January 26, 2016

This Might Not Be Good

Here is something that may or may not be something.
But it's something to ponder before bed....
On Jan. 25, a new update from the Comex vaults shows a massive decline in registered physical gold assigned for potential deliveries, making the number of paper contract claims against that gold a record 542 to 1. 

Sleep well.

Posted by: The Brickmuppet at 10:11 PM | Comments (3) | Add Comment
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1 I don't know enough about that particular speculative market to understand why this is significant. All it says to me is that there are a lot of options out there.

Posted by: Steven Den Beste at Wed Jan 27 00:14:50 2016 (+rSRq)

2 I don't either, but if I'm reading it right, it turns out that one of the big gold depositories in the U.S. was revealed to have 542 vouchers for an ounce of gold for every ounce of actual gold they have. That seems...bad.

Posted by: The Brickmuppet at Wed Jan 27 06:24:40 2016 (AaBUm)

3 If I understand that article, there is an exchange, where the entities that own large stocks of gold make them available for trade, and then the exchange allows trade at a multiple of the gold actually available, on the assumption that almost all trades are just paper and the actual gold is never delivered.  Sounds iffy, but it's standard commodity market so far.  But then, one of those depositors says "I'm taking my large stockpile out of the exchange" with little or no advance warning period to shrink down the open paper.  That seems scary.  Even if this instance is benign, what's to prevent somebody like China from doing that a strategic time, followed by other moves to force calls on the paper?

Posted by: David at Wed Jan 27 14:02:17 2016 (V4nC5)

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