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Gold, Discussion
mullokintyre
post Posted: Apr 5 2020, 12:20 PM
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Gold back above AUD$2700.
Gotta be positive for gold stocks come Monday mornings open.
Mick



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mullokintyre
post Posted: Apr 3 2020, 10:10 PM
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Those that do not learn from History, are doomed to repeat its mistakes.
From Zero hedge


QUOTE
Between 1962 and 1968, a cartel of central banks from the US and Europe ran a price manipulation scheme in London, aiming to keep the price of gold at $35 per ounce. They did this by constant intervention into the market, pooling their gold reserves to sell down the market. Conceived and coordinated at the Bank for International Settlements (BIS) in Switzerland by the G10 central bank governors, the dirty work of actual gold market intervention was done by the Pool's agent, the Bank of England gold trading desk in London.

The syndicate, known as the London Gold Pool was successful until it wasn’t, with the beginning of the end in early March 1968 as the huge run on gold became a tidal wave with sterling and US dollar weakness. On 10 March 1968, a Sunday, the consortium released a statement claiming that: “the London Gold Pool reaffirm their determination to support the pool at a fixed price of $35 per ounce”. At the same time, Fed chairman William McChesney Martin even vowed that the US would defend the Pool “to the last ingot”.

The Pool then proceeded to airlift hundreds of tonnes of gold bars from the US Treasury’s Fort Knox to RAF Mildenhall, which they dumped into the London market for the rest of the week (March 11 -14). With all the Good Delivery Gold siphoned off to the Market (actually a consortium of European merchant banks), the Rothschild and the Bank of England pulled the plug, and the London Gold Pool collapsed on the evening of 14 March 1968, ushering in an era of free market gold prices.
Moral of the story, don’t believe the pronouncements of the powers that be in the London and US gold markets, especially during a crisis.

Fast forward to today, and the parallels of the Pool with the modern bullion bank cartel, the London Bullion Market Association (LBMA) and CME’s Commodity Exchange (COMEX) are uncanny. In the space of a week, the LBMA – COMEX nexus, which together control price discovery in the global gold market through their combination of fractionally backed synthetic unallocated gold, and cash settled gold futures, has issued two statements to try to placate the gold market, each one more panic stricken.

Last week, as the contango between COMEX futures and London spot gold blew up to a nearly $100 differential, and London market maker bid-ask spot spreads blew out to $100, the LBMA in a rush to deflect attention, issued a statement claiming that:

“The London gold market continues to be open for business. There has, however, been some impact on liquidity arising from price volatility in Comex 100oz futures contracts. LBMA has offered its support to CME Group to facilitate physical delivery in New York and is working closely with COMEX and other key stakeholders to ensure the efficient running of the global gold market."

As we asked at the time last week:

Why is the LBMA colluding with the COMEX?

How can the London gold market be open for business if LBMA market makers are not providing liquidity in spot gold

Why is the LBMA deflecting attention from the London market and pinning the focus on the COMEX?

Why does the LBMA want to facilitate physical delivery in New York when its remit is the London Gold Market (loco London)?

Who are the other key stakeholders that the LBMA and COMEX are colluding with?hen yesterday, April 1, for a second the LBMA and CME issued an unprecedented second statement, more desperate than the first, with the pair seemingly running scared:

“LBMA AND CME GROUP COMMENT ON HELTHY GOLD STOCKS IN NEW YORK AND LONDON

CME Group and LBMA..will continue to coordinate efforts as market circumstances evolve. Together, both CME Group and LBMA are actively taking measures to ensure the continued efficient operation of global gold markets during this unprecedented time.

LBMA reports record gold stocks

Gold stocks in London remain healthy with the latest published numbers showing record stocks of 8,326 tonnes of gold, which is equivalent to 666,045 standard 400-ounce gold bars. Visit the LBMA website for more information.

CME Group depositories open and gold stocks near record high

CME Group’s New York depositories are operating normally as they have been deemed essential businesses and deliveries are occurring as planned. As of March 30, 2020, our depositories currently hold 9.2 million ounces of gold (with 5.6 million ounces eligible), nearing a record high in terms of stock levels..."
London Gold Pool - Bank for International Settlements (BIS), Basel
Never before has the gold market seen such panic from the paper gold conductors, and all this in the presence of record physical gold demand, cleared out gold bars and coin inventories across the entire gold supply chain, closed down precious metals mints and refineries, and a price disconnect between the physical and paper gold markets.

The fact that the LBMA - COMEX tag team which front for the modern bullion bank cartel have to comment not once, but twice in a week about the health of gold inventories in London and New York means they are panicking. It's unprecedented.

And this comes after the bullion banks placed disinformation into the media last week about needing to physical deliver gold bars from London to New York (hint - In modern times the US never imports physical gold from the UK), and were panicked into moving the goalposts with the launch of a new CME COMEX futures contract that brazenly tries to prop up COMEX GC 100 trading with the figment of fractional delivery of 400 oz gold bars that sit in London. Not to mention that on Monday this week, after CME published a COMEX vault report that had 400 oz bar categories listed for all the vaults, but with absolutely no 400 oz gold bars listed, and we mentioned it here on ZeroHedge, the CME then panicked and pulled the 400 oz version of the report, reverting back within an hour to the original version

The entire LBMA - CME Group statement about healthy gold stocks is, in the words of Francis Bacon - “of Simulation and Dissimulation” - simulation being a pretense of what is not, and dissimulation being a concealment of what is.

The LBMA reference to 8326 tonnes of gold in its network of London vaults is completed misleading.

This figure is from 31 December 2019, which is 3 months ago

Of this 8326 tonnes figure, 5373 tonnes (65%) represents gold held by central banks at the bank of England, and another 1895 tonnnes representes gold backing Exchange Traded Funds held in London LBMA vaults, such as the vaults of HSBC and JP Morgan. Subtracting these leaves 1057 tonnes (13% of total). Thais 1057 is just the maximum possible London float and does not itself exclude allocated gold held by entities such as sovereign wealth funds, investment institutions, ultra wealthy and family offices. I am hearing from the London gold market sources that the real LBMA bullion bank float is less than 500 tonnes and maybe be as low as 200 - 300 tonnes.
Looking at the COMEX data and vaults, as always, COMEX has very low gold holdings. The 9.2 mn ozs number which CME refers to in the above statement (actually 9.245 mn ozs) is only 287 tonnes of gold. Of that figure (which refers to Tuesday 31 March), 114 tonnes was in the Registered, meaning there already are vault warrants issued against that.
The other 5.6 mn ozs (actually 5.85 mn ozs) is ‘Eligible gold’, but eligible just means any gold that happens to be in the approved COMEX vaults that is in the form of kilo bars or 100 oz bars. It could be anything. It is already owned by entities, which would include mints, refiners, and jewellery companies, and eligible gold may have nothing to do with COMEX or CME.

There are now over 2.19 mn ounces of Comex contracts standing for delivery in April (stops issued) - that's 68 tonnes..and increasing.
From this latest April Fool’s Day statement, we can conclude that the LBMA is terrified that unallocated investors who have claims on LBMA bullion banks, will line up to take allocation of gold in London, while the CME is terrified that COMEX futures contract holders will increasingly try to take physical delivery of gold in New York (not just delivery of warrants but actually withdrawing the gold bars out of the COMEX vaults.

In March 1968 during the last days of the London Gold Pool, the cartel of central banks kept playing while the ship began to sink, brazenly saying that “the London Gold Pool reaffirm their determination to support the pool."

This time around, with their “healthy stocks of gold in London and New York” (you can be the judge of that), “the LBMA has offered its support to CME Group”. It therefore seems that while history doesn't repeat itself, it often rhymes.


At some stage, this has all got to blow up.
=It can't last forever this constant rigging of the market.
At some stage, the enemies of the west will stage a coordinated push to smash the paper warriors.
physical will eventually whem I just don't know when.
Mick



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Said 'Thanks' for this post: triage  bg99  
 
mullokintyre
post Posted: Mar 31 2020, 12:45 PM
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Russia has suspended gold purchases by their CB.

Kitco News) -

QUOTE
The gold market continues to deal with liquidity issues as mines and refiners close down because of the economic impact the spreading coronavirus is having across the globe; however, the market can now also expect to see lower demand as a major central bank said that it is not buying any gold as volatility remains high.

Monday, the Russian central bank announced that starting April 1 it will be suspending its domestic gold purchases.

"Further decisions on gold purchases will depend on how the situation develops," the bank said.
Not only is high volatility creating a challenging gold market, but Russia ’s economy is suffering as it engages in an oil price war with Saudi Arabia. West Texas Intermediate (WTI) crude oil prices fell to a fresh 17-year low Monday as prices dropped below $20 a barrel.

The announcement also comes as the coronavirus pandemic created chaos in the global gold market by grounding thousands of flights that deliver the metal to banks and dealers around the world. The breakdown in the global supply chain has caused shortages in key markets. Analysts have said that while there ’s plenty of the precious available, it ’s not always in the right place.

The Russian central bank has dominated the gold market, consistently increasing its gold reserves every month for the last three years.

According to data from the World Gold Council, the Russian central bank bought 158.1 tons last year. The WGC data shows that the central bank bought 8.1 tons of gold in January.

Although Russia will not be adding to its gold reserves in the near future, some analysts are not expecting the central bank to start selling its gold anytime soon.

In a recent interview with Kitco News, Juan Carlos Artigas, director of investment research at the WGC said that although gold purchases might fall compared to previous years ’ spending sprees, gold remains an attractive diversifier for central banks.

He added that in a world of low interest rates, central banks could start to rely on their gold holdings to support their currencies.

Gold price are currently struggling to find consistent buying momentum. June gold futures last traded at $1,636 an ounce, down more than 1% on the day.

Started reducing my gold shares.
Been a great run, but time tio go back to mostly cash till the next indicator pops up.
Mick



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joules mm1
post Posted: Mar 30 2020, 12:14 PM
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$silver front month contract is rolling down as i type, gold in USD's front month contract made a concise 76.4% bounce unlike it's comex counterpart contract which made within a few points of a double top retracementso neither has managed to make headway further than those bounce highs, mostly driven by (see Perth mint) retail

the COT report clearly has not seen the commercial go from historic extreme sellside to a bullish bidside, asks the questiongiven the current global index swing south are we in an inflationary (pro gold) or a deflationary period (con gold)
conversely if the commercials decide to pullback from their extreme sell to open positions the upside would have few limits



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. . . . . . . . everything has an art.....in the instance of the auction process, the only thing, needed to be listened to; price
 
nipper
post Posted: Mar 29 2020, 02:25 PM
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QUOTE
....supply disruptions were announced from a slew of mines along with the Perth Mint, Australia’s official bullion-making operation, and South Africa’s Rand Refinery, the world’s largest metals processing outfit.

That appeared to blow out the “delivery risk premium” as the spread between spot gold and the front-month futures contract ballooned in the latter’s favo(u)r

from The Perth Mint:
BULLION - LIMITED STOCK AVAILABLE
Due to overwhelming demand for our products during this time we are out of stock of many items and some will be subject to considerable delays before they become available again.
https://www.perthmint.com/covid19.aspx

- it's time to worry when the gold market seizes up. Equities, pshaw; credit & Bond markets; throw cash at it; but GOLD!!



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Mar 28 2020, 10:55 AM
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An interesting Development.
According to Sprott gold sales
UPS have declared that all shipments will no longer be insured, and from now on will not require a signature.
For this reason, Sprott Money (and perhaps other gold sellers) are not shipping the gold coins ingots, bars etc to its customers.
Wonder what effect this will have on Physical??
Mick




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mullokintyre
post Posted: Mar 27 2020, 10:50 AM
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From Kitco News

QUOTE
While ounces produced may be down in 2020, the margins for gold miners may be better.

A number of precious metal producers are reducing production due to government restrictions in response to COVID-19 concerns. Companies with operations in South Africa, Quebec and parts of Ontario have been told to stop operating.

One-third of NYSE-listed senior gold miners have withdrawn 2020 production guidance, according to data compiled by Kitco. (Sibanye-Stillwater, which is putting its South African mines on care and maintenance for the next 21 days, just said "...production for 2020 may differ from previous guidance.") And as more miners reckon with the impact of COVID-19, the number should rise.

Joe Mazumdar, editor and analyst at Exploration Insights, said this setback might not hurt as much as imagined. Gold seniors are cashed up due to the precious metal performing well in 2019, so the miners are in better shape to weather the downturn. Oil prices have also fallen steeply, a significant cost for miners.


Gold has fallen below the AUD2740 high, but at AUD2670, it is still above the level where it was when all the cataclysmic CV induced falls started.
Mick



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mullokintyre
post Posted: Mar 19 2020, 11:10 AM
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In Reply To: joules mm1's post @ Mar 17 2020, 04:25 PM

Lots of people will have an outlook (including me).
If any of them have an outlook that turns out to be accurate, it will be a fluke.
Mick



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joules mm1
post Posted: Mar 17 2020, 04:25 PM
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does anyone have an outlook for Au in AUD when this trend reverses:

Attached Image



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. . . . . . . . everything has an art.....in the instance of the auction process, the only thing, needed to be listened to; price
 
joules mm1
post Posted: Mar 17 2020, 03:54 PM
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despite the US and Aus hit-up in mining stocks yesterday and today, gold (in USD's) is still displaying sell-side structure inline with the larger daily rotation, the more the construction plays out (lack of bid + impulsive sell after sideways chop) should leave open the idea that bounces are oppostunities to exit trapped or long positions that are "doubtful"



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. . . . . . . . everything has an art.....in the instance of the auction process, the only thing, needed to be listened to; price
 
 


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