Two stories emerged last week, which will create additional interest in the precious metals market.
1) Elke Koenig, the president of Germany's top financial regulator, Bafin, which apparently is not as corrupt, complicit and clueless as its US equivalent, and who said that in addition to currency rates, manipulation of precious metals "is worse than the Libor-rigging scandal." http://www.gold-eagle.com/article/bafin-enquiry-deutsche-bank
2) Deutsche Bank, one of the 5 banks involved in setting the daily AM and PM London fix gold prices has announced today it will quit participating in precious metals price setting due to the ongoing investigation by German authorities into alleged precious metals manipulation. It appears that the daily price fixes may be in jeopardy particularly in silver, as the bank’s exit would leave only HSBC and the Bank of Nova Scotia as the remaining banks involved in the daily silver fix, and reports indicate others may follow Deutsche’s lead
3) The leverage of 112 times in Comex has reached unprecedented levels and is facing massive delivery problems. Serious investors are moving from the western future exchanges and ETF’s into the physical market, making the exchanges obsolete
4) The FED has no gold. Interestingly, this theory is simply getting stronger and stronger. The "theory" is that the NY Fed has rehypothecated out more gold contracts that it actually has physical gold in the vault. Over a year ago, the Bundesbank announced that it had decided to repatriate the 674 tons of gold that the FED held on its behalf, however, one year on, the FED has actually only managed to physically deliver into the Bundesbank, a grand total of 37 tonnes with 32 tonnes delivered by the Bank of France and 5 tonnes by the NY FED announcement according to Zerohedge. See larger article below.
Submitted by Tyler Durden on 01/19/2014 13:35 -0500
On December 24, we posted an update on Germany's gold repatriation process: a year after the Bundesbank announced its stunning decision, driven by Zero Hedge revelations, to repatriate 674 tons of gold from the New York Fed and the French Central Bank, it had managed to transfer a paltry 37 tons. This amount represents just 5% of the stated target, and was well below the 84 tons that the Bundesbank would need to transport each year to collect the 674 tons ratably over the 8 year interval between 2013 and 2020. The release of these numbers promptly angered Germans, and led to the rise of numerous allegations that the reason why the transfer is taking so long is that the gold simply is not in the possession of the offshore custodians, having been leased, or worse, sold without any formal or informal announcement. However, what will certainly not help mute "conspiracy theorists" is today's update from today's edition of Die Welt, in which we learn that only a tiny 5 tons of gold were sent from the NY Fed. The rest came from Paris.