An odd week begins with Dec14 option expiry today, Dec14 contract expiry on Wednesday, an American holiday on Thursday, a holiday-shortened trading session on Friday and the Swiss Gold Initiative vote on Sunday. What does this mean? Be ready for all sorts of price volatility.
The good news, though, is that paper gold and silver continue to find buyers. The London GOFO rates continue to deepen as the supply squeeze of readily-deliverable, 400-oz bars continues at these price levels. In fact, GOFO has now been negative each day for the past four weeks and it put it new lows just today! Even the 6-month rate is now significantly negative:
Against this backdrop, Koos reports today that Shanghai delivered another 52 metric tonnes just last week. This brings the YTD total for Shanghai up to 1,761 mts. No dropoff there...just a steady, relentless Chinese demand. Additionally, Koos adds up all Chinese gold imports, mining, official reserves and jewelry base (which hasn't been updated in 19 years) and comes up with a total Chinese gold reserves of 15,496 mts. Hmmm...Something tells me you won't see that number quoted by Reuters or the WGC.
At any rate, Koos concludes this post by stating this:
"I found some interesting things ‘on the ground’ here in Amsterdam regarding the repatriation of Dutch gold from New York by DNB, I think it’s in everybody’s interest I continue writing on that story."
Well, that sounds interesting, doesn't it? I guess we'll stay tuned. Anyway, great work Koos! Read it all here: https://www.bullionstar.com/blog/koos-jansen/total-chinese-gold-reserves-nearly-16000t/
Further good news is that the yen is back in the toilet today but gold is still not following it down. (So far, recall that it IS option expiration day.) This makes Turd happy and provides another day of reinforcing evidence that we are analyzing this correctly.
If we remove the yen candlesticks from the chart above and focus solely upon gold, we see that the $1204-1206 level continues to act as stout support. Once again last evening, the high was $1204.40. But price is hanging in there with a last of $1200.00 so we should really be quite encouraged. Our main goal now is to keep our weekly winning streak going with another green candle this week. Can we do it? I think so but it's likely not going to be easy.
And lo and behold, silver has not (yet) been smashed today! Count me amongst the stunned. As noted last week, simply by moving sideways here, silver is going to finally break out of the brutal down channel that has contained it since mid-July. This is very encouraging but it ain't over yet. Watch this very closely in the hours ahead.
And there is a major OPEC meeting set to begin on Thursday in Vienna. Therefore, expect a volatile week in crude oil and this could/might have an impact in silver, too. As you can see below, the algo linkage of crude and silver has been fraying recently just as the algo gold--yen linkage has broken. Regardless, I'd expect to see fluctuations in crude continue to have at least a tangental impact on silver...so...watch crude closely this week, too. http://www.zerohedge.com/news/2014-11-24/brent-plunge-60-if-opec-fails-cut-junk-bond-rout-default-cycle-follow
Finally, after considering all sorts of positive and negative feedback, I've decided to reopen (for Vault subscribers) the comments pages on all homepage threads. This means:
- All Vault subscribers can comment freely on Vault threads.
- All Vault subscribers (only) can also comment freely on public threads.
- But the renewed use of the forums has been encouraging and exactly what I was hoping for. Please continue to freely share information and discuss TEOTGKE there. The forums offer everyone the opportunity for in-depth and lengthy discussions of the type that simply can't be had on the daily threads.
I'm going to stop now so that I can write up a new public thread which will allow everyone to see how this works. I hope that everyone is pleased with the new arrangement.