Fraud Confirmed: 100-Day Delay To Take Bullion Delivery In London

This would be a good article, except the author confuses the London Metal Exchange (which deals in industrial metals) <click here> with the London Bullion Market Association (which guarantees good delivery of gold and silver) <click here>.

He correctly calls the 100-day delivery delay at the LME as a default, but that doesn't have anything to do with the dwindling inventory of gold and silver in London and New York, although also true.

http://www.bullionbullscanada.com/gold-commentary/26273-fraud-confirmed-100-day-delay-to-take-bullion-delivery-in-london-

Like a lamb London surrenders London Metal Exchange

http://www.telegraph.co.uk/finance/comment/damianreece/9335026/Like-a-lamb-London-surrenders-London-Metal-Exchange.html

China should not be allowed to buy the LME

My prediction:  if China is the winning bidder for the London Metal Exchange, inflation is guaranteed going forward, as the world's largest consumer of base metals will control the world's biggest exchange.

http://www.telegraph.co.uk/finance/comment/damianreece/9298413/China-should-not-be-allowed-to-buy-the-LME.html

Inquiry Into Monopolistic Trading Practices By JPMorgan On LME Launched, Sending PMs Higher

http://www.zerohedge.com/article/inquiry-monopolistic-trading-practices-jpmorgan-lme-launched-sending-pms-higher

Revisiting registered silver in COMEX depositories

There are approximately 32 million ounces of registered silver in COMEX warehouses.  Each futures contract controls 5,000 ounces of silver.  Which means there is enough deliverable silver for 6,400 COMEX contracts.

The open interest was 123,000 contracts as of today.  126,000 contracts traded last Friday.

Normally, most COMEX contracts are settled via cash (rumor is that cash settlement premiums are up to 80% due to the shortage of physical silver).  However, if enough longs stand for physical delivery, the shorts don't have the inventory and the COMEX would have to default.  That can't be good for an exchange.

The supply/demand dynamic is already strained, and the price of physical silver is starting to bifurcate from the manipulated spot price.  A default would send physical prices soaring above the paper prices.

A default on silver or gold has never occurred at a major exchange.  There was a default on nickel at the LME in London in 2006, at which point nickel prices spiked.  The same thing will happen to silver if there is a delivery default at the COMEX.

Hong Kong Mercantile Exchange's 1 Kilo Gold Contract To End Comex Gold Futures Trading (And "Bang The Close") Monopoly

Long-term, this Hong Kong Mercantile Exchange will be just another vehicle for bullion banks to manipulate the paper prices of precious metals, but short-term, it provides competition for the LME in London and the COMEX in New York.  This is rather bullish for precious metals as the emerging countries in Asia are now the biggest buyers of gold and silver. 

http://www.zerohedge.com/article/hong-kong-mercantile-exchanges-1-kilo-gold-contract-end-comex-gold-futures-trading-and-bang-

First Nickel, Then Silver?

Does anybody think a default at the COMEX can't happen?  Read on.  Note:  The LME, unlike the COMEX, fixes daily prices for physical metals.  And yet, there was still a default.

http://news.silverseek.com/TedButler/1156198042.php

To see how prices reacted after the default in nickel in 2006:

http://www.kitcometals.com/charts/nickel_historical_large.html#5years

Note to self:  buy the physical bullion, not the paper futures contracts.

JP Morgan revealed as mystery trader that bought £1bn-worth of copper on LME

Is JPMorgan cornering the market in copper?

http://www.telegraph.co.uk/finance/newsbysector/industry/8180304/JP-Morgan-revealed-as-mystery-trader-that-bought-1bn-worth-of-copper-on-LME.html

Gold and silver price suppression

Price manipulation conspiracy theories in the London Metals Exchange and COMEX pits are going mainstream.

http://www.nypost.com/p/news/business/metal_are_in_the_pits_2arTlGNbMK7mb1uJeVHb0O/0#ixzz0knioYd8m

Note whistleblower Andrew Maguire and his wife were run off the road in a hit-and-run accident in London a day after the article was published. See previous blog entry about Maguire here.

Beware of fake gold bullion

With the decade-long surge in gold prices, it's inevitable that gold counterfeits are proliferating. Some conspiracy theorists believe even official central bank gold inventories include tungsten, which has the same density as gold, and therefore harder to detect when embedded inside gold bullion bars.

Since the largest central bank of all--the Federal Reserve Bank, has not had an independent audit since 1953, who knows how much gold resides in Ft. Knox and the official US government mints. Add to the list of suspicious gold inventories at the COMEX and LBMA vaults, as well as the gold ETF's, which are allegedly backed by physical gold.

There is a growing disconnect between the countervailing forces for pricing: paper gold contracts are constantly sold short by the bullion banks in futures exchanges, while demand for physical demand remains high, propping up prices. Something has to give, and it will eventually.

Meanwhile, watch this video on how tungsten-filled gold bullion is detected.

http://www.youtube.com/watch?v=ZKczs-7BFRI

According to jsmineset.com:

BullionAnalysis LLC has developed a technological application that is unique to the precious metals market, for the purpose of determining if your bullion has been counterfeited by including tungsten alloy. This technology is completely safe and non-destructive to the precious metal, and will be effective on everything from fractional ounce coins all the way up to the full size 100, 400 and 1,000 ounce COMEX bars of gold and silver.

Their technological application has been developed in response to the growing threat to the bullion community from tungsten/lead alloy adulteration. Tungsten (19.25 g/cm3 density) has a density nearly identical to gold (19.32 g/cm3 density), and lead (11.35 g/cm3) will have a density very close to pure silver (10.45 g/cm3). Lead can also be alloyed with lighter elements to match even closer the density of silver. The threat arises from unscrupulous individuals and possibly institutions that have been removing precious metal from the center of bullion bars and replacing it with tungsten or lead alloy. Modern computer-aided machine tools are then used to seamlessly re-smooth the surface of the bullion product to hide any trace of the theft that has just happened.

Traditionally, the use of a density calculation (mass divided by volume) has been the solution to verify the assay purity of bullion. Unfortunately the insidious use of tungsten and other alloys that match the densities of gold and silver make this test completely useless for this type of problem.

Their new detection technologies are unique to the bullion market. They can detect tungsten/lead and other impurities and cavities that are hidden at any depth inside the bullion product and it is 100% completely non-destructive and safe.

In addition, they are able to produce tamper-resistant holographic-sealed assay certificates with the analysis results for the bullion item, that bear a digital image of the bullion product and show the serial number and hallmark if present. These tamper-resistant assay certificates could then trade with the bullion product and give both buyers and sellers a sense of real security.

At the present time they are focusing their efforts on delivering this service to depositories and institutions and plan to expand their services to cover retail gold and silver investors in the near future.

Spot price vs. street price

I stopped by a local reputable coin dealer yesterday, to pick up some gold and silver coins, and happened to see a sign on one of their displays: "We pay higher than spot prices for gold bullion." Remember: coin dealers have to mark up whatever they pay for their gold purchases, so why would they pay higher for gold bullion from a retail seller--when they could just buy a contract at the COMEX for a lower price? Could it be there is a physical shortage at the COMEX also?

In the local Vietnamese gold market, the premium on the street price for gold above the worldwide spot price reached as high as $59.37. Clearly, there is a worldwide shortage of physical inventory, as premiums firm up above spot prices.

Think about it: why would the spot price, established by the COMEX in New York, or the London Metals Exchange, be so much lower than the true market price? Could it be further evidence that bullion banks are using naked shorting of paper contracts to artificially suppress exchange prices? Furtheremore, could these lower COMEX prices not be reflective of the true price of gold?

Despite setting new all-time highs in nominal prices, gold seems to be setting new support levels--and not new resistance levels, as two central banks (from India and Sri Lanka) stockpile gold, instead of selling their inventory. Other central banks are looking to bid for the remaining IMF inventory for sale, after India swooped in and purchased half of the original 403 tons. China, Russia, and Brazil are looking to shore up their gold reserves. They are coming to the realization that holding USDollars in their reserves is a riskier proposition than holding gold.