Gold reverses Friday’s gains, another mysterious mega-trade

Gold reversed today what it gained on Friday finishing down $17.25 at $1276.63.  Silver followed suit giving up 39¢ and finishing the day at $16.89.  Again today, gold and the Japanese yen were traveling partners, and now with the yen recovering in Asian trading gold has perked up as well (up $3 in the overnight market at $1279.50).  There was little in the way of news to justify the price drop – just a huge 15,000 contract dump  in a matter of seconds at the COMEX open reminiscent of a similar mysterious mega-trade last week. By the way, the U.S. federal government just went over $80 billion in additions to the national debt in November – quite a pace as we move to the end of 2017.

Quote of the Day
“Gold traders are having to grow more accustomed to surges in trading volume as spikes that began surfacing around mid-year become more frequent. In the 10 minutes ended 3:10 a.m. in New York on Tuesday, when most North American traders were probably still asleep, contracts representing more than 2 million ounces of the metal changed hands on the Comex, sending prices down as much as 0.7 percent. The bulls responded hours later, with trades covering more than 3.5 million ounces at around 10 a.m., helping to push the price higher.” – Luzi-Ann Javier, Bloomberg


From the October, 2017 issue of News & Views. . . . .

“In fact, institutional involvement may be unprecedented at this juncture and it is not just the high-profile gold advocates like Ray Dalio, Stanley Druckenmiller and David Einhorn pumping capital into the market, but hundreds of funds and institutions from one end to the globe to the other.

It came to light this past month, for example, that almost 3000 tonnes* of gold in physical form sit on the balance sheets of Chinese commercial banks and financial institutions – a surprising revelation. In the West, inventories at gold ETFs, the favored gold ownership vehicle for professional investors, have gone from 2050 tonnes in late 2015 to just under 2770 tonnes now – a gain of 720 tonnes or 35%. Last month, the World Gold Council (WGC) published a report showing that European funds accounted for 79% of the overall growth in gold ETFs in 2017 with German funds and institutions accounting for half of those inflows.”

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