Gold-Oil Ratio Declines to Lowest Since 2008

The four precious metals didn’t do a lot price wise yesterday…and the rallies associated with the release of the FOMC minutes at 2:00 p.m. EDT got dealt with in the usual manner within the space of an hour.

Then Bernanke spoke…and shortly after 4:30 p.m. EDT, all four precious metals rallied into the 5:15 p.m. New York electronic close, with gold and silver leading the pack.  All four precious metals basically closed at, or very close to, their respective highs of the day.  In gold and silver, Kitco recorded those prices as $1,268.40 spot…and $19.69 spot.

Gold closed at $1,262.90 spot…up $12.20 on the day.  Net volume was pretty impressive…around 164,000 contracts.

Silver finished the Wednesday session at $19.47 spot…up 20 cents from Tuesday’s close.

Here are the platinum and palladium charts for yesterday…

For Wednesday, gold closed up 0.98%…silver was up 1.06%…platinum up 0.44%…and palladium was the winner, up 2.29%.

The dollar index closed late on Tuesday afternoon in New York at 84.64…and stayed around that level until exactly 10:00 a.m. Hong Kong time on their Wednesday morning.  From that point, the index developed a negative bias…and by 4:40 p.m. EDT, it had declined down to just barely above the 84.00 mark.  Then the bottom fell out for real…and the index dropped all the way down to the 83.09 mark by the N.Y. close…and kept right on going down after that.  The index finished down a chunky 155 basis points.

You should carefully note that all four precious metals began to rally significantly before the 5:15 p.m. EDT electronic close…and at that point in time, the dollar index wasn’t doing much of anything.  But once the gold market reopened forty-five minutes later at 6:00 p.m. in New York yesterday evening, the four precious metals blasted higher immediately…and the dollar fell off the proverbial cliff forty minutes later.  I’d sure like to know who knew what…and when…regarding the dollar/precious metals equation around that point in time, as something stinks.

Despite the fact that the dollar index declined for almost the entire New York trading session, the precious metals prices barely reacted and, obviously, neither did the shares.  The HUI chopped around either side of unchanged…and then popped a bit with the release of the FOMC minutes at 2:00 p.m. in New York…but that rally fizzled as the not-for-profit sellers showed up in the metals during the following hour of trading.  The shares rallied a bit going into the 4:00 p.m. EDT close as the precious metals rallied anew…but still finished in the red by a hair, as the HUI closed down 0.12%.

The silver stocks finished mixed…and Nick Laird’s Intraday Silver Sentiment Indexclosed down 0.55%.

(Click to enlarge)

The CME’s Daily Delivery Report showed that 1 gold and 116 silver contracts were posted for delivery on Friday within the Comex-approved depositories.  The two largest short/issuers were Jefferies…and JPMorgan Chase out if its client account…with 72 and 40 contracts respectively.  The only long/stopper of note was JPMorgan Chase with 103 contracts in its in-house [proprietary] trading account…and another 6 contracts for its client account.  Once again it appears that JPMorgan is trading against its own clients…something that the Volker Rule was written to prevent…and we all know what happened to that.  The link to yesterday’s Issuers and Stoppers Report is here.

Well, it obviously doesn’t matter whether the price of gold is rising or falling, as GLDhad another withdrawal again yesterday…albeit a small one.  This time it was ‘only’ 21,598 troy ounces.  But the surprise of the day/week was what happened in SLV…as an authorized participant[s] added a knee-wobbling 2,894,490 troy ounces.  Since the beginning of July, SLV has had 7.05 million troy ounces of silver deposited…and over at GLD the withdrawals for the month total 980,000 troy ounces as of the close of business on Tuesday.

After big withdrawals from the gold and silver ETFs over at Switzerland’s Zürcher Kantonalbank for the week ending June 28…their report for the week ending July 5 was far more positive.  They added a chunky 164,626 troy ounces of gold…along with 871,537 troy ounces of silver.

I see that the new short positions for the end of June for both GLD and SLV were posted on the shortsqueeze.com Internet site last night.  The numbers show that the short position in SLV increased by another 13.33 percent…and now sits at 20,946,300 shares/troy ounces held short…an increase of 2.5 million shares/ounces from the mid-June report.  This short position represents 6.21 percent of the outstanding shares of SLV.  Over at GLD, the short position only increased by a smallish 0.73 percent…about 21,000 troy ounces…hardly worth mentioning.

Once again there was no sales report from the U.S. Mint.

Over at the Comex-approved depositories on Tuesday, they reported receiving 49,922 troy ounces of gold…all into HSBC USA…but a very chunky 156,457 troy ounces was shipped out of Brink’s, Inc. The link to that activity is here.

In silver, these same depositories didn’t receive any, but did ship 446,507 troy ounces out the door.  The link to that action is here.

Once again I thank Nick Laird for these numbers…and for the 11-year chart below which shows total Comex gold stockpiles during the period.  The recent draw-downs are obvious…and I’m sure we would love to know where that gold has ended up.  China and Germany are the two obvious suspects considering the facts we have at hand, but the truth of the matter is that nobody knows for sure, as the gold market is totally opaque.  All any of us can do is speculate…and I try to avoid that.  I’ll leave that to others.

(Click to enlarge)

Maybe it’s just me, but it’s obvious from the above, that there are massive amounts of gold and silver being moved around at an ever-faster pace…and that’s just what’s being reported in the public domain.  You have to wonder what the reasons are…and who is behind it all.  The only thing that I do know for sure is that those that are doing it, have the deepest pockets on Planet Earth.

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About abwehra group

The Art&Science of Trading Gold
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