Friday, May 27, 2011

Long Weekend Ahead For Those Short Bullion

Right now I'm watching the June open interest for Comex gold.  Anyone long a June gold contract and who either can't take delivery or does not have an account funded to take delivery must be out of their June gold position by the end of close today, as Tuesday is 1st notice day and Monday is a holiday.  As of yesterday afternoon, there were still 3.4 million ozs. of open contract positions vs. 1.7 million ozs. of Comex gold available for delivery (registered).  Yesterday saw heavy liquidation of June gold positions, with 60% of that liquidated rolled to August, the next front-month (significant delivery month).  It will be interesting to see what the June gold o/i is for the end of today when the numbers are published Tuesday.  Whatever that number is will be an indication of the number of contracts that want delivery, as notices can go out as early as tonight. 

Typically, NY trading desks start long weekends a day early.  So it's possible that we might not see much liquidation in June today.  For sure the price-action is not indicative of open interest liquidation, although there could be heavy roll with no net liquidation.  Anything around 2mm ozs. still open will not be good news for the Comex shorts.  Stay tuned...

I'm busy watching the French Open on ESPN 2 and adding to my fund's ECU position, so I just wanted to post an excerpt from an interview on King World News with Rob McEwen, a legendary mining company builder/operator:
“If we follow the course of history, we’re going to see the value of the dollar, in terms of its purchasing power, further reduced. Our cost of living is going to go up and that’s not good for anyone. So we need to find ways to protect ourselves, and historically gold, silver have been one of those areas that have protected large parts of financial assets when you have monetary systems being debased by governments that are eager to try to ward off the creditors.  The QE3 is going to happen and there will be a QE4 and probably a QE5. We’re looking at unprecedented amounts of monetary stimulation occurring not only on this side of the Atlantic, but over in Europe and it has been to stave off a collapse. There has been tremendous loss of value, but we haven’t seen a big jump in employment and we haven’t seen a large jump in capital investments and that’s what we need to see.
Here's the LINK.  Buon fine settimana e divertiti per il ponte! (Have a good weekend and have fun for the long weekend)


  1. Think about how you can overlay this story to what happened in the US....remind you of anything...then think about gold!

    Okay, Enough: Stop Feeling Sorry for Misha Khodorkovsky

    But Khodorkovsky didn't do much to add cash to the state's coffers, because he got the money to buy Yukos from ... the Russian government! In those days the Russian Central Bank farmed out some of its operations to private banks.

    Even better, Khodorkosky got his buddies in the Yeltsin administration to allow Menatep to administer the Yukos auction; it naturally excluded its rivals from bidding on the stake, making the Yukos auction a one-horse race.

    Thus Khodorkovsky not only got his stake in Yukos with other peoples' money, he did so through a rigged auction that left him bidding on one of the biggest companies in the world with no rivals, for a ridiculously low price. gives you chills!

  2. Have a great weekend Dave! I am doing MOINKs tomorrow (meatballs wrapped in bacon then smoked.)

  3. Ahahahah you really know italian very well if you know what "ponte" means !!! Ciao e buon ponte a te !


  4. This is how it starts. When the UN pull out we are 30 days away from an Israeli invasion. Put your golden helmets on. Anyone going short after the UN pullout is going to suffer a religious experience.

    Deadly blast hits UN convoy in Lebanon
    Fri May 27, 2011 3:24PM
    Italian peacekeepers, serving with the UN Interim Force in Lebanon
    At least one person has been killed and four others wounded in a roadside bomb explosion targeting a UN peacekeeping patrol south of Lebanon.

    Lebanese security sources say the blast occurred as an Italian patrol in the UN Interim Force in Lebanon (UNIFIL) was on a highway leading to the coastal city of Sidon on Friday.

    An Italian peacekeeper was killed in the blast while one of those wounded is in critical condition, Italy's ANSA news agency reported, citing defense ministry sources.

    The multinational force, which is tasked with monitoring Lebanon's border with Israel, has yet to comment.

    UNIFIL currently has 13,000 troops stationed in south Lebanon, with Italy holding the largest contingent.

    The last attack against UNIFIL troops was in January 2008, when a roadside bomb struck a UN vehicle traveling along the coastal highway south of Beirut. Two peacekeepers were wounded in the blast.

    The deadliest attack against UNIFIL was in June 2007, when six Spanish peacekeepers were killed after a bomb hit their convoy near the Israeli border.

  5. Geez GYC - that sounds like a total cholesteral explosion! Let me know when the pics are posted.

    I found a deli in downtown Denver that has H&H Bagels flown in every day plus they have a pizza place that has the best pizza in Denver. It's as close to NYC 'za as anything I've had here!

  6. Lol Marco. Grazie per le vostri parole gentili. Ho imparato che quello dalla mia insegnante di l'italiano!

  7. Yeah I understand why my grandfather lost his leg and brother in the scumbags like these could enjoy their lives...?

    More Political Capture: Goldman Hires Top Republican Fed Transparency Foe; Spends More Time With SEC Than Any Other Bank

    In the wake of the financial crisis, which has been partly blamed on
    the excesses of Wall Street banks such as Goldman, Gregg was an
    outspoken critic of the Obama administration's effort to tighten
    oversight of the financial industry. He was also a defender of Goldman
    during the heated congressional debate over the $700 billion bank

    Early last year, Gregg said that Democrats were overreacting to civil
    charges filed against Goldman for securities fraud by using the
    indictment to push regulatory reform. He noted at the time that the
    allegations had not yet been proven in court.

    "It's really disingenuous for some people to pursue regulatory reform
    based off this one instance," the retired senator said on MSNBC. "This
    is a single event, we don't even know what the outcome will be."

  8. Listen...

    The Last Nail - Floor Speech May 25 2011

    The Last Nail The last nail is being driven into the coffin of the American Republic. Yet, Congress remains in total denial as our liberties are rapidly fading before our eyes. The process is propelled by unwarranted fear and ignorance as to the true meaning of liberty. It is driven by economic myths, fallacies and irrational good intentions. The rule of law is constantly rejected and authoritarian answers are offered as panaceas for all our problems. Runaway welfarism is used to benefit the rich at the expense of the middle class. Who would have ever thought that the current generation and Congress would stand idly by and watch such a rapid disintegration of the American Republic? Characteristic of this epic event is the casual acceptance by the people and political leaders of the unitary presidency, which is equivalent to granting dictatorial powers to the President.

  9. Dave--

    I can understand why you don't want to reveal your ultimate target for gold. It looks like Jim Sinclair recently did that though.

    In recent posts, he outlined "the formula" he used in 1974 to predict that gold would hit $900 at the top of the 70s bull (came close enough for me). After outlining that formula, he challenged his readers to put it to work and come back with an estimate for the top of this gold bull.

    The answer that he said was correct: $13,664/oz. Sinclair says this is the price "where gold wants to go."


  10. jh, i posted this in comment section Wed - i was cajoled into doing it LOL:

    re: gold target and timeframe. my calls for what will happen as this unfolds are always several years early. I thought we would be where we are now in 2005. i do think the process is accelerating.

    Let's just say I think gold could easily hit $10,000 within the next 3-5 years. The ultimate target will depend on what price it needs to revalued to in order for the China/China et al. to create gold/silver-backed currency.

    I like $30,000, but if the U.S. were monetize all of its obligations, on and off-balance sheet plus known entitlement commitments, the gold it supposedly owns - 8100 tonnes - would have to be reval'd up to around $40k.

    The upside is probably more of a moving target than the timeframe....

  11. Let me add this: we may end up in a totalitarian system and be engaged in widespread global conflict before my target of $30k-40k is something we can ever enjoy for being right. And the dollar will be completely useless.

  12. Thanks, Dave!

    You have a great site, and are very generous with your considerable expertise. You're helping a lot of people weather this Financial Hurricane.

    All the best!


    "Newman in Minneapolis" ;^)