Gold was pushing $1230/oz overnight, as the methodical take-down of
gold and silver in the NYC and London paper markets has triggered an
avalanche of demand for physical gold in the eastern hemisphere.
Last night ex-duty import premiums in India were $14 over spot gold.
In Shanghai the premium to world gold was $9.76. Delivery volume into
the Shanghai Gold Exchange rocketed to an extraordinary 86.55 tonnes (it
was 35.9 tonnes on Wednesday). The open interest on the SGE was 807
tonnes. To one observer’s recollection, John Brimelow of John
Brimelow’s Gold Jottings, this is the first time the open interest has
been over 800 tonnes.
In Vietnam the premium paid by the public was $90 over world gold.
The spread has been wider over the last 15 years, but not much and only
during times when there’s been high “backwardation” between the
physical delivery bullion markets in the east vs. the fraudulent paper
gold markets in London and NYC.
To reinforce this nebulous idea of gold flowing from west to east,
and unusually high amount of gold was shipped out of the Comex kilo bar
vaults yesterday. 320,434 ozs left the Comex. Over 12,000 kilobars
have left JP Morgan’s kilobar vault account in the last two days. This
is being attributed as evidence of Asia’s voracious demand right now, as
NY and London – when those two conduits actually clear real metal –
trade 400oz LBMA grade bars whereas Asia prefers kilobars.
The price of gold is being attacked right now in a manner that is
quite reminiscent of the way it was attacked in the summer of 2008,
right before the global financial markets collapsed, led by the fall of
Lehman.
Something really ugly is coming toward the global economic and
financial system. The dollar index soared from 72 to 86 between June
2008 and October 2008, while gold and silver were systematically taken a
lot lower. We know how that played.
Similarly, the dollar has gone parabolic in the last week without any
visible news or events that would have triggered this move. Too be
sure, if Trump implements his borrow and spend program for
infrastructure projects, the Fed will have to print a lot of money to
monetize the avalanche of Treasury debt issuance, given that the rest of
the world is now dumping their Treasuries.
Both of those factors should be dollar-bearish and gold-bullish. In good time, that’s how this will play out.
In the latest episode of the Shadow of Truth, we discuss the
extraordinary “backwardation” that has developed in the price of gold
between the west and the east. We also discuss evidence of the ongoing
collapse in the U.S. economy.
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Dave Kranzler spent many years working in various Wall Street jobs. After business school, he traded junk bonds for a large bank. He has an MBA from the University of Chicago, with a concentration in accounting and finance, and graduated Oberlin College with majors in Economics and English. Dave has nearly thirty years of experience in studying, researching, analyzing and investing in the financial markets. Currently he co-manages a precious metals and mining stock investment fund in Denver and publishes the Mining Stock and Short Seller Journals. Contact Dave at dkranzler62@gmail.com.
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Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.
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The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
