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  • GLD: Please Do Not Overreact - Part 1 [View article]
    Nice to have a perspective that is clearly of Eastern origin, and not Anglo-North American. Thanks for your input exk.
    Nov 15, 2014. 09:55 PM | 1 Like Like |Link to Comment
  • The Gold And Silver Smack-Down Cometh [View article]
    LBMA GOFO rates have been negative for 10days, and remain so. Negative GOFO rates appear to mean tightness in the physical market for immediate delivery.

    Based on history through the course of 2013, the price of gold only rises when GOFO rates are negative. Its plain for all to see.

    A price "smack down" whilst GOFO rates are negative is possibly not achievable?
    Feb 23, 2014. 09:49 PM | Likes Like |Link to Comment
  • The Gold Trade: I Tried To Warn You [View article]
    Well .. I missed your earlier warnings, apologies. Could you put out new warnings for 2014 .. are you now warning of Gold $2000 or Gold $700?
    Feb 10, 2014. 08:11 AM | 11 Likes Like |Link to Comment
  • Gold- Buffett And Morgan Stanley Agree [View article]
    The conversation between JPM and China over that building purchase could have been very funny:

    JPM - Here's the keys, as agreed 20T gold in the vault is included in the building price
    China - Thank you very much, its been a pleasure doing business
    2days later
    China - where's the 20T gold? we see empty vault with small stack of paper in corner
    JPM - Those are paper certificates for 20T gold
    China - What? We buy worlds largest gold vault with paper? Paper is not Gold!!!
    JPM - Is!
    China - NOT!!
    JPM - Is!
    China - OK, you put real gold in vault, or we cancel transaction and tell whole world that PAPER is NOT GOLD!!
    JPM - OK OK!! We swap paper for real gold, just give us till end of January 14... and PLEEEAAASSSEE don't tell anyone!
    Jan 31, 2014. 08:09 PM | 10 Likes Like |Link to Comment
  • Gold- Buffett And Morgan Stanley Agree [View article]
    Yup - JP Morgan - look, they took 96% of physical delivery of the Comex December 13 contract. One has to assume that they are on the right side of the trade?
    Jan 31, 2014. 10:53 AM | 8 Likes Like |Link to Comment
  • Gold- Buffett And Morgan Stanley Agree [View article]
    Mr Buffet is well-documented as decrying Gold as something that is "golden, shiny, looks nice and has no application", of course the same Mr Buffet had a lucrative business in the 90's milking the silver market for great profit, a metal very similar in appearance "silver, shiny and looks nice". Gold may have limited industrial use compared with silver - BUT - if half the world's population (India and China) want it really really badly that will (and is) surpass any lack of industrial use. in 2013 China imported gold equal to or exceeding annual mine production; India sat on the sidelines. This is just the beginning. Supression of the price of gold by western central banks, the Fed and BIS will continue until physical demand overwhelms them. The use of gold is a hedge against devaluing fiat currencies, presently being led by pesos, liras, rubles; to be followed by euros, dollars and others Moving forward the price of gold may only drop only when measured in and compared to units of silver! after all, the measurement of value is always relative to something else ....
    Jan 31, 2014. 10:49 AM | 4 Likes Like |Link to Comment
  • Weekly COMEX Gold Inventories: The New Year Brings New All-Time Lows [View article]
    Hebba: your repetitive articles presenting Comex inventories and rising owners per ounce miss many points.

    As you point out registered stocks on Comex are available for delivery and Eligible stocks are not presented by their owners for delivery. The drop in registered inventories is a manifestation of the drop in price of gold - owners with stock in Comex warehouses are not prepared to sell at current prices. The bullion banks which manage the Eligible inventories, also have no imperative to keep any more stock in Eligible than absolutely necessary to meet contracted deliveries.

    The graphs which are presented in this article clearly show an inverse relationship between registered inventories and owners per ounce. The drop in registered inventories on Comex has tracked the drop in the price of gold through 2013. In my opinion, this indicates that the drop in price has not been due to drop in demand for gold (applying usual price/demand economics" but has been for other reasons. As demand for gold has remand strong despite the drop in price many owners are not prepared to sell, hence the drop in Registered inventories.

    In practical terms, Owners per Ounce has minimal application. It is well documented that of 6,500 contracts for Dec 13 Comex Gold futures which stood for delivery, JP Morgan took delivery (or has stood for delivery) of over 90% - into its prop/house account. Of the 94 owners per ounce presented above, the other 93 owners just aren't showing up for delivery.

    20ton of Gold (6,500 contracts) were presented for delivery on Comex in December 13. The Shanghai Gold Exchange trades 10-20ton of Gold PHYSICALLY each day, this dwarves Comex as a physical exchange!. For better or worse, Comex and the London Fixes are a price setting mechanism, but historically not an active exchange of physical metal, such as Shanghai. An argument that "what if" the 94 owners per ounce stood for delivery has no historical basis.

    Even if more contracts stood for delivery than Registered stocks available, the bullion banks would simply source additional supply, such as transferring stock from their own Eligible inventories. Noting that annual gold production in the US runs in the order of 200ton annually, gold is available for purchase by the banks to settle Comex contracts. Cash settlement is also permissible under Comex rules.

    I disagree with your conclusion that high owners per ounce is a "dangerous thing". It is indicative that owners with stocks stored in Comex warehouses are not prepared to sell at current prices. The high ratio is perhaps indicative that the current price of gold is not based on market forces and is low for 'other reasons'.

    Gold is available. There is relatively little available for sale through Comex, but then Comex is an increasingly small component of the world's physical supply chain.
    Jan 12, 2014. 09:33 AM | 3 Likes Like |Link to Comment
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