Wednesday, June 2, 2010


Harvey Organ's - The Daily Gold released updated June Gold delivery numbers today. The Gold warehouses at the CRIMEX may be in far worse shape than suggested in my post yesterday:

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 17.

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.

Adrian Douglas comments on the deliveries with respect to gold:

The open interest in JUN gold is 6,497 contracts or 0.65 Mozs. With the delivery notices issued the total gold standing for delivery could be 2.5 Mozs. BINGO! This is 77% of the dealer inventory of gold! We have never seen anything like this before. This is stunning. I don’t see how the dealers are going to handle this demand. They will be left with almost nothing. This could be the breaking point for the Comex. Watch this space.

This is about as serious as it gets now for the bullion banks. The potential for a MAJOR short squeeze in Gold may be looming. With the potential now to wipe out 3/4 of the CRIMEX Gold, it will be impossible for the CRIMEX goons to keep up the charade they call a Gold market. It's bad enough that they have been allowed by government regulators to continually sell Gold they do not own under the pretext that less than 1% of the contract holders stand for delivery. With virtually no Gold in the CRIMEX warehouses, even the appearance of a legitimate market in Gold will be impossible. Let the countdown begin!

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