Another Huge Conversion of SLV Shares For Physical Silver

03 November 2016 — Thursday


The gold price traded flat until 9 a.m. China Standard Time on their Wednesday morning — and began to inch higher from there.  The price really began to sail shortly before 1 p.m. BST in London, which was about thirty minutes or so before the COMEX open in New York.  The high tick of the day came about ten minutes before the COMEX close — and shortly after the Fed announcement, the powers-that-be began to lean on the price — and by the 5:00 p.m. close of trading, all of its New York gains had vanished, just like they did on Tuesday.

The low and high ticks in gold were recorded as $1,288.40 and $1,309.30 in the December contract.

Gold was closed on Wednesday at $1,296.50 spot, up $8.70 from Tuesday’s close.  Net volume was sky high at just under 205,000 contracts, so it should be obvious that JPMorgan et al were standing there as short buyers and long sellers of last resort all day long, but particularly during the COMEX trading session.161103gold

Here’s the 5-minute gold tick chart courtesy of Brad Robertson as usual.  And although there was certainly noticeable volume in Far East and London trading, the real action began at the COMEX open, which is 6:20 a.m. Denver time on the chart below.  As was the case on Tuesday, volume really didn’t drop off to background levels until well after 2 p.m. MDT, which was 4 p.m. in New York.

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.161103-5-minute-gold

Silver made several tiny rally attempts up to and including the London open yesterday, but all were turned back — and the silver price really wasn’t allowed to go anywhere until around 9 a.m. BST.  Even then, every rally attempt that looked remotely like it was going to develop into something, was met by ‘da boyz’.  Silver’s high tick came shortly before 12:30 p.m. EDT in New York — and the price was guided lower for the rest of the Wednesday session, with all of the COMEX gains, plus a bunch more, disappearing by the 5:00 p.m. EDT close.

The low and high ticks in this precious metal were reported as $18.36 and $18.75 in the December contract.

Silver was closed in New York yesterday at $18.46 spot, up only 12 cents on the day.  Net volume was huge, at a hair under 67,000 contracts.161103silver

I’m posting the 5-minute silver tick chart from Brad for information purposes only, as it looks almost identical to the 5-minute gold chart — and certainly doesn’t require any further embellishment from me.

Like with it’s gold counterpart, 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.161103-5-minute-silver

Both gold and silver broke above their respective 50-day moving averages during the COMEX trading session yesterday, but both were closed below them by the time the after-hours trading session was done at 5:00 p.m. EDT.

Platinum traded down for half the Wednesday session, with the low tick coming somewhere between 1 and 2 p.m. Zurich time.  The subsequent rally ended/got capped at the $1,000 spot mark at precisely noon in New York — and starting minutes before 1 p.m. EDT, it got sold lower for the remainder of the day — and finished the Wednesday session at $988 spot, down 2 dollars from Tuesday’s close.161103platinum

Palladium traded mostly lower on Wednesday as well — and every attempt to break above unchanged was met by “all the usual suspects” — and it was closed at $627 spot — and down 4 bucks on the day.161103palladium

The dollar index closed very late on Tuesday afternoon at 97.74 — and then chopped sideways until about 9:25 a.m. China Standard Time on their Wednesday morning.  At that point it began to head lower, with the 97.18 low tick coming about 12:15 p.m. in New York.  It rallied about 25 basis points by 3:25 p.m. EDT, before trading mostly flat into the close.  The dollar index finished the Wednesday session at 97.38 — down 36 basis points on the day.161103intraday-gif

Here’s the 6-month U.S. dollar index chart — and how low it’s allowed to go is entirely up to ‘da boyz’ as well, as there are no free markets anymore, only interventions.161103-6-month-usd

The gold stocks rallied about 3 percent and change in the first thirty minutes of trading — and held in there pretty well until the gold price was turned lower shortly after 2 p.m. in New York.  The shares crashed into negative territory to stay a few minutes before 3 p.m. EDT — and the HUI closed down 1.86 percent.  I was underwhelmed.161103hui

The silver equities had an almost identical price pattern as their golden brethren, which I found rather surprising considering the fact that silver’s high tick of the day came around 12:20 p.m. — and the price headed lower from there.  But, as Nick’s chart below shows, the silver stocks didn’t begin to head lower until the gold price began to head lower — and that was shortly after 2 p.m. in New York.  The Silver Sentiment/Silver 7 Index closed down by 0.86 percent.  Click to enlarge if necessary.161103silver-7

The CME Daily Delivery Report showed that 26 gold and zero silver contracts were posted for delivery within the COMEX- approved depositories on Friday.  ABN Amro and Morgan Stanley issued 14 and 12 contracts out of their respective client accounts — and the only long/stopper worth mentioning was Canada’s Scotiabank with 23 contracts for its own account.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in November declined by 376 contracts, leaving 118 still around.  Tuesday’s Daily Delivery Report showed that 381 gold contracts were posted for delivery today, so that means that another 381-376=5 gold contracts were added to the November delivery month.  November o.i. in silver dropped by 5 contracts, leaving 46 left.  Tuesday’s Daily Delivery Report showed that 12 silver contracts were actually posted for delivery today, so that means that 12-5=7 more silver contracts were added to the November delivery month.

There were no reported changes in GLD on Wednesday.  But after a 569,316 troy ounce deposit on Tuesday, there was another monster withdrawal from SLV yesterday, this one totalling 2,806,778 troy ounces.  Without doubt, this was another conversion of shares to physical metal by one of Ted Butler’s “large entities with the initials JPM“.

Since October 27, Ted’s “large entity” has converted SLV shares into physical metal to the tune of 8.50 million troy ounces.

There was another sales report from the U.S. Mint yesterday.  They sold 13,000 troy ounces of gold eagles — 2,000 one-ounce 24K gold buffaloes — and no silver eagles.  This is probably Ted’s “big buyer” at work as well.

Over at the COMEX-approved depositories on Tuesday, there was 6,411 troy ounces of gold reported received — and all of that went into Brink’s, Inc.  There was also 26,258 troy ounces shipped out the door.  Of that amount, there was 24,608 troy ounces was received at Canada’s Scotiabank — and the small amount left over went into Brink’s, Inc.  The link to that activity is here.

In silver, there was one load of 599,926 troy ounces into Brink’s, Inc. — and one load of 607,570 troy ounces was shipped out of Delaware.  The link to that action is here.

It was another big in/out day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 5,920 — and shipped out 7,162 of them.  All the activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

Here are two charts that Nick Laird passed around yesterday evening Denver time — and they show the Intraday Average Price Movements for gold and silver in October.  This is the daily 2-minute tick data averaged out for very business day of the past month.  This weeds out the daily price noise — and make the price management scheme very visible — and as you can tell, the ‘fix was in’ for both precious metals starting about 30 minutes after the morning gold fix in London — and the COMEX close in New York.  But, as you can tell from the chart, about 95 percent of the price damage is during the COMEX trading session.  London is a side show to all this.  The only rallying that was allowed on average in October was between the 6 p.m. New York open every evening, until around noon China Standard Time — midnight in New York.  The the whole ‘wash, rinse, spin’ cycle began anew at the morning gold fix in London.

As I like to say from time to time, “It’s so obvious, that even Stevie Wonder could see it.”  The ‘Click to Enlarge‘ feature works wonderfully well for both charts.161103gold-intraday


I have even fewer stories today than I did yesterday.  However, a couple of them are on the longer side.  Your final edit won’t take much effort.


U.S. construction spending unexpectedly falls in September

U.S. construction spending unexpectedly fell in September as outlays on private nonresidential structures recorded their biggest decline in nine months, which could see a mild downward revision to the third-quarter economic growth estimate.

The Commerce Department said on Tuesday that construction spending slipped 0.4 percent after an upwardly revised 0.5 percent drop in August. Construction outlays were down 0.2 percent from a year ago.

Economists polled by Reuters had forecast construction spending rising 0.5 percent in September after a previously reported 0.7 percent drop in August. July’s outlays were revised up to show them rising 0.5 percent instead of falling 0.3 percent as previously reported.

Spending on private nonresidential structures, which includes factories, hospitals and roads, tumbled 1.0 percent in September, the largest drop since December 2015, after rising 0.5 percent the prior month.

Why is bad news always “unexpected” — as it’s the norm these days.  This Reuters story, filed from Washington on Tuesday, was picked up by the Internet site the same day — and it’s something I found in yesterday’s edition of the King Report.  Another link to it is here.

Meltdown at the Department of Justice: Attorney General Lynch abdicates her duty in the Clinton probes [WSJ]

Fewer than 3 of 10 Americans trust government to do the right thing always or most of the time, Gallup reports, and the years since 2007 are “the longest period of low trust in government in more than 50 years. The details emerging about the multiple investigations into Hillary Clinton explain a lot about this ebbing public confidence in institutions such as the Justice Department and Federal Bureau of Investigation.

Start with Attorney General Loretta Lynch. A cavalcade of former Justice heavyweights are now assailing FBI director James Comey for reopening the Clinton e-mail file, and Justice sources are leaking that the director went rogue despite Ms. Lynch’s counsel not to alert Congress so close to an election.

But Mr. Comey works for the Attorney General. If she thinks Mr. Comey was breaking Justice rules by sending Friday’s letter to Congress, then she had every right to order him not do so. If Mr. Comey sent the letter anyway, and he didn’t resign, Ms. Lynch could then ask President Obama to fire him.

Our guess is that she didn’t order Mr. Comey not to send the letter precisely because she feared Mr. Comey would resign—and cause an even bigger political storm. But the worst approach is to let a subordinate do something you believe is wrong and then whisper afterwards that you told him not to. The phrase for that is political cowardice.

This amazing opinion piece was posted on The Wall Street Journal website on Tuesday — and then posted in the clear on the Zero Hedge website at 12:18 p.m. EDT Wednesday afternoon.  It certainly falls into the must read category, as 108,000+ people have already done so — and another link to it is here.

Former British Ambassador Claims Source Of Podesta Leaks “Comes From Within Washington

With the media gripped by accusatory speculation regarding the identity of the source behind the Wikileaks leak of hacked Podesta and DNC e-mails, much of it focused on Russia, a new theory has emerged from Craig Murray, the former British ambassador to Uzbekistan, who tells Sputnik News (a Russian media outlet) that the source of the leaks are not Russian hackers but a Washington insider.

The source of these emails and leaks has nothing to do with Russia at all. I discovered what the source was when I attended the Sam Adam’s whistleblower award in Washington. The source of these emails comes from within official circles in Washington DC. You should look to Washington not to Moscow.

Asked about whether or not WikiLeaks have ever published information at the behest of Moscow, Murray said that “WikiLeaks has never published any material received from the Russian government or from any proxy of the Russian government. It’s simply a completely untrue claim designed to divert attention from the content of the material.”

While blasted by Washington, first by Republicans several years ago, and most recently by Democrats, the WikiLeaks revelations have often been hailed as a champion of accountability.

I think whistleblowers have become extremely important in the West because the propaganda model — as Chomsky puts it — has been reinforced to the extent that people don’t get any true information out of the media at all. It’s worth saying that Julian Assange and WikiLeaks are publishers; they publish what whistleblowers leak to them,” Mr. Murrary told Sputnik News.

This is the Zero Hedge spin on a Sputnik News story.  It showed up on the ZH website at 9:28 a.m. on Wednesday morning EDT — and another link to it is here.

This Election Has Disgraced the Entire Profession of Journalism

We still don’t know the outcome of the 2016 election, in which our “democratic process” has produced two candidates widely despised by the American people, but we do know the race’s biggest loser: reporters and the profession of journalism, which has been reduced to surrogacy, largely on behalf of Hillary Clinton.

Before going further, let me state that my own politics are on the left but I won’t be voting in this election. Both parties have collaborated to rig the system so that’s it’s virtually impossible for an independent candidate to compete given the financial and institutional hurdles that have been put in place to block such a possibility. We live in an oligarchy where democracy is virtually meaningless; I’m not debasing myself by participating in this charade.

Several studies rank electoral integrity in the United States as the worst among Western democracies — and this year’s campaign has made the United States an international embarrassment. I’ve personally witnessed elections in Africa and Latin America that had more legitimacy than the charade that will culminate here next Tuesday. The idea of the United States lecturing foreign countries about holding fair elections has long been dubious and is now grotesque.

Gee, I wonder what the author…Ken Silverstein…really thinks?  This longish commentary appeared on the Internet site at 10:10 a.m. EST yesterday morning — and it’s the first of two offerings that I ‘borrowed’ from today’s edition of the King Report.  Another link to it is here.

Doug Casey — A Civil War Could Be in the Cards After the Election

Nick Giambruno: The U.S. presidential election is only days away. What are the country’s greatest problems right now?

Doug Casey: Domestically, I’d say the continual and accelerating loss of freedom, compounded by the prospect of what I suspect will be the biggest financial/economic crisis of modern times. What might that crisis be like? That’s unpredictable, although the odds are it will be unlike any others that are still fresh in people’s memories, simply because people tend to be most prepared for the things that have most recently scared them. The big problems usually come from an unexpected quarter, and/or at an unexpected time. Like the monetary crisis of 1998 that materialized in Thailand.

That said, the question remains of where to look. It could come from outside American borders, in the form of war. War is perhaps the worst thing that can happen, not only for the destruction it will cause in itself, but because it will immensely exacerbate America’s domestic problems. As Bourne famously said, “War is the health of the State.” Certainly, the U.S. government is actively provoking other governments in a score of places around the world. The next war could be serious, not just a sport war, like those in Iraq and Afghanistan.

This Q&A session between Doug and senior editor Nick Giambruno was posted on their website yesterday — and another link to it is here.  It’s certainly worth reading.

Maersk’s Profit Tumbles on Weak Freight Rates, Low Oil Prices

Moller-Maersk A/S’s third-quarter profit plunged 43{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} as weak freight rates and low oil prices continued to batter the Danish shipping-and-oil company’s results.

Maersk’s shares sank more than 7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in Copenhagen on Wednesday. Investors fear that the shipping industry—the company’s biggest market—remains caught in its deepest down-cycle in 30 years.

Maersk Line, the company’s shipping unit and the world’s biggest container operator, swung to a loss of $122 million, from a $243 million profit a year ago.

Net profit for the company dropped to $429 million from $755 million a year earlier, as revenue fell 9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to $9.18 billion. Analysts had forecast a profit of $496 million on revenue of $9.39 billion, according to FactSet estimates.

This longish, but interesting Wall Street Journal news item put in an appearance on their website at 1:07 p.m. on Wednesday afternoon EDT — and it comes to us courtesy of Zero Hedge, via Brad Robertson.  Another link to it is here.

Deutsche Bank Thinks Draghi’s Gone Over to the ‘Dark Side’

Grim mutterings about European Central Bank policy can probably be heard echoing around the skyscrapers of Frankfurt’s financial district on any given day: Low interest rates, tough supervision, no bonds left out there to buy, et cetera.

David Folkerts-Landau, chief economist of Deutsche Bank AG has taken those concerns to a whole new level, and has just published an excoriating attack on ECB policy. The research note is entitled “The Dark Sides of QE.” Here’s a taste:

While European central bankers commend themselves for the scale and originality of monetary policy since 2012, this self-praise appears increasingly unwarranted,” he writes, going on to conclude that the “ECB is stuck … between an unfavorable equilibrium of low growth, high unemployment and zero reform momentum on the one hand and growing risks to core country balance sheets on the other.

Folkerts-Landau lists a number of the dastardly deeds of the ECB’s 80 billion-euro ($89 billion) a month asset-purchase program, which, lest we forget, has so far achieved its aim of preventing a spiral of deflation in the euro area: Bond prices have lost their signaling function; national balance sheets risk being overburdened; savers are being penalized; asset bubbles are forming. You may recognize some of these arguments.

This story was posted on the Bloomberg website at 5:46 a.m. Denver time on Wednesday morning — and I found it in today’s edition of the King Report.  Another link to this news item is here.

Kuroda dismisses idea of BOJ buying municipal bonds

Bank of Japan Governor Haruhiko Kuroda on Wednesday signalled that the central bank’s massive asset purchases will continue to focus on government bonds, saying it was difficult to buy municipal bonds given the fairly small market for them.

It’s hard to see how we can buy municipal bonds as part of our monetary policy,” Kuroda told parliament, when asked by a lawmaker whether it could be a policy option.

Kuroda also said prices are not determined by the pace of money printing alone, distancing himself from the views of BOJ Deputy Governor Kikuo Iwata – a former academic who was an architect of the central bank’s asset-buying programme dubbed “quantitative and qualitative easing” (QQE).

Under QQE deployed in 2013, the BOJ set base money – or the amount of deposits and cash in circulation – as its policy target under Iwata’s theory that the central bank can accelerate inflation simply by printing money aggressively.

But after more than three years of aggressive government bond purchases failed to end economic stagnation, the central bank in September switched its policy target to interest rates in an overhaul of its policy framework.

This Reuters article, filed from Tokyo, appeared on their website at 9:09 GMT on their Wednesday morning, which was 3:09 a.m. in Washington — EDT plus 6 hours.  It’s also from Zero Hedge via Brad Robertson — and another link to it is here.

The $100 billion gold mine and the West Papuans who say they are counting the cost

In 1936, Dutch geologist Jean Jacques Dozy climbed the world’s highest island peak: the forbidding Mount Carstensz, a snow-covered silver crag on what was then known as Dutch New Guinea. During the 4,800-metre ascent, Dozy noticed an unusual rock outcrop veined with green streaks. Samples he brought back confirmed exceptionally rich gold and copper deposits.

Today, these remote, sharp-edged mountains are part of West Papua, Indonesia, and home to the Grasberg mine, one of the biggest gold mines – and third largest copper mine – in the world. Majority-owned by the American mining firm Freeport McMoRan, Grasberg is now Indonesia’s biggest taxpayer, with reserves worth an estimated $100bn (£80bn).

But a recent fact-finding mission (by the Brisbane Archdiocese’s Catholic Justice and Peace Commission) described a slow-motion genocide  taking place in West Papua, warning that its indigenous population is at risk of becoming “an anthropological museum exhibit of a bygone culture”.

Since the Suharto dictatorship annexed the region in a 1969 U.N. referendum largely seen as a fixed land grab, an estimated 500,000 West Papuans have been killed in their fight for self-rule. Decades of military and police oppression, kidnapping and torture have created a long-standing culture of fear. Local and foreign journalists are routinely banned, detained, beaten and forced to face trial on trumped-up charges. Undercover police regularly trail indigenous religious, social and political leaders. And children still in primary school have been jailed for taking part in demonstrations calling for independence from Indonesia.

There is no justice in this country,” whispered one indigenous villager on condition of anonymity, looking over his shoulder fearfully. “It is an island without law.

This long essay appeared on The Guardian‘s website at 12:15 a.m. GMT on their Wednesday morning, which was 6:15 p.m. in New York on their Tuesday evening — EDT plus 6 hours.  I found it in a GATA release — and another link to it is here.  I’m including it in today’s column mainly because I don’t have many stories in total.

Diwali, Gold and India – Is the Love Affair Over? — Jan Skoyles

I live in Dubai where Diwali has been the focus for many this weekend. With Diwali comes not just fantastic light displays and celebrations but also huge adverts for Hindus to buy gold for their loved ones in India and throughout the world.

Buying gold at Diwali is a religious or spiritual act and it is considered auspicious and thought to bring good fortune and prosperity.

Not only are there offers to buy gold jewellery, bars and coins but there are competitions to win gold.  When I went to do my weekly shop at a Carrefour I was delighted to see a gold coin on display that I could win.

‘The more you shop the more coins you can win’ the poster told me, so on I shopped convincing myself I was making a possible investment decision.

Double page spreads, billboards and radio adverts regarding gold are not uncommon here and are very much a part of day-to-day life. The gold price, UAE gold coin and reports of gold take front and centre of the daily newspaper. Back in London a Financial Times mention of gold — and at least six people forward it onto me. In Dubai, the Middle East and much of Asia, it’s no big deal.

This very long essay by Skoyles put in an appearance on the Internet site yesterday — and another link to this commentary is here.


Here are two more photos from Bob Anthony’s trip to South Africa — and these are shots of vervet monkeys.161103image014




As I mentioned further up, both gold and silver blew through their respective 50-day moving averages yesterday, but did not close above them.  However, from the volume numbers it should be abundantly clear that JPMorgan et al were standing right there as short buyers and long sellers of last resort, as the Managed Money traders piled in on the long side.

For the second day in a row the Commercial net short positions in both metals has blown out by enormous amounts, but none of yesterday’s action will be in tomorrow’s COT Report, because it occurred the day after the cut-off.  And it’s already a given that tomorrow’s COT Report will be ‘yesterday’s news’ in every respect before the CME Group posts it on their website.

Here are the 6-month charts for all four precious metals — and as I also mentioned further up, the closing prices for the day, which were below their respective 50-day moving averages, don’t show up on these charts because they occurred after the COMEX close.161103-6-month-gold


It’s impossible to tell at the moment if the Managed Money traders are being set up for another “knee-capping” as Ted Butler so quaintly put it in his mid-week commentary yesterday, or if the commercial traders are going to get over run this time around.  But using past as prologue, it looks like the “same old, same old” at least for the moment.  Time will tell.

And as I write this paragraph, the London open is less than ten minutes away — and I see that gold rallied until just before noon China Standard Time on their Thursday — and then was turned lower starting around 1 p.m. over there.  It was up 9 bucks at it high, but is only up $4.60 the ounce at the moment.  Silver rallied about 15 cents during the same time period — and followed gold’s price path almost to the tick — and is now down a penny on the day.  Ditto for platinum — and it’s only up a buck currently.  Palladium didn’t do much in Far East trading — and is up 2 dollars.

Net HFT gold volume is sitting at a just about 43,000 contracts, which is enormous — and that number in silver is monstrous as well at 15,500 contracts.  It’s obvious that ‘da boyz’ have been very busy during the Far East trading session, because if they hadn’t been there, the current precious metal prices would be at eye-watering levels by now.  The dollar index traded pretty flat until 8:30 a.m. CST — and then began to head lower.  The current low tick came minutes before noon in Shanghai, which corresponded with the high ticks in gold and silver — and it hasn’t improved much since — and is down 26 basis points as London opens.

I certainly wasn’t amused at the share price action in either precious metal on Wednesday, but I get the impression that there was a lot of day trading going on — and at the first sign of price weakness in gold, they hit the ‘sell’ button in droves.  But why that didn’t happen with the silver equities when the metal price itself peaked out hours before the gold price, remains a mystery.

Tomorrow at 8:30 a.m. EDT, we get the latest job numbers — and almost without fail, there’s price action in the precious metals at that instant — and it remains to be seen which direction that is when the numbers hit the tape at that time.

And as I post today’s column on the website at 4:02 a.m. EDT, I note that the gold price hasn’t done a thing in the first hour of London/Zurich trading — and the same can be said of the other three precious metals as well.  It’s obvious that JPMorgan et al have killed the rally that occurred in Far East trading — and one has to wonder what the New York trading session will bring.

Net HFT gold volume is just over 46,000 contracts, so volume has dropped off to next to nothing since shortly before London opened a bit over an hour ago.  The same can be said of silver’s volume which currently sits at a bit under 17,000 contracts.  Whatever fires were started in the gold and silver prices in Far East trading have been crushed — and that’s apparent in both the price and volume numbers during the last ninety minutes.  The dollar index is sitting at the 97.10 mark — and was saved from falling below the 97.00 mark by the usual ‘gentle hands’ just minutes after London opened.  It’s down 28 basis points currently.

With the job numbers tomorrow — and the U.S. presidential election on Tuesday, it would be a fool’s errand to try and handicap the precious metals between now and next Wednesday.  Like everyone else, I’ll be watching and waiting to see what unfolds, or is allowed to unfold.  But for the moment ‘da boyz’ appear to have everything well in hand.

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


Print Friendly, PDF & Email