Posted on 02/21/2025 4:30:14 PM PST by delta7
will prove difficult for the US Treasury to deflect Trump from opening its gold book, since Elon Musk and Ron Paul appear to be driving the move to come clean over national gold reserves.
Gold and silver continued to rise this week, despite the premiums on Comex futures returning to more normal levels, putting an end to arbitrage flows. In European morning trade, gold was $2927, up $46 from last Friday’s close, and silver $32.92, up 81 cents. Turnover in Comex’s gold contract was moderate, but healthier in silver.
Notably, Comex Open Interest in gold declined significantly during the market’s hiatus, shown in the next chart.
At its recent peak on 21 January, gold was $2735. Since then, OI declined, while the price rose $200. This can only have happened due to a vicious bear squeeze, panicking the shorts who are predominantly in the Swaps category. Swaps are made up mainly of bullion bank trading desks.
The next chart shows the mark-to-market position of the swaps up to 11 February, the last Commitment of Traders release:
re a tad below the highs of 2 February, but higher prices could intensify the bear squeeze.
The textbooks say that Comex is a hedging facility, whereby bullion banks long of physical gold in London’s spot market hedge price risk by selling futures. But it is more complex than that, because London is itself a derivatives market based on future settlement dates which rarely lead to actual settlement. Furthermore, there is the shell game of London being an over-the-counter market whose participants do not reveal other obligations, principally unallocated bullion accounts. And this monumental turnover of 20 million ounces every day is based on leases and swaps which are temporary ownership of bullion for collateral.
All this is fine when gold prices range-trade. But when there is a significant change in the price basis, big losses become exposed with heightened risks of systemic failures.
No doubt, the other side of the squeeze is the mounting problem of stand-for-deliveries. All the evidence is that the shorts are extremely reluctant to deliver bullion using delaying tactics. It leads to an accumulation of unsatisfied demands. The rate of increase of these demands has accelerated fourfold since last year’s total of 491.2 tonnes. So far this year, from 1 January the total to yesterday was 291.4 tonnes, an annualised rate of over 2,000 tonnes.
With gold in the headlines President Trump has announced that he will “count the bullion in Fort Knox to see if it is there”. Scott Bessent has said he wants to set up a new sovereign wealth fund, putting all the Treasury’s gold into it. But everyone knows or think they know that much of it is missing. And Fort Knox has only half the Treasury’s holdings, the rest split between West Point and Denver.
It is a reasonable assumption that the Treasury has something to hide, otherwise it should have been prepared to conduct credible audits. Normally, it manages to deflect this issue. But Trump’s involvement, and particularly that of Musk and Ron Paul will make it extremely difficult for them to do so.
If Musk and Paul manage to expose the true position and that there is missing bullion, it is likely to be the thin edge of a wedge exposing shortfalls in other central bank holdings arising from non-return of leased gold going back decades. Have no doubt that the Treasury will take the view that this must be stopped in the interests of global monetary stability.
If this story gets legs, it could drive gold significantly higher.
YOY return is 45 percent. Gold has been a historic indicator of financial melt downs- Yet Americans have their eyes on paper things like Bitcoin and AI.
If the entire world’s Central Banks are buying gold( not Bitcoin), maybe the sheep should to.
The central banks are pure evil. The entire world swims in debt and the central banks are the cause. I think all of this may lead to a global jubilee. The globalists will be the biggest losers.
Trump “inspecting” it is not a substitute for a real audit
If I remember correctly, JFK threatening to do this is one of the things that got him assassinated.
Trump will wear his orange vest and hand carry each bar to the scale & resonance test.
Well they have tried twice now to assassinate Trump, except now his people run the agencies. Noticed he announced this after Kash got in.
The gold is right next to the Dilithium Crystal’s, two flying saucers (broken), a tomb for cryptoids we can’t explain, Al Capones safe, and Hillary Clinton’s charm and wit.
And Obama’s real birth certificate.
This doesn’t need to be a walk through “look at the gold” with cameras stunt. It needs to be a DOGE audit establishing not only what is there, but ownership etc.
Trump “inspecting” it is not a substitute for a real audit
———
Correct. The last full asssy audit was done in 1953. For Trump to make an audit stick, it must be done by checking the bar serial numbers ( Germany took three years to get their Gold back from the US, and the serial numbers didn’t match), audited by an independent group, bars checked to see if gold plated tungsten, ( in 1953 they drilled bars and analyzed the drill shavings), AND check all depositories ( New York, West Point, Denver)….Ft Knox supposedly has 4,000 tons, the other locations the rest of the 8,133 tons.
GATA filed for past “ audits” under the freedom of information act- they received none. The fact is we are long overdue for a complete assay audit.
He has to get past Oddjob Stacey Abrams. Electrifying experience.
Ha. History Channel CEO: “Darn it all. After this we’ll get one summary show one night and then have nothing to do.” “Back to “what did golden age movie stars really think of their co-stars?” and “Daily life in the Year 1,000.”
Question for everyone:
The US has 147.3 million ounces of gold on its balance sheet and values it at $42.22 an ounce. Is there some legal reason it has it not been revalued? Revaluing it at over $2700. per ounce would certainly shore up our balance sheet. Also, do other countries (China, India, Russia, etc) sitting on high stocks of gold value it at the same $42.22 or do they use the current exchange rate?
You can laugh and joke, but it now takes $2900 USD to buy an ounce of Gold, indicating the huge loss of USD purchasing power. Should our Gold not be there ( not saying it as fact), it could spark a huge USD crisis, sell off of US Treasuries and other ills.
Interesting last month the entire world’s currencies took a historic loss, it took record amounts of sovereign currencies to buy an ounce of Gold. Gold is not “ going up”, but the amount of currencies to buy an ounce are increasing worldwide.
Prepare accordingly.
Revaluing gold will spark more inflation, it effectively devalues the USD. China does not honestly report their Gold holdings ( national security ). GATA reports they are lying, and actually have 27,000 tons compared to the US’s 8,133 tons.
Keep in mind every country in the world has been buying historic amounts of Gold, one must ask why? The generally accepted explanation is they are hoarding Gold to shore up their paper holdings.
Judy Shelton, Trump’s Fed Reserve member pick states the US will soon issue 50 year Treasury bonds REDEEMABLE in Gold. Historic events ahead.
Andy Schetchman interviewed Judy Shelton a few months ago. The sad fact is virtually no one in the US has their eyes on the historic Gold events.
“ Some interesting coincidences…
“We are going to have to have some kind of a grand global economic reordering.”
Scott Bessent, the incoming Treasury Secretary, is stepping into the spotlight to manage the monumental task of selling trillions in U.S. government bonds.…
……****Judy Shelton, with whom I recently had a conversation, is advocating for a Treasury instrument that includes the gold convertibility of the dollar upon maturity.
She recently tweeted about a proposal for a 50-year Treasury bond, convertible into gold, to be issued at the initiative of President Trump on July 4, 2026.*****
Trouble dead ahead.
> You can laugh and joke… <
That’s part of my calling here. Try to make my fellow FReepers smile now and again. Sometimes I’m successful. Sometimes not.
> Gold is not “ going up”, but the amount of currencies to buy an ounce are increasing worldwide. <
You’re right about that. I read somewhere that an ounce of gold always bought one high-quality men’s suit. True 100 years ago. True today. So the value of an ounce of gold did not go up. The value of the paper dollar went down.
I have read that China has been lying about their holdings but did not realize it was to that extent.
Had not heard about a 50 year Treasury. Will be interesting to see how much of the excessive money supply those could Hoover up. Thanks for the information!
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