Today London whistleblower and metals trader Andrew Maguire told King World News that gold and silver are vulnerable to a short-term pullback, but expect the price dips to be very shallow.
Gold & Silver COT Report
January 11 (King World News) – Andrew Maguire: “During the US federal government shutdown the Commitments of Traders report (COT), will not be published. No report has been issued by the CFTC since the week of December 18. Do we already know what the month old delayed report will reveal if it was published? 100%, yes…
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Andrew Maguire continues: “Does it matter that the report will reveal controlling COT insiders going 1/1 short and once again building up a net short position against the specs? Only insomuch as it would trigger a predictably weak response from battle weary synthetic traders to place some close by long stops for the CME casino to harvest. However, given that the current rise in gold and silver is being driven by safe haven PHYSICAL buying, any such stop hunting gaming will also trigger additional, very strong physical buying and simply offer up another opportunity for wholesalers with large order books to capitalize on any such dip.
Gold & Silver Vulnerable Short-Term, But Price Dips Will Be Shallow
The COT report only offers up the data the insiders want scripted. The data is rendered largely useless without weighing in the increasingly physically driven side of the transactional ledger. So where are we, really? Given that the Commercial Opex footprints are evidencing resistances lightening up across the entire curve, we can assess that any dips from hereon will be very shallow.
From a technical perspective, the increasingly bullish Opex pricing structure has been heavily influenced by some very powerful upside technical chart damage, evidencing the market making banks exposed to the physical market delta hedging, and repositioning these historically rolled Opex resistances to higher levels. From a fundamental supply/demand perspective and based upon known strong global physical demand and tightening supply, and this acting as the driver that is raising the offer price to sell gold and silver stock out of inventory, we are absolutely sure the same insider banks are simultaneously accruing physical gold and silver for their own books to capitalize upon an upcoming price rise and support reset.
LBMA Forecasts $1,530 Gold In 2019
Driven by global physical demand, the synthetic market swamp is draining, revealing the serious structural disconnect between price setting non-delivery derivative gold and silver, and from a physical market view, what is actually considered to be ‘fair value.’ The LMBA forecast of a $1,530+ gold price in 2019 actually jives with what the wholesale market estimates as current ‘fair value.’ And any interim short-term spec driven wash and rinses aside, (as seen after the strong NFP print and Powell stick saving the S&P), dips will be very shallow as sub $1,500 gold and $21 silver are both considered to be in bargain territory.
Draining the derivative swamp has forced the controlling LBMA cabal of bullion banks to throw up a smokescreen of their activities in London while they cover and reposition ahead of Basel III rules coming into place in April (as we discussed in our last KWN interview, it is no coincidence that the gold and silver backed Kinesis Monetary System launches in tandem with Basil 3 rules monetizing physical gold).
Much like the COT reported component of gold and silver commercial vs. spec positioning, reported LBMA data is also missing one side of the reported data — the difference between the OTC FX reported data of around $5 trillion per annum and the estimated $15+ trillion of estimated OTC volumes reported by liquidity providers, rendering this reported ‘transparent’ LBMA data virtually unusable. In fact, ever since the physical gold window was closed by Nixon in 1971, and gold was licensed as a tradable FX currency under the symbol XAU, and silver became licensed as an FX currency XAG 10 years later, all but a tiny percentage of the reported daily clearing data has ever represented an actual physical trade. Instead, it merely logs transfers between a daisy chain of LBMA members metals accounts.
We’ve Look At LBMA Data For Decades
We have looked at this LBMA published data for decades, but updating the available data, the volumes of reported cleared data has evidenced a rise from some 600 tonnes of daily cleared volumes to 1,000+ tonnes per day, or around 1/3 of total annual global supply that is cleared between LBMA member banks every trading day. Out of the 1,000 tonnes of OTC FX related gold reported as traded each day, the fact is that only 3-5 tonnes are actually physically delivered and settled in London. However, wheels within wheels, the leveraged 100/1 spot gold to physical relationship, reported by the Reserve Bank of India in 2010, has expanded proportionately by at least 40% to a staggering 140/1 or higher, not even accounting for the large percentage of unreported Comex EFP’s fly-wheeled into equivalent OTC forwards. An unspecified number of these deliberately obscured OTC forwards currently enjoy a perpetual 14 day rollover reporting exemption. That will not be the case after Basel III rules are instituted.
Current smoke and mirrors clearing activity fails to capture billions of dollars of obscured EFP fly wheeling where equivalent Comex futures trades are ‘exchanged’ for equivalent OTC forwards positions, the bulk of which escape reporting, by way of contrived OCC rules that discounts all forward positions that are rolled or settled within 14 days. The EFP mechanism should strictly represent an actual physical delivery, which, under 1980 FX amendments, is currently considered to be as good as cash. This is about to change on March 31, 2019, and the banks are gearing up for it.
We have been tracking EFP data for several years, and last year drew attention to an explosion of EFP activity at exactly the same period where we reported a massive divergence between synthetic supply and strong wholesale market activity, which without exception has proved to act as a bullish price driver into enormous synthetic supply. This supply was mostly evidenced as tricked in spec supply ignoring or unaware of the growing physical market divergence that during the last 18 months had evidenced the bullion banks going long physical gold and silver for their own accounts.
The LBMA is projecting a $1,530+ gold price for 2019, and footprints reveal that this is directly influencing fresh physical hedging structures which are the polar opposite of the bearish positioning witnessed into January 2018. I am not saying gold and silver are going to the moon overnight. However, what we are evidencing is an opportunity to swap intrinsically worthless fiat money and to stock up on physical gold and silver while it is still very cheap by any metric.”
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