COT Surprise/Russia’s Central Bank Adds 1.3 Million Ounces of Gold

19 November 2016 — Saturday


‘Da boyz’ hit the gold price a couple of times in Far East trading on their Friday — and the low tick of the day was set about 15 minutes before the London open.  From that point it didn’t do much until the morning gold fix in London was put to bed, which was around 10:30 a.m. GMT.  A decent rally began at that juncture, but JPMorgan et al were there at 8:30 a.m. on the button in COMEX trading, to to put the kibosh on that.  It was sold lower until minutes before the London close, which was minutes before 11 a.m. EST.  The price chopped sideways for the remainder of the Friday session.

The high and low tick were reported as $1,217.50 and $1,201.30 in the December contract.

Gold finished the day at $1,207.40 spot, down another $8.90 from Thursday’s close. Net volume was way up there once again at just over 204,000 contracts.161119gold

I’m posting Brad Robertson’s 5-minute tick gold chart for information purposes only, as it barely qualifies to be in today’s column — and you can read into it whatever you wish.  But note the volume spikes on the two engineered price declines in Far East trading on their Friday…one in the morning — and the other one that came 15 minutes before London opened, which is 12:45 p.m. Denver time on the chart below.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ is a must for this chart.161119-5-minute-gold

Silver was tagged by ‘da boyz’ in Far East trading on Friday, but not anywhere near the same extent as gold.  The low tick of the day came at, or just after, the morning gold fix in London.  The rally off that low met the same fate as gold at 8:30 a.m. EST.  It’s New York low came at 10:40 a.m. — and then silver rallied a bit, but that got hastily capped just before  the 1:30 p.m. EST COMEX close, before getting quietly sold down once again in the thinly-traded after-hours market.

The high and low ticks in silver were recorded by the CME Group as $16.745 and $16.43 in the December contract.  Net volume was fairly heavy at just under 47,500 contracts — and there was decent roll-over activity out of December.161119silver

And here’s the 5-minute tick chart for silver — and it’s courtesy of Brad as well.  There were a few higher volume moments outside of the COMEX trading session, but they didn’t add up to much.  Note the volume spike in the last five minutes before the COMEX close, which is 11:30 a.m. Denver time on the chart below.  That’s where the price got capped, as it was about run away to the upside at that juncture.

Like the 5-minute gold tick chart, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ is a must here as well.161119-5-minute-silver

It was mostly similar in platinum trading.  Once it was sold down in morning trading in the Far East, every attempt to rally back above unchanged was met by a short buyer/long seller of last resort, with the final rally attempt being snuffed out at 8:30 a.m. in New York…just like silver and gold.  The low tick came at the Zurich close, which was 11:00 a.m. in New York.  It rallied five bucks from there until noon EST — and then traded mostly flat for the rest of the Friday session, closing at $922 spot — and down an even 10 bucks from Thursday.161119plati

For the most part, the trading pattern in palladium was similar to ‘all of the above’.  The low tick came shortly before 1 p.m. Zurich time.  A rally began — and the price got capped by JPMorgan et al at 8:30 a.m. EST.  It’s New York low came at the 11 a.m. EST Zurich close.  It rallied from there until shortly after COMEX trading ended at 1:30 p.m. EST, but got sold off a few dollars in the thinly-traded after-hours market the moment it attempted to rally above unchanged on the day.  Palladium was closed at $723 spot, down 3 dollars from Thursday.161119plad

The dollar index closed very late on Thursday afternoon at 100.96 — and was up about 30 basis points by 9:25 a.m. China Standard time on their Friday morning.  It chopped sideways from there until about 3:25 p.m. CST — and began to sell off quietly from there.  The 100.83 low tick came around 12:45 p.m. in London — and its 101.48 high tick came minutes after 10:30 a.m. in New York.  The index sold off about 20 basis points by noon EST — and then didn’t do much for the rest of the day.  The dollar index closed at 101.30 — which was up 34 basis points from Thursday.161119intraday-gif

And here’s the 3-year U.S. dollar index chart, so you can put the current ‘rally’ in some sort of context.161119-3-year-usd

The gold stock opened down a percent, but quickly rallied back to unchanged.  But once it became apparent that the gold price was going to continue to get sold lower, the shares followed.  Their low ticks came around 10:35 a.m. EST — and they began got chop quietly higher starting shortly before 1 p.m.  They couldn’t squeeze a positive close, but did give it the old college try as the trading day wound down — as the HUI finished lower by 0.63 percent, which ain’t half bad, all things considered.161119hui

The silver equities also opened down a bit, but they managed to poke their respective noses above unchanged, albeit briefly.  Once the London p.m. fix was done, they began to chop lower in a fairly broad range, with the low coming around 12:50 p.m. EST.  Then, like their golden brethren, the chopped quietly higher — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.49 percent.  Click to enlarge if necessary.161119silver-7

And here are the usual three charts from Nick that tell all.  The first one shows the changes in gold, silver, platinum and palladium for the past week, in both percent and dollar and cents terms, as of Friday’s closes in New York — along with the changes in the HUI and Silver Sentiment/Silver 7 Index — and the Click to Enlarge feature really helps on all three.161119weekly

And the chart below shows the month-to-date changes as of Friday’s close.161119month-to-date

And below are the year-to-date changes as of the close of trading yesterday.161119year-to-date

The CME Daily Delivery Report showed that 536 gold — and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  The big short/issuer was no surprise…as it was Goldman Sachs once again, this time with 495 contracts out of its client account, plus Morgan Stanley issued 34 as well.  The big stopper was Canada’s Scotiabank, the same as it was in yesterday’s report, with 528 contracts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in November fell by 522 contracts, leaving 553 left, minus the 536 mentioned above. Thursday’s Daily Delivery Report showed that 522 gold contracts were actually posted for delivery on Monday, so the number work out perfectly.  Silver o.i. in November was unchanged once again at 1 contract still left.  Thursday’s Daily Delivery Report shows that zero silver contracts are posted for delivery on Monday, so that 1 contract still remains on the books.

There was another decent-sized withdrawal from GLD yesterday, as an authorized participant removed 171,606 troy ounces.  But the big change was in SLV — and that ETF fell by 6,071,127 troy ounces, as this huge amount was obviously an exchange for physical by Ted’s “big buyer with the initials JPM” in order to avoid SEC reporting requirements.

As I stated in Friday’s column — “Except for the conversion of 8.5 million SLV shares into physical silver on October 27 and November 2…there hasn’t been much in the way of withdrawals from SLV…and I’m wondering who might be gobbling up all these SLV shares that have been falling off the table for the last week.  I’m sure that Ted would say that it was JPMorgan — and I’m not about to disagree, but I did point out that if Scotiabank is the other big short, they could snapping them up as well.  We’ll see.

Well, dear reader, we just found out.  I’m sure that Ted will have lots to say about this in his weekly review this afternoon.

There was another sales report from the U.S. Mint yesterday.  They sold 6,000 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — and another 151,000 silver eagles.

Month-to-date the mint has sold 88,000 troy ounces of gold eagles — 20,000 one-ounce 24K gold buffaloes — and 2,196,000 silver eagles.

But just in this past week alone, gold eagle and gold buffalo sales have more than doubled since the beginning of the month — and silver eagles sales have more than tripled in the same one-week period.  I’d bet that it’s Ted’s “big buyer” loading the boat once again, because retail bullion sales suck.

There’s an unconfirmed rumour on the Internet that the mint has suspended production of 2016 silver eagles — and no more silver eagles will be forthcoming until mid-to-late January, which is two months away.  They normally cease production on the current year in early-to-mid December anyway, so if this story is true, they certainly are stopping early this year.  I’ll wait until I see something about this in on a more main-stream website before declaring it to be gospel.

There wasn’t big gold movement over at the COMEX-approved depositories on the U.S. east coast on Thursday, but what was moved, was all kilobars once again.  For the second or third day in a row, nothing was reported received, but 37,230.858 troy ounces/1,158 kilobars [SGE kilobar weight of 32.151 troy ounces] was shipped out of Malca-Amit USA, plus another 5,626.250 troy ounces/175 kilobars [U.K./U.S. kilobar weight of 32.150 troy ounces] was shipped out of Canada’s Scotiabank.  A link to this activity is here.

It was pretty quiet in silver as well.  Only 300,042 troy ounces were received — and only 12,004 troy ounces were shipped out.  All of this activity, both in and out, was at the CNT Depository — and a link to that is here.

There was a decent amount of movement over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  There were only 606 reported received, but 3,544 were shipped out.  All of that action was at Brink’s, Inc. as per usual — and a link to that, in troy ounces, is here.

Since the 20th of November falls on a Sunday this month, the good folks over at The Central Bank of the Russian Federation do what they always do in that instance — and that’s update their website with the previous month’s data on the Friday before the weekend.

Despite the fact that they’ve stated several times in the last six months that not only may they stop buying gold for their reserves, but they may start selling some as well — they haven’t.

They added a record 1.3 million troy ounces of gold to their reserves in October, bringing their total up to 50.9 million troy ounces, or 1,583.2 metric tonnes.  Here’s Nick’s most excellent chart — and there’s already a story about it floating around on the Internet — and it’s posted in the Critical Reads section.  Click to enlarge.161119russian-reserves

It should be noted that this is their largest central bank buy since the turn of the century, which is almost 17 years ago now.  Where the hell is the time going?

Well, in two words, the much-anticipated Commitment of Traders Report was a crushing disappointment in one, but very important respect.  Yes, the Managed Money traders sold buckets full of long contracts in both silver and gold.  But, as Ted Butler pointed out — and I had noticed, but didn’t grasp its significance on my own — was that they were almost totally missing in action on the short side.

For that reason, Ted’s estimates of a 25,000+ contract hoped-for improvement in silver — and 75,000+ in gold — weren’t even close.  But that was through no fault of his, as the Managed Money traders didn’t turn out to be the Pavlovian puppies they normally are when JPMorgan et al pulled the lever on the “big flush” during the reporting week just past.

In silver, the Commercial net short position declined by only 3,740 contracts, or 18.7 million troy ounces of paper silver.  They got to this number by selling 2,502 long contracts — and they also reduced their short position by 6,242 contracts.  The difference between those two numbers was the change in their short position for the reporting week.

Because the Managed Money traders didn’t pile in on the short side like they normally would, there was no long side for the Commercial traders to buy so they could go long themselves, or use that long position to cover one of their own short positions.  Ted said that this fact limited to a large extent how well the Commercials could improve their positions during the reporting week.  Ted said that the Big 4 reduced their short position by only 3,900 contracts — and the ‘5 through 8’ large traders also managed to cover around 1,800 short contracts.  Surprisingly enough, Ted’s raptors, the commercial traders other than the Big 8, actually sold around 2,000 contracts of their long position during the reporting week.  Very strange.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders — and much more, as they dumped 7,973 long contracts, but only added 325 short contracts — and that’s truly bizarre!  The total of those numbers — 8,298 contracts — was the change in the reporting week.   Although the Big 8 commercial traders managed to cover about 4,700 short contracts during the reporting week, the traders in the “Other Reportables” category snapped up 4,188 long contracts for themselves.  That’s another reason why the Commercials didn’t cover more, because other traders beat them to what few long positions there were to buy from the Managed Money traders and the raptors.

Before I forget, the commercial net short position in silver is now down to 392.6 million troy ounces of paper silver, which is almost no change at all from last week.  If the Managed Money traders had piled onto the short side like they normally do, that number would have been 100 to 130 million troy ounces of paper silver less than it is now.  Ted figures that JPMorgan’s short position is down to around 20,000 contracts, or 100 million paper silver ounces sold short.  Last week it was 24,000 contracts, so he attributes the entire improvement in the commercial net short position of the Big 4 traders, to JPMorgan.

Here’s the 3-year COT chart for silver, so you can see how little improvement there actually was during the extraordinary week that we just went through.  Click to enlarge.161119cot-silver

It was almost the same situation in gold.  The commercial net short position improved by only 45,620 contracts, or 4.56 million troy ounces of paper gold.

They got to this number by reducing their short position by 45,344 contracts, but they only added a piddling 276 contracts to their long positions.  The total change for the reporting week was 45,620 contracts, which is the sum of these two numbers.

Ted said that the Big 4 decreased their short position by about 22,100 contract, the ‘5 through 8’ traders did the same to the tune of around 4,200 contracts — and the rest of the heavy lifting was Ted’s raptors — the commercial traders other than the Big 8 — as they reduced their short positions by about 19,300 contracts.

Under the hood in the Disaggregated COT Report, the Managed Money traders dumped 33,538 long contracts, but only added 5,419 short contracts!  If hadn’t been for the traders in the Nonreportable/small trader category dumping longs and going short to the tune of about 6,000 contracts, the commercial net short position wouldn’t have even improved as much as it did, because the traders in the “Other Reportables” category ended the reporting week basically unchanged.

The commercial net short position in gold is down to 20.00 million troy ounces, a decline of 4.56 million troy ounces of paper gold.  But if the Managed Money traders had piled in on the short side like they normally do, the improvement during the reporting week could have easily been twice as much as it was.

Here’s the 3-year COT chart for gold — and there nothing it that even hints that last week’s trading was on record volume and price movement.  Click to Enlarge.161119cot-gold

So…will the brain-dead/black box Managed Money traders be tempted by the short side if JPMorgan et al continue to press them?  Beats me — and there’s nothing in the price action since Tuesday’s cut-off that suggests that may be the case.  But if ‘da boyz’ can force them, or entice them to go short the way they’ve done in the past, then look out below for precious metal prices.  But if the Managed Money traders can’t, or won’t be turned to the ‘Dark Side’ this time around, then it’s a whole new ballgame according to Ted.

I couldn’t agree more — and I await his weekly review with great interest.

Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.161119days-to-cover

For the current reporting week, the Big 4 are short 130 days of world silver production—and the ‘5 through 8’ traders are short an additional 51 days of world silver production—for a total of 181 days, which is 6 months of world silver production, or about 439.8 million troy ounces of paper silver held short by the Big 8.

And it should be pointed out here that in the COT Report above, the Commercial net short position in silver is 392.6 million troy ounces.  So the Big 8 hold a short position larger than the Commercial net position to the tune of 439.8-392.6 = 47.2 million troy ounces…give or take.  And don’t forget that Ted Butler pegs JPMorgan’s short position at around 100 million ounces of the 439.8 million troy ounces held short by the Big 8 — which works out to around 41 days of world silver production.  How concentrated — and ridiculous is that?

And if that isn’t bad enough, the Big 8 are short 50.4 percent of the entire open interest in silver in the COMEX futures market.  In gold it’s 40.7 percent of the total open interest that the Big 8 are short.

And as an aside, the two largest silver shorts on Planet Earth—JPMorgan and Canada’s Scotiabank—are short about 85 days of world silver production between the two of them—and that 85 days represents around 65 percent of the length of the red bar in silver in the above chart.  The other two traders in the Big 4 category are short, on average, about 22 days of world silver production apiece.

As I stated just above, based on Ted’s estimate of JPMorgan’s short position of 20,000 contracts, JPMorgan is short around 41 days of world silver production all by itself.  Because of that, the approximate short position in silver held by Scotiabank works out to around 45 days of world silver production.  At this point in time, Scotiabank’s short position in silver is larger than JPMorgan’s, but not by much.

In gold, the Big 4 are short 51 days of world gold production, down from 58 days last week — and the ‘5 through 8’ are short another 19 days of world production [down from 20 days last week], for a total of 70 days.  Based on these numbers, the Big 4 in gold hold about 83 percent of the total short position held by the Big 8 — and that’s a new record high.   That ridiculous situation is more than obvious in the “Days to Cover” chart above.  How’s that for a concentrated short position within a concentrated short position?

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 72, 70 and 66 percent respectively of the short positions held by the Big 8.

I don’t have all that many stories for you today — and I hope you’ll find a few that pique your interest.  Included is one that I posted in yesterday’s column.  But for length and content reasons, I said it would be included in my Saturday column as well — and it is.


Gap and Abercrombie & Fitch slump on unhappy holidays

Shares in two of America’s largest clothing retailers plunged on Friday following disappointing third quarter sales and a downbeat forecast for the crucial holiday shopping season.

Gap shares sank by 13.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} after a seventh consecutive quarter of falling revenue and warned that fewer people were visiting stores.

Abercrombie & Fitch’s stock fell 13.9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} on poor sales and a weak outlook.

Both have been attempting to revitalise their brands, with limited success.

This news item appeared on the Internet site on Friday — and I thank Swedish reader Patrik Ekdahl for bringing it to our attention.  Another link to it is here.

JPMorgan Chase to pay US$264 million in Chinese bribery case

New York City-based JPMorgan Chase & Co. has agreed to pay US$264.4 million in fines to federal authorities to settle criminal and civil charges that it hired friends and relatives of Chinese officials in order to gain access to banking deals in that country.

JPMorgan’s Asia affiliate allegedly created a quid pro quo program that would hire the children and friends of high-ranking Chinese officials, regardless of the person’s qualifications, in order to gain favour and win banking deals.

“Awarding prestigious employment opportunities to unqualified individuals in order to influence government officials is corruption, plain and simple,” Assistant Attorney General Leslie Caldwell said in prepared remarks.

Caldwell called the JPMorgan program, which was called the “Sons and Daughters Program,” was “nothing more than bribery by another name.

Another licensing fee — and just another cost of doing business for a criminal enterprise.  This AP story was posted on their Internet site at 12:35 p.m. on Thursday afternoon EST — and was picked up by the website — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

Fear and Loathing Inside the Deep State

Everyone in the Deep State is threatened by the Trump Presidency. The Deep State understands that power, funding, ideological stratagems and domination of government, media, academia, think tanks and NGOs are in the ‘field of fight’, to use the book title by a prime target the Deep State intends to destroy in order to save itself from Trump.

Lt. General (ret.) Michael T. Flynn, three-star expert in Military Intelligence, former director of the Defense Intelligence Agency (DIA), counselor to Trump for the last fifteen months, is a vital Trump ally the Deep State is attempting to discredit.

We have seen the one-week ferocious political and media attack on Stephen Bannon, begun the instant that Bannon was named Trump’s number one strategist-advisor. Bannon is the theologian of Drain the Swamp, the Trump policy to rid the system of corruption and catastrophically disastrous policies and bureaucrat enablers.

To understand Steve Bannon, take the time to read this transcription or listen to the audio Q&A from a 2014 event in the Vatican. He lays out his philosophical agenda, and used the 2016 campaign to advance his war on the Elites.

‘Drain the Swamp’ pertains to more than getting the corruption out of the system.

This very interesting commentary put in an appearance on Internet site yesterday — and it’s certainly worth reading.  I thank ‘aurora’ for passing it around — and another link to it is here.

Doug Casey’s Two Days with the Real and Wannabe Elite

Recently I made a few comments about the world’s self-identified “elite”, and also about the migrants that are plaguing Europe.

Happily, I was able to do some one-stop shopping on both of these topics when I was in New York to attend a very elitist and Globalist conference. I’m not going to name it because its organizers/sponsors are business partners of mine. And since they spent multi-millions putting it together, and I pretty much despised their invitees, I’m not about to identify it exactly. Just let me say that the conclave has aspirations to become another Council on Foreign Relations, Bilderberg, Bohemian Grove, Atlantic Council, or Davos. Same kind of people, same ideas. Uniformly bad ideas. But ideas that the public has been brainwashed into thinking are good.

A lot of people are afraid these groups control the world, or at least governments. They don’t. They’re social gatherings for high level government employees and NGO types who like to network, and feel relevant. And lots of their minions, who enjoy the rich food, pretending they’re big shots too, while listening to pontifications by actual big shots. They hope they can cozy up to them, close enough to ride a richer gravy train.

The avowed purpose of this conclave was to “build the public-private partnership”—the exact definition of fascism. So there were also lots of big league corporate types who want to “make a difference”, and rich guys who want to be known for something besides having money.

This longish discourse from Doug, which is well worth reading, was posted on the Internet site on Friday — and another link to it is here.

Doug Noland: As Exciting as the 1930s

One trouble with every inflationary creation of credit is that it acts like a delayed time bomb. There is an interval of indefinite and sometimes considerable length between the injection of the stimulant and the resulting speculation. Likewise, there is an interval of a similarly indefinite length of time between the injection of the remedial serum and the lowering of the speculative fever. Once the fever gets under way it generates its own toxics.” “The Memoirs of Herbert Hoover – The Great Depression 1929-1941”

There are few apt comparisons to today’s extraordinary backdrop. Late in the “Roaring Twenties” period offers the closest parallel – the global nature of vulnerabilities and faltering booms; policymaker confusion and increasing ineffectiveness; fundamental deterioration in the face of impenetrable speculative impulses. It was by 1929 deeply embedded in speculator psyche that the enlightened Federal Reserve would never allow a market or economic collapse.

Top Federal Reserve officials (Yellen, Dudley, Bullard) this week suggested that Trump policies specifically target productivity. It must be a tough pill to swallow for the Fed to admit that their policies have succeeded in stimulating Credit growth and record securities prices, while coming up dreadfully short with respect to productivity gains.

By the late 1920s it had become an objective of the Federal Reserve to stimulate productive Credit. While there was deepening concern for market speculation, the weakened economic backdrop had the Fed determined to support ongoing Credit expansion.

An increasingly entrenched speculative Bubble had over years fomented financial and economic fragilities. Meanwhile, the Federal Reserve’s focus on the increasingly vulnerable economy worked to underpin speculator enthusiasm. Even as the fundamental backdrop turned alarming, a manic inflationary psychology grew only more powerfully entrenched in the marketplace. In the end, efforts to promote productive Credit fatefully prolonged the life of “Terminal Phase” Bubble excess.

Doug’s weekly Credit Bubble Bulletin never crossed my mind when I was writing Saturday’s column — and I only thought of it very late on Saturday evening Denver time.  I’m inserting on the website version at 1 a.m. EDT on Sunday morning, but it will appear again in my Tuesday column.  It’s always a must read for me — and another link to it is here.

Volkswagen plans 30,000 job cuts worldwide

Volkswagen has announced plans to cut 30,000 jobs worldwide with about 23,000 of the losses borne in Germany.

It has 120,000 workers in Germany so the cuts represent a fifth of employees in its heartland.

VW, still dealing with the aftermath of the emissions-cheating scandal, aims to rejuvenate its core brand, and develop new electric and self-driving cars.

VW says it will create 9,000 jobs as part of investments in new products.

The cuts should bring annual savings of €3.7bn (£3.2bn; $3.92bn) by 2020. VW and unions have been hammering out a plan to revive its fortunes since June.

This news item appeared on the BBC website early on Friday morning.  Swedish reader Patrik Ekdahl sent it to me about 15 minutes after I’d filed Friday’s column, so it had to wait for today.  Another link to it is here.

Obama’s Parting Gift to Kiev? NATO ‘Strategic Advisors’ Set Up Shop in Ukraine

NATO ‘strategic advisors’ from the U.S., the U.K., Canada and Lithuania arrived in Ukraine on Tuesday as part of an ongoing effort to reorganize Ukraine’s military to alliance standards. However, Kiev’s acknowledgement that the advisors also “discussed the situation in the east of Ukraine” has observers concerned.  Ukrainian Defense Minister Stepan Poltorak met with the advisors on Tuesday. According to a Ministry press release, the meeting was devoted to “proceeding to the practical stage of work” between NATO strategists and the Ukrainian Armed Forces. Poltarok stressed that alliance advice and assistance at all levels was crucial, and that advisors would soon be meeting with the heads of the Defense Ministry reform subcommittees.

Worryingly, the Defense Minister also confirmed that the two sides “discussed the situation in eastern Ukraine.” That region has been embroiled in a civil war since April 2014, when Kiev moved its army into the Donbass, where local residents came out in opposition to the Maidan coup d’état in February of that year. Locals quickly formed militia units, and the two sides fought a fratricidal war against one another until February 2015, when they agreed to a ceasefire deal in talks brokered by Russia, France, Germany and Ukraine in the Belarusian capital of Minsk.

NATO and Ukraine have several agreements on the provision of assistance to modernize the country’s military, but this is the first time in recent memory that officials publically admitted to strategic discussions at a senior level regarding the conflict in Donbass. Before that, since 2014, when Kiev gave up its non-aligned status, Ukraine’s Armed Forces have hosted NATO advisors in the country’s western and central regions with regularity.

This story showed up on the Internet site back on November 10 — and I thank Larry Galearis for pointing it out.  Another link to it is here.

Ridiculous Lame Duck Agreements: Obama, E.U. Agree to Keep Sanctions on Russia

Outgoing US president Barack Obama agreed with the E.U. to Keep Sanctions on Russia. It was an agreement that neither may be able to live up to.

U.S. president Barack Obama and E.U. leaders agreed on Friday to keep in place economic sanctions imposed on Russia over the Ukraine crisis, dispelling suggestions they might be eased because of president-elect Donald Trump’s expressed sympathies for Moscow.

The move by six government heads at an informal summit in Berlin hosted by chancellor Angela Merkel highlighted their commitment to close transatlantic cooperation amid concerns that Mr Trump’s election might bring divisions between the U.S. and the E.U., reports Stefan Wagstyl in Berlin.

Mr Obama, making a farewell visit, urged the E.U. leaders to work on common challenges with the incoming Trump administration “on the basis of the core values that define the United States and Europe as open democracies,” said the White House.

This news item, based on a Financial Times article, appeared on the Internet site at 1:52 p.m. EST on Friday afternoon — and I thank Roy Stephens for finding it for us.  Another link to it is here.

New Détente for the New Cold War:  John Batchelor Interview Stephen F. Cohen

It would seem that new deals and a détente may already being discussed between Trump and Putin by phone.  Speculation in the press is rampant as to topics discussed by the two, at least in the U.K., and Batchelor is treating the speculation according to what happened in the first Cold War when especially dangerous conditions were negotiated away.  And Cohen, with personal observations of events from past Russian/Washington Summits, confirms that this was the process.  As we know Trump’s election campaign indicates he is open to this, and this is very good news, indeed.  (And given that the Clinton campaign did not benefit from the vilification of Putin it suggests that Americans would be open to this as well.)  But the political establishment will resist strenuously. On a personal note I have begun to receive anti-Trump emails from political advocacy groups in Canada – even as it is clear that Canadians will not matter to affairs unfolding in the USA – and with similar events, protests here,  in the U.S., and Europe, the anti-Trump campaign seem worse than during the election. Cohen speculates that Trump will have a rough road to travel without political help in the USA, and “he needs a partner in the Kremlin.

Elsewhere there are more problems for détente in Ukraine. Batchelor notes that the Right Sector (neo-fascist) Azov Battalion is taking over the police function in Kiev, American elements in Kiev are opposing changes there in the status quo, and the problems in Syria and Iran need to be resolved in a coherent manner. Cohen looks at Ukraine as a humanitarian failure and a foreign policy failure. And it is a problem still for Russia. But Washington’s view remains irrational and Kiev’s policies are supportive for the chaos continuing.  The question is whether Trump addresses these issues on the various NCW (New Cold War) fronts with a view of solving them.

But the second half of the broadcast is a very valuable discussion by Cohen about the disruption that would be caused by a reversal of policies to détente in the U.S. Congress, NATO, the Baltic States, economies of all, and the politics of all global governments – as the real costs of change are assessed. And there would be costs. Cohen thinks that Trump’s embrace of a different strategy, a business-like strategy, will bring diplomacy back to the dysfunctional Washington outlook. (The Wolfowitz Doctrine may be nullified).   But the last four minutes of Cohen’s discussion are priceless for our understanding of what the solutions will be for a workable détente.  I will not paraphrase; this is for the listener to hear from the man who made these statements.

This 40-minute audio interview was posted on the Internet site on Tuesday — and I thank Ken Hurt for sending me the link.  But, as always, the biggest of all THANK YOUs goes to Larry Galearis for above executive summary.  It’s certainly a must listen for any serious student of the New Great Game.  Another link to it is here.  This interview was in my Friday column — and I said I’d post it in today’s column as well — and here it is.

Eagles attack and take down drones at remote mining site in Australia

Wedge-tailed eagles want nothing to do with the increasing number of unmanned aerial vehicles (UAV), commonly known as drones, which ride the skies in Western Australia.

South Africa’s Gold Fields, the world’s seventh-largest gold producer, has already lost ten of these vehicles since it adopted the technology at its St. Ives operation. One crashed as a result of human error, the Australian Broadcasting Corporation reports, while the rest have been the victim of wedge-tailed eagles, the largest bird of prey in Australia and one of the world’s biggest.

They have razor-sharp talons that allow them to grab and destroy drones in flight, a feature that mine surveyor Rick Steven told ABC makes them “the natural enemy of the UAVs.”

Tee hee!  The 21-second video that’s embedded in this article, shows you what happens when the wedge-tail takes aim.  This amusing story, but not so amusing for the company, was posted on the Internet site on Friday sometime — and my thanks go out to Jim Akers for pointing it out.  Another link to it is here.

Synthetic Gold Leasing: More Details Regarding the “Precious Metals” on Chinese Commercial Bank Balance Sheets — Koos Jansen

One of the topics about the Chinese gold market that has not been fully illuminated is the “gold” on the 16 Chinese commercial banks’ balance sheets. At the end of 2015 the aggregated “precious metals assets” on the bank balance sheets accounted for 598 billion yuan (RMB), which translates into approximately 2,682 tonnes of gold – if all the precious metals were gold related, which is very likely.

In my previous post on this subject we learned from examining the banks’ annual reports from 2015, that there are at least five gold assets that can appear in the “precious metals” line item on the balance sheets. Namely:

  1. Gold savings that belong to the banks’ customers (Gold Accumulation Plans, GAP)
  2. Gold inventory for the banks’ retail gold bar business
  3. Gold leasing business
  4. Gold held for hedging purposes
  5. Gold held outside China

In this post we’ll examine more thoroughly the (Chinese and English) annual reports from 2007 until 2014 of the 16 banks, to learn more on what these huge tonnages represent. The most significant new finding is that Chinese banks conduct synthetic leases – in other words: swapsBy performing synthetic leases,  Chinese banks can show “precious metals assets” but no “precious metals liabilities” on their balance sheets. Then, at the very surface it appears these banks own gold, in reality they own zero gold.

This is another very long and very convoluted commentary from Koos — and I glanced at it just long enough to cut and paste the above paragraphs in today’s column, which I consider to be the essence of the whole article anyway.  In my opinion, the rest of the essay ain’t worth your valuable time, but that’s your call, not mine.  It was posted on the Singapore-based Internet site yesterday — and another link to it is here.  I found it embedded in a GATA release.

Russian gold reserves post large monthly gain to 50.9 million troy ounces

Russia’s gold reserves posted a large monthly gain of 1.3 million troy ounces to 50.9 million ounces at the start of November, the central bank said on Friday.

From Oct. 1, the central bank tweaked its reserve rules so that gold held in unallocated bullion accounts at banks could be included in its reserves.

Russia has also been buying gold to try to diversify its reserves and make its economy more resilient to external pressure including sanctions.

The increase in Russia’s gold holdings over October is the largest monthly increase for at least the past two years.

The central bank’s website displays Russia’s quarterly gold holdings, as opposed to monthly ones, up until the end of 2014. Russia had 45.5 million troy ounces of gold at the start of 2016, up from 38.8 million ounces a year earlier.

The above five paragraphs are all there is to this brief gold-related news item, filed from Moscow, that showed up on the Internet site at 8:46 p.m. EST yesterday evening.  It’s a must read — and I thank Roy Stephens for sharing it with us.

First Majestic Silver CEO: Why I love a low peso

A weakening peso following Trump’s victory is good news for one silver producer with operations in Mexico.

We hear from Keith Neumeyer, president and CEO of First Majestic Silver, about where his focus will be moving forward.

This 7:46 minute video interview appeared on their internet site at 11:20 a.m. on Friday morning EST — and I thank Ken Hurt for bringing it to our attention.  It’s certainly worth watching if your a K.N. fan and/or a stockholder.

Gold coins now hitting melting pot

It has been common practice for years for coin dealers to melt common date U.S. and foreign silver coins for their intrinsic value rather than offer them to retail clients. U.S. dealers are now considering melting more common date gold coins as well, especially since the premiums on many of these coins make it less attractive to take the time to seek out collectors willing to buy them for a pittance more.

The practice already exists in Europe. Richard Lobel is the owner of CoinCraft in London, England, a shop situated directly across the street from the British Museum.

The market for modern gold is very close to their bullion value,” said Lobel. “[British] sovereigns can be bought for two percent over melt. [British] Royal Mint gold proofs can be had for five to seven percent. Many of the world coins are being melted because they [coin dealers] can get 98 percent of gold value.”

Lobel continued, “With the price of gold being so high it is impossible to sell many of the common gold coins. I was even offered by a Spanish dealer the 1915/1916 Cuban gold in Extremely Fine at gold plus five percent. British sovereigns and Britannias are the most wanted in this country. There is no VAT [Value Added Tax] on them and no capital gains tax on them at the moment. A lot of the French, Belgium and Austrian coins are being melted. Any British coin that has been mounted is almost always going into the pot.”

This very interesting news item put in an appearance on the Internet site on Thursday.  I received it in time for Friday’s column, but thought I’d hold off until my Saturday missive.  I thank West Virginia reader Elliot Simon for finding it for us — and another link to this worthwhile article is here.


The first shot if of a baby Tasmanian devil — and this is as cute as they get, as it’s all down hill from here in the ‘looks’ department as the grow older.  The second photo is one of the entrants in the “2016 Comedy Wildlife Photography Awards” contest.  I was posting some shots from this contest until Bob Anthony’s South Africa shots appeared, but I’m back to these now.161119tasmanian-devil



Today’s pop ‘blast from the past’ is one that I’m sure I’ve featured before, but if I have, it’s been so many moons ago that I’ve forgotten, so it’s time for revisit!  This number, which was on their debut album back in 1978, was soon released as a single — and the rest, as they say, is history.  The link is here.

Today’s classical ‘blast from the past’ is not a classical tune, but I really don’t care.  Saskatchewan reader Steve Buttinger sent it to me on Tuesday — and I was so dazzled by it, that it was going in today’s column regardless.  It only runs for 3:04 minutes — and it’s amazing.  The link is here.

JPMorgan et al are continuing the salami slicing, as gold, silver and platinum were all closed at new lows for this move down on Friday.  Gold volume was very heavy and, comparatively speaking, silver’s volume was on the lighter side.

However, it should be noted that if the powers-that-be hadn’t shown up at 8:30 a.m. in New York on Friday, it’s a given that not only would have precious metals closed up on the day, but their respective equities would have as well.

Here are the 6-month charts for all four precious metals, plus copper, once again — and none of them require any further embellishment from me.161119-6-month-gold


Well, I’m still taken aback by what yesterday’s Commitment of Traders Report showed — and I’m not sure what should be read into the face of it, or what it may portend for precious metal prices going forward.  I’ve already speculated on what may or may not happen in my closing comments on Friday’s COT Report further up — and I’m not inclined to repeat myself here.

Along with a stranger-than-strange COT Report, I’m more than intrigued by the huge amount of kilobar gold being shipped out of the east coast COMEX warehouse stocks during the last week or so, particularly JPMorgan, because I don’t ever remember them receiving those quantities in the past.

Then during this reporting week, we’ve had gold and silver eagle sales that were much stronger than usual — and although I suspect it could be JPMorgan et al…as would Ted, I’m sure…it’s always possible that dealers were stocking up because they knew that the 2016 minting season was coming to an end sooner than normal.  We have nothing official on that, so until we do, I’ll be watching U.S. Mint sales for any and all signs.

Then there’s the matter of SLV shares being converted to physical in the last thirty days.  If yesterday’s activity in SLV is what I suspect, then that means that in the last three weeks, a “large buyer[s]” has converted a total of 14.6 million SLV shares into an equal number of troy ounces of physical metal — and moved them out of the ETF.

Then on Thursday there was that 1,017 COMEX gold contracts that surprisingly showed up in the November delivery month.  Goldman Sachs was the short/issuer — and it was all picked up by Canada’s Scotiabank.  This came totally out of the blue, with half being delivered on Monday — and the rest on Tuesday.

They’re all pieces of some larger puzzle I’m sure, but I just can’t see how they all fit together at the moment.

But whatever is coming, is coming at us at an ever-increasing speed, as there seems to be a new sense of urgency in what the powers-that-be are doing.  And considering the perilous state of all the world’s paper “assets”…whatever monster that comes shambling forth to be born will probably bear most of the hallmarks of what Jim Rickards talks about in his new book “The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis“.

I’m hoping it ain’t so, but it probably is.

On that happy note, I’m done for the day — and the week — and I’ll see you here on Tuesday.


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