The price of gold is surging $25 on news a physical squeeze may be unfolding as 68 tonnes of gold has been delivered from Comex. On the other side of the Atlantic, hundreds of tonnes have been delivered in London.
Physical Gold Squeeze
June 10 (King World News) – Alasdair Macleod: Gold and silver moved sideways this week in light to moderate trade. … Sentiment is increasingly negative, with a general feeling that gold and silver are failing to deliver protection as inflation hedges. But this sentiment is common with any market that is emotionally oversold.
It should be remembered that the bullion banks are taking most of the short side in the paper markets and it is in their interest to close their shorts profitably. This is particularly true at the half-year stage when traders make up their books and report their profits and losses to senior management. There are still three weeks to go to end-June, so they are bound to try and keep their short positions and prices as low as possible.
There is no doubt that they have managed to suppress long interest, as the next chart of declining open Comex positions shows.
Open Interest (Longs) Has Collapsed On Comex
68 Tonnes Of Gold Taken From Comex, Even More From London
But suppressing the paper gold price comes with a cost. On Comex, we have seen a rise in delivery levels, which since the May contract ran off the board have totalled 21,825 contracts, or 67.89 tonnes. If that’s what’s happening on Comex, then the tonnage going out of the far larger London forward market similarly must be well into the hundreds (of tonnes)…
Billionaire and mining legend Ross Beaty, Chairman of Pan American Silver, just spoke about what he expects to see in the gold and silver markets and also shared one of his top stock picks in the mining sector CLICK HERE OR ON THE IMAGE BELOW TO HEAR BEATY’S INTERVIEW.
The next chart expresses this resistance to further falls in a different way. Comex net managed money longs have declined to less than half the long-term average (50,793 v. 111,000 contracts) at a time when the dollar’s trade-weighted index has been strong. Yet, since 2020 gold has consolidated sideways rather than fallen with the decline in interest. While amateur punters are losing patience, the facts illustrate impressive underlying strength.
Comex Net Longs Now Less Than Half
Of Long Term Average
An Accelerating Financial Market Liquidation
So much for the market position. In the coming weeks we can expect to hear more bad news for financial markets, and not only on the inflation/interest rate front. At a bankers’ conference in New York recently, Jamie Dimon of JPMorgan Chase gave the clearest indication that JPMorgan will restrict and contract bank credit.
We can expect all global systemically important banks (G-SIBs) to follow which means credit will be withdrawn from the financial system, accelerating financial market liquidation.
Not only will stocks and bonds will be liquidated, but revolving credit for businesses withdrawn leading to insolvencies. Dimon was signalling a credit crisis which will crash the global economy. The short-term consequences could be seen to be bad for gold because the bullion banks will push the deflation argument for all its worth, while they can.
This Will Be Good News For Gold
The good news, at least for bullion prices, is two-fold. First, part of credit contraction will be banks closing their commodity trading desks, including precious metals. That will impede the banks’ collective ability to suppress prices. Second, the central banks are bound to respond by upping the inflation game, doing whatever it takes to stop their economies going into a credit-induced slump.
JUST RELEASED: Gold, Bonds, Oil, Economy And China Shutdown CLICK HERE.
JUST RELEASED: Gold Preparing To Massively Strengthen vs Stocks CLICK HERE.
JUST RELEASED: ECONOMY IMPLODING: 50 Year Record Shattered As US Consumer Is Devastated. Take A Look At This… CLICK HERE.
JUST RELEASED: This Global Crisis Will Cause Governments To Topple And Chaos To Ensue CLICK HERE.
JUST RELEASED: This Is How Bad Things Have Become, Plus Silver Bull Ready To Emerge CLICK HERE.
JUST RELEASED: PUBLIC PANIC: Recent Record Panic Selling In Stocks Broke Record CLICK HERE.
JUST RELEASED: LAST TIME THIS HAPPENED GOLD ROCKETED: Market Liquidity Now Approaching 2020 Collapse Lows CLICK HERE.
JUST RELEASED: Fear Is Building As This Setup Brought Down Bear Stearns & Lehman In 2008 Collapse CLICK HERE.
JUST RELEASED: The New World Order Will Be Backed By Gold CLICK HERE.
© 2022 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the articles is permitted and encouraged.