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For the past ten years, we’ve railed against the Bullion Bank fractional reserve and digital derivative pricing scheme. The solution has always been the removal of physical metal from the hands of the Banks and the Mints. Are we finally making some progress?

Before we begin, it is crucial that you understand this basic point: The globally recognized prices of gold and silver are not determined through the exchange of actual physical metal. Price is instead determined by the exchange of derivative contracts. Thus, the supply and demand of physical metal has very little day-to-day bearing on the derivative price. Instead, it is the supply and demand of the derivative itself that determines price.

About four years ago, I wrote the article linked below with the purpose of explaining, in as simple terms as possible, how and why this digital derivative pricing scheme benefits The Bullion Banks that have monopolistic control of these “markets”. If you’ve never read this post, please do so now:

Econ 101 — Silver Market Manipulation

The key pillars in maintaining this fraudulent pricing scheme are the market activities in New York and London. The CME-owned COMEX and the LBMA collective work together to manage price and the flow of physical metal that is needed to legitimize it. To understand this hand-in-glove approach, consider that Michael Nowak—the recently indicted former head of global precious metals trading for JPMorgan—also sat on the board of directors of the LBMA:

LBMA in “discussions” with JPMorgan following fraud indictment

For precious metal investors everywhere, it is vital that we one day force this pricing scheme to collapse. Since The Scheme is built upon leverage and hypothecation, the only way we can win this fight is if we can force a deleverage of the fractional reserve system…

…click on the above link to read the rest of the article…

Bullion Bank Nightmare as LBMA-COMEX Spread Blows Up Again

April 11, 2020

Bullion Bank Nightmare as LBMA-COMEX Spread Blows Up Again

The gaping price differential between spot gold and gold futures that has been plaguing the paper gold markets in London and New York for the last three weeks shows no signs of abating and is continuing to flare up.

In essence, the contango phenomenon we are seeing is one of gold futures prices trading far above spot gold prices, a sign of liquidity problems in the London gold market and a signal that something is completely broken between the world‘s two predominant “gold price discovery” trading venues – which both, by the way, trade paper gold.

As a reminder, London LBMA trades unallocated gold over the counter (OTC), a form of synthetic fractional gold derivative. The vast quantities of unallocated gold which are traded in London are then netted and cleared in an electronic clearing engine called Aurum by 5 LBMA bullion banks that comprices London Precious Metals Clearing Limited (LPMCL), namely JP Morgan, HSBC, UBS, Scotia, and ICBC Standard Bank). Allocation of physical gold is a totally separate process beyond clearing in Aurum.

COMEX trades predominantly cash-settled gold futures contracts on exchange and facilitates the trading of these contracts bilaterally. COMEX futures are 99.9% cash-settled and even those that result in delivery really result in warehouse warrants changing hands but the gold staying in the New York vaults of JP Morgan, HSBC and Scotia.

That the wide-open spread continues to persist is even more remarkable, despite the best efforts of the London Bullion Market Association (LBMA), CME Group (operator of COMEX) and the powerful London-New York bullion bank syndicate to throw all they have at the problem.

…click on the above link to read the rest of the article…

Gold Bar Shortage Deepens: Credit Suisse Tell Clients “Do Not Bother Asking”

March 30, 2020

Gold Bar Shortage Deepens: Credit Suisse Tell Clients “Do Not Bother Asking”

◆ Gold bar shortage globally prompts preppers, bankers and high net worth investors alike to try and acquire large gold bars but mints, refiners, banks and dealers globally are sold out.

◆ As the coronavirus pandemic takes hold, retail and institutional investors and banks are encountering severe shortages of gold bars and coins according to industry participants (see Wall Street Journal story below).

◆ Epic gold shortage prompts those concerned about systemic collapse including preppers, bankers and high net worth alike to try and acquire gold bullion which has become ‘unobtanium’.

◆ Credit Suisse Group AG, which has minted its own bars since 1856, told clients this week “not to bother asking” for gold bars.

◆ Dealers are sold out or closed for the duration and in London, bankers are chartering private jets and trying to finagle military cargo planes to get their bullion to New York exchanges, according to the WSJ.
◆ Gold prices are consolidating after the near 8% gain last week and remain one of the best performing assets in the last twelve months and year to date.

◆ GoldCore remains open for business and when they become available we are buying coins and bars from our government mint and large refinery suppliers and from our clients. Premiums have surged and we are paying 1.5% over spot to clients for gold kilo bars and higher premiums for smaller bars and bullion coins (1 oz). We are only selling to clients who have cleared funds on account and are on our Buyers List.

NEWS and COMMENTARY

Coronavirus Sparks a Global Gold Rush – WSJ

The COMEX Issues and Stops Reports Expose Conditions Behind Physical Gold Supply Problems

March 29, 2020

The COMEX Issues and Stops Reports Expose Conditions Behind Physical Gold Supply Problems

Currently, the latest COMEX Issues and Stops reports expose conditions behind the COMEX physical gold supply problems. Though I have written about the various reasons why physical gold supply problems manifest many times in the past, this topic still remains one rarely discussed by financial journalists, and never discussed by the mass financial media. For client accounts, when bullion banks stop more notices than issued, they, will lose physical inventory. For house accounts, the opposite is true. When bullion banks issue more notices than stops, then they will lose physical inventory as well. Normally, when bullion banks manufacture waterfall declines in paper gold and silver prices, as they did earlier this month, with the complicity of the CME’s largely unreported rampage in raising initial and maintenance margins on futures contracts many times within a 2-month period in the midst of a stock market crash, they load up on physical gold and silver for their house accounts while ensuring that their clients take almost zero delivery of physical gold and silver ounces. However, if they are unable to execute this clever strategy, this is when physical gold supply problems can manifest.

In fact, I have not seen a single news site in the entire world, except for my own, mention the relentless increase in initial and maintenance margins in gold and silver futures contracts (the 100-oz gold futures contract and the 5000-oz silver futures contract) for the past two months, in a desperate attempt to knock long positions out of the game and thereby prevent an increasing amount of physical delivery requests. Just recently, the CME raised margins yet again for 100-oz gold futures contracts to $9,185/$8,350 for initial/maintenance margins, representing a massive 86% increase in margins, and for 5000-oz silver futures contracts to $9.900/$9,000 for initial/maintenance margins, representing a gigantic 73% increase in margins, in just a couple months’ time.

…click on the above link to read the rest of the article…

Real Gold vs Pretend Gold

January 15, 2020

Real Gold vs Pretend Gold

The battle continued in 2019, and rarely has the disparity been this sharp.

And what do we mean?

Well, on one hand, you have real physical gold. This is gold that you store yourself or at a trusted vaulting company. This is gold that you can actually hold in your hands. This is the gold that is demanded at record levels by central banks around the globe.

On the other hand, we have pretend gold. This is the domain of the bullion banks. They offer futures contracts, unallocated accounts, and ETFs…all as an alternative to the real thing and as a way of increasing the total supply of “gold” in what amounts to a modern day alchemy.

What’s astonishing is that the investment world allows a physical price to be determined through the trading of the pretend alternative. More on that in a minute. But first, let’s look at two data points that stand in stark contrast to each other.

First, there’s demand for the real thing: physical gold. One great story in 2019 was how the Polish central bank purchased—and then demanded immediate delivery of—about 100 metric tonnes of physical gold. The Poles are no dummies, and they apparently wanted no part of the unallocated promises from the LBMA: https://www.bloomberg.com/news/articles/2019-11-25…

In total, it appears that reported central bank demand for gold will exceed 670 metric tonnes in 2019. This follows what was a 50-year record demand of 641 metric tonnes in 2018. This from the World Gold Council at the end of Q32019: https://www.gold.org/goldhub/research/gold-demand-…

So, as price rose by 18% in 2019, a logical conclusion would be that this was due to strong physical demand. And that conclusion would be mostly correct. This is Econ 101. Surging demand often leads to higher prices, and the central banks alone soaked up nearly 25% of global gold production in 2019.

…click on the above link to read the rest of the article…

Greyerz – China Just Took Delivery Of A Massive Amount Of Gold From London & New York

October 30, 2018

Greyerz – China Just Took Delivery Of A Massive Amount Of Gold From London & New York

Egon von Greyerz met with a large group of individuals from China that manage money for the elite in China. They went to Switzerland to meet with Egon and this is a small portion of what they discussed:

Eric King: “Egon, they (the money managers for the elite in China) have virtually all of the high net worth clients into (physical) gold.”

The Chinese Know What Is Happening
Egon von Greyerz: “They’re all into gold. Absolutely. Yes, virtually all of them own gold. That’s what’s so interesting. The Chinese buying is continuously going up and up and up without stopping. The Chinese know what is happening. They know it and they will continue to buy gold. And one day that’s going to have a major influence on the gold price.

And when the paper market breaks, and China dominates the gold market, it’s going to be very interesting because I really look forward to the West failing in their manipulation of the gold price through the various paper markets and through the interbank market.

Again last month we saw imports of gold into Switzerland and then exports to Asia and India. Last month, over 70% of the gold import figures (into Switzerland) came from London and the United States.

We again see that Switzerland is buying the 400 ounce bars from the UK and US bullion banks and converting them into 1 kilo bars and then shipping them on to Asia. Last month there was hardly any buying from the mines. It all came out of London and New York.

…click on the above link to read the rest of the article…

Manipulation of Gold & Silver by Bullion Banks

June 24, 2018

Manipulation of Gold & Silver by Bullion Banks

As a former spot currency trader for a major international bank, I have had first-hand experience of central banks directly intervening in currency markets in massive size, repeatedly. You’ll hear a lot of people say market manipulation is a conspiracy theory, despite the fact that it has been proven in court several times in various assets classes and especially in precious metals. Books have been written about Gold and Silver manipulation for decades. Central Bankers have admitted it publicly. Now it has become so obvious that it’s predictable. I know because I made 500% in less than 24 hours on Friday last on a 1-week SLV 15.50 strike put option I bought on Thursday at 2pm. I bought that put expecting the Bullion Banks to come in and hammer the metals, given the typical signals I was seeing ahead of each time they slam Gold and/or Silver lower. Moreover, I began warning people on Twitter a week ahead of time that this could happen (note the dates posted):

I’ll provide those typical signals later, but let’s take a look at what happened to Gold…

Since May 24^th, Gold has been capped at its 200 day moving average despite being oversold, extreme overbearish per the DSI and Funds positioning being at levels that has consistently led to strong rallies over the past 3 years. Yet, on this occasion the price went down?

So why did the price go down? Below is the daily changes in Gold open interest (“OI”) on the COMEX up to and including Friday last.

Notice how OI rose significantly around May 10, and the price of Gold fell hard. Then OI fell consistently but the price did not rise, instead it remained capped under its 200-day MA. Then, beginning Tuesday, June 12 and for the next two days, open interest rose a total of 18k contracts.

…click on the above link to read the rest of the article…

Are Big Banks Using Derivatives To Suppress Bullion Prices?

July 9, 2015

Are Big Banks Using Derivatives To Suppress Bullion Prices?

We have explained on a number of occasions how the Federal Reserves’ agents, the bullion banks (principally JPMorganChase, HSBC, and Scotia) sell uncovered shorts (“naked shorts”) on the Comex (gold futures market) in order to drive down an otherwise rising price of gold. By dumping so many uncovered short contracts into the futures market, an artificial increase in “paper gold” is created, and this increase in supply drives down the price.

This manipulation works because the hedge funds, the main purchasers of the short contracts, do not intend to take delivery of the gold represented by the contracts, settling instead in cash. This means that the banks who sold the uncovered contracts are never at risk from their inability to cover contracts in gold. At any given time, the amount of gold represented by the paper gold contracts (“open interest’) can exceed the actual amount of physical gold available for delivery, a situation that does not occur in other futures markets.

In other words, the gold and silver futures markets are not a place where people buy and sell gold and silver. These markets are places where people speculate on price direction and where hedge funds use gold futures to hedge other bets according to the various mathematical formulas that they use. The fact that bullion prices are determined in this paper, speculative market, and not in real physical markets where people sell and acquire physical bullion, is the reason the bullion banks can drive down the price of gold and silver even though the demand for the physical metal is rising.

…click on the above link to read the rest of the article…

Gold Futures Market Used For Fraud

February 22, 2015

Gold Futures Market Used For Fraud

The Comex is a complete fraud.

It’s one of the biggest Ponzi schemes in history.

With China and Viet Nam (the latter being a major gold importing country) now closed until next Wednesday in observance of their Lunar New Year, the bullion banks have engaged in a major attempt to drive the price of gold lower. Yesterday (Tuesday) 99,000 gold contracts – 9.9 million ounces or 287 tonnes – were sold into the market between 9 a.m and 11 a.m. EST, which had the effect of driving the price of gold down over $26. To put this into context, a total of 179,833 contracts traded between 6 p.m. Monday and 5 p.m. Tues. The entire daily trading period is 23 hours. But 55% of yesterday’s total trading volume – the volume used to slam gold – was traded in a two-hour window of NY trading.

Think about it this way: in that two-hour window, 35 days worth of daily global gold mine production traded in the form of paper gold. The open interest expanded by 5,290 contracts, which translates into just over 15 tonnes of gold. The total amount of gold available for delivery – the “registered” account gold – is 804.9k ounces, or 23 tonnes. In just one day, the bullion banks (JP Morgan, HSBC and Scotia) sold forward 65% of the entire stock of deliverable gold on the Comex. And that’s if you really believe the unaudited bank reports which produce the gold warehouse stock reports. I do not.

Gold was raided again today (Wednesday, Feb 18) – again at 11:00 a.m. EST. This time gold was slammed another $9 in the space of 30 minutes, most of it in the first seven minutes. Today 18,000 April gold contracts traded in the 30 minute space, representing 24% of the total volume in the April gold contract up to that point since 6:00 p.m EST the previous evening. This is 52 tonnes of paper gold – more than twice the amount of gold in Comex vaults available for delivery.

…click on the above link to read the rest of the article…

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