29 November 2016 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price began to rally very shortly after trading began at 6:00 p.m. EST in New York on Sunday evening — and that lasted until the dollar index, which had been crashing, was turned higher — and that moment came around 10:40 a.m. China Standard Time on their Monday morning, just as it was making a run for the $1,200 spot mark. From there it was sold down, but rallied anew in the last hour of trading before London opened. That tiny rally got capped, then the price rolled over around 8:45 a.m. GMT — and the low tick came at 9:40 a.m. EST in New York. It chopped quietly higher for the rest of the day.
The high and low ticks were reported by the CME Group as $1,197.20 and $1,182.40 in the December contract.
Gold finished the Monday session in New York at $1,193.80 spot, up $9.90 from Friday’s close. Gross volume was monstrous at 327,769 contracts, but with the last of the large traders selling/rolling out of the December contract yesterday, the net volume was very quiet at just under 28,000 contracts.
The 5-minute gold chart that Brad sent didn’t include all of Sunday night/Monday morning trading in the Far East, so I’m not posting it. But the biggest volume of the day, on what little net volume there was, came with the price spike at the 9:40 a.m. EST low tick.
The price action in silver was almost a carbon copy of what transpired in gold, so I shan’t dwell on it. The smallish rally off the 9:40 a.m. EST low tick got dealt with almost right away — and from there it chopped quietly higher, until some thoughtful not-for-profit seller took about 8 cents off the price just minutes before the 5 p.m. EST close.
The high and low ticks in this precious metal were reported as $16.85 and $16.435 in the December contract.
Silver closed on Monday afternoon at $16.565 spot, up 5.5 cents from its close on Friday. Gross volume was exceptionally heavy as well, at 123,320 contracts. But once the smoke cleared, only 7,800 contracts net were actually traded.
Here’s the 5-minute silver tick chart courtesy of Brad Robertson — and as you can tell at a glance, the rally in Monday morning trading in the Far East took place on very little volume and, like gold, the only noticeable volume occurred at — and in the hour after, the 7:40 a.m. Denver time low price tick.
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.
The platinum price was handled mostly the same as both gold and silver, except its low tick came at 9 a.m. EST. From there it rallied and retested its earlier high, before chopping a few dollars higher as the afternoon progressed. Platinum closed in New York yesterday afternoon at $922 spot — and up 17 bucks.
Palladium traded flat until about an hour before the Zurich open on their Monday morning. It was up about 8 dollars by around 11 a.m. Zurich time — and then gave almost all that back by 9 a.m. in New York. It began to rally anew from there and, like platinum, was capped shortly after the Zurich close. It was sold down a handful of dollars until the 1:30 p.m. COMEX close — and didn’t do a lot after that. Palladium finished the Monday session in New York at $755 spot, up another 11 bucks from Friday. The palladium price rally is starting to look a little like the “Energizer Bunny”.
The dollar index closed very late on Friday afternoon in New York at 101.47 — and opened for trading shortly before noon EST on Sunday morning. By 4:30 p.m. EST it was down about 25 basis points before rallying back to a hair over unchanged by 6:25 p.m. From there it began to head south with a vengeance, with the 100.64 low tick coming at 9:30 a.m. China Standard Time on their Monday morning. It rallied back to the 100.98 mark at exactly 2 p.m. CST, before rolling over again. It then appeared that ‘gentle hands’ showed up at the 100.74 mark at 8:30 a.m. in London — and by the time they were through, the 101.60 high tick had been placed just a few minutes before 9 a.m. in New York. It chopped lower from there to the 101.16 mark by the close of trading, finishing the day down 31 basis points from Friday.
The silver equities opened up a percent and change, but gave up half of that by 10:15 a.m. EST. From there they headed mostly higher, with almost all the day’s gains in by shortly before the 1:30 p.m. COMEX close. They chopped mostly sideways for the rest of the day, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 3.15 percent. Click to enlarge if necessary.
The CME Daily Delivery Report showed that 19 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday. The sole short issuer was Merrill…and Goldman stopped 10, with ADM picking up the rest. I won’t bother linking this activity.
The CME Preliminary Report for the Monday trading session showed that gold open interest for November fell by 3 contracts, leaving just 26 left, minus the 19 mentioned in the previous paragraph. Friday’s Daily Delivery Report showed that 2 gold contracts were posted for delivery today, so that means that 3-2=1 gold contract holder on the long side got let off the delivery hook by the party owning the short side…but at a price, I’m sure. Silver o.i. in November dropped by 1 contract — and since Friday’s Daily Delivery Report showed that 1 silver contract was posted for delivery today, that mean that November open interest is now zero — and the delivery month in silver is complete. Now we await the same in gold.
Not surprisingly, gold open interest in December took a big hit yesterday, as all the large traders that weren’t standing for delivery, had to roll or sell their December positions by the close of COMEX trading yesterday afternoon. It declined by 43,890 contracts, leaving 33,666 still remaining. Ditto for silver o.i. in December, as it plunged by 14,486 contracts, leaving 12,662 still open. Without doubt, there will be very substantial o.i. drops in both precious metals today as well.
There were no changes in GLD yesterday — and as of 9:09 p.m. EST yesterday evening, there were no reported changes in SLV, either.
The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on in their gold and silver ETFs as of the close of trading on Friday, November 25 — and this is what they had to report. Their gold ETF showed a smallish increase of 6,570 troy ounces…but their silver ETF had a fairly large withdrawal of 385,873 troy ounces.
The folks over at the shortsqueeze.com Internet site updated the short positions of both GLD and SLV as of the close of business on July 15 — and there weren’t big changes in either one. The short position in SLV declined by 213,800 shares/troy ounces, which was a drop of 2.26 percent. The short position in SLV now stands at 9,261,800 shares/troy ounces. The short position in GLD increased from 724,190 troy ounces, to 748,200 troy ounces, a rise of 3.32 percent.
There was a sales report from the U.S. Mint. They sold 5,500 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 125,000 silver eagles.
The only gold activity at the COMEX-approved depositories on the U.S. east coast on Friday was a deposit of 96,450.000 troy ounces/3,000 kilobars [U.K./U.S. kilobar weight] into Canada’s Scotiabank. There was nothing reported shipped out. The link to that is here.
There was no in/out activity in silver at all.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, it was big business as usual. There were 5,566 kilobars shipped in — and another 4,098 shipped out the door. All of the action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.
The U.S. Thanksgiving holiday-delayed Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, November 22…showed improvements in the Commercial net short positions in both gold and silver as expected. The changes weren’t overly large, especially in silver — and that was expected as well. But away from the headline numbers in the legacy COT Report, there were some big changes.
In silver, the Commercial net short position declined by only 289 contracts, or 1.45 million troy ounces of paper silver. They arrived at this number by selling 4,555 long contracts, but they also reduced their short position by 4,844 contracts — and the difference between those two numbers is the change for the reporting week.
Ted says that the Big 4 actually increased their short position during the reporting week by about 700 contracts. He wasn’t happy to see that, nor was I, but it’s not really a material amount…especially considering the price action since the Tuesday cut-off. The ‘5 through 8’ large traders decreased their short positions by around 1,100 contracts — and Ted said that the raptors, the commercial traders other than the Big 8, decreased their long position by about 100 contracts.
Ted pegs JPMorgan’s short position in silver somewhere between 20,000 and 21,000 contracts. Of course the total Commercial net short position in silver is virtually unchanged from what it was last week, at 391.2 million troy ounces.
Under the hood in the Disaggregated COT Report it was a different story entirely, as the Managed Money traders were responsible for the entire change in the Commercial net short position, plus a whole bunch more. Once again they reduced their long positions by a chunky amount, this week by 6,085 contracts. The other eye-opener was the fact that they didn’t add to their short positions during the reporting week. They actually reduced them by 765 contracts! The net change for the reporting week is the difference between those two numbers…5,320 contracts. The difference between that number — and the Commercial net short position — was made up by the traders in both the other categories, as both groups went net long in a big way.
As an aside, the Managed Money long position is now down to 57,931 contracts as of this report — and if the Managed Money traders had any long contracts left, they’ve certainly dumped them during the current reporting week. What remains of this long position as of this coming Friday’s COT Report will be what’s held by what Ted calls the long-term “unblinking” non-technical traders…the ones that don’t buy or sell on moving average penetrations. I’ll be very interested in what the number shows three days from now. So will Ted.
In gold, the Commercial net short position declined by 7,794 contracts, or 779,400 troy ounces of paper gold. They arrived at that number by selling 17,216 long contracts, but they also covered 25,010 short contracts — and the difference between those two numbers is the change for the reporting week.
Ted said that the Big 4 reduced their short position by about 9,100 contracts — and the ‘5 through 8’ largest traders did the same to the tune of around 3,300 contracts. But Ted’s raptors obviously didn’t get the “all for one, and one for all” memo this week as Ted mentioned, as they increased their short position by 4,600 contracts.
The Commercial net short position in gold now sits at 19.22 million troy ounces of paper gold.
Under the hood in the Disaggregated COT Report, the Managed Money traders were responsible for all the change in the Commercial net short position, plus a bunch more. They reduced their long positions by 6,268 contracts, plus they added 4,023 contracts to their short positions…a very tiny amount for the second week in a row. The sum of those two numbers…10,291 contracts…was the change for the reporting week. The difference between that number — and the Commercial net short position — about 2,500 contracts, was entirely made up for in the Nonreportable/small trader category, as they went net long by quite a bit.
And here’s the 9-year COT chart for gold. It was nice to see the decline, but it wasn’t overly large — but that was expected. However, the standout features for gold were how aggressively the Big 8 covered short positions during the reporting week — and the M.I.A. Managed Money traders on the short side. Click to enlarge.
Now that I’ve had time to digest it, this report is hugely positive — and the changes that really counted for something were mostly hidden from view. As I mentioned in Saturday’s column, in some ways Monday’s COT Report was already “yesterday’s news” — and in most ways that assumption was the correct one, but that in no way diminishes the significance of the data that was in this one.
And now that I’ve read Ted’s comments on this COT Report, my conclusions were mostly correct — and he goes further than that, which you’ll find it today’s quote.
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.
For the current reporting week, the Big 4 are short 131 days of world silver production—and the ‘5 through 8’ traders are short an additional 49 days of world silver production—for a total of 180 days, which is 6 months of world silver production, or about 437.4 million troy ounces of paper silver held short by the Big 8.
In the COT Report above, the Commercial net short position in silver is 391.2 million troy ounces. So the Big 8 hold a short position larger than the Commercial net position to the tune of 437.4 – 391.2 = 46.2 million troy ounces…give or take. And don’t forget that Ted Butler pegs JPMorgan’s short position at around 102.5 million ounces of the 437.4 million troy ounces held short by the Big 8 — which works out to around 42 days of world silver production. How concentrated — and ridiculous is that?
And if that isn’t bad enough, the Big 8 are short 51.7 percent of the entire open interest in silver in the COMEX futures market. In gold it’s 39.6 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 20,500 contracts, JPMorgan is short around 42 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 48 days of world gold production, down from 51 days last week — and the ‘5 through 8’ are short another 17 days of world production [down from 18 days last week], for a total of 65 days. Based on these numbers, the Big 4 in gold hold about 74 percent of the total short position held by the Big 8 — and that’s off its record of high of the prior week by around 10 percentage points. 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 73, 72 and 70 percent respectively of the short positions held by the Big 8.
Here are two charts that Nick Laird passed around very late Friday night that I just didn’t have the space for in Saturday’s column, so here they are now. They show the weekly changes in all known gold and silver depositories worldwide, updated with Friday’s data. As you can tell, although gold and silver prices have been engineered lower by significant amounts in the last month or so, the amount of physical metal being held by these same depositories hasn’t dropped off by much. Click to enlarge for both charts.
I have a fairly decent number of stories for you today — and I hope you can find the times for that ones that interest you.
Early holiday promotions and a belief that deals will always be available took a toll on consumer spending over the Thanksgiving weekend as shoppers spent an average of 3.5 percent less than a year ago, the National Retail Federation said on Sunday.
The NRF said its survey of 4,330 consumers, conducted on Friday and Saturday by research firm Prosper Insights & Analytics, showed that shoppers spent $289.19 over the four-day weekend through Sunday compared to $299.60 over the same period a year earlier.
The survey found that 154 million people made purchases over the four days, up from 151 million a year ago. However, there was a 4.2 percent rise in consumers who shopped online and a 3.7 percent drop in shoppers who purchased in a store.
The U.S. holiday shopping season is expanding, and Black Friday is no longer the kickoff for the period it once was, with more retailers starting holiday promotions as early as October and running them until Christmas Eve.
NRF Chief Executive Officer Matt Shay said the drop in spending is a direct result of the early promotions and deeper discounts offered throughout the season.
This Reuters news item, filed from Chicago, was posted on their Internet site at 4:28 p.m. on Sunday afternoon EST — and today’s first story is courtesy of Richard Saler. Another link to it is here.
The large global bond market selloff of late has naturally elicited much commentary from investment strategists and the financial media. By some estimates as much as $1tn in bond value has been wiped out. That is a large number. But what is behind the selloff? Did expectations for Fed rate hikes suddenly surge? In fact, rate expectations have risen only modestly, perhaps in reaction to president-elect Trump’s expected fiscal stimulus plans. More important has been a large expansion in so-called ‘term-premia’ for longer-dated bonds. Term premia represent the additional yield bondholders require for holding long-dated bonds as opposed to short-dated paper. When premia fall, so does the real cost of long-term borrowing and vice-versa. This is why recent developments are of such interest, as premia have remained structurally low for years. In this report, we explore the implications of a premia reversal on financial assets, the dollar and gold. In brief, gold is highly likely to outperform financial assets in this environment, although not necessarily the dollar itself. The key to the dollar is to understand the Fed’s reaction function to the above.
Although it may have coincided with president-elect Trump’s surprisingly successful campaign, in fact the global bond markets have been indicating that a trend reversal might be underway for some time.
On trend, yields have been declining for many years. However, in 2016, there had already been a notable loss of momentum. The great global bond market rally had, for the most part, ground to a halt. Central bank policy rates were already zero to negative in most of the developed world, and commodity and consumer price inflation had begun to trend higher again, if only gently in most economies; so it was understandable that the bond market rally was probably nearing exhaustion.
This longish but worthwhile commentary showed up on the goldmoney.com Internet site over the weekend — and I thank Scott Otey for sharing it with us. Another link to it is here.
People have paid a company $95,000 to dig a giant hole for no reason — and the money is still pouring in
This is the definition of a money pit.
On Friday, Cards Against Humanity, the makers of the popular card game, announced it was celebrating Black Friday by digging a hole in the ground for as long as people were willing to pay for it.
“The holidays are here, and everything in America is going really well. To celebrate Black Friday, Cards Against Humanity is digging a tremendous hole in the earth,” the company said.
It’s as insane as it sounds, but people are already paying up to see the John Deere digger continuously scoop up dirt.
Last year, its Black Friday deal was just as unusual as the company asked people to give it $5 to receive absolutely nothing in return. The stunt made more than $71,145, which the Cards Against Humanity split among its employees. Two years ago, the company even sold $180,000 worth of actual bull poop.
I promise you dear reader that I ain’t making this up! This ‘story’…if you wish to dignify it with that name…appeared on the businessinsider.com Internet site last Friday evening EST — and has been updated a few times since. I thank Swedish reader Patrik Ekdahl for finding it for us — and another link to it is here.
In 1928, Republican Herbert Hoover was elected as president of the U.S. He took office in March of 1929. The following October, the stock market crashed, heralding in the Great Depression. Millions of Americans lost their jobs and homes and/or starved in the ensuing years.
Countless people, having nowhere to live, set up shantytowns that came to be known as “Hoovervilles.” Their new residents relied for the most part on public charities or begging for whatever income they could attain. Throughout the 1930s, hundreds of Hoovervilles sprang up, housing hundreds of thousands of recently homeless people. There was even one in New York’s Central Park.
Why was Mister Hoover blamed? Well, whenever there’s disaster, it’s human nature to want to put a face on the cause of the problem. We tend to need to have someone at whom we can point our angry finger. (Almost immediately after the shooting of John Kennedy, the public were shown a photo of Lee Harvey Oswald holding a rifle; the day after the destroying of the Twin Towers, the television news showed a photo of Osama bin Laden. The viewers didn’t question whether these were indeed the culprits; they simply accepted them, as their need to have someone to blame was greater than their need to have truth.)
As a Republican, Mister Hoover became an easy target for Democrats seeking to further their own careers. Although the events that led up to the depression were caused by both Democrats and Republicans, both within politics and without, Mister Hoover was a convenient target for Democrats. In fact, the term “Hooverville” was created by Charles Michelson, publicity chief of the Democratic National Committee. Democrats also came up with other pejoratives, such as “Hoover blankets” for newspapers and “Hoover leather” for cardboard used in a shoe when the sole had worn through.
By ascribing the Great Depression and everything that went with it to Mister Hoover, it was a foregone conclusion that in the next presidential election, the Democratic candidate would win by a landslide.
This absolute must read commentary by Jeff showed up on the internationalman.com Internet site yesterday — and another link to it is here.
Washington Post Names Drudge, Zero Hedge, & Ron Paul As Anti-Clinton “Sophisticated Russian Propaganda Tools“
The desperate flailing of a mainstream-media struggling through the five stages of grief continues as no lesser unbiased foundation of the fourth estate than The Washington Post pushes ahead with its “fake news, blame the Russians” narrative for why their candidate failed so miserably.
Citing “two teams of independent researchers” (who surely have a substantial libel litigation provision) who found “Russia’s increasingly sophisticated propaganda machinery… echoed and amplified right-wing sites across the Internet as they portrayed Clinton as a criminal,” the Jeff Bezos-owned website names Drudge, Zero Hedge, and The Ron Paul Institute and countless other outlets among the “useful idiots” that true American patriots should be wary of.
“The way that this propaganda apparatus supported Trump was equivalent to some massive amount of a media buy,” said the executive director of PropOrNot, who spoke on the condition of anonymity with the Post.
“It was like Russia was running a super PAC for Trump’s campaign.”
So in other words, any and every one who is anything but a liberal drone is now a Russian plant? McCarthy would be proud.
As the “scientists” explain, reporting facts is tantamount to being a “useful idiot.”
Along with the Zero Hedge article itself, the 9:04 minute embedded video clip headlined “Useful Idiots, Subversion & Active Measures“…is an interview of former KGB agent Yuri Bezmenov, that’s hosted by G. Edward Griffin…and it’s definitely worth watching. This ZH article showed up on their Internet site very late on Friday night EDT, which is the reason that it didn’t make my Saturday column. I thank ‘aurora’ for passing it around — and another link to it is here.
The “war on terror” has simultaneously been a war on truth. For fifteen years—from 9/11 to Saddam Hussein’s “weapons of mass destruction” and “al Qaeda connections,” “Iranian nukes,” “Assad’s use of chemical weapons,” endless lies about Gadaffi, “Russian invasion of Ukraine”—the governments of the so-called Western democracies have found it essential to align themselves firmly with lies in order to pursue their agendas. Now these Western governments are attempting to discredit the truth tellers who challenge their lies.
Russian news services are under attack from the E.U. and Western presstitutes as purveyors of “fake news.” Abiding by its Washington master’s orders, the E.U. actually passed a resolution against Russian media for not following Washington’s line. Russian President Putin said that the resolution is a “visible sign of degradation of Western society’s idea of democracy.”
As George Orwell predicted, telling the truth is now regarded by Western “democratic” governments as a hostile act. A brand new website, propornot.com, has just made its appearance condemning a list of 200 Internet websites that provide news and views at variance with the presstitute media that serves the governments’ agendas. Does propornot.com’s funding come from the CIA, the National Endowment for Democracy, George Soros?
I am proud to say that paulcraigroberts.org is on the list.
At least my column didn’t make the list, at least not yet! This commentary by Paul put in an appearance on his Internet site on Sunday sometime — and I thank Larry Galearis for pointing it out. Another link to it is here.
The E.U. must compromise to win a good Brexit deal for Britain and the rest of the union, warns Polish P.M.
The E.U. must compromise to win a Brexit deal that works for both the U.K. and the rest of Europe, the Polish Prime Minister warns today ahead of a historic meeting with Theresa May.
In an exclusive article for The Telegraph, Beata Szydlo praises the British-Polish alliance in fighting the Nazis and says that ongoing defence and security co-operation between the two countries is essential, and must be at the heart of any new deal.
Ms Szydło said the result of negotiations will depend on “imagination and leadership” and called on the Prime Minister to set out her Brexit plan soon.
However, her focus on security and defence policy is likely to be welcomed by senior Government ministers as many European leaders have sought to concentrate discussions over the post-Brexit deal on economic and immigration policy.
This news item appeared on the telegraph.co.uk Internet site at 7:55 a.m. GMT on Monday morning, which was 2:55 a.m. in Washington — EST plus 5 hours. It’s courtesy of Roy Stephens — and another link to this story is here.
Up to eight of Italy’s troubled banks risk failing if prime minister Matteo Renzi loses a constitutional referendum next weekend and ensuing market turbulence deters investors from recapitalising them, officials and senior bankers say.
Mr Renzi, who says he will quit if he loses the referendum, had championed a market solution to solve the problems of Italy’s €4tn banking system and avoid a vote-losing “resolution” of Italian banks under new EU rules.
Resolution, a new regulatory mechanism, restructures and, if necessary, winds up a bank by imposing losses on both equity and debt investors, particularly controversial in Italy, where millions of individual investors have bought bank bonds.
The situation is being closely watched by financiers and policymakers across Europe and beyond, who worry that a mass failure of Italian banks could trigger panic across the eurozone banking system.
This commentary from Mish Shedlock, based on an extensive ‘cut and paste’ from a Financial Times story, was posted on his Internet site at 3:17 p.m. on Monday afternoon EST — and it comes to us courtesy of Roy Stephens. Another link to it is here.
The Syrian military is now denying that the Syrian air force carried out the air strike on the Turkish troops north of Al-Bab which the Turks say killed several of their soldiers.
If the Syrians are telling the truth then that makes the Turkish reports of the air strike more worrying not less because the reports would in that case have to be a deliberate provocation concocted by the Turks either in order to explain away the casualties the Turkish military is suffering at the hands of the Kurdish militia the YPG near Al-Bab, or in order to prepare Turkish public opinion for action against the Syrian military near Aleppo.
The Syrians themselves are saying as much. The Al-Masdar news agency, which is aligned to the Syrian government, reports a Syrian military official saying the following:
“No Syrian or Russian aircraft bombed the Turkish Army near Al-Bab on November 23rd – all reports claiming otherwise are lies. Turkey is planning something in east Aleppo and using this alleged attack as a ploy to escalate the situation.” (bold italics added)
This comes directly after Syrian reports – discussed earlier – of Turkish artillery shelling the Syrian military as it carried out an offensive against the Jihadis in Lattakia province.
It is in fact clear that it is Erdogan who is now making all the important decisions in Ankara, and as the megalomaniac quality of his recent speech in Busra shows, since the coup attempt he seems to have cast off all restraints and appears to be increasingly inclined to risk confrontation in Syria and Iraq in order to realise his geopolitical ambitions. This explains why the situation has now become so dangerous.
This commentary by Alex Mercouris was posted on theduran.com Internet site on Saturday — and it’s certainly worth reading if you’re a serious student of the New Great Game. I thank Larry Galearis for sending it our way — and another link to this article is here.
The world could face an oil supply shortage by the end of the decade, triggering large swings in the price of the commodity, the International Energy Agency has warned.
In its annual publication World Energy Outlook, detailing expectations for global energy trends, the IEA warned that the recent low price of oil could have serious ramifications within years.
A barrel of Brent crude has more than halved in price since early 2014 from $112 (£90) to around $44 in mid-November this year, having fallen to $32 earlier in the year amid oversupply.
As anyone who has visited Japan knows, cash is still king.
Even though many places now take credit cards, Apple Pay and other forms of cashless technology, the actual amount of notes and coins circulating in the country has doubled in 20 years. And that’s while the economy and population has shrunk.
More than ¥101 trillion ($966 billion) of cash was circulating at the end of October. It was used for more than 80 percent of transactions by value in 2014.
One problem with this preference for notes and coins is that it limits the central bank’s policy options. The tendency of Japanese to prefer cash means that any attempt to further lower negative interest rates or to impose them on private bank accounts might push people to take their money from the banking system and add it to their stash under the mattress.
This interesting news item, along with a couple of worthwhile charts, showed up on the Bloomberg website way back on November 7 — and it’s something I lifted from an article over at the mishtalk.com Internet site yesterday. I thank Roy Stephens for bringing it to our attention — and another link to it is here.
Black money holders, who have been struggling to convert their money into white, are now buying huge amount of silvers bars at high prices. This illegal trade is picking up very rapidly in Salem City.
After Prime Minister Narendra Modi announced that Rs 500 and Rs 1,000 currencies have no legal tender from midnight of November 8, the black money holders have been finding various way to change their money into white. Now, black money holders, especially in west zone consisting Salem, Dharmapuri, Namakkal, Krishnagiri, Erode, Tirupur, Coimbatore and The Nilgiris districts have turned their eyes on silver bars.
Particularly, black money holders in districts around Salem are now heading towards Salem to buy silver bars by using Rs 500 and Rs 1,000 notes. Salem district is well known for silver anklet business. Shevapet in Salem City is the hub for silver business.
This silver-related news item, filed from the Salem district in India, put in an appearance on the newindianexpress.com Internet site at 4:22 a.m. IST on their Saturday morning — and was updated about 6 hours later. I found it in a GATA release — and it’s worth reading. Another link to it is here.
The government is not considering any proposal to restrict holding of gold by individuals, a top finance ministry source said today.
Following the demonetization of 500- and 1,000-rupee notes in a bid to crack down on black money, there were apprehensions among people that the government might impose some kind of restrictions on gold holding by individuals.
“There is no such proposal before the government on restricting domestic gold holding,” the source said.
This brief PTI story, filed from New Delhi, appeared on The Economic Times of India website at 9:20 p.m. IST on their Friday evening — and it’s another precious metals-related news item that I found on the gata.org Internet site. Another link to it is here.
Gold researcher Koos Jansen reports that gold demand in China, already strong, has been strengthening with the recent decline in the international price.
Jansen’s report is headlined “Q1Q3 2016 China Net Gold Import Hits 905 Tonnes” and it was posted on the bullionstar.com Internet site on Saturday. This is another story that I found in a GATA release — and it’s worth your while if you have the time.
The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) said on Monday it had approved a sharia standard for gold-based products, a move aimed at expanding the use of bullion in Islamic finance.
Traditionally, gold has been treated as a currency in Islamic finance which has confined its use to spot transactions, but fresh guidance from AAOIFI is expected to spawn a wave of product development in the industry.
AAOIFI approved the final version of the standard on gold and its trading controls during a meeting of its sharia board held last week, the industry body said in a statement seen by Reuters.
This followed a year-long effort that included public hearings held in Oman, Sudan and Malaysia over the past few months, as well as a series of meetings of a dedicated AAOIFI subcommittee.
An official launch would be announced shortly, AAOIFI said.
Well, it’s official now. This Reuters news item showed up on their website at 1:16 a.m. EST on Monday morning — and it’s another article that I picked up from that gata.org Internet site. Another link to it is here.
The PHOTOS and the FUNNIES
I went out of my way a week ago to highlight two key features of the previous COT report – the reduction in the concentrated short position of the big 4 (JPMorgan) in gold and silver and the highly unusual light new short selling by the managed money traders on what were always clear technical signals to go short. Going into today’s release, I was wondering if last week was a fluke and there would be big new shorting by the managed money traders in today’s report. Now, more than ever, a paradigm shift looks to have occurred – for some reason and for the very first time, the managed money traders are not adding to the short side.
I’ve described why this is so important – the less the managed money traders add to short positions, the less the commercials can buy back their own shorts and the less reason for prices to drop further. Try as I might, I can’t see how this is not a new powerfully bullish factor; a factor, quite frankly, that I didn’t anticipate beforehand. Now that it has been confirmed for the second week running, I’m convinced it was no fluke and I’m glad to have jumped on it initially. The commercials may slice prices lower, but they appear to have lost a formerly reliable source of paper supply. — Silver analyst Ted Butler: 28 November 2016
The price run-up in three of the four precious metals in early Far East trading would certainly be chalked up to the big sell-off in the dollar index yesterday during the same time period — at least by most so-called ‘analysts’. But if that’s why it really occurred, then please explain to me why palladium traded flat during that time period — and then rallied strongly once the London p.m. gold fix was in?
Of course on the other side of the coin was the big rally in the dollar index that started shortly after the London open — and ended around 9 a.m. in New York. Although precious metal prices declined during that period, they certainly didn’t decline by much considering the dollar rally strength exceeded the earlier sell-off.
As I’ve already noted further up, the net volume traded in both gold and silver — and most likely platinum — was extremely light…mostly fumes and vapours. Therefore it was easy for anyone with an agenda to push prices around, even through roll-over/switch volume was sky high in both silver and gold.
But having said all this, I’m pleased to see this kind of strength as December goes off the board, especially considering last Wednesday’s engineered price declines. Why ‘da boyz’ haven’t pressed their advantage since, is still a bit of a surprise.
Here are the 6-month charts for all four precious metals — and except for the fact that they all rose in price yesterday, not much should be read into them. As mentioned, palladium continues to be the outlier here — and copper appears to be trading in a world of its own as well.
Let’s see what happens once December gets here — as the Fed’s interest rate hike looms in the distance.
And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price has been chopping erratically lower throughout all of Far East trading on their Tuesday — and it’s currently down $2.40 an ounce. Silver was up a bit over a dime in early morning Far East trading, but it’s down a penny at the moment. Platinum chopped sideways a few dollars either side of unchanged up until early afternoon China Standard Time — and has been heading a bit higher — and is currently up 4 dollars. And after trading a few dollars higher in morning trading in Shanghai, palladium is now down 2 bucks.
Net HFT volume in gold is just about 28,500 contracts, with most of that volume in the new front month, which is February. Net HFT silver volume is sitting right at 6,000 contracts and, like in gold, most of the volume is in its new front month, which is March.
The dollar index made it up to the 101.40 mark in early morning trading in the Far East, but lost most of that by around 1:30 p.m. China Standard Time. It has been rallying a bit since — and is currently up 22 basis points as London opens.
I’m still thinking about yesterday’s Commitment of Traders Report — and this would be a good time for you to re-read Ted’s quote above.
Did the Managed Money traders go short last Wednesday, the day after the cut-off for yesterday’s COT Report? Isn’t that the $64,000 question. As I said at the time — and I’ll say it again now, the fact that JPMorgan et al pulled off that stunt when they did, means it was a deliberate act. And as I’ve also pointed out on many occasions, they pull that stunt whenever they want to hide what they’re doing from public sight for as long as possible. At times they’ve started in right after the COMEX close the day of the cut-off, or when trading begins in New York at 6 p.m. the same day.
Whatever happened will find out in three days.
Not to be forgotten of course is the fact that the cut-off for Friday’s COT Report is at the close of COMEX trading today. But also today, all the remaining COMEX traders that aren’t standing for physical delivery in December, have to roll or sell the rest of those contracts by the close of today’s COMEX trading as well. First Day Notice for delivery into December will be up on the CME’s website around 10 p.m. EST tonight.
Events seem to be coming to a head all at the same time.
And as I post today’s column on the website at 4:05 a.m. EST, I see that the gold price is heading lower — and is currently down $5.50 an ounce. Silver is back to unchanged — and had a big down/up price spike shortly after the London open. I’m not sure if that’s real, or maybe it’s a data feed error. We’ll know later this morning. Platinum is now up only a dollar — and palladium is down a buck.
Net HFT volume in gold is now up to 32,000 contracts — and that number in silver is just about 6,700 contracts. Net volume in both metals has been extremely light in the first hour of trading in London. The dollar index is down a bit from an hour ago — and is up 13 basis points currently.
With December going off the board at the COMEX close today, I’m not sure what to expect for price action, especially after that up/down price spike in silver just now. So nothing will surprise me when I check the charts after I roll out of bed later this morning.
I’ll have First Day Notice numbers for you in tomorrow’s column — and I’ll see you then.
NOTE: I’m having major problems with the e-mail version of today’s column, so it could be late, to very late, today.