Another New Low Close For Gold Yesterday

14 December 2016 — Wednesday


NOTE:  My apologies for the downtime yesterday, but there was nothing my webmaster could do about it — and Murphy’s Law was in full force against us.  By the end of the day I found out more about DNS servers than I ever thought I wanted to know.  Modern technology is great, until it stops working, that is.

Gold was up a couple of dollars in the first two hours of trading on Monday evening in New York, but was sold lower from there — and didn’t begin to rally until the noon silver fix in London.  It blasted higher at the COMEX open — and ran into ‘da boyz’ right away.  The low tick came at 10:15 a.m. EST — and all three rally attempts after that got capped in short order.

The price was kept within a ten dollar price range all through the Tuesday trading session — and the highs and lows aren’t worth looking up.

Gold was closed at a new low for this move down yesterday at $1,158.00 spot, down $3.90 on the day.  Net volume was not overly heavy at just under 127,000 contracts.

Silver chopped sideways until shortly after London opened — and dipped below $17 spot for a few hours before rallying into the COMEX open.  That got capped — and at 9:40 a.m. EST, JPMorgan et al appeared — and by 10:30 a.m. had peeled 35 cents off the price.  The subsequent rally got capped at 11:15 a.m. and, like gold, the price wasn’t allowed to go anywhere after that.

The high and low ticks were reported by the CME Group as $17.23 and $16.83 in the March contract.

Silver finished the Tuesday session at $16.875 spot, down 18 cents from Monday.  Net volume was a hair under 42,000 contracts.

The platinum price didn’t do much of anything until around 1:30 p.m. China Standard Time on their Tuesday afternoon.  It began to drift lower from there, with the low coming around noon Zurich time.  Then an hour later, which was the noon silver fix in London, it began to head higher.  That rally ran into resistance on more than one occasion…once before the COMEX open…and then again, like silver and gold…immediately after the COMEX open.  The rally was snuffed out for good at, or just before, the London p.m. gold fix — and from there every rally attempt met the same fate as the other two precious metals.  Platinum was closed at $933 spot, up 3 bucks on the day.

Palladium traded higher in the Far East and Europe yesterday…up 3 to 5 dollars for the most part.  And, like the other three, precious metals, rallied sharply at the COMEX open.  From there ‘da boyz’ handled it in the same manner as they did platinum and, by extension, silver and gold as well.  Palladium was closed in New York yesterday at $728 spot, up 8 dollars from Monday.

The dollar index was closed very late in New York on Monday afternoon at 100.92 — and struggled up to the 101.17 mark by 11:50 a.m. GMT in London on their Tuesday morning.  It headed lower from there — and the saw-tooth chart pattern certainly indicated that a not-for-profit buyer was around, as the index would have cratered if they hadn’t been.  The 100.75 low tick came about ten minutes after the 11:00 a.m. EST London close.  The subsequent rally lasted until 2:30 p.m. EST — and it chopped quietly lower for the rest of the day, finishing the Tuesday session at 100.98 — up 6 basis points from Monday.

And here’s the 6-month U.S. dollar chart for you to read into whatever you wish.

The gold stocks opened unchanged — and after a tiny rally, dipped to their lows of the day around 10:15 a.m. in New York trading.  Then they chopped rather unsteadily higher for the rest of the Tuesday session, closing up 1.93 percent.

The silver equities started off the day in similar fashion to the gold shares, but had a wild roller coaster ride from there into the close of trading.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index finished higher by 1.21 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that zero gold and 40 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  There were three short/issuers involved…Morgan Stanley [15]…JP Morgan with 14 out of its client account…and 11 contracts from ADM.  The two long/stoppers of note were JPMorgan with 17 for its own account — and Canada’s Scotiabank with 16 for its own account as well.  Scotiabank only trades for its own account, it doesn’t have a client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday session showed that gold open interest in December actually increased by 63 contracts, leaving 1,159 still open.  Monday’s Daily Delivery Report showed that 1 gold contract was actually posted for delivery today, so that means that 1+63=64 gold contracts were added to the December delivery month.  Silver o.i. in December declined by 136 contracts, leaving 454 still around, minus the 40 contracts mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 209 silver contracts were actually posted for delivery today, so that means that another 209-136=73 silver contracts were added to December.

There were no reported changes in GLD yesterday, but there was a decent-sized withdrawal from SLV, as an authorized participant took out 1,801,766 troy ounces.  I’m sure that Ted would suspect that JPMorgan is now the proud owner of that metal now.

The folks over at Switzerland’s Zürcher Kantonalbank updated their Internet site with the goings-on insider their gold and silver ETFs as of the close of trading on Friday, December 9 — and this is what they had to report.  Their gold ETF declined by 11,028 troy ounces — and their silver ETF shed 78,770 troy ounces.

There was no sales report from the U.S. Mint yesterday.

All the in/out activity in gold over at the COMEX-approved depositories on Monday was over at Canada’s Scotiabank.  They reported receiving 32,150.000 troy ounces/1,000 kilobars [U.K./U.S. kilobar weight]…and shipped out 64,164 troy ounces.  The link to that activity is here.

The only activity in silver was 38,467 troy ounces shipped into Delaware — and that was all.  I shan’t both linking this amount.

It was another busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They received 1,159 of them — but shipped out a very chunky 6,376.  All of this action 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 — and after all my Internet/website issues yesterday — I’ve very happy about that.


The Russell 2000 ETF has NEVER been this extended above its monthly Bollinger Band

There’s nothing to this story other than a chart that goes back to 2003…but if I owned this ETF, I’d hit the ‘sell’ button on it at the first moment possible.  It was posted on the Internet site on Saturday — and I found it in yesterday’s edition of the King Report.  It’s definitely worth a quick look.

From Captive Audience to Open Democracy: Why the Mainstream Media Is Freaking Out

In its panicky rush to demonize the independent media via baseless accusations of “fake news,” the mainstream press has sunk to spewing “fake news” of its own.

Here’s The Washington Post‘s criminally false “fake news” article in case you missed it: Russian propaganda effort helped spread ‘fake news’ during election, experts say.

So-called “fake news” was perfectly acceptable to the mainstream media when it was the exclusive purview of the central state. The infamous Gulf of Tonkin Incident in August 1964 that was used to justify a massive escalation of the heretofore limited war in Vietnam was heavily promoted by the mainstream media of the day.

[Now] the MSM has awakened to the reality that the monopoly they once held on a captive audience has eroded to the point of ineffectiveness.

The fundamental dynamic here is the transition from a captive audience in thrall to a handful of media corporations to a radically democratized media. In 1964, Americans had essential zero alternatives to the three TV networks and the mainstream magazines and newspapers.

Increasingly, the media is becoming more of a Wild West than the homogenized, centralized media with a captive audience.  With the advent of digital publishing, a lot more voices can be heard. But it takes effort to find them, and separate the wheat from the chaff. As I explain in my short video recorded for Max Keiser, democracy implicitly imposes a responsibility on the citizenry to sort out who benefits from whatever narrative is being pushed.

This very interesting commentary by Charles Hugh Smith was posted on his website on Sunday — and it’s the second story is a row that I plucked from yesterday’s edition of the King Report.  Another link to it is here.  I believe that a reader sent me this story on Monday, but I passed on it at the time, but had a change of heart since.

Venezuelans rush to stash cash before biggest bill is voided

Venezuelans were wearily rushing to deposit bank notes or dump their cash savings entirely on Monday following an announcement by President Nicolas Maduro that he was invalidating the country’s biggest bill because of what he says is an attack on the nation’s liquidity.

The socialist leader shocked the country on Sunday when he said the 100-bolivar note would be removed from circulation within 72 hours. For months, the South American nation has suffered a hard-cash shortage as inflation spirals toward 500 percent, which Maduro insists is the product of an “economic war” and an attempt by his political foes to smuggle currency out of Venezuela.

Maduro doubled down on those claims Monday evening, ordering an “inevitable, necessary, radical” measure to close his country’s border with Colombia for three days while authorities yank the bills from circulation.

Higher-denominated bills are scheduled to be released this week, but Venezuelans, already reeling from a deep recession marked by triple-digit inflation and rampant shortages of consumer basics, seemed to let out a collective groan as they added an unscheduled trip to the bank to their list of woes.

I posted a story about this in my Tuesday column, but this is an update from that.  I appeared on the Bloomberg Internet site at 12:57 p.m. Denver time on Monday — and was updated about four hours later.  I found it embedded in a GATA release — and another link to it is here.

UniCredit Soars on Plan to Raise $13.8 Billion, Slash Costs

UniCredit SpA jumped the most in six years after it laid out a plan to boost profitability that relies on cutting costs and shedding bad loans as Italy’s slow growth holds back revenue.

The stock rose 16 percent to €2.81 in Milan trading, paring the year’s decline to 44 percent. Deutsche Bank AG analyst Paola Sabbione described the plan, which includes a €13 billion ($13.8 billion) rights offer, as “a good trade-off between profitability and capital strengthening.”

The bank is targeting €4.7 billion of net profit in 2019, more than triple that of last year, Milan-based UniCredit said in a presentation of its strategic plan on Tuesday. As part of the three-year strategy, the lender plans to shed an additional 6,500 jobs, bringing the total to 14,000, as it aims for €1.7 billion of annual cost savings.

Given lack of control over the external environment, we think the focus on capital and costs is important,” Jefferies Group LLC analysts including Benjie Creelan-Sandford said in a note, repeating their buy rating. The bank’s “net profit target for 2019 is well ahead of consensus expectations.”

This news item was posted on the Bloomberg website at 11:51 p.m. MST on Monday morning — and I extracted it from a Zero Hedge story that Richard Saler sent our way.  Another link to it is here.

UniCredit detox is key moment in Italy bank reboot

UniCredit’s revamp is a key moment in Italy’s bank crisis. A cost cull, bad debt purge and mega-cash call mean the country’s biggest bank should soon be less of a worry. With Rome facing a volatile 2017, it’s just as well.

All Italian banks are hampered by low rates and high bad debts, but UniCredit’s lowball 10.8 percent core Tier 1 capital ratio and Banca Monte dei Paschi’s ongoing fragility are the two biggest concerns. Add in the political uncertainty following the domestic referendum and getting investors to support a 13-billion-euro rights issue – nearly the same size as UniCredit’s markets value – is a big ask.

Italian banking now has two pillars – UniCredit and Intesa Sanpaolo – but two concerns. One is that raising smaller banks to the same level of provisioning could cost 9 billion euros, according to Mediobanca research. The other is that rights issue investors will know UniCredit’s assumed annual GDP growth of less than 1 percent in 2017 could be too optimistic if the populist 5-Star wins Italian elections, and the country quits the euro zone.

Recently-installed CEO Jean-Pierre Mustier had already delivered the bad news: the sale of stakes in profitable businesses like Pekao. But the overall 20 billion euros of capital raised will enable provisions of 77 percent on bad loans – compared to around 60 percent now – and over 40 percent on those deemed unlikely to pay. UniCredit will have a comfortable common equity Tier 1 ratio of 12.5 percent. A combination of lower loan losses and cutting costs by 1.7 billion euros, with over half coming via cutting branches and staff, should bring UniCredit’s return on tangible equity to around 9 percent by 2019, from 5 percent last year.

This Reuters story, filed from London, is similar in some respects to the Bloomberg story that preceded it, except this one gives a more macro view of the situation.  It was posted on their Internet site at 2:50 p.m. EST on Tuesday afternoon — and it’s courtesy of Richard Saler as well.  Another link to it is here.

Tehran, Moscow open new page in energy, industry ties

Iran and Russia signed 11 memoranda of understanding (MOUs) on energy and industry cooperation in Tehran on Tuesday.

Ten of the MOUs were penned during the 13th session of the Russian-Iranian Intergovernmental Commission on Trade and Economic Cooperation co-chaired by Iranian Communications and Information Technology Minister Mahmoud Vaezi and Russian Energy Minister Alexander Novak, Mehr news agency reported.

The MOUs included one inked between the Export Insurance Agency of Russia (EXIAR) and the Iranian private sector.

In addition to the ten above mentioned MOUs, Gazprom Neft PJSC, a subsidiary of Russian oil giant Gazprom, signed a memorandum of understanding with National Iranian Oil Company for carrying out development studies on two Iranian oilfields.

A Russian delegation including over 200 representatives of ministries, agencies, and leading corporations and companies, headed by Novak arrived in Tehran on Sunday to outline the main spheres of bilateral cooperation and joint priority projects for the nearest future.

This article appeared on the Internet site on Tuesday sometime — and I thank Roy Stephens for finding it for us.  Another link to it is here.

Future of the Australian $100 note up for grabs as government targets cash

The Turnbull government is to consider a ban on the $100 note and a crackdown on all but small cash payments as part of an assault on the cash economy to be unveiled in Monday’s mid-year budget update.

There’s nothing wrong with cash, the issue is when people don’t declare it,” said Financial Services Minister Kelly O’Dwyer ahead of the announcement.

The latest Reserve Bank figures show an explosion in the $100 notes even as electronic payments have become more widely used. There are 12 $100 notes per person in circulation, more than double the five in circulation 20 years ago. There remains about six of the more widely-seen $20 notes in circulation, roughly as many as there were 20 years ago.

The use of $100 notes jumped 9 per cent in just the past year, well above the long-term growth rate of 7 per cent and far more than the use of $50 notes, which jumped 6 per cent and $20 notes, which increased 2 per cent.

The war on cash accelerates.  I thank Australian reader ‘J.W.’ for sending us this story that appeared on The Sydney Morning Herald website at 2:54 p.m. AEDT on their Wednesday afternoon.  Another link to it is here.  Australian reader ‘R.T.’ sent us another story about this from the Internet site headlined “Federal Government task force to crack down on cash economy, assess future of $100 note

Silver Investing Manipulation: The Truth On A Timeline — Mike Maloney

For years, Mike Maloney has talked about how precious metals markets were being manipulated and today we have the proof. Deutsche Bank recently settled a lawsuit accusing it of the rigging silver markets. And as part of the settlement, the bank released 350,000 pages of documents and 75 audio tapes.

These documents show there was a silver market “mafia” of big banks including Deutsche, UBS, and HSBC all working together to artificially suppress the price of silver and fleece the general public in the process.

In this video, Mike walks you through the historical silver charts and pinpoints the exact moments bank traders colluded together to rig the markets. The evidence leaves little to doubt. But as you’ll learn, there’s an upside for silver investors who accumulate physical metals.

Mike’s right-hand guy and video photographer extraordinaire, Dan Rubock, sent me this 11:51 minute video in the wee hours of Tuesday morning Denver time yesterday morning — and it’s worth watching.  Another link to it is here.

Silver Fixing By Banks Proven In Traders Chats — Mark O’Byrne

Since 2003, we have believed and written about how the silver and gold markets are manipulated and “fixed” by banks. Even then there was circumstantial evidence to suggest this was the case.

Now we have definitive proof and the smoking gun that the “silver market mafia” in the form of leading bullion banks – such as Deutsche Bank, UBS and HSBC – were coordinating the manipulation of the price of silver and suppressing prices as alleged by the Gold Anti Trust Action Committee (GATA).

While this is a joke to the young, naive, greedy and overpaid traders, it is important to remember that this is not a victimless crime. These traders were allowed to this by the banks they work for, thereby defrauding retail silver investors and bullion buyers around the world.

Hopefully business and finance journalists will now spend more time looking at this story and take the lead in exposing such fraud and indeed help prevent it from happening again.

It is hoped that the acquiescence of central banks in tolerating such manipulation and the possible collusion in manipulating the gold market as alleged and indeed documented by GATA here will now be considered with a fresh pair of eyes and an open mind.

As much as Goldcore‘s Mark O’Byrne heaps praise on GATA for all this, it should never be forgotten for a moment that it’s actually silver analyst Ted Butler that’s been at the pointy end of the price management scheme in silver for the last 30 years.  Mark’s commentary from Tuesday appeared in a more readable form on the Zero Hedge website yesterday.  I thank ‘aurora’ for sending it our way — and another link to it is here.  It’s certainly worth your while if you have the time.

NOVEMBER: Gold Price Down, Chinese Demand Strong Despite Import Curbs

Gold researcher Koos Jansen reports that gold demand in China remains strong, adding that it seems unlikely that the Chinese government will interfere much with gold imports.

Jansen’s report is headlined “November Gold Price Down, Chinese Demand Strong Despite Import Curbs” and it was posted on the Singapore-based Internet site yesterday.  I found it on the Internet site.

Big 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} uptick in November gold withdrawals on Shanghai Exchange — Lawrie Williams

As we had predicted the monthly report from the Shanghai Gold Exchange (SGE) for gold withdrawals during November showed a sharp upwards move to 214.72 tonnes – a remarkable increase of some 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} over the October figure.  If this kind of level, or better, is maintained into December this gives us the realistic possibility that the full year total could still reach 2,000 tonnes – well down on last year’s record 2,596 tonnes, but would keep China in its position as being comfortably the world’s largest gold consumer.  See table below for month by month SGE gold withdrawal figures for the past three years.

The above figures also show, that for the first time this year the monthly total actually exceeded that for the same month a year ago, but this could be due to the fact that the 2017 Chinese New Year holiday starts 11 days earlier than the 2016 one which means gold traders and fabricators could be bringing their restocking ahead of the holiday forward by a few days.

The SGE withdrawal figures, and their comparisons with previous years, are very definitely an important measure of Chinese gold consumption trends and on this basis, although the year to date data show a 25{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} year on year fall compared with 2015 one should recall that Chinese gold demand in 2015 was a huge new record and even a 25{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} fall from this to an annual level of around 2,000 tonnes still represents a huge slice of global gold demand from a single nation – more than 60{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of global new mined gold output.  It makes one wonder where other gold consuming nations are sourcing their gold and helps explain why SGE gold benchmark prices (the SGE deals in physical gold) have recently been consistently higher than COMEX and London prices which are largely based on paper gold transactions.

This commentary by Lawrie showed up on the Sharps Pixley website yesterday — and it’s definitely worth reading.  Another link to it is here.


Here are two more of the finalists in for the 2016 Comedy Wildlife Photography Awards.  The Click to Enlarge feature only works on the second photo.


At the end of the day, JPMorgan et al had closed gold at a new low for this move down.  It wasn’t by much, but every salami slice makes a difference in the internal structure of the Commitment of Traders Report.  There weren’t any changes of importance in the other three precious metals.

Here are the 6-month charts for all four and, as usual, I’ve included copper as well.

And as I type this paragraph, the London open is less than ten minutes away — and I note that gold rose by about 2 bucks in early Wednesday morning trading in the Far East — and then moved sideways until 2 p.m. China Standard Time.  Then it began to rally — and is up $4.70 an ounce at the moment.  Silver was up a few pennies until around 1 p.m. CST, then it too began to move higher — and is up 18 cents at the moment.  Platinum was unchanged until shortly after 2 p.m. CST — and it began to rally as well — and is up 4 dollars currently.  And after trading a few dollars lower in morning trading in Shanghai, palladium is back to unchanged.

Net HFT gold volume is sitting at 22,500 contracts, which is pretty light all things considered.  Silver’s net HFT volume is very decent at 8,100 contracts.  There’s no roll-over volume at all, so most of this volume activity is for price management purposes only, as the short buyers and long sellers of last resort do their thing.

The dollar index traded ruler flat until 1:30 p.m. China Standard Time — and then began to head south with some authority — and as London opens, it’s down 28 basis points from Tuesday’s close in New York.

As I mentioned in Tuesday’s column, I was going to take stab at what we might see as far as changes in this Friday’s COT Report.  Just eye-balling the gold and silver dojis in the 6-month charts above, I’d guess we’ll see another decent, although not earth-shattering improvement in gold.  Silver is a tougher call, because as Ted pointed out, the numbers will be skewed by the big ‘up’ price day we had last Wednesday to start off the current reporting week.  His question was…who were the buyers and sellers on that rally?  ‘Da boyz’ have been  trying to take all those gains back since then, but haven’t quite made it.  I’d guess we’ll see a slight increase, with the fervent hope that I’m wrong.

Ted posts his mid-week review for his paying subscribers this afternoon — and he has all the changes in open interest at his fingertips.  He’s the real authority on this — and I’ll be more than interested in what he has to say.

And as I post today’s column on the website at 4:05 a.m. EST, I see that gold got turned lower the moment that the dollar index blasted off, which occurred about 25 minutes before the London open.  It’s up $3.50 at the moment.  But considering the size of the dollar index move, that’s not much of a drop.  Silver is still up 14 cents — and platinum is up 3 dollars, with palladium still sitting at unchanged.  Normally ‘da boyz’ would have hammered the precious metal prices on a dollar index move of that size — and in that short of a time period.

Net HFT volume in gold is up to just over 26,500 contracts, which is only about 4,000 contracts higher than an hour ago.  I’m somewhat surprised by that.  Silver’s net HFT volume is just over 9,900 contracts — and although that’s a fairly hefty number, it’s only up about 1,800 contracts in the last hour.

The dollar index, which touched it current 100.76 low tick twenty-five minutes before the London open, has obviously been rescued by the usual ‘gentle hands’ — and is currently up 2 basis points, after being down 28 at the open.

Well, we get ‘the word’ from the Eccles Building at 2 p.m. EST this afternoon and, without doubt, there will be a ‘reaction’ in the markets.  And if the powers-that-be don’t like those reactions, they will introduce their own through the forces of the President’s Working Group on Financial Markets, which is the official name for the Plunge Protection Team, so be prepared for anything.

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


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