Friday, October 2, 2015

The Global Economy Is In Serious Trouble But There Will Be A Short Squeeze In Gold

"...Ironically, Comex, the major futures market where billions of paper gold ounces are traded is not the market where the central banks purchase gold. Comex has become a casino where high frequency trading, spoofing and price rigging has become commonplace. The Swiss watchdog just launched a probe into possible collusion or manipulation of the precious metal trading by seven big bullion banks. In fact, there is growing evidence of a short squeeze developing with Comex’s available gold for delivery is overshadowed by demand on the order of 200 ounces for every one ounce held in the warehouses.
Gold was been in backwardation with the near month for delivery trading at a premium to gold for future delivery reflecting tightness in the physical market where there is less supply. Central banks buy physical gold with nineteen purchasing gold last year. Meantime, China’s Shanghai Gold Exchange has surpassed the trading on Comex where the shenanigans are banned, delivering over 64 tonnes in one week alone. Chinese investors are a big buyer of gold and withdrew almost 1,400 tonnes, up 150 percent in a year from Shanghai Exchange. Simply there’s too many paper ounces against too few physical ounces made less by the regular purchases of China, Russia and the Middle East. Gold players will learn that the shorts should “neither borrower or lender be.”

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