swissaustrian
Yellow Jacket
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The comment out of Japan tonight (YEN has weakened enough) means they're worried about a spike in their bond yields already. This could easily spill over into other countries.
The comment out of Japan tonight (YEN has weakened enough) means they're worried about a spike in their bond yields already. This could easily spill over into other countries.
GOFO seems to have stabilized somewhat over the last few days:
16-May-13 0.04833 0.06833 0.08000 0.12333 0.18833
17-May-13 0.04833 0.06500 0.07833 0.12167 0.18500
20-May-13 0.05000 0.07167 0.08500 0.12667 0.18333
21-May-13 0.06500 0.08167 0.09500 0.13167 0.18833
22-May-13 0.04833 0.06000 0.07500 0.08833 0.13000
23-May-13 0.04833 0.06667 0.08500 0.13000 0.18833
Looks like someone found a lot of gold...
29-May-13 0.01667 0.03333 0.05500 0.11000 0.19667
30-May-13 0.02500 0.04500 0.06333 0.11500 0.18500
31-May-13 0.07333 0.08833 0.10667 0.14500 0.20167
Perhaps a sign that the bottom is in? We'll see how much blood the streets can hold I guess.
22-May-13 0.01667 0.06000 0.07500 0.08833 0.13000
23-May-13 0.04833 0.06667 0.08500 0.13000 0.18833
24-May-13 0.04833 0.06000 0.07667 0.12333 0.18667
28-May-13 0.03000 0.04200 0.06600 0.12200 0.18600
29-May-13 0.01667 0.03333 0.05500 0.11000 0.19667
Two remarks:
1. They changed the May 22nd data for the 1m rates retroactively :doodoo: (see the post above) That puts a big questionmark behind the data in general
2. 1m rates are about to go negative again. Western central banks are probably pretty busy right now...
If that's true, ie central banks being unable to supply the market via leasing, then demand has to be in the thousands of tons per month. If the official figures of central bank holdings are even closely true, the NY FED and the BOE should have ample gold holdings available for leasing (incl. third party holdings like Germany's gold). Rumors are that these holdings are all leased out already, though. That would mean that we're wittnessing the big one, ie the collapse of the bullion banking system. I don't hold my breath to be honest.This made me think that they have already been intervening to keep gold from going into backwardation via central bank leasing and maybe even manipulating the rates, so the fact that it's finally dived into backwardation makes me think the intervention has already happened and failed?
...
1. Prices should rise in the short term.
2. Negative rates should not stay for more than another day.
3. Something huge is happening behind the scenes.
...
The gold market continues to digest the ramifications of gold borrowing costs surging to the highest since the post-Lehman Brothers scramble for gold bullion.
Gold Forward Offered Rates (GOFO) or the cost to borrow gold remains negative and overnight the 1 month GOFO has gone from -0.106% to -0.11167%. Other durations eased marginally.
The lack of liquidity in the the interbank London Good Delivery gold market (400 ounce gold bars) has pushed gold forward rates, known as “gofo”, into negative territory, meaning that gold for future delivery is trading at a discount to physical market prices – a rare situation that has occurred only after the Lehman Brothers collapse and near the bottom of the gold market in 1999.
The last time forwards were negative was in November 2008, when a scramble for physical gold led a sharp price rally of 46% from $682/oz to over $1,000/oz between October 2008 and February 2009.
...
The increase in gold borrowing costs is likely due to a lack of supply of large 400 ounce bars as mints, refineries and jewellers internationally and especially in Asia are scrambling to secure supply.
Last quarter’s record slump is leading to continued physical demand especially in Asia. China in particular continues to see record demand and premiums on the Shanghai Gold Exchange are now at $24 over spot (see table above).
The feverish buying has left many of Hong Kong’s banks, jewellers and even its gold exchange without enough yellow metal to meet demand according to the FT.
In mainland China, the Shanghai Gold Exchange saw record volumes on Monday, while queues formed outside some jewellery shops in Beijing.
China’s net gold imports from Hong Kong increased from 80 tonnes in April to 108.8 tonnes in May or a 35% increase and May was the second highest total on record.
China is set to become the world’s No. 1 gold buyer this year – and it may be already. So far net imports through Hong Kong for the first five months of the year have totalled over 413 tonnes – double those of a year earlier when China imported just over 830 tonnes in the full year.
...
Backwardation day no. 5!!
12-Jul-13 -0.04167 -0.02333 -0.01333 0.06167 0.17000
Any thoughts SwissAustrian? Do you think it's the big one?
I noticed Comex had a big delivery last night, 50k ounces, but no withdrawals, so no clues there.
Gold still in backwardation and the numbers have gotten worse since Friday not better!
15-Jul-13 -0.05500 -0.04000 -0.02333 0.06167 0.18500
... It might last until the COMEX warehouses are empty and GLD has no inventory, ...
Interesting. 3 months and less is getting worse. 6 months and out is easing up. Something supposed to happen around year end that changes metal availability?
...
11-Jul-13 -0.05167 -0.02833 -0.01500 0.04667 0.15833
12-Jul-13 -0.04167 -0.02333 -0.01333 0.06167 0.17000
15-Jul-13 -0.05500 -0.04000 -0.02333 0.06167 0.18500
16-Jul-13 -0.05667 -0.04333 -0.02500 0.06333 0.18833
17-Jul-13 -0.06500 -0.04667 -0.03000 0.05833 0.17667
Rates have been getting steadily worse this week, so the problem definitely isn't getting better.
Yeah I don't know why the longer rates aren't worse, ...
... maybe they think demand is only tight in the short term because now that India 'seems' to have curbed imports they think demand will start to ease up?
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