Harvey Organ's Comments for this week

[JohnQPublic]

Gold and silver started today nicely. Let's see if it holds opn COMEX open. Harvey Organ had this to say: (http://harveyorgan.blogspot.com/2010/05/may-222010-commentary.html)


"...As I pointed out to you during the week, this Tuesday is the last day for options and as is the cartel's custom, they will continually raid to force option holders to lose. Most of the option holders held 1200 gold calls and now all of those calls are worthless. Expect that gold will remain below 1200 until Tuesday afternoon and then gold will rise as the cartel banks cover their shorts which forced the gold and silver price down...In conclusion expect sideways action in gold and silver up until Tuesday and then these metals will resume its northernly trajectory as the whole world resorts to quantitive easing.

Europe is being bailed out by swap money and these dollars and euros are desperately trying to prop up markets..."



I guess this means if you want to buy, do it Monday or Tuesday morning. Of course, he could be wrong.

[Fudup]

Already bought what little I could afford. I'm just waiting on the rockets! 8)

[gunDriller]

Harvey's Blog @

http://harveyorgan.blogspot.com/

is great !

[JohnQPublic]

From today's HOB report:

"Monday, May 24, 2010
Compelling Evidence For A Big Move In Gold This Summer?
Trader Dan Norcini has outstanding commentary on the gold/silver markets (and other commodities), which can be found at http://www.jsmineset.com/ One aspect he monitors is the weekly Commitment of Traders report. Over the past few weeks he has uncovered a potentially extraordinary development which could support a very big move higher in the price of gold.

In summary, the swap dealers - the bona fide trading desks at banks that make markets in gold, paper vs. physical, for bona fide commercial users/hedgers - have been aggressively covering their net short position, in contrast to the proprietary "cartel" desks at banks, which have been increasing their paper short positions in an attempt to cap the price of gold/silver. In my view, based on Trader Dan's empirical analysis, I believe this is more evidence that the Comex paper fraud is moving closer to GATA's "commercial signal failure," which occurs when the demand for physical gold completely overwhelms the ability of the paper shorts to deliver the actual goods. Here's Dan's excellent analysis: Gold: Look Out Above?

One possible interpretation of this is that the swap desks, because they deal in both paper and physical gold, have a first-hand view of physical availability and are attempting to reduce their exposure to the growing shortage of physical bars in both London and NY by reducing their net position and actually increasing their long position in further out months, as pointed out Dan. This would be consistent with the ever persistent reports out of London, and the actual delivery experience of our bullion fund, of delivery delays and an increasing tightness of phsyical supply.

I have been discussing with long-time colleagues the possibility that this summer may experience a big move higher in gold, contrary to the seasonals, as Europe and the U.S. continue to melt-down fiscally and economically, and the world continues to shift from fraudulent paper currencies into safe haven of physical gold and silver. The COT report, as per Trader Dan, adds more evidence the support the view of a big move in gold soon."

[SQUEXX]

Harvey Organ............insert joke here! :D

[JohnQPublic]

If he is right, and I suspect he may be, we should see the price start going up this afternoon. I guess after COMEX closes. Probably gold and silver.

[JohnQPublic]

About half an hour until COMEX closes. POG ahs been fighting 1200 throughout the session. Let's see what happens on Globex this afternoon. ;)

[JohnQPublic]

We have broken through $1200 for several hours now. Notr sure what will happen in COMEX tomorrow. Harvey Organ had some more interesting comments tonight. You should read the whole post (http://harveyorgan.blogspot.com/2010/05/commentary-may-252010.html), but this was of short term interest:

"...The big news was the adjustments in gold:

There was almost no external movement of gold into or out of the Comex warehouse. However, there was a large internal “adjustment” which made a ledger transfer of 119,275 ozs from the customer inventory to the dealer inventory.

This is a lease from a customer to a dealer to the tune of 119.275 oz or approx 3.8 tonnes of gold.

Whenever you see this, you know that there is a shortage of metal. They must be preparing for a huge amt of gold standing for the June delivery month.

In silver, we are seeing a steady increase in the customer inventory but not the dealer inventory. The dealer inventory must supply the necessary silver for our newfound long holders who are taking delivery of 22 million oz of silver from March and 24 million oz from this delivery month of May."

[JohnQPublic]

Getting interesting!

From Thursday (smilies added):

Here is Bill Murphy of Lemetropole cafe.com:

The gold open interest drop yesterday was one of the largest I can ever recall … down 26,947 contracts to 564,413. Lead contract June lost 95,049, while the August contract only rose 63,530. This means a huge amount of shorts covered their positions rather than rolling them over. My question is how did they do so without forcing the price up more than $13.50? How convenient that THEY did so the day following the June option expiry. However, the bottom line is that a substantial amount of shorts wanting to cover above $1200 is bullish.

and this from Dave Kranzler:

Dave from Denver getting back to me on the gold open interest drop…

Most of that was the June contract - 95,049. Not unexpected given that tomorrow is first notice and anyone not funded for delivery has to be out by the end of today. I was actually surprised out how big June o/i was yesterday. The more interesting number will be to see June o/i for today when it comes out tomorrow. There's still 61,107 contracts open, which is 6.1mm ozs of gold vs. about 2mm of registered/deliverable gold on Comex. The fact that gold rallied yesterday in the face of that big overall o/i drop is very bullish...

...OK lets go straight to the gold and silver inventories:


COMEX Warehouse Stocks May 27, 2010
SILVER

25,177 ozs withdrawn from the dealer’s (registered) inventory
1,124,168 ozs deposited in the customer (eligible) inventory
Total dealer inventory 52.58 Mozs
Total customer inventory 65.94 Mozs
Combined Total 118.52 Mozs

GOLD

ZERO ozs withdrawn from the dealers (registered) category
32 ozs withdrawn from the customer (eligible) category
Total dealer inventory 3.24 Mozs
Total customer inventory 7.49 Mozs
Combined Total 10.74 Mozs.

Notes:

There was a further 125000 oz of gold internally transfered from the customer inventory in gold to the dealer inventory.

This gold is leased in exactly the same format as I described yesterday. It means that there is no gold to supply to the waiting arms of the new longs and will stand for gold tomorrow. This must be alarming to the banks. :o

There was 1.12 million oz of silver deposited into the customer inventory. There has been huge activity between the dealer and customer inventories in silver.

Instead of deposits at the dealer inventory in silver we saw a small withdrawal equal to 5 contracts. There is no doubt trouble with the huge amts of silver waiting delivery for the months of March and May.( 22 million and 24 million oz for each of the two delivery months) :o

Lets see how the delivery scene shapes up:

There were no delivery notices issued in the MAY gold contract. The MAY gold delivery notice total for the month is 2,046 notices or 204,600 ozs.

This represents the number of oz of gold exercised in the non delivery month of May. The total in tonnage is 6.6 tonnes of gold.

How about silver:

There was 1 delivery notice issued in the MAY silver contract. The total delivery notices for the month in silver stand at 4,209 or 21 Mozs.

Thus the amt of silver standing is identical to yesterday at 23.73 million oz.

The open interest for the front month of June in gold stands at a huge 61,000 contracts:

There is still a massive open interest in JUN gold of 61,107 contracts.

Adrian Douglas comments:

First notice day is tomorrow 28th May. This is a very large open interest at this stage. It represents 6.1 million ozs of gold which is almost 2 times what the dealers have in their inventory.

end.

I did not realize that Monday is a holiday in the usa and the comex and markets will be closed. Thus the delivery process must begin tomorrow.

I will follow this development for you. Suffice it to say that 61,107 contracts standing tonight is a huge number. However, remember that the comex is always 24 hours back.

We get todays closing OI tomorrow at 1:30. That will tell the tale. :box :whistle

[JohnQPublic]

Interesting comments May 29th:

...I would like to give you a background demand for real physical silver and gold and how it relates to the comex:

In gold, the world produces 2400 tonnes per year or approx 75 million oz of gold. The world gold stock advances 2% per year. From the beginning of time approximately 150-160,000 tonnes of gold have been

produced and that would fit in a tennis court-cubed.

The usa produces around 240 tonnes of gold or 7.5 million oz, mainly from the Newmont and Barrick gold deposits in Nevada. Other gold mines are in Idaho and Colorado.

Gold demand per year is a little more difficult to pin due to poor reporting practices of the World Gold Council.

However, I will try and give you what we believe is the most accurate demand picture in gold;

It looks to us that jewellry demand from around the world is about 3200 tonnes of gold. The jeweller also receives old gold jewellry from customers and he melts this down

to make new jewellry. We call old jewellry handed in to make new gold, scrap gold and this is estimated at around 600-800 tonnes of gold per year. The fabricated 3200 tonnes of gold

includes this scrap into its figures.

Investment demand is even more difficult to guage and the reason for this is the addition of GLD which is included in investment demand.

In this figure we get bars of gold for investment and newly minted gold coins. Our best guess, is that investment demand is around 1800 tonnes of gold.

It may be higher.

Thus for physical gold the demand is 3200 tonnes of gold for jewellry -600 tonnes scrap + 1800 tonnes of investment gold = 4400 tonnes.



The demand over supply with respect to physical only is around 2000 tonnes. (It may be as low as 1500 tonnes or as high as 2200 tonnes).

It is this deficit in gold that must be made whole by above ground gold from central banks holdings.

The 6 delivery months on the USA comex generally see an average of 1.0 million oz standing for real gold. This gold generally serves two purposes:

1. jewellry demand

2. investment demand.

The usa demand for gold is approximately 25% of world totals. Thus, jewellry demand is around 800 tonnes and investment demand is around 400 tonnes of gold.

Here is a summary for the usa gold and silver eagle sales this month: (from ed Steer)

The U.S. Mint had another report yesterday. They advised selling another 8,000 one-ounce gold eagles and another 111,500 silver eagles. Month-to-date, they have reported 184,000 one-ounce gold eagles sold... and 3,611,500 silver eagles sold. Will they break the 4 million mark today? Good question... and if they don't, look for a huge number to be reported in the first couple of days of June that they've deliberately withheld from reporting in May.



end.



In gold eagles, the usa has reported a monstrous 184,000 oz sold and the month has not been concluded. They is also a smaller no of 24K gold buffalos.

The total number of gold oz that the usa mint is predicting for the next 12 months period is around 2.6 million oz of gold or 83.3 tonnes of gold or approx 34% of usa production.

The usa must use gold produced in the usa first in its production. If demand exceeds supply, it can then import the gold needed. With respect to gold, the usa has sufficient supplies to meet

the mint regulations.

Thus with respect to jewellry because the demand is so high at 800 tonnes in the usa, gold coming from the usa sources do not meet the demand requirements and gold must be imported

and that source is London, the dominant physical market.

The silver market is a little different because we do not have a central or above ground supply of silver metal.

The world demand for silver is around 900 million oz. The supply of silver coming from all mines throughout the world is 680 million oz.

There is really only one major silver mine in the world:

Pan America Silver (PAAS)

Most silver is produced as a by-product to gold production. For example, Agnico eagle produces silver as a by product to its gold production. The silver reduces its cost of gold mining.

The big difference between gold and silver is the fact that gold is always accumulated and silver is always consumed. Gold has very little industrial use other than to make our women beautiful. Silver has many industrial uses such as a terrific conductor of electricity and thus it is the dominant
commodity in hydro-electric wires. It is a terrific antibacterial and thus it is used in my profession of pharmacy, in burn creams such as silver sulfadiazine

It is now being used with bandaids to prevent infection. It is being used in washing machines to stop odours etc. It is used in x-rays and of course in photography.

Colloidal silver is finding continually new uses in medicine.

The usa produces 40 million oz of silver per year. The usa mint produces a beautiful silver eagle and these coins are in great demand throughout the world.

As explained above, the mint must use all usa supplies first. As you can see from the above commentary, the silver eagle sales for this month will probably total 4.0 million oz.

Thus on a 12 month scale at this rate, demand for silver eagles will total around 48 million oz. For the first time ever, the usa will have to import silver as it only produces 40 million oz.

Last month silver eagle sales totalled 3.6 million oz.

Thus in silver we have demand of 900 million oz and a supply of 680 so the deficit is 220 million oz. Scrap is around 100 million oz so the real deficit is 110 million oz.

which must be made up from somewhere!!

I hope this give you a little background on total supply and demand for gold and silver and how this will interlate with the comex deliveries.

Many have asked me if the comex can default with this delivery month of June with 1.3 million oz of physical gold standing. (43 tonnes of gold) The answer is it is very possible

as we see many competing entities wishing gold and silver product:

1. PHYS (Eric Sprotts physical gold ETF) is after 6 tonnes of gold after receiving his initial 12 tonnes of gold.

2. CEF.a (Central Fund of Canada). This fund generally demands 6 tonnes of gold annually, and issues shares for that gold. This fund has equal amts of gold and silver.

3. GTU>UN (Central Fund of Canada ..gold only) demands also around 6 tonnes annually and issues shares for that gold.

As you can see from my complaint to the SEC and CFTC, the GLD entity was put on earth to remove demand from the equation as the world was losing too much gold

to private entities like jewellers, hoarders and sovereign authorities like Russia, and China.

We are now seeing jewellry demand return in India from its former higher regal status. At one point in time, India imported almost 40% of world's gold production at 800-1000 tonnes per year.

The Indian culture use gold in the wedding season as the bride's family issues gold to the groom's side. The women wear their wealth for all to see.

With demand increasing from all sectors it will become more difficult for the comex authorities to satisfy the long holders.

[Gneisenau]

Harvey Organ's latest update. If he's right the 1% physical market may very well be a 0% physical market soon.

--------------------

June 2.2010 commentary.....extremely important.

Good evening Ladies and Gentlemen:

Gold today closed down by $4.20 to 1220.60. The price of silver fell 24 cents to 18.30.

One could see early on, that the authorities wanted to hit the commodities and juice the stock market. The Euro was heading below 1.22 when the plunge protection
went into action and propelled the stock market up by 224 points.

However the real action is in the physical markets of which I will try and explain.

First of all, the total OI on gold comex rose by 6425 contracts to 554000 and silver's oi also rose by 1417 contracts to 122,369

No surprise that the gold open interest rose 6425 contracts to 553,950 … as the cabal forces retreated to higher ground to prevent gold from blowing through $1230. The silver open interest went up 1417 contracts to 122,369.
The big story is in the gold and silver inventory. First, a snapshot of closing inventory tonight in both gold and silver:

COMEX Warehouse Stocks June 1, 2010

SILVER

609,366 ozs withdrawn from the dealer’s (registered) inventory
1,000,214 ozs deposited in the customer (eligible) inventory
Total dealer inventory 51.92 Mozs
Total customer inventory 67.54 Mozs
Combined Total 119.45 Mozs

GOLD

ZERO ozs withdrawn from the dealers (registered) category
97ozs withdrawn from the customer (eligible) category
Total dealer inventory 3.24 Mozs
Total customer inventory 7.49 Mozs

Combined Total 10.74 Mozs

Notes: you can see that 609366 oz of silver was withdrawn and 1.0 million oz deposited into a customer warehouse.

This is what I want to see. Please remember that there is approx 24 million + 22 million oz of silver from the two delivery months of March and May that have not been deposited into a customer inventory. I must see 46 milllion of deposited to the dealer inventory and then this number withdrawn from the dealer and into the customer.

We have seen only miniscule amts deposited into the dealer and then withdrawn. Things look pretty scary for a silver default. There was no activity for withdrawals of gold.

Now the biggy news. Let's go to gold: (Ron..I rememembered to put the apostrophe)

There were 665 delivery notices issued in the JUN gold contract. The JUN gold delivery notice total for the month is 18,230 notices or 1,8230,000 ozs. (The Comex report on Friday apparently was not a typo there is truly a massive amount of OI standing for delivery!). Deutsche Bank issued none and stopped 46, JPM issued 66 and stopped 297, Barclays issued 408 and stopped none, while BNS issued 0 and stopped 179.

Now Ladies and Gentlemen, I can put the puzzle together for you.

On Friday, the OI announced at the conclusion of trading was 1.3 million oz of gold standing. The only thing left out was options exercised. These extremely smart players receive a futures contract and then they make a decision as to stand or roll to a future contract. Generally if you exercise an option you stand for delivery.

Also, you will recall that gold OI dropped by a massive 24,000 contracts. Most commentators thought it was massive liquidation. I did not buy this as demand for gold is going through the roof so why would intelligent traders cash in the newfound gains in gold. I thought that maybe the longs were offered a premium and roll to the next big month of August.

However the volume was just not there. I had a lot of trouble figuring out the data.

Now I know what happened:

the big drop in OI in June was due to the massive standing of longs for physical gold:

1. the Friday OI of 13,000 contracts or 1.3 million

2. the exercise of options by gold holders. They were not fooled by the lowering of the gold price by the cartel banks...and then the subsequent loss of 24000 OI gold contracts due to the fact that these guys stood for and received their delivery slips. Only the almighty will know if these delivery slips have real gold in them or they are just a piece of paper with no gold behind them.

Thus so far, 18,230 contracts of gold have been served upon. If this is not a typo then this is a massive amount and my bet is that this will surely bust the comex.

This is not all the story:

there are 6497 contracts still remaining to be served or 650,000 oz of gold:

The open interest in JUN gold is 6,497 contracts or 0.65 Mozs.

Thus total amt of gold standing for June is 650,000 oz (left to be served) + 1.823 million oz (already served) + 204,000 oz from options exercised in May = 2,677,000 oz of gold.

I will wait for tomorrows reading to confirm this total. I may be out by 200,000 oz due to the OI figure is always 24 hours back.

Tonight is the first data that we received so far in June and the exchange clearly hid a lot of longs who decided to exercise.

In silver, very little action as only 4 contracts have been exercised which are options that will stand for July silver :

There were 3 delivery notices issued in the JUN silver contract. The total delivery notices for the month in silver stand at 4.

[JohnQPublic]

Harvey Organ's latest update. If he's right the 1% physical market may very well be a 0% physical market soon.



Keep an eye on the GSUS-Apmex Precious Metals Retail Supply Index (http://gold-silver.us/forum/gold-silver-precious-metals/apmex-precious-metals-retail-supply-index/) .

Popular gold coins will lead the draining, and 10 oz silver bars will probably be one of the last items to go.

[the white rabbit]

The total number of oz of gold standing for this delivery month equals:

2,019,100 oz + 59900 oz + 204,000 (options exercised in May) = 2,283,000 oz 0r 73.6 tonnes of gold ( a touch higher than Thursday). http://harveyorgan.blogspot.com/

[JohnQPublic]

The total number of oz of gold standing for this delivery month equals:

2,019,100 oz + 59900 oz + 204,000 (options exercised in May) = 2,283,000 oz 0r 73.6 tonnes of gold ( a touch higher than Thursday). http://harveyorgan.blogspot.com/


If we get short covering action in gold like we had on the euro recently, the price could go through the ceiling.