CRIMEX/COMEX NEWS:
Gold:
-Front expiry March month OI rises 18 contracts (bullish)
-Thursday Red candle day volume was an ENORMOUS 229,484, bankers provide the unbacked paper for shorting, Friday's volume was 133K and rise in price. See what happens when they short? Massive volume shows up.
-35,899 oz withdrawal from the dealer, very little deposited
-3.241 tonnes standing for delivery (6482 lbs)
Silver:
-OI raises
-March delivery OI DROPS WITH NO DELIVERIES...right...Blythe dealing out cash fiat paper worthless premiums like little vials of crack-keep em hooked Blythe!
-ZERO deliveries, Massive withdrawal of 317,097 oz, this is out of the COMEX, gone.
-lots of funny adjustments and negative entries and fraud as well
-COMEX could NOT fulfill ANY obligations to settle upon longs standing for the physical yet the OI falls. WELL DONE BLYTHE, keep handing cash out!
-10,895,000 oz still standing, which is great as its bucking the trend
-SLV ADDS 3.253 million oz of physical YET the CANADIAN fucking mint cant even get silver, NICE! I guess they have 1400 little trolls rummaging through the streets of the world finding million and millions of ounces of silver ever night!
Yet SPROTTS NAV is at 18.4 %!!! that deserves a WOWzers! SLV if full of shit. The CTFC is a joke, and its here to protect JPM. Case fuckin closed.
COT report:
Gold:
Holy fuck, I dont even know what to say. Commercial banks add 16,669 contracts short. I'm not even going to do the math and convert that into ounces, fuck it.
-Small specs are gobbling up anything they can eat long.
Silver:
Gooooood news, JPM et al REDUCED 1592 contracts short...they are essentially fucked. Case closed. We will need the DOW and SLV to go to ZERO in order to save them. And get this, small speculators covered a HUGE 5368 contracts.
-Backwardation up again to $1.38!
We need to be cautious here. We have breached $35, but SLV is not at $35, its lower, and the options frenzy has not commenced yet, which should have some impact on lower SLV prices IF they are exercised. Why someone would exercise now is beyond me, but I guess 20% this month isnt bad to lock in. The Weekly Silver chart is now, in my opinion, over stretched, and I would now welcome some weakness and a 2-3 weekly red candles to settle back into the $32-34 range. That being said, the overall stock market needs to sell off, and a short term $US retrace may be in store. If the market cant sell off, and only a nuclear bomb will stop it from going up, expect Silver at $37.30, as the shorts will continue to get fucked up. This may not be the case on this leg up...I would rather take a retrace back down NOW, so we can get all coiled up for April, and another crack at the CRIMEX leading up to May 1st.
Oh I forgot, all this speculation can be worth nothing, if the "Day of Rage" pulls through. We are living in FAST times right now, hope you can keep up!
QUICK NEWS: I'm sure by now you know who this is brought to you by.
Libya civil war commences as Interpol warrant Gadaffi's arrest, Egypt rioting again, Saudis make protesting ILLEGAL HAHAHAHAH, unemployment stats are staggering.
i am first reader of this post :-)
ReplyDeleteat 1.38 backwardation we may not get that pull back.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThis week I'm actually expecting higher gold and silver prices to continue. There is too much demand for investment now in these two metals. I have tried to secure large amounts of bullion from several sources in a short time and it is becoming increasingly difficult to do. I feel like Sprott on a much smaller scale of course.
ReplyDeleteI believe we are going to see an unbelievable short term spike of these two metals. I didn't want to get into posting this but the time has come to see $2000 gold and $65 silver now. If this doesn't happen for these metals then something else is in the works and it's not good for any asset whatever it is.
We have less than 1 month to get the direction we are going to go. I'm convinced we will know what that direction is very soon. I would be very surprised if we do not meet those prices I have listed here in the short term.
"Buy the dips"? Yes! But I'm not seeing any right now.
Just think: Less than 1% of the entire U.S.A. population has any gold or silver. I have at random been asking people about it and they don't have a clue.
ReplyDeleteJust think. Only the wealthy people (who have awareness) and a smaller group of informed people that accidentally found out about this are accumulating.
Well: There has to be losers and END USERS of the fiat transformation which is soon upon us. Those that hold this bullion will have a built in bonus. If you doubt this then....well....ok.....
hey SGS -
ReplyDeletewhat's all this hype about "cash settlements" ? I think it all originates with Harvey Organ, who, sadly, seems to not know of what he speaks, and has created a totally false thesis, which can't help anyone's trading.
If I'm long silver futures after first notice day, I can close out that position before expiration. Everyone understands that, right? I mean, you can call this "cash settlement" if you want, but there's nothing remotely odd, unusual or conspiratorial about it. And there's no "premium" involved - you can see the price the futures trade at.
rule 807 at the CME is the relevant one:
http://www.cmegroup.com/rulebook/CME/I/8/
Of course, for me to close it out, someone has to be willing to take the other side. A short who wants to make delivery will still be able to make delivery - he just won't close out his short (by buying my long from me).
Here's what I consider to be the news that will ignite the gold and silver rush of 2011.
ReplyDeleteCall it:
The Gold and Silver Rush of 2011
Beyond Utah there are other states that will follow this return to a Constitutional trend: Video:
Gold and Silver Coin Standard Beginning in U.S.A.
Soon more than 1% or the U.S.A. are going to flock to the mints. This is going to get busy. I think I'll buy some more mining stocks pre-market Monday.
I actually sold SLW Friday like a dummy to get in lower and it didn't go down.
I have to add to my string of posts here because I just watched this video and it just quantifies what will likely occur here soon:
ReplyDeleteThe Case for $175 ounce Silver
This very year 2011, I might have a real good chance to see prices exceed my expectations. How about that?
@Kid Dynamite, I think that if you are long after first notice day you have to enough money in your account to take delivery.
ReplyDeleteSee the bottom 3 paragraphs of this post for how this seems to me to be working. http://wp.me/p1ePZy-ID
@Marketcuriousity - that link is dead - do you have a working link?
ReplyDeleteHaving enough money in your account to take delivery and having to take delivery are not the same thing. fact: march futures are still trading - I'm sure we agree on that. There's a reason for that: so that traders can close out their positions prior to expiration.
newsunit,
ReplyDeleteyou and I are on the same wave length.. exactly what I am thinking. Today Adrian Douglass came out and said there is starting to be rumors of 1000 ounce bar shortages.. when the industrial users panic its the shit hits the fan in the silver market.
I'm ordering from everywhere as soon as those charts start ticking Sunday night. If they start down a little all the better but I doubt they will. I'm buying either way.
ReplyDeleteSo does anyone have a theory on why the commercial banks added even more contracts short? I mean they're not stupid (arguable I know) so what's the play here? They are basically going in balls deep on the short side to try like hell to keep the price down? Thoughts?
ReplyDeleteYukon
Can anybody explain?
ReplyDelete"No of oz served (contracts )"
and
"No of notices to be served"
@Kid Dynamite: http://wp.me/p1ePZy-ID
ReplyDeleteI don't know the ins and outs for sure, but I think if you have a contract past first notice day that literally means by default you want delivery. "The first day that a notice of intent to deliver a commodity can be made by a clearinghouse to a buyer in fulfillment of a given month's futures contract."
http://www.investopedia.com/terms/f/firstnoticeday.asp
Interactive Brokers, since they don't allow delivery on anything I think, specifically won't allow anyone to have a contract past first notice day. An entity with the right, and funded, account can trade, but can also get delivered on at any time.
Kiddynamite,
ReplyDeleteRic Ackerman received a 25% premium for his silver and told the world and documented the offer.
Google is your friend. Well sort of.
>Ric Ackerman received a 25% premium for his silver
ReplyDelete>and told the world and documented the offer.
That was early 2010, wasn't it?
Search for 'Ackerman' on this page
Victor
@Marketcuriousity - i had found that post on your blog. "What seems to be happening is that everyone with a large enough account who understands the game buys, say, 100 contracts, and gets paid, say $10/oz to not take delivery. " - no - that's what Harvey Organ says is happening - it's not what's happening in the real world.
ReplyDeleteWhat MAY be happening is people might actually be buying into this hype, holding their longs past first notice day, finding that there is no magic mushroom, and then offsetting their positions in the market (closing them out, because they didn't want to take delivery anyway).
@LouisCypher - please point me toward the "documentation" you are talking about. All I see is Harvey Organ SAYING that Rick Ackerman received a premium... Surely you're not talking about this: http://news.goldseek.com/RickAckerman/1260255720.php which is related to a different metal (gold) in a different market (LBMA) and was a story told by some guy on a message board...
It boggles my mind that so many silver longs are so eager to form their investing thesis around false information. Groupthink? Yes. Good trading plan? oy vey - no.
I am long SLV, by the way - don't think I'm short silver. (and please, don't get sidetracked with more nonsense about the SLV not having the metal - that's another great rumor made up by people who do not understand)
What scares me as a silver long is that the people on the same side of the trade as me are voicing theses that are flat out wrong.
@Marketcuriousity - by the way, you wrote
ReplyDelete"An entity with the right, and funded, account can trade, but can also get delivered on at any time. "
yes - I agree. It's the shorts who give the delivery notices, and they can give them at any time. I read on another message board where someone wrote something like "it makes zero sense that longs would close out positions without a premium if they'd already funded their account"
I strenuously disagree with that. There is one very simple and very likely reason: futures are levered, physical is not. If the longs are still bullish, they have every incentive to close their front month position and open new positions in the next month. Since they are now fully funded, they have capital to gain even more exposure if they want it.
Good posts Kid, always appreciate the (correct) info.
ReplyDeleteKidD,
ReplyDeleteWhy don't you pose the question to Harvey or Ric? They are pretty open to discussion.
Kid...I'm not sure I understand your thoughts. I'm not sure Harvey states that cash settlements are illegal. We are stating that adding PREMIUMS to cash settlements are questionable. Go to the top of my blog, Harvey's link is there. Ask him. He will answer you.
ReplyDeleteOkay KID, I just read your other comment about SLV having all the silver. Enjoy cashing your silver certificates out when TSHTF. I wish you luck. I enjoy both sides of an argument, but you are beginning to sound like a sheep.
ReplyDeleteSGS,
ReplyDeleteMy head has grey hairs sprouting everywhere so correct me if I'm wrong here.
Were you the guy who was tracking SLV bar numbers and finding some odd results?
SGS - I posed the question here because you, having rejected the WB nonsense, seemed to be rational.
ReplyDeleteHarvey is living in his own planet, and has zero interest in the facts. I don't waste my time trying to have a discussion with people who have no interest in the facts.
by the way, if you want to know when there is a real shortage of silver, SLV is the instrument that will tell you - it will trade at a premium if/when traders can't do the creation arb (if there's no silver available).
Even eric sprott knows that SLV has the silver in their vaults - he uses it in his numbers. As does the completely moronic "simple case for $175 silver" video you posted.
@kid,
ReplyDelete> Since they are now fully funded, they have capital to gain even more exposure if they want it.
I don't understand what you mean.
The point is - you can close your position without fully funding it. You will get the same absolute amount of money no matter if your position is fully funded or not (in case there is no premium paid).
So why fully fund it in the first place? As you state, paper silver is a leveraged play. When you fully fund a position, you'd have to close others in order to get the money.
It just doesn't make sense that the oi drops so much after first notice day - without a premium, that is.
If you disagree, please let me know, I just might be too naive.
SGS wrote "Kid...I'm not sure I understand your thoughts. I'm not sure Harvey states that cash settlements are illegal. We are stating that adding PREMIUMS to cash settlements are questionable."
ReplyDeleteWell, I am fairly certain that Harvey definitely states that cash settlements are illegal, but that's not even what I"m talking about. What Harvey thinks are "cash settlements" are really just non-assigned positions being closed out. He doesn't understand how the market works.
Adding premiums to "Cash settlements" are absurd - the shorts can buy their contracts back before expiration. If there are no longs who want to close their side out, then the price rises - that's the only "premium" involved.
But in any case, none of this has anything to do with the shorts - it's all about the LONGS who can always accept delivery if they want to - just like the Mythical WB group was supposed to do, right? Another silver fairy tale.
Fairy tales don't help anyone make money. When the thesis is based on false information, it's guaranteed to blow up in the end - just remember that.
btw, as front month silver is now every now and then in backwardation to the next month, you'd be even more inclined to close your closest positions and roll over into the next since you'd be able to buy more contracts.
ReplyDeletetherefore, why fully fund your position?
KidD,
ReplyDelete"Harvey is living in his own planet, and has zero interest in the facts. I don't waste my time trying to have a discussion with people who have no interest in the facts."
It sounds like you have some preconceived notions yourself.
There is a reason Harvey has Bart Chilton's home number and it's not because he is perceived as a tin foil hat wearing guy. It's because he is perceived as someone who sticks with the facts. Again, ask Harvey or Ric but I think whatever they say will not be satisfactory to you.
Whos to say whos thesis is right? Maybe JPM thesis is right for shorting to infinity...Doesn't everything blow up in the end? Tech boom, housing, etc. At least this thesis is working in our favour thus far, would you not a agree? Are we not fighting the EE? You seem to be more on the side of JPM, no conspiracies are going on there side...and please post your references to Sprott and his saying that SLV has the silver, I call bullshit. Sprott has been taken the exact opposite position on GLD and SLV physical inventories. Post reference please.
ReplyDelete@silverto500:
ReplyDeleteas MarketCuriousity pointed out, longs have to be ready to stand for delivery, so they need to have the money in their accounts.
Perhaps the longs have read all of the fairy tales on the internet, and are eagerly awaiting a call from Blythe Masters begging to accept cash at an 80% premium to spot.
In the real world, however, that call doesn't come, so they liquidate their contracts, take their profits, and maybe roll into the next month to maintain exposure.
OR, maybe the shorts actually do start scrambling, and buying back the contracts (After all, the price has been on a steady march upwards). At some point, longs take profits and close positions. That's how it works.
Is it possible that the longs are starting to gain the upper hand in the "Games" around settlement? Sure - they hold all the power as long as they are willing to accept delivery.
So, longs don't close their positions prior to first notice day, fund them, are willing to take delivery, and try to squeeze the shorts. However, what they're really interested in is profit - not holding physical silver. So they get a few more bucks and close out their positions - price rises, and OI decreases. Kinda sounds like exactly what happened, doesn't it?
If the shorts don't get squeezed, then the longs have a decision: take delivery, or puke their positions (if they haven't been assigned yet!)
SGS - Sprott knows damn well that SLV has the silver (and that GLD has the gold). Every presentation he makes cites their ownership:
ReplyDeletehttp://www.sprott.com/Docs/MarketsataGlance/11_10%20The%20Double-Barreled%20Silver%20Issue_FINAL.pdf
If you don't like that one, which is the clearest, you can see the recent ZH post where he uses the same table in a video:
http://www.zerohedge.com/article/eric-sprott-there-no-more-silver-left
Sprott relies on the Internet Warriors to spread the demand and hype for his product, which has no reason to exist - SLV does the same thing without a 20% premium. People buying PSLV are victims (because of the 20% premium, which will get whacked as soon as Sprott decides to do a secondary - don't believe me? Don't you remember PHYS? we saw the EXACT same playbook in 2009), it's actually really really sad.
Then you bring up JPM:but you start with a false premise: of course, they're probably not short 3B ounces of silver either. I've written at length about his, and have no interest in rehashing it in a comment thread, but I offer you this challenge: they just released an extremely detailed 10k report. Find the losses from their imaginary silver short (silver ripped higher in Q4 2010, after all) in there. Good luck. (hint: it's not in there. and "off balance sheet" isn't the answer: the off balance sheet exposure is quantified in the 10k)
More importantly, and please think about this: I'm not on the side of anyone. I'm interested in making money. The Tech boom blew up because it was based on false underpinnings. Housing blew up because it was based on false underpinnings. that's EXACTLY my point - if you base your silver long on false underpinnings, it is destined to end very very badly.
So, I HOPE that the industrial demand for silver is enough to support it, but what worries me is that the long thesis is increasingly dependent on the INVESTMENT demand side of the equation, which, judging from the nonsense spewed daily across a plethora of websites, is resembling a ponzi scheme more and more every day - sucker more and more people into believing that they're "fighting the EE" (hint: you're not!) or the "Blythe" is curled up in the fetal position (hint: she's not! they're making more money than ever. they're probably net long silver!)
but why are we getting off topic here guys?
ReplyDeleteIt's much simpler than the direction this off-topic conversation is heading:
this is a fact: March Silver Futures still trade at the COMEX.
Does anyone disagree with that?
What do you think is the reason that March Futures contracts still trade?
Answer: it's so that non-assigned positions can be closed out IF SO DESIRED.
guess what - that happens. Daily. Harvey Organ sees the numbers daily - the declining open interest numbers - he just has no idea what they mean, and makes up garbage to make it seem insidious. It's not - it's perfectly normal, and it happens in every futures market, not just silver.
I would urge you guys to read this post about the concept of confirmation bias, because there's no stronger force explaining the silver MANIA on the web these days:
http://kiddynamitesworld.com/what-american-idol-taught-me-about-confirmation-bias/
You can rally around on the message boards and comment threads and scream "SILVER BITCHES" and "F*CK BLYTHE" but it doesn't make the thesis based on blatant falsehoods any more sound.
Thankfully, silver has been going up, and we're all making money right now - but if the reason that silver is going up is because people THINK that JP Morgan is going to be bankrupted, or people THINK that there is a massive shortage of silver which doesn't actually exist yet, or people THINK that SLV doesn't hold 350MM ounces of silver, well then, don't be left holding the hot potato - as a long, that's why I'm scared. The thesis is bad...
my final comment seems to have been deleted, let me repost part of it:
ReplyDeletewe're getting off topic in the comments here. the topic is this:
1) FACT: March Silver still trades. does anyone disagree with that fact?
2) There's a reason that March Silver still trades - that reason is so that not-yet-assigned contracts can close their positions if they so want to.
3) People do this every day - they close out positions, which reduced open interest.
4) Harvey Organ sees these Open Interest changes, he just doesn't understand what they mean, and tries to make it into something insidious. It's not crazy, conspiratorial, or illegal - it's how futures work, and it's not just silver either.
So, you have two choices: you can stick to groupthink based on factual misinformation, or you can understand what's really happening.
@kid, thanks for your input.
ReplyDeletei highly doubt that small specs, believing the wb story and then "seeing reality" are responsible for a decrease of more than 10,000 contracts. they don't have this fire power as can be seen in the COT.
And yes, the shorts might be covering, but as long as the longs standing for delivery don't close, oi won't decrease for the front month.
"So they get a few more bucks and close out their positions - price rises, and OI decreases."
As i say, this doesn't make sense economically. Traders want to maximize profits. And you won't maximize it by fully funding your positions, just to close them out in the following 3 days.
Also, if a long is betting on a squeeze and shows determination by funding his account, I also doubt that his will vanish in just 3 days. A squeeze needs more than that. And a long will definitely know that.
@silverto500: just remember this: if all the hype is true, it's the LONGS that can blow up the entire "scam" at any point in time. THEY are the ones with the power - not the shorts. the WB group claimed that this is exactly what their plan was... turns out they didn't do it...
ReplyDeletelast comment was spam, was not deleted its up now
ReplyDeletegood luck folks
ReplyDeleteHuuummmmmm....sounds CNBCish to me.
ReplyDeleteIt seems your entire premise is loosely based around the fact that JPM's statements are factual. Therefore, further assimilating your perception of JPM as a truthful, law abiding, and representing a clear and concise responsibility for accurate and within SEC rules and accounting regulations. Am I right?
If I am, I need you to come back to Earth, b/c I think you are in Disney Land.
Lets get something straight. Forget the numbers and TA or ANYTHING related to the current silver play in general for a moment and answer me this: Why is the nemesis of printed money (silver and gold) goign higher? Is it b/c Harveys blog is putting out some reports on metal? You would have to be a fucktron to believe that Harvey alone has made silver go from $15-35. Right?
Commodities are goign higher because Ben is printing money.
No we come back to the current silver play. Historically, and you cannot disagree that the gold/silver ratio is on par...right? You can also not disagree that 90% of above ground silver from 40 years ago till today has evaporated, right? Based on this alone, we are going higher.
Here's the deal...you seem intelligent. I have an idea. Why dont you give daily updates on the metals on a blog? Crist you spend all after noon typing on mine!
And if you truly do believe SLV has metal, you may not want to hang around here that often...SLV and GLD were introduced as a proxy to keep prices suppressed. The only way this will end is $15,000 gold, and $1000 silver.
Again if you feel obligated to enlighten the truth on us, go ahead. We are all here to learn, I guess.
it's hilarious that the gold bugs still don't understand that GLD and SLV have been a bigger boon to the price of each respective metal than any other factor has ever been. They made it simple for anyone to invest in the asset class. GLD holds over $50B in gold... SLV holds over $12B in silver - that's a huge part of the reason the price of each has accelerated - it's not the monkeys buying 100 1 ounce coins at a time on APMEX, it's traders buying 50k, 100k SLV at a time, which results in arbs buying silver and creating new SLV shares (which they continue to have no trouble doing, which is how you know the silver shortage isn't as severe as everyone screams about - but you'll surely say that they're lying, right?) - that's how they get the metal, I'm sure you know that already. But then again, if you don't believe that they have the metal, you'd never understand this.
ReplyDeletejust so we're clear: when exactly will we see $15k gold and $1k silver, by the way? I can't wait. I'm on board. bring it on.
So yeah, SGS, you can believe that everything in the world is a lie. That JPM's financial statements are a lie, that SLV is a lie (but only when you want to believe it's a lie - not when you want to count its demand in the allocation of the silver in existence), that SLV's auditor is lying, that the SEC is complicit in the fraud in both SLV's statements and JPM's 10k - but the much more likely scenario is that it's all accurate, and that the shortages in silver aren't YET quite what everyone makes them out to be, and that JPM isn't going bankrupt from the silver Keiser campaign (oh - how are the silver Keiser's by the way?)
anyway, let's talk about the key - what really matters - supply and demand. Two sources of demand - investment and industrial. Investment demand from a few sources is very visible: ETFs, mint sales. Investment demand from other sources is harder to measure: retail coin sales.
Do you have data on annual industrial demand? I don't have it. Can you enlighten me?
I'm sure you know that Sprott says that annual mine production is nearly 700mm ounces...
re: your question about the driver of silver: see, that's what worries me, and maybe it's where I'm being an idiot. I read ZH, I read Harvey's hype, I read TF's blog, now I read your blog - these guys get TENS of thousands of hits a day. Silver is a small market. Is it possible that this hype is driving the price action? Yes. If that's the case, then a lot of people are going to lose a lot of money. Maybe I give them too much credit - maybe I give comment thread maniacs too much credit.
Either way - I'm telling you that it scares me when the people on the same side of the trade as me voice reasons that are blatantly false. That's a pretty simple statement, it's not something you should want to argue about!
i HOPE that's not the driver, and maybe i'm being an idiot for being swayed into thinking that these groups have impact, as a result of my reading the repeated mania in the comments thread of each post.
Anyone who has every traded any kind of market would probably agree that the kind of mania exhibited by the metals crowd, combined with the lack of actual facts, is a very very dangerous combination.
I think that the point of the $175 price for silver vid was the "under" capitalization of the silver market in general and that if and when the hot money comes in... look out. I get it.
ReplyDeleteKID: "Anyone who has every traded any kind of market would probably agree that the kind of mania exhibited by the metals crowd"
ReplyDeleteYou know that less than 1% of hedge funds and even less that that in mutual funds are in the metals markets right? So what mania are you talking about? Mania is when in the tech boom, and analyst would be reporting his targets live on TV at say $50, but in the background the ticker was already printing $87. Thats mania. No one know about silver. No one.
Here is Harveys response to you:
"So let me get this straight, a buyer takes a huge amount of cash to put into their brokerage account to take delivery and then they decide to change their mind
with all of this silver turmoil and roll? give me a break!!
also: if there are huge storage costs and insurance costs for what reason does the dealer keep his metal beyond the first two days of delivery and not serve upon a long?
why is gold OI in March rising and silver Oi falling ie. the amount of gold oz is rising in March and the amount of silver oz standing is falling. Why?"
SGS - you wrote: "You know that less than 1% of hedge funds and even less that that in mutual funds are in the metals markets right? So what mania are you talking about? Mania is when in the tech boom, and analyst would be reporting his targets live on TV at say $50, but in the background the ticker was already printing $87. Thats mania. No one know about silver. No one."
ReplyDeleteYes - I know that the average American has no clue what the price of silver is, and doesn't own any. I hope you're right. As I said, it's quite possible that I'm giving too much credit to the online metals mania - and yes, there is absolutely positively metals mania going on online. Have you seen ZH's comment threads? it's scary stuff.
re: Harvey - you win. I'm sure you and he are correct - that "The Morgue" is offering up fat 80% premiums to settle their shorts in cash. Because that makes sense - because that's a good business model. (I hope you caught the sarcasm there)
but your assertion that March Gold OI is "rising" is an overly literal interpretation, don't you think? It's fallen pretty severely over the last week, to a tiny level. I wouldn't count that 18 contract rise in open interest on Friday to be much of an indicator of anything.
This comment has been removed by the author.
ReplyDeletei answered my own question about industrial demand numbers here:
ReplyDeletehttp://www.silverinstitute.org/supply_demand.php
please do let me know if you have data that differs from that.
@kid,
ReplyDelete(posting from my blogspot account as currently somehow my openid account doesn't let me post this comment)
if you read ZH, you should know this article published in December, "Eric Sprott's Double Barreled Silver Issue":
http://www.zerohedge.com/article/eric-sprotts-double-barreled-silver-issue
You will find good arguments to why GFMS's and The Silver Institute's numbers don't represent the full picture. In short - investment demand is totally understated.
And see, even FastMoney "gets" it. Some numbers are shown regarding silver, especialy that demand is 127% of the current supply:
http://www.youtube.com/watch?v=0u4EMUd6uuI
(I won't cite numbers by other more credible sources here, I think you are already familiar with them)
With all those numbers, don't forget that China turned a net-importer of silver, in the tunes of 100 million ounces. Older reports don't reflect this. China's production of 100 million ounces therefore disappeared from the western supply. That is a swing of 200 million ounces!
That a determined long can squeeze the whole silver market is nothing new (Hunt, Buffet etc.). People often get too excited here; if you google for "comex default", you will find that this topic pops up every now and then. I doubt that anybody is really interested in blowing up the COMEX. Why would you do that in the first place? Again, it doesn't make sense economically. You'd rather try to abuse the COMEX.
Regarding positions, yes, they can be closed out. But your argument just doesn't make sense regarding fully funded positions. And that's what the whole point is about.
A fact is that COMEX is apparently not able to restock silver for there has been now a constant drain of their supply. Sprott needs weeks to get its silver. But the SLV is able to add several million ounces a day, continuously? You just have to agree that somthing is fishy here.
For JPM I find it very amusing that revenue through commodities "shrank by 43% in 2010 compared with a year earlier".
http://www.marketwatch.com/story/wall-street-missed-out-on-commodities-boom-2011-02-14-181100
Could it have something to do with gold & silver? At this stage it's just a thought, until facts come out.
And then, there was basically only one person finding Enron's scam in their reports. A layman won't find anything in JPM's reports.
The silver bubble: there is a big difference with the tech bubble. Back in 2000, you could just go out and buy tech stocks, a lot of them, through online brokers who had just discovered the internet and lured people with low commissions.. But how about silver or gold? Yes, you can by the miners, but they are still lagging big time compared to the S&P / DJ companies. In fact, a lot of them are fundamentally still undervalued. No bubble here. And yes, you can buy the SLV & GLD, but are they in a bubble with the small market cap they have?
You have to understand that at the current stage, nothing can implode since wise people buy the physical! And you don't just sell your physical in 3-4 weeks. Physical is different from stocks since you own a tangible! In fact, I know a lot of people who own gold coins, given to them buy their grandparents who in turn have been holding it for decades!
Corrections? Yes, please! There are enough people who will start buying. For a bubble to burst, everybody who has the potential to buy must have bought, so that there is no buyer left. With gold and silver, we are still far far away from this point.
@kid,
ReplyDelete(posting from my blogspot account as currently somehow my openid account doesn't let me post this comment)
if you read ZH, you should know this article published in December, "Eric Sprott's Double Barreled Silver Issue":
www.zerohedge.com/article/eric-sprotts-double-barreled-silver-issue
You will find good arguments to why GFMS's and The Silver Institute's numbers don't represent the full picture. In short - investment demand is totally understated.
And see, even FastMoney "gets" it. Some numbers are shown regarding silver, especialy that demand is 127% of the current supply:
www.youtube.com/watch?v=0u4EMUd6uuI
(I won't cite numbers by other more credible sources here, I think you are already familiar with them)
With all those numbers, don't forget that China turned a net-importer of silver, in the tunes of 100 million ounces. Older reports don't reflect this. China's production of 100 million ounces therefore disappeared from the western supply. That is a swing of 200 million ounces!
That a determined long can squeeze the whole silver market is nothing new (Hunt, Buffet etc.). People often get too excited here; if you google for "comex default", you will find that this topic pops up every now and then. I doubt that anybody is really interested in blowing up the COMEX. Why would you do that in the first place? Again, it doesn't make sense economically. You'd rather try to abuse the COMEX.
Regarding positions, yes, they can be closed out. But your argument just doesn't make sense regarding fully funded positions. And that's what the whole point is about.
A fact is that COMEX is apparently not able to restock silver for there has been now a constant drain of their supply. Sprott needs weeks to get its silver. But the SLV is able to add several million ounces a day, continuously? You just have to agree that somthing is fishy here.
For JPM I find it very amusing that revenue through commodities "shrank by 43% in 2010 compared with a year earlier".
www.marketwatch.com/story/wall-street-missed-out-on-commodities-boom-2011-02-14-181100
Could it have something to do with gold & silver? At this stage it's just a thought, until facts come out.
And then, there was basically only one person finding Enron's scam in their reports. A layman won't find anything in JPM's reports.
The silver bubble: there is a big difference with the tech bubble. Back in 2000, you could just go out and buy tech stocks, a lot of them, through online brokers who had just discovered the internet and lured people with low commissions.. But how about silver or gold? Yes, you can by the miners, but they are still lagging big time compared to the S&P / DJ companies. In fact, a lot of them are fundamentally still undervalued. No bubble here. And yes, you can buy the SLV & GLD, but are they in a bubble with the small market cap they have?
You have to understand that at the current stage, nothing can implode since wise people buy the physical! And you don't just sell your physical in 3-4 weeks. Physical is different from stocks since you own a tangible! In fact, I know a lot of people who own gold coins, given to them buy their grandparents who in turn have been holding it for decades!
Corrections? Yes, please! There are enough people who will start buying. For a bubble to burst, everybody who has the potential to buy must have bought, so that there is no buyer left. With gold and silver, we are still far far away from this point.