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Albert Sung is the author of the Katchum Macro-Economic Blog, monitoring breaking economic news from a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at... More
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  • GLD ETF Physical Gold Selling Has Exhausted Itself 1 comment
    Sep 12, 2013 12:02 PM | about stocks: GLD

    A small update on how the COMEX is doing. As we can see on this chart, the blue line is getting closer and closer to a blow up. Soon there is no registered physical gold left in any vaults of the COMEX. Maybe we'll see something happening in October 2013.

    (click to enlarge)

    I have always said that open interest should follow the amount of registered gold, because the COMEX needs to have the physical stock available in order to leverage their paper gold contracts.

    What we see now is that open interest is much higher than the registered gold at the COMEX.

    The black chart below shows the immense leverage.

    (click to enlarge)

    What is the result? You won't get your gold anymore. Grant Williams reports that people cannot get anymore physical gold at the GLD ETF.

    And with this news, we will see that the physical gold stored at GLD will not go down anymore. Indeed, when you make the chart of GLD ETF, you can see that the red chart isn't going down anymore. (Maybe they don't even have the physical gold at GLD...)

    This also means that extra supply of gold going onto the market by selling physical gold from GLD won't happen anymore and when extra supply won't come, the gold price cannot be manipulated lower by the ETF's (like we saw in 2012).

    (click to enlarge)

    And meanwhile, China keeps buying physical gold.

    (click to enlarge)

    I think there is a good chance that we see a bottom here.

    Stocks: GLD
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  • dieuwer
    , contributor
    Comments (2931) | Send Message
     
    Beware, there is a big difference between "buying" aka ordering gold, and have the bullion actually delivered to your doorstep.
    Me thinks China has been ordering gold, but not have it delivered. A rude awakening awaits them.
    12 Sep 2013, 03:05 PM Reply Like
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