Gold & Silver Digest: 6/4/13

Adam Taggart
By Adam Taggart on Tue, Jun 4, 2013 - 8:25pm

The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.

If you have articles to submit for the next digest, please email them to me by clicking here.

6/04/13 8:34 PM EST US close metals price quotes from Finviz

Reuters: Gold down 1 pct as India extends bullion import ban

Gold fell about 1 percent on Tuesday to extend losses after the world's largest bullion consumer India further restricted imports of the precious metal.

The Reserve Bank of India (RBI) on Tuesday extended the import restrictions placed on banks, which were introduced last month, to all nominated agencies and trading houses.

Jesse's Café Américain: Gold Daily and Silver Weekly Charts - Comex Puts Disclaimer On Its Precious Metals Warehouse Inventory

It was a dull day in the metals trade.

Early this morning a friend sent me a note saying that the CFTC had put a disclaimer on its warehouse inventory report.  At first I though it was a joke or some hoax. He sent me the links to their site, and I saw that it was true.

"The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only."

Zero Hedge: JPM Vaulted Gold Slides To New All Time Low

Beginning on May 13, when JPM's commercial gold holdings tumbled to an all time low of 137,377 ounces, the firm's daily Comex updates became erratic with daily reallocations out of its Registered holdings into Eligible. Over the next three weeks, some 209K ounces had their warrants detached, and shifted into customer account, all the while the total number of ounces held in the JPM gold warehouse at 1 Chase Manhattan Plaza, remained flat at 817,167. Then two days ago the first withdrawal in nearly one month took place, with 13K ounces pulled out of JPM's Eligible holdings. Moments ago, the daily Comex update [3]showed that yet another 15.4K ounces were withdrawn out of JPM, following the latest gold withdrawal, offset by a 49K ounces reallocation. This however is still short of the roughly 70K ounces due for delivery. Long story short, as of close of activity on June 3, the total gold held by the JPMorgan depository is now the lowest it has ever been at just 788,786 ounces and once again falling fast.

Business Insider: DOUG KASS: This Is A Great Time To Buy Gold

Gold futures are well off their 52-week high of $1,804 per ounce. They are currently at about $1,394.50 per ounce.

Hedge fund manager Doug Kass thinks it's a great time to buy gold. 

"There is probably no better time to consider diversifying one's portfolio into a depressed asset class (e.g., gold) than when the crowd is optimistic about a vigorous and self-sustaining global economic recovery and when the world's stock markets are at record high prices," writes Kass in a  Real Money column (via The Street).

Fox Business: Is the Worst Finally Over for Gold?

The recent price movement of gold has been extremely bearish. Despite logging twelve consecutive annual gains, the precious metal is one of the worst performing assets this year. However, with sentiment at rock-bottom levels, the worst may finally be over.

Over the course of only two days in April, gold plunged $200 to reach its lowest level since February 2011. In the process, gold posted its worst one-day percentage drop since 1980, and the largest fall in dollar terms on record. On a technical basis, gold reached its most oversold reading since at least 1975. The dismal performance was followed with a 5.4 percent loss in May. In fact, gold has now declined for seven of the past eight months.

GoldSeek: Redemptions in the GLD are, oddly enough, Bullish for Gold

Recent outflows from physical gold exchange traded products (we use the SPDR Gold Shares, GLD) have been interpreted by the financial press as a sign of weakness in the demand for gold as an investment vehicle.1

However, a closer look at the evidence suggests otherwise: the largest outflows in the history of the GLD (see Figure 1) started well before the large drop in the price of gold we observed on April 15th, 2013 (-9%, which represents a 1 in 11 years event)2. In fact, the net redemption of shares of GLD started as early as the second week of January 2013 (on a 3-month cumulative rolling basis). In this note, we will explore the theory that it was the shortage of physical gold and the ensuing arbitrage opportunity that drove market participants to redeem shares of GLD.

Hard Assets Alliance: Central Banks Loading Up on Gold

Central banks have been aggressively purchasing gold since the start of the global economic downturn. In fact, the amount of gold added to central bank reserves in 2012 was the most since 1964. This trend is even more impressive considering that China has not reported official gold reserves since 2009.

GoldSilverWorlds: A Gold Myth Exposed With 7 Simple Figures

The number of statements that link investor liquidation of the GLD ETF to the end of the gold bull market is countless. However, as shown below, drawing conclusions from such a fact in a multifaceted market shows a lack of insight and expertise.

It is indeed a fact that GLD investors have sold massive ETF holdings in 2013. It is a fact that it has had a profound impact on the gold price. It is a fact that a gigantic amount of physical gold has been sold as a consequence of GLD liquidation. But it is plain nonsense to link physical gold selling from the GLD ETF to the end of the bull market. Sure, it COULD be the case. But the gold market has much more dimensions than the GLD only. Besides, we have repeatedly asked a key question here, here, and here: “who is buying all that PHYSICAL gold”?

321Gold: Gold Bear Train Wreck?

  1. The gold bears may have gotten themselves into a bit of hot water. Please click here now . Double-click to enlarge.
     
  2. That’s the daily chart for DUST-NYSE, which is a triple-leveraged bet against gold stocks. There’s a massive double top pattern in play now, featuring an important RSI non-confirmation. The technical target of that top formation is $30.
     
  3. Please click here now . Double-click to enlarge. That’s the weekly DUST chart, which portrays the big picture. It looks like a technical “train wreck”; almost every technical indicator and oscillator on this chart is flashing a substantial sell signal.

GoldSilver.com: Silver Ready to Shine

in @ 2m4s -  Is Silver Ready to Shine? Phillip Streible, Senior Commodities Broker at RJO Futures, says silver has bottomed and is a better play on currency debasement than gold.

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