Hochschild Mining Share Discussion Threads

[breaktwister] 17/11/2016 16:18

I read from the Harvey Organ blog that 45t of gold have left the comex in the last two months. Only 51t was delivered in the whole of 2015. If the velocity of physical withdraws is increasing and as we all know the fraudulent sellers dont have the goods then surely the comex days are numbered?

[obbig60] 17/11/2016 16:01

Chip - I find your contributions most valuable in helping me to understand the machinations of the PM markets - so please keep up your commentary.

My question is - does the fact that the paper market is so large actually matter. I know that a gold future gives you the right in principle to be paid in metal but I would guess that many of the players in this market are simply taking a bet on the price of gold etc and are only interested in increasing their bank balance on expiry.
At the end one side will have won and the other side lost, without any actual gold changing hands.
Please feel free to shoot me down!

[chipperfrd] 17/11/2016 15:47

Breaktwister,

I will do my best to keep this board updated, although I am wary of overdoing it as it tends to be an area that most people appear to ignore or lack interest in.

As for the current large open positions on the Dec16 contract: yes, if enough longs stand for delivery then a problem is likely on meeting delivery. But as it has never happened before (to my knowledge) I rather suspect it will somehow be 'fiddled'.

On the other hand, all this excessive use of derivatives just has to end sometime. But I am loath to state that this is that time!
Chip

[breaktwister] 17/11/2016 15:32

Chip, please keep us up to date on the Comex open contracts. I tried to read a COT report recently but didnt understand it. Am I right in thinking that, unless there are a lot of longs closing in the next 10 days then the Comex casino shorts are likely to default on delivery on a scale never encountered before?

[chipperfrd] 17/11/2016 14:36

Probably better to use as it also provides the silver price in INR per 1,000 gm as well as the 10 gm gold price.

[chipperfrd] 17/11/2016 14:28

Gaaston,

Use to get the Delhi price per 10g of 24k gold.

Then divide by 10 and then multiply by 31.1 to get the INR price per oz.

Look up the USD/INR exchange rate on Google and divide the INR price by the FOREX rate to finally get the Indian gold price in USD terms.

Chip

[charles clore] 17/11/2016 14:22

gaaston, Topicel - if you read through this you will find that $2800 gold is indeed mentioned.

[gaaston] 17/11/2016 14:12

Topicel ~ my figure of $2800 was taken from a gold miner thread: I don't know how to access the figure direct, guess not many do!

[topicel] 17/11/2016 14:08

Yes, gold has to be going to India to make the arbitrage gain. Glad to see $2,800 was a nonsense figure btw, $1,446 an ounze is much more realistic and obviously those who can trade gold into India will do so with the price in New York at $1225 or so.

Easy money. Question is, how long will this last and when or if it will impact the price in the west.

As ever, thanks to Chip. I imagine he feels one of his conclusions is to beware another smash down unless the derivatives paper exchange has been sated over this last week so no more fire power needed unless gold makes another attempt north.

Topicel

[hectorp] 17/11/2016 13:42

Afternoon charlie

India is in a mess now chip.
We are reading that gold is almost unobtainable.
Also that USD in some far east cities is also running out..
Today's Japan Bank action to buy " unlimited" bonds has probably stopped the rally on the USD/JPY. Could give gold a boost, if not for... the

Comex open interest.... and those shorts .. poison.. shame they can't lick it up!


H

[charles clore] 17/11/2016 13:33

Indeed chip. I see any weakness in PMs as a physical buying opportunity. As fiat declines I am converting more paper into physical. My problem though, is in deciding where / how to keep the stuff securely with immediate access as there is a limit to how much I am prepared to keep locally and I don't 100% trust the vaults even though they tell me they keep mine separate lol!

[chipperfrd] 17/11/2016 12:51

There will probably be further attempts to drop PM prices by dumping more paper on the LBMA & COMEX this month.

But this is very short term. Over the longer term I cannot see the paper markets competing with actual physical demand and pricing.

[gaaston] 17/11/2016 12:44

That being the case, logic suggests that the mountains of paper contracts should eventually become 'cleaner'
providing buyers insist on physical buying from China or Singapore...... A year ago the Americans 'collected' 6 tonnes from the Ukraine and more recently Switzerland sent west some 40 tonnes, but maybe that was a 'regular' transaction.

there must be a consolidation outcome, however, surely ?

[chipperfrd] 17/11/2016 12:32

In India currently, Silver appears to be at an 11% premium to the LBMA price (ie US$18.93/oz).

[chipperfrd] 17/11/2016 12:30

Gaaston,

Yes I agree entirely.

I hold metals as savings - and not for trading whatsoever.

I hold miners for capital gain.

Chip

[goldenshare888] 17/11/2016 12:28

I feel $1446 is a much more realistic price for GOLD right now.

Next year I expect to see new highs in GOLD & SILVER...

[gaaston] 17/11/2016 12:28

Finally, and you're being so helpful chipp, do you subscribe to the view (long held) that physical gold is slowly, or not so slowly, exiting the west and is finding welcome homes in the east ? If that is the case then surely pm's are a long term hold ? Even with such huge amounts of paper contracts chasing around (confess I don't have your technical skills)

[chipperfrd] 17/11/2016 12:18

Worth noting that, thanks to the crazy financial repression going on in India this month (ie cancellation of their two largest notes), the premium on gold has gone through the roof.

Current INR price/oz = 98,123

At USD/INR of 67.83 that works out at the equivalent of US$1,446/oz !!

I imagine a LOT of bullion is heading into India.

Current premium to LBMA price is 18%.

Chip

[gaaston] 17/11/2016 12:06

Please do keep posting, chipperfrd, but with "your conclusions" if you can, because not all of us can comprehend the detail of some aspects.

Thanks again

[chipperfrd] 17/11/2016 11:51

Hi Gaaston,

re latest data on COMEX gold: (note all figures are in metric tonnes)

Total Open Interest = 1,490.6t

Amount currently standing for delivery on the December contract = 737.49t

(there are therefore 10 trading days left before delivery notices will need to be dispatched on this contract. Hence c. 73.7t/day of Long Closures/Short Covering is needed to reduce this to zero - which looks difficult!). To put it into proportion, the highest delivery month so far this year was June at 49.1t.

Vaulted Gold in COMEX = 64.5t Registered for delivery (so about 1/11th of Dec16 contract). note: this was the level reported on the 10th November.

Deliveries so far on the November contract have been 4.96t.

Total deliveries so far this year = 188.8t.

Total gold withdrawals from COMEX vaults (so far) this year = 39.98t.

As this is all about derivatives, on what tends to be historically a purely paper exchange, perhaps my concern about the high level of the December contract will turn out to be a 'damp squib'. However, it has been at such an extraordinary level, that I have felt obliged to share on this BB.

Prior large movements of Open Interest on the COMEX have always been accompanied by large movements in PM prices - not surprisingly! Hence (IMO), the dramatic turn-down immediately following the Trump win. Clearly, a continuation of the gold price of c. US$1,330 (on the Florida result) would have been 'poison' to the short side of the Dec16 contract.

Chip

[pixi] 17/11/2016 11:49

I bought again yesterday afternoon, HGM and HOC, and and just sold the lot for a clear profit of £4K. I am now back in cash in all three dealing accounts.

[goldenshare888] 17/11/2016 11:42

sign of things to come gaaston.......

:))

[gaaston] 17/11/2016 11:18

chipperfrd

Reference your recent comments about Comex and their silver holdings, are you able to extrapolate a similar view towards gold? = being near half of HOC's production.
Thank you in advance for your insight or comments there.

edit: I see Indians are paying up to $2800 for gold at the moment: due to their cash crisis.

[dstorey1] 17/11/2016 11:09

Yellen before US Legislature today, maybe a few hints regards future monetary policy.

[lauders] 17/11/2016 11:02

I can understand your enthusiasm to be a bull rather than a bear then GS888! I have quite a lot invested here for me but not quite a house-worth, although I suppose it depends on the house! Good luck anyway, as any luck will rub-off on me too ;-)