A Gold Oddity

Here is a news item from Zerohedge :

Link to the rest of the article: http://www.zerohedge.com/news/2013-03-24/another-gold-shortage-abn-halt-physical-gold-delivery

Please note the date of the article in Zerohedge was 24 March 2013.

So this sounds like gold that was in trust for clients had been rehypothecated, nay let us not use weasel-word bankster-speak, let us use English instead. How about: "stolen"," illegally converted to title of another party" instead? Alas I do not know the terms of the gold account contracts, so I can not be sure what was allowed and legal, or disallowed and illegal, or what was just shady sharp practise! So I must refrain from characterizing what was done last March to the gold account holders' gold. All I can surmise (from the bank's own letter) was that the gold was gone, or seemed to be so, and paper settlement would replace the obligation, or was that it?

So pretty soon the anti-bankster oriented alternative media jumped upon this news released .... err ... from ABN AMRO .... and did what they do best.

Now Dear Reader, if you receive news that a large bank can not deliver the gold (entrusted to them by their customer clients) back to those clients upon demand, well you might think that the gold is gone, and some freshly printed notes will be offered to clients instead, whereupon the clients would have to enter the gold market and purchase "their" gold back. It seems a reasonable and bullish way to interpret such information, doesn't it?

Well, let us look at the gold price in the period following this news release.

Here is a chart of what happened next:

Yes that is some coincidence isn't it? And 1600 minus 1200 = 400 which is a lot of money which changed pockets. A whole lot of money.

Now at this stage I should mention that people who made investment decisions based upon a letter written by a bank, and found in the public media (and there were a lot of them)  may have learned something from how their trading system subsequently panned out. Something about what is and what isn't actionable information and what is and what isn't bait laid by the covert sales departments of large corporate entities who make money from trading assets. Maybe that letter was not for the adressees. Maybe it was for the public.

Still, Reader, I leave it up to you to figure out cause and effect in the byzantine world of gold pricing, and I will focus instead on a slightly different facet of the story than who made how much and how back in 2013. Let us look more towards the present.

One of the things which follows an investment pro selling at the top or a significant high, is that the pro usually gets interested in buying back the asset after the price has fallen by a large amount. They like to buy at the bottom, or near a significant low.

So if a lot of gold got sold to .. .err, the public .... at the beginning of a 200 dollar decline, then it might seem reasonable that when gold stops falling it might just be a teeny bit possible that maybe somebody is buying their gold back at a lower price.

So now I bring this little interview from Kitco. The first 4 1/2 minutes are quite relevant:

...." 144 million ounces of gold that came into Switzerland that stayed there".......

But, but, but ... why don't they want us to know this? We received no letter from the banks this time ! What would they do in silence?

Sherlock Holmes once solved a mystery based upon "the dog that didn't bark".

Here is an excerpt:

Quote: Gregory (Scotland Yard detective): "Is there any other point to which you would wish to draw my attention?"

Holmes: "To the curious incident of the dog in the night-time."

Gregory: "The dog did nothing in the night-time."

Holmes: "That was the curious incident."      :Unquote

I can't remember if the dog's name was provided in Sir Arthur Conan Doyle's book, but, tongue in cheek, could it possibly have been called "Accumulation"?

Caveat emptor readers! It's just another gold market tale!

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

135 Comments

Dr Jerome's picture

Whaaat? Nobody wants first?

I bet that if I rehypothecated my real estate by applying for, and obtaining multiple mortgages using one property as collateral, that they would toss me in jail. but what' is the problem? If I can keep up my end of the deal by earning fiat with the borrowed money and keeping my obligations...

Yet they can sell gold warehouse receipts to multiple clients, lets say, 30 to one. Lets hope two of those 30 don't ask for their physical.

stackaloha's picture

I promise

I won't be a rehypothecator! Thanks for more to ponder AM

Swift Boat Vet's picture

Interesting find my friend

I keep wondering when big, smart money in the west will build up or begin a replentishment of gold.   That is if any of the gold sold the last year or two was actually their own.   Knowing TPTB's code of ethics and morals,  they probably never sold an ounce of their own personal stash.   Sell all gold but their own!  What do you think?

Swifty

Bollocks's picture

Great stuff Argentus

A gold oddity indeed.

Ooh, what a coincidence.

Spot-on Sherlock yes.

pm_newbie's picture

intrigue

Since becoming a member of this site I watch no TV. All the mystery intrigue and entertainment imaginable are to be found following the story of gold. Excellent post!

sierra skier's picture

I'm sure glad all of these

I'm sure glad all of these folks are taking care of 'our gold' and cashing us out when we decide to close out our accounts and ask for our physical.

goldcom's picture

Curiouser and curiouser

Are the Swiss to be trusted?

SS121's picture

as the cycle completes

Only Silver and Gold are Money.  And so it was.

but then it started... with people using paper that represented their gold, (that was being held for them)

paper usage grew and matured, and became the norm.  

for a time paper thrived in spite of it's fatal flaws,  great fake markets and economies with  glorious charts and polished narrators!! ...but the weight of natural law was always pulling until the best years were past.

declining in place, it's demise only became more and more obvious.

and as it ends... people are using paper to represent their gold. (that is being stored for them?)

Only Silver and Gold are Money.  And so it will be.

infometron's picture

WTF!? Christian blowing hot air!

Nice post, AM, thank you!

How I would very much love to hear Koos Jensen's opinion/critique of the "facts" put forth this interview!

"Chinese investment demand was about 43,000,000 ounces [1,219 Metric Tons] cumulatively from 2008 to 2013." (my emphasis). That is a LOT LESS than the numbers we've been hearing from people like Koos and Eric Sprott.

"So, if you look at it from 2008 through 2013, it comes down to about 147,000,000 ounces of net imports, about 4,000,000 ounces were used in jewelry and watches, so you have about 144,000,000 ounces [4,082 Metric Tons] of gold that came into Switzerland and stayed there. So, investment demand in Switzerland is much higher than the demand in China, and, much more importantly, Switzerland is not running out of gold, and, in fact, it has, since 2008, added about 10% of global private investment holdings of gold in Switzerland alone."

Below is the graph presented in the interview. If Christian is right in this regard, there is lots of hoarding going on...

[Edit, sorry, for whatever reason, I am not successful in uploading the dingy dang darn file!!]

DeaconBenjamin's picture

Gold Prices to Rise Further Amid Middle East Tensions

  • Gold Prices to Rise Further Amid Middle East TensionsView Photo

    Gold prices are set to rise further next week with geopolitical tensions in the Middle East expected to boost the precious metal's safe-haven status.

As many as 16 of 24 analysts polled in a Kitco Gold Survey said they expected gold prices to trade higher next week, while three predicted that prices will drop and five forecast prices to trade sideways.

However, analysts also said that traders are heading towards the energy market, and away from precious metals, in their pursuit of safe-haven assets.

In addition, the US Federal Reserve's monetary policy statement and Fed chief Janet Yellen's press conference, on 18 June, will influence gold prices.

Kevin Grady, owner, Phoenix Futures and Options, said developments in Iraq this week supported gold.

But traders are using crude oil as a safe-haven play, and not gold, partly because the yellow metal is nearing the technical chart resistance, he added.

Afshin Nabavi, head of trading at MKS in Geneva said: "I think the Iraq situation shook everybody up. Oil rallied sharply and we were able to push gold higher.... But I'm not convinced that we won't see more downside. I think you can cautiously sell rallies if we get to $1,280.

"Thirteen hundred is the big resistance. If we don't find any more news then we'll probably go back to $1,240. There's the FOMC next week; that's worth watching. That could change things quickly. And it's another reason why I would sell rallies."

https://uk.news.yahoo.com/gold-prices-rise-further-amid-middle-east-tensions-103955646.html#XLp91Ex

DeaconBenjamin's picture

Dubai to launch spot gold and agricultural contracts

Dubai: Diversifying away form its derivatives focus, the DGCX is all set to launch a spot gold contract this year that will make Dubai a major price discovery centre for the precious metal.

“We are working on the spot gold contract’s specifications and timing the launch. We expect to launch it next 2 to 3 months. The reason for the spot gold is to create a contract that is very much regionally and Dubai relevant asset class,” said Anderson.

Now up to 40 per cent of the gold traded in the world comes through Dubai. The city has a robust gold ecosystem that constitutes of importers, refiners, exporters, an active gold trading market and a derivatives market. One thing missing is the physical spot gold trading and benchmarking.

“What we are attempting to do is to bridge this gap. We have a fully internationally compliant vault and storage facility we will also be utilising the trade flow system of the DMCC. It is the warrant system. We will use that as part of the delivery mechanism,” he said.

The exchange expects to attract multiple users of gold ecosystem to participate in this contract such as mining companies, refiners, fabricators, traders and international banks. Primarily it will be a spot gold price discovery platform and will be fully deliverable. So the price that is seen on DGCX’s screen will be the price for spot gold in Dubai for delivery.

One of the benefits of trading in spot gold on the exchange is that the trade is cleared through the clearing house making it a much more efficient way of trading in Gold from a collateral perspective. In this type of trade, counterparty risk is virtually eliminated as trade is routed through clearing house. In simple terms once a trade is executed, the clearing house becomes buyer to the seller and the seller to the buyer and then it does all the collections and payouts and there is no need for bilateral credit limits.

http://gulfnews.com/business/banking/dgcx-to-launch-spot-gold-and-agricultural-contracts-1.1347470

infometron's picture

Richard Haass Re: what's happening in Iraq

I've been ruminating on an interview with Richard Haass, president of the Council on Foreign Relations, on Fareed Zakaria's GPS on CNN this morning. Therein he advocated (I paraphrase) 'going with the flow' and accepting that Iraq as a 'unified nation' is finished, advocating instead to make the best out of a three way split of Iraq amongst Sunni, Shia, and Kurd.

My impression of Haass is that he's the guy (or at least the front man for those) who really pulls the strings regarding U.S. foreign policy, and if correct, it is hard for me to believe that this civil war in Iraq is quite as spontaneous and unexpected as we are being led to believe. Perhaps there are 'understandings' the U.S. already has in place with Saudi Arabia, Iran, and Turkey? Could Maliki just be the 'fall guy'?

A piece of the puzzle I can't reconcile with this hypothesis is who eventually controls the southern oil fields. Iran?!

Dr Jerome's picture

Janet Yellen's press conference

I cannot recall a recent Fed announcement, minutes or press release where gold was not undercut. Beware of Wednesday, if not tomorrow morning. We may see AU run flat until then... 1280 provided resistance in Jan uary and support all through April and May. It took five tries for them to push it down through. I expect profit taking as some point here. Back on Jan 27 when we touched 1280 on the way up to 1390, it bounced back to 1240 before continuing up through.

DeaconBenjamin's picture

regarding eastern Ukrainian oblasts

The lesson appears clear.  Collaborate with the Bolsheviks, expect a holodomor.

Dagney Taggart's picture

$35+ by August

wink

PS. Yes. THIS August. Screw gold. Thank you palladium.

Urban Roman's picture

@DeaconBenjamin,

I don't get it -- NATO is Bolsheviks?
 

[edit]
Nevermind -- I see you were referring to the article.

infometron's picture

@Dagney Re: $35+ by August

I'd like that even more than Brasilian cheerleaders at the World Cup!!

cliff 567's picture

Drums keep beating a rytham to my brain

And the bet goes on,

And the beat goes on.

stackaloha's picture

jeff christian

same guy who swore up and down that there is no gold manipulation, so ya he's reliable ;-)

here's the latest from belangp:

Green Lantern's picture

Other Pump and Dumps?

Bitcoin a pump and dump? 

Ben Bernanke Endorses BitCoin

http://www.newrepublic.com/article/115801/bernankes-bitcoin-comments-signal-growing-acceptance​

Prices Fall As Bitcoin Confronts Doomsday Scenario

http://www.businessinsider.com/today-bitcoins-doomsday-scenario-arrived-2014-6​

A blast from the past

The Greatest Pump and Dump in Wall Street History? Rockefellars and Rothchilds 

http://en.wikipedia.org/wiki/Amalgamated_Copper_Mining_Company​

They really screwed alot of people. 

SteveW's picture

Christian is disingenuous

First the chart embedded in the video runs for, I believe, two frames so that he can talk about it but you didn't really see it; although perhaps he is unaware that the video can be stopped for closer inspection.

If you accept Koos Jansen's work that the withdrawals of gold from the Shanghai exchange equate to Chinese demand then you see the following:

Chinese 2013 demand was 2181 MT.

http://www.ingoldwetrust.ch/unprecedented-total-chinese-gold-demand-2013

The total 2009-2013 demand looks to be around 5500 metric tonnes from eyeballing the graph or 176 million oz.

Now Jeff says Swiss net imports 2008-2013 were 144 million oz. This would be more than Chinese demand if one accepts the World Gold Council figures for Chinese demand.

But have a good luck at Jeff's graph and what is most striking? To me its the decline in Swiss net imports from 40 million oz in 2009 to around 10 million oz in 2013 while at the same time imports rose from around 70 million oz in 2009 to 100 million oz in 2013. This in itself supports the meme that Switzerland is importing more gold, refining it and then exporting it, maybe as kilo bars to China?

Frankly I don't see any mystery given the multi year time frame involved AM, but thanks for bringing to my attention another of JC's explanation of gold demand. I always like to interpret the data for myself.

SteveW's picture

ABN AMRO's default

One way of looking at the decline in the gold price immediately (well 3 weeks) after the default would be to suggest that some of that gold was held by ABN AMRO and they had been selected by their brethren to default, which would then release this gold for price suppression.

Woof, woof.
 

Fred Hayek's picture

Everything is rigged: Equities Edition

Oh, sure, we've all known about the "Plunge Protection Team" for a long time now.  But equity whores and financy boys have always contended, "Oh, that's just in case of emergencies!"

Yeah.  Sure.

Well, this piece at ZeroHedge links to a Financial Times article that says that Central Banks around the world are known to have more than $29 Trillion in various equity markets. 

http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market

How much imagination does it take to go to the next step and realize which way central banks prefer those equity markets go?  Can you say low volume melt up around the world?

Fred Hayek's picture

@SteveW --Yes!

I agree with your cynical take.  It wasn't the case that they had none of it.  Maybe they just didn't have all that they were supposed to and were chosen by their brethren to be the sacrificial lamb.

tyberious's picture

Something to ponder

(NaturalNews) More and more people are wondering today why systems of American government and corporate enterprise don't seem to be working. The education system fails to educate, the health care system fails to create good health, and the border patrol isn't even allowed to protect the border. Why are these systems failing the American people over and over again?

The answer -- which may surprise you -- is that many systems are designed to fail from the very start.

The health care system, for example, would collapse if the American people really got healthy and started taking vitamin D, eating healthier foods, exercising regularly and taking care of their own health. So the health care system encourages "maintenance" of disease rather than preventing or curing disease. Disease "maintenance" is profitable, while disease prevention is not. That's why the health care system is designed to fail at its primary stated purpose: creating good health. If it actually succeeded, it would put itself out of business.
 

Systems that depend on the continuation of the very thing they claim to oppose

There are all sorts of systems in America today that depend on the continuation of the very thing they oppose in order to continue to exist. Here, I list the more obvious ones, but there are many more worthy of attention.

Each of these systems works much like a cancer tumor, incessantly seeking to expand its size by redirecting support resources to itself. In cancer, this process is called angiogenesis. In government, it's called a "budget increase," and every agency, department and group within government always seeks to grow larger and command a more lucrative budget.

To accomplish this, it must stay relevant to some enormous problem in society. If the National Cancer Institute, for example, discovered a cure for cancer and shared it with the public, the entire organization would suddenly become irrelevant and see its operating budgets collapse. It is the ongoing search for cancer -- not its cure -- that keeps the NCI in business. That's why no cure for cancer will ever be publicized... it runs counter to the very existence of the cancer industry!

The following list reveals some of the top systems in America which are designed to fail so that they can continue to remain well-funded and profitable.

As you read this list, keep in mind that the individual people working in these systems are often well-meaning, ethical individuals who are trying to do their best. They usually have little awareness, however, that the system in which they are functioning was never designed to achieve success in the first place.

Conclusion: Don't be suckered into thinking policy failures are accidents

As you observe what's happening in the world around you, it's important to understand why the failure rate on so many institutions and policies is so high: it's because they are designed to fail from the start.

There is no real effort to cure cancer, end disease, nourish the population, reform violent criminals, educate children or pay off the national debt. All of these are designed to remain ongoing failures for political or economic purposes. Their activities are often just pure theater to maintain the illusion that they are doing something useful for society while they maintain positions of power and profit.

Learn more: http://www.naturalnews.com/045577_engineered_failure_government_institutions_theatrics.html#ixzz34lm5Ahwd
 

Libero's picture

Cure for cancer would never be revealed

More or less what u are saying tyberious. Would think that all the pharmies would make billions off a cure. Not all cancer research is done through NCI.

tyberious's picture

‘Inventing terrorists’: New

‘Inventing terrorists’: New study reveals FBI set up terrorism-related prosecutions

Nearly 95 per cent of terrorist arrests have been the result of FBI foiling its own entrapment plots as a part of the so-called post-9/11 War on Terror, a new study revealed.

According to the report entitled ‘Inventing Terrorists: The Lawfare of Preemptive Prosecution’, the majority of arrests involved the unjust prosecution of targeted Muslim Americans.

The 175-page study by Muslim advocacy group SALAM analyzes 399 individuals in cases included on the list of the US Department of Justice from 2001 to 2010.

“According to this study’s classification, the number of preemptive prosecution cases is 289 out of 399, or 72.4 percent. The number of elements of preemptive prosecution cases is 87 out of 399, or 21.8 percent. Combining preemptive prosecution cases and elements of preemptive prosecution cases, the total number of such cases on the DOJ list is 376, or 94.2 percent,” the report concluded.

The authors define ‘preemptive prosecution’ as “a law enforcement strategy adopted after 9/11, to target and prosecute individuals or organizations whose beliefs, ideology, or religious affiliations raise security concerns for the government.”

http://rt.com/usa/166060-usa-fbi-terrorism-prosecutions/

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