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So Who Sold All That Gold? - JP Morgan's Own Version
Zero Hedge ^ | 04/21/2013 | Tyler Durden

Posted on 04/21/2013 7:18:08 PM PDT by SeekAndFind

Since prevailing fringe theory is that JPMorgan and the other bullion banks 'control' the price of gold, we thought it would be interesting to hear yet another explanation for last week's monumental precious metal market events... from the horse's mouth...


Via JPMorgan,

Who sold the gold?


Gold’s 1 day fall of 9% on Monday was one of the largest 1-day falls in the history of the gold market, but what do we know about who was selling?


We have three high frequency flow indicators for the gold market: CFTC futures positions, Gold ETFs and gold coin sales in the US. Of course, these only make up a portion of gold demand but the remaining physical demand is difficult to capture on a high frequency basis.


The peak in gold ETF holdings of physical gold was actually in December 2012 and there have been reasonably steady outflows since then. In contrast, the peak in the gold price was in October 2012 and it has been falling steadily since then.


Additionally, the outflows from gold ETFs have continued in the latter part of this week, even though the gold price has rebounded some 4%. Looking further back there has not been a strong correlation between ETF flows and gold prices on either a high or low frequency basis. ETFs do not seem likely to have been the culprit here, although Monday’s $1.8bn outflow undoubtedly didn’t help.


[ZH: It would seem the data in the chart above suggests that JPM is incorrect and ETFs were very responsible - as the momentum from the Q4 to Q1 divergence corrects]


Sales of American Eagle gold coins, perhaps an indicator of retail investment demand, have actually risen sharply over the past two weeks.



Total sales so far in April are 153,000 ounces, already the highest month since mid 2010, and we still have two weeks to go.


[ZH: It seems - unlike stocks - that a falling price does encourage more demand]


That leaves CFTC managed money futures positions. Unfortunately, we only have data up until last Tuesday, the 9th of April, so not including the sell-off period itself. However, there has historically been a strong correlation between changes in these positions and changes in the gold price, so it seems likely that CFTC positions will also have fallen sharply, but we have to wait until next week to know for sure.


[Updated chart below shows the exact opposite]



[ZH: The updated chart above suggests that this was not the case as net long positions actually rose on the week...]


In summary, of the three high frequency indicators of gold demand at our disposal, it seems likely that futures investors will turn out to be the biggest sellers over the sell-off period. Of course this doesn’t tell us anything about causality, especially as we are missing a large part of the physical market. Anecdotal reports suggest that physical demand, driven by China was very strong in the days following the sell-off, so this may well be what has allowed prices to stabilize at current levels.

Hhhhmmm - doesn't seem so convincing...

TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: gold; jpmorgan

1 posted on 04/21/2013 7:18:08 PM PDT by SeekAndFind
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To: SeekAndFind

Obama’s friend Buffett?

2 posted on 04/21/2013 7:26:59 PM PDT by Linda Frances (Woe to those who call evil good and good evil, who put darkness for light and light for darkness)
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To: SeekAndFind
I'm looking at getting a couple of these

From Govt Mint PF70-First Strikes

Recently bought a PF70-First Strike Silver Eagle signed by John Mercanti who served as the 12th Chief Engraver of the U.S. Mint before he retired in 2011. They don't list them on their website and I am not sure they even have anymore, but I think they might have some value in the not too distant future. But it is something I bought to pass along to the grandkids, as will the gold $5.00 coin. Not really much of a coin collector, but I think proof 70's that are first strikes will offer the greatest return for them. Hope so anyway.

3 posted on 04/21/2013 7:36:10 PM PDT by Robert DeLong (u)
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To: Robert DeLong
The problem with recent bullion coins like the ASE is that a 70 rating is no longer a rarity. Modern minting techniques make it hard to find a bullion coin rated less than 69, whether proof or other.

It won't hurt any to buy a PR70 but it may not be worth the premium on resale. The engraver's signature is a common "sweetener" and doesn't add to the coin's value.

4 posted on 04/21/2013 9:41:37 PM PDT by hinckley buzzard
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To: jiggyboy; PA Engineer; blam; TigerLikesRooster; Cheap_Hessian; CJinVA; Jet Jaguar; ...

Goldbug ping.

5 posted on 04/21/2013 9:42:31 PM PDT by Jet Jaguar
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To: SeekAndFind

No doubt it was GS and JPM combined who put the big short in June futures. The manipulation is purely paper. There is no change in physical demand.

6 posted on 04/21/2013 9:51:11 PM PDT by FlyingEagle
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To: FlyingEagle

Not just shorts but naked shorts! Naked shorting of silver and gold by the usual suspects -— FR acting via JPM, GS and other hooligans

7 posted on 04/22/2013 5:36:20 AM PDT by dennisw (too much of a good thing is a bad thing - Joe Pine)
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To: FlyingEagle

There is disagreement about the reality not only here but elsewhere. From the second of your articles......

” If the dollar’s exchange value drops, then the price of imports that come in here (to the US) rise. So you get domestic inflation, and if you have domestic inflation you can’t have zero interest rates, or negative real interest rates. So the Fed would lose control and that’s the basis of this policy.

They are trying to destroy gold as a (safe) haven from the dollar in order to carry on the Fed’s policy of negative real interest rates. That is what is driving the illegal policy of selling naked shorts in order to manipulate a market. If you and I were to do something like this without the government’s instruction or protection, we would be arrested (laughter ensues). So the fact that it’s illegal, being done by the authorities, tells me that they are seriously worried about the dollar.”

The reality of US$ devaluation and inflation seems to be the real problem. People around the world seem to agree and are buying gold ahead of the calamity.

8 posted on 04/22/2013 6:00:29 AM PDT by bert ((K.E. N.P. N.C. +12 .....History is a process, not an event)
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To: SeekAndFind

Are Jay Gould and Jim Fisk back in the game?

9 posted on 04/22/2013 8:30:29 AM PDT by Jimmy Valentine (DemocRATS - when they speak, they lie; when they are silent, they are stealing the American Dream)
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To: bert
The reality of US$ devaluation and inflation seems to be the real problem. People around the world seem to agree and are buying gold ahead of the calamity.

What you posted put it all into perspective for me. Thanks. It also explains why physical silver bullion sales are through the roof here in the US as well. Some sites are out of silver eagles. (Although I would also think physical gold sales would be high as well.)
10 posted on 04/22/2013 11:10:17 AM PDT by yorkiemom
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