HOUSTON – The Commodity Futures Trading Commission (CFTC) released data for the disaggregated commitments of traders (DCOT) and Legacy “COT” reports for the week ending September 26, 2014. Our recap of the net positioning for large reporting futures traders is below, compared to the prior week’s data. Source: CFTC for COT data, Cash Market for gold and silver prices. The positioning and price data is as of the close of trade in New York on Tuesday, September 23, 2014. In the DCOT table above a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting “longer” and red figures are traders getting less long or shorter. All... Continue reading

Dan Popechu After the original drop in gold price from the top of $1,920 per ounce in 2011 to $1,180 per ounce in 2013, gold has started a sideways consolidation triangle pattern. Is this a correction, or is it just a pause within a move that will retrace the whole move since 2009? What does sentiment tell us? The gold market is a very opaque one and very hard to analyse. The amount of gold exchanging hands outside the markets is enormous. China seems to continue buying in a very discrete way and shows regularly, through speaches but also actions, that it considers gold at the core of its currency war, mainly with the United States. It’s interesting to notice that, recently, on every attack on the gold price to push it down, once the original move stops, almost every time momentum fails to take gold lower. This pattern doesn’t look to me as a correction into a bear market but more as a bottoming formation. Chart #1 : Spot Gold If we also look at the sentiment in the... Continue reading

GGR Comment: In our opinion an example of the real reason Venezuela repatriated its gold back to Caracas is the story below and many more like it that will be coming at them from the ICSID. Chavez didn’t want his gold confiscated by an international tribunal to pay aggrieved companies, after he expropriated these companies’ Venezuela assets and businesses. Gold Reserve says awarded $740.3 mln in Venezuela Brisas arbitration (Reuters) - The International Centre for Settlement of Investment Disputes (ICSID) determined Venezuela must pay U.S.-based miner Gold Reserve $740.3 million for terminating its Las Brisas gold concession, the company said on Monday. Socialist-run Venezuela in 2009 formally ended the concession in one of Latin America's largest gold deposits as part of a strategy to increase state control of key economic sectors. Gold Reserve then sought $2.1 billion in damages at the World Bank's ICSID for what it deemed an expropriation. "While the company is pleased with the award, it is less than the value of the Brisas project at today's gold and copper prices and Venezuela will substantially benefit from... Continue reading

Any serious silver investor knows that there was an attempt to break silver down through its implied support on Friday, Sep 19. In short term tick charts the sell raid took on a look something like this. Take a look at the COMEX open interest graph for silver futures below. The Key point here is that there is an extremely high open interest at the same time that silver is probing its implied lows. In essence there is an unusual amount of “paper metal” in the system. By the way, a COMEX open interest of 171,260 contracts is equivalent to 856,300,000 ounces of metal. (That's about $15.4 billion worth sold into the COMEX, mainly by traders and speculators who neither have the metal nor intend to have it in the future.) One more interesting graph before we get back on the road... Just since July 15, as silver declined $1.97 or 9.5% (from $20.67 to $18.70 measured on Tuesdays) Managed Money traders have, by doing their usual trend-following, gone from hugely net long (by 45,943 contracts) to report an unusual... Continue reading

The Shanghai International Gold Exchange Is Launched! Koos Jansen is an intrepid observer of the precious metals biz, especially in Asia. He writes: Where to begin. Much has happened this week in the Chinese gold market; on wednesday the Shanghai Gold Exchange (SGE) released multiple rule books written in English describing every detail on the workings of the SGE and its brand new subsidiary the Shanghai International Gold Exchange (SGEI). Finally the world can read everything about the Chinese exchange that is strongest force in the physical gold market, but was widely misunderstood because of the language barrier. Though having channeled unprecedented amounts of physical gold into China mainland the SGE has been enjoying little coverage in the mainstream media. Thursday September 18, at 8 pm GMT+8, in the Chinese night trading session, the SGEI was officially launched and started trading three physical gold contracts. On the next screen dump below we can see the first activities of the SGEI; iAu100g, iAu995, iAu9999 are SGEI physical gold contracts. The SGEI in the Shanghai Free Trade Zone facilitates physical gold trading... Continue reading

The Perth Mint's Bron Suchecki wrote on the 18th: This morning I recorded an interview with Al Korelin for his weekend show which should be up Saturday US time. Al talked about how bad the sentiment was in the gold market right now, the worst he has ever seen, and I'd have to agree. Having said that, I talked about the recent return of demand for gold kilobars from Asia. Premiums have come up off the floor and are moving up nicely. This caused me to have a look at the kilobar movements in COMEX warehouses (see here for background on this indicator), which are shown in the chart below What it shows is that deposits seem to line up with future price weakness, as bullion banks stockpile them when Asian demand is weak. The withdrawals of kilobars, certainly in January this year, foretold price strength but it is not as strong an indicator considering the late 2012/early 2013 ones. You can see that on the 2nd of September 5 tonnes came out of JP Morgan's warehouse and that doesn't... Continue reading

HOUSTON – The Commodity Futures Trading Commission (CFTC) released data for the disaggregated commitments of traders (DCOT) and Legacy “COT” reports for the week ending September 19, 2014. Our recap of the net positioning for large reporting futures traders is below, compared to the prior week’s data. Source: CFTC for COT data, Cash Market for gold and silver prices. The positioning and price data is as of the close of trade in New York on Tuesday, September 16, 2014. In the DCOT table above a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting “longer” and red figures are traders getting less long or shorter. All... Continue reading

Peter Schiff slices and dices the popular economic narrative in this brief, but worthy CNBC interview below. Continue reading

More from Michael Pento in a note to KWN... Wall Street powerhouse Goldman Sachs has recently reiterated its negative view on gold, which it has held for the past year. However, it is now doubling down on this view and advising clients to go short the metal. Jeff Currie, head of commodity research at Goldman, wrote, “Our target is really driven by the view that we think that the Fed will ultimately be the dominant force here and put more downward pressure” on gold prices. While I agree with Goldman that the Fed will be the dominant force behind the price of gold, I believe the central bank will soon be back into the quantitative easing business, rather than raising interest rates and crushing the dollar price of gold. Below is the reason why: Since President Nixon closed the gold window in 1971, gold has made an impressive move up from its fixed price of $35 an ounce to where it sits now around $1,250. But few seem to grasp what actually causes gold to move higher. An increase in... Continue reading

Michael Pento, Pento Portfolio Strategies writes: The deafening cacophony on Wall Street for the past six years has been since interest rates are at zero percent that there is no place else to put your money except stocks. For most, it just doesn’t matter that the ratio of Total Market Cap to GDP is 125 percent, which is 15 percent points higher than in 2007 and the highest at any time outside of the tech bubble at the turn of the century. Sovereign bond yields are at record lows across the globe and the strategy for most investors is to ignore anemic economic growth rates and just continue tow more money into the market simply because, “there’s no place else to put your money.” But the epicenter for this market’s upcoming earthquake will be in the FX market. The US dollar has soared since May due to the overwhelming consensus that while the Fed will be out of the QE business in October and raising rates in 2015, Japan and the Eurozone are headed in the exact opposite direction. The... Continue reading

This is the graph for the Managed Money shorts only. It goes with a comment in the public forum section of GGR. Comment the chart goes with: http://www.gotgoldreport.com/2014/09/speculator-insurance-shorts-and-swap-dealer-shorts-likely-to-spark-a-counter-rally-in-gold.html#comment-6a0120a6002285970c01b7c6df5fb2970b Continue reading

The CNBC set up for this brief video of Art Cashin of UBS reads: Discussing pressure in the commodity complex, and whether the market is headed into a deflationary cycle, with Art Cashin of UBS, and CNBC's Bob Pisani. CNBC Continue reading

Adam Hamilton writes for Zeal, LLC. He begins: Gold and silver have been pounded lower over the past month, contrary to their bullish seasonals. This selling pressure has come from the usual suspects, American futures speculators. They’ve been busy aggressively dumping gold and silver futures, particularly on the short side. But each time they pressed this bet in the past 15 months, gold soon surged higher. Shorts are bullish since they must soon be covered. Gold suffered its worst quarter in 93 years in 2013’s second quarter, a nauseating 22.8% loss. This was triggered by the Fed’s stock-market levitation, which sucked vast amounts of capital out of alternative investments. Gold plunged early in that catastrophic quarter when major support failed, and again later on Ben Bernanke’s initial QE3-taper scare. This naturally left gold sentiment overwhelmingly bearish. American futures speculators responded by betting heavily against gold and silver during that Q2’13 timeframe. And given gold’s once-in-a-century plunge, they obviously enjoyed great initial success. But even after gold decisively bottomed in late June 2013, this elite group of traders remained extremely bearish... Continue reading

HOUSTON – The Commodity Futures Trading Commission (CFTC) released data for the disaggregated commitments of traders (DCOT) and Legacy “COT” reports for the week ending September 12, 2014. Our recap of the net positioning for large reporting futures traders is below, compared to the prior week’s data. Source: CFTC for COT data, Cash Market for gold and silver prices. The positioning and price data is as of the close of trade in New York on Tuesday, September 9, 2014. In the DCOT table above a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting “longer” and red figures are traders getting less long or shorter. All... Continue reading

(Reuters) - European Central Bank President Mario Draghi, fresh from announcing a new batch of stimulus measures a week ago, urged governments to match the ECB's effort with investment and structural reforms to help the flagging euro zone grow. (GGR comment at end.) A day after incoming European Commission chief Jean-Claude Juncker unveiled his team, Draghi said it may also be useful to have a discussion about the overall fiscal stance of theeuro zone with a view to raising public investment where possible. Mario Draghi, President of the European Central Bank (ECB), addresses the media during the ECB's monthly news conference in Frankfurt, September 4, 2014. CREDIT: REUTERS/KAI PFAFFENBACH Draghi stressed that the ECB, which last Thursday cut interest rates to a fresh record low and launched a new scheme to push money into the euro zone economy, could not support the bloc alone. "My main message today is that only if structural, fiscal and monetary policies go hand in hand will the euro area see investment return," he said in remarks for delivery at the Eurofi Financial Forum in... Continue reading

Koos Jansen is a keen observer of the precious metals biz in Asia. He writes for BullionStar.com. Koos begins: Despite the fact the new Indian government, led by Narandra Modi since May, hasn't lowered the import duties on both gold and silver, Indians keep on buying precious metals. Despite the fact we already knew this, there was less gold being smuggled into the country and more imported through official channels last June; 77 tonnes were gross imported, which is up 48 % from a month earlier, and up 75 % from June last year. This was accompanied by falling premiums. Gross export in June accounted for 4 tonnes, according to India's customs department DGCIS. One of the import restrictions the Indian government implied on gold in 2013 was the 80/20 rule; of every amount of gold imported 20 % has to be re-exported. The gross amount exported in June falls short of the required 15.4 tonnes (20 % of 77 tonnes is 15.4 tonnes), meaning importers have some overdue obligations to be met in coming months. The other restriction on... Continue reading

HOUSTON – (Got Gold Report) -- Just a little “thinking out loud” on the Managed Money, what I call “insurance short” positions. Doing so shows a considerable amount of gun powder laying on a large wooden box of short covering dynamite, metaphorically speaking. That's because while The Funds piled on new shorts Swap Dealing banks hung onto most of their record high shorts. An imbalance is an understatement. See if you agree… Recall that as of August 12, with gold then $1309, Managed Money, aka, The Funds, held a smallish 21,930 short contracts for gold futures on the COMEX bourse. Recall that The Funds are trend followers that will generally continue to add to their positions in the direction of the trend until they “break” that trend (or it breaks of its own volition). Below is (are?)* the Managed Money data since July 8 for reference. Managed Money Disaggregated COT Data From August 12 to September 2 gold declined $44 or 3.4%. As it did, Managed Money traders increased their gross shorts on gold by 31,272 contracts or about 142%.... Continue reading

Jack Ewing reports for The New York Times ... Mario Draghi, the president of the European Central Bank, on Thursday stepped up pressure on countries like Italy to improve the climate for business. But he also said there was room for governments to use public spending to reinvigorate the stalled eurozone economy. Speaking in English in Milan, Mr. Draghi both amplified and clarified themes he raised last month during a speech in Jackson Hole, Wyo., in which he surprised many Europeans by appearing to step back from the E.C.B.’s longtime insistence that countries focus above all on reducing budget deficits and debt. According to a text of the speech, Mr. Draghi said government stimulus should come in the form of lower taxes, financed by cuts in “unproductive” government spending. Countries should remain within the deficit and spending limits that are a condition for eurozone membership, Mr. Draghi said. He made no mention of the French government’s admission this week that it will not meet its budget targets until 2017. But Mr. Draghi also suggested that countries that can afford it... Continue reading

Wayne Cole reports for Reuters Down Under... * Risk of hawkish Fed lifts dollar, Treasury yields * Commodities, carry-linked currencies among the losers * Asian shares mostly mark time, Tokyo aided by weaker yen SYDNEY, Sept 12 (Reuters) - The U.S. dollar was riding high in Asia on Friday as incessant speculation about the outlook for U.S. interest rates undermined commodity prices and unwound leveraged trades in higher-yielding currencies. Talk the Federal Reserve might take a hawkish turn at its policy meeting next week has seen U.S. Treasury yields steadily creep higher and injected new life into the dollar. (Image added by GGR. U.S. Dollar Index showing that the USD has gone parabolic to the upside. We believe it has overrun the fundamentals by a goodly measure and is due for a reversion to the mean, at the very least.) The article continued... This sudden outbreak of volatility has prompted some to pare back on carry trades, where they borrow at low rates in euros and yen to buy higher-yielding assets such as commodity-linked or emerging market currencies. Victims included... Continue reading