"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Tuesday, May 27, 2014

GLD reports Big Jump in Gold Holdings

GLD, reported a very sizeable jump in reported gold holdings this afternoon, something which I felt has enough significance that it should be noted. Holdings were at 776.89 tons as of last Friday but jumped to 785.28 tons this afternoon. After all, an 8.39 ton increase is not a small matter.

Let's keep an eye on this, especially if gold continues to descend lower. It would indicate some buying from some larger players if this sort of buying is more than a one day wonder. Reported holdings are now back to the levels that they were back at the start of this month.

They were at 798.22 tons to start off the year so the holdings are down by some 1.6% so far this year.

I have had my share of dealings with those from the gold bug community who have continually dismissed my notice of falling gold ETF holdings as if it bore no connection whatsoever to the fall in the price of gold over at the Comex. I maintain it is a measure of Western-based investment demand and as long as it is falling, gold is not going to be able to mount any sort of sustained rally.

If GLD reports holdings that begin to increase REGULARLY, then the downside for gold from this point, will be limited. If however the reported holdings begin to drop again after today, and continue to do so for the remainder of the week, gold has more downside left in it.

Stay tuned.

I still am concerned about the number of speculators who remain on the net long side of this market. Maybe today flushed a goodly number of them out but as I stated in the earlier comments from today, I would feel much better about this market moving forward if I could see speculative sentiment become bearish over at the Comex. It is not there as the specs remain bullish at this point.


  1. Great analysis as usual Dan. Do you think any of the draw down in GLD can be from physical redemption by big players wanting to take advantage if the lower price? This way they aren't affecting the market price.

  2. It sure flushed me out at 1275 (last 2/3 of the long taken at 1270). I have no long positions on PMs at the moment. We may easily reach 1230 pretty soon.
    There, support area, might stop the bleeding.
    I'm waiting to see if gold has any strength to try a pull back towards 1280 and if it fails there, I'll probably go short...

  3. Hubert

    I am very, very long of physical Gold, and although I didn't buy the high tick, I last increased my position in mid-March, on the Friday before the Crimean referendum, when I took in 20 oz at around $1374. It was - as Dan points out - a bad call and I am wearing it, but in the greate scheme of things it can stay in the vault and wait for happier days

    I have thought for quite a while now that in this essentially confused and trendless market, there are probably only 3 numbers that matter to me:

    - $1500 Game On!

    - $1000 Oh dear! Time to reevaluate the situation

    - $2000 OK, so how far can this puppy run?

    and to be frank, all stations in between are pretty much noise

    It all depends what you are in this for; personally, I consìder deposit interest and bond yields to be unattractively low, economic conditions to be just a little too uncertain to persuade me to commit any more to equities than i already have, and the world just about scary enough to keep me focused. Your mileage may differ

  4. at 1500, when the crowd is saying "game on!", I'll be trimming the physical stack as fast as I can.

    maybe replacing with some GLD, as long as things remain over the 200 day, or maybe not.

  5. most xlnt blog!! futures option expirations and last trading days really can provide turns or at least volatility. last friday the ags had their op-ex and they kept soybeans up, then the woooosh monday nite!

    never trade copper or crude oil (as the big players totally control them), but watch them as tells for the world economy. copper large specs being long might be saying china is off the bottom, and how about a paired trade long copper short silver. (most of the silver production in the world comes out of copper mines)..silver used to be called 'sludge' haha.

    in the ags 'el nino' is confirmed, so that means great crops in the usa corn belt. those commentators saying dec corn can't lose the crop insurance (4.65) level were silent yest. and many calls for 4.0 were seen. wheat is seasonal down now into june harvest. corn and wheat losing 200-day SMA's. beans yest. took a dive with several cargoes of beans coming into US southeast ports of Wilmington and Norfolk and tight old crop stocks outlook looking to correct itself on increasing import program.


  6. Has anyone noticed that the US DOLLAR is going down with GOLD here recently? Is this some sort of indication of hyper-deflation?

    Maybe it is just some sort of trading anomaly?



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