Arthur Cutten: JPM Holds the Whip Hand on the Comex - Gold Buy Signal GLD, MUX, TNR.v, GDX

  

  

  Arthur Cutten has issued his Buy Signal on Gold. He has a very conservative approach and his article speaks for itself.

Bloomberg: China May Become The Third-largest Holder Of Gold GDX, TNR.v, MUX, GDX

 "Here it comes and a lot of people will be taken totally by surprise. Record buying of Gold by China last year will be translated in the much higher Gold holdings by PBOC. Bloomberg reports that these holdings could surpass now those of Italy and France - Jim Rickards talks about the announcement by Chinese Central Bank of 5,000 t of Gold holdings in the nearest future. It will be the game changer and puts Gold solidly into the investment game as well. Yesterday shock with Jobs numbers can be the sign of the real state of US Economy and it means that FED does not have any real exit strategy from QE permanent state. In another news Royal Mint in UK has run out of gold coins due to the exceptionally high demand."

Jesse's Cafe Americain:

Gold Daily and Silver Weekly Charts - JPM Holds the Whip Hand on the Comex - Buy Signal

About 89,757 ounces of gold bullion left the deliverable category at Brinks, and a similar amount showed up in the eligible inventory at JPM yesterday.  

I do not know who owns the registered gold, since title can be transferred fairly easily.  But it remains fairly clear that JPM was in the driver's seat in stopping most of the deliveries, and now likely holds the 'whip hand' on the Comex in terms of gold.

This brings the overall number of deliverable gold ounces down to 370,137 which is a shockingly low number considering that we are coming into the normally heavy delivery month of February in a few weeks.

Along with a few other indicators this triggers a 'buy signal' for gold in the intermediate term.  This is the first buy signal that I have issued since gold broke out of its cup and handle and ran to its all time high.  This is a 'structural' buy signal that must be confirmed by price and the chart formation.   The price signal will remain active unless gold sets a lower low on price.

I will post something about potential claims per ounce later tonight.

There is sufficient gold in the eligible categories at the bullion banks, and while we do not know who actually 'owns it,' there is a high probability that it will take higher prices to pry that gold into the delivery process in February, at least from profit motivated holders.

Take a look at the distribution of all categories of gold on the Comex.   Brinks and Manfreda have been 'cleaned out,' and the three bullion banks, JPM, HSBC and Scotia Mocatta are the big holders.  This market is now made up of big holders and bag holders.

There is some strong overhead resistance at 1260 which any number of analysts have noted, and there does seem to be an effort to hold the line on price here.

I have marked the most important resistance level, at least from my charting perspective, on the chart in red, just under 1,350 dollars per ounce.  A breakout through 1350 will confirm the buy signal.

February is shaping up to be an interesting month.   The various indicators have come together to signal a buy here but one might wish to wait for confirmation if you wish.  After all, it is a manipulated market.  There might be a rocky road before the precious metals finally break out.

I am now holding a full allocation of trading account gold and am considering adding more on pullbacks.    There are likely to be some vicious pullbacks since the Banks will not wish to have small spec company during the initial leg of this bull market move.  They are just like that.

If the specs jump on the metals here with leverage they are going to get their teeth knocked out.   I was of two minds in writing this, because I do not wish to see amateur traders throwing themselves to the sharks.  But on the other hand sentiment is so bad that perhaps now they will stand aside and take a more measured approach to investing rather than speculating.

It's been a long time coming.  But change is going to come.

Have a pleasant evening.

Comex Registered Gold Falls To New Low at 640,552 Ounces - Claims Per Ounce Still Around High of 59 GLD, MUX, TNR.v, GDX

  Jesse reports another New Low at COMEX. With this rate of outflow COMEX will be empty very soon - can we assume that now higher Gold prices will come to save it?

Gold Catalyst: COMEX Deliverable Gold Falls to 658,443 Ounces, Claims Per Deliverable Ounce at 55 GLD, MUX, TNR.v, GDX

"Jesse reports the COMEX deliverable Gold inventory which goes on fumes now. Maybe this will be the Catalyst Jim Puplava is looking for the Gold? The Game of Musical Chairs in the Gold Fractional Reserve System is getting more dangerous for its participants by the day now.

  As ZeroHedge has put it with the chart above: "when it comes to physical gold and China's appetite for it, one word explains it best:unstoppable."

Gold: As Good As It Gets…For A Buy GLD, MUX, TNR.v, GDX

 "Aden sisters provide us with very interesting long-term historical charts for Gold and their applications for the potential next move.  These observations are particularly important, when you take in the account the recent COMEX situation and China's demand for Gold."

Jesse's Cafe American:

Comex Registered Gold Falls To New Low at 640,552 Ounces - Claims Per Ounce Still Around High of 59

There was a withdrawal of 17,988 registered ounces of gold from the Scotia Mocatta warehouse on Tuesday.

The three kilogram bars representing 96.46 ounces came back to the registered category at Brinks.

This brings the total ounces of deliverable (registered) gold down to a new low of 640,552 ounces for this leg of the gold bull market.

The 'owners per ounce' of registered gold is still bumping around the all time high of 59 potential claims per ounce.  For the interest of those who have asked, I include the comparable charts for silver this evening as well.

As claims are presented at these prices, gold will have to be delivered.  If the gold becomes scarce at these prices, higher prices may be called for to make additional supply available. The bullion banks can continue to resort to leasing gold from the central banks and using it to settle claims, but that particular game seems to be coming to a sad and sorry end.  When Germany asked for the return of its gold and was flatly refused, we heard the faint sounds of a fat lady preparing to sing.

Weighed and found wanting.

Stand and deliver.

COMEX Gold Inventories Hit New Low GLD, GDX, MUX, TNR.v

   SRSrocco reports on further deterioration of the COMEX Gold inventories available for deliveries. You can guess who is taking now all deliveries. The game of musical chairs for fractional Gold bullion system has begun. This time it is HSBC taking the heat.

Eric Sprott: "China Bought 60% of Gold Production Last Month, I Am Buying Gold And Silver Stocks Now." MUX, TNR.v

"Price of Gold and Silver will be the main driving forces for all survived companies. Eric has very bold prediction for Gold going to $2400 by next year: "The most important thing in the precious metals business - the price of precious metals. They all go up if the price of Gold will go up. The question is which one will go up 200% or 500%. If the Gold will go up to $2400, I can bet that the Gold miners index goes up 200%. What we are trying to do: where is the one which will go up 1000%."

  This summer we had the capitulation in Gold and Silver stocks with the following turn around and now we are looking to the Eric Sprott and Rick Rule for guidance to run this new Bull. China will play the very important role in this big picture, according to Eric."

SRSrocco Report:

Comex Gold Inventories Hit New Low

It looks like the stagnate two month bottom in the Comex Gold inventories is now over as a huge withdrawal from HSBC has taken the total warehouse stocks to a new low not seen since 2006.

As you can see from the table, 173,358 oz of gold were withdrawn from HSBC’s Eligible category.  While this withdrawal was only 5.5% of HSBC’s Eligible (Customer) inventory, it would have totally wiped out Brinks, HSBC, Scotia Mocatta, and most of JP Morgan’s Registered inventories.

This single withdrawal was more than what most of these individual banks held in their Registered Inventories.  Furthermore, the 173,358 oz withdrawn from HSBC is 5.4 tonnes of gold… now more than likely gone forever from the Comex.

Not only does this large withdrawal from HSBC break the two month flat line bottom, but it also puts the Comex Gold Inventories at a NEW LOW not seen since 2006:

Here we can see in the one month chart below what a huge decline has taken place as it does not fit on the chart.  This chart will not be updated until tomorrow, so I stretched the graph to include the new data point which is now at 6,860,160 oz.

Another surprising trend is taking place on the GLD inventories.  Since the price of gold bottomed in the beginning of July, the level of gold at the GLD is 1,887,419 ounces less even though the price has rallied nearly 12%.

On July 1st, the gold inventory at the GLD stood at 31,131,769 oz while the price of gold bottomed at $1,180.  Today, gold ended the day at $1,323, but the total gold inventory at the GLD is 29,244,351 oz.  For some odd reason, the GLD is not adding gold as readily now that the price has increased compared to how it was drained as the price declined.

There seems to be an orchestrated effort by the Gold Cartel to convince investors not to purchase physical gold.  As I mentioned in a previous article, the World Gold Council has announced the following:

World Gold Council Promoting Gold ETFs with New Program

(Kitco News) - Weak investor demand in gold markets remains a major concern as outflows continue to plague gold-backed exchange-traded funds.

However, the World Gold Council is trying to change investors’ perceptions of the yellow metal with the creation of a new program. On Thursday, the council announced the appointment of William Rhind as the managing director of its new Institutional Investment Program.

According to the WGC, Rhind will be “responsible for developing and implementing initiatives focused on expanding the use of SPDR Gold Shares (NYSE: GLD) and other physical gold-backed products.” GLD is the world’s biggest gold-backed ETF and since the start of the year has seen significant outflows as investors moved out of gold and into better performing equity markets.

Thus, the World Gold Council has appointed Rhind to be “Responsible for developing and implementing initiatives focused on expanding the use of the SPDR Gold Shares and other ETFS” to continue to bamboozle investors into buying worthless paper garbage gold products while making sure that MUMS the word for those who want to purchase physical metal.

There seems to be serious trouble ahead for the bullion banks as their registered inventories are at record lows.  There is no way a withdrawal of this size today could have been met by the bullion banks registered gold inventories.

There will be new updates on the COMEX & Shanghai inventories at the SRSrocco Report."

Gold Short Squeeze: COMEX Deliverable Gold Bullion Drops To Levels Not Seen Since 2003 - Claims Per Ounce Around 55 GLD, MUX, TNR.v

  

  Jesse has summarised the COMEX explosive situation for us this week. Gold LBMA fractional reserve system is under The Bank Run now.

  Big boyz know too well about it and have positioned themselves well in advance before the Syria escalation. We are just wondering: How would they know about it in advance?

  And by the way, this is what happened with Gold after 2003:

Turd Ferguson: More Evidence That JPM Has Cornered Comex Gold GLD, GDX, GDXJ, MUX, TNR.v

"We continue to build up our puzzle together for The Crime Of The Century - Gold Market Manipulation by the banksters. Planet Ponzi run by the banksters is very cynical in its attempts to push everybody to the worthless FIAT IOUs by all means necessary.

  Turd Ferguson provides very interesting findings on the recent events behind the curtain in the gold market and what could happen next. 

  It appears that the Boyz from Goldman Sachs and JPMorgan know too well where the Real Value is and they were  shaking the tree very hard to get out of Gold short positions and accumulate longs from the weak hands in the market place, just before the Syria geopolitical card will be played out."

  

Guess Which "Bearish" Bank Bought A Record Amount Of GLD In Q2 GLD, GDX, GDXJ, MUX, TNR.v

"Zero Hedge reports what we have already suspected, but now it is the matter of fact and we have the clear answer Who Was Buying. We must be close to that Waking Up Moment Peter Schiff is talking about."

Jesse's Cafe Americain:

COMEX Deliverable Gold Bullion Drops To Levels Not Seen Since 2003 - Claims Per Ounce Around 55

"Price discovery is not a sexy function of markets, but it is critical to the efficient allocation of scarce capital and resources, and to the preservation of the long term wealth of investors and the economy as a whole. If price discovery is compromised by manipulation, then we will all be gradually impoverished and the economy will be imbalanced and unstable."

London Banker, Lies, Damn Lies, and Libor


"Delivery takes on a note of finality, of a reckoning, when supply has become rehypothecated into little more than a state of mind.  The unanswered call for delivery is the final lifting of the veil."

Jesse

Gold bullion available for delivery on the COMEX dropped a little more than 15,000 ounces on Thursday, with one large withdrawal from Scotia Mocatta and one small adjustment that added back a few hundred ounces at HSBC.  

There were no other ounces received. Total registered (deliverable) gold at the COMEX now stands at 686,434 ounces of actual bullion.

This number is, according to the COMEX' own language on the report, based on sources believed to be reliable.  But COMEXassumes no liability for errors or related counterparty risks.

We have not seen deliverable levels this low since 2003, which was in the earliest stage of the current gold bull market.

There are still over 7 million total ounces of gold bullion in COMEX warehouses.  It will probably take higher prices to motivate owners to move their stored bullion into the market.

The claims per deliverable ounce on the COMEX remains unusually elevated at 54.6.   If there is a rush to exercise those contracts, the gold on the exchange that is available for delivery will not go very far.   That means price would have to go much higher, in the manner of a short squeeze.  I tend to watch 'claims per ounce' in the same way you might watch 'days to cover' for the short interest on a stock.

The gold cartel is trying hard to keep the price from breaking out above 1420, which could precipitate some short covering with the leveraged traders, and prompt the ETFs to try and recover some of the bullion which they so graciously surrendered into the price decline earlier this year.

At some point there is always a reckoning, and claims that have been made on paper must be fulfilled or surrendered, one way or the other.  And in this case the supply and demand flows worldwide do not seem favorable for those who attempted to knock the price of gold down below a sustainable market value earlier this year. 

I marked when enough ounces had been made available from the ETFs to return Germany's gold to their people.  But the gold was not returned, and they did not stop their pricing operation there.   It is always the greed, and then the coverup.

The strong physical buying, especially out of Asia, seems to have turned a pricing operation into a stubborn trap.  Keeping the price lower only seems to prompt more buying, and more scarcity of legitimate supply.

But let's assume the price goes high enough so that all 7 million ounces of gold held in all the COMEX warehouses becomes available to the market.  That is a little less than 218 tonnes.  That would satisfy the current demand from China through Hong Kong alone for about two months at current rates. 

The last chart below shows how import levels into China exploded when the clever boys knocked the prices down well below the natural market rates given demand and costs of production.

If global supply should show signs of faltering at any point, with undue delays from another bullion bank or, worst case, the LBMA, the relatively thin inventories at the COMEX that are used as largely symbolic bollards for the world's precious metals price would evanesce,  almost overnight, with bids up limit and none offered.  Défaut, en fait accompli.  Quel dommage!

You may wish to fold your cards here, gentlemen, and let the price rise to a more defensible level, before the supply levels become untenable at any price.  Once confidence has become broken, it is often difficult to get it back.   And there are a lot of delivery days between now and the end of the year. 

Weighed, and found wanting.

Stand and deliver.

ZeroHedge: "Hello Scotia Mocatta, This Is JPMorgan - We Urgently Need Some Of Your Gold"

  

  The Great Gold Game of Musical Chairs has begun, ZeroHedge reports on dramatic gold shortages unveiling behind the scenes. We are putting all these pieces of the puzzle together here and the picture is becoming more and more clear - Mother of Shorts Squeeze is coming to the Gold market.

Matt Taibbi: Is JPMorgan Too Big To Chase? Will The Gold Market Manipulation Be Exposed Next?

"Now these Jamie Dimon's cufflinks explain everything. "Brothers" and Gold Manipulation - anyone?"

Currency Markets: The Next Crisis Has Begun

"We would like to share with you today very interesting observations from the currency markets by Toby Connor. Recent volatility in the currency market was exceptional, particularly, when you consider that equity market was moving almost always in one direction - Up. Equity market volatility is at the record low and it looks like the real action now is in the US Dollar camp. Gold will follow this development fuelled by physical shortage as well.

  This concept of "Megaphone Top" in US Dollar is very interesting and we have seen its brutal Bearish resolution in 2008 in equity markets before."

Rick Rule On Gold & Resources: "The Stage Is Set For An Absolutely Dramatic Recovery" TNR.v, MUX

"To make this dramatic and pleasant for Survivors picture come true we need just one thing - Pros with the money coming into the market, without them it will always be only the wishful thinking. We can see them coming now."

Alasdair Macleod: Bullion Banks Still Stuck With Massive Short Gold Position on LBMA.

ZeroHedge:

"Hello Scotia Mocatta, This Is JPMorgan - We Urgently Need Some Of Your Gold"

Yesterday, it was HSBC. Today, the lucky respondent to JPM's polite gold 'procurement' request, is the second "fullest" New York commercial gold vault: Scotia Mocatta.

As ZH reported previously, following the announcement of an imminent withdrawal of 63.5k ounces of its gold (16% of the total), JPM's vault operations team promptly called around and to its disappointment was only able to procure a tiny 6.4k ounces: not nearly enough to preserve the impression that it is well-stocked. We then said, "None of which changes the fact that in a few days, the inventory in JPM's gold vault will drop to another record low of only 380K ounces and the JPM "rescue" pleas from HSBC and other Comex members will become ever louder and more desperate until one day they may just go straight to voicemail."

Today, as we predicted, the calls into HSBC indeed appear to have gone straight to voicemail (perhaps HSBC did not have any more unencumbered gold to share, perhaps it just didn't want to) which left JPM with just one option: go down the list.

Sure enough, as the just released Comex update shows, JPM was forced to receive a "completely unsolicited" handout of some 20.2K ounces from Scotia Mocatta, the vault best known for being situated under 4 WTC during September 11 (and whose current physical vault can be found conveniently within spitting distance of JFK airport).

However, what is notable today unlike yesterday, is that JPM's pleas seem to be getting more shrill: while yesterday HSBC released eligible inventory, today Scotia was forced to hand over registered gold straight into JPM's eligible pile: this is perhaps the first time we have seen this happen laterally between two vaults, without an intermediate warrant detachment step. Furthermore, with HSBC moving 43.4K oz from Registered to Eligible, we would expect either another major Comex withdrawal in the next few days from HSBC, or this is merely HSBC making room for further gold "requests" by JPM.

Either way, assuming that first the HSBC transfer, and now the Scotia Mocatta gold delivery, aren't entirely unsolicited, how long until someone inquires just why it is that the biggest bank by assets is forced to run around town and beg for whatever gold it can get its hands on?

***

And for those who missed it, here is yesterday's lateral gold move from HSBC to JPM:

So which bank's gold stash will JPM politely plunder tomorrow having already gone through the two top commercial gold vaults? Find out tomorrow: same time, same place.

Source: Comex"