Tag Archives: Shanghai Gold Exchange

From Dystopia To Armegeddon

When the going gets weird, the weird turn pro.  – Hunter S. Thompson

I mentioned the news reports of fist-fights breaking out at traffic intersections in Denver. Then yesterday I hear two different news reports of random gun shots.  One of shots fired into someone’s house in a not so great part of Denver (Aurora).  The second report of bullets flying across one of Denver’s busiest highways and hitting cars.  Then I learn last night that bullets flying into cars driving on highways in Arizona have become part of everyone’s daily routine.

We’re sliding into the “Mad Max” scenario which many of us for a long time have envisioned eventually hitting this country.  I would have thought that this environment would have started engulfing this country in 2008.  But the Government pulled what appeared to be a rabbit out of its hat which enabled it to kick “Mad Max” down the road for a bit.  That “rabbit” by the way, while preventing an all out collapse and actually making life better for the people closest to the money spigot, was nothing more than a disguise designed to help the elitists confiscate even more wealth from the middle class.

The population’s hatred for the Government grows stronger by the day.  The popularity of Trump’s candidacy for President is a reflection of this intensifying despise.   A growing segment of the population cheers harder for Trump everyday as he lashes out with insults at the politicians everyone now hates.  Let’s be honest, Trump is at least as corrupt as the career politicians he’s humorously defacing.  He would be a horrible President.  Of course, so would every other candidate on the roster for both Parties.

Perhaps the best – yet least understood – evidence of the darkness which is slowly engulfing the the U.S. is the disappearance of physical precious metals from the global financial system.   Gold and silver is being removed hand-over-fist from public view.  Most of the gold is being moved from west to east, where it’s being removed from the bullion exchanges by the 10’s of tonnes on a daily basis.  For instance, the Hong Kong Metals Exchange just had its largest daily withdrawal – 19.7 tonnes – in its history.   Roughly 100 tonnes per week is now being removed from the Shanghai Gold Exchange.  This is Gresham’s Law in action, folks.

We already know about the growing shortages for minted silver products around the world, especially in the U.S.   And the disappearance of gold from the Comex bank vaults is nothing short of stunning.  The ratio of fraudulent paper gold to deliverable physical gold hit 229:1 to yesterday.  To say this is “silly” is an insult to the word “silly.”  This reflects and epitomizes the extreme degree of corruption, fraud and theft which is burying the United States.

I was exchanging emails this morning with GATA’s Bill “Midas” Murphy.  We were marveling at just how extreme and blatant the manipulation of the precious metals market has become.  I find it beyond amusing that mainstream financial media – which rolls out charts of stocks and select commodities all day long – has failed to put on display the chart that shows that gold gets hit 90% of the time only when the Comex floor trading is open.  Funny non-coincidence, that.

I suggested to Bill that something really bad is going to hit our system:

Think about the manipulation of the metals market that occurred just before the Lehman, AIG/Goldman collapses. They took silver from $21 in March that year to $7 by late October.

Now think about how much more brutal this manipulation is both in the context both of the intensity and the disappearance of physical metal from the system.

I’d estimate that the manipulation now is probably 5x worse and more blatant than in 2008. Which means whatever is going to hit the system will be at least 5x worse than 2008.

I know most people who understand what is going on would like to see a collapse and thorough flush of the system.  Unfortunately, the dystopic behavior starting to show up in the general population will be met with brutal force by the near-totalitarian U.S. Government in an attempt to control it.   The inevitable systemic collapse will enable the Government to impose totalitarian control on the country to a degree that would be heartily admired by history’s despots.

It’s going to start to get really weird in this country (as if it has gotten weird enough already)…

Something Is Percolating In The Gold Market

Note:  The junior mining stock featured below is now up 11% since I re-published the updated version.  Technically it’s getting ready to break out.  The junior mining stock I have it paired with is an insanely undervalued “prospect generator/royalty” company.  As the price of gold continues to move higher, both of these stocks will continue to outperform the market.

A longtime friend/colleague of mine sent me a note tonight in which he said he thought something significant might be coming to light about gold in the next week or two.  There’s certainly some unusual behavior on the Comex, with Goldman taking delivery of 98,300 ounces last week (2.8 tonnes), the amount of gold cleared on the LBMA at the a.m. fix spiked up from an average of about 100,000 ozs per day to over 150,000 ounces, the Shanghai Gold Exchange saw the 4th largest withdrawal of gold in its history and the premiums on both physical gold and silver rose considerably.

It’s anyone’s guess what might be going on, but China is certainly accumulating an increasing amount of the Wall Street Journal’s “Pet Rock.”  And the Chinese seem to be unloading a massive amount of dollars/Treasuries.

If you think gold is getting ready for a big move, you should take some capital and buy some high quality junior mining stocks.  I only evaluate and invest in juniors that have several characteristics:  1) a 43-101 resource report demonstrating a significant deposit of gold/silver (or at least a lot of drill holes with “strikes” on a property that is situated in area with surrounding mines;  2) plenty of liquidity; 3) low-risk jurisdiction; 4) management owns a decent amount of stock; 5) ideally, but not a definitive requirement, the stock has a large cap miner with a significant amount of equity or a JV partner.

This stock has all five objectives plus it has significantly outperformed the GDXJ since Jan 1 – click to enlarge:

UntitledA major gold mining company recently bought 50% of stock this Company issued to raise capital in order to advance its projects.  I recently updated my research report on this company, which you can access here:

DE-RISKED JUNIOR MINER

I’ve added a technical analysis supplement to the report on this stock, which was provided to me courtesy the DenaliGuide’s Summit blog, which accompanies access to a mining stock and stock market technical analysis subscription service. I highly recommend both.

The report on the stock above is available individually for $30 or packaged together with another one of my favorite, highly undervalued junior mining stocks for $45 (for two reports):    TWO REPORT SPECIAL  – Click on the image:

TwoMiningStockReports

Massive Shortages In Gold And Silver Developing – GLD Looting Continues

Renowned gold expert James Turk says prolonged gold backwardation like we are seeing now, where the spot price is higher than the future price, has never happened before. Turk contends, “No, never, and I am a student of monetary history as well, and I have never seen it happen like this in monetary history.  – James Turk on Greg Hunter’s USAWatchdog

The signs are everywhere.  We are seeing extreme “backwardation” in gold on the LBMA. Backwardation occurs when the spot price is higher than the future price for LBMA forward contracts.  It means that buyers of gold are willing to pay more for gold for immediate delivery than pay a lower price to receive delivery in the future (30-day, 60-day, etc).  It means that physical gold buyers do not trust the ability of the market to delivery physical gold in the future.

It is an unmistakable sign of physical gold shortages.

Not surprisingly, the LBMA suspended reporting the gold forward rate which was the best indicator of physical gold shortages in London, but we can still get reports on physical market conditions from London gold market participants, like James Turk.

To reinforce this information, Bill Murphy reported his latest conversation with his LBMA trader source in London (www.lemetropolecafe.com):

The essence of it is more confirmation that the BIG MONEY is buying down here at these price levels.More confirmation that silver is extremely difficult to buy in size. It takes two to four weeks for delivery. What is new is that buying gold in size is now becoming a thing … for our source says it now takes two weeks to buy in size.

Perhaps the most visible sign is the removal of gold from the GLD ETF.   The only way gold is removed from the Trust is when an Approved Participant bank redeems 100k share block in exchange for delivery of bars from the Trust. – (source:  John Titus of the “Best Evidence” Youtube channel, edits are mine) – click to enlarge:

GLD tonnage.001

Make no mistake about it, the bullion banks often can borrow GLD shares to scrape together 100k share lots in order to redeem gold. Or they can smash the gold price with paper and force weak holders of GLD to sell shares in the hands of the bullion banks.  In the last two weeks the short interest in GLD has soared 49% from 9.4 million shares to 14 million.  That represents roughly 46 tonnes.

The ongoing raid of GLD gold is perhaps the most direct evidence that the Central Banks and their bullion bank agents are struggling to find gold in which to deliver into Asia.  But speaking of which, something interesting is occurring on the Shanghai gold exchange.  In the last three days, 298 tonnes of gold have been delivered into the SGE.  While everyone monitors the amount of gold withdrawn from the SGE, the amount of gold flowing in to the SGE is just as important.   This is by far the most amount of gold that has been delivered into the SGE that I can recall.

I get my data from John Brimelow’s “Gold Jottings” report, which is invaluable for tracking the physical gold market outside of London.  He had this to say about the stunning flow of gold into China over the last three days:

Delivery Volume was 90.444 tonnes (Wednesday 112.454 tonnes) and open interest surged 48.374 tonnes (11.26%) to 477.920 tonnes. Since last Friday Shanghai open interest has risen 18.68%. Something is happening in gold in China. What is not immediately apparent.

Finally, to further reinforce the evidence of physical market shortages, we can monitor the gold lease rates, published by Kitco everyday.  I sourced this graph from Jesse’s Cafe Americain, who sourced it from Sharelynx – click to enlarge:

JessesCafeGold lease rates spike up like this when there is heavy demand from bullion banks to borrow physical gold from Central Banks in order to sell the gold into the market or deliver gold that can’t be readily procured in adequate quantities in the spot market.  It is one of the most visible signs that there is a shortage of physical gold on the market.

To be sure, the unprecedented degree manipulation of the gold price in the paper gold market reflects a serious desperation by the Central Banks and western Governments to cover up an enormous disaster fomenting beneath the heavily applied of veneer of “things are so good we need to raise interest rates in September” mantra.  In fact, the specific reason to keep a lid on the price of is to enable the Central Banks to maintain a zero interest rate policy.

The truth is, the Fed can’t afford to raise interest rates and anyone with two brain cells to rub together and a willingness to look at the truth knows that the Fed is trapped – unless it wants to crash the system for some reason.

We note that physical off-take of gold is spiking higher, with Reuters reporting yesterday that the South Koreans are buying gold in record sums while the US Mint reports that sales of gold coins in July were nearly 5 times what they were a year ago.  – John Brimelow, “Gold Jottings” report

 

Shanghai Gold Exchange Has Third Largest Withdrawal Week In Its History

I was exchanging emails with Eric King of King World News earlier this week and, in the context of the unprecedented degree of paper gold manipulation and anti-gold propaganda regurgitating from the financial media, I asked him if he thought what was happening signaled a bottom:

Yes I do think it’s the bottom, Dave.  The anti-gold propaganda is off the charts.  I have never seen it this bad.  Every bullion bank and mainstream media station is bashing gold.  – Eric King, King World News

I thought the “pet rock” article in the wall street journal was the height of the madness.  But an article featured by Marketwatch which suggested that gold might hit $350 and that its fair value is $875 is perhaps the culmination of absurdity.

The irony in this is that, while the U.S. propagandists who are pulling the proverbial rug out from under the American public and extracting as much wealth from the public as they can before the country collapses, the Chinese are accumulating physical gold – aka real money – at a record rate.

Meanwhile gold and silver eagle sales from the US Mint have begun to accelerate this summers.  My good friend and colleague of several years, “Jesse” of Jesse’s Cafe Americain posted commentary which succinctly encapsulates contrast between fact and fiction:

And as you may have seen in the posting from earlier today showing the sea change in leverage over even the past ten years there, it is seemingly getting a lot less physical all the time, even compared to just five or six years ago. Winning…Even the US Mint seems to be getting in on the act.  The mint sold 202,000 ounces of gold in the form of coins for the month of July, one of its largest monthly sales totals in several years.  

That’s a lot of pet rocks.  Do the math. I wonder where the poor, deluded ignoramuses who obviously do not understand finance are getting all that money to spend on such worthless trifles.  Does the US Mint take food stamps?

You can read the rest of his piece here:  Jesse’s Cafe Americain

In contrast to Jesse, the Wall Street Journal’s Jason “Gold is a pet rock” Zweig is perhaps the most pathetic journalist of our era…

 

IRD On “Turning Hard Times Into Good Times”

History tells us that Government interventions always fail and when they fail, they fail spectacularly. I don’t think they can keep up this intervention in gold market much longer and I think we’re getting close to the end of it. – Dave Kranzler on “Turning Hard Times Into Good Times”

We’re not wrong about the reasons for owning gold and silver.   In fact, if looked at over the entire duration of the precious metals bulls market starting in 2001, gold and silver have outperformed every asset sector.  If we’re wrong about anything, it’s in underestimating the degree to which fraud, corruption and criminality have completely engulfed the entire U.S. corporate, Wall Street and political system.

A perfect example of the lies and propaganda is the fact that the Obama government, Wall Street and the media are forcing this idea on the public that the economy is “recovering.” And yet, the economic metrics – including and especially the price of oil – are telling us that we’re entering a depression.    Does this graph reflect that idea that the public feels good about the future? (source:  Zerohedge, edits are mine):

GallupHope

The graph above is a Gallup poll that measures the economic outlook of those polled as of the last week.  The sentiment is plunging along with the economy.

Below is my interview with Jay Taylor on his “Turning Hard Times Into Good Times” internet radio show on the VoiceofAmerica network:

China To Launch A Yuan-Based Gold Fix By Year-End

China has been quite reserved about commenting on the extreme corruption and fraud which pervades the west hemisphere’s Governments, Central Banks and financial markets, especially as it regards the United States and its flagrant manipulation of the currency and precious metals markets.   But China has been quite active with diversifying its sources of revenues and foreign reserves out of the U.S. dollar and in to alternative currencies and hard assets.

Follow the money:  The Shanghai Gold Exchange has announced that it intends to roll-out a renminbi-denominated fix by the end of the year.  The plan is now being reviewed by the Central Bank (the PBoC) for approval:

Pan Gongsheng, a deputy governor of the People’s Bank of China (PBOC), said the bank would continue to support “speedy and healthy growth of the China gold market” and its internationalisation.

Here’s a link to the report:   China’s Yuan-denominated Gold Fix

RMB-world-currency-billboard

I find it quite interesting that China still has not released the highly anticipated update of its current gold reserves.   The blogosphere was rampant that this event would occur this month.

China has an interesting game-theory dilemma.  If it releases a report that shows its current reserves at or near the reported level of U.S. gold reserves (note:  emphasis on “reported”), it risks subverting its massive gold accumulation at current prices because such disclosure would likely cause a parabolic re-set in the global price of gold.

Quite frankly, given the catastrophic level of the paper gold “naked short” position held by the west’s Central Banks and bullion banks, a move like this would cause untenable disruption to global financial markets and commerce.

On the other hand, if China were to release a reserve report that was not significantly greater than its current reported gold reserve of 1,054 tonnes, it would risk losing credibility given the enormous amount of gold flowing into China and being withdrawn from the Shanghai Gold Exchange – not to mention the 400 tonnes of gold per year mined in China that goes completely unaccounted for.

My best guess is that China will continue to play hide and seek with its gold reserves until it feels comfortably hedged from the turmoil that will ensure once the truth is revealed.  This most catastrophic of which will be a collapse in the dollar and a collapse in the value of China’s Treasury holdings.  Please note that Russia is unloading Treasuries quickly in order to side-step this event.

As a former trader, I know that if I were holding China’s cards, I would accumulate a massive position in gold and a massive short in the dollar and then release the truth in shock and awe fashion.  The instantaneous transfer of wealth from the west to the east that will occur when this happens will be spectacular.

 

“China Gold Demand Picking Up Strongly This Month”

While the London and New York fraudulent paper gold market continues to function as the price-setting markets for the global price of gold, China continues hoovering physical gold. In the latest week reported (June 8-12), 46 tonnes of gold were removed from the Shanghai Gold Exchange.  This puts the year-to-date total at 1,061 tonnes, which is up 20% for the same period over 2014 and 7% over 2013.   Koos Jansen refers to the YTD total as “staggering”  LINK.

The actual amount of gold being “consumed” by China is quite contrary to the flood of bearish media reports on gold this year, including several which characterize China’s demand a weak.  The reports, of course, are entirely misleading as they rely on data from the World Gold Council.  The WGC only tracks and publicizes gold which enters China through Hong Kong.  This is despite the fact that China opened up Beijing and Shanghai for gold imports specifically to mask the amount of gold that it is bringing into the country:

Opening the capital as the third shipment point will help the PBOC keep purchases discreet as it is believed to be adding to its bullion reserves.  – South China Morning Post, April 21, 2014 – LINK

Of course, the western media only uses factual reporting when it fits the propaganda it promotes.

Lawrence Williams has written a short piece describing the facts about the amount of gold flowing into China vs. the media disinformation:

Contrary to a number of media reports telling us China demand for gold has collapsed, and also that premia on the Chinese gold markets have turned to discounts, the latest figures out of Shanghai belie these statements…We have been calculating that perhaps around 40% of Chinese gold imports are now coming in directly rather than via Hong Kong which makes the Hong Kong figures, as reported by the mainstream media, no longer indicative of total Chinese demand.

Here’s the link:  China’s Gold Demand Is Strong

We can pnly wonder how much longer London and NYC can rig the price of gold, as occurred in overnight trading into Monday morning:

GoldJun21Once again gold was somewhat steady during Indian/Asian market hours. Rumors about a deal with Greece started to appear shortly before Asia closed and London opened. Of course the market manipulators used this as an opportunity to put downward pressure on gold.  Then the Comex opened.  Selling hit the Comex floor right at the floor trading opened at 8:20 a.m. EST.  There was no news or events that would have triggered selling by an investment account that was long gold futures.  This was yet another blatant paper attack on the price of gold by the banks, acting on behalf of the policy-makers at the Fed and the U.S. Treasury – collectively the “Plunge Protection Team.”

Of course, it’s easy to put the blame on an HFT hedge fund.  But this is nothing more than a shameless manner in which the truth gets repackaged by the elitists and served up the masses wallowing  in a cesspool of denial and hungry for a fairytale.

But here’s the truth:

COMPLACENY

 

Gresham’s Law: No More Retail Gold In Europe

Bad money drives out good money.”   Gresham’s law is an economic principle that states:  “When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation.”  – Murray Rothbard

Gresham’s Law is also known as Copernicus’ Law, as Nicolaus Copernicus first formulated the theory in 1519.   The idea is that when a system has different forms of currency circulating and one of the currencies is perceived to be overvalued relative to the alternative currency, the undervalued currency will be hoarded and the overvalued currency will be used for transactions.

From The Dollar Vigilante:

I’ve been in Europe a couple of days now and one of my main goals here, other than protesting the G7, Bilderberg and visiting Liberland, was to find out if what Martin Armstrong wrote about – that there is a shortage of gold at the retail level in Europe – is true. What I’ve found is that, indeed, it is true, as in many European countries one is no longer able to buy retail gold coins for investment.

Shops are buying precious metals still, but no one is selling. Spanish banks that once sold gold to the public have shut down in Spain, and if people leave Spain wearing a lot of jewelry, authorities weigh and inspect the precious metals, as Armstrong reports.

You can read the rest of this here:  No More Retail Gold In Europe

The article above is based on reports from Martin Armstrong.  If the author for The Dollar Vigilante had not verified the assertions from Armstrong, I would not have published the report.

Armstrong never misses a chance to throw in some kind of reasoning for why he thinks gold is going lower.  He erroneously correlates demand in China with reported shipments of gold from Switzerland to Hong Kong.  That’s laughable because anyone who writes about gold should know that China also imports gold through Beijing and Shanghai and those numbers are a State secret.  Through the week ended May 22, withdrawals from the Shanghai Gold Exchange are up 20% vs. 2014 and 8% over the same period in 2013, which was a record year for withdrawals (2,197 tonnes).

China’s Gold Imports On Track For A New Record

Despite the erroneous mainstream media reports that China’s demand for gold is trending lower, based on the withdrawal figures from the Shangai Gold Exchange, China’s demand for gold YTD is tracking at a record annual rate.

The reason that mainstream sources for gold imports into China – like the World Gold Council and GFMS/Thomson Reuters –  are highly inaccurate is that they only track the amount of gold exported to Hong Kong , the numbers of which are released to the public. However, China also now imports gold through Beijing and Shanghai.  Those numbers are kept secret by the Chinese Government.  Thus, it is impossible to gauge Chinese import demand for gold base on the numbers published out of Hong Kong.

YTD through May 22, 945 tonnes have been withdrawn from the SGE.  While the rate of deliveries to the SGE have been slowing the past two weeks, this is a function of seasonal patterns.   The reason the amount of gold withdrawn from the SGE is the best barometer of demand for gold in China is that, by law, all gold bought and sold in China must be transacted through the People’s Bank of China.  The PBOC uses the SGE for this purpose. However, this does not represent the total amount of annual gold demand in China because it does include any gold purchased by the PBOC, as the PBOC does not have acquire its gold from the SGE.

Mineweb.com’s Lawrence Williams wrote an article China’s YTD gold demand and the possible implications of China’s heavy accumulation of gold:

We keep seeing reports in the mainstream media suggesting that Chinese gold demand is slipping away, but continuing strong gold withdrawal figures from the Shanghai Gold Exchange (SGE) seem to contradict these reports. While, as we have reported before, there are many doubts expressed as to whether SGE withdrawals are actually equivalent to Chinese consumer demand, there is no doubt that they do represent the underlying consumption situation.

You can read the rest of this article here:   China’s Gold Demand Is Holding Up Well

Untitled

“Tectonic Plate” Movement Suggests Gold Earthquake Coming

Like tectonic plates pushing against each other making pressures build up we must wait for that point when we have an earthquake. What history shows is that it may take just a tiny event to trigger major moves after the foundation of such a move has been laid over such a long time. When will it happen? It’s impossible to say, but we are certain it will happen! Everything changes after that.  – Julian Philips

Julian Phillips is a financial markets journalist and gold market analyst I have been following for over a decade.   He’s one of the few analysts who I believe is worth taking the time to read.  He certainly is not guilty of being a “perma-bull” and his analysis is supported by facts, data and historicity.

Julian’s latest piece was featured on Lawrie William’s LawrieOnGold.com and is worth the read:

New York closed at $1,188.50 up $1 on yesterday [Thursday, May 28] as the trading range tightens again. Today sees the dollar almost the same as yesterday at $1.0949 against the euro with the dollar index at 97.06. The LBMA Gold Price was set at $1,190.40 up $0.95 and the equivalent euro price was €1,087.75. Ahead of New York’s opening, gold was trading in London at $1,189.00 and in the euro at €1,082.43.The silver price fell back to $16.70 up 1 cents in New York. Ahead of New York’s opening it was trading at $16.72.

Wednesday and Thursday saw no purchases or sales into or from the SPDR Gold ETF and Gold Trust. The holdings of the SPDR gold ETF are at 715.857 tonnes and at 166.60 tonnes in the Gold Trust.

Today, being Friday, is the busiest day of the week for gold and silver in New York as traders and speculators don’t look at one day’s risk but three days. The week has been relatively quiet but the trading range of gold and silver has tightened as they both sit on support.

The saying for traders is that if it won’t go up it must go down. The long sideways move of both over the last 18 months disproves that. So which way is it likely to go?

You can read the rest of this here:   Earthquake In Gold Ahead