“All that is gold does not glitter,

Not all those who wander are lost;

The old that is strong does not wither,

Deep roots are not reached by the frost.

From the ashes a fire shall be woken,

A light from the shadows shall spring;

Renewed shall be blade that was broken,

The crownless again shall be king.”

J.R.R. Tolkien, The Fellowship of the Ring

The bucket shop has been fairly quiet, at least in terms of physical activity.

There were some ounces of gold claimed as 'delivered' last Friday as noted on the report below. 

But other than that the warehouses remain quiet, with little gold flowing in or out, and silver being 'pushed around the plate.'

Someone corrected me to day saying that the Comex was never intended as a physical market, but as 'a means to manipulate prices.' 

I will take some issue with that. The intent of the futures markets were not to manipulate prices. They may have become that, but it is not in their original or even stated intent. I do not see many mission statements for the CME and their minders at the CFTC admitting that our intent is to manipulate the prices of real goods in the world.

It is important to keep some account of what is intended, and what is a deficiency and a corruption. 

There can be a place for a futures market. It has very specific hedging and risk spreading functions to perform for those who wish to use and sell particular commodities. They facilitate the price discovery mechanism of the real markets.

But when the price discovery mechanism gives way to raw speculation, and the purposes of a market give way to the predations of powerful speculates who neither make nor utilize that thing productively, then the price discovery mechanism becomes broken, and the consequences for real work markets begin to build, and with time, can become almost exponential.

That we have allowed our markets to become broken does not mean that this is their proper function by any stretch of our modern narcissism that sees what we are as the epitome of all human progress and development.

Have a pleasant evening.