How's that for some shameless search engine optimization? Seriously, why the heck not? If folks are out there searching Google for information on the precious metals, we might as well direct them here, right?
It's not as if the site isn't plenty busy...the last two weeks have seen record numbers of visitors and pageviews...but what the heck? The world needs as many Turdites as possible. And I suppose that this is a good place to remind new readers and lurkers: Remember that Turdville is managed, written and edited by yours truly. If you decide to join, your comments won't immediately be seen in the posts or forums. To control spam, every new "account" is moderated until I can approve it. Sometimes this happens almost immediately. Sometimes I'm away and/or busy and it takes a while. But we want you to sign up so please do...and then just be patient. We'll get you up and running as soon as possible.
Speaking of being up and running, how about our precious precious? I had noted last evening that the move through $1435 was a positive development and look at us now. I currently have June gold at $1455, just $2 off its highs. May silver had actually breached $24 but is now back down to $23.88. Some of the action in silver is undoubtedly related to option expiry today but, nonetheless, the action in both metals is encouraging.
Let's start with gold. It is now UP for seven of the last eight days since the $240 disaster of 4/12 and 4/15. Dead cat bounce. Snap back rally. Whatever. The fact is that price came down so quickly that it has left a virtual "air pocket" on the chart. See for yourself. Yes, there are some spots where technical selling could emerge but, frankly, there just isn't anything in the way of gold until it approaches $1500. There we will find some rough sledding. There are three main points that you can expect the shorts to protect.
- The 20-day moving average, currently near $1493
- Psychological resistance of the round number $1500
- And this is the biggest: Keeping gold down and out, below the 19-month range bottom of $1525-1530.
So, let's see what the rest of the day and tomorrow brings. Tomorrow morning has the release of the initial Q1 U.S. GDP guesstimates so perhaps that can provide the spark for a rush toward resistance point #1. We'll see. For now, here are your charts:
And I suppose that this is no surprise: Where gold has rallied 7 of the past 8 days, silver hasn't done squat. It's actually only up 2 of the last 8! And notice the different trajectories on the 4-hour charts. Ick. Oh well. Let's not get too caught up in the very short term. Look instead at the daily silver chart and note that it, too, has an air pocket between $24 and $26. (Now you know why silver fell back from $24 so quickly earlier today.) Like gold, let's see what tomorrow brings. Until then, with May silver option expiry today, expect some more volatility, likely centered around $24. First Notice Day is not until next Tuesday, the 30th, so there's still plenty of time for Cartel fun-and-games. Personally, I'm just laying low.
The global physical gold drain that we've been monitoring for weeks is continuing. In fact, it seems to be increasing in intensity. Two weeks ago today, I wrote this about the ongoing liquidation of the GLD: https://www.tfmetalsreport.com/blog/4633/enencumbered-gold At the time, the alleged GLD "inventory" stood at 1,181.42 metric tonnes, already down 12.48% for calendar year 2013. In the two weeks since, GLD has shed another 88.44 metric tonnes. This brings the combined liquidation YTD to 256.94 metric tonnes or 19.03%. This means that, YTD, the alleged GLD "inventory" has lost:
Let's look at it another way. Here's my pallet. 192 gold bars on this sucker. Very heavy. I hope the wood is strong enough to support all that gold!
The total withdrawal from just the GLD year-to-date is 107.56 of these. "Here you go. Where would you like them Mr. Li. Shall I put them in the vault with the others?"
But this is only part of the story. As stated, the GLD began 2013 with an "inventory" of 1,349.92 metric tonnes of gold. By 3/7/13, the "inventory" had fallen to 1,243.05. So, it took a little over two months to suck out the first 100 metric tonnes. By 4/16/13, it had fallen to 1,145.92. Thus it took about 6 weeks for the next 100 tonnes to leave. Now at 1,092.98, the GLD is halfway to another 100 but it has only taken 8 days. Holy exponential increase, Batman! At this rate, the GLD will be completely drained by about 2:00 next Wednesday.
But, again, that's not the whole story. Confirmed data out of Shanghai shows deliveries in excess of 1000 metric tonnes YTD. https://www.sge.sh/publish/sgeen/statistics/index.htm And London is delivering allocated gold like crazy, too, often at the rate of 15-25 tonnes/day.
On the retail level, The U.S. Mint reports April sales of 196,500 ounces. This is the 2nd-highest monthly total on record behind 231,500 of December 2009...and there are still 6 days to go! It's not just the U.S., though, retail sales are breaking records around the globe. https://www.bloomberg.com/news/2013-04-24/u-s-mint-sales-of-gold-coins-a...
And here is what we really need to watch: The Comex inventories. First a refresher:
Registered gold: Available for immediate delivery to those who demand bullion. In condition to satisfy a Comex delivery contract. This is actual gold, in London good delivery bar form.
Eligible gold: This is also gold (allegedly) in good condition but this gold is not available for delivery. Since it's not available for delivery and not "registered", this "gold" could be anything. Gold bars? Yes. But, frankly, no more valuable/deliverable as gold than my left shoe, some used toner cartridges or my old 5-iron.
OK, so where are we? As of late yesterday, TOTAL COMEX INVENTORY was this:
Eligible: 8,345,000 ounces or 266.9 metric tonnes. Hmmm. That's interesting. I'm sure it's just a coincidence that the total withdrawal YTD from the GLD is 8,260,812 ounces or 256.94 tonnes.
Registered: 2,210,000 ounces or just 68.74 metric tonnes.
And now here's the fun part. First Notice Day for the June13 contract is Friday, May 31. Deliveries will then take place through the month of June to all who stand on 5/31 as well as anyone else who shows up and plunks down 100% margin during the month of June. We've had two "delivery months" thus far in 2013. In February, over 1.3MM ounces or about 41 metric tonnes were delivered. So far in April, we've seen 1.1MM ounces delivered, about 34.5 metric tonnes. Do the math, please. Two more delivery months and The Comex registered inventories will be bone dry and empty. Already we're hearing anecdotal stories of delivery delays and cash settlement. At this rate, can you imagine how this will all look by August? This "story" is about to get much, much more interesting.
Finally, today, I need to throw a bone to Uncle Ted. In his mid-week letter to subscribers yesterday, he came up with some analysis that, frankly, I'm angry that I didn't think of myself. (You can read it all at: www.butlerresearch.com)
Ted broke down the actual paper gains and losses on The Comex for the biggest traders. By using the CoT data and the price changes for The Big Smash last week, this is what he found:
In silver, the Specs and Commercials that were short made $2.5B and those who were long lost $2.5B. In gold, the shorts made even more, ringing the register for $7B while the longs got clipped for $7B. OUCH! Those are preposterously large numbers. But that's not the point of this exercise.
Recall all of the frustration here and on other sites regarding "the paper tail wagging the spot dog". Comex futures trading is not and was never meant to be a price discovery platform. (Do you hear me Bart? Are you reading this Gary?) Instead, it is a place for producers to hedge and speculators to wager. Real price discovery should always be in the physical market. Nonetheless, Comex price currently sets the physical price and look at the damage the paper traders on the Comex have wrought.
If one assumes about 1B ounces of silver in the global bullion inventory and another 1B ounces in retail coins and bars, these holders alone saw the value of their physical silver decline by $10B on the $5 paper price drop. The paper traders rigged price lower in order to line their pockets and they made $2.5B. By doing so, they "cost" the holders of physical silver $10B.
Now if you thank that's bad and infuriating, wait until you see the paper effect on physical gold...
For the sake of simplicity, let's calculate the total amount of gold in the world to be about 5B ounces. (Your three Olympic swimming pools or whatever.) A $200 paper price drop multiplied by 5B ounces equals a total loss in "value" of $1,000,000,000,000. Yes, that's one trillion dollars! And you wonder why we should all be furious and full of hate toward the bankers and their monkeys. For the sake of their selfish padding of their trading accounts and bonus pools, they rigged price lower by $200 in two days. This made them $7B. By doing so, they diminished the fiat-conversion value of the entire stock of global gold by $1T!! Bastards! Greedy, selfish, narcissist bastards! My unbending desire is that, one day soon, retribution will be dealt to them and I hope to be standing at the base of the gallows when it comes.
OK, it's now 12:45 EDT so I suppose I'd better stop and get this posted. I see that prices are hanging in there at $1456 and $24.09. This is very encouraging! Again, let's see what tomorrow's GDP estimates are and hope for short-squeezing. Have a great rest of your day. Thanks for stopping by.