Good afternoon Ladies and Gentlemen:
Gold rose by $23.70 to 870.40; silver rose by 18 cents to close at 10.50. The open interest on gold comex continues to rise, climbing by 3000 contracts to 290,000. Silver’s OI remains relatively comatose.
However, events over at the comex delivery pits are getting very exciting. Here is a graph of the events up to Dec 24.08 :
Posted on December 26, 2008 by Scott Gallup
COMEX trades hundreds of times more gold & silver than they actually possess. If enough investors demand delivery of PHYSICAL gold & silver COMEX stockpiles will be depleted. If COMEX runs out, the ensuing rush to grab physical metal to settle contract obligations *could* be the spark that ignites the long-awaited precious metals wildfire.
COMEX warehouses contain both “registered” and “eligible” metals. The “registered” metals are available for physical delivery. The “eligible” metals are not ready for delivery until they become “registered.” Although this pool of “eligible” metals is stored at COMEX warehouses there is no obligation to “register” these metals for subsequent physical deliveries.
The graph shows:
1) the cumulative ounces of metal delivery notices this month,
2) the ounces of “registered” metal available for delivery,
The percentage shown is based on the cumulative physical metal delivery notices for the month against the “registered” amount of metal in COMEX.
“Eligible” metal inventories are not shown as they do not have a direct bearing on the inve
In gold, 11000 oz were hit bringing the total to date at 1.356 million oz. There are a total of 2.8 million oz of registered or “for sale” gold.
The comex still has 212 contracts left to go, or 21,200 oz.
In silver, a huge 415000 oz of silver were bought and stood for delivery immediately. There are also 120 contracts or about 600,000 left to be hit. The total silver standing for delivery for the month of Dec-January are as follows:
- As of Dec 24.08 31,090,000 million oz have been hit so far.
- On Nov 30.08 a further 1.0 million oz of silver options were hit and these stood for silver delivery. They are not in the Dec totals.
- There are .6 million oz left to be hit
- There are 550 contracts moved to January and they will stand for delivery. The totals here are 2.75 million oz of silver.
This makes the totals for silver delivery on the comex to 35.45 million oz (31.1 + 1.0 + .6+ 2.75).
What is very strange is that there have been zero oz of silver added to the comex. In previous months, if 2 million oz of silver left you would see the identical amt. of silver enter.
In gold, we have witnessed only a tiny 10,000 oz of gold enter on Dec 12.08.
On the flip side of things, the cartel seem not at all worried about the default as suggested by the increase in open interest and the 20,000 increase in commercial short side interest.
Or is JPMorgan the only banker supplying the paper and everybody else abandoning the arena.
Dec 31.08 will be the day which we will see the score. Apply for ring seats.
There is another disturbing event in the physical vs paper arena. We are now seeing the premiums for Central Fund of Canada skyrocket.
The gold GTU is now 24% and the gold/silver CEF.a rose to 18.%. The gold premium for the first time ever rose above the silver entity.
The operators of the fund are now seeking metal as the new owners pay net asset value plus a small premium. They are probably having a hard time finding the metal. The fund grows as long as they can obtain metal and the high premiums pay for the insurance costs and storage costs.
The custodians of the fund have been seeking metal for over 2 months but cannot find any of sufficient quantity.
Here is the link:
GTU premium now above 24% - this has to be a record. So get ready for a big offering next week, to suck up more gold (who knows, this may be them buying right now).
And CEF back up to 18%
We have pointed out in the past
Here is the newspaper article on
Russia to grow gold reserves 513 tonnes, coal 58 mln tonnes in 2008
The Russian Gold Producers' Union forecasts
If I read this right, the Russians produce 165.6 tonnes of gold. If they are going to increase their reserves next year by 513 tonnes, the obvious question becomes where is that huge increase going to come from? Could this news alert be correct? If so, yikes! That means the Russians will be buying an enormous amount of gold in a market that is already in a severe annual supply/demand deficit.
If that is true, and then the Chinese decide to add to their gold reserves, we will be at $2,000 per ounce in a blink. The Gold Cartel, or what is left of it, will be in the deepest of trouble, which is just what I explained to Commissioner Bart Chilton of the CFTC and the other three CFTC personnel at out meeting. end
The ECB in its weekly announcement of gold sales, reported a sale by one captive bank of 6.12 tonnes of gold. The previous week was only 1 week. Judging from past performance, my bet is that is a collar by a commercial entity who had calls on gold by the ECB. They decided to exercise that right and take the gold. This is why physical gold is depleting. Here is the link:
ECB Condition Statement
Tuesday’s condition statement indicated a fall in "gold and gold receivables" of E125Mm, attributed to sales by on captive CB. This is 6.12 tonnes at the present book value – last week’s total was 1.04 tonnes. A larger sale than usual, but still well below the notional weekly average implied by WAG2.
Best wishes for Christmas to those who care to receive them. end
The much revered ECRI, a leading think tank that maps leading indicators have stated that they saw a small movement up but the economy still remains close to the bottom. Here is their report.
US yearly growth rate ticks above record low -ECRI
NEW YORK, Dec 26 (Reuters) - A measure of future economic growth in the United States and its annualized growth rate inched up in the latest week, but still indicate the U.S. recession is here to stay, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose in the week ending Dec. 19 to 106.6 from 106.2 in the previous week.
The index's annualized growth rate edged up to negative 29.2 percent from minus 30.1 percent, initially reported at minus 30 percent.
"With WLI growth barely above its all-time low seen two weeks ago, the
The weekly index rose due to lower interest rates and higher stock prices and the gain was partly offset by higher joblessness, according to ECRI data.
We are hearing trouble at ECB members. The ECB remember have kept interest rates at around 3 PER CENT when everyone else is at zero. The British will move to zero shortly.
Just look at
05:10 Euro zone may have its wish for a weaker currency granted soon - WSJ
A "Heard on the Street" column says rising political tensions will lead investor confidence to crash, causing the devaluation the euro needs. The range in government debt trading levels indicate investors think a euro-zone member could default or quit the currency.
Reference Link (subscription required)
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The total debt will climb to 25.-26 trillion dollars. The GDP is 13 trillion so the debt to GDP will be over 200%..by far the most dangerous of any nation on earth.
The losses so far to the economy have been as follows:
- 7 trillion dollars …loss on the stock market value for everyone
- 6 trillion dollars…loss on home values.
Total losses 13 trillion dollars.
The Fed will have pumped in 8.5 trillion dollars, but that is still not enough.
Early in 2009, the ALT a’s implode which will further exasperate the collateral mess at the banks. Expect further losses in this field.
In summary, the credit default spiral will still be very pronounced even though the Fed is massively printing money. Legislators will demand that the banks loan this new money out. I cannot see how they will do this with such massive losses on their books.
Have a great weekend