Tuesday, January 28, 2014

"Demand Physical Gold" As One Day Paper Price Manipulation Will End "Catastrophically"

"Physical gold is in a serious present shortage with price implications soon to be seen."
  --Jim Sinclair

"We are currently seeing all time lows in registered gold and all time highs in claims against that gold. What is wrong with this picture?"
 --Art Cashin

Scrambling Gold Mints Around The World Plead: "We Can’t Meet The Demand, Even If We Work Overtime"

Submitted by Tyler Durden on 01/27/2014

One of the big disconnects over the past year has been the divergence between the price of paper gold and the seemingly inexhaustible demand for physical gold, from China all the way to the US mint. Today we get a hint on how this divergence has been maintained: it now appears the main culprit is the massive boost in supply by gold mints around the world working literally 24/7, desperate to provide enough supply to meet demand at depressed prices in order to avoid a surge in price as bottlenecked supply finally catches up with unprecedented physical demand.

Bloomberg reports that "global mints are manufacturing as fast as they can after a 28 percent drop in gold prices last year, the biggest slump since 1981, attracted buyers of physical metal. The demand gains helped bullion rally for five straight weeks, the longest streak since September 2012. That won’t be enough to stem the metal’s slump according to Morgan Stanley, while Goldman Sachs Group predicts bullion will "grind lower" over 2014." Odd - one could make the precisely opposite conclusion - once mints run out of raw product, the supply will slow dramatically forcing prices much higher and finally letting true demand manifest itself in the clearing price.


Gold Mint Runs Overtime in Race to Meet World Coin Demand

By Debarati Roy Jan 27, 2014

Austria’s mint is running 24 hours a day as global mints from the U.S. toAustralia report climbing demand for gold coins even while Goldman Sachs Group Inc. says this year’s price rebound will end.

Austria’s Muenze Oesterreich AG mint hired extra employees and added a third eight-hour shift to the day in a bid to keep up with demand. Purchases of bullion coins at Australia’s Perth Mint rose 20 percent this year through Jan. 20 from a year earlier. Sales by the U.S. Mint are set for the best month since April, when the metal plunged into a bear market.

Global mints are manufacturing as fast as they can after a 28 percent drop in gold prices last year, the biggest slump since 1981, attracted buyers of physical metal. The demand gains helped bullion rally for five straight weeks, the longest streak since September 2012. That won’t be enough to stem the metal’s slump according to Morgan Stanley, while Goldman Sachs Group predicts bullion will “grind lower” over 2014.

“The long-term physical buyers see these price drops as opportunities to accumulate more assets,” said Michael Haynes, the chief executive officer of American Precious Metals Exchange, an online bullion dealer. “We have witnessed some top selling days in the past few weeks.”


The FT Goes There: "Demand Physical Gold" As One Day Paper Price Manipulation Will End "Catastrophically"

Submitted by Tyler Durden on 01/25/2014

What have we done: after a series of reports in late 2012 in which we showed, with no ambiguity, that not only might the Bundesbank's offshore held gold be severely "diluted" (follow our 2012 exposes on German gold here,here, here, and here), but that on at least one occassion, the Fed and the Bank of England conspired against the Buba in returning subpar quality gold, the Bundesbank shocked everyone in early January 2013 when it announced it would repatriate 300 tons of gold helt in New York and all of its 374 tons of gold held in Paris. But convincing the Bundebsbank to demand delivery was peanuts compared to changing the tune of the Financial Times - that bastion of fiat "money", and where the word gold is mocked and ridiculed, and those who see the daily improprieties in the gold market as nothing but "conspiracy theorists" - to say the magic words: "Learn from Buba and demand delivery for true price of gold", adding that "one day the ties that bind this pixelated gold may break, with potentially catastrophic results."

In other words, precisely what we have been saying since the beginning.

Welcome to the 'conspiracy theorist' club, boys.

From the FT's Neil Collins: "Learn from Buba and demand delivery for true price of gold: One day the ties that bind the actual and the traded commodity will snap:


Is there a shortage of physical gold?

Sultan Ameerali, BNN.ca staff
1:18 PM, E.T. | January 17, 2014

With spot gold trading near $1,260 US, veteran trader Tres Knippa says investors should consider accumulating physical gold to take advantage of a delivery squeeze.

Pointing to recent Comex futures data, Knippa says there may not be enough gold to go around if everyone with a futures contract insists on taking delivery of physical bullion. He believes gold shot through $1,900 in 2011 before plunging last year because of an explosion in the amount of gold futures contracts – setting up separate markets for “real” and “paper” gold.

“Maybe the reason gold prices went up is an expansion of that multiple of the amount of paper gold versus real gold,” Knippa tells BNN. “So maybe the market has come back down as the people who are holding the paper gold start to liquidate it.”

“But the underlying story here is that the people acquiring physical gold appear to be continuing to do that. And that’s what I think is important,” Knippa adds, noting large investors like hedge fund manager Kyle Bass are taking delivery of the gold they're buying.


Things That Make You Go Hmmm...Manipulation of Gold by Central Banks Cannot Continue in 2014

By Grant Williams, 1/20/2014

2013 was an absolutely seismic year for gold, but the way in which the tectonic plates shifted has yet to be fully understood.

I firmly believe that in the years to come, when we look back at the great game being played in gold, we will pinpoint January 16, 2013, as the day when it all began to unravel.

That day, the day the Bundesbank blinked and demanded its bullion, will be shown to be the beginning of the end of the gold price suppression scheme by the world's central banks; and then gold will go on to trade much, much higher.

The evidence of suppression is everywhere, though most refuse to believe their elected officials are capable of such subterfuge. However, the recent numerous scandals in the financial world are slowly forcing people to realize that anything and everything can be manipulated.

Libor, mortgage rates, FX — all were shown to be rigged markets, but NONE of them have the importance that gold has at the centre of the financial universe, yet all of them are far bigger markets than gold and therefore much harder to rig.

Gold is a manipulated market. Period.

2013 was the year that manipulation finally began to unravel.

2014? Well now, THIS could be the year that true price discovery begins in the gold market. If that turns out to be the case, it will be driven by a scramble to perfect ownership of physical gold; and to do that you will be forced to pay a lot more than $1247/oz.

Count on it...


Precious Metals in 2014

Alasdair Macleod, Posted 31 December 2013

Gold has become undervalued relative to fiat currencies such as the US dollar, as shown in the chart below, which rebases gold at 100 adjusted for both the increase in above-ground gold stocks and US dollar FMQ since the month before the Lehman Crisis.

Given the continuation of the statistically-concealed economic slump, plus the increased quantity of dollar-denominated debt, and therefore since the Lehman Crisis a growing probability of a currency collapse, there is a growing case to suggest that gold should be significantly higher in corrected terms today. Instead it stands at a discount of 36%.

This undervaluation is likely to lead to two important consequences. Firstly, when the tide for gold turns it should do so very strongly, with potentially catastrophic results for uncovered paper markets. The last time this happened to my knowledge was in September 1999, when central banks led by the Bank of England and the Fed rescued the London gold market, presumably by making bullion available to distressed banks. The scale of gold's current undervaluation and the degree to which available monetary gold has been depleted suggests that a similar rescue of the gold market cannot be mounted today.

The second consequence is to my knowledge not yet being considered at all. The speed with which fiat currencies could lose their purchasing power might be considerably more rapid than, say, the collapse of the German mark in 1920-23. The reason this may be so is that once the slide in confidence commences, there is little to slow its pace.


Saturday, January 25, 2014

Gold And Silver Manipulation “Conspiracy Theories” Are Becoming More Conspiracy Fact By The Day

"It's easier to fool people than to convince them that they have been fooled." 
   - Mark Twain

If Physical Gold Demand Soared As Gold Price Tumbled In 2013 | Zero Hedge, why did the "price" of Gold fall 28% over the course of the last year? The WSJ reports that demand for gold coins shot up 63% to 241.6 metric tons in the first three quarters of 2013.
"Most people who buy physical gold aren't doing it for the same reason you'd purchase a stock," said Mike Getlin, vice president with Merit Financial, a bullion and coin dealership in Santa Monica, Calif. "They tend to have a much longer investment horizon. They tend to hold onto them forever and pride of ownership is a huge factor in that."
What do these buyers of Gold in a market falling in price know that the "mainstream" doesn't?

The Mainstream Loves to Hate Gold

In his famous essay on gold and economic freedom published in 1966, Alan Greenspan stated that gold stands as a “protector of property rights”:
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.”

Many readers probably have come across this tidbit already, but for those who haven't, here is an interesting excerpt from an article published by the New York Times:
“Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.
The rout says a lot about consumer confidence in the worldwide recovery. The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined to eliminate gold's allure. 
Although the American economy has reduced its rapid rate of recovery, it is still on a firm expansionary course. The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators' dreams into a nightmare.”
This reads exactly like what much of the mainstream press has written about gold over the past several weeks. A more perfect reflection of the current conventional wisdom is hardly imaginable as Peter Schiff has pointed out.

There is only one problem – this article wasn't written today, or at anytime in the past few weeks. Rather, it appearedin the August 29, 1976 edition of The New York Times. Gold had just gone through a vicious correction, losing almost 50% of its value in a span of a little over 18 months. Unbeknown to the authors of the article, it had actually bottomed exactly four trading days before the article was published, and embarking on a rally that would eventually see it rise by nearly 800% from said low over the next three years.

The reason for mentioning this is not to assert that exactly the same thing is going to happen again these days – we don't know the future after all. It is merely meant to demonstrate how utterly misguided the conventional wisdom often is, especially in connection with financial assets. Every word of this article reflects today's conventional wisdom as much as it reflected the general opinion in 1976. If the NYT wants to publish an article about gold today, it actually doesn't even need to write anything new: it could simply copy/paste this 1976 article. No-one would notice.


How low will gold go in 2014? Consensus forecast says down 14.5%

January 15, 2014

Why will gold prices keep falling? A Bank of America Merrill Lynch strategist has said a lack of buyer interest is his biggest worry. A stronger global economy, a continued tapering in the Federal Reserve’s bond buying and no sign of inflation could also pull interest away from gold, analysts say.


"There are a number of good reasons why so many love to hate gold. We rather suspect though that this tends to cloud their judgment. They certainly have no better handle on the future than we do, and their forecasts need to be taken with a big grain of salt. Once there is such a broad consensus about a trend, the trend is usually close to reversing."
  --Pater Tenebrarum in The Mainstream Loves to Hate Gold 

“Truth is like the sun. You can shut it out for a time, but it ain't going away.”
   ― Elvis Presley

Conspiracy Fact?

Author : Bill Holter 
Published: January 22nd, 2014

I just recently wrote that “2 things will happen:”

1. It will be understood that the central banks have far less gold than they had claimed

2. The true “fractional reserve” nature of the paper gold markets will become common knowledge

I’d like to do a couple of things here, first use a little common sense to show that these will become “conspiracy fact” and then how might the “reaction” be.

“We” conspiracy nuts have long said that physical supply did not and could not meet the current physical demand for nearly 20 years now. We argued that WGC and GFMS demand numbers were always too low and that supply numbers to meet even their too low numbers were fudged with “scrap” used to plug the gap. We argued all along and much more fervently after many central banks turned into buyers that the ONLY places that the supply could have come from were the central banks (particularly the Fed). Using only 3rd grade common sense here, why is it do you suppose that Germany was told 1 year ago that they’d have to wait 8 years to get 20% of their gold back? Was it because as we were “told” that any undertaking “this large” would take many years…or maybe because the gold actually isn’t in the vault anymore? I would ask the question, how has China imported several thousand tons over the last couple of years yet we can’t move 300 tons unless it’s done of 8 years? Does China have “stronger boats” or “more powerful airplanes?” Or is the gold that we are shipping of the “heavier sort?” Yes I know, gold is gold but I never could get the answer correct whenever asked which is heavier, a pound of feathers or a pound of gold.


Dear reader, the majority of “stuff” I read from analysts and economists these days says the 12-year run in gold bullion is over…the U.S. economy is getting better and gold has no reason to go back up. Hogwash, I say.

After a 12-year bull market in gold prices, the correction came in 2013. The depth of the correction caught many gold investors by surprise. And many investors have given up on gold’s future. It’s at that point, when the speculators have left the market, that a correction in an upward-moving market completes itself and the bull resumes. I’ve seen it happen countless times…it’s exactly what’s happening with the 12-year-old bull market in gold bullion.

A massive price shock is coming to the gold market…and it will be on the upside.


Historic Short Squeeze To Send Gold To New All-Time Highs

Eric King, KingWorldNews.com - January 22, 2014

On the heels of tremendous volatility in key global markets, today a 42-year market veteran spoke with King World News about exactly what is going to trigger a massive and historic short squeeze that will quickly send gold to new all-time highs. John Hathaway, who is one of the most respected institutional minds in the world today when it comes to gold, and whose fund was awarded a coveted 5-star rating, also discussed how this short squeeze will unfold, and what it will mean for investors.

Eric King: “Earlier in this interview you predicted a major short squeeze in the gold market. How do you see this short squeeze unfolding, John?”

Hathaway: “There are people who sold gold synthetically. A lot of that settlement will be made in cash. There are a lot of people who are short and you can see that in the CFTC numbers -- managed money accounts, managed futures, HFTs (high frequency traders), etc....

“But all of these shorts will need to get on side. Again, they can settle in cash, but what you see on the Comex is just a fraction of the shorts that are out there. Some of this is because of the opacity of London.

But once people begin to question the integrity of the intermediaries between the financial market and the bullion market, and those would be primarily Comex and even more importantly the London mechanism, those exchanges for dealing with gold will be bypassed. KWN has reported on the increase of gold that is no longer going through London. I think that is really going to hurt the leveraged trading of gold and create a demand for the real metal itself.

This demand for the real thing will be through exchanges like the one in Shanghai, where you have 100% physical gold backing all of the paper. There are a lot of ramifications from this. We have seen the Germans, after asking for their gold over a year ago, have only received 5 tons from the US. What’s that all about?

This all comes down to the integrity or the lack thereof in the connection between financial instruments, financial intermediaries, and physical gold. It seems to me that the potential is great for people to say, in sort of a moment of epiphany, ‘There is a difference. I don’t want to have unallocated gold accounts with my bank. I want to have the real thing. I don’t want to have gold in an ETF where I can’t get my hands on it.’

They will just want to have a form of liquidity, which is physical gold, that’s not in the banking system. The banking system is becoming increasingly oppressive, onerous, and intrusive. So I think we are in the very early days of recognition that banks are instruments of government policy.


Watch Out, "Bull Market Ahead" - Seven Key Gold Charts

Submitted by GoldCore on 01/17/2014

Gold and silver manipulation “conspiracy theories” are becoming more conspiracy fact by the day.

Often “a picture paints a thousand words” and the seven key gold charts below should make gold bears nervous. The charts were compiled by Nick Laird ofwww.ShareLynx.com and emailed to us Wednesday night. Sharelynx.com is a great website for charts and well worth the subscription.

The seven gold charts suggest that there is a “bull market ahead”, as Nick says. Again, we may see some further weakness in the short term but the outlook is good for 2014 and the coming years.

So without further ado, lets look at these important gold charts.

Gold Chart 1 - The banks are long gold ...

Gold Chart 2 - Gold stocks are being withdrawn ...

Gold Chart 3 - Supplies are being held back ...

Gold Chart 4 - COT Data shows that banks and others are positioned perfectly for a bull run to start ... 
Gold Chart 5 - Pivot point time - double bottom ...
Gold Chart 6 - Never been a better buy …
Gold Chart 7 - Just bounced off one of it's most oversold phases ...

Sentiment is as bad as we have seen it in the precious metals market. As the charts show, such sentiment, price action and oversold conditions tend to coincide with major lows in gold and silver prices and multi month price gains. 
Very poor sentiment towards gold and oversold conditions is reminiscent of the conditions seen in  late 2008 and January 2009 when gold prices had fallen by more than 25% in 9 months.

 Gold in US Dollars - 6 Years
Subsequently, gold rose from a low on January 15, 2009 at $802.60/oz to a high less than 12 months later at $1,215/oz for a gain of over 50%.  A similar move today would see gold above $1,800/oz by year end.
We believe similar gains may be seen in the coming months and years. Investors should position themselves accordingly.

What an Inflation-Adjusted All Time High in Gold Would Look Like

Submitted by Phoenix Capital Research on 01/22/2014

Gold has been in a bear market for some two years now. As a result of this, many investors believe that the precious metal is no longer a viable investment.

No investment ever goes straight up or straight down. During the last bull market in gold, the precious metal rose 2,329% from a low of $35 in 1970 to a high of $850 in 1980. However, during that time, there was a period of 18 months in which gold fell nearly 50% (see the chart below)

As you can see, from mid-1971 to December 1974, gold rose 471%. It then fell 50%, from December ’74 to August ’76. After that, it began its next leg up, exploding 750% higher from August ’76 to January 1980.

With that in mind, I believe the next leg up in Gold could very well be the BIG one. Indeed, based on the US Federal Reserve’s money printing alone Gold should be at $1800 per ounce today.

Moreover, at $1,800, Gold is Still Nowhere Near Its All-Time High


So I ask again...

What do these buyers of Gold in a market falling in price know that the "mainstream" doesn't?


Tuesday, January 21, 2014

Precious Metals Manipulation At Risk Of Failure As Physical Supplies Running Out

The manipulation of the gold market by the U.S. Government and the Federal Reserve has been going on for decades.  If you are reading this, you are most likely very aware of this suspicion fact.  Others who have aided and abetted the Federal Reserve and the U.S. Government  over the years, and are the suspected accomplices in this Global Fraud are JP Morgan, Goldman Sachs,  Barclays Plc , Deutsche Bank AG, Bank of Nova Scotia, HSBC Holdings Plc and Societe Generale SA.

I prefer to think of this "manipulation of the gold market" as a coordinated effort to "suppress" the "price" of Gold.  For if this were a real "manipulation" of the Gold Market, how could the manipulators run out of Gold?  The manipulators stopped selling "physical" Gold months ago, and resorted to selling Gold which they didn't own doesn't exist to maintain the "false impression" of a weak Gold Market based solely on a sliding "price" over the past two years.

How could the "price" of Gold be falling if demand is at all-time highs?  With the illusion of unlimited Gold to sell in the "Gold Futures Market", created by selling non existing Gold, the above mentioned banking entities, along with the blessings of the U.S. Government have created the largest "reverse bubble" the financial markets have ever witnessed.

Reverse Bubble?  Yes!  Rising demand for Gold as the price has been artificially driven down has created a scenario for one of the greatest short squeezes of ALL-TIME.

Join me as I connect the dots to The Beginning Of The End Of The Global Gold "Price" Manipulation.

Metals, Currency Rigging Is Worse Than Libor, Bafin Says  Jan 17, 2014 7:11 AM ET

Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal, which has already led to fines of about $6 billion.

The allegations about the currency and precious metals markets are “particularly serious because such reference values are based -- unlike Libor and Euribor -- typically on transactions in liquid markets and not on estimates of the banks,” Elke Koenig, the president of Bonn-based Bafin, said in a speech in Frankfurtyesterday.

Koenig is the first global finance regulator to comment publicly on the investigations as probes into the London interbank offered rate, or Libor, expand into other benchmarks. Joaquin Almunia, the European Union’s antitrust chief, said this week that its preliminary probe into possible foreign-exchange manipulation covers similar practices as in the regulator’s probe into Libor-rigging.

Investors should short Deutsche Bank AG (DBK) stock because of probes into currency manipulation and as a rally in banking shares reverses, Berenberg Bank said in a report today. “The investigations by regulators into the bank’s foreign-exchange trading remain a significant risk considering Deutsche is the world’s largest foreign-exchange dealer,” Berenberg said.

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K."  - Eddie George, then Governor of the Bank of England, 1999

The Hows and Whys of Gold Price Manipulation

January 17, 2014
By Paul Craig Roberts and Dave Kranzler

The deregulation of the financial system during the Clinton and George W. Bush regimes had the predictable result: financial concentration and reckless behavior. A handful of banks grew so large that financial authorities declared them “too big to fail.” Removed from market discipline, the banks became wards of the government requiring massive creation of new money by the Federal Reserve in order to support through the policy of Quantitative Easing the prices of financial instruments on the banks’ balance sheets and in order to finance at low interest rates trillion dollar federal budget deficits associated with the long recession caused by the financial crisis.

The Fed’s policy of monetizing one trillion dollars of bonds annually put pressure on the US dollar, the value of which declined in terms of gold. When gold hit $1,900 per ounce in 2011, the Federal Reserve realized that $2,000 per ounce could have a psychological impact that would spread into the dollar’s exchange rate with other currencies, resulting in a run on the dollar as both foreign and domestic holders sold dollars to avoid the fall in value. Once this realization hit, the manipulation of the gold price moved beyond central bank leasing of gold to bullion dealers in order to create an artificial market supply to absorb demand that otherwise would have pushed gold prices higher. The manipulation consists of the Fed using bullion banks as its agents to sell naked gold shorts in the New York Comex futures market. Short selling drives down the gold price, triggers stop-loss orders and margin calls, and scares participants out of the gold trusts. The bullion banks purchase the deserted shares and present them to the trusts for redemption in bullion. The bullion can then be sold in the London physical gold market, where the sales both ratify the lower price that short-selling achieved on the Comex floor and provide a supply of bullion to meet Asian demands for physical gold as opposed to paper claims on gold.

The evidence of gold price manipulation is clear. In this article we present evidence and describe the process. We conclude that ability to manipulate the gold price is disappearing as physical gold moves from New York and London to Asia, leaving the West with paper claims to gold that greatly exceed the available supply.

Former Assistant Treasury Secretary Paul Craig Roberts is making some bold new claims about the Federal Reserve and its official government gold holdings. Dr. Roberts contends,“They don’t have any more gold. That’s why they can only give Germany 5 tons of the 1,500 tons it’s holding. In fact, when Germany asked for this delivery last year, the Fed said no. But it said we will give you back 300 tons . . . . So, they said we will give you back 20% of what you trusted us to keep for you over the next seven years, but they are not even able to do that.” Dr. Roberts goes on to say, “The stocks of gold at the Bank of England seem to be disappearing. The stocks of many of the gold trusts, such as GLD, are being looted . . . all of this gold is disappearing into Asian markets. The entire West is being drained of gold.” According to Dr. Roberts, this is an inflection point for the gold market. Dr. Roberts says, “The reason is: the ability to supply large amounts of gold to the bullion dealers to sell has diminished with the supply of gold and silver. What the Fed did was turn to massive ‘naked shorts’ of gold futures contracts. They don’t have the real gold . . . so they come in and dump contracts, say in a period of 6 minutes, that are three times the amount of gold COMEX has to make delivery. . . . So, it drives down the price of gold. That’s how they got the price down from $1,900 to $1,250.”


Deutsche Bank reports surprise loss as legal costs mount

19 January 2014

Deutsche Bank has reported a surprise loss for the fourth quarter of 2013, after releasing its latest results before they were expected.

Overall Deutsche said it posted a pre-tax loss of 1.153bn euros for the final quarter of 2013.

The bank said that litigation costs and restructuring had weighed heavily on its financial performance.

Also in December it was among six banks fined $2.3bn (£1.4bn) by the European Commission after been found guilty of colluding to rig two global interest rate benchmarks.

Deutsche Bank suffered the largest fine of the six - 725.36m euros - over rate fixing.

For the year, it has set aside 2.5bn euros for various lawsuits.


Deutsche Bank To Withdraw From Gold Fix Amid Probe

Published January 17, 2014

Deutsche Bank will withdraw from gold and silver benchmark setting, or fixing, amid an investigation by German regulators into suspected manipulation of precious metals prices by banks.

Deutsche, one of five banks involved in the twice-daily gold fix for global price setting, said it was dropping out of the process after withdrawing from the bulk of its commodities business.

"Deutsche Bank is withdrawing its participation in the gold and silver benchmark setting process following the significant scaling back of our commodities business," the bank said in a statement on Friday.

"We remain fully committed to our precious metals business."

In mid-December, German banking regulator Bafin demanded documents from Deutsche Bank as part of a probe into suspected manipulation of benchmark gold and silver prices by banks, the Financial Times reported, citing sources.


Shortage of large gold bars leads to rare London premiums

Posted on January 15, 2014 by Eddie van der Walt
London 15/01/2014 – The London bullion market has seen intermittent shortages of 400-ounce bars, traders in the City told FastMarkets, pushing premiums for physical delivery for these large bars as high as 50 cents.

This shortage may have been driven by several factors, including a scramble for physical delivered material after the end of the year and reduced availability due to good delivery bars flowing from London to the Far East, they suggested.

“There is a shortage of big bars, especially good-delivery 400-ounce bars,” Bernard Dahdah at Natixis said. “One part of the problem is that large quantities of these bars that have come from ETFs, have now been moved to be re-refined into three-nines bars of smaller sizes and are therefore no longer available to the London market.”


Germany Has Recovered A Paltry 5 Tons Of Gold From The NY Fed After One Year

Submitted by Tyler Durden on 01/19/2014

On December 24, we posted an update on Germany's gold repatriation process: a year after the Bundesbank announced its stunning decision, driven by Zero Hedge revelations, to repatriate 674 tons of gold from the New York Fed and the French Central Bank, it had managed to transfer a paltry 37 tons. This amount represents just 5% of the stated target, and was well below the 84 tons that the Bundesbank would need to transport each year to collect the 674 tons ratably over the 8 year interval between 2013 and 2020. The release of these numbers promptly angered Germans, and led to the rise of numerous allegations that the reason why the transfer is taking so long is that the gold simply is not in the possession of the offshore custodians, having been leased, or worse, sold without any formal or informal announcement. However, what will certainly not help mute "conspiracy theorists" is today's update from today's edition of Die Welt, in which we learn that only a tiny 5 tons of gold were sent from the NY Fed. The rest came from Paris.

As Welt states, "Konnten die Amerikaner nicht mehr liefern, weil sie die bei der Federal Reserve of New York eingelagerten gut 1500 Tonnen längst verscherbelt haben?" Or, in English, did the US sell Germany's gold? Maybe. The official explanation was as follows:

The BlazeTV, Glen Beck


Century-Old London Gold Fix Said to Face Overhaul Amid Scrutiny

By Suzi Ring, Liam Vaughan and Nicholas Larkin Jan 21, 2014

Banks are considering an overhaul ofLondon’s century-old gold benchmark used by miners, jewelers and central banks to buy, sell and value the precious metal, according to a person with knowledge of the process.

The five banks that oversee the so-called London gold fixing -- Barclays Plc (BARC), Deutsche Bank AG (DBK), Bank of Nova Scotia, HSBC Holdings Plc (HSBA) and Societe Generale SA (GLE) -- have formed a steering committee that’s seeking external firms to advise how the process could be improved, according to the person, who asked not to be identified because the review isn’t public.

The fixing is a rate-setting ritual dating back to 1919. Representatives of the five member banks spend from a few minutes to more than an hour on the telephone discussing buying and selling gold. The method has faced scrutiny in recent months, with regulators in London, Bonn andWashington -- who are already looking into manipulation of interest rates and currencies -- investigating how prices are set in the market.


COMEX Gold Stocks At Record Lows As SGE Volumes Surge 61%

Technically, gold is looking sounder. Support is at $1,220, $1,200 and of course what appears to be a double bottom at $1,180/oz. A close above $1,270 could see gold quickly move to test resistance at $1,300 and $1,330.

The supply demand fundamentals of the gold market remain sound with the flow of gold from West to East.

COMEX gold stocks have fallen to new record lows (see chart) showing demand for physical bullion remains very robust. Indeed, the scale of the fall in COMEX gold stocks since 2007 and which accelerated in early April 2013 is important to note.


Gold Should be at $1800 Based on the Fed Balance Sheet Alone

Submitted by Phoenix Capital Research on 01/20/2014

Since the Crash hit in 2008, the price of Gold has been very closely correlated to the Fed’s balance sheet expansion. Put another way, the more money the Fed printed, the higher the price of Gold went.

Gold did become overextended relative to the Fed’s balance sheet in 2011 when it entered a bubble with Silver. However, with the Fed now printing some $85 billion per month, the precious metal is now significantly undervalued relative to the Fed’s balance sheet.

Indeed, for Gold to even realign based on the Fed’s actions, it would need to be north of $1,800. That’s a full 30% higher than where it trades today (see below).