Harvey Organ: Backwardation in Gold is Incompatible With Massive Raid on Gold!

The 6th month GOFO rate has entered backwardation
The backwardation in gold is incompatible with the raid on gold .   It does not make any economic sense.
Lets head immediately to see what the data has in store for us today: 

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Submitted by Harvey Organ: 

HarveyOrgan1

I would like to thank you for your patience.

Gold: $1158.90  down $3.90
Silver: $15.62  down 5 cents

In the access market 5:15 pm

Gold $1163.00
silver $15.70

Gold and silver did not have a good day today price wise as the bankers generally will not let momentum build. They rarely allow a two or three day runup in the precious metals.

The bankers came to work early in London knocking both metals down but gold/silver rebounded as we approached the comex and the 2nd London fix where gold reached its zenith and then it was downhill from there..(strictly a paper market)

The gold comex today had a poor delivery  day, registering  0 notices served for nil oz.

Silver registered 0 notices for nil oz.
A few months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 255.02 tonnes for a loss of 48 tonnes over that period. .

In silver, the open interest rose considerably despite Tuesday’s constant price.  It looks like we have a few nervous shorts in silver racing against the clock to cover some of their shortfall!! The total silver OI  remains extremely high with today’s reading  at 170,684 contracts.
The big  December silver OI contract lowered to 91,419 contracts which is to be expected with a normal contraction as some of the paper longs move to March..

In gold we had a small loss in OI despite yesterday’s rise in price of gold to the tune of $3.10 . The total comex gold  OI rests tonight quite elevated at 443,422 for a loss of 442 contracts. The December  gold OI rests tonight at 246,126 contracts which is also quite elevated for this time in the delivery cycle.

Today, we had a big withdrawal of gold Inventory at the GLD of 1.7900 tonnes/ inventory rests tonight at  722.67 tonnes.

In silver,  the SLV inventory had no change.

SLV’s inventory  rests tonight at 344.888 million oz.

.

We have a few important stories to bring to your attention today…

Let’s head immediately to see the major data points for today.

First: GOFO rates: move  deeper in backwardation!!

OH!!! OH!!

All months basically moved deeper into backwardation and all months moved into the negative direction..

Now, the first 4 month GOFO rates moved  deeply into the negative with the 6th month GOFO just entered  backwardation..  On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates.

It looks to me like these rates even though negative are still fully manipulated.

London good delivery bars are still quite scarce.

The backwardation in gold is incompatible with the raid on gold . It does not make any economic sense.

Nov 12 2014

1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate

-.2025%                  -0.1475%               -0.0950%          – .0000%          + .11500%

Nov 11 .2014:

1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate

.185% +          -.1275%                  +-.0800%           +.00500 %      + .120%

end

Let us now head over to the comex and assess trading over there today,

Here are today’s comex results:

The total gold comex open interest fell by a tiny  margin of 422 contracts from  443,864 down to 443,422 with gold up  $3.10 yesterday. The bankers still seem quite confused as  to the huge increase in oI for gold and a thus a reason to whack again.  The front delivery month is November and here the OI actually rose by 3 contracts We had 0 delivery notices filed on Monday so we gained 3 contracts or  300 additional gold ounces will stand for the November contact delivery month. The big December contract month  saw it’s Oi fall by 7880 contracts down to 246,126 which is a normal contraction. Most of the  December longs sold rolled into February.  The estimated volume today was fair at 142,742.  The confirmed volume yesterday was very good at 219,637. Strangely on this 10th day of notices, we had zero notices filed for nil oz.

And now for the silver comex results.  The total OI rose nicely  by another 333 contracts from  170,351 up to 170,684 even though silver was unchanged yesterday. It seems that judging from gold’s OI, our banker friends are still very nervous as they continue to cover their massive shortfall in silver.   In ounces, this represents a total of 853 million oz or 121.8% of annual global supply.  We are now in the non active silver contract month of November and here the OI fell by 12 contracts down to 112. We had 12 notices filed on yesterday so we neither  gained nor lost any silver contracts that will  stand for the November contract month.  The big December active contract month saw it’s OI fall by 4250 contracts down to 91,419.  This is slightly below normal contraction of around 5,000 contracts.

The December contract month remains highly elevated for this time in the delivery cycle.  In ounces the December contract  is represented by 457 million oz or 65.2% of annual global production  (production = 700 million oz – China). The estimated volume today was fair at 34,179.  The confirmed volume yesterday  was huge at 54,838. We also had 0 notices filed  today for nil oz.

Data for the November delivery month.

November initial standings

Nov 12.2014

Gold

Ounces

Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz 3225.05 oz  (includes 7 kilobars(Scotia,Manfra)
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz nil oz
No of oz served (contracts) today   0 contracts(nil oz)
No of oz to be served (notices) 29 contracts (2600 oz)
Total monthly oz gold served (contracts) so far this month  10 contracts  (1000 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month    80,623.1  oz

Total accumulative withdrawal of gold from the Customer inventory this month

 517,442.7 oz

Today, we had 0 dealer transactions

 

total dealer withdrawal:  nil   oz

total dealer deposit:  nil oz

we had 2 customer withdrawals:

i) Out of Scotia;  3,000.000  oz  ??? how could this be possible/not even kilobars as not divisible by 32.15 oz

ii) Out of Manfra;  225.05 oz  (7 kilobars)

total customer withdrawals : 3225.05   oz

we had 0 customer deposits:

 

total customer deposits : nil  oz

We had 0 adjustments:

Total Dealer inventory: 868,910.561 oz or   27.02 tonnes

Total gold inventory (dealer and customer) =  8.200 million oz. (255.07) tonnes)

Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 48 tonnes have been net transferred out. We will be watching this closely!

Today, 0 notices was issued from  JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts  of  which 0 notices were stopped (received) by JPMorgan dealer and 0  notices were stopped by JPMorgan customer account.

To calculate the total number of gold ounces standing for the November contract month, we take the total number of notices filed for the month (10) x 100 oz to which we add the difference between the OI for the front month of November (29) – the number of gold notices filed today (0)  x 100 oz  =  the amount of gold oz standing for the November contract month.

Thus the  initial standings:

10  (notices filed today x 100 oz +   (29) OI for November – 0 (no of notices filed today) = 3900 oz or .1119 tonnes.  We lost 1700 oz of gold standing for the November contract month.

 And now for silver:

Nov 12/2014:

 November silver: initial standings

Silver

Ounces

Withdrawals from Dealers Inventory  nil oz (Scotia)
Withdrawals from Customer Inventory 185,515.53 oz
(CNT,Brinks,Scotia)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory nil
No of oz served (contracts) 0 contracts  (nil oz)
No of oz to be served (notices) 110 contracts (550,000 oz)
Total monthly oz silver served (contracts) 124 contracts (620,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  183,382.9. oz
Total accumulative withdrawal  of silver from the Customer inventory this month 4,238,502.3 oz

Today, we had 0 deposits into the dealer account:

 total dealer deposit: nil oz

we had 0 dealer withdrawal:

total  dealer withdrawal: nil  oz

We had 3 customer withdrawals:

i) Out of CNT:  993.10 oz

ii) Out of Brinks:  124,507.43 oz

iii) Out of Scotia;  60,015.000 oz  ?????  how could this be possible  (x.000 oz)

total customer withdrawal  185,515.53  oz

 

 

We had 0 customer deposits:

total customer deposits: nil      oz

we had 0 adjustment

Total dealer inventory:  66.200 million oz

Total of all silver inventory (dealer and customer)   179.442 million oz.

The total number of notices filed today is represented by 0 contracts or nil oz.  To calculate the number of silver ounces that will stand for delivery in November, we take the total number of notices filed for the month (124 ) x 5,000 oz to which we add the difference between the total OI for the front month of November(110) minus  (the number of notices filed today (0) x 5,000 oz =   the total number of silver oz standing so far in November.

Thus:  124 contracts x 5000 oz  +  (110) OI for the November contract month – 0 (the number of notices filed today)  = amount standing or 1,170,000 oz of silver standing.

we neither gained nor lost any silver standing.

It looks like China is still in a holding pattern ready to pounce when needed.

end



The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.

There is now evidence that the GLD and SLV are paper settling on the comex.



***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold.  I can visualize demand coming to the buyers side:


i) demand from paper gold shareholders

ii) demand from the bankers who then redeem for gold to send this gold onto China

 

vs no sellers of GLD paper.

 

 

And now the Gold inventory at the GLD:

 

Nov 12.2014; we lost another 1.79 tonnes of gold at the GLD/Inventory at 722.67 tonnes

This gold left the shores of England and landed in Shanghai.

 

 

Nov 11.2014: we lost another 0.900 tonnes of gold at the GLD/Inventory 724.46 tonnes

Nov 10. we lost another 1.79 tonnes of gold at the GLD/Inventory 725.36 tonnes

Nov 7 wow!! we lost another huge 5.68 tonnes of gold at the GLD/inventory 727.15 tonnes

Nov 6.2014: we had another huge withdrawal of 2.99 tonnes of gold. Inventory 732.83 tonnes

This gold is also heading to Shanghai.  If I was a shareholder of GLD I would be quite concerned as there will be no real gold inventory left per outstanding shares.

Nov 5 we had another huge withdrawal of 3.000 tonnes of gold.  This gold will be heading to Shanghai/GLD inventory 735.82 tonnes

Nov 4.2014: a huge withdrawal of 2.39 tonnes of gold/GLD inventory/738.82 tonnes

Nov 3.2014: no change in gold inventory at the GLD/741.21 tonnes

Oct 31.2014: no change in gold inventory at the GLD despite the raid/inventory at 741.21 tonnes

October 30.2014: we had another 1.2 tonnes of gold leave the GLD and heading to Shanghai/Inventory 741.21 tonnes

October 29.2014: we had another .99 tonnes of gold removed from the GLD/inventory 742.40 tonnes

Oct 28.2014: we had another withdrawal of exactly 2 tonnes of gold heading to Shanghai;  Inventory 743.39 tonnes

Oct 27.2014: no change in gold inventory at the GLD/inventory 745.39 tonnes.

 

Oct 24.2014: a huge withdrawal of 4.48 tonnes of gold at the GLD/Inventory 745.39 tonnes.  This gold is heading to friendly territory: namely Shanghai.

 

Oct 23.2014: no change in gold inventory at the GLD/Inventory at 749.87 tonnes.

 

Oct 22.2014: we lost another 2.1 tonnes of gold at the GLD. Inventory rests at 749.87 tonnes.  This tonnage no doubt is off to Shanghai.

 

Oct 21.2014: no change in inventory/GLD inventory rests tonight at 751.96 tonnes.

 

Today, Nov 12. a big withdrawal of 1.7900 tonnes   gold inventory   at the GLD

inventory: 722.67 tonnes.

The registered  vaults at the GLD will eventually become a crime scene as real physical gold  departs for eastern shores leaving behind paper obligations to the remaining shareholders.   There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat  (same banks).

GLD gold:  722.67 tonnes.

end

 

 

And now for silver:

 

Nov 12.2014: no change in silver inventory at the SLV/inventory rests tonight at 344.888 million oz.  And please note that gold leaves GLD/silver does not.  Why? there is no physical silver at the SLV..just paper obligations.

Nov 11.2014: no change in silver inventory at the SLV/inventory rests tonight at 344.888 million oz.

Nov 10/ we had an addition of 1.438 million oz of silver into inventory at the SLV/Inventory 344.888 million oz  (again note the difference between gold and silver)

Nov 7/ 2014/no change in silver inventory/inventory rests at 343.45 million oz.  (please note the difference between silver (SLV) and gold  (GLD)

Nov 6.2014: no change in silver inventory/(as of 6 pm est) inventory rests at 343.45 million oz.

Nov 5  today, the total silver inventory drops of 2.074 million oz/SLV inventory: 343.45 million oz

Nov 4.2014: wow!! we had another addition of 1.151 million oz of silver inventory/SLV inventory rises to 345.524

Please note the difference between GLD and SLV.  The GLD has physical gold to send on its way to Shanghai/SLV has no silver to offer to the participants to give to various players..

Nov 3.2014:  this is good news:  the “actual silver inventory” rose by 958,000 oz to 344.373 oz

(I guess there is no physical silver to raid from the SLV vaults:)

October 31.2014: despite the huge raids yesterday and today:  no change in silver inventory at the SLV/inventory at 343.415 million oz

October 30.2014; no change in silver inventory at the SLV/inventory at 343.415 million oz

October 29.2014 no change in silver inventory at the SLV inventory/343.415 million oz

October 28.2014: no change in silver inventory at the SLV/Inventory at 343.415 million oz

Oct 27.2014: no change in silver inventory at the SLV

 Today, Nov 12..2014: we have no change in silver inventory /inventory 344.888 million oz

end

And now for our premiums to NAV for the funds I follow:

Note:  Sprott silver fund now deeply into the positive to NAV

Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)

1. Central Fund of Canada: traded  at Negative 10.6% percent to NAV in usa funds and Negative   10.3% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold  61.8%

Percentage of fund in silver:37.60%

cash .6%


( Nov 12/2014)   

2. Sprott silver fund (PSLV): Premium to NAV falls to positive 3.90% NAV (Nov 12/2014)  

3. Sprott gold fund (PHYS): premium to NAV  falls to negative -0.77% to NAV(Nov 12/2014)

Note: Sprott silver trust back hugely into positive territory at 3.90%.

Sprott physical gold trust is back in negative territory at  -0.77%

Central fund of Canada’s is still in jail.

 

 

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