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Redemptions In The GLD Are Bullish For Gold

Tyler Durden's picture





 

Submitted by Eric Sprott & Etienne Bordeleau of Sprott Asset Management,

Recent outflows from physical gold exchange traded products (we use the SPDR Gold Shares, GLD) have been interpreted by the financial press as a sign of weakness in the demand for gold as an investment vehicle.

However, a closer look at the evidence suggests otherwise: the largest outflows in the history of the GLD (see Figure 1) started well before the large drop in the price of gold we observed on April 15th, 2013 (-9%, which represents a 1 in 11 years event). In fact, the net redemption of shares of GLD started as early as the second week of January 2013 (on a 3-month cumulative rolling basis). In this note, we will explore the theory that it was the shortage of physical gold and the ensuing arbitrage opportunity that drove market participants to redeem shares of GLD.

So why are the bullion banks that act as Authorized Participants for GLD, a group that includes JP Morgan and HSBC and others (who by-the-way were mostly bearish on gold leading to the April Crash), redeeming so many shares of GLD?

One explanation could be that they are trying to match supply and demand so that the net asset value (NAV) of the ETF is in line with its price. Historically, we have observed that large movements in and out of the GLD are associated with large discounts/premiums to NAV (Figure 2). This is due to the constant creation/redemption of the shares to minimize the discrepancies between the ETF share price and the NAV. However, the recent wave of redemptions has occurred even while the premium to NAV has been very stable, hovering around 0% for most of the year.

FIGURE 1: FLOWS IN THE GLD (TONNES) - 3 MONTH ROLLING BASIS
fig1.gif
Source: SPDRgoldshares.com and Sprott Calculations.
Last Observation: May 28, 2013 (Week 22).

 

FIGURE 2: GLD PREMIUM TO NAV AND GOLD FLOWS
fig2.gif
Source: SPDR Gold Trust, Sprott Calculations.
Note: Large flows are defined as weeks where the average % change in tonnes lies in the top or bottom 10% of its distribution (i.e. tail events). 

We believe that the answer lies in the discrepancy between the paper and physical markets for gold. Over the past few months, there have been rumours of bullion bank customers unable to redeem their gold. While, at the same time, physical demand in Asia has been extremely strong this year. According to the World Gold Council (WGC), Indian imports should reach 230-400 tonnes in Q2 2013 (an increase of more than 200% year-over-year) and imports from China keep breaking records (the WGC now forecasts total Chinese imports of 880 tonnes for 2013).

This is reflected in the large premium customers in these markets pay over the “London Fix”, the price one should be able to get for physical gold. One way to measure the extent of the demand imbalance for physical gold in Asia is to look at what has been termed the “Shanghai Premium”, which is the difference between the quoted physical gold price on the Shanghai Gold Exchange and the London Fix gold price. Figure 3 above shows a weekly time series of the Shanghai premium in USD/oz. of gold. Since the beginning of the year, the Shanghai premium has been consistently above zero and historically large, reaching more than $50 per oz.

FIGURE 3: SHANGHAI PREMIUM (GOLD, $/OZ)
fig3.gif
Source: Bloomberg. Last Observation: May 28, 2013 (Week 22).
Definition: Shanghai Gold Exchange Au9999 Gold (USD) minus London Gold Market Fixing Ltd - LBMA AM Fixing Price/USD.
“The Shanghai Premium is calculated on a weekly basis. Formula: (SHGF9999 Index * CNYUSD Curncy * 31.1g/oz) - GOLDLNAM Index”. 

Putting the pieces together

It is clear that demand for physical gold in Asia is strong and that the price of gold in these markets is well above the “Western” price. This creates arbitrage opportunities for market participants that have access to large and cheap quantities of physical gold in the West. The bullion banks happen to be the only ones able to redeem GLD shares for gold, and the GLD, with its 1,000 tonnes of inventory, acts like a large physical gold bank.

FIGURE 4: SHANGHAI PREMIUM ($/OZ) AND GLD FLOWS
fig4.gif
Source: Bloomberg, SPDR Gold Trust, Sprott Calculations. 
Note: Shanghai Premium shown as a 3-month Moving Average GLD flows are rolling cummulative flows over 3 months 

According to the GLD prospectus, the bullion banks can create or redeem units for as little as 10bps (0.10%). Even with transport and insurance costs (which are arguably lower for large transactions and large international banks), there is a clear arbitrage opportunity for the bullion banks when the Shanghai premium (or any other physical gold price premium in emerging markets) is as large as it has been recently.

Moreover, because of the intense demand for physical gold we have seen so far this year, it is very probable that the bullion banks themselves are in a shortage of physical gold, hence the need to use the GLD reserves.

Indeed, since 2005, there has been a strong negative correlation between GLD flows and the Shanghai Premium (-53%) (Figure 4 above). This means that large outflows (redemptions) from the GLD are typically associated with high premiums in the Shanghai gold market. This association has been particularly marked since the beginning of the year, with historically large outflows corresponding to an all-time high in the Shanghai premium.

To conclude, the evidence presented here suggests that, contrary to what has been stated in the financial press, the flows out of the SPDR Gold Trust may have been generated by the bullion banks to take advantage of an arbitrage opportunity in the physical market. This arbitrage opportunity occurred because of the intense demand for gold stemming from Asia and the inability of traditional suppliers to provide this gold (hence the large Shanghai premium). We believe that this activity further supports our hypothesis that there is a lack of availability of physical gold and an obvious dislocation between the physical and paper gold markets.

In these conditions, it is not hard to imagine that prior to April 15, the bullion dealers, with their large resources, were tempted to sell large amounts of gold futures in order to lower the spot price and make the arbitrage even more profitable by increasing the spread and sparking a tsunami of buying in Asia.

To us, this is clearly a bullish signal for gold.

 


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Tue, 06/04/2013 - 12:52 | Link to Comment SheepDog-One
SheepDog-One's picture

Come onnnnn POMO!! We're all counting on you!

Tue, 06/04/2013 - 12:53 | Link to Comment Dear Infinity
Dear Infinity's picture

Never a bad tuesday! CompareGoldPrices.com also supports this theory, look at the charts, the premiums are consistently higher with every spike lower. 

Tue, 06/04/2013 - 12:59 | Link to Comment LawsofPhysics
LawsofPhysics's picture

No shit, what's the breaking point?  That is what matters.

Tue, 06/04/2013 - 13:05 | Link to Comment Enslavethechild...
EnslavethechildrenforBen's picture

I have 500 trillion shares of GLD that I will gladly sell to you for $100 each. Just let me plug in my Xerox...

Tue, 06/04/2013 - 13:08 | Link to Comment LawsofPhysics
LawsofPhysics's picture

all paper going to zero, got it.

Tue, 06/04/2013 - 13:14 | Link to Comment Pareto
Pareto's picture

Good one +1 In the sprit of ZH: "On a long enough timeline, the survival rate for all fiat drops to zero."

Tue, 06/04/2013 - 13:18 | Link to Comment Spider
Spider's picture

What else is bullish for gold?  The shutdown of the largest gold mine in the world for at least 3 months...

http://seekingalpha.com/article/1476581-biggest-gold-mine-in-the-world-shutdown-is-this-the-catalyst-gold-has-been-awaiting?v=1370359360&source=tracking_notify

 

 

Tue, 06/04/2013 - 13:27 | Link to Comment negative rates
negative rates's picture

No shit sherlock, now he wants to talk about separation of PM's ponzi's.

Tue, 06/04/2013 - 13:36 | Link to Comment Thisson
Thisson's picture

Not really.  The rate of gold production has a very minor impact on the price of gold, since gold is not consumed.  Mine shutdowns are more meaningful when discussing other commodities, such as Silver, which are actually consumed.

Tue, 06/04/2013 - 16:15 | Link to Comment freet0pian
freet0pian's picture

Does this happen to be your etf you're spamming me with? Cause if it is you're liable to refund my coffee.

http://i42.tinypic.com/15n7spx.jpg

http://i40.tinypic.com/b62ekh.png

 

 

Tue, 06/04/2013 - 13:19 | Link to Comment SRSrocco
SRSrocco's picture

I posted this link in another thread, but this may be an appropriate place to put it.  It looks like the Chinese are taking advantage of the lower price of silver since the take-down on April 12th:

Shanghai Silver Stocks Decline Substantially after Price Take-down
Tue, 06/04/2013 - 13:39 | Link to Comment Chaffinch
Chaffinch's picture

+1 and thanks for that link Steve!

I find it interesting that even with the availability to the bullion banks, as Authorised Participants, of the gold held within GLD, the Shanghai Premium graph is still looking like a hockey stick in the making!

I suspect that in, addition to arbitrage, they are using the gold within GLD to keep topping up the gold in the Nymex warehouses, to keep the balance at 8,000,000 ounces. It will be interesting to see if they lower the bar to another obvious round number target, like 7,000,000 ounces, then 6,000,000 ounces, and so on, as the pressure builds.

Tue, 06/04/2013 - 13:37 | Link to Comment Thisson
Thisson's picture

This is econ 101: when price falls, more is purchased by customers.  But it is a nice confirmation that we're not in some momementum-driven bubble.

Tue, 06/04/2013 - 13:30 | Link to Comment TheEdelman
TheEdelman's picture

POMO v. GOLD on Turbo Tuesday

This is intense. 

Tue, 06/04/2013 - 14:09 | Link to Comment mattdubz86
mattdubz86's picture

looks like the NFP # was leaked super early ;)

Tue, 06/04/2013 - 14:19 | Link to Comment GVB
GVB's picture

Eric Sprott is the man. When he says something, at least he comes up with solid figures rather than guessing. For example this "Nouriel Roubini" found it necessary on Monday to "predict" gold to go below $1000. Try to google this guy and you'll see the google auto fill option to automatically associate this man's name with "wrong". Says enough. 

Tue, 06/04/2013 - 15:54 | Link to Comment machineh
machineh's picture

His figures seem solid enough (Figure 4) for the correlation between the Shanghai premium and GLD flows.

But where is the model showing the correlation between high physical premium and the subsequent PRICE?

Nothing presented here substantiates his claim that today's physical premia (and GLD outflows) are bullish for the gold price.

SHOW ME THE TRADING PROFITS.

 

 

Tue, 06/04/2013 - 15:21 | Link to Comment Ruffcut
Ruffcut's picture

It has to do with benny's paper, taper caper, too.

Paper gold is not gold. Can't drive my paper car or live in my paper house.

Can't wait for more shitty paper food. More like cardboard.

Tue, 06/04/2013 - 12:53 | Link to Comment MFLTucson
MFLTucson's picture

Moreover, because of the intense demand for physical gold we have seen so far this year, it is very probable that the bullion banks themselves are in a shortage of physical gold, hence the need to use the GLD reserves.

 

This is otherwise known as theft and most likely what is happening in the fraud capital (Wall Street) of the world.

Tue, 06/04/2013 - 13:01 | Link to Comment Canadian Dirtlump
Canadian Dirtlump's picture

Any reasoning beyond some sort of fraud, theft or manipulation for anything that goes on in my view these days stretches the limit of rational thinking.

 

As a fully committed stacker though it has grown tiresome collecting positive information for gold and silver for years, all while averaging down as I buy more. You have positive news that could fill a warehouse, but until the casino crumbles we are where we are. I dearly hope we are near that point. Like driving by the bar and seeing a "free beer tomorrow" sign.

 

Given the fact that the criminals have sold much of their short positions to hapless hedge fund swamis, we may be closer than many think. Let's be real, this bitch can go to the moon only when the guys who run the show can either take the most advantage of it, or suffer the least for it. So anyways, I'll keep on stackin.

Tue, 06/04/2013 - 16:02 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Did you know that you can now 'stack it' at the Mint?  The RCM, that is:

https://rcmpa.kitco.com/KitcoRCMPA/Home?requestName=HomeAction&CommandNa...

https://rcmpa.kitco.com/KitcoRCMPA/faq/faq.html

Some (Americans) will bitch & moan about "gold confiscation" or getting "Corzined".  What they (conveniently) overlook, is that all these things only happened in the US.  Just like they overlook the embarrassing truth that only the US has ever used nukes on people.  More than once.  How ironic.

I submit to you, that gold is and will remain safer to store (publicly or privately) in Canada than ANYWHERE in the US.  Its record speaks for itself:  Zero confiscations, zero foreign wars to fund a broke government.  And a darn sight closer than Hong Kong or Singapore.

"On a long enough timeline... the US Gov or an 'Ex' (and their lawyers) will come after your ass(ests) and gold."

I hedge accordingly, and therefore refuse to hold significant PM within US borders.

Tue, 06/04/2013 - 17:03 | Link to Comment ronaldawg
ronaldawg's picture

Yayyyyy! Stack your PMs at a foreign mint - especially one with a semi-socialist government with "free" healthcare.   What could EVA could go wrong?

Bitchez!!

P.S.  As a disclaimer, I love Canada and all of its gold and silver products.

Tue, 06/04/2013 - 16:09 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

the entire long gold bullion position is valid from knowing the years following will see 3k to 10k per 1 oz bar or equivalent purchasing power in a post-dollar world.

Any crying on the way there about manipulation keeping the price down tells me people are day-traders looking to get fiatbux a.s.a.p. and are weak-hands who couldn't care less about holding bars or coins.

Tue, 06/04/2013 - 12:57 | Link to Comment Ignatius
Ignatius's picture

"Redemptions In The GLD Are Bullish For Gold"

File under 'No Shit'

Tue, 06/04/2013 - 13:00 | Link to Comment Canadian Dirtlump
Canadian Dirtlump's picture

I wonder if they redeemed the gold bar pisani showed off during his Scooby Doo Mysetery Incorporated grade investigation of the GLD vaults which wasn't on their bar list and belonged to someone else LMAO!

Tue, 06/04/2013 - 12:59 | Link to Comment kito
kito's picture

im not saying gold wont go higher if the dollar collapses (although im not in that camp), but mr sprott, who is getting totally spanked by gold and silver prices, is not to be taken for more than book talking..............

Tue, 06/04/2013 - 13:10 | Link to Comment oddjob
oddjob's picture

I guess if you just started paying attention to Eric Sprott 2 years ago you might think that.

Tue, 06/04/2013 - 13:33 | Link to Comment francis_sawyer
francis_sawyer's picture

Kito ~ EVERYONE talks their book... [you & I included]... Remove the 'book talking' constant from the equation & it's the same equation [with no fans or TV cameras in the stadium]...

Tue, 06/04/2013 - 13:33 | Link to Comment kito
kito's picture

i dont have a book, except for Cheesepope Sports Legends, which is only 1 page long........  ;)

Tue, 06/04/2013 - 13:13 | Link to Comment disabledvet
disabledvet's picture

These are PAPER prices he's talking about. Will that move the price...at some point, sure. But as capital flows go this is puny too. Try to fund a single oil gas rig in North Dakota...FOR A DAY. That's REAL money. "for what purpose" I agree is a good question. Listen...surging equity prices put bottoms in ALL asset classes...including gold. "there's always a bid" as they say. Obviously the 90's stands out as a time when equities generated massive returns across the board and ALL commodities crumbled (including gold and silver.) but we had some real economic growth then...certainly less unemployment, a LOT more inflation pressures. We also did NOT have an experience of getting stabbed in the back by an entirety of politco's for going into Iraq. "there is surprisingly little war in our war effort S a consequence."

Tue, 06/04/2013 - 13:25 | Link to Comment fiddler_on_the_roof
fiddler_on_the_roof's picture

Very Correct, just talking his book.

 

At the same time when GLD is losing Gold, SLV is gaining Silver ?

Why don't Sprott talk about that ? Because it is bearish for Silver and he knows that and the reason he sold for his charities.

Tue, 06/04/2013 - 13:29 | Link to Comment negative rates
negative rates's picture

He's not in it, but he's got bring it up.

Tue, 06/04/2013 - 13:04 | Link to Comment Quinvarius
Quinvarius's picture

Eventually we will find out how much gold is really in the GLD the same way we found out how much silver was in SLV.  The reported inventory will just flatline.  Unable to redeem without making a purchase and unable to maintain any added inventory.  It will look like a flatline with every single ounce they get added dumped out the back door the next day.

Tue, 06/04/2013 - 13:01 | Link to Comment OutLookingIn
OutLookingIn's picture

Follow the insiders.

Like George Soros.

At the start of the year he redeemed over $40+ million, in bullion from GLD and now he is very heavy into precious metals miners, both seniors and juniors. His gold and silver investment portfolio is rumoured to be north of $250 million.

He sees a very good thing, yet he will 'bad mouth' gold in the MSM so as to extend the gold bear, so he can gather more for himself! Greedy bastard!

Tue, 06/04/2013 - 13:08 | Link to Comment Arius
Arius's picture

nothing personal - thats how the game is played.

otherwise, how can he continue to lure the greedy fund managers to Short the mining stocks ... i can guess who is providing liquidity and taking the other side of the trade to muppets ... double down you muppets - losers!

Tue, 06/04/2013 - 13:48 | Link to Comment gmrpeabody
gmrpeabody's picture

+100

Tue, 06/04/2013 - 13:01 | Link to Comment greatbeard
greatbeard's picture

The last time Sprott was pumping silver he was selling his own big time and it soon after took a big dump.  I don't get real warm and fuzzy anymore when I see Sprott Promotions Inc anymore.

Tue, 06/04/2013 - 13:09 | Link to Comment Canadian Dirtlump
Canadian Dirtlump's picture

the last time sprott sold shares in his REAL 100% backed ETF it was to pay bills for his charitable trust, and to buy mining shares.

Tue, 06/04/2013 - 13:16 | Link to Comment disabledvet
disabledvet's picture

Ooops.

Tue, 06/04/2013 - 13:17 | Link to Comment MxBonanza
MxBonanza's picture

Perfect timing, just before the mega smackdown of April.

Tue, 06/04/2013 - 14:51 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Sprott seems to be a market-maker.  I don't trade, maybe a trader can confirm that.

Tue, 06/04/2013 - 13:57 | Link to Comment greatbeard
greatbeard's picture

>> it was to pay bills for his charitable trust,

What bills were due that would demand him dumping that number of shares all the sudden?  I have no problem with Sprott selling, but his pumping at the same time is what changed my attitude towards him.  I'm no less a fan of the metals but the list of people I trust gets reduced every day.  Due to his actions, Spott joined that list of people to ignore when their lips are moving.

Tue, 06/04/2013 - 13:15 | Link to Comment MxBonanza
MxBonanza's picture

Redemptions of GLD are bullish for the COMEX ponzi. It provides physical, so the fractional paper gold scheme and the price suppresion continues for a loooong time.

I do not trust Sprott any more than the other banksters.

I believe that this manupulation will continue much longer, in the meantime, I keep stacking.

Tue, 06/04/2013 - 13:38 | Link to Comment Winston Churchill
Winston Churchill's picture

"Im just hopimg for another three months more of manipulation before

the G20 meet in September.

Tue, 06/04/2013 - 13:25 | Link to Comment Zero Govt
Zero Govt's picture

"In this note, we will explore the theory that it was the shortage of physical gold and the ensuing arbitrage opportunity that drove market participants to redeem shares of GLD."

this is worse than "theory" from Eric Sprott ...it's complete fantasy

I don't suppose the sales of GLD had anything to do with simple buying and selling patterns of stock markets through the centuries where you sell as price goes down (tanks)?

you'd think Sprott was an academic (born yesterday) with this rubbish 

Tue, 06/04/2013 - 13:23 | Link to Comment fiddler_on_the_roof
fiddler_on_the_roof's picture

At the same time when GLD is losing Gold, SLV is gaining Silver ?

Why don't Sprott talk about that ? Because it is bearish for Silver and he knows that and the reason he sold for his charities.

 

 

Tue, 06/04/2013 - 13:45 | Link to Comment digalert
digalert's picture

If you read Harvey Organs daily gold and silver report, you wou see that while GLD is losing bigtime. Silver in the SLV vaults have remained rather steady.

Tue, 06/04/2013 - 14:56 | Link to Comment fiddler_on_the_roof
fiddler_on_the_roof's picture

yes, SLV is showing steady inventory unlike GLD for the year 2013.

There is a lot of silver. Only silver shortage if at all for small retial clients because of minting issues to smaller coins.

Looks at increase in Asian demand for Gold unlike Silver, when price dropped.

Silver demand actually slumped in India.

 

I don't need to read any Harvey's blog, I can read it directly from source.

 

GLD: http://www.spdrgoldshares.com/usa/historical-data/ click "Spreadsheet of archived data"

SLV : http://us.ishares.com/product_info/fund/downloads/SLV.htm click under "Historical data"

 

 

GLD : inventory down by 24.99% for the year to date.

===

12/13/2012 : 1350.82 tons

6/3/2013    : 1013.15 tons

 

SLV: inventory down by .91% for the year to date.

===

12/31/2012  : 10084.96 tons

6/3/2013      : 9992.92  tons

 

Tue, 06/04/2013 - 13:28 | Link to Comment francis_sawyer
francis_sawyer's picture

Ya'd think... In any case, I'd place 'reportings' of GLD & SLV inventory on par with BLS...

Tue, 06/04/2013 - 13:31 | Link to Comment seek
seek's picture

Must not... allow... AU... over $1400.

The market open takedowns are getting super predictable. Too bad I'm a saver and not an trader, or I'd take advantage.

 

Tue, 06/04/2013 - 13:47 | Link to Comment socalbeach
socalbeach's picture

Victor the Cleaner's algorithm for trading gold goes long whenever there is a large GLD redemption, and closes out the position when there is a large creation.  Read about it here:

 

GLD – The Central Bank Of The Bullion Banks

If I understand what he's saying, there's the correct amt of physical gold in the GLD ETF for every share, but there is more than one owner of each GLD share.  Furthermore, the gold in the trust can just be gold in transit between a seller and a buyer.  In other words, GLD is fractional reserve gold ownership just like your bank deposits are fractional reserve dollar ownership.

Tue, 06/04/2013 - 15:32 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Interesting link, thanks for sharing.

 

One thing, though:

"WARNING (April 2013): This article uses the term buy signal in a technical sense. It does not mean that you ought to buy anything without understanding what you are doing. Notably, the rapid price increases after the buy signals have been absent since the fourth quarter 2012. Now you might dismiss the trading algorithm as a statistical fluctuation. Alternatively, you can wonder whether something might have changed."

            *Emphasis mine

The included link("might have changed") leads to an interesting FOFOA article.

Tue, 06/04/2013 - 13:59 | Link to Comment slightlyskeptical
slightlyskeptical's picture

But I thought GLD didn't really have the Gold to start with? Now them supplying the Gold is what is causing the market dislocations? Something doesn't make sense here. Is this whole article really just an admission that GLD is what GLD pushers have stated it was all along - they real unlevered gold kept in a vault?

Tue, 06/04/2013 - 14:18 | Link to Comment oddjob
oddjob's picture

They had a chance to prove that with pissonmee's little mystery trip....they even fucked that up.

Tue, 06/04/2013 - 14:47 | Link to Comment socalbeach
socalbeach's picture

If Vic's theory has merit, there is 0.097 oz/gold for very GLD share in the trust, but more people who think they own GLD shares than actual shares of GLD.  So if the GLD trust allowed individuals to redeem what they think is their GLD shares (they don't), there wouldn't be enough gold in the trust to satisfy the redemption requests.

It's analogous to what would happen if everyone tried to get their dollars out of the bank.  Even with > $1.7t in excess reserves, there wouldn't be enough vault cash and bank reserves on deposit with the Fed to satisfy all the requests.

You might have to read his article and comments to follow.

Wed, 06/05/2013 - 10:02 | Link to Comment auric1234
auric1234's picture

There's a bunch of gold bars somewhere. GLD share holders think they own it. But they're not the only ones who think that.

COMEX futures holders think they own it, too. The same gold.

And it's also owned by several wealthy clients of the bullion banks, who entrusted their gold to them.

And to some firms that hold long positions in LBMA "allocated" accounts.

And to a few central banks, including the Bundesbank.

Yes, the gold is there. But when it's time to claim it back, it will be a bit crowded.

 

Tue, 06/04/2013 - 15:09 | Link to Comment SqueekyFromm
SqueekyFromm's picture

Oh, I have figured out how to get rich off GOLD!!! I am looking for investors sooo here is my plan. I am going to create a new statistical product, called MINX! This really stands for Mass Insanity Index, but we will tell the public it stands for Midas Index. Behind the scenes, we can collect statistics on the number of admissions to mental hospitals, and police reports of crazy people, and purchases of tin foil and stuff like that. Then, we do some math to turn that into a number, like "12.4" or "27.9".

Then, every month when BLS and all those Richmond and PMI index stuff comes out, we release the "Midas Index" number and the higher it goes, the more gold will get sold. If mass insanity goes down, the "Midas Index" will decrease and people can sell gold. For extra money, we can cut a Sekrit Deal with some Gold miners and bullion dealers to jiggle the numbers.

This is a really really good idea because you kinda need a rational way to measure the irrational urge to spend big bucks on a useless shiny metal on the hope somebody else will buy it from you for more money. Sooo, if you want to invest in this send me some fiat.

Squeeky Fromm, Girl Reporter

PS: Oh, and plus I would sooo like to wear a cute little T-shirt that says "Minx" on it!

Tue, 06/04/2013 - 15:37 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Nothing about you really tells me you're a girl.

Nothing about what you write indicates you're any kind of reporter.

you're squeeky but much like some kind of weasel-troll hybrid.

Were you made by Monsanto?

Tue, 06/04/2013 - 15:55 | Link to Comment BigJim
BigJim's picture

Christ, you are lame

Tue, 06/04/2013 - 16:39 | Link to Comment SqueekyFromm
SqueekyFromm's picture

BigJim:

What is LAME is treating all this GOLD crap as something worthy of technical analysis. About as silly as doing technical analyses of investments in Beanie Babies, which were once a object d'bubble, as they say in France. Wouldn't you laugh your ass off if you saw:

The 50 day moving average for Fluffy the Puppy is $17.10. Reports indicate that the factory in Bumfuk Bangladesh is temporarily out of plastic dog noses, which should decrease the supply of Fluffy the Puppy by 27% for 32 days until Plastic Noses R Us in Pakistan can obtain replacement injection presses to replace the ones blown up by angry employees who thought the plastic compound was tainted with pig lard. 

Prices for Fluffy the Puppy may reach the $28 - $35 dollar range, more in line with Boo the Bobcat, who was subjected to similar supply pressures when several children in the Atlanta area poked their eyes out on the hog bristle whiskers.

Therefore, we upgrade Fluffy the Puppy to a STRONG BUY!

Same with gold as far as I am concerned. How do you analyze an inherently useless product and pretend it is science??? The only value IN THE 21ST CENTURY comes because some goobers think some other goobers will pay them more for the stuff than what they paid for it.

Squeeky Fromm, Girl Reporter

Wed, 06/05/2013 - 09:58 | Link to Comment auric1234
auric1234's picture

Why do you keep talking about this $ thing? You're a ridiculous paper bug just like the stereotype you're trying to depict. Go look yourself in the mirror.

 

Wed, 06/05/2013 - 09:57 | Link to Comment auric1234
auric1234's picture

I suppose you don't realize you just described the paper gold manipulation?

Replace "MINX" with "paper gold" and there you have it.

 

Tue, 06/04/2013 - 15:29 | Link to Comment BlackSunshine
BlackSunshine's picture

What happened to Supernova? I just saw that article written back on 2011, it appears that big money is no longer fearful of that.

Tue, 06/04/2013 - 15:35 | Link to Comment Squiddly Diddly
Squiddly Diddly's picture

 

This is interesting:

http://truthingold.blogspot.ca/2013/06/the-comex-confirms-that-its-gold-and.html

The Comex Confirms That Its Gold and Silver Inventory Reports Are Fraudulent

"The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only." - disclaimer now posted on the Comex gold and silver daily warehouse stock report as of Monday, June 3, 2013.
Tue, 06/04/2013 - 15:44 | Link to Comment KansasCrude
KansasCrude's picture

My bet is the SLV has been out of physical silver since December and thats why the inventory doesn't decline....its all paper.  Don't have to be a genius to see the dollar sales for silver always seem to be roughly equal to the dollar sales of gold.  With the ratio at +60 only the math impaired could believe the physical inventories of silver are plentiful....most likely the the above ground inventories of silver are tighter than gold over most the globe.  When Asia realizes which they most likely now are given the continued NON delivery of physical Au on the Shanghi Exchange that gold is gone then the final rush for Ag picks up big Mo and the windows finish closing.....

Tue, 06/04/2013 - 16:08 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Eric, lemme guess how much of your bullion you hold north of the border and how much/little you hold south of the border?  That's right, I'd keep precious little south of the border also. Just can't trust NYNY or DC.

"On a long enough timeline... the US Gov or an 'Ex' (and their lawyers) will come after your ass(ests) and gold." -Kirk

 

 

Wed, 06/05/2013 - 03:54 | Link to Comment zipit
zipit's picture

Taper hurts gold same as it hurts everything else.

Wed, 06/05/2013 - 04:45 | Link to Comment bvrulez
bvrulez's picture

and when they have to buy the futures back they will make losses. i am not convinced.

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