Saturday, October 10, 2009
Good morning to you all:
Gold closed down by 7.60 to 1048.90. Silver fell by 13 cents to 17.67.
The open interest on gold comex basis Thursday climbed by an astronomical 17500 contracts to 500,187 which is by far a record. The previous high was around 509000 but that included
huge calender spreads. The spreaders have almost vacated the arena so the 500,187 OI is real and is indicitive of the strength in gold.
The silver Oi rose by a rather large 1696 contracts to rest at 133113. The previous high was around 150,000 contracts but that too that considerable calender spreads. The spreaders have also almost vacated the silver arena as well.
There are several big news events that I would like to bring to your attention. The first is the gold COT report which is basis last Tuesday. Remember that on Monday we saw the release of
Robert Fisk's article on the DEMISE of the DOLLAR which caused the gold price to skyrocket and the dollar to swoon badly. Robert Fisk writes for the Indepedent News Organization in the UK and he is a highly regarded newpaper correspondent. He reports that Russia, Asia, China are planning to abandon the pricing of oil in dollars, replacing it with SDR's. This action alone would cause a huge surplus of dollars on the market as the usa would finally have a pay for something as the world shuns it as a reserve currency.
Here is the COT report which shows the commercials covering in a rising gold market. It looks like the cartel members saw the whites of the enemy's eyes and ran:
We have 5 or 6 confirmations on the above caper. The venue was the LBMA which is the centre of all physical gold and silver trading in the world. The LBMA volume is 400% of that on the comex!
There is now no question that the counterparty purchasing the gold was the Chinese. Please note the day that they bought the gold. It was the last day of Sept and the last day that a contract for Oct can trade. (Although Kirby did not state the exact amt of gold, other sources
revealed that it was 20 tonnes of gold). What happened here is shear genius. The Chinese disguised themselves as if they were going to roll ie. pretrend that they were going to roll to December contracts.
So they took the rollers Oct contracts and tendered to a surprised LBMA. The LBMA did not have 20 tonnes of physical gold. The Chinese knew this as they were shut out at the window for their small normal purchases of gold
during regular business hours at the two London fixes. The Chinese have been quite angry lately due these events:
1, the oil problem last year where they purchased huge number of contracts of oil at prices well above $130.00 per barrel. The Chinese wealth funds have indicated that they are going to renege on those contracts.
2.the huge number of bonds rated AAA that are basically junk and not marketable
3.they have not got their gold from the IMF yet.
4.they wished the USA to remove Ben Bernanke and that was not done.
5.the usa is purchasing all of their debt with freshly minted dollars much to the chagrin of the Chinese (quantitative easing)
6.the usa money supply is rapidly increasing with the Federal debt now at 11.9 trillion dollars. China is also alarmed that future obligations due to usa citizens as they age is approximately 60 trillion usa dollars.
7.the usa engaged in a trade war with the chinese with respect to tires and the Chinese reciprocated on many fronts of their own.
The cartel members immediately made a phone call upstairs to the head offices of the major central bankers ie. the Bank of England, the Euro Central Bank and the Fed. These bankers tried to offer a huge premium of 25%
to get the Chinese to take dollars instead of gold but to no avail. They were given an extention of 5 days. It seems that the Bank of England found some .9000 gold (not good delivery bars) in the hope that the Chinese would be satisfied. We did not know if they were completely satisfied in total.
The big question is this: how did the Bank of England get .900 gold? The only official gold that is .9000 gold and nopt .999 is gold held at Fort Knox. Did the Fed ship gold from Fort Knox over to England?
Or did the Fed ship .900 gold first to the Bank of NY to satisfy the French (in 1968). Maybe this gold was eventually shipped from NY over to the Bank of England which then put that gold on deposit for the Bank of France.
Please remember this: England is one of two major banks as a foreign depository. However in England you must put your gold on deposit and the English can do whatever they like with the gold. However it is an obligation of the Bank of England. If they cannot deliver gold back to a depositor they then default in much the same manner as a depositor comes for his printed dollars. (the other foreign depository is the Federal Bank of NY. The foreign held gold however is earmarked gold and the usa cannot touch this gold)
Is it possible that the Bank of France decided to bail out the Americans one more time?
I will leave these unanswered questions for you to decide. However the following point is clear: USA citizens gold somehow has been shipped overseas and has been sold to satisfy a foreign countries demand for settlement of a claim. This gold is not Government's gold as set by the usa constitution. They need an act of Congress to sell gold.
Have a wonderful weekend.
Posted by Harvey Organ at 10:30 AM
Thursday, October 8, 2009
Good evening Ladies and Gentlemen:
The gold price rose again for the 4th day in a row rising by 15.70 to 1059.00. The closing price of gold and silver occur at 1:30 est.
Silver rose by 33 cents to close at 17.81.
The open interest on the gold comex fell by a very small margin 1,300 contracts to 482700. This is in response to the huge gain in gold on Wednesday.
The silver OI actually rose a fraction to 131417 from 131000.
In the case of gold, the speculators continue to pile into the metal and the major commercials supply the paper. The minor commercials have already announced
to their president that they are vacating the short side of the two precious metals, gold and silver.
With the case of silver, the speculators piled into silver and again JPMorgan supplied the paper. All other commercials are leaving the sinking ship.
OK. Lets go to some important news events of the day:
First of all the chief European Central Banker Trichet had this to say today:
The usa dollar started to swoon early today starting the day at 76.10 and falling early to 75.98 where this announcement by Trichet seemed to stop the dollars fall and cause the Gold
price to fall from its perch of 1059 to around 1045. The dollar rebounded to around 76.15 and then the avalanche of sales started on the dollar. The usa dollar ended the day at
75.93 and gold finished at its high 1059 and silver at 17.81. This is close to another outside day reversal, with gold negating a negative perception that central banks are going to cushion the usa dollar's fall.!
Here is the LeMetropolecafe.com comment on the trading of the dollar, gold and silver today:
Posted by Harvey Organ at 4:22 PM