Guest Post: The Gold Market- Part 2

The center of world gold trading is London, and the center of London gold and silver trading is the London Bullion Market, operated by the London Bullion Market Association (LBMA). Members are classified into market making members, which include all of the participants in the twice-daily London gold fix described in Part 1, as well as other bullion houses (for a total of 14), and ordinary members, of which there are about 50. Most bullion houses act both as brokers for customers, and as primary dealers who hold positions of their own in order to profit from the bid/asked spread or from equilibrium price movements.
Most gold trading takes place by paper transfers between unallocated accounts. Bookkeeping entries avoid the transactions costs and security risks of moving the actual metal. Traders clear their trades with one another through book entry transfers in or out of accounts at one or more clearing members, while clearing members clear their net trades with one another through their gold accounts at the Bank of England, as well as by physical gold transfers. [Read more...]

Bloomberg: London Gold Vaults Are Virtually Empty, All the Gold Has Been Transferred to Hong Kong!

goldIn this MUST WATCH clip, Bloomberg Industry’s Kenneth Hoffman shockingly reveals that London’s gold vaults arevirtually empty“:
“You could go into a vault in London a couple of years ago. The vaults were packed to the rafters with gold, and the gold would trade from me to you to somebody else. You can walk into those vaults today and they are virtually empty. All that gold (26 million ounces) has been transferred from London and has gone to Switzerland where it has been recast to higher grade formats and shipped off to Hong Kong and then to China never to return.
Hoffman discusses What’s Happening to All the Gold? openly on financial MSM below: [Read more...]

Gold & Silver Weekly Recap: A Breakout Week; Is GOFO Signalling an Impending Default at the LBMA?

This week saw a very important upward price breakout, reversing several key moving averages for the precious metals. This week’s recap also includes detailed discussion of the importance of key inventory supply indicators and negative GOFO rates.
Negative GOFO rates are all about an all-time-low LIBOR, combined with a mildly increasing Gold Lease Rate.  A GLR over 0.40% is nothing historic; therefore the “historic” negative GOFO rates are all about LIBOR’s historic lows along with some mild moves in the GLR.  I’m not saying a supply shortage does not exist.  All I’m saying is, negative GOFO rates aren’t “smoking gun” evidence of this with LIBOR at 0.39%.
Half the GOFO story is about historically low LIBOR rates, and the other half is about an increase in the Gold Lease Rate.  The next question is, what made the GLR rise? 

Perhaps its an impending default at the LBMA?
[Read more...]

Silver Update: LME & LBMA

empty COMEX vaultBrotherJohnF discusses Friday’s BLS metals smash, gold & silver’s technicals, and recent reports of 100 day delivery delays at the LME
in his latest Silver Update: LME & LBMA: [Read more...]

Andrew Maguire: Cyprus Was Straw That Broke the Camel’s Back- A Gold Default is Underway!

Cyprus gold defaultWhistle-blower and gold trader Andrew Maguire was on the latest Keiser Report, discussing last week’s gold and silver cartel take-down with Max Keiser.  Maguire, who CPM Group’s Jeffrey Christian once claimed was a figment of Bill Murphy’s imagination, states that a gold default is underway & states that The straw that broke the camel’s back was the Cyprus issue.

On physical gold vs. paper promised Maguire stated:
If you think you are a holder of bullion, and you happen to turn up and ask for that bullion and you’re told, I’m sorry, we don’t have that bullion, you will have to take cash instead.   Technically, that’s a default.  If you read through the LBMA’s fine print, technically you can be settled for cash, however, that’s not what most people think. 
You’ve either got something in your hand that you can klunk, or it’s paper.  I don’t trust the latter. 

Maguire’s full interview on the gold default underway is below: [Read more...]

Ned Naylor-Leyland: Silver Manipulation Story Will Go Mainstream in 2013, Price Will Break Free From Cartel Shackles!

silver break freeOur friend and Cheviot Asset Management’s Ned Naylor-Leyland joined Max Keiser in studio to discuss the cartel silver manipulation and whether Leyland sees an end to the manipulation in 2013.

Naylor-Leyland stated that: I will make a bold prediction, I think that contrary to all the evidence, I think they silver manipulation story will break in 2013The price will break free of it’s shackles, due to the fact that there’s a serious lack of physical silver within the bullion banking system, and I think we’re all going to be very happy this time next year!

If NNL is correct, 2013 will be the year that the silver manipulation story goes from tin-foil conspiracy theory to widespread MSM attention.

Full interview below: [Read more...]

Ned Naylor-Leyland: MSM Intentionally Ignoring Silver Manipulation Story

In the latest Keiser Report, Max Keiser talks to our friend Ned Naylor-Leyland of Cheviot Asset Management about the fishy smoke signals blowing at the LBMA regarding silver contracts and about the debate between inflation, deflation, hyperinflation actually being a debate about the final denouement of paper currencies. Ned also reveals that the LBMA is about ten times larger than the Comex and that BBC’s flagship program, Panorama, had interviewed him and Andrew Maguire about silver manipulation and yet have never aired the episode.

Full interview below: [Read more...]

Ned Naylor-Leyland: LBMA Smoke Signals Smell Fishy

Our friend Ned Naylor-Leyland has released a MUST READ letter regarding the implications of the LBMA’s decision to go dark on their reporting of the Silver Forward Lease Rate (SIFO) on Nov 2nd 2012.   Naylor-Leyland states the action by the LBMA smells fishy, and appears to be a smoke signal of increasing problems in the physical silver market.

Naylor-Leyland states: Bearing in mind that while this was going on there also has been near-frantic churning taking place between the COMEX and the SLV and reports of genuine trouble in size orders of silver being delivered by LBMA members, it seems to me that there are presently a lot of coincidences layering themselves all over the silver market.  God’s work perhaps…either way, these backwardation smoke signals are black as can be, and indicate that a move to much higher ground is imminent.

Naylor-Leyland’s Full note below: [Read more...]

LBMA Chairman: Chinese Gold Reserves Can Only Go One Direction: UP!

Chairman of the LBMA David Gornall told the conference, “When comparing China to the U.S., it would seem that in China, gold asset allocation can only go in one direction.  The country has only 2% of its reserves in the form of gold compared with the U.S. at 75%.” The People’s Bank of China hasn’t disclosed any changes to its gold holdings since 2009, when it said they had risen a whopping 76% to 1,054 metric tons. While the U.S., Germany, Italy and France keep more than 70% of reserves in gold, China’s share is less than 2%. “Prices have recently been supported by official sector buying,” Gornall said today, without listing any central bank. “Will the gap between the amount of gold held in reserve by the developing markets and that of the developed world close?” Brazil, South Korea and Russia have all added gold reserves this year data from the International Monetary Fund show. Nations bought 254.2 tons in the first six months and may increase to 500 tons this year, the World Gold Council said in August, exceeding the 456 tons added in 2011. China has the world’s largest foreign-exchange reserves, totaling $3.29 trillion in September, according to data by Bloomberg. [Read more...]