Thursday, September 29, 2011

Amateurism?

Wednesday’s CME Final reported that on volume of 245,205 lots, 12.11% above estimate, open interest dropped 4,396 lots - 13.67 tonnes, to 461,018 lots. This total is actually some 21,000 lots below the level of open interest reported on Wednesday which was said to be 482,089 contracts. If accurate, open interest would be down to the lows seen in February.

On Wednesday gold continued to slump all day from it’s up $19.50 high in the Dec contract seen around 3-15 AM NY time. Having settled down $34.40 at $1,618.10, gold lost another $4.45 by 4PM to stand 2.27% below Tuesday’s stock market closing level. Silver on this basis was down 6.79%. Estimated volume was 191,073 lots.

Gold shares slid all day and closed close to their lows. The HUI finished down 4.45% and the XAU down 4.59%. The GDX/GDXJ ratio was, surprisingly, only moderately unfavorable to speculative golds at (4.43%)/(5.85%).

PHYS slipped to a 2.65% premium to NAV and CEF to 1.3% (Tuesday 3.08% and 1.8%). The GLD ETF reported no change in stated gold outstandings at 1,241.91841 tonnes.

MarketVane’s Bullish Consensus for gold slipped 2 points to 62% as did silver’s to 53%. The HGNSI jumped 13.3 points to +7%.

On Thursday morning local Vietnam gold stood at a $105.68 premium to world gold of $1,606.10 (Tuesday $83.45/$1,642.60).

This evening Dec gold made a low around $33.10 about 8-30 PM NY time and has since been rising. CME volume at some 5-20 AM NY was 55,000 lots.

The short interest is of course well financed with the decline of the last few days. Nevertheless, driving gold down in the late NY day ahead of the Asian open smacks of amateurism. Certainly of malign intent.

***

http://english.vietnamnet.vn/en/business/13546/domestic-gold-prices-get-chaotic--controlled-by-big-enterprises.html

Standard Bank comments today:

"Although buying interest out of India has been particularly

strong, support is broad-based throughout Asia, with physical

demand in places like Thailand and China also rising. At the

same time, gold scrap sales, though present, have been sporadic

rather than consistent.

Y/y, current buying momentum is much stronger than the respective

comparable period in 2009 and 2010."

Shanghai gold closed at a premium of $8.53 to world gold of $1,623.82 on volume equivalent to 13,611 NY lots (Wednesday $11.87/$1,658.05). The Yuan was backed down to a 6.68% post $US "depegging" appreciation (Wednesday 6.8%). Business in southern China was severely impeded today by a powerful typhoon.

On volume equivalent to 18,324 NY lots TOCOM saw open interest fall by 3.251 tonnes (1,045 NY lots). The public’s net long was static although they cut both long and short by about 1.5 tonnes. The active contract closed down 47 yen and world gold rose some $44 during the session to go out $18.20 above the NY 4PM level.

After making a low of down $23.10 around 8-40PM NY last night Dec gold proceeded to make a high up $19.80 around 3-50 AM, and has since been trading roughly sideways. Rumors abound of difficulties at the Paulson funds. The market does seem to reflect forced liquidation but the professionalism JBGJ knows to be embodied at Paulson is strangely lacking.

Perhaps they have been obliged to deal with Goldman Sachs.

Thursday, September 29, 2011

A forced seller?

The CME Final for Wednesday reports that on volume of 245,204 lots, 28.35% or 54,000 lots above estimate, open interest crashed 12,112 lots – 37.67 tonnes or 2.63% to 453,302 contracts. Gold of course was down 2.1% at the floor close and 2.27% at the stock market close.

Yesterday’s action therefore appears to have been a case of long liquidation, possibly distressed. JBGJ is still puzzled by the sudden unacknowledged evaporation of some 16,000 lots of open interest between Tuesday and Wednesday. The reported open interest is the low for 2011.

Indian ex-duty premiums: AM $22.20, PM $6.75, with world gold at $1,617.65 and $1,620. 25. Very ample for legal imports. The rupee closed down 0.4% at $1= R48.97 but the stock market closed up 1.53%.

As noted earlier, local Vietnam gold stood at a $105.68 premium to world gold of $1,606.10 today (Wednesday $83.45/$1,642.60). Further testimony to the fact that Vietnam is having a gold rush is at