10 April 2014

Why no direct relationship between price and stocks

A great article by Keith Weiner explaining why open interest in gold has fallen but in silver it has increased - hint: to do with profit from carrying gold. Apart from that, it is also useful for those who falsely think that if the price goes up (or down) then open interest should increase (or fall), and also that ETF holdings should increase (or decrease).

It does puzzle me why people think there should be a direct relationship between open interest or ETF stocks and price, given that they don't have any problem understanding that the price of a company's shares can go up and down while the number of shares on issues doesn't change.

For a company ownership of shares is just transfered between buyer and seller and that doesn't drive price. Price is a function of there being more buying pressure resulting in buyers not being willing to sit around waiting for people to accept their bids and instead accepting seller's offers (and vice versa).

The same can happen with precious metal ETFs. ETFs shares are only created or redeemed if the person on the other side of the trade is someone with no interest in the ETF (ie a market maker). Where existing holders sell to new buyers no new shares need to be created, yet the price can still go up if the buyers are willing to accept the seller's offers (and the non-market maker sellers are adjusting their offers to match gold prices on Comex or the spot market.

Also, check out Warren's latest bullion bars project post, where he notes that 70% of bars added to GLD during 2013 where previously in the GLD list, demonstrating that "there is a really large stock of gold in London and that it doesn't necessarily all vanish instantly to China". He also predicts the return of specific bar numbers by July 30th - now that's a real forecast, no vague hedged cop out wording.

25 March 2014

Gold forecaster with 100% accuracy says gold to remain weak

I have found a gold forecaster with a 100% accuracy rate. Below is a chart of two of his recent predictions.

The first arrow marks the 15th of January when he said to "use narratives, not just charts, to tell if gold's bottom may be near", noting that mainstream commentary was a "precursor to more bullish narratives. It also gives confidence to smart money to start to get into the market"

The second arrow marks the 15th of March when he said that he "would not be surprised to see it correct down" and that "there will be corrections on the climb back up" during the rest of 2014.

Of course the forecaster is me, and the 100% accuracy rate is misleading as I've only made these two calls in the entire time I've blogged (here and here), but hey, since when does the full truth matter in click baiting headlines?

Now given that my sample size is only two forecasts, you can probably bet against my next call as there is no way I can maintain a 100% accuracy rate. I'm not ready to make a call for a bottom in this correction so at this time will just expand on the March 15 comments I made in an interview with Al Korelin.

In that interview I noted negative premiums on the SGE were possibly indicative of bullion banks having overestimated Chinese New Year demand (BBs stockpile ahead of these high demand periods, see here for some evidence of this). Perth Mint has seen some on and off weakness in kilobar premiums recently and this was confirmed by Ed Steer noting that JP Morgan received exactly 160,750.000oz of eligible gold into their Comex warehouse on March 20. This is exactly 5 tonnes, which readers of this blog know is indicative of kilobars. If the Chinese are so hot for gold right now, why is JPM putting kilobars into a NY warehouse?

For a current read on the market I think you have to take a narrative approach I discussed in that January 15 article - and that is mainstream financial markets narratives, not goldbug narratives, as that is where the big money is. Where is that narrative now? First this Business Insider article quoting Goldman:

"we see potential for a meaningful decline in gold prices towards the level implied by 10-year TIPS yields, which our rates strategists expect to rise further this year, and reiterate our year-end $US1,050/toz gold price forecast. More broadly, we believe that with tapering of the Fed’s QE, US economic releases are back to being a key driving force behind gold prices"

And this from the Australian Financial Review via Macro Business, quoting some nobody and SocGen:

"Gold is going to be somewhat problematic from an investment standpoint over the next six to 12 months. We’re probably looking to a relatively higher and quicker increase on rates, which is a headwind for precious metals."

"We continue to believe that the economic momentum in the US shows further improvement, we reiterate our very bearish outlook for this year. Prices could drop below $US1,000. I would not rule that out."

The important thing is these people believe this stuff, that the US is "improving" and they will trade gold accordingly. I think it is also worth noting Dan Norcini's repeated comments that this price run up was more about short covering than new longs, and he is representative of the Comex floor "narrative".

I also note the Zero Hedge article on China Commodity Funding Deals regarding gold, which has some potential to be negative for gold, despite what some may say. Most likely their "don't worry, it is bullish for gold" interpretation comes from a lack of understanding of the deals as they probably haven't got access to the professional market commentary on that topic. That is for another post, but I will note I brought this issue to your attention in September 2012 and ZH and others who are now jumping on it could have found out a lot earlier from these articles (good background reading if you're keen) June 2013, August 2013, September 2013, December 2013 and finally from Koos Jansen, who you'd think gold bloggers would read, with this quote indicating the risk: "some enterprises in China use gold leasing from banks to solve their short-term funding problems in the hope of buying back the gold at lower levels to repay the lease. However they can be short-squeezed when gold moves higher"

So at this stage I think the risk is to the downside but will hold off on a bottom call until I can see some shift in the mainstream narrative.

19 March 2014

GLD vault defragmentation

Warren has a cool animation showing the addition and redemption of pallets of gold bars out of GLD's vault, done in the style of the old PC disk defrag programs, at the screwtapefiles blog.

A few comments on the 5 minute animation (see screenshot below):
  • During the redemptions in 2013, most of the bars are taken from the bottom, that is, the recently added stuff. Makes sense, this stuff is easier to access.
  • But note much of the redemptions are from all over the place. Some of that is explained by them "hunting" for 9999 bars as Warren discussed in emails. He will have a follow up post taking this animation analysis into more detail showing this.
  • In the pic below the area just above the empty bottom area is really stubborn, something about those bars they don't redeem from, even though they are more recently added than the bars in the first half of the pic above that section.
Snapshot of GLD defrag youtube:

13 March 2014

How ETFs Haven't Altered The Dynamics Of Gold

Have a post up on the corporate blog How ETFs Haven't Altered The Dynamics Of Gold where I have a go at the mainstream finanical narrative that gold ETFs were a “game changer for the gold industry”, making it easier for investors to buy gold and having a positive impact on the gold price. If you properly classify bar/coin and jewellery bought for investment reasons then that accounts for over 11,400 tonnes of physical gold compared to only 2,600 tonnes of ETF investment between 2004 and 2012. More at the link.

Still snowed under with work so fustrated at limited blogging capacity. Just one quick FYI from a contact Ronan on a soon to be launched gold ETF from Axel Merk:

This Trust seems to follow the standard format, a trust backed by allocated physical 400oz bars. JP Morgan will be custodian. The differentiating factor in this trust will be that it holds other types of gold in addition to 400oz bars, such as smaller bars and even coins, and small investors will be able (if they want) to redeem shares for gold bullion, which is a new angle.

There is a web site which seems to be on hold www.merkgold.com until after the IPO. See link for one of the filings.

I'm surprised anyone would think more gold ETFs are needed, but maybe they think the redeemability in small sizes will be attractive. I would note that redeemability at any size into any coin or bar was a feature of Perth Mint's ASX listed gold product PMGOLD when launched in 2003. Ten years later they are catching up. The holding of smaller bars will just add to costs, but as they don't have a Mint out the back, I suppose there is no other way for them to offer than redeemability.

Merk has some good articles on gold here, quote: "I am an optimist. I’m no conspiracist. I just happen to think the road to hell is paved with good intentions. As a result, I own gold".

FYI, you may also find this paper by CME Group having a go at gold ETFs versus Comex futures of interest/amusement, quote:

"While there is a place for ETFs in any investment portfolio, there are several drawbacks that do not make them the first choice for individuals wishing to invest in gold.

When the goal is to simply benefit from a rise or fall of the price of gold, COMEX Gold futures are the logical choice. COMEX Gold futures offer the investor a fast and accurate pricing mechanism, the ability to leverage their trading strategies and the security of doing business on an exchange that has guaranteed the performance of each of its transactions for over 100 years."

07 March 2014

Sprott PHYS redemptions arbitrage driven

Sprott PHYS fund redemptions show up in the first few days of a month, and for March there were no redemptions. This lack of news is actually news as it confirms for me that the redemptions we have seen in the past (see here) were driven by an arbitrage opportunity.

Below is a graph that demonstrates this. First I took the reported premium/discount to Net Asset Value (NAV) and subtracted the $5 per ounce redemption cost. This is graphed in green (for a profit) and red (for a loss) in percentage terms on the right hand scale. When it is green, you can make a profit buying PHYS shares at a discount to NAV, redeeming, and then selling the physical gold at the higher spot market price.

Second, I graphed the amount redeemed on the left hand scale and shaded the months during which the shares would have been accumulated to do the redemption. You'll note that the shaded periods run from the 16th of a month to the 15th of the next month. This is because you have to submit your redemption request to the fund by the 15th of each month to give the fund 2 weeks to process and get your gold ready for delivery by the end of the month.

You can see from the chart that the redemption accumulations only occur when there is an arbitrage profit to be had and cease when there is no profit.
PHYS first started to go into discount during April 2013 (prior to that it had always traded at a premium). However, while there was some arbitrage profit in May/June, that month only showed a redemption for 400oz. I think this is explained by the fact that PHYS was only showing small discounts to NAV and a trader or bullion bank first wanted to test the redemption process before redeeming in bulk. Hence they redeemed exactly one LBMA bar - not coincidental I think and strongly suggestive of a test transaction.
As the discount persists into the Jun/July and July/August periods we see the trader ramp up the redemption quantities. I note that as a percentage of PHYS' trading volume for those months, the units redeemed were only 0.6% and 1.6% respectively. That is quite low. August/September presented no arbitrage opportunity so we don't see any redemptions.
But in September/October and subsequent periods, the discount (and arbitrage profit) reappears and we see the redemptions increase. Note that while the next two redemptions are similar in ounces to Jun/July and July/August periods, due to lower trading in PHYS they represented 12.1% and 16.5% of trading volume respectively. This is getting quite high but the buying of PHYS did not drive PHYS back into a premium, so in the next two months the traders must have felt more confident and really ramped up their buying to the 3 tonne level, and at 28.9% and 30.1% of PHYS' trading volume in November/December and December/January respectively.
I am wary of ascribing causality here, but do wonder if this high level of buying relative to the number of shares of PHYS that normally trade did result in the fund returning back into a premium to NAV from January onwards. That is what arbitrage in theory should do.

I would note that the redemption activity we see may not be an arbitrage trade (that is, someone just looking to pocket the different in prices) but also a physical investor who is not interested in holding a fund and just sees PHYS as offering a cheaper way of getting physical. In either case the result is the same.
I'll keep track of this data and post if there is any action that further confirms, or contradicts, the theory that a trader or investor is opportunistically taking advantage of PHYS trading at a discount to NAV.

06 March 2014

US deep storage gold - weights

Still catching up after my two week holiday, have many posts planned including finishing the fractional bullion banking, the London fix manipulation and legal case, Sprott PHYS redemptions, bitcoin. In the meantime, the table from the last post but by ounces of fine gold:

Similar percentages to the one by number of bars. As Golden Nugget commented, I should note that the spreadsheet is only for US Mint held gold, which is 95% of the total, with the other 5% held at the US Fed. Unfortunately the bar list for that is only supplied as a pdf of a scan so impossible to analyse in Excel.
Anyone interested in the reality of the US gold reserves really should read the pdf of hearing 112-41 (see link) as this bascially busts many of the memes around the US gold reserves. I will do a post on that hearing as there is a lot of detail supplied and suprising that I've never seen much commentary around it.

05 March 2014

US deep storage gold reserves bar list made public

Warren James (the guru of ETF bar list analysis) was tipped off by a reader that the US government had a bar list of its deep storage gold reserves on its website, see Victor's tweets here for details and links. Warren's initial comments are:

"Have already perused the bar numbers - a stack of Rand/Matthey/Rothschild bars there but no match (obviously) for the bar signatures we have in ETF data and happy to say that the sequences are consistent with the data we have. They are (again as you might expect) really old bar sequence numbers. Talking, early Rand number sequences. I gave them both the observation that the spreadsheet seems to have been built up from some older documents - there seem to be some OCR errors, which I assume were from earlier typewritten lists."

He will no doubt come out with a full analysis in due time assessing its internal consistency (as he has done for the ETF bar lists). In the meantime below is a quick analysis of the type of bars. I'm just looking here at the number of bars but have identified clear groupings of bar types. First the raw data:

My choice of purity and bar size categories was driven by clear clusterings in the data. The key categories are:

So 8 bar types account for 85% of the bars. No suprise that few meet the LBMA standards for weight and purity, given the source (1930s confiscation, ie coin melt) of most of the gold.
Not suprised to see 100oz bars given that is Comex futures standard, but the 36% is not standard and clearly coin melt source.

Significant is the fact that 55% of all the bars are 90% (+/- .1%) purity and 13% are 22ct (current US Eagle purity). Unusual is the circa 840oz and 1070oz bar sizes, very heavy.
Note that the LBMA standards are post 1987, hence the bars which are close to LBMA weight and/or under purity are reflective of a general industry standard to 90%+ purity circa 350oz size bars prior to 1987, but this was later firmed up later by the LBMA to the currently 350oz-430oz 99.5%+ standard.

I think that the sub 2 percent purity cateory is an error. There are 714,993oz of gross weight recorded for this category and if we assume the purity is more likely around 90%, then this spreadsheet understates US gold reserves by 640,000oz!
A lot more to come from this data but just wanted to draw attention to this data ASAP and look forward to further analysis and comment by Warren and others.

18 February 2014

Service interruption annoucement

Your goldchat blogging service will have intermittent service interruptions over the next two weeks due to the fact that I'm in Singapore/Malaysia for holidays and my other half has this crazy view that gold blogging is not an authorised holiday/relaxation activity.

I was aiming to get the series of fractional bullion banking posts completed before I left for holidays but it didn't work out. If it is not clear, I did not start this series with any idea of how it would end up or how long it would take. I had some general ideas on the topic but have just been exploring them as I go. That is why they don't seem clearly structured and I think it will be worth putting them altogether into one article and fixing them up into a more coherent whole.

As an FYI, most of the posts in this series have only been getting around 1000 views with the "how can I default on thee" one getting 3600, due to a GATA referral. This is not surprising as the material is technical in nature. I'm consoling (deluding?) myself that it is the quality of the readers, not the quantity, that matters.

I will do my best to try and sneak in a final (or two) posts in the fraction/run series. Now off to get some congee for breakfast - yum.

14 February 2014

Fractional reserve bullion banking and gold bank runs: a run or stroll?

The fact that Australia's Prime Minister referred to the global financial crisis as a "shitstorm" will probably just reinforce Americans' Paul Hogan/Steve Irwin view of Australians. Shitstorm is also the title of a book about that Prime Minister's first term and how close Australia came to financial disaster. In that book they cover the bank run that was developing at the time:

"It was a silent run, unnoticed by the media. Across the country, at least tens and possibly hundreds of thousands of depositors were withdrawing their funds. Left unchecked, there would soon be queues in the street with police managing crowd control ... It's a long time since Australia has had a serious run on a financial institution, but it's all about confidence, and you cannot allow an impression to develop generally in the public that there is any risk."

So how did the Australian government stop this bank run? Simples, they just told people they would guarantee bank deposits. End of run. I think it worked because the average Westerner can't conceive of a government becoming bankrupt. If pushed, the government would just print physical cash and send it to bank branches and take on the bank's assets and the average person would feel safe as long as they had that physical cash in their hands.

Now the holders of BB-unallocated are a step ahead of the average person because they hold gold, but the fact that they hold it with a bank tells you they still trust the system. Certainly if there was a fiat bank run, these BB-unallocated holders would request physical gold, but our focus here is if/when and how would a gold run occur, independent of a fiat run.

As I said in yesterday's post, the opacity of the gold market works to suppress run dynamics but paradoxically, that lack of information also means that if a credible rumour can gain hold (ie a narrative develops) then the run will be fast and thus the BB system is more unstable than the fiat banking system in this respect, particularly as even the most naive investors knows you can't print gold.

My best guess as to what could cause these BB-unallocated holders to begin redeeming in large numbers would be multiple reports of failures to deliver. If that coincided with reports of coin shortages it would help. But it has to be multiple reports - this bank, that bank - around the same time. The one off reports/events we have had are not enough to trigger a mass redemption. The fact is people rationalise away such single events. I mean, look at MF Global - people are still trading futures and there has not been any uptick in deliveries vs open interest. I think it needs a clustering of multiple events, and it would help if some of those were picked up by more mainstream news/blogs.

Also, it would be necessary for a large number of people to redeem at the same time. I believe that the gold market is already experiencing a slow gold run, more of a gold walk or stroll. The fact that Perth Mint clients have been increasingly preferring allocated, that non-bank storage services are growing, and other anecdotal stories I've heard (plus a soon to be launched product we are working on with a big bank) show that more and more clients are withdrawing away from BB-style unallocated and becoming risk adverse.

However, the reason I spent so many posts on the structure of the BB system was to show that this slow shift is not a problem for the BBs as they can handle such a move between themselves and central banks - it gives them time to let their gold assets mature into physical.

It is important to note at this point that while BB engages in maturity transformation just like fiat banking, it is mostly short term in nature - BBs don't lend gold out for 30 year mortgages. Even at the height of the miner short selling, a WGC August 2000 report on gold derivatives stated that most of the global mine hedge book was concentrated in the first 4 years and did not extend past 10 years. Today we have hardly any mine hedging, as this chart from Sharelynx.com shows:

Note that the the blue line representing miner hedging is a delta hedged figure where as the OCC figures are notional. The notional miner hedging figure would be much more but I don't have any figures on it. Even so, it would not account for all of the OCC notional figure. The balance would be other short positions (eg Comex hedges, OTC forwards and options, etc) as well as gold lent to industry for inventory funding purposes.

So in a slow burn scenario, BBs can just let their gold leases mature. Indeed, the chart above shows that this is exactly what has been happening, with gold derivatives declining from 10,000t in 2000 to 2,500t today. If miner hedging is basically nil at the moment, what makes up the 2,500t and more importantly, how long is it lent out?

Obviously, part of those OCC figures would reflect Comex and other futures. But note the open interest in futures - there is hardly any volume outside the current contract. This indicates that most speculators are playing short term. As far as the OTC markets are concerned, note that GOFO rates are only quoted up to terms of 1 year. Again an indicator of where most of the volume is, in the short stuff. Finally, the Perth Mint's understanding of the extent of central bank leasing is that the majority, if not all, of it is for terms of one year or less.

The other significant part of the 2,500t figure would be lending to industry for inventory and consignment funding/hedging purposes. The WGC derivatives report estimated this at 1465t as at December 1999. Demand for gold is much higher today so, say, 2000t of gold tied up in refiners/mints/coin dealers (plus jewellery distribution and retailing) is highly realistic.

So my reading of the BB assets is that most of the short selling lending is very short term in nature and thus can mature quite quickly, in months. However, that which is lent to industry, even if terms are less than one year, are more ongoing in nature. While industry could liquidate inventory if lease rates rose (which they would if BBs were desperate for physical), that would not be overly quick, particularly as it would bump up against refinery capacity limitations and in any case, the industry needs a base amount of gold in process to function. So industry inventories can mostly be considered locked out in respect of meeting any BB-unallocated redemptions.

What the OCC chart does not tell us is the size of the unallocated pool and how much of it is backed by physical. In the WGC report, they estimate the total gold lending supply at 5,230t as at December 1999. Whether the OCC notional 10,000t would delta hedge down to 5,230t I don't know, but for our purposes whether the WGC estimate is understated is not as relevant as the estimate that only 520t of that lending came from non-central bank sources - 10%.

With the gold bull market there is no doubt that unallocated balances have increased but if this ratio of central bank to investor lenders then BBs don't have much risk of a run as private investor are only a small part of their borrowings and may be able to be met by repayments from their short term gold loans.

The other interesting data point is the red star in the chart above. That marks the date when BBs started to charge professional investors for holding unallocated. It is not coincidental I think that this happened after the amount of derivatives and mining hedging peaked and started to decline. I also coincides with the beginning of the gold bull market. Why would BBs start to charge a small fee on unallocated, thereby discouraging it? They would if they were facing two trends:
  1. A decline in the demand for borrowing gold, which means they don't need as much unallocated (particularly as they can get what they need from central banks).
  2. More investors starting to buy gold, of which some would be doing by holding unallocated.
The result of these two trends would be increasing amounts of physical gold that the BBs had to hold against their unallocated. If you had OCC derivatives declining by 7,500t but as the same time increasing unallocated balances, then there is no one to lend that unallocated to and the only way to cover it is to hold gold. This increases your costs and thus the need to start recovering some of that by fees. I would note that the fees are in basis points and quite small, so this whole thesis is speculative and possibly overstated. Nevertheless, beginning to charge for unallocated is an interesting data point that should be considered.
Now the picture painted so far is not one which leads to much chance of the BB system being caught out by a slow run. It is possible as well that BBs may be running a much higher amount of reserves against unallocated than many would consider possible. However, I think that this series of post has shown that the BB system is still quite vulnerable. We will discuss that further tomorrow and how central banks may respond to a gold run.

13 February 2014

Fractional reserve bullion banking and gold bank runs: bank run theory

A key question in bank run dynamics is whether the information/event points to one specific bank. George Kaufman notes that if people just "switch their deposits to other banks [and] their concerns about the bank’s solvency are unjustified, other banks in the same market area will generally gain from recycling funds they receive back to the bank experiencing the run." As we have seen with the interconnectedness between the key BBs via the LPMCL and also the role of the central banks who can step in between the BBs, such "a run is highly unlikely to make a solvent bank insolvent."

System wide bank runs are therefore not going to occur from a rumor believed to be about just one bank. However, an academic paper on bank runs by Diamond and Dybvig concludes that all depositors have the incentive to withdraw immediately as the early movers get all their money back, the later ones part or none. The result is that bank runs can be self-fulfilling.

This BIS paper by Haibin Zhu notes that Diamond and Dybvig assume that people don't know whether other people are withdrawing their money. One does not have to be a master of game theory to realise that if you come across some information about the solvency of a bank that you don't think is true, if you can't tell whether other people don't think it is true, then you're best precautionary action is to take your money out anyway.

Zhu considers this assumption is unrealistic, saying that in the real world people "are able to observe partial or complete information about those that make decisions before them". Selgin also notes that "panics happen because liability holders lack bank-specific information about changes in the banking systems’ total net worth" but that this would not occur in a true free banking system "where bank liabilities are competitively bought and sold there would not be any risk-information externality" - depositors would be able to see current market discount rates for each bank's banknotes.

Opacity, however, is a defining feature of the gold market and the quality of information about whether a gold BB run is in play is poor given that:
  • Bullion banking is not a true free banking system;
  • BBs don't have physical branches where people can see people taking physical gold out;
  • Initial liquidity problems would result in increasing inter-BB gold borrowing rates, but GOFO/lease rates are LIBOR style estimates by the BBs themselves rather than actual market/executed rates on an exchange, so subject to conflict of interest;
  • Continuing liquidity problems would result in increasing premiums on wholesale bars, as BBs compete to acquire physical, but this information is restricted to the professional markets and when revealed to the retail market by people like myself, it will be largely ignored anyway (see why here and here);
  • Anecdotal stories about "I couldn't get my gold" are likely to be ignored by mainstream gold investors due to a "cry wolf" effect, given past reports of such events have been pushed by websites as "this it is" yet no run eventuated and the BB system continued to operate.
Zhu notes that "when information becomes noisy, the banking sector is more vulnerable to runs and the probability of [panic] bank runs increases." Now while the BB system may have a higher risk to a run, how would one start if holders of BB-unallocated lack information on the solvency of a BB's gold balance sheet or whether a run is starting?

One may argue that there are no standalone BBs, BBs are just divisions within a larger fiat bank, and as such a trigger may come from a concern about the parent bank's solvency. However, with "too big to fail", and the ability and demonstrated willingness of central bankers to print money to back up the banking system, I would consider it doubtful that a gold run would start this way.

So for a gold run to occur, there would need to be a non-bank specific piece of information/event which gains the attention of mainstream gold investors (not goldbugs, by definition, goldbugs don't hold BB-unallocated) who still have some faith in banks.

Many goldbugs are going to have a problem with that last sentence but I ask you to cast your mind back to before you became aware of gold and fiat fractional reserve banking etc and remember that you once believed in "the system". You also have to consider that there are investors out there who hold gold for portfolio diversification reasons, or as a hedge against non-catastrophic financial problems but who do not want to see themselves, or be seen, as one of those "crazy goldbugs" as the mainstream financial media paint it. This image is reinforced by gold websites which hype up stories that play well to a goldbug audience (and drive clicks), but these just create a "cry wolf" effect to mainstream investors when the claims of "imminent failure" never eventuate and make them see much of the gold internet as inaccurate and sensationalised claims.

Such websites may well have desensitised mainstream investors to the really important information when it comes out, and thus be indirectly helping to support the BB-unallocated system. Indeed one of the key motivations for my blogging activities is to pull up such inaccuracies and exaggeration for this very reason, but the need for fact based professionalism in gold commentary is lost on them and I'm accused of being a shill if I dare to critique any meme.

Tomorrow: what could cause a run to start, and how vulnerable is the system-wide gold balance sheet to a run.