FTA (emphasis mine):
If that is the physical price then you wouldn't be able to get any at that ridiculously low price. If you could find some gold and silver for that price, it would be a steal.
This is critical - the separation of paper and physical pricing. The official numbers don't include premiums.
Very important is today's drop in silver: this is risking massive global demand for physical metal. The COMEX is already at risk of default in silver next month. Thus the vicious raid in silver and the additional round now, during illiquid market hours. With the price under the 200-dma,
big players will notice on the daily/weekly closing. When they buy, they buy for the next several months, so it will be a monstrous influx. The banks are hoping to squeeze enough current players out to prevent default on delivery or encourage cash settlements in lieu of physical delivery before the big players start piling in.
What's most dangerous about this is that if the paper price is pushed too far, the premiums won't follow
at all and will even begin to go in the opposite direction because dealers simply can't source physical metal that inexpensively. They won't care if the market says silver is only worth $30 - if they'll only break even at $35, the premiums will rise above $5 to provide a profit. Now imagine the spot paper price at $10/oz in the same situation where a dealer can't remain profitable without charging $35/oz. Premiums will then be at least $25/oz. What is the
real value of silver then? Will paper markets matter at all by that point?
In the above scenario, the banks lose
all control and credibility. None of the established futures markets will be trusted and private contracts will have to be negotiated on a case-by-case basis among producers and merchants, dramatically slowing business down. Small timers won't even be able to participate without serious connections. Oh, sure there'll still be futures markets, but they'll be more like currency exchanges - trading nothing of real value, only shuffling numbers back and forth that buy fewer real assets by the month/week/day.
That leads to a resurgence of the monetary metals, and offers a potential large-scale proving ground for Bitcoin.
Where is there any information on how many futures contracts end up going to delivery? The majority of institutions that are short with gold futures buy the contracts back so they have no delivery obligations for gold they don't have: That's how the futures manipulation works isn't it?
People buy gold futures (and futures based securities) thinking it's the same as physical gold which is silly. It's hard to find information that shows the extent of phony paper vs real gold, do you have any good sources of information miscreanity?
It's not just futures, it's all kinds of securities that are gold "equivalents" but have only a fraction of gold supporting it.
CME Group daily reports, including deliveries. There are also trends in volume and open interest that can be contrasted with price action to provide direction as to whether buying or selling is occurring. Some of the information can also be calculated by using the
disaggregated Commitment of Traders reports in coordination with trends from reported warehouse stocks.
Harvey Organ does an excellent job of posting most of the information on a daily basis, although his site and written grammar are horrible.
The information in paper price data is not enough. Physical metal data as found from CME Group and the CFTC provide insight into the inner workings that
cannot be gleaned from the price data.
People simply don't realize the difference between paper and physical yet. Banks have been playing on that ignorance and even encouraging it for decades. It's the basis of their power, so as more people realize how the game works, the less power the banks have. It's really just a matter of time; awareness accelerates as it spreads, which culminates in the real parabolic rise. Then the early adopters and quick learners to figure out the next base of power in the new system will take the reigns, but by then we'll all have sexbots and flying cars.
Even Bloomberg is starting to wise up:
Gold-Backed Dollar Puts ‘Fair Value’ at $10,000 an Ounce
