Another Day — and Another Load of Silver Into JPMorgan

19 October 2016 — Wednesday


It was another day where the gold price chopped quietly higher in Far East trading, only to run into the short buyers/long sellers of last resort just before the London open.  It was sold off a bit into the COMEX open — and the sharp rally that began at 8:35 a.m. in New York got summarily dealt with by 9:35.  From there it rallied, with obvious resistance until it got capped and sold lower for good starting around 12:20 p.m. EDT.  After that the gold price traded sideways into the 5:00 p.m. close.

Once again the low and high ticks aren’t worth my effort to look up, as the gold price traded within a ten dollar price range for the entire Tuesday session.

Gold finished the day at $1,262.20 spot, up $6.90 from Monday’s close.  Net volume was decent at just over 126,500 contracts, because as I said in The Wrap in Tuesday’s column, ‘da boyz’ had to throw a fair amount of paper at the gold price to get it behave in the early going on Wednesday in the Far East, plus early London trading as well.161019gold

The trading pattern in silver was very similar to gold’s, except the price action was more ‘volatile’.  The 8:30 a.m. EDT price spike got dealt with — and the New York low came at, or just after, the London p.m. gold fix.  From there, the silver price traded the same as gold.

The low and high ticks, which are barely worth looking up as well, were reported by the CME Group as $17.455 and $17.73 in the December contract.

Silver was closed in New York on Tuesday at $17.59 spot, up 15 cents from Monday — and would have obviously closed materially higher if allowed to do so.  Net volume was reported as a bit over 48,500 contracts, so it took decent COMEX paper for JPMorgan et al to put out the silver fire as well.161019silver

Platinum was up 10 bucks by the Zurich open on Tuesday morning — and gave half of the back by the COMEX open.  From that point, the price wasn’t allowed to go anywhere until after the afternoon gold fix was in — and then away it went to the upside.  The price got capped at the $950 spot mark very shortly after the Zurich close, which was 11 a.m. in New York and, like gold and silver, the price was engineered lower into the COMEX close starting around 12:20 p.m. EDT.  Then, it too traded flat into the close, finishing the Tuesday session at $942 spot, up 6 dollars on the day.161019platinum

The price path for palladium was most similar to platinum’s except it was sold down for a small loss on the day, closing at $635 spot, down 2 dollars from Monday.161019palladium

The dollar index closed very late on Monday afternoon in New York at 97.88 — and promptly fell out of bed to the tune of about 30 basis points or so by 9 a.m. China Standard Time on their Tuesday morning.  After rallying briefly until precisely 2:00 p.m. over there, it retested its earlier low around 11:35 a.m. in London.  It began to rally from there, but it was very choppy, with the 97.96 high tick of the day coming minutes before the London/Zurich close, which was 11 a.m. in New York.  By noon it was back to the 97.75 mark, before chopping higher until exactly 3:00 p.m. EDT — and from there it traded more or less sideways into the close.  It finished the day at 97.88 — which was exactly unchanged from Monday’s close.

These on-the-hour-to-the-second changes in price direction indicates interventions to me, as nothing ever happens precisely on the hour, especially when it happens multiple times in one trading session.  That’s why I post the 6-month dollar index for ‘entertainment purposes’ only.161019intraday-gif

And here’s the 6-month U.S. dollar index chart — and I offer the same comments on it today that I did yesterday — and that was that it’s starting to look a little “toppy” to me.161019-6-month-usd

The gold shares jumped up about two percent at the open — and kept right on going from there, as the HUI finished the day up 4.04 percent.161019hui

It was mostly the same for the silver equities, although the inital rally was much more rapid — and that steep ascent ended when silver got clocked by the powers-that-be at 12:20 p.m. in New York.  From there they chopped more or less sideways for the rest of the Tuesday trading session.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index close up a decent 3.65 percent.  Click to enlarge if necessary.161019silver-7

The CME Daily Delivery Report showed that 11 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  Morgan Stanley was the short/issuer on all 11 contracts — and JPMorgan stopped all 11 for its client account.

The CME Preliminary Report for the Tuesday trading session showed that October gold open interest fell by 6 contracts, leaving 121 still open, minus the 11 mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 5 gold contracts are posted for delivery today, so only 1 short/issuer got let off the hook by its opposite number holding the long contract on that trade.  Silver o.i. for October rose another 13 contracts, leaving 163 still open — and since Monday’s Daily Delivery Report showed that no silver contracts were posted for delivery today, that means the obvious.

There were no reported changes in GLD yesterday — and as of 7:23 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

But there was another sales report from the U.S. Mint yesterday.  They sold 8,000 troy ounces of gold eagles — 5,000 one-ounce 24K gold buffaloes — and 150,000 silver eagles.  It’s been many a moon since the mint has reported that many gold buffaloes sold in one day.

It was a pretty quiet day in gold over at the COMEX-approved depositories on Monday.  Nothing was reported received — and only 225.050 troy ounces/7 kilobars [U.K./U.S. 32.150 troy ounce kilobar weight] were shipped out.  Like yesterday, I shan’t bother linking this volume.

It was certainly busier in silver, as another 516,081 troy ounces of silver were deposited into JPMorgan, plus 177,893 troy ounces were shipped off for parts unknown — and all of that came out of Brink’s, Inc.  A link to that action is here.

JPMorgan’s silver stock in its COMEX-approved depository is a hair under 80 million troy ounces…at 79.83 million.

It was fairly busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday as well.  They received 6,166 kilobars — and shipped out 1,056 of them.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

I don’t have all that many stories for you today — and after yesterday’s plate full, I’m quite happy about that.


Ford to Idle Four Factories as Slowing Sales Bloat Inventory

Ford Motor Co. is temporarily halting one of two plants that builds the top-selling F-150 pickup as it idles four factories this month amid slowing U.S. auto sales.

This week, Ford is shutting its Louisville, Kentucky, factory building the Escape and Lincoln MKC sport utility vehicles, as well as two plants in Mexico that make the Fusion sedan and Fiesta subcompact, according to an e-mailed statement. Next week, the second-largest U.S. automaker said, it will close the F-150 factory near Kansas City for seven days. And starting October 31, the Louisville plant will be idled for another week, Ford said.

The plant closings follow last week’s idling of Ford’s Mustang factory in Michigan after sales of the sports car plunged 32 percent in September. U.S. auto sales are slowing as many analysts predict the industry won’t match last year’s record of 17.5 million cars and light trucks. The temporary shutdowns do not change Ford’s guidance to investors that it expects pretax profits of about $10.2 billion this year, Bob Shanks, chief financial officer, said in an interview.

What we’re doing here with these plants and these product lines is adjusting to demand,” Shanks said. “We’re just at the more mature part of the cycle and while we still see strong demand, we do think we’ll start to see some softening.

No statistics from the BLS can sugarcoat this, as it’s proof positive that the U.S. economy is slowing down.  This Bloomberg story was posted on their Internet site at 4:46 p.m. MDT on Monday afternoon — and was updated about thirteen hours later.  It’s something I found in yesterday’s edition of the King Report — and another link to it is here.

Goldman Says U.S. Bondholders Risk a $1.1 Trillion Hit if Rates Spike

First they came for the yield, then they came for the duration.

A Goldman Sachs Group Inc analysis says investors could be mired in a world of pain if yields on long-dated assets snap higher. Just a modest backup in rates could inflict outsized losses on bond portfolios — a sobering prospect in light of the recent jump in longer-dated bond yields that’s already eating into bondholders’ capital returns.

A 1 percent increase in interest rates could inflict a $1.1 trillion loss to the Bloomberg Barclays U.S. Aggregate Index, analysts at Goldman calculate, representing a larger loss for bondholders than at any other point in history. With the bank predicting the selloff in bonds has further to run, that remains “far from a tail scenario,” its analysts write.

Bets on longer-maturity obligations had paid off handsomely for most of the year amid a global bond rally triggered by expectations that weak economic activity will persuade central banks in advanced economies to postpone tightening monetary policy. Asset purchases by the Bank of Japan, Bank of England and the European Central Bank helped the average maturity of new U.S. corporate bonds climb to a peak of 11.3 years in August.

This Bloomberg news item put in an appearance on their Internet site at 9:30 a.m. Denver time on Tuesday morning — and was subsequently updated about twenty minutes later.  It comes to us courtesy of Swedish reader Patrik Ekdahl — and another link to it is here.

Saudis, China Dump Treasuries; Foreign Central Banks Liquidate a Record $346 Billion in U.S. Paper

One month ago, when we last looked at the Fed’s update of Treasuries held in custody, we noted something troubling: the number dropped sharply, declining by over $27.5 billion in one week, the biggest weekly drop since January 2015, pushing the total amount of custodial paper to $2.83 trillion, the lowest since 2012. One month later, we refresh this chart and find that in the latest weekly update, foreign central banks continued their relentless liquidation of US paper held in the Fed’s custody account, which tumbled by another $22.3 billion in the past week, pushing the total amount of custodial paper to $2.805 trillion, another fresh post-2012 low.

Then today, in addition to the Fed’s custody data, we also got the latest monthly Treasury International Capital data, which showed that the troubling trend presented last one month ago, has accelerated. Recall that a month ago,  we reported that in the latest 12 months we have observed a not so stealthy, in fact quite massive $343 billion in Treasury selling by foreign central banks in the period July 2015- July 2016, something truly unprecedented in size and scope.

Fast forward to today when in the latest monthly update, that of July, we find that what until a month ago was “merely” a record $343 billion in offshore central bank sales in the LTM period ending July 30, one month later this number has risen to a new all time high $346.4 billion, or well over a third of a trillion in Treasuries sold in the past 12 months.

This 4-chart Zero Hedge news item was posted on their website at 4:54 p.m. on Tuesday afternoon EDT — and it’s definitely worth a minute of your time, if only to glance at the charts.  I thank West Virginia reader Elliot Simon for bringing it to our attention.  Another link to this story is here.

Max Keiser interviews Mike Maloney

Max talks to Mike Maloney of about his latest chapter in his online documentary on monetary history, Hidden Secrets of Money.

The interview starts at the 14:25 minute mark — and runs for about twelve minutes.  I thank Jim Gullo for sharing it with us.  It was posted on the Russia Today website at 8:28 a.m. BST yesterday morning.

The New York Sun: The alt-Trump?

The idea that Donald Trump’s campaign is borderline anti-Semitic is being hauled out this week as we hurtle toward Election Day. No one suggests Mr. Trump himself is hostile to Jews. The idea seems to be that because some of the alt-right groups are kvelling over his criticism of the big international banks and the Federal Reserve, Jews should vote for Hillary Clinton. Never mind that the Democrats have emerged as the party of appeasement in respect of, in Iran, the world’s most anti-Semitic regime.

This all burst into the headlines after Mr. Trump’s speech Thursday at Palm Beach. It was praised on a Web site called the Daily Stormer, which reported that in the speech Mr. Trump “affirmed” that the “the mass media isn’t ‘biased’ in the innocent sense; it’s the lying Jewish mouthpiece of international finance and plutocracy, seeking to protect agendas that make trillions of dollars for a small film of scum at the very top, at the expense of middle- and working-class Americans.”

The Daily Stormer article was being emailed around by some of the most distinguished journalists in the country. So imagine our surprise when we called up on the Web the text (and then the video) of Mr. Trump’s tirade only to discover that neither the Jews, nor Israel, nor Zionism were mentioned in the speech at all. Not once. The only thing that came close was when Mr. Trump attacked the Obama administration for sending $1.7 billion — in cash — to the Iranians.

Wow!  I came close to deleting this Sun editorial without reading the whole thing.  But I stuck with it — and was ever so glad I did.  It falls into the must read category for sure — and it’s something I found in a GATA release yesterday.  Another link to it is here.

Dear Wall Street Journal: You don’t have to be a Nazi to question central banking

Before your Bret Stephens again casually attributes anti-Semitism to complaints about central banking, as he did in his October 18 commentary, “The Plot Against America” — he should try attending the monthly meetings of the Federal Open Market Committee and the Bank for International Settlements, where unelected officials gather secretly to determine what money is worth, to allocate huge amounts of it to favored institutions but not to others, and to plot surreptitious intervention in markets, thereby determining the value of all capital, labor, goods, and services in the world.

The Wall Street Journal itself seems to accept this most undemocratic wielding of immense power as the natural order of things.

But just as the old advertising slogan for rye bread noted that “you don’t have to be Jewish to love Levy’s,” you don’t have to be a Nazi to question central banking. Theoretically, at least, you could even be a journalist, if not at The Wall Street Journal.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
7 Villa Louisa Road
Manchester, Connecticut 06043-7541

The Sedition Act: The Bad Penny Returns — Jeff Thomas

In much of what was formerly known as “the free world”, freedom is being dramatically curtailed by governments. Nowhere is this truer than in the US. I discussed the future of freedom of speech with an American recently. She postulated that it could never be taken from her, as she was assured freedom of speech under The Constitution. She’s correct in the latter part of her statement. Her Constitution clearly states:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of speech.”

But as to the former part of her statement, that she could never have her freedom of speech removed is, I believe, entirely incorrect. Not only is her freedom of speech currently at risk, but this is nothing new in the US. The first suspension of this constitutional right came as early as 1798.

The Sedition Act of 1798 was passed by John Adams’ federalist government. It criminalised the making of statements that criticised the federal government. The Act was used by the Adams government to prosecute newspaper owners if they favoured the views of the Jeffersonian Democratic-Republican Party.

This very interesting commentary by Jeff Thomas appeared on the Internet site on Monday.  But I had no room for it in yesterday’s column, so it had to wait until today — and here it is.  Another link to it is here.

Ecuador Cuts Internet Access for Julian Assange to Preserve Neutrality in U.S. Election

The government of Ecuador confirmed on Tuesday that it had decided “to temporarily restrict access” to the internet inside its embassy in London, effectively cutting off Julian Assange, the editor of Wikileaks, who has lived there since he was granted political asylum in 2012.

Assange first reported on Monday that his internet connection had been “severed by a state party,” and the organization was forced to resort to a back-up plan to continue its work.

In an official statement, Ecuador’s foreign ministry suggested that the restriction was related to the release of documents by Wikileaks that could impact the presidential election in the United States.

The Government of Ecuador respects the principle of non-intervention in the internal affairs of other states,” the statement said. “It does not interfere in external electoral processes, nor does it favor any particular candidate.

As The Intercept reported in August, since Wikileaks began publishing e-mails hacked from the accounts of Democratic party officials, the site’s editor has been accused of attempting to undermine Hillary Clinton’s campaign for the presidency.

This very interesting news story put in an appearance on website at 6:47 p.m. EDT on Tuesday evening — and I thank Roy Stephens for bringing it to our attention.  Another link to this article is here.

U.K. Inflation Rate Surges to Highest in Almost Two Years

Mark Carney’s tolerance for faster inflation could be tested sooner rather than later.

U.K. consumer-price growth accelerated more than economists forecast last month, reaching 1 percent for the first time since November 2014 and almost doubling August’s 0.6 percent annual rate. While that’s still just half the Bank of England’s target, the pound’s dramatic slide since the U.K. voted to leave the European Union is promising to fuel a rapid pickup.

The fallout from sterling has already been felt in the economy, with Tesco Plc protesting price increases for Unilever products and holidaymakers paying more for their euros and dollars at airports. As BOE staff crunch numbers and prepare crucial new quarterly forecasts for November’s policy decision, they’ll have to take into account the impact of the currency move on inflation, leaving Governor Carney with a tough decision on whether it’s the right time for more easing.

After years of undershooting, he must allow a little bit of overshooting,” former Bank of England foreign exchange manager John Nugee said in a Bloomberg Television interview with Francine Lacqua. “He cannot push too hard on inflation, it risks upsetting the fragile recovery.

Carney has indicated that he’s prioritizing support for the economy over inflation concerns for now. Speaking last week, he warned the U.K. would have lost more jobs if the BOE hadn’t acted with stimulus in August after the Brexit vote. “So we’re willing to tolerate a bit of overshoot in inflation over the course of the next few years in order to avoid that situation, to cushion the blow,” he said.

This Bloomberg article showed up on their Internet site at 2:30 a.m. MDT on Tuesday morning — and was updated a bit over four hours later.  The Bloomberg ‘though police’ have given it a new headline, which reads…”Carney Steels for Inflation Test as Prices Jump Most Since 2014” I thank Patrik Ekdahl for pointing it out — and another link to it is here.

Why Hillary Clinton is a bigger concern for China than Donald Trump — Pepe Escobar

So you think Donald Trump is the biggest threat to world peace? And Barack Obama engineered America’s “pivot to Asia”?

It was actually Hillary Clinton, emphasising the necessity of a “strategic turn” for the United States, who launched the pivot to Asia in an October 2011 article titled “America’s Pacific Century”. The tone was martial: “Our military is by far the strongest and our economy is by far the largest.” The South China Sea duly featured: “Half the world’s merchant tonnage flows through this water”. Informed observers didn’t need a manual to spot Clinton’s subtle cue alerting them to the danger of China’s “nine-dashed line”.

Clinton’s essay preceded Obama’s November 2011 speech to the Australian Parliament in which he officially announced the pivot. The key theme was the U.S. as a “Pacific nation”. The tone was mostly combative. Only after 10 long confrontational paragraphs did a meek “effort to build a cooperative relationship with China” appear.

This commentary by Pepe, surprisingly, put in an appearance on the South China Morning Post on Saturday — and I thank Roy Stephens for sending it our way.  It’s certainly worth reading, especially if you’re a serious student of the New Great Game — and another link to this opinion piece is here.

Deutsche Bank’s confession may lead to more disclosures of market rigging

Deutsche Bank’s agreement to pay $38 million to settle class-action antitrust lawsuits charging the bank with being part of a cabal that was rigging the silver market — seems important for at least three reasons:

1) It is a confession of sorts and confirms the rigging of the silver market by investment banks. The settlement will make it harder for apologists for the world financial system to dismiss complaints of rigging in the monetary metals markets.

2) While the cash award in the settlement with Deutsche Bank is relatively small, $38 million, it will have been worth so much more if, as the plaintiffs’ lawyers believe, it makes other investment banks that have been heavily involved in silver trading more vulnerable and more inclined to settle the complaints against them.

3) Of course GATA is more interested in discovery and deposition in these lawsuits in the hope that they will produce evidence implicating central banks and governments in the market rigging. But if such evidence indeed is found, it might do no more than inflate the settlement offers from the defendants and condition their acceptance on suppressing all the evidence.

In short the settlement with Deutsche Bank is positive for the pursuit of free and transparent markets and limited and accountable government. It’s negative for financial repression.

The above commentary by GATA secretary/treasurer Chris Powell was posted on the Internet site yesterday.

Monsoon of Demand Expected to Drive Indian Gold Jewelry Sales to Four-Year High

Just as April showers bring May flowers, plentiful monsoon rains in India tend to drive up demand for gold jewelry among rural, income-flush farmers, who make up a third of the country’s consumption of the yellow metal.

It’s a relief to hear, then, that India just had its best monsoon season in three years, with heavy rains washing away people’s fears of yet another drought. Add to that the fact that the yellow metal is now trading in the affordable $1,250 to $1,260 range—a sizeable discount from only a month ago—and gold jewelry sales are expected to surge as much as 60 percent over last year, according to the India Bullion and Jewellers Association.

That would take sales to a four-year high as we near Diwali—traditionally a time when gold-buying is considered auspicious—which would help support prices.

Following Diwali comes the important Indian wedding season. It’s almost impossible to exaggerate how massive this industry is, with one India-based research firm expecting it to hit 1.6 trillion rupees ($24 billion) by 2020. Between 35 percent and 40 percent of a typical Indian wedding’s expenses is devoted to gold jewelry. If we use the higher estimate, that means close to $10 billion could be spent on gold alone, but for spending like this to happen, a strong monsoon is needed, which farmers in many parts of India got this year.

This gold-related commentary from Frank Holmes appeared on the Internet site on Monday evening EDT — and I ‘borrowed’ it from the Sharps Pixley website last night.  Another link to it is here.

The PHOTOS and the FUNNIES161019photo-4



It was another day where not much happened from a precious metal price perspective, at least when the charts are your only guide.  But if you look at the volumes on the price rallies, particularly the one in Far East trading on their Tuesday, then the story is different.  JPMorgan et al were at battle stations again yesterday to do ‘whatever it took’ to keep a lid on prices.  It didn’t take a huge amount of volume, but they were obviously in the market.

Here are the 6-month charts for all four precious metals — and the only notable feature is that gold closed right at its 200-day moving average.  But as you already know from the chart and volume activity, it would have certainly broken above that with ease if allowed to do so.  The other three precious metals would have run away to the upside if allowed to do so as well.161019-6-month-gold


And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price didn’t do much in Far East trading on their Wednesday — and is down 90 cents at the moment.  Exactly the same thing can be said of silver — and it’s down 3 cents the ounce.  Platinum is down 2 bucks, but palladium is up 2 dollars — and heading lower as I write this.

Net HFT volume in gold is just under 18,000 contracts, which is very light.  Silver’s net HFT volume is just over 3,600 contracts which is very light as well, so nothing should be read into the current price action in any of the four precious metals.  The dollar index had a 15 basis point down/up move during early morning trading in the Far East — and is up 3 whole basis points as London opens.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and just eye-balling the silver and gold charts above, plus taking into account yesterday’s price/volume activity, unchanged in both is the best guess I can come up with.

Ted Butler posts his mid-week commentary for his paying subscribers this afternoon — and he may see it differently, as he tracks this sort of thing far more closely than I.  So if he has a different take, I would certainly defer to his call on this.

I included JPMorgan’s COMEX silver inventory chart in one my columns late last week — and here it is updated with Monday’s data.  You can’t make out that particular deposit, as it’s still mashed up against the right side of the chart, but the trend is clear.161019jpm-silver  Click to enlarge.

Of course if it wasn’t for Ted, none of us [including this writer] would be the wiser about JPMorgan’s activities in the physical silver market outside of these COMEX deposits, particularly what he’s had to say over the years about the silver in JPMorgan’s London depository, plus their 5-year stint of buying every silver eagle and silver maple leaf the John Q. Public wasn’t buying.  Here’s what he had to say about all this in his weekly review on Saturday.

While I wasn’t necessarily expecting JPMorgan to add [another 2 million ounces – Ed] to its COMEX silver inventories at this time, I can’t say it knocked me off my feet either. It certainly does not detract in any way from my key finding that JPMorgan has accumulated more than 500 million ounces of physical silver over the past five and a half years. I’ve always included JPM’s COMEX inventories in my total calculation of what the bank holds and while it only represents 15{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of JPM’s total silver holdings, the COMEX portion is clearly the most visible and easy to prove. In fact, I find it remarkable that the bank has been so transparent in allowing the world to see even this portion of its silver holdings. And I continue to remain baffled by those who claim not to see it.Silver analyst Ted Butler: 15 October 2016

And as I post today’s column on the website at 4:05 a.m. EDT, I see that not much has happened with the gold price during the first hour of London/Zurich trading, although it’s currently up 20 cents now, rather that down the 90 cents it was ten minutes before the London open.  Silver has rallied back to unchanged, from down 3 cents — and platinum is down 3 — and palladium is up 3.  Not much to see here, but the Wednesday trading session is still young.

Net HFT gold volume is just over 21,000 contracts — and that number in silver is just about 4,400 contracts, so there’s still very little happening.  It’s as quiet as the proverbial church mouse at the moment.

With the silver price management thingy back on the front burner this week, it remains to be seen if anything comes of it, either in the courts, or in the silver price itself.  But make no mistake about it, every individual and their dog that’s evenly remotely connected to the precious metals industry knows that JPMorgan et al are at Ground Zero of the biggest price management scheme the world has ever known — and it’s just a matter of when, not if, the whole thing blows sky high.

So we wait some more.

That’s all I have for today — and I’ll see you here tomorrow.


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