It was more back and forth with gold and silver today.
I thought I had already given a fairly complete overview of what I think is happening in the precious metals markets. Perhaps I need to repeat it with just a little embellishment.
And just for grins, although it does contain some satirical exaggeration just for effect, the cartoon to the right is pretty much how I conceive our current situation and the real economy. Our financial problems cut right to the bone of who we are and how we are conducting ourselves as a society.
We have just seen an historically significant decline in the precious metals in terms of days lower without relief. And we have seen a remarkable rise in the US dollar index against the Euro and the Swiss franc that cannot possibly be good for the real economy of the US, when every other developed nation is trying to devalue their currencies to stimulate their exports and inhibit imports.
I believe that a portion of the gold selling in particular is an effort to knock down the open interest in gold for December. Why? Because of the incredibly high ratio of open interest to deliverable gold, which I publish frequently and was among the first to do so, although Nick Laird is the data wrangler pre-eminent on this. If there was any serious attempt for holders of those contracts to stand for delivery, even JPM, which has been obviously building up its stores of gold to act as the ‘fixer’ in that market, would not be able to cover the demand.
JPM was consistently taking delivery for their house account in gold, and just transferred 70,000 ounces over from Nova Scotia’s warehouse, from whom they had been taking delivery.
This post was published at Jesses Crossroads Cafe on 11 NOVEMBER 2015.
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