The Pattern Re-Emerges
February, April and June were Comex delivery months that saw the price of gold get hammered. August was a delivery month that saw the price of gold rally. October is a delivery month and gold is getting hammered again. What's the difference? Do you really want to know or does all of this make YOU want to go get hammered?
I think at this point it's safe to say that we're onto something. As documented here (https://www.tfmetalsreport.com/blog/4827/pattern-emerges), in 2013 if JPMorgan is issuing the majority of the delivery contracts in a delivery month, the price of gold gets hammered. If, instead, JPM is taking (stopping) deliveries to their own house account, the price of gold rallies. See August, for example: https://www.tfmetalsreport.com/blog/4909/why-jpm-hoarding-gold & https://www.tfmetalsreport.com/blog/4941/jpm-continues-hoard-gold & https://www.tfmetalsreport.com/blog/5018/evidence-gold-corner
October13 Comex gold deliveries began yesterday and we are back to the Feb/Apr/June pattern. For the first two days of the delivery month, there has been a total of 2,126 contracts delivered. That's 212,600 troy ounces or about 6.5 metric tonnes. Of the total, JPM has so far issued 1,991 of them or 93.6%. The primary stopper has been HSBC, claiming 1,570 of them (73.8%) for their own house account.
To no surprise, I guess, we now have this beatdown in progress. Since the $1353 highs of Sunday evening, gold has now fallen over $65 to $1288. Pretty remarkable given that there are no fundamental reasons for this selloff. And we can correctly assume that this is a Cartel bank inspiring this hammering. Why? For the same two reasons as always:
- No single Spec has the firepower of a position large enough to dump into the market all at once to cause such a bid-swallowing decline.
- And no for-profit Spec would ensure the worst trade execution possible by unloading 5,000 contracts in a single trade.
Here's how it looks in action:
And, so, once again it's mission accomplished.
- The charts are in tatters (see below) and price looks almost certain to trade even lower in the days ahead.
- Lower prices allow JPM to accumulate and deliver the gold necessary to settle their October obligations.
- Lower prices allow JPM to accumulate additional December futures contracts for their "corner".
- Lower prices will shake even more "gold" out of the GLD "inventory", the last update from which showed a new 2013 low balance of just 905.99 metric tonnes, down nearly 444 metric tonnes YTD or 32.88%.
So, we'll see where we go tomorrow and Thursday. I would still expect a minor rally and bounceback but, without a BLSBS on Friday because of the U.S. government shutdown, all bets are off, frankly. ANYTHING could happen.
There also will not be a CoT or a BPR this week. With the government "closed", there are no bureaucrats at the CFTC available to take the surveys and process the reports. When that might happen will be a function of when the government "re-opens". Until then, it's The Wild, Wild West in the metals pits. The Cartel Banks can put on or take off any positions they'd like without concern for grooming ahead of a CFTC survey. Long story short...expect much greater volatility as the Specs are jammed whichever way the banks would like.
Good luck and stay safe out there.