Ares
9th December 2010, 04:30 AM
Good evening Ladies and Gentlemen:
Today, the banking cartel orchestrated another raid trying to let technical analysis state that gold and silver have topped out. When you have massive shorting, technical analysis is out the window and has no value whatsoever. The real problem today for the Obama administration is the huge rise in the 10 yr bond yield (to 3.34%) and the long bond rising in yield, and thus falling in price.
Today, the 30 yr bond fell 1.3 points to 121.35. I will discuss this in the big economic stories of the day. However we must go straight to the comex trading and see how things fared today.
Gold closed today at $1385.50 down $25.80. Silver also fell badly to the tune of $1.52 to $28.22.
The gold comex open interest surprisingly held firm with today's reading of 603,632. Yesterday the reading was 603,569 so we actually gained 63 contracts. The front December delivery month saw its open interest fall from 3131 contracts to 2883 for a loss of 248 contracts reflecting some of the deliveries yesterday. It is obvious that some cash settlements prevailed yesterday and today as some of our longs must have received very healthy premiums to forgo delivery!. The estimated volume as today was a humongous 223,484 with no switches. The banking cartel seemed frightened on the rising bond and on the massive printing of paper bills. As promised to you yesterday, the confirmed volume for Tuesday's trading was 225,285 a huge 32% higher than estimated.
The silver comex open interest totally shocked me. I expected to see a huge drop in open interest as we have witnessed a huge fall in silver these past few days. The reading today which is basis yesterday saw IT'S OPEN INTEREST RISE by 449 contracts. Today's reading is 137,675 and yesterday's reading was 137,226 to give us the rise of 449. The front delivery month of December saw its OI fall from 782 to 644 for a fall of 138 contracts. With deliveries yesterday of 78 contracts, we must have lost 60 contracts to cash settlements ( 138- 78)
Here is a chart on the 8th of December for gold and silver comex inventory changes and deliveries.
Charts at Link - http://harveyorgan.blogspot.com/
let us start with the silver deliveries and inventory changes:
as you can see, we did not get any deposits or withdrawals from the dealer. We did get a massive 30,521 oz of silver entering the customer. Also there was a withdrawal of 1002 oz from another customer so the net deposit of silver was 29,519 to the customer only. We got another adjustment today this time 5035 oz of silver arriving to the customer from the dealer in a probable lease repayment from previous sessions.
The total number of notices sent down today for delivery in silver amounted to 22 contracts for a total of 110,000 oz. The total number of notices sent down so far this month total 1167 for a total of 5.835 million oz. The number of notices that remain to be served is as follows: we take the open interest for December at 644 and subtract the 22 notices sent down today. That should give the approximate number of notices left to be serviced or 622 which represents 3.110 million oz.
Thus the total number of silver oz standing in this delivery month of December is 5.835 + 3.110 = 8,945 million oz. (as mentioned we lost 300,000 oz to cash settlements...60 contracts)
And now for gold:
The gold comex vaults were very quiet again today. We saw a small 2900 oz of gold enter a dealer and yet this gold did not find its way to the customer. We did see a small withdrawal from a customer of 129 oz. There were no adjustments.
As mentioned, there were 68 notices served upon our longs for a total of 6800 oz of gold. The total number of notices sent down so far total 8506 or 850600 oz of gold.
The total number of notices that remain to be serviced is as follows: we take the Dec OI of 2883 and subtract the notices sent down, 68, to give us the probable number of notices that remain or 2715 notices x 100 oz equals 271500 oz of gold.
Thus, the total number of gold oz standing in this delivery month is 850,600 oz (already served) + 271,500 oz (to be served) = 1,121,500 oz. (we lost around 24,000 oz to cash settlements)
end.
The GLD registered a fall in inventory of 2.43 tonnes as this "inventory" was used in the raid. Here is today's inventory levels:
Total Gold in Trust
Tonnes: 1,295.30
Ounces:41,645,077.46
Value US$:
57,693,862,723.43
Surprisingly, the folk at the SLV held pat with their "inventory" today. You would have thought that with silver "less in demand" they would lighten up
Nope! they held firm.
Ounces of Silver in Trust
351,772,162.100
Tonnes of Silver in Trust
10,941.34
:
Our ETF's that we follow still command a decent positive to NAV.
The Sprott silver fund PSLV registered a huge positive to NAV of 10.06% reflecting silver's huge strength. (tonight's value..Dec 8.2010
The Sprott gold fund PHYS registered a positive to NAV of : 3.73%( tonight's value.)
The central fund of Canada which represents equal parts of physical silver and gold registered a positive to NAV of:7.2% (tonight's value).
end.
Now we shall discuss the big stories of the day. Without a doubt the big story is the huge increase in yield on the 30 yr bond and the 10 yr bond.
First the official stories and then I will show you how significant this really is:
Here is the result of the 10 yr auction which saw yields rise to 3.34%
13:05 Follow-up: 10-yr note auction yields 3.340%, with bid/cover 2.92 vs average 3.12
* Allotted at high 8.71%
* Indirect participation 44.38% vs. avg of past ten auctions 43.38%
* In reaction:
o 2-yr (6/32) at 0.628%
o 5-yr (26/32) at 1.901%
o Dow 11,358.21, -0.95
* * * * *
end.
Here is the official story from Reuters on the rise in bond yields:
Prices plunge for second day on deficit fears
NEW YORK, Dec 8 (Reuters) - U.S. Treasury prices plunged on Wednesday for a second straight day, pushing benchmark yields to a six-month high, after a deal in Washington to extend tax cuts fueled fears of inflation and a swelling budget deficit.
The sharp dip in prices brought some buyers to the table in an auction of $21 billion of reopened 10-year notes, which was part of $66 billion of coupon-bearing securities sales this week. Bond prices rebounded somewhat from their lowest levels of the day following the sale, which analysts said saw about average demand.
Still, sentiment remained strongly bearish heading into the sale of $13 billion of reopened 30-year bonds on Thursday.
"One auction does not reverse a process, and it would take tens rallying a lot more to give us a convincing technical reversal," said David Ader, head of government bond strategy at CRT Capital Group in Stamford, Connecticut.
A proposal to extend Bush-era tax cuts is expected to boost U.S. economic growth by as much as 1 percentage point next year. But the long-term cost to the government from falling tax receipts has spooked bond investors and resulted in a disappointing three-year debt auction on Tuesday.
Some investors fear such a tax move could result in more bond purchases by the Federal Reserve, which would boost the government's deficit and stoke price inflation.
"This tax agreement is a disaster for the U.S. fiscal situation," said Howard Simons, strategist at Bianco Research in Chicago.
Though the sell-off in Treasuries has certainly been vicious, so far it appears to be a bond market correction from historically low yields rather than the beginning of a sovereign debt crisis like the one that has raged in the euro zone this year.
For example, the cost of insuring U.S. government debt in the credit default swap market was little changed at around 40 basis points, or $40,000 per year for five years to insure $10 million in Treasuries.
Benchmark Treasuries were on track, however, for the biggest two-day sell-off since September 2008. That jump in yields came in an unwinding of safe-haven bets as the
government said it would use $50 billion to back money-market mutual funds and as the U.S. temporarily banned short trading in stocks.
That week in September 2008 witnessed the bankruptcy of Lehman Brothers, a government bailout of giant insurer AIG and the sale of Merrill Lynch to Bank of America.
The Federal Reserve had interest rates at the time set at 2 percent, as opposed to the current range of zero to 0.25 percent.
The market decline on Tuesday resulted in a paper loss of $61 billion, according to Bank of America Merrill Lynch fixed income indexes.
Adding to the bearish sentiment was unwinding of hedges by mortgage investors and weak demand at a 4 billion euro auction of two-year German government debt.
The bond market is stuck in negative territory, as it attempts to find stability after breaching a series of key technical supports in recent days.
"I think that the market is going through the process of re-pricing that in. It was already long, and now you have a situation where the market is re-pricing against what the economic outlook is going forward." said Tom Tucci, head of government bond trading at RBC Capital Markets in New York
Given the swiftness and magnitude of the sell-off, analysts were reluctant to predict where the market would bottom…
-END-
Please note the 61 billion paper loss stated by Bank of America on the huge downfall in bonds.
http://harveyorgan.blogspot.com/
Today, the banking cartel orchestrated another raid trying to let technical analysis state that gold and silver have topped out. When you have massive shorting, technical analysis is out the window and has no value whatsoever. The real problem today for the Obama administration is the huge rise in the 10 yr bond yield (to 3.34%) and the long bond rising in yield, and thus falling in price.
Today, the 30 yr bond fell 1.3 points to 121.35. I will discuss this in the big economic stories of the day. However we must go straight to the comex trading and see how things fared today.
Gold closed today at $1385.50 down $25.80. Silver also fell badly to the tune of $1.52 to $28.22.
The gold comex open interest surprisingly held firm with today's reading of 603,632. Yesterday the reading was 603,569 so we actually gained 63 contracts. The front December delivery month saw its open interest fall from 3131 contracts to 2883 for a loss of 248 contracts reflecting some of the deliveries yesterday. It is obvious that some cash settlements prevailed yesterday and today as some of our longs must have received very healthy premiums to forgo delivery!. The estimated volume as today was a humongous 223,484 with no switches. The banking cartel seemed frightened on the rising bond and on the massive printing of paper bills. As promised to you yesterday, the confirmed volume for Tuesday's trading was 225,285 a huge 32% higher than estimated.
The silver comex open interest totally shocked me. I expected to see a huge drop in open interest as we have witnessed a huge fall in silver these past few days. The reading today which is basis yesterday saw IT'S OPEN INTEREST RISE by 449 contracts. Today's reading is 137,675 and yesterday's reading was 137,226 to give us the rise of 449. The front delivery month of December saw its OI fall from 782 to 644 for a fall of 138 contracts. With deliveries yesterday of 78 contracts, we must have lost 60 contracts to cash settlements ( 138- 78)
Here is a chart on the 8th of December for gold and silver comex inventory changes and deliveries.
Charts at Link - http://harveyorgan.blogspot.com/
let us start with the silver deliveries and inventory changes:
as you can see, we did not get any deposits or withdrawals from the dealer. We did get a massive 30,521 oz of silver entering the customer. Also there was a withdrawal of 1002 oz from another customer so the net deposit of silver was 29,519 to the customer only. We got another adjustment today this time 5035 oz of silver arriving to the customer from the dealer in a probable lease repayment from previous sessions.
The total number of notices sent down today for delivery in silver amounted to 22 contracts for a total of 110,000 oz. The total number of notices sent down so far this month total 1167 for a total of 5.835 million oz. The number of notices that remain to be served is as follows: we take the open interest for December at 644 and subtract the 22 notices sent down today. That should give the approximate number of notices left to be serviced or 622 which represents 3.110 million oz.
Thus the total number of silver oz standing in this delivery month of December is 5.835 + 3.110 = 8,945 million oz. (as mentioned we lost 300,000 oz to cash settlements...60 contracts)
And now for gold:
The gold comex vaults were very quiet again today. We saw a small 2900 oz of gold enter a dealer and yet this gold did not find its way to the customer. We did see a small withdrawal from a customer of 129 oz. There were no adjustments.
As mentioned, there were 68 notices served upon our longs for a total of 6800 oz of gold. The total number of notices sent down so far total 8506 or 850600 oz of gold.
The total number of notices that remain to be serviced is as follows: we take the Dec OI of 2883 and subtract the notices sent down, 68, to give us the probable number of notices that remain or 2715 notices x 100 oz equals 271500 oz of gold.
Thus, the total number of gold oz standing in this delivery month is 850,600 oz (already served) + 271,500 oz (to be served) = 1,121,500 oz. (we lost around 24,000 oz to cash settlements)
end.
The GLD registered a fall in inventory of 2.43 tonnes as this "inventory" was used in the raid. Here is today's inventory levels:
Total Gold in Trust
Tonnes: 1,295.30
Ounces:41,645,077.46
Value US$:
57,693,862,723.43
Surprisingly, the folk at the SLV held pat with their "inventory" today. You would have thought that with silver "less in demand" they would lighten up
Nope! they held firm.
Ounces of Silver in Trust
351,772,162.100
Tonnes of Silver in Trust
10,941.34
:
Our ETF's that we follow still command a decent positive to NAV.
The Sprott silver fund PSLV registered a huge positive to NAV of 10.06% reflecting silver's huge strength. (tonight's value..Dec 8.2010
The Sprott gold fund PHYS registered a positive to NAV of : 3.73%( tonight's value.)
The central fund of Canada which represents equal parts of physical silver and gold registered a positive to NAV of:7.2% (tonight's value).
end.
Now we shall discuss the big stories of the day. Without a doubt the big story is the huge increase in yield on the 30 yr bond and the 10 yr bond.
First the official stories and then I will show you how significant this really is:
Here is the result of the 10 yr auction which saw yields rise to 3.34%
13:05 Follow-up: 10-yr note auction yields 3.340%, with bid/cover 2.92 vs average 3.12
* Allotted at high 8.71%
* Indirect participation 44.38% vs. avg of past ten auctions 43.38%
* In reaction:
o 2-yr (6/32) at 0.628%
o 5-yr (26/32) at 1.901%
o Dow 11,358.21, -0.95
* * * * *
end.
Here is the official story from Reuters on the rise in bond yields:
Prices plunge for second day on deficit fears
NEW YORK, Dec 8 (Reuters) - U.S. Treasury prices plunged on Wednesday for a second straight day, pushing benchmark yields to a six-month high, after a deal in Washington to extend tax cuts fueled fears of inflation and a swelling budget deficit.
The sharp dip in prices brought some buyers to the table in an auction of $21 billion of reopened 10-year notes, which was part of $66 billion of coupon-bearing securities sales this week. Bond prices rebounded somewhat from their lowest levels of the day following the sale, which analysts said saw about average demand.
Still, sentiment remained strongly bearish heading into the sale of $13 billion of reopened 30-year bonds on Thursday.
"One auction does not reverse a process, and it would take tens rallying a lot more to give us a convincing technical reversal," said David Ader, head of government bond strategy at CRT Capital Group in Stamford, Connecticut.
A proposal to extend Bush-era tax cuts is expected to boost U.S. economic growth by as much as 1 percentage point next year. But the long-term cost to the government from falling tax receipts has spooked bond investors and resulted in a disappointing three-year debt auction on Tuesday.
Some investors fear such a tax move could result in more bond purchases by the Federal Reserve, which would boost the government's deficit and stoke price inflation.
"This tax agreement is a disaster for the U.S. fiscal situation," said Howard Simons, strategist at Bianco Research in Chicago.
Though the sell-off in Treasuries has certainly been vicious, so far it appears to be a bond market correction from historically low yields rather than the beginning of a sovereign debt crisis like the one that has raged in the euro zone this year.
For example, the cost of insuring U.S. government debt in the credit default swap market was little changed at around 40 basis points, or $40,000 per year for five years to insure $10 million in Treasuries.
Benchmark Treasuries were on track, however, for the biggest two-day sell-off since September 2008. That jump in yields came in an unwinding of safe-haven bets as the
government said it would use $50 billion to back money-market mutual funds and as the U.S. temporarily banned short trading in stocks.
That week in September 2008 witnessed the bankruptcy of Lehman Brothers, a government bailout of giant insurer AIG and the sale of Merrill Lynch to Bank of America.
The Federal Reserve had interest rates at the time set at 2 percent, as opposed to the current range of zero to 0.25 percent.
The market decline on Tuesday resulted in a paper loss of $61 billion, according to Bank of America Merrill Lynch fixed income indexes.
Adding to the bearish sentiment was unwinding of hedges by mortgage investors and weak demand at a 4 billion euro auction of two-year German government debt.
The bond market is stuck in negative territory, as it attempts to find stability after breaching a series of key technical supports in recent days.
"I think that the market is going through the process of re-pricing that in. It was already long, and now you have a situation where the market is re-pricing against what the economic outlook is going forward." said Tom Tucci, head of government bond trading at RBC Capital Markets in New York
Given the swiftness and magnitude of the sell-off, analysts were reluctant to predict where the market would bottom…
-END-
Please note the 61 billion paper loss stated by Bank of America on the huge downfall in bonds.
http://harveyorgan.blogspot.com/