JP Morgan’s COMEX Silver Stash Tops 80 Million Troy Ounces

26 October 2016 — Wednesday


The gold price dipped down a couple of dollars by 9 a.m. China Standard Time on their Tuesday morning — and that proved to be the low tick of the day.  From there it rallied until minutes after 10 a.m. BST in London — and then chopped lower by another few dollars until the p.m. gold fix was in at 10 a.m. EDT.  It rallied in decent fashion until 2:20 p.m. in the thinly-traded after-hours market — and at that juncture the price was capped — and sold off a few dollars into the close.

The low and high ticks were reported as $1,262.40 and $1,277.50 in the December contract.

Gold finished the Tuesday session at $1,273.10 spot, up $8.70 from Monday’s close.  Net volume wasn’t overly heavy at just over 123,500 contracts.161026gold

Here’s the 5-minute tick gold chart courtesy of Brad Robertson.  To me the stand-out feature is the 12:20 p.m. Denver time volume spike that accompanied the price spike in the after-hours market.  It was at that point that ‘da boyz’ showed up to ensure that things didn’t get out of hand to the upside.

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.161026-5-minute-gold

Silver’s low tick of the day came around 8:20 a.m. in Shanghai — and its rally from there was much choppier, but followed the same general price path as gold.  The New York low came shortly after 9 a.m. — and the high tick came at the same time as gold’s in after-hours trading.

The low and high ticks in this precious metal were recorded as $17.51 and $17.82 in the December contract.

Silver was closed in New York yesterday at $17.74 spot, up 17.5 cents on the day.  Net volume was fairly decent at a hair over 44,000 contracts, so yesterday’s rally did not go unopposed, as the short buyers and long sellers of last resort were there when needed.161026silver

For the most part, silver traded in a two bit price range for virtually the entire Tuesday session, so I’ll dispense with the 5-minute chart on this one.

The platinum price jumped up 5 or 6 bucks in early morning Far East trading — and again began to rally quietly but steadily staring shortly after the Zurich open.  That all ended shortly before 12:30 p.m. in New York — and it was sold lower by 5 dollars going into the COMEX close.  It didn’t do a lot after that, as platinum finished the Tuesday session in New York at $962 spot, up 24 bucks.161026platinum

Palladium’s rally on Tuesday was rather lacklustre — and that’s being kind.  It was up about 9 dollars by shortly before 2 p.m. Zurich time, but starting at 12 noon in New York, it was sold back to unchanged on the day shortly before the COMEX close — and it didn’t do much after that, closing where it did on Monday at $632 spot.161026palladium

The dollar index closed very late on Monday afternoon in New York at 98.75 — and then chopped and flopped around in a very tight range until minutes before 8 a.m. in New York on Tuesday morning.  The subsequent rally topped out around 99.12 mark minutes after 10:00 a.m. in New York, which was probably the time of the London p.m. gold fix.  By around 2:10 p.m. EDT, it was down to its 98.60 low tick of the day, but rallied back 15 basis points by minutes after 4 p.m. — and didn’t do anything after that.  The index finished the Tuesday session at 98.73 — which was virtually unchanged from where it closed on Monday afternoon.161026intraday-gif

Here’s the 6-month U.S. dollar index — and the current ‘rally’ is starting to look even longer in the the tooth than before, if that ‘gravestone’ doji that was painted yesterday is any indication.161026-6-month-usd

The gold stocks gapped up a bit at the open, but didn’t find their legs until 10:30 a.m. in New York trading.  Then away they went to the upside until noon EDT.  They chopped more or less sideways until 2:30 p.m. — and then sold off about a percent going into the close of trading.  The HUI finished the day up 2.51 percent.161026hui

The chart for the silver equities was mostly similar, but the sell-off after 2:30 p.m. was bit more severe than it was in gold.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up only 2.06 percent.  Click to enlarge if necessary.161026silver-7

The CME Daily Delivery Report showed that 1 lonely gold contract was posted for delivery within the COMEX-approved depositories on Thursday — and that was all.

The CME Preliminary Report showed that gold open interest in October rose by another 24 contracts, leaving 324 still open, minus the 1 lonely contract mentioned above.  Monday’s Daily Delivery Report showed that 250 gold contracts were actually posted for delivery today, so that means that another 250+24=274 gold contracts were added to the October delivery month.  Silver o.i. for October dropped by 48 contracts, leaving 41 still around.  Monday’s Daily Delivery Report showed that only 4 silver contracts were actually posted for delivery today, so that means that 48-4=44 short-side contract holders in COMEX silver were let off the delivery hook by their opposite numbers holding the long side of those contracts, as they didn’t want to push the short/issuers for delivery of physical.

After a monster withdrawal on Friday, which Ted Butler has a comment on below, there was another very decent deposit into GLD yesterday, as an authorized participant added 104,899 troy ounces.  And as of 8:55 p.m. EDT yesterday evening, there were no reported changes in SLV.

This is what Ted had to say in his weekly review on Saturday about the huge withdrawal in gold and monster deposit in silver that occurred last Friday.  I would say he’s spot on with this.

The large withdrawal in GLD represented a conversion of shares for metal by a large entity to avoid SEC reporting requirements, the same process JPMorgan has employed regularly in SLV for more than five years. Such a conversion results in a reduction in shares outstanding and a corresponding reduction in the amount of metal held for the trust. By converting shares to metal, the metal doesn’t even have to be moved as all the conversion does is put ownership of the metal in a non-reporting status – perfect for concealing ownership.

As far as the large deposit in SLV, my best guess is that a large entity (I’ll let you guess who) has accumulated shares stealthily which required the big metal deposit and that the transaction will also eventually result in a conversion of shares to metal to avoid reporting requirements. At the very least in both, none of this is related to broad investment buying or selling — and is the work of a large entity.

Just before posting today’s column this morning I noticed that the folks over at updated their website with the changes in the short positions for both GLD and SLV as of the close of trading on October 15 — and this is what they had to report:  The short position in GLD declined from 730,500 troy ounces, down to 657,490 troy ounces, a drop of 9.99 percent.  The short position in SLV declined as well…from 11.75 million shares/troy ounces, down to 11.27 million share/troy ounce, which is a decline of 4.07 percent.

As I mentioned, I happened on this information just before I hit the ‘publish’ button, so the above data did not make the e-mail version of today’s column.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of trading on Friday, October 21 — and this is what they had to report.  Their gold ETF added a smallish 3,391 troy ounces — but their silver ETF added a somewhat more impressive 52,695 troy ounces.

There was another sales report from the U.S. Mint yesterday.  They sold 3,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 75,000 silver eagles.

There wasn’t a lot of activity in gold over at the COMEX-approved depositories on Monday, as only 10,933 troy ounces were received — and 4,273 troy ounces shipped out.  A link to that is here.

It was another busy and record-setting day in silver, as 495,407 troy ounces was deposited — and all of it went into JP Morgan’s warehouse, taking them over the 80 million troy ounce mark for the first time since they opened their silver depository a few days before their drive-by shooting that began on May 1, 2011 in Far East trading. Their total COMEX silver inventory now totals 80.33 million troy ounces — and Ted may have a word or two about this in his mid-week column this afternoon.   There was also 629,774 troy ounces shipped out — and all of that [except for 20,642 ounces of HSBC USA] came from Canada’s Scotiabank.  A link to this action is here.

It was another monster in/out day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  The received a whopping 26,939 kilobars — and shipped out a chunky 11,567 kilobars.  All of that action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

I have an average number of stories for you today — and hopefully there are few in here that you’ll find worth your while.


Caterpillar Warns of “Economic Weakness Throughout Much of the World“, Cuts Guidance

As we previewed yesterday when we showed that for 46 consecutive months industrial bellwether Caterpillar has failed to post a retail sales increase it should probably not come as a surprise that moments ago CAT not only badly missed revenues, reporting $9.2 billion well below the $9.80 billion expected (courtesy of the usual non-GAAP fudging, CAT managed to “boost” its EPS enough to beat estimates, reporting adjusted earnings of $0.85, above the $0.76 consensus), but it also once again slashed full year guidance, now expecting revenue of $39 billion, and EPS of $3.25 per share excluding restructuring costs, down from the guidance of $40.0 to $40.5 billion and EPS of $3.55 provided just three months ago.

But it was outgoing CEO Doug Oberhelman’s commentary in the release that was more troubling, to wit:

Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged.  In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks.

While we are seeing early signals of improvement in some areas, we continue to face a number of challenges.  We remain cautious as we look ahead to 2017, but are hopeful as the year unfolds we will begin to see more positive momentum.  Whether or not that happens, we are continuing to prepare for a better future.  In addition to substantial restructuring and significant cost reduction actions, we’ve kept our focus on customers and on the future by continuing to invest in our digital capabilities, connecting assets and jobsites and developing the next generation of more productive and efficient products“… “Many of our businesses, including mining, oil and gas, rail and construction, are currently operating well below historical replacement demand levels in many parts of the world.”

This news item put in an appearance on the Zero Hedge website at 8:14 a.m. on Tuesday morning EDT — and it’s something I found in this morning’s edition of the King Report.  Another link to this story is here.

Ratings Inflation Is Back, Subprime Style

A decade after the triple-A failures of the subprime era, grade inflation is back on Wall Street.

This time, Moody’s Investors Service and S&P Global Ratings Inc. are cutting companies slack on mergers and acquisitions, an analysis of credit-ratings data by Bloomberg News found.

Over the past year and a half, both have bumped up their ratings by two, three or even six levels on a majority of the biggest deals, the analysis found.

Moody’s and S&P don’t dispute those findings, which are based on ratings guidelines posted on their websites. But the firms say a by-the-numbers approach overlooks one of their most valuable assets: human judgment. Both make clear that their analysts have leeway to nudge ratings up or down, based on a company’s track record and their confidence in management’s commitment to reduce indebtedness.

We want our analysts and committees to get behind the story and make their judgments about what they think the organization will look like in the next couple of years,” says Mark Puccia, a chief credit officer at S&P.  Says Stephanie Leavitt, a spokeswoman for Moody’s: “The evaluation of financial metrics alone provides an incomplete view of credit risk to investors.

We’ve seen this all before, dear reader.  How can anything possibly go wrong?!  This article comes to us courtesy of West Virginia reader Elliot Simon.  It was posted on the Bloomberg website at 3:00 a.m. Denver time on Tuesday morning — and updated about ten hours later.  Another link to it is here.

Fed’s Bullard says one rate increase is all that’s needed for now

St. Louis Federal Reserve President James Bullard said on Monday that a single U.S. interest rate rise would be all that was necessary for the time being, repeating comments he had made recently.

Bullard was speaking on the U.S. economy and monetary policy before a conference co-sponsored by the Association for University Business and Economic Research (AUBER), in Fayetteville, Arkansas.

Really?  The rate increase will come in December, if it comes at all, because the Fed won’t want to move rates just days before the election.  They’re more than aware of the fact that an interest rate increase going into a recession will kill both the stock and bond markets in one fell swoop.  The Plunge Protection Team will be out in force as the situation requires it.  The above two paragraphs are all there is to this tiny Reuters story that showed up on their Internet site at 9:07 a.m. on Monday morning EDT — and it comes to us courtesy of Brad Robertson…via Zero Hedge.

A hedge fund manager who retired at 36 says you should stay away from the industry

A hedge fund manager who ran money for one the world’s biggest funds has a warning for those considering following his path: don’t bother.

It’s a pretty miserable industry,” said Raoul Pal, who previously co-managed the GLG Global Macro Fund in London for GLG Partners and retired at 36 in 2004. “People are fed up.”

Pal made the comments in an interview with Business Insider‘s Matt Turner on Monday.

Pal said he gets e-mails “all the time” asking how to get into the industry. His answer: “Don’t bother.

This very interesting news item showed up on the Internet site at 9:32 p.m. EDT on Monday evening — and it comes to us courtesy of Swedish subscriber Patrik Ekdahl.  Another link to it is here.

‘Siri, catch market cheats’: Wall Street watchdogs turn to A.I.

Artificial intelligence programs have beaten chess masters and TV quiz show champions. Next up: stock market cheats.

Two exchange operators have announced plans to launch artificial intelligence tools for market surveillance in the coming months and officials at a Wall Street regulator tell Reuters they are not far behind. Executives are hoping computers with humanoid wit can help mere mortals catch misbehavior more quickly.

The software could, for instance, scrub chat-room messages to detect dubious bragging or back slapping around the time of a big trade. It could also more quickly unravel complex issues, like “layering,” where orders are rapidly sent to exchanges and then canceled to artificially move a stock price.

A.I. may even sniff out new types of chicanery, said Tom Gira, executive vice president for market regulation at the Financial Industry Regulatory Authority (FINRA).

The biggest concern we have is that there is some manipulative scheme that we are not even aware of,” he told Reuters. “It seems like these tools have the potential to give us a better window into the market for those types of scenarios.

Well, they won’t even act on the scam right in front of their faces in the CME Group and the COMEX.  The proof is right in the weekly COT Reports.  But who knows, maybe this artificial intelligence is a step up from the level of intelligence these regulators have now?  Of course the next question is, when they find something, will they do anything? This Reuters article, filed from New York, appeared on their Internet site at 5:22 a.m. EDT yesterday morning — and I thank Elliot Simon for his second contribution of the day.  Another link to it is here.

Barclays Warns ‘Politics of Rage’ Will Slow Global Growth

Brexit, rising populism across Europe, the ascent of Donald Trump in America, and the backlash against income inequality everywhere.

A slew of political and economic forces have nurtured a growing narrative that globalization is now on life support—a potential game-changer for global financial markets, which have staged a rapid expansion since the end of the Cold War thanks to unfettered cross-border flows.

No more: Trade volumes have stalled while the “politics of rage” has taken root in advanced economies, driven by a collapse in the perceived legitimacy of political and economic institutions, a new report from Barclays Plc warns. The result, the bank says, is an oncoming protectionist lurch—restrictions on the free movement of goods, services, labor, and capital—combined with an erosion of support for supranational bodies, from the European Union to the World Trade Organization.

Even mild de-globalization likely will slow the pace of trend global growth,” Marvin Barth, head of European FX strategy at Barclays, writes in the report. “A sense of economic and political disenfranchisement due to imperfect representation in national governments and delegation of sovereignty to supranational and intergovernmental organisations” has generated the backlash, he said. He cites as a major factor the collapse in support for centrist parties in advanced economies and adds that the role of income inequality may be overstated.

I think Mr. Barth deliberately misses the point.  Trade volumes have stalled because all the world’s economies and their citizens are dead in the water, buried by debt and massive money printing, plus taxed to death.  Until all that disappears, this recession/depression will continue unabated.  I said ten years ago that if the world’s governments and banking systems continued on their current path, I wouldn’t live long enough for the world to see the start of a new growth cycle — and I’m still of that opinion.  This Bloomberg commentary was posted on their website at 12:39 p.m. MDT on Monday afternoon — and it’s the second offering of the day from Patrik Ekdahl.  Another link to it is here.

Russia Calls the War Party’s Bluff — Pepe Escobar

From the Clinton (cash) machine – supported by a neocon/neoliberalcon think tank/media complex – to the British establishment and its corporate media mouthpieces, the Anglo-American, self-appointed “leaders of the free world” are racking up demonization of Russia and “Putinism” to pure incandescence.

And yet a hot war is not about to break out – before or after the November 8 U.S. presidential election. So many layers of fear and loathing in fact veil no more than a bluff.

Let’s start with the Russian naval task force in Syria, led by the officially designated “heavy aircraft-carrying cruiser” Admiral Kuznetsov, which will be stationed in the eastern Mediterranean at least until February 2017, supporting operations against all strands of Salafi-jihadism. The Admiral Kuznetsov is fully equipped with anti-ship, air defense, artillery and anti-submarine warfare systems – and can defend itself against a vast array of threats, unlike NATO vessels. Predictably, NATO is spinning with alarm that “all of the Northern Fleet”, along with the Baltic Fleet, is on the way to the Mediterranean. Wrong; it’s only part of the Northern Fleet, and the Baltic Fleet ships are not going anywhere.

This worthwhile commentary/opinion piece by Pepe appeared on the Internet site at 6:34 p.m. Moscow time on their Tuesday evening, which was 11:34 a.m. in Washington — EDT plus 7 hours.  I thank U.K. reader Tariq Khan for bringing it to our attention — and another link to it is here.

Philippines Duterte tells U.S. to forget about defense deal ‘if I stay longer

Philippine President Rodrigo Duterte hit out at the United States on Tuesday, saying he did not start a fight with Washington and it could forget about a military agreement between both countries if he were to be in power longer.

Duterte said he was against the presence of any foreign troops in his country and the United States could “forget” an Enhanced Defence Cooperation Agreement (EDCA) with the Philippines, if he stayed longer, without elaborating.

The United States, he said, should not treat the Philippines “like a dog with a leash“, adding to confusion about the future the longtime allies’ ties.

I look forward to the time when I no longer see any military troops or soldier in my country except the Filipino soldiers,” Duterte said prior to his departure to Japan.

The above five paragraphs are all there is to this brief Reuters article that put in an appearance on their Internet site at 6:47 a.m. on Tuesday morning EDT.  I thank Doug Clark for sharing it with us.

America Has Lost” in the Philippines — Pepe Escobar

Your honors, in this venue I announce my separation from the United States… both in military and economics also.”

Thus Philippines President Rodrigo “The Punisher” Duterte unleashed a geopolitical earthquake encompassing Eurasia and reverberating all across the Pacific Ocean.  And talk about choosing his venue with aplomb; right in the heart of the Rising Dragon, no less.

Capping his state visit to Beijing, Duterte then coined the mantra – pregnant with overtones – that will keep ringing all across the global South; “America has lost“.

And if that was not enough, he announced a new alliance – Philippines, China and Russia – is about to emerge; “there are three of us against the world“.

Predictably, the Beltway establishment in the “indispensable nation” went bananas, reacting as “puzzled” or in outright anger, dispersing the usual expletives on the “crude populist“, “unhinged leader“.

Here’s another commentary/opinion piece by Pepe, this one is datelined Tuesday as well, so he was a busy boy yesterday and the day before.  This one appeared on the Internet site — and I thank ‘aurora’ for passing it around.  Another link to it is here.

China Money Rate Rises to 18-Month High as Yuan Depreciation Spurs Outflows

China’s overnight money rate climbed to the highest level in 18 months, fueled by capital outflows as the yuan weakened to a six-year low.

The one-day repurchase rate, a gauge of interbank funding availability, jumped 17 basis points, the most since February, to 2.41 percent, weighted average prices show. That’s the highest since April 2015. The rates rose after the People’s Bank of China weakened its daily reference rate for the yuan for the third day in a row.

Yuan depreciation-fueled outflows are causing a shortfall in base money supply and tightening liquidity,” said Liu Dongliang, a senior analyst at China Merchants Bank Co. in Shenzhen. “This will add pressure to institutions which are highly leveraged in bond investments, if the tightness continues.

Liquidity in China’s interbank market has been hard hit by the currency’s accelerated decline. A net $44.7 billion worth of yuan payments left the nation last month, according to data released by the State Administration of Foreign Exchange. That’s the most since the government started publishing the figures in 2010, and compares with August’s outflow of $27.7 billion. Goldman Sachs Group Inc. warned Friday that China’s currency outflows have risen to $500 billion this year.

This Bloomberg story was posted on their website at 10:14 p.m. Denver time on Monday night — and I thank Richard Saler for sending it our way.  Another link to it is here.

Global renewable power capacity overtakes coal as 500,000 solar panels installed every day

Global renewable electricity capacity has overtaken coal to become the world’s largest installed power source for the first time, after a record-breaking year in which half a million solar panels were installed every day.

Some 153 gigawatts (GW) of renewable power capacity – more than the total generation capacity of Canada – was installed during the course of 2015, making it the fastest-growing electricity source, the International Energy Agency said.

This was primarily due to unprecedented expansion of solar and onshore wind, with two new wind turbines installed every hour in China, which was the “indisputable global leader of renewable energy expansion”.

As a result, worldwide renewable capacity hit 1,985 GW, or about 31pc of global power capacity, just pipping coal-fired power, which stands at 1,951 GW, the IEA said.

Normally I’d save a story like this for the weekend, but not this time.  This amazing story, which is definitely worth reading, appeared on the Internet site at 7:01 p.m. BST on their Tuesday evening, which was 2:01 p.m. in New York — EDT plus 5 hours.  It’s another offering from Patrik Ekdahl — and another link to it is here.

Hugo Salinas Price: How I Became a Gold-Bug

My father was Hugo Salinas Rocha -“Salinas” was his father’s surname, and “Rocha” was his mother’s surname; the custom of using both parents’ surnames is universal in Latin America. Father was a successful merchant in Mexico City, and in the 1930’s he ran a store in downtown Mexico City. The store belonged to a company founded by his father, Benjamin Salinas Westrup and to the partner he took into the business, his brother-in-law, Joel Rocha Barocio; the company name used their initials: “SyR” (the “y” means “and” in Spanish).

I was born in 1932. As a little boy, I loved to play in my father’s store after school hours, and one afternoon when I was perhaps eight years’ old, one of the salesmen took two gold coins out of his vest pockets (men wore vests in those days). They were the large, 1.2 ounce gold “Centenarios” that had been minted to celebrate the 100th Anniversary of Mexican Independence from Spain in 1810. The salesman balanced the two coins on his forefingers, and placing them near my ear, he gently touched one against the other. The sound was the delightfully pure ringing of gold!

A couple of years later, when my father was driving home after the store closed, he pulled out a lottery ticket from his coat and said: “This lottery ticket did not win a prize, but it did win a refund of $100 pesos. I’ll give you the refund. What would you like to buy with the refund?” I unhesitatingly replied: “Buy me some gold coins!” So the next day, a salesman from my father’s store took me on a short walk downtown, from the store to a side-street. Three or four men in suits and wearing hats – men wore hats in public, in the 1940’s – were posted along the sidewalk, and were clicking gold coins in their hands. They were gold-traders, and clicking gold coins was their way of attracting the attention of customers.

This wonderful must read commentary by Hugo showed up on his website on Monday sometime — and my thanks goes out to Roy Stephens for bringing it to my attention — and now to yours.  Another link to it is here.

Russia may have to sell gold to boost current account — Lawrie Williams

A report in Pravda suggests that the lower oil prices and the implementation of Western sanctions in particular have been having a particularly adverse impact on Russia’s current account and it may now become necessary to sell some of its gold reserves and diamond stocks to counteract a growing deficit.

Regarding gold, Russia is vying with Australia to be the world’s second largest producer of the yellow metal – indeed some projections suggest it could become the world’s largest gold miner within the next ten to fifteen years. The Russian Central Bank has also been the world’s largest official gold buyer in recent months.  It is also the world’s no. 1 producer of diamonds mining around 25{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the global total.

Now whether this reported necessity to sell gold and diamonds is going to affect the country’s foreign reserves is not certain from the report.  We seem to recall a similar statement  a couple of years ago, but since then Russia has continued to buy gold for its reserves – indeed it is reported to have taken 15  additional tonnes into its Central Bank holdings in September, bringing the total to around 1,540 tonnes, worth around US$63 billion at current gold prices.  This is the world’s sixth largest national official gold holding.

We will need probably to wait another 3 weeks or so for any official confirmation that Russia may be starting to dip into its official gold reserves to help reduce debt, or perhaps cutting the level of its central bank’s gold buying, or finding the gold from other stockpiled sources.  Russia currently mines around 22.5 tonnes of gold a month.

The above four paragraphs are all there is to this brief must read commentary by Lawrie that appeared on the Sharps Pixley website sometime on Tuesday.  And as far as Russia selling part of its gold reserves, I’ll believe it when I see it.  Elvira Nabiullina, the chairman of The Central Bank of the Russian Federation, made similar comments several months ago — and nothing changed, so we’ll see if they’re serious this time.

Indian, Chinese love affairs with gold turn financial

For Surender Kumar Jindal, one of the biggest sellers of gold and silver bars in India, this year has not been good for business.

Gold may have rallied 20 per cent in U.S. dollar terms, putting it on course for its first annual rise in four years. For the Indian market, though, that has contributed to a fall in demand for the physical metal. …

Lacklustre demand in India marks a fundamental change for the physical gold market. After prices dropped in 2013, hefty buying from India and China saw hundreds of tonnes of metal flow eastward from vaults in London.

However, analysts say this does not mean the world’s two largest consumers of the metal have lost their love for bullion, rather that the way people buy gold there is changing.

In China, gold is becoming an increasingly popular investment product through platforms run by the country’s state-owned banks that allow investments on the Shanghai Gold Exchange via smartphones and online. New financial investment products such as gold exchange traded funds have also started to see inflows.

The above five paragraphs are all that are posted in the clear from this Financial Times story on Monday.  The rest is behind their subscription wall.  I found this in a GATA release yesterday.

Chinese miners in talks for stake in Barrick’s Veladero mine, Reuters says

China’s Zijin Mining Group Co. Ltd. and Shandong Gold Mining Co. Ltd. have held separate talks with Barrick Gold Corp. to buy a 50-percent stake in its Veladero gold mine in Argentina, according to four sources with knowledge of the process.

Veladero is one of Barrick’s five core mines; all are in the Americas. It is expected to produce between 580,000 and 640,000 ounces of gold this year.

The high quality of the mine, production capacity, and the prospect for geographical diversification have appealed to the state-owned Chinese suitors, said three of the sources, who requested anonymity because the matter is private. All spoke over the past week.

This Reuters article, co-filed from Toronto and Vancouver, showed up on their website at 5:06 p.m. EDT on Tuesday afternoon — and it’s another gold-related story I found in a GATA release.  Another link to it is here.

Gold coin worth £250,000 discovered in child’s pirate treasure collection

An 18th-century gold coin worth up to £250,000 has been discovered in a child’s pirate treasure collection.

The anonymous owner had been given the rare Queen Anne Vigo five guinea piece as a youngster by his grandfather.

With no idea of its value, he kept it in his toy box for pirate games until it was packed away and forgotten about.

But when his grandad died, he rediscovered the coin and gave it to his own son to play with — before experts told him it was one of 20 made of gold seized from Spanish treasure ships in Vigo Bay, Spain, in 1702.

This short, but very interesting gold-related news item appeared on the Internet site early Monday evening London time — and I found it on the Internet site.  The photos alone are worth the trip — and another link to this article is here.

The PHOTOS and the FUNNIES161026photo-8



When the people fear the government, there is tyranny. When the government fears the people, there is liberty.” ~ Thomas Jefferson

Of course I was happy to see the rallies in three of the four precious metals yesterday, but it was obvious from the price action and volume that the rallies in both gold and silver were not going unopposed.  Volume was far higher in both metals that I like to see, on such smallish gains — and the fact that both got capped at 2:20 p.m. in the after-hours market meant that ‘da boyz’ had things well in hand.

Here are the 6-month charts for all four precious metals — and it’s obvious that all four are off their lows, but how far they will be allowed to rally from here, remains to be seen.  Gold closed back above its 200-day moving average once again.161026-6-month-gold


And as I type this paragraph, the London open is less than ten minutes away — and I see that gold has been trading just above unchanged for most of the Far East trading session on their Wednesday — and is up $1.70 at the moment.  The same can be said of silver, as it’s up a nickel.  Platinum and palladium have been chopping around unchanged, but rallied a bit since the dollar index began to head south — and the former is up 5 bucks an ounce currently — and the latter 4.

Net HFT gold volume is just under 25,000 contracts, with not much roll-over activity.  Net HFT volume in silver is sitting at 6,500 contracts, with no roll-over activity worth mentioning, either.  The dollar index traded pretty flat until exactly 2:00 p.m. China Standard Time — and that point began to sell off — and is down 14 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 if forced to bet ten bucks on what Friday’s report will look like, I would speculate that the best we can hope for his unchanged.  Of course that’s what I said at this time last week — and that turned out to be a wildly conservative estimate, as there were improvements in both, particularly gold.  But I doubt that I’ll be out by that much this time around.   We’ll see.

With the addition of another container load of silver into JPMorgan, their 80.33 million troy ounce stockpile now represents 46 percent of the silver held by all the COMEX depositories combined — and more than three times as much silver as the next closest depository, which is HSBC USA, with 24.61 million troy ounces.  Ted continues to be amazed, as I am, that few if any others ever comment on this.

Here’s the latest chart from Nick Laird that shows yesterday’s deposit but, like the previous deposit, is squashed up against the right ‘Y’ axis — and it will be several more days before it becomes clearly visible on the chart.161026jpmorgan-silver  Click to enlarge.

And as I post today’s column on the website at 4:05 a.m. EDT, I note that very little has changed in the first hour of London/Zurich trading on their Wednesday morning.  Gold is up $1.90 an ounce, silver is up 6 cents, platinum is up 6 dollars — and palladium 5.

Net HFT gold volume is a hair over 26,000 contracts — and that number in silver is 7,300 contracts.  There’s not much happening price or volume-wise at the moment.  The dollar index is down 13 basis points.

That’s it for today — and I’ll see you tomorrow.


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