Another of Ted Butler’s “Scams Within a Scam”

25 October 2016 — Tuesday


The gold price inched higher once trading began at 6:00 p.m. EDT on Sunday evening in New York.  At 9:00 a.m. China Standard Time, the algos got spun a bit and drove the price into negative territory by a few bucks.  The price rallied back to just above unchanged minutes after the London open — and it quietly sold off until just before 1 p.m. BST — and about twenty-five minutes before COMEX trading began in New York.  Then it blasted higher by ten bucks before getting capped and then driven lower by a bit more than ten dollars starting at, or just before, the London p.m. gold fix.  The low tick of the day was set minutes after London closed.  It rallied weakly into the 5:00 p.m. New York close from there.

This had all the hallmarks of one of Ted Butler’s “scam within a scam” scenarios that some of the Commercial traders pull to make a few tens of million of dollars.  ‘Da boyz’ pulled the same stunt in silver and platinum as well — and I’ll have more about all this in The Wrap.

Even though the Kitco gold chart below looks rather impressive, all of this price activity occurred mostly in a $10 price range.  The high and low ticks on Monday were reported by the CME Group as $1,272.80 and $1,260.10 in the December contract.

Gold finished the Monday trading session in New York at $1,264.40 spot, down $1.30 from Friday.  On the whole, net volume wasn’t overly heavy at 116,500 contracts, but volume up to that point had been exceedingly light, so this volume is deceptive to a certain extent.  There were very decent roll-overs out of the December contract once again, as gross volume was a hair over 182,000 contracts.161025gold

And here’s the 5-minute tick chart courtesy of Brad Robertson — and I’m only including it so you can see the commercial traders [most likely a group of small commercial traders, Ted’s raptors] and their 2-hour long “scam-within-a-scam” episode in more detail.

You can see the volume start to edge higher as the low was set before the price run-up.  Then the big volume followed as the Managed Money traders plowed in on the long side, with the commercials taking the short side of the trade.  Then the price was capped once the commercial traders involved got as many mice in the trap that they wanted, or thought they could get in that short of a time period — and through a series of bid-pulling, spoofing and spinning their algorithms, they cratered the price below where it started, covering these same short positions they’d held for less than an hour, for fun, profit — and price management purposes.  By 9:30 a.m. Denver time on the chart below, the scam was over with — and volume dropped back to what it had been before — and that was next to nothing.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ is a must here.161025-5-minute-gold

And as egregious as the scam was in gold, it was orders of magnitude worse in silver.  Its low tick of the day came around 9:30 a.m. China Standard Time on their Monday morning.  From there it rallied quietly — and was up a dime shortly before trading began in London.  It then traded ruler flat until the “scam within a scam” commercial traders showed up shortly after the COMEX open — and once the scam was done by shortly after the London close, it went back to trading ruler flat for the rest of the day.

Nothing to see here folks, please move along.

The low and high ticks in this precious metal were reported as $17.465 and $17.89 in the December contract, which was a huge intraday move.

Silver was closed in New York on Monday at $17.565 spot, up 6.5 cents on the day.  Not surprisingly, net volume was very heavy at just under 55,000 contracts.  The roll-over volume into future months [mostly March] was pretty substantial as well.161025silver

And here’s the 5-minute silver tick chart courtesy of Brad Robertson as well.  I’ll offer no comments, as the scenario is the same as it was for gold — and platinum as well.

As with the 5-minute tick gold chart, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ is a must here as well.161025-5-minute-silver

Platinum was up 9 dollars by the time Zurich opened on their Monday morning.  It was sold down a bit from there — and went into the COMEX open up 5 bucks.  And, like gold and silver, Ted’s “scam within a scam” was over and done with minutes after the Zurich/London close.  It rallied very quietly higher from there for the rest of the day, finishing the Monday session up 7 bucks at $938 spot.161025platinum

Palladium got hit for 7 dollars the moment that ‘trading’ began at 6:00 p.m. on Sunday evening in New York — and immediately began to rally off that low — and was up 7 dollars by the Zurich open.  There was a slight up/down move during the “scam within a scam” process in the other three precious metals, but I doubt palladium was involved.  The New York low [a dollar below Friday’s close] came moments after Zurich closed for the day — and it rallied sharply until COMEX trading ended at 1:30 p.m. EDT.  It traded flat after that, finishing the day up 10 bucks at $632 spot.161025palladium

The dollar index closed very late on Friday afternoon in New York at 98.66 — and then didn’t do a lot until Monday morning in the Far East when it rallied to its 98.85 high tick around 9 a.m. in Shanghai. — and then headed lower, with the 98.55 low coming at, or minutes before the noon silver fix in London.  By 2 p.m. in New York it was almost back to its high tick of the day, but then rolled over anew.  It appeared to get ‘saved’ around 5 p.m. — and took off from there into the close, finishing the Monday session at 98.75 — up 9 basis points from Friday.

It was a roller coaster ride for the dollar index yesterday — and here’s the 3-day dollar index so you can see part of Friday’s — and all of Sunday and Monday in one go.  Needless to say, the “scam within a scam” in the precious metals was only COMEX related, not currency related.161025intraday-gif

And here’s the 6-month U.S. dollar index, so you can see the ongoing rally in the world’s leading fiat currency.161025-6-month-usd

The gold stocks opened just above unchanged, but began to sell off hard shortly thereafter, once the downside of the “scam within a scam” began to unfold after the ‘fix’.  Most of the day’s losses were in by shortly after the London close when the scam ended, which was shortly after 11 a.m. in New York.  But they did continue to creep lower from there until exactly 2:00 p.m. EDT — and then rallied a bit into the close.  The HUI finished lower by 2.45 percent.161025hui

With no exceptions, the silver equities followed their golden brethren like a shadow.  And despite the fact that silver was never in negative territory at all during the Monday trading session in New York, Nick’s Intraday Silver Sentiment/Silver 7 Index still closed down 1.88 percent.  Click to enlarge if necessary.161025silver-7

The thing I found most surprising about the precious metal equities yesterday was the fact that they didn’t gap up at the open, because gold was almost ten bucks and silver by 40+ cents when the equity markets opened in New York at 9:30 a.m. EDT on Monday morning.  The silver stocks jumped by more than a percent, but that wasn’t much, all things considered.

The CME Daily Delivery Report showed that 250 gold and 4 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  Once again it was Macquarie Futures with 225 contracts out of their own account, plus another 25 contracts from International F.C. Stone’s client account.  The three largest long/stoppers were JPMorgan with 164 contracts for its client account.  In second spot was Canada’s Scotiabank with 64 contracts for its own account — and Goldman picked up 21 for its client account as well.  The issuers and stoppers in silver were not material — and the link to yesterday’s Issuers and Stoppers Report is here.

Month-to-date there has been 9,413 gold contracts issues, but a decent chunk of that number is reissues as well, particularly Macquarie Futures lately, which is something that Ted was mentioning in his column on Saturday.  Month-to-date there have been 500 silver contracts issued and stopped.

The CME Preliminary Report for the Monday trading session showed that October gold open interest rose another 26 contracts, leaving 324 still open, minus the 250 contracts mentioned above.  Friday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today.  Silver’s o.i. for October dropped by 48 contracts, leaving 41 left, minus the 4 mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 48 silver contracts were actually posted for delivery today, so that means that no silver contracts were either added or subtracted to the October delivery month today.

After the huge changes in both GLD and SLV on Friday, I wasn’t surprised to find them both unchanged at the close of trading on Monday.

But there was another sales report from the U.S. Mint.  They sold 14,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 175,000 silver eagles.

There was decent activity in gold over at the COMEX-approved gold depositories on Friday.  There was 82,182 troy ounces received — and 53,783 troy ounces shipped out.  Of the amount shipped in, there was 65,610 troy ounces received at Brinks, Inc. — 497 troy ounces at JPMorgan — and 16,075.000 troy ounces/500 kilobars [U.K./U.S. 32.150 troy ounce kilobar weight] were received at Canada’s Scotiabank.  Scotiabank also shipped out 46,724 troy ounces as well — and the other 7,058 troy ounces came out of HSBC USA.  A link to all that action is here.

It was fairly busy in silver as well, as 611,789 troy ounces were received — and 686,693 troy ounces shipped out the door for parts unknown.  All of the ‘in’ activity was at CNT — along with 60,014 troy ounces of the ‘out’ activity.  The rest of the ‘out’ action was 626,678 troy ounces out of Delaware.  The link to all that action is here.

And, for the second time in less than a month, there was no activity reported at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.

The chart below is one that Nick Laird sent around just after midnight Denver time on Saturday morning, but because I was all full up on charts for Saturday’s column already, it had to wait for today’s missive.  This shows the last two years of activity in all the known and transparent silver depositories updated with Friday’s data.  And as you can tell, despite the shenanigans in the  COMEX paper price, which is slaved to the right-side ‘Y’ axis, the amount of silver being tucked away continues to climb.  Click to enlarge.161025-2-year-transparent-silver-holdings

And to make it even more shockingly clear, here’s the long-term [20-year] version of the above chart — and despite the fact that silver is trading for only about a third of what its price was at its 30 April 2011 peak, there is now a new record high amount of silver bullion in all these depositories.

I knew we were getting close to that record, but when Ted mentioned it in his weekly review on Saturday, I thought I’d post the chart so it’s visible to you as well.  And as you can tell at a glance, everything changed once SLV was open for business starting just before mid-2006.  It’s been up, up and away for silver every since — and the JP Morgan-instigated drive-by shooting on 01 May 2011 is but a blip on this chart as far as changes in visible physical inventories are concerned, even though the price was driven into the dirt by ‘da boyz’.  Click to enlarge.161025-20-year-lt-silver

And to make it even more clear to you the difference between transparent silver inventories — and transparent gold inventories — here’s the 20-year chart for visible gold inventories. The difference between these two charts is quite striking.161025-20-year-lt-transparent-gold  Click to enlarge.

In U.S. dollar terms, the gold price has to rise about 50 percent to get back to its old high — and in silver, that number is closer to 200 percent. 

I have a decent number of stories for you today — and I hope you’ll find a few in here that interest you.


Why Corporate America’s Debt Is a ‘Major Risk’

Are investors in denial about how dim the outlook is for American businesses?

That’s the question Société Générale’s Andrew Lapthorne, global head of quantitative strategy, posed to his bank’s clients.

Asset valuations are extreme; returns are poor, the probability of losses is high and the ability to recover any losses quickly is low,” he writes.

In particular, the strategist sounded an alarm over the state of corporate America’s balance sheet. Company spending exceeds cash flow by a near-record amount—a fundamentally unsustainable situation—as net debt continues to increase at a rapid pace.

In many cases, companies have used debt to repurchase their own stock, flattering their bottom-line financial performance. While not all buybacks are financed by debt, Lapthorne did note a correlation between net repurchases and the change in corporate indebtedness.

­“U.S. corporate balance sheets are a major risk going forward,” he says. “U.S. corporates are massively overspending.

This Bloomberg article appeared on their Internet site early on Friday morning MDT — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to this story is here.

Smartwatch Market Declines 51.6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in the Third Quarter as Platforms and Vendors Realign

The worldwide smartwatch market experienced a round of growing pains in the third quarter of 2016 (3Q16), resulting in a year-over-year decline in shipment volumes. According to data from the International Data Corporation, (IDC) Worldwide Quarterly Wearable Device Tracker, total smartwatch volumes reached 2.7 million units shipped in 3Q16, a decrease of 51.6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} from the 5.6 million units shipped in 3Q15. Although the decline is significant, it is worth noting that 3Q15 was the first time Apple’s Watch had widespread retail availability after a limited online launch. Meanwhile, the second generation Apple Watch was only available in the last two weeks of 3Q16.

The sharp decline in smartwatch shipment volumes reflects the way platforms and vendors are realigning,” noted Ramon Llamas, research manager for IDC’s Wearables team. “Apple revealed a new look and feel to watchOS that did not arrive until the launch of the second generation watch at the end of September. Google’s decision to hold back Android Wear 2.0 has repercussions for its OEM partners as to whether to launch devices before or after the holidays. Samsung’s Gear S3, announced at IFA in September, has yet to be released. Collectively, this left vendors relying on older, aging devices to satisfy customers.

It has also become evident that at present smartwatches are not for everyone,” said Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers. “Having a clear purpose and use case is paramount, hence many vendors are focusing on fitness due to its simplicity. However, moving forward, differentiating the experience of a smartwatch from the smartphone will be key and we’re starting to see early signs of this as cellular integration is rising and as the commercial audience begins to pilot these devices.”

This news item, filed from Framingham, Mass. put in an appearance on the Internet site yesterday — and I thank Roy Stephens for sending it along late last night.  Another link to this story is here.

The Elimination of Reason — Jeff Thomas

Recently, I paid for an item with the exact amount requested, including 89 cents in change. The salesgirl stared at the coins and clearly wasn’t sure what to do. Eventually, she reached for a calculator and began to total them up one at a time: 25 + 25 + 25 + 10 + 4. Having been schooled in the age prior to calculators, I’m accustomed to doing arithmetic in my head, but this particular instance evidenced a level of “dumbing down” over the last fifty years that was beyond what I had realised.

Since the dumbing down has been so consistently prevalent over the decades, it’s clear that this is no accident, nor is it an experiment in “alternative education” that hasn’t worked out as was intended. It’s clearly the result of a conscious effort to diminish the average person’s ability to think. As such, it’s had a long gestation period and was expected to require generations, but was nevertheless a conscious goal.

But why on earth would the controlling elite of any country seek to diminish the power to reason? Surely, reason is the basis of all independent thought – the catalyst for new ideas and improvement on existing goods and systems.

The answer, in a word, is control. Independent thought is the prime enemy of those who seek to dominate a people. For that reason, those who rule will happily sacrifice technological and social progress if it means that their dominance can be increased.

This commentary by Jeff is definitely worth reading.  It appeared on the International Man website at 4:09 p.m. EDT yesterday afternoon — and another link to this must read article is here.

Major banks mark first-ever international trade using blockchain technology

The first cross-border transaction between banks using multiple blockchain applications has taken place, Commonwealth Bank of Australia and Wells Fargo & Co said on Monday, resulting in a shipment of cotton to China from the United States.

Australian cotton trader Brighann Cotton Marketing bought the shipment bound for the port city Qingdao from U.S. division Brighann Cotton in Texas, the companies and their banks said in a joint statement. The blockchain trade, for 88 bales, totaled $35,000, Commonwealth Bank told Reuters.

Blockchain is a web-based transaction-processing and settlement system whose efficiency banks say could slash costs. It creates a “golden record” of any given set of data that is automatically replicated for all parties in a secure network, eliminating any need for third-party verification.

Existing trade finance processes are ripe for disruption and this proof of concept demonstrates how companies around the world could benefit from these emerging technologies,” Michael Eidel, Commonwealth Bank’s executive general manager for cash flow and transaction services, said in the statement.

The transaction is not the first involving the decentralized database, used since 2009 for the digital currency bitcoin. But it is a milestone for the traditional banking industry which at first shied away from the technology, partly because it makes money flows harder for law enforcement agencies to track.

This interesting Reuters news item, filed from Sydney, showed up on their Internet site at 1:18 a.m. EDT on Monday morning — and I thank Brad Robertson for sending it our way via Zero Hedge.  Another link to this article is here.

Canada’s Bombardier to cut 7,500 jobs worldwide in latest cost-saving move

Bombardier has announced a new round of job losses worldwide, having cut 1,340 UK roles in February.

The Canadian train-to-plane manufacturer said it planned to cut a further 7,500 jobs, or 10{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of its total workforce, as part of its transformation efforts, saying it needed to reduce costs more aggressively and refocus investment.

It was yet to give a full breakdown on where the positions would go, with more details expected in the coming weeks, though at least 2,000 would be in Canada.

The company said its transportation division, which incorporates the train side of the business, would feel the bulk of the pain.

This news item appeared on the Internet site at 1:36 p.m. BST on Friday afternoon, which was 8:36 a.m. in New York.  This is another story that Patrik Ekdahl sent our way over the weekend — and another link to it is here.

The collapse of the E.U./Canada landmark deal shows how the E.U. sets itself up for failure

The European Union is on the brink of witnessing a landmark free-trade deal crumble before its very eyes.

But the structure of the E.U. effectively allows the likelihood of these kinds of deals to collapse at the very last minute, said a trade expert to Business Insider.

CETA, a proposed free-trade arrangement between the 28-nation bloc and Canada, looks set to collapse after the Belgian region of Wallonia refused to support the deal on Monday, having vetoed it last week.

The deal has taken over seven years to negotiate, with talks between the E.U. and Canada beginning in 2009.

Failure to push it through would be a serious blow to the Union, as it would cast serious doubt on its ability to strike any future trade deal, including with post-Brexit Britain.

This interesting article was posted on the Internet site at 3:39 a.m. EDT on Monday morning — and that makes it the third contribution of the day from Patrik.  Another link to it is here.

Brexit latest: Manufacturing orders disappoint in October

Manufacturing orders disappointed in October, as the sharp depreciation of the pound failed to provide the overall lift for the sector that was hoped for.

The total order book balance was -17 in the month according to the CBI’s latest survey, down from -5 in September.  City of London analysts had expected a slight improvement of the reading to -4.  The export order balance was -6, better than the -10 reading in September.

Manufacturers largely are treading water, as weakness in domestic demand offsets the boost from the lower pound,” said Samuel Tombs of Capital Economics

Rain Newton-Smith, the CBI chief economist, said the survey showed manufacturers are optimistic about export prospects but added that the weaker pound is also feeding through to firms’ costs.

This story put in an appearance on the Internet site late Monday afternoon London time — and the offerings from Patrik just keep on coming.  Another link to this story is here.

Europe’s Ultra-Long Debt List Grows as Austria Eyes 70-Year Bond

The exclusive club of European countries who have sold debt due in more than 50 years may be about to be expanded.

Austria is said to be exploring the possibility of a 70-year debt sale via banks, according to a person familiar with the matter. The sale, subject to investors’ feedback, would follow this year’s century bond offerings from Belgium and Ireland, as well as 50-year deals from France, Italy and Spain as countries take advantage of historically low interest rates to issue ultra-long debt. The Treasury in Vienna also hired banks to sell notes maturing in July 2023, the person said.

This is another example of the opportunity issuers have to lengthen the maturity of the debt,” said Antoine Bouvet, a London-based rates strategist at Mizuho International Plc. “There is such a hunt for yield and such a hedging demand for long-dated maturities on the part of pension funds and insurance companies. The demand is creating the supply.”

Investor interest in multi-decade debt has swelled as the European Central Bank’s asset-purchase program crushes yields on shorter-dated securities. The amount of government debt due in 10 years or more has swelled by a record $733 billion this year, having more than doubled since 2009 to about $6 trillion, data compiled by Bloomberg and Bank of America Corp. show.

Wow again!  Who in their right minds would buy this stuff, as they would know full well that the maturity value in 70 years would be pennies on the dollar in today’s purchasing power.  This Bloomberg news item showed up on their website at 8:16 a.m. Denver time on Monday morning — and it’s yet another contribution from Patrik Ekdahl.  Another link to this story is here.

Spanish government begins to make up for lost time

Spain is no longer waiting until manana to form a government. The country looks set to finally have a functioning administration after the country’s Socialist Party agreed to allow acting Prime Minister Mariano Rajoy a second term, ending 10 months of political deadlock. He will now begin arduous tasks like cutting the budget deficit as the economy slows. A fractured parliament won’t help.

Spain’s political vacuum hasn’t so far done much damage to the economy.  GDP is set to grow by 3.1 percent this year – nearly four times faster than Italy’s, according to forecasts by the International Monetary Fund. Low interest rates and energy prices have helped, as has booming tourism. Job creation helps boost confidence and spending.

Rajoy’s main challenge will be to shrink the country’s budget deficit to 3.1 percent of GDP next year, in order to comply with European Union rules. This will require some combination of higher taxes and a tighter leash on government spending. As a result growth is expected to slow to 1.8 percent in 2017, according to Barclays analysts.

Madrid must also grapple with other issues like the restive Catalonia region, whose government has pledged to hold an independence referendum in 2017. Then there are a host of other reforms pending in the labour market and pensions.

This opinion piece by Reuters columnist Fiona Maharg-Bravo appeared on their Internet site on Monday sometime — and this comes courtesy of Richard Saler.  Another link to it is here.

Moody’s sees banks recovering in Russia

Though problem loans will continue to drag on performance, Moody’s said it raised its outlook on the bank system for oil-rich Russia from negative to stable.

Slow economic recovery and stabilization of macroeconomic indicators in Russia will support the operating environment for Russian banks,” Irakli Pipia, a senior credit officer at Moody’s, said in a statement from London.

Moody’s said the asset quality for Russian banks declines, and problem loans on the books increase, though overall profitability should post gains for full-year 2016.

The value of Russia’s currency collapsed as oil prices moved from $100 per barrel in 2014 to under $30 early this year. From the perspective of the International Monetary Fund, the Russian economy is moving through a fiscal adjustment period that started in 2015, though there are prospects for “modest” recovery starting in 2017.

This UPI story, filed from London, was posted on their website yesterday at 6:23 a.m. — EDT I presume, although no time zone is stated.  Another link to this news item is here.

By Co-operating With Washington on Syria Russia Walked Into a Trap — Paul Craig Roberts

A month ago I wrote a column , “He Who Hesitates Is Lost—And Russia Hesitated.” The consequences of this hesitation are now apparent:

1. A U.N. report orchestrated by Washington has accused Syria and Russia of war crimes in Aleppo. According to the report, “indiscriminate airstrikes across the eastern part of the city by Government forces and their allies [Russia] are responsible for the overwhelming majority of civilian casualties. These violations constitute war crimes. And if knowingly committed as part of a widespread or systematic attack directed against civilians, they constitute crimes against humanity.

The U.N. Human Rights Council has now voted to start an “independent” investigation. The purpose of the investigation is to indict Russia and Putin as war criminals and to “bring to justice those responsible for the alleged abuses.” Moreover, “the situation should be urgently referred to the International Criminal Court. Every party to this conflict must know that they will be held accountable for the international crimes they commit – all, without selective protection or discrimination.” Keep in mind that Washington provides the largest share of the U.N.’s budget, and the U.N. will overlook that it was Washington that sent ISIS to Aleppo.

Obviously, neither Washington nor the U.N. will be able to drag Putin into the International Criminal Court, but a war criminal charge can serve Washington’s purpose by stopping Putin from traveling abroad and curtailing his diplomatic efforts. The purpose of this orchestrated exercise is its propaganda value. Among Washington’s many concerns is that some Eastern European countries, alarmed by the conflict that Washington is leading them into with Russia, will threaten NATO with a non-participation statement. If Russia is branded a war criminal, it becomes even more difficult for countries that foolishly and thoughtlessly joined NATO to extricate themselves from the consequences.

This commentary by Paul showed up on his Internet site yesterday — and is certainly worth reading.  The fact that the U.S. would stoop to this kind of behavior should scare the bejesus out of anyone, especially considering the atrocities that the U.S. war machine has done to the peoples of Planet Earth starting with the Vietnam war — and continuing to this day without a break.  I thank Larry Galearis for bringing it to our attention.  Another link to this commentary is here.  And if you do read it, you should spend time reading some of the comments as well, as they vary greatly.  Some agree, some don’t — and the comment at the 5 hour mark by “Isabella Jones” is certainly worth your while.  You decide, but the situation is worth following closely — and I’ll keep you posted.

Iran to sign 6 oil deals with International firms

Gholam-Reza Manouchehri, the deputy for engineering and development affairs of the National Iranian Oil Company (NIOC), neither specified the companies nor the projects. Nevertheless, he did indicate that the projects are large scale.

Manouchehri further emphasized that the companies that win oil sector deals in Iran will have to team up with locals.

The foreign companies will play a central role in the development of major fields,” Manouchehri. “Still, they will have to use the help of Iranian companies for their projects”.

The official also added that Iranian companies can be only the project leader for the development of small fields and can to the same effect use the help of foreign enterprises.

Elsewhere in his remarks, Manouchehri said that Iran has so far signed memorandums of understanding (MoUs) with 10 companies over the development of certain oil sector projects.  However, he did not name the companies and the projects for which they have signed the MoUs.

This news story showed up on the Internet site at 11:10 a.m. Tehran time on Sunday morning — and I thank Brad Robertson for finding it for us.  Another link to it is here.

Fake Divorce Is Path to Riches Buying Hot China Real Estate

Earlier this year, Mr. and Mrs. Cai, a couple from Shanghai, decided to end their marriage. The rationale wasn’t irreconcilable differences; rather, it was a property market bubble. The pair, who operate a clothing shop, wanted to buy an apartment for 3.6 million yuan ($532,583), adding to three places they already own. But the local government had begun, among other bubble-fighting measures, to limit purchases by existing property holders. So in February, the couple divorced.

Why would we worry about divorce? We’ve been married for so long,” said Cai, the husband, who requested that the couple’s full names not be used to avoid potential legal trouble. “If we don’t buy this apartment, we’ll miss the chance to get rich.”

China’s rising property prices this year have been inspiring such desperate measures, as frenzied buyers are seeking to act before further regulatory curbs are imposed. While the latest figures out Friday show easing in some of the hottest cities such as Beijing and Shanghai, the cost of new homes surged by the most in seven years in September.

On the whole, the real estate market “apparently cooled” in October following targeted measures rolled out in first-tier and some second-tier cities, China’s National Bureau of Statistics said in a statement. Local governments in at least 21 cities have been introducing property curbs, such as requiring larger down-payments and limiting purchases of multiple dwellings in a bid to cool prices.

The impact of the curbs may be short-lived as regulators have shown no signs of tightening on the monetary front, according to analysts from UBS Group AG and Bank of Communications Co.

Well, dear reader, you just have to know that when you see things like this going on, that the Chinese real estate market is in a bubble beyond anything anything that we have ever seen.  I’ve been through a couple like this myself, but nothing on this scale.  This Bloomberg news item put in an appearance on their website at 3:00 p.m. MDT on Sunday afternoon — and was subsequently updated about thirteen hours later.  Another link to this article is here.

Major Bling! Massive Jade Boulder Unearthed in Myanmar

The stone, a massive jadeite block measuring roughly 14 by 15 by 19 feet, is estimated to weigh over 200 tons and be worth some $170 million. It is expected that the stone will be sent to China to be carved into jewelry and statues.

We can say it is the largest piece of jade ever unearthed in Burma,” said U Win Htein, director general of the Ministry of Natural Resources and Environmental Conservation, The Irrawaddy reported.

Miner Sao Min, 44, told the Daily Mail, “We thought we had won the lottery. But this belongs to the country. It is in honor of our leaders.”

According to, Myanmar produces nearly all of the world’s high-quality jade, but through an industry widely accused of causing injury and environmental devastation with impunity.

This very interesting news story put in an appearance on the Internet site last Thursday Moscow time — and I thank Larry Galearis for sharing it with us.  Another link to this news item is here.

Report from LBMA conference in Singapore — Torgny Persson

Reporting on the London Bullion Market Association conference just concluded in Singapore, Bullion Star’s Torgny Persson writes, among other things:

— There was no place in the official program for discussion of unallocated gold and gold lending in the London market. Given the importance of the subject, this struck Persson as odd. Of course the omission would not have surprised GATA. Why would the LBMA want the world to know that most of the gold sold by its members doesn’t exist?

— A representative of the commercial bank Bank of China said he thought the yuan eventually should have some gold backing.

— The LBMA and Shanghai Gold Exchange are familiar with the gold market research of Bullion Star’s Koos Jansen and Ronan Manly. GATA finds that research the best in the business but generally unmentionable in polite company because it is often so politically incorrect.

Persson’s report is headlined “Bullion Star Attends LBMA Conference in Singapore, October 2016” and it was posted on the Internet site on Saturday sometime.  I found it in a GATA release on the weekend — and another link to it is here.

Austrian central bank conceals gold audit and bar list — Koos Jansen

Gold researcher Koos Jansen reports that while Austria’s central bank has been closing out its gold leases through the Bank of England and auditing its gold reserves, it will release neither the audit nor a list of its gold bars.

Jansen’s report is headlined “Central Bank of Austria Claims to Have Audited Gold at Bank of England, Refuses to Release Audit Reports and Gold Bar List” and it was posted on the Internet site on Saturday as well.  I borrowed ‘all of the above’ from Chris Powell, but the first reader to point this story out to me was Scott Otey.  It’s a little on the longish side, as is everything that Jansen writes, but it’s worth your while if you have the time — and another link to it is here.

SGE gold withdrawals picking up but well down y-o-y — Lawrie Williams

It’s taken a few days longer than usual for the Shanghai Gold Exchange (SGE) to report its September gold withdrawals figure – no doubt as an after-effect of the week long Golden Week  holiday which meant the Exchange was closed for most of the first week of October.  The latest figures did show though that withdrawals that month were comfortably higher than in August, but still well down on those for September 2015 – but 2015 was a huge record year for SGE withdrawals.

As can be seen from the above table, SGE gold withdrawals for the first three quarters of the year are running around 29{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} lower than a year ago, but the figures still remain substantial in terms of overall global gold flows.  Some equate SGE gold withdrawals to total Chinese gold demand – others suggest it may overstate the true picture, although known gold imports plus Chinese new mined gold production together with a relatively small recycling figure put total Chinese demand around the 2,000 plus tonne level – which corresponds much more closely with the SGE withdrawals totals and remains far higher than that of the mainstream analysts like GFMS and Metals Focus which put the figure at around half of that.  But then, much depends on what is included in demand figures with the mainstream analysts tending to ignore ‘consumption’ by the Chinese banking sector for financial transaction purposes – and those figures can be substantial.

Regardless of the accuracy or otherwise of the SGE figures, they do at least tend to confirm that Chinese gold demand has been slipping so far this year, in line with virtually all recent analyses – but it does appear to be picking up, although still not to last years’ exceptionally high monthly levels at this time of year.  Currently we are looking at a projected total for the year of around 1,875 tonnes, but with a possible build-up in demand ahead of the Chinese New Year, one can’t rule out another 2,000 tonne full year total – similar to 2014.

The above three paragraphs are all there is to this commentary by Lawrie that appeared on the Sharps Pixley website last Friday.  The table of numbers embedded in the story — and referred to in the above text — is worth a minute of your time if you have the interest.  Another link to this gold-related news item is here.

The PHOTOS and the FUNNIES161025photo-9



America will never be destroyed from the outside.  If we falter and lose our freedoms, it will be because we destroyed ourselves.” ~ Abraham Lincoln

It was a “watching paint dry, or grass grow” kind of day on Monday, with extremely low volumes in the early going.  But the quiet and calm was shattered as some of the commercial Traders, most likely some of the raptors, the commercial traders other than the Big 8, zoomed the Managed Money traders for tens of millions.

I wasn’t able to talk to Ted Butler yesterday, but he’s watched over, plus written about, more than one of these “scams within a scam” — and as I said further up, yesterday’s price action had all the hallmarks of just such an event.

I certainly don’t have Ted’s 25+ years experience as a Wall Street commodities trader, so I’m only speculating here, but would guess that between all three precious metals, the small commercial traders that pulled off this robbery/drive-by shooting in broad daylight, walked away with at least $30 million for their 3-hour effort in the COMEX futures market.  I’ll be happy to adjust that amount once Ted gives me a hard number — and I’ll let you know what it is.

Of course neither the CME Group or the COMEX people will say a word, or do a thing about this.  Nor will you hear a peep out of the mining industry, either.  They’re complicit by their very silence, but they all know what’s going on.

Here are the 6-month charts for all four precious metals.  If these charts were all you had to go on, what happened on Monday during COMEX trading wouldn’t be that obvious.  It should also be noted that gold was closed back below its 200-day moving average once again — and silver is still trading ‘flat’.161025-6-month-gold


We’re down to the last full week of trading in October.  I believe that options expiry for gold and silver for November is on Wednesday, but I reserve the right to be wrong about that, as it could be today.  November is not a traditional delivery month for either metal, so volumes won’t be that high regardless, although as I’ve pointed out in today’s and Saturday’s columns, the roll-over activity out of December has already started in both gold and silver.

All the large traders in gold and silver futures in the November contract have to roll or sell by the close of COMEX trading on Thursday — and the rest on Friday at that time — unless they’re standing for delivery of course.  First Day Notice for what gold and silver deliveries there are in November is on Monday, although I believe they’ll be posted on the CME’s website on Friday evening — and if that proves to the case, then I’ll have those numbers for you in Saturday’s missive.

As of this writing, the current open interest in gold for November is 2,436 contracts — and in silver it’s 333.  And as you are already aware from the Daily Delivery Reports and the Preliminary Reports, lots can change either up or down, as the delivery month progresses.  Let’s see how this one unfolds, but I’m not expecting big surprises, although you just never know.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price was sold down a few dollars by 9 a.m. China Standard Time — and has rallied quietly since — and is up $2.30 the ounce at the moment.  Silver’s low came around 8:15 a.m. CST — and its rally has taken it to up 5 cents currently.  Platinum and palladium have been chopping rather aimlessly higher all during Far East trading, with the former up 6 dollars and latter up 3.

Net HFT volume in gold is sitting right at 23,000 contracts — and that number in silver is just under 7,300 contracts — and neither number is overly heavy volume.  The dollar index has been chopping around about 5 basis points either side of unchanged all night long — and is down 2 basis points as London opens.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and after yesterday’s price action, I’m prepared for any eventuality during the New York trading session today.

And as I post today’s effort on the website at 4:00 a.m. EDT, I see that the gold price is now up $3.50 an ounce — and silver is up 12 cents.  Platinum is now up 8 bucks — and palladium is still up 3.

Net HFT gold volume is a hair under 27,000 contracts, which is only up about 4,000 contracts from an hour ago.  In silver that number is up to just under 8,800 contracts — and that’s not a lot of extra volume from just before the London open, either.  The dollar index is basically unchanged, up 1 whole basis point, from down 2 basis points an hour ago.  There isn’t much happening at the moment as precious metal prices creep higher, but I suspect things will be quite a bit different when I check the charts later this morning.

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


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