09 December 2016 — Friday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
Once trading began at 6:00 p.m. EST on Wednesday evening in New York, the gold price chopped quietly higher — and its high tick of the day, such as it was, came shortly before noon China Standard Time. It gave almost all of that by shortly after the London open — and then rallied back the same amount by 12:45 p.m. GMT. Then Draghi spoke — and the powers-that-be hit the ‘ramp the dollar index/hit the precious metal prices’ button — and you know the rest. The monster dollar index rally only dropped the gold price by 8 bucks when all was said and done — and once the London p.m. gold fix was out of the way, the price traded quietly sideways into the 5:00 p.m close in New York.
Despite the impressive chart pattern on the Kitco graph below, the intraday move was barely 8 dollars, so I shall dispense with the high and low ticks once again.
Here’s the 5-minute tick gold chart from Brad Robertson as usual — and as you can imagine, except for the odd volume spike in the Far East and early London trading, the main volume came on the engineered price decline that accompanied the ‘engineered’ dollar index rally. That started at 5:50 a.m. Denver time — and by shortly after the COMEX close…11:30 a.m. Denver time…volume was back at background levels once again.
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 price action in silver was similar to gold’s, except it was much quieter for a change. The low price spike came around 9:45 a.m. in New York — and the smallish rally that developed from there got dealt with about ten minutes before the 1:30 p.m. EST COMEX close. The price drifted sideways from there.
The high and low ticks in this precious metal certainly aren’t worth looking up, either.
Here’s the 5-minute tick chart for silver from Brad as well. There was a bit of volume in morning trading in the Far East on their Thursday — and then again before the London open. But of course the real volume fireworks started around 5:45 a.m. Denver time and, like gold volume, was back to nothing by shortly after the COMEX close.
As per the 5-minute gold chart above, 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 as well.
Platinum was forced to trade in about the same pattern as gold — and its rally into positive territory off its New York low was also hammered flat shortly before the COMEX close — and platinum was closed down on the day as well. It finished the Thursday session at $935 spot, down 4 dollars from Wednesday.
Palladium was up a couple of dollars by around 2 p.m. China Standard Time on their Thursday afternoon. It began to drift lower from there, but the engineered rally in the dollar index had little if any impact on the palladium price when it occurred. The low tick of the day came shortly before 9 a.m. in New York — and its rally from there became too rambunctious for someone, as it was capped shortly before 1 p.m. EST as well — and driven lower from there. Then, like the other three precious metals, it traded sideways once the COMEX closed. Palladium finished the day at $736 spot, up 5 bucks from Wednesday’s close.
The dollar index closed very late on Wednesday afternoon in New York at 100.18 — and continued its decline once trading began at 6:00 p.m. EST that evening. It got ‘saved’ by the usual ‘gentle hands’ once it broke below the 100.00 mark around 11:45 a.m. in Shanghai on their Thursday morning — and by 8:15 a.m. in London they had it up about 20 basis points off its low tick. Then it headed lower — and back below the 100.00 mark once again. I commented on this event in The Wrap section of Thursday’s column, with this sentence…”Will it get ‘rescued’ this time, one wonders?”
At 12:35 p.m. GMT in London it fell precipitously [ino.com recorded the low tick as 99.43…which I find very hard to believe] — and five minutes after that I got the answer to my question. The usual ‘gentle hands’ appeared to catch that falling knife — and the ramp job began in earnest when Draghi spoke. Most of the gains were in by minutes before 11 a.m. in New York, which was minutes before London closed. It traded quietly lower from there — as the index finished the day higher by 94 basis points at 101.12.
Here’s the 6-month U.S. dollar index chart — and I stand corrected!!! The Thursday doji does indeed show that the dollar index plumbed the depths yesterday — so the ino.com low tick of 99.43 is correct. It’s obvious that if ‘da boyz’ hadn’t stepped in when they did, the dollar index would have crashed and burned within hours. The internal structure of the currency markets is even more precarious than I though it was.
The gold shares opened about unchanged — and then chopped a bit lower, with their lows coming around 11:15 a.m. in New York. From there they chopped higher — and back into positive territory, as the HUI closed up 0.29 percent. Despite the visual appearance of the chart below, the stocks only traded in a bit over a one percent price range on Thursday.
The silver equities also opened unchanged, but their decline from there was quite a bit more precipitous. Their low ticks came at the same time as they did for gold — and the subsequent rally never even got a sniff of positive territory, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.51 percent. Click to enlarge if necessary.
The CME Daily Delivery Report showed that 70 gold and 121 silver contracts were posted for delivery within the COMEX-approved depositories on Monday. In gold, the sole short/issuer was ABN Amro and, like yesterday’s report, the only long/stoppers that mattered were Ted’s “Three Musketeers” — HSBC USA , Canada’s Scotiabank  and JPMorgan with 32 for its client account, plus 5 contracts for its own account. In silver, it was ABN Amro as sole short/issuer as well — and also as in yesterday’s report, it was the same long/stoppers of note…JPMorgan stopping 61 contracts for its own account — and Macquarie Futures stopping 37 for its own account as well…with Citigroup a distant third with 10 contracts for its client account. The link to yesterday’s Issuers and Stoppers Report is here.
As Ted pointed out on the phone yesterday, of the 2,672 silver contracts issued so far this month, JPMorgan has already stopped 1,217 contracts for its own account in December — and none for its clients. Macquarie Futures has stopped 852 silver contracts for its own account this month as well.
The CME Preliminary Report for the Thursday trading session showed that gold open interest in December actually rose by 33 contracts, leaving 1,411 still open, minus the 70 contracts mentioned above. Wednesday’s Daily Delivery Report showed that 19 gold contracts were actually posted for delivery today, so that means that another 19+33=53 gold contracts just got added to the December delivery month. Silver o.i. in December dropped by exactly 1,000 contracts, leaving 825 still open, minus the 121 contracts mentioned two paragraphs ago. Wednesday’s Daily Delivery Report showed that 1,027 contracts were actually posted for delivery today, so that means that 1,027-1,000=27 more silver contracts were added to the December delivery month.
There was another withdrawal from GLD yesterday, as an authorized participant took out 95,316 troy ounces. And the long-awaited [by me] exchange of SLV shares for physical by Ted’s “big buyer” finally occurred yesterday, as an a.p. withdrew 3,129,01 troy ounces. I would guess that JPMorgan owns this now.
There was no sales report from the U.S. Mint yesterday, the second day in a row with zero sales, so I guess they’re officially done with the 2016 sales year now.
There was a fair amount of gold movement at the COMEX-approved depositories on the U.S. east coast on Wednesday, as 17,755 troy ounces were received — and 85,060 troy ounces were shipped out. Of the amount shipped out, there was 53,049.150 troy ounces/1,650 kilobars [SGE kilobar weight] shipped out of HSBC USA, plus 31,817 troy ounces shipped out of Canada’s Scotiabank. Scotiabank also received 16,075.000 troy ounces/500 kilobars [U.K./U.S. kilobar weight] The link to this activity is here.
It was another busy day in silver, as 1,308,133 troy ounces were received — and another 458,281 troy ounces were shipped out the door. A container load, plus a bit, went into Canada’s Scotiabank — and another shipping container went into CNT. There was 304,186 troy ounces shipped out of Brink’s, Inc…plus 154,095 out of HSBC USA. The link to that action is here.
It was another fairly busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, as 1,424 were reported received — and 4,291 were shipped out the door. All of the activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.
I don’t have all that many stories again today — and I’m OK with that, and hope you are too.
While the S&P 500 is reaching all-time highs on optimism over Donald Trump’s economic agenda, some Wall Street strategists are increasingly worried about a widely followed valuation measure that’s reached levels that preceded most of the major market crashes of the last 100 years.
“The cyclically adjusted P/E (CAPE), a valuation measure created by economist Robert Shiller now stands over 27 and has been exceeded only in the 1929 mania, the 2000 tech mania and the 2007 housing and stock bubble,” Alan Newman wrote in his Stock Market Crosscurrents letter at the end of November.
Newman said even if the market’s earnings increase by 10 percent under Trump’s policies “we’re still dealing with the same picture, overvaluation on a very grand scale.”
The warning signs are everywhere — and have been for decades. Only the powers-that-be and their sycophants are keeping the entire world’s financial system from forming a great smoking crater that none of us will live long enough to ever get out of. This news item showed up on the cnbc.com Internet site around noon EST on Thursday — and it’s something I found on Doug Noland’s website last night MST. Another link to it is here.
Two days after the Mayor of Dallas, Mike Rawlings, filed a lawsuit against the Dallas Police and Fire Pension system to block withdrawals, which he referred to as a “run on the bank” of an “insolvent” pension system in “financial crisis“, the Pension’s board has finally taken steps to halt further withdrawals. Of course, this delayed action has come only after $500 million in deposits have been withdrawn since just August.
According to the Dallas Daily News, an incremental $154mm in withdrawal requests were pending at the time the decision was made earlier today.
The Dallas Police and Fire Pension System’s Board of Trustees suspended lump-sum withdrawals from the pension fund Thursday, staving off a possible restraining order and stopping $154 million in withdrawal requests.
The system was set to pay out the weekly requests Friday. Pension officials said allowing the withdrawals would leave them without the liquid reserves required to sustain $2.1 billion fund.
“Our situation is currently critical, and we took action,” Board chairman Sam Friar said.
This is the Zero Hedge spin on a Dallas Daily News story. It appeared on the ZH website at 8:08 p.m. on Thursday evening EST — and another link to it is here.
Having rallied into today’s ECB meeting on hopes of getting more “whatever it takes” from Mario Draghi, his surprising tilt to the hawkish taper has sparked selling across European bond markets (pushing Bund yields to 11-month highs). EUR/USD knee-jerked higher on the statement but faded back quickly. Yield curves across Europe are also steepening dramatically and bank stocks are loving it.
This is the event that blasted the dollar index higher — and the precious metals lower. This multi-chart Zero Hedge article was posted on their website at 8:01 a.m. EST yesterday morning.
The latest consequence of economic mismanagement in Europe was the failed attempt at constitutional reform in Italy this week.
The Italian people have had enough of their government’s economic failure, and is refusing to give it more power.
The E.U. and the euro project have been an economic disaster for all participants, including Germany, which will eventually be forced to write off the hard-earned savings she has lent to other Eurozone members. We know, with absolute certainty, that the euro will self-destruct and the Eurozone will disintegrate.
We know this for one reason above all. The political class and the ECB are guided by economic beliefs – I cannot dignify them by calling them reasoned theory – which will guarantee this outcome. Furthermore, they insist on using statistics that are incorrect for the stated function, the best example being GDP, which I have criticised endlessly and won’t repeat here. Furthermore, the numbers are misrepresented by government statisticians, CPI and unemployment figures being prime examples.
This commentary by Alasdair was posted on the goldmoney.com Internet on Thursday GMT sometime — and I found it embedded in a GATA release. Another link to it is here.
Beijing is about to turn its guns back on the gaming industry in its battle against the multi-billion-yuan outflow of capital from its economy as Macau prepares to slash in half the amount of cash China UnionPay bank card holders can withdraw from ATM machines in the city.
The move to cut the daily withdrawal limit from 10,000 to 5,000 patacas is expected to take effect from Saturday and follows the discovery that as much as 10 billion patacas in China UnionPay ATM withdrawals were made in one month alone.
It also comes amid so far unanswered claims that the customer voucher scheme run by Marina Bay Sands casino resort in Singapore – which apparently allows China UnionPay card users to buy gaming chips in breach of China’s strict currency controls – has seen billions of yuan flow out of the mainland.
The Monetary Authority of Macau’s ATM withdrawal cut is understood to be a reaction to attempts by illicit money movers to circumvent Beijing’s move at the beginning of this year to cap at 100,000 yuan (HK$112,600) the annual amount that UnionPay card holders could withdraw.
This very interesting news item put in an appearance on the South China Morning Post at 12:03 a.m. CST on their Friday morning — and was subsequently updated about 10 hours later. I extracted it from a Zero Hedge story — and another link to it is here.
Gold advocate Ned Naylor-Leyland, now managing Old Mutual’s gold and silver fund, was interviewed today by Bernie Lo on CNBC’s “Squawk Box” program in Hong Kong — and remarked that while the gold price in U.S. dollars has been down, gold is commanding premiums in many other currencies, including the British pound.
A 2:11 minute excerpt from the interview can be seen at the CNBC website. It was posted there back on December 1 — and it’s another article I found on the gata.org Internet site. Another link to it is here.
“Can I Take One of These Home?”
As jokes go it probably wasn’t the most tactful, but at least it tickled Prince Charles.
On a royal visit to the Bank of England today, Governor Mark Carney told the heir to throne as he sat down with a group of deputies in his historic office for a private briefing: “A tremendous amount of mistakes have been made at this table!”
The prince’s tour came at the personal invitation of Mr. Carney, who visited him at Clarence House in February.
The aim of the visit was, ostensibly, to “recognise and celebrate the bank’s mission to promote the good of the people of the U.K. by maintaining monetary and financial stability.”
During his tour of the building Charles was given a private viewing of more than £100 billion worth of gold.
This photo-laden story was posted on the dailymail.co.uk Internet site on Wednesday evening GMT — and I found it on the gata.org Internet site yesterday. The above headline comes courtesy of Chris Powell — and another link to this story is here.
Jewellers sold 15 tonnes of gold ornaments and bars, worth around 5,000 crore rupeees, on the intervening night of November 8 and 9 after the government demonetized Rs 500 and Rs 1,000 denomination notes, said Surendra Mehta, national secretary of India Bullion & Jewellers Association. The association has 2,500 jewellers registered with it from across the country.
“We estimate gold worth Rs 5,000 crore, or around 15 tonnes, was sold between 8 pm on November 8 and 2-3 am the next day, after the prime minister’s demonetization announcement,” Mehta told The Times. He said nearly half of these sales happened in Delhi, Upper Pradesh, and Punjab. He claimed that only 1,000 of around 6 lakh jewellers across the country had accepted Rs 500 and Rs 1000 notes in exchange for gold on the night of November 8.
The association has requested the government to take strict action against erring jewellers as they had brought a “bad” name to the entire trade, Mehta added.
This gold-related news item appeared on The Economic Times of India website at 3:12 p.m. IST on their Thursday afternoon — and it’s another article I found on the GATA website. Another link to it is here.
It’s only a matter of time before the next financial crisis descends – and it’s destined to be far more destructive than any before.
So says Jim Rickards, a New York Times bestselling author, adviser to the US Department of Defence and the US intelligence community.
Central banks still have debt in the trillions of dollars from the last crisis and simply won’t have the ammunition to cope with the next one, he says.
In this latest episode of the Big Money Questions, Jim tells presenter Rachel Rickard Straus why he believes the next crisis is looming, what it will look like and what can be done to mitigate it.
He also explains how individuals can prepare their investments – including buying physical gold, which he believes could hit $10,000 an ounce, up from around $1,170 today.
This 18:09 minute video interview was embedded in a business story that showed up on the dailymail.co.uk Internet site on Thursday morning GMT — and I thank Roy Stephens for pointing it out. Another link to it is here.
Eight months after Deutsche Bank AG settled a lawsuit claiming it manipulated gold and silver prices, documents it disclosed as part of the accord provide “smoking gun” proof that UBS Group AG, HSBC Holdings Plc, Bank of Nova Scotia and other firms rigged the silver market, plaintiffs claim.
The allegation came in a filing Wednesday in a Manhattan federal court lawsuit filed in 2014 by individuals and entities that bought or sold futures contracts.
According to the plaintiffs, records surrendered by Deutsche Bank show traders and submitters coordinating trades in advance of a daily phone call, manipulating the spot market for silver, conspiring to fix the spread on silver offered to customers and using illegal strategies to rig prices.
“Plaintiffs are now able to plead with direct, ‘smoking gun’ evidence,’ including secret electronic chats involving silver traders and submitters across a number of financial institutions, a multi-year, well-coordinated and wide-ranging conspiracy to rig the prices,” the plaintiffs said in their filing. The new scheme “far surpasses the conspiracy alleged earlier.”
This Bloomberg story from 10:26 p.m. EST on Wednesday night was the first hint of what was to follow on Thursday. I received this from Helen Hoyt an hour and change after I’d posted and e-mailed my Thursday missive, so it had to wait for today. Another link to it is here.
Earlier this year at April’s hearings for London Silver and Gold Fix lawsuits the judge and defendant’s attorney quipped about trader chats named “the mafia” and “the bandits” published in prosecutors findings of Forex investigations but conspicuously absent from precious metals investigation findings, and the silver and gold antitrust lawsuits under consideration.
THE COURT: “Those were bad facts for the defendants.”
MR. LACOVARA: “I think, your Honor, that if we had chat rooms that said “The Cartel”, we might be having a different focus to oral argument today.”
THE COURT: “I think that is correct.”
Given the judges skepticism of the allegations described in an earlier article, it came as a surprise early October when the banks listed were ordered by magistrate Valerie E. Caproni to face charges. More surprising perhaps was the exemption granted Swiss bank UBS, which despite having been found guilty and fined for “precious metals misconduct” by the Swiss Financial Market Supervisory Authority FINMA in November 2014, was granted motion to dismiss from both silver and gold lawsuits.
All that may be about to change according to documents filed in a New York district court yesterday, where plaintiffs claim that transcripts showing conspiracy to manipulate silver, provided by Deutsche Bank as part of an April settlement agreement, includes extensive smoking gun evidence involving UBS and other banks. Plaintiffs describe a “multi-year, well-coordinated and wide-ranging conspiracy to rig the prices of silver and silver financial instruments that far surpasses” that of the previous complaint, including potentially incriminating evidence of UBS precious metals traders allegedly conspiring with other banks.
Five additional banks to the remaining defendants HSBC and Bank of Nova Scotia are mentioned including Barclays Bank, BNP Paribas, Standard Chartered Bank, Bank of America and Merrill Lynch. The Memorandum of Law signed by Vincent Briganti on behalf of Lowey Dannenberg Cohen & Hart for plaintiffs on Wednesday 7th December seeks leave to amend the existing complaint filed with the United States District Court Southern District of New York.
Included in the memo are numerous astounding transcripts indicating coordination between UBS and other banks of “pushing,” ”smashing,” ”bending,” ”hammering,” ”blading,” ”muscling,” and “ramping” the prices of silver and silver financial instruments.
This very interesting and must read commentary appeared on the comexwehaveaproblem.ca Internet site yesterday — and I plucked it from another GATA release. Another link to it is here.
Back in April, when we first reported that Deutsche Bank had agreed to settle allegations it had rigged the silver market in exchange for $38 million, we revealed something stunning: “in a curious twist, the settlement letter revealed that the former members of the manipulation cartel have turned on each other”, and that Deutsche Bank would provide documents implicating other precious metals riggers. To wit: “In addition to valuable monetary consideration, Deutsche Bank has also agreed to provide cooperation to plaintiffs, including the production of instant messages, and other electronic communications, as part of the settlement. In Plaintiff’s estimation, the cooperation to be provided by Deutsche Bank will substantially assist Plaintiffs in the prosecution of their claims against the non-settling defendants.”
Overnight we finally got a glimpse into what this “production” contained, and according to documents filed by the plaintiffs in the class action lawsuit, what Deutsche Bank provided as part of its settlement was nothing short of “smoking gun” proof that UBS Group AG, HSBC Holdings Plc, Bank of Nova Scotia and other firms rigged the silver market. The allegation, as Bloomberg first noted, came in a filing Wednesday in a Manhattan federal court lawsuit filed in 2014 by individuals and entities that bought or sold futures contracts.
In the document records surrendered by Deutsche Bank and presented below, traders and submitters were captured coordinating trades in advance of a daily phone call, manipulating the spot market for silver, conspiring to fix the spread on silver offered to customers and using illegal strategies to rig prices.
“Plaintiffs are now able to plead with direct, ‘smoking gun’ evidence,’ including secret electronic chats involving silver traders and submitters across a number of financial institutions, a multi-year, well-coordinated and wide-ranging conspiracy to rig the prices,” the plaintiffs said in their filing.
Here’s the Zero Hedge spin on this — and this article was certainly updated at least once on Thursday, as it’s now datelined five hours after I got it from Bev Currie. It’s worth your while as well — and another link to it is here.
The PHOTOS and the FUNNIES
Despite the fact that the dollar index ‘rallied’ big time when Draghi came out with the ‘news’, the best ‘da boyz’ could do was drop gold by 8 bucks — and silver by about 15 cents. Once the effect of that wore off, JPMorgan et al had to resort to their more usual methods of price suppression in order to prevent the precious metals from rallying back into positive territory, which they all wanted to do. Only palladium, which was unaffected by the Draghi news, was able to manage a positive close.
And as I type this paragraph, the London open is less than ten minutes away — and I note that an hour after trading began in New York yesterday evening, the gold price was sold down to its current low by 10 a.m. China Standard Time on their Friday morning. It’s rallied back a bit since, but is still down $1.70 at the moment. It was much the same price activity in silver — and it’s down 5 cents the ounce currently. Ditto for platinum and palladium, with the former down 3 bucks…but palladium has bucked the trend of the other three — and is currently up 3 dollars, after getting sold lower earlier in the day as well.
Net HFT gold volume is just under 24,000 contracts — and that number in silver is just under 5,500 contracts. This is pretty light volume, so not too much should be read into the current price ‘action’.
The dollar index opened unchanged at 6:00 p.m. in New York yesterday evening — and traded flat until 9:30 a.m. in Shanghai. It rallied a quick 30 basis points in the next half-hour — and has been drifting quietly lower since then — and is now up only 2 basis points as London opens. I would guess that the dip in the precious metals in Far East trading on their Friday morning was in direct response to this dollar index move, because the time lines are a perfect match.
The silver story regarding Deutsche Bank et al, was certainly the standout news item in the precious metal world yesterday. But as Ted pointed out on the phone, JPMorgan’s name was never mentioned, nor were the illegal activities/concentrations in the COMEX futures market. The fix really doesn’t mean anything — and until these investigations lead to these two “Ground Zero” facts, the only result of these lawsuits to date is to make the class-action lawyers rich.
But even with this sort of news floating around, it’s a given that neither The Silver Institute or the silver miners will say or do anything on their own behalf, let alone ours.
But, having said that, there’s no doubt that these bombs are now falling ever closer to what should be there primary target… and that’s JPMorgan and the COMEX…and the fact that they are, may bring about a change in their actions going forward.
As Ted has been pointing out for the last three weeks, the internal changes in the Commitment of Traders Reports during that time certainly indicates a change in pattern in the COMEX silver market — and the fact that something might be afoot in that regard. JPMorgan has been reducing their short position in silver at a frantic pace — and taking delivery of the metal in the December delivery month like there’s no tomorrow.
Today we get the new COT Report, plus the companion Bank Participation Report — and both should tell us a lot. Whatever the numbers are, I’ll have them in tomorrow’s column.
And as I post today’s efforts on the website at 4:00 a.m. EST, I note that not much is going on from a price perspective in any of the four precious metals now that London and Zurich have been open for an hour. Gold is down $1.50…silver is down 4 cents…platinum by a buck — and palladium is still up the same 3 dollars it was before.
HFT gold volume is just over 27,000 contracts — and that number in silver is just over 6,000 contracts. These numbers are very marginally higher than they were an hour ago. There’s nothing going on at the moment. The dollar index is still chopping around unchanged — and is up 5 basis points currently.
After the price action so far this week, all bets are off as to what we’ll witness as Friday rolls along. But as is almost always the case, it’s what happens during the New York trading session that matters the most — and I expect that to be that way again today.
Enjoy your weekend — and I’ll see you here tomorrow.