under control. As it grew larger, however, and finally in an ultimate spurt of growth attained ruling power, the tumor broke open, as it were, and infected the whole body.

The greater part of its former opponents went into hiding. The German intellectuals fled to their cellars, there, like plants struggling in the dark, away from light and sun, gradually to choke to death."

Sophie Scholl

The economic news came in weakly this morning, inspiring yet another round of 'will they or won't they raise rates' in December. Stocks were largely flat, but the auto sales numbers came in well, and this inspired a further rally in stocks that pushed them to levels that seem a little lofty.

I am waiting to see if stocks will keep going through the Non-Farm Payrolls report.

It is going to take quite a bit of time and effort to the repair the damage to the real economy and to society that we have allowed the financiers and their crony capitalists to inflict.

Have a pleasant evening.