Ted Butler: The Royal Flush

16 December 2016 — Friday


After a one hour or so 6 dollar down/up move in early morning trading in the Far East, gold traded flat until around 2:30 p.m. China Standard Time on their Thursday afternoon.  At that point, the powers-that-be showed up, with the low tick of the day coming at 11:45 a.m. in New York.  From there it rallied about ten dollars until around 2:30 p.m. EST in the thinly-traded after-hours market, before getting sold a bit lower into the 5:00 p.m. close.

The high and low ticks were reported as $1,146.00 and $1,124.30 in the February contract.

Gold was closed in New York yesterday afternoon at $1,128.20 spot, down another $14.40 from Wednesday.  Not surprisingly, net gold volume was enormous at just under 240,000 contracts.

Once again, the 5-minute tick gold chart I received from Brad Robertson had no volume data attached, so I decided not to post it.

Silver had a bit of a wild ride in the first half of the Far East trading session — and was down a dime when JPMorgan et al appeared around 2:30 a.m. in Shanghai.  Not surprisingly, the low tick in that precious metal came at precisely 11:45 a.m. EST as well…the same as gold.  It rallied back above the $16 mark by around 2:45 p.m. EST, but that wasn’t allowed to last — and it was sold down a few pennies into the 5:00 p.m. close.

The low and high ticks in silver were recorded by the CME Group as $17.00 and $15.925 in the March contract, which was an intraday move of over 6 percent.

Silver finished the Thursday session at $15.95 spot, down 85 cents from its close on Wednesday.  Net volume was enormous in this precious metal as well, at just over 98,000 contracts.

Here’s the 5-minute silver tick chart from Brad.  On the left-hand side of the chart you can see the volume associated with that up/down move during late morning/noon trading in Shanghai — and the amount of paper silver that had to be thrown at it to kill the rally.  The volume picked up again at 01:00 a.m. Denver time, which was the 8:00 a.m. open in London.  Volume was back to background at 13:00 MDT…3 p.m. in New York.

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‘ feature is a must.

Platinum had the audacity to rally 10 dollars by 12:30 p.m. China Standard Time.  But then the ‘long knives’ came out — and by the time ‘da boyz’ and their algos were done with it, the $887 low tick was placed a few minutes after 12 o’clock noon in New York.  After that it traded in a similar manner as silver and gold.  Platinum was closed at $893 spot, down a chunky 29 bucks…but at its low tick, JPMorgan et al had it down $35 the ounce.

Palladium spent all of the Far East and Zurich trading session in positive territory — and at its high, it was up 8 dollars on the day in Shanghai.  That state of affairs lasted until the London p.m. gold fix  — and then the HFT boyz and their algorithms were let loose — and by noon EST, they had palladium down over 25 bucks from its Wednesday close.  Its rally attempts from there were handled in the usual manner — and from shortly after 2 p.m. EST onwards, it was sold quietly lower into the close.  Palladium finished the day at $701 spot, down 19 dollars.

Without exception, the powers-that-be closed all four precious metals at new lows for this move down — and by material amounts.  ‘Da Boyz’ have been taking no prisoners since the Fed ‘news’ on Wednesday.

The dollar index was closed late on Wednesday afternoon in New York at 102.09 — and it blasted up to the 102.61 mark within thirty minutes of the 6:00 p.m. EST open.  It was back to around 102.17 mark by shortly before 11 a.m. China Standard Time on their Thursday morning — and from there began to chop higher until the 103.56 high tick was printed around 11:50 a.m. in New York.  By 2:30 p.m. EST it was back to the 103.00 mark — and it rallied a bit from there into the close.  The index finished the Thursday session at 103.11 — up 102 basis points from Wednesday.

Since the Fed ‘news’ at 2:00 p.m. EST on Wednesday afternoon, the dollar index has ‘rallied’ by 213 basis points.  And, without doubt, as I mentioned in yesterday’s column…this was an engineered ramp job/short covering rally for the ages.  Behind which JPMorgan et al did the dirty in the precious metals.  This was particularly obvious in palladium, which was in positive territory until the London p.m. gold fix was done for the day.

And here’s the 6-month U.S. dollar index chart, with the RSI trace just touching the overbought line.  How much longer ‘da boyz’ can keep this dollar ‘rally’ farce going is open for debate.  But make no mistake about it, these guys are in full control of the currency market, as they are in the precious metals.

The slaughter in the gold shares continued yesterday, as they gapped down about 4 percent at the open, with their low ticks coming at gold’s low — and the dollar index high — at 11:50 a.m. in New York.  They recovered a bit from there — and the HUI closed down 4.24 percent.

It was a similar chart pattern for the silver equities, with their respective low ticks coming at silver and gold’s low, which was around 11:45 a.m. EST.  The recovered a bit from there, but got turned lower shortly after 2 p.m., as the silver price was turned lower as well.  Nick Laird’s Intraday Silver Sentiment Index was clubbed for 7.54 percent.  Ouch!  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 448 gold and 354 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, HSBC USA issued 447 of those contracts.  There were a dozen long/stoppers — and the largest was Canada’s Scotiabank with 288 contracts.  In distant second and third place was S.G. Americas and Goldman Sachs with 53 and 35 contracts for their respective client accounts.  JPMorgan picked up 27 contracts for its own account.  In silver, the two largest short/issuers by far were Macquarie Futures with 216 contracts — and HSBC USA with 128…all from there own accounts.  Scotiabank was biggest long/stopper with 234 contracts for its own account.  JPMorgan stopped 85 contracts…16 for its client account and the 69 for itself.  Citigroup picked up 23 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in December dropped by 119 contracts, leaving 1,321 still open…minus the 448 mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 158 gold contracts were actually posted for delivery today, so that means that 158-119=39 more gold contracts just got added to the December delivery month.  Silver o.i. in December rose by 136 contracts, leaving 691 still around, minus the 354 mentioned above.  Wednesday’s Daily Delivery Report showed that 83 silver contracts were actually posted for delivery today, so that means that another 83+136=219 contracts were added to December!

I don’t recall a delivery month like this before in silver.  Something appears to be afoot, but I just don’t what.  Whatever it is, it certainly doesn’t appear negative for the silver price going forward.  I’m sure that Ted will have something to say about all this in his weekly review for his paying subscribers tomorrow.

There was another big withdrawal/share conversion in GLD yesterday, as an authorized participant took out 228,738 troy ounces.  And as of 5:37 p.m. EST yesterday afternoon, there were no reported changes in SLV.

But don’t let that lack of activity in SLV fool you, as we’ll see another big withdrawal/conversion of shares in this ETF sometime soon as well.  Because, like all the gold coming out GLD, all the silver coming out of SLV is being picked up by the strongest of hands, with JPMorgan being Ted Butler’s prime suspect.

When I checked back on the ishares.com Internet site at 9:13 p.m. EST yesterday evening, I noted that an a.p. had withdrawn 2,370,685 troy ounces of silver from SLV.

I suspect that there will be more withdrawals/conversion of shares in both precious metals in the days ahead.

There was decent activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday — and all of it went out the door.  There was 61,772 troy ounces shipped out of Canada’s Scotiabank — and 34,486 troy ounces shipped out of Brink’s Inc. — plus a tiny bit out of HSBC USA.  The link to that activity is here.

There was a big silver deposit made yesterday — and every troy ounce…1,159,478 of them…went into JPMorgan’s depository.  These guys are really ‘in your face’ about all this — and there’s lots more silver yet to come.  The link to that action is here.

Their COMEX inventory in silver is now up to 82,069,188 troy ounces — and here’s Nick’s chart updated with that data, although it will be a few days before this increase becomes visible on the very right-hand side of it.  Click to enlarge.

It was another busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving only 203 of them, but shipped out 3,877.  All of that activity was Brink’s, Inc. — and the link to that, in troy ounces, is here.

Here’s a chart that Nick Laird passed around very late on Thursday night Denver time.  It shows the daily gold deliveries from the Shanghai gold exchange for every business day of 2016 — and he had this to say about it in his covering e-mail…”SGE deliveries have largest day for the year at 39.586 tonnes“.  Click to enlarge.

Once again I don’t have all that many stories for you today — and I’ll happily leave the final edit up to you.


Trump’s Showdown With the CIA

It doesn’t come more scathing than this. On nationwide television, U.S. President-elect Donald Trump rubbished the Central Intelligence Agency as “ridiculous” for making claims that Russian hackers helped get him elected. The CIA – America’s foremost intelligence apparatus set up after the Second World War by then President Harry Truman – is supposed to be the guiding light for occupants of the White House on all matters geopolitical.

And here we have aspiring White House occupant Donald Trump telling the CIA to shut up.

Over the last week, the spy agency was quoted by both the Washington Post and New York Times as having informed anonymous government officials that there was “high confidence” that Russian-sponsored hackers had interfered in the US presidential election in favor of Trump over his Democrat rival Hillary Clinton.

The alleged modus operandi to sway the election was the leaking of private emails to whistleblower site Wikileaks which implicated Clinton in big business corruption and fomenting foreign wars, among other scandals. It’s a sensational claim, especially given that the CIA or its unnamed official conduits quoted by the US’ two most prominent newspapers have provided zero evidence to support their contention of Russian malfeasance. Russia has flatly denied the accusations. As has Wikileaks.

This commentary by Finian Cunningham put in an appearance on the sputniknews.com Internet site on Tuesday afternoon Moscow time — and I thank Larry Galearis for sending it along.  Another link to it is here.

No proof, no evidence, no hard facts’ that show Russia meddled in U.S. election – America’s Lawyer

To discuss the latest CIA statement that concludes “Russia meddled” in the U.S. election, former CIA analyst Ray McGovern and host of RT America’s new show, “America’s Lawyer,” Mike Papantonio join RT’s Simone Del Rosario. Papantonio says: “There is no proof, no evidence, and no hard facts” that Russia meddled in the U.S. elections.

This 9:19 minute video interview was conducted by the folks over at rt.com — and was posted on the youtube.com Internet site on Monday.  It’s the second offering in a row from Larry Galearis.

Mexican Central Bank Hikes Overnight Rate to 5.75{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, More Than Expected: Peso Spikes

While the U.S. secular stagnation theme was all the rage, until some time in October, the rest of the world couldn’t cut rate fast enough.

However, now that things are flipped courtesy of a suddenly hawkish Fed which as per yesterday’s FOMC announcement realized it is behind the curve on both inflation, and the potential Trump Fiscal Stimulus, everything has flipped, and shortly after every Arab Gulf nation hiked rates overnight in sympathy with the Fed to keep their pegged currencies level, moments ago Benxico surprised market watchers who had expected a mere 25 bps hike from 5.25{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 5.50{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in the overnight rate, by doubling the tightening, and setting the overnight rate at 5.75{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.


As a reminder, Banxico hiked previously by 50bps in February, June, Sept and November, and said that the increase is intended to counteract CPI pressure and bank will pay close attention to potential pass through from exchange rate, according to statement.

This brief 1-chart Zero Hedge article was posted on their website at 2:09 p.m. on Thursday afternoon EST — and I thank Richard Saler for pointing it out.  Another link to it is here.

Brexit, migrants on agenda as E.U. leaders gather for ‘minefield’ summit

Leaders of the European Union meet in Brussels on Thursday for a summit fraught with so many disputes Brexit could prove to be the least divisive.

After a day of talks on migrants, Turkey, Russia, defence in the era of Donald Trump and the euro zone economy in the age of austerity, leaders will see British Prime Minister Theresa May out and then agree over dinner how to get rid of her for good.

Diplomats and officials involved in preparing the quarterly European Council said a consensus on the procedures the 27 will adopt once May launches Britain’s formal withdrawal by March had been among the least divisive issues on the table.

We are walking on a minefield,” a senior E.U. official said.

The 28 leaders will start with a review of where they stand on dealing with the crisis which blew up last year when over a million people, many war refugees from Syria, reached Europe, mostly via Turkey by boat to the Greek islands.

This news item showed up on the france24.com Internet site on Wednesday — and I thank Roy Stephens for finding it for us.  Another link to this article is here.

Italy prepared to pump €15 billion into ailing banks: sources

Italy’s government is ready to pump €15 billion into Monte dei Paschi di Siena and other ailing banks, sources said, as the country’s third-largest lender pushes ahead with a private rescue plan that is widely expected to fail.

The world’s oldest bank has until Dec. 31 to raise €5 billion ($5.2 billion) in equity or face being wound down by the European Central Bank, potentially triggering a wider banking and political crisis in Italy.

If needed, the government will pump €15 billion into the Siena-based lender and several other smaller banks to prevent that, two sources close to the matter said on Thursday.

One source said unlisted regional banks Banca Popolare di Vicenza and Veneto Banca, which were rescued this year by a state-backed fund, would also get support from the state.

This Reuters story, co-filed from Rome and Milan, is datelined 4:03 p.m. EST yesterday afternoon, but has obviously been updated since I first received it from Brad Robertson [via Zero Hedge] at 8:53 a.m. EST on Thursday morning.  Another link to it is here.

E.U. extends Russia sanctions citing ‘lack of progress’ on Minsk, while giving Ukraine deal new chance

Economic sanctions imposed by the E.U. against Russia are to remain in place for another six months due to “not enough progress” on Minsk peace agreement, to which Kiev is a party. E.U. leaders then decided to give the stalled Ukraine association deal a new chance.

“It was clear that we would prolong the sanctions for six months,” European Council President Donald Tusk told a press conference, following the E.U. summit in Brussels. He noted that although “some of our colleagues would prefer [to extend sanctions] maybe [for] 12 months,” there was not much of a debate on the issue.

Reuters reported that Poland was one of the states pushing for a longer extension period, but its proposal was dismissed by other countries, in particular Italy, which has opposed the policy previous occasions as detrimental as detrimental to its economy.

Touching on the possible change in E.U. policy toward Russia, including, in terms of sanctions, with new U.S. President-elect Donald Trump assuming the office in January, Tusk refused to speculate on the matter, saying that “we have too many signals.”

At the same time, he noted that the leaders have not discussed a possibility to adopt another package of punitive steps against Russia in connection with situation in Syria.

This story appeared on the rt.com Internet site at 5:21 a.m. Moscow time on their Friday morning, which was 9:21 p.m. in Washington on Thursday evening.  I thank Roy Stephens for bringing it to our attention — and another link to it is here.

China Halts Trading In Bond Futures After Record Bond Market Crash

Following Wednesday’s violent selloff in bonds, which has continued today across the globe, one country that was particularly impacted was China, where as we reported overnight, Chinese government bond futures plunged by the most on record, dropping by 2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in the session, and erased in a week the gains of the past 18 months, hitting a 16 month high yield of 3.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

The crash happened just two weeks after we warned that as a result of the PBOC’s imprudent recent tightening of financial conditions, the central bank was practically begging for a bond market crash, one which Janet Yellen was happy to catalyze with the Fed’s rate hike and hawkish language. As the chart below shows, a crash is precisely what China got.

The crash, however, was just the start of China’s woes, because what happened next could spell far more headaches for a market that is now in a “bursting bubble” mode. As the WSJ reported this morning, Chinese authorities halted trading in key bond futures for the first time on Thursday, “as panicky investors sold the securities on concern that a long, credit-fueled bull market was coming to an end amid slowing growth, capital outflows and heightened government concern about asset bubbles.

After China’s 10-year Treasury bond future crashed by 2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, the biggest daily drop in history, exchange authorities had no choice but to suspend the securities to avert a selling panic. Trading resumed only after China’s central bank came to the rescue – as it always eventually does – injecting $22 billion into the short-term money market. The furious selloff, captured in the chart above, began in late November and has accelerated this week on concerns of capital outflows, a hawkish Fed and rising inflationary pressures.

This Zero Hedge story appeared on their Internet site at 10:01 a.m. EST yesterday morning — and it’s the second contribution of the day from Richard Saler.  Another link to it is here.

China Dumps Treasuries: Foreign Central Banks Liquidate a Record $403 Billion in U.S. Paper

One month ago, when we last looked at the Fed’s update of Treasuries held in custody, we noted something troubling: the number had continued to drop sharply, declining by another $14 billion in one week, and pushing the total amount of custodial paper to $2.788 trillion, the lowest since 2012. One month later, we refresh this chart and find that in last week’s update, there is finally some good news: foreign central banks finally bought some U.S. paper held in the Fed’s custody account, which following months of liquidation, rose over the past two weeks by $23 billion, the biggest two-week advance since November of 2016, pushing the total amount of custodial paper to $2.816 trillion, the highest since early October.

That was the good news.

The bad news came out with the release of latest monthly Treasury International Capital data for the month of October, which showed that the troubling trend presented one month ago, has accelerated to an unprecedented degree.

In the latest monthly update for the month of October, we find that what until a month ago was “merely” a record $375 billion in offshore central bank sales in the LTM period ending  September 30 has, one month later, risen to a new all time high $403 billion in Treasuries sold in the past 12 months.

As the chart below shows, there has never been such an aggressive selling of U.S. Treasuries over a 12 month period in history.

This longish Zero Hedge piece contains some worthwhile charts.  It was posted on their website at 4:58 p.m. on Thursday afternoon EST — and I thank Richard Saler for sharing it with us.  Another link to it is here.

Bill Fleckenstein dismissed as ‘nonsense‘ the silver rigging Deutsche Bank has just admitted

Thanks to GATA’s friend D.W. for noting today that your secretary/treasurer should have read deeper into money manager Bill Fleckenstein’s internet site when criticizing him last night for his obliviousness to market manipulation.

Fleckenstein not only dismissed the likelihood of market manipulation by government. He also dismissed as “nonsense” concerns about the possibility of “massive collusion to suppress silver prices.”

Toward the bottom of Fleckenstein’s question-and-answer page is this entry:

“Q: Do you think the silver market is manipulated?

“Fleck: No. Silver is a thin market, and it is possible to push the futures around to some degree (which does happen). Thus, silver is extremely volatile and always has the potential to go berserk — in either direction. But massive collusion to suppress silver prices is nonsense — not to mention, if it did exist, they have done a terrible job. ‘But what about the Hunts?’ The Hunts weren’t stupid; they just got beaten. ‘But what about JPM?’ Silver is not where it is because JPM was short it. My silver buddy, who is very experienced as a silver trader, would tell you that story is nuts, as would my friend who in fact used to trade the silver book at JPM.”

Of course what Fleckenstein assures his readers and investors is “nonsense” has just cost Deutsche Bank $38 million to settle the anti-trust lawsuit against it for rigging the silver market. It also has cost Deutsche Bank the disgorgement of massive documentation of silver- and gold-market rigging by the bank’s traders and traders for other investment banks, documentation of … yes, “massive collusion.”

As I said in yesterday’s column…Bill is strong with the dark side of ‘The Force’.  This commentary by Chris Powell was posted on the GATA website at 11:24 a.m. EST on Thursday morning — and another link to it is here.

Cash ban gives a boost to India’s government-run banks

Shares of India’s biggest state-run lenders are on a roll, thanks to a government ban on high-value notes that took almost four-fifths of the nation’s currency out of circulation.

Since the so-called demonetization policy was introduced on Nov. 8, State Bank of India and Bank of Baroda have risen at least 4 percent amid speculation they will benefit more than private-sector peers from the influx of deposits that followed the cash ban, according to IDBI Capital Market Services Ltd. Private-sector rivals HDFC Bank Ltd. and ICICI Bank Ltd. dropped 7 percent and 9 percent, respectively.

The government’s surprise move last month to invalidate old 500- and 1,000-rupee notes has driven millions of Indians to banks to deposit the currency or exchange them for new denominations. Lenders had taken in 12.4 trillion rupees ($183.6 billion) of deposits as of Dec. 10, out of the 15.6 trillion rupees of notes canceled, central bank figures show.

State-run banks are getting to generate a large float of low-cost current and saving account deposits after demonetization,” A.K. Prabhakar, head of research at IDBI Capital in Mumbai, said by phone.

This Bloomberg story showed up on their Internet site at 2:00 p.m. Denver time on Wednesday afternoon — and it’s another article I found on the gata.org Internet site yesterday.  Another link to it is here.

Life in the Time of Demonetisation: India’s Rural Gold Hubs Silent

Jewellers and bullion dealers in India are refraining from buying gold despite the dip in price, thwarted by subdued demand in rural areas due to the demonetisation-induced cash crunch.

Rural areas account for 60 percent of India’s gold consumption, which has fallen after the government’s demonetisation move. Although there are signs of a gradual recovery in urban demand, the sentiment remains negative because of patchy buying in rural areas, where purchases are in cash.

Traders are not buying gold. … They continue to be on the sell side,” said Prathamesh Mallya, chief analyst for non-agricultural commodities and currencies at Angel Broking.

This gold-related news item, filed from Kolkata, put in an appearance on The Economic Times of India website at 12:32 p.m. IST on their Thursday afternoon — and I found it in a GATA release.  Another link to this brief story is here.

Ted Butler: The royal flush

In order to make a point, I’m going to address a very popular question, by giving the answer first and then providing the question. The answer does involve a bit of imagining on your part. I ask you to picture yourself at the highest stakes poker game imaginable, where quite literally many billions of dollars are at stake and in which you have just been dealt the indisputable best hand possible – a royal flush. Please accept that you are guaranteed to win.

It’s the last deal of the game with winner take all. The pot is enormous and all the other participants have been dealt very high and normally winnable hands and are flush with funds and every player is intent on raising and re-raising as each new bet is made. You have plenty of betting funds left and know that you must win in the end; so it is obvious that you will sit back and enjoy the circumstances and hope the raising and re-raising will continue for as long as possible, making the once-in-a-lifetime pot as large as possible – tens and hundreds of billions of dollars.

The most popular question in silver and the one I ask myself daily is when will JPMorgan finally decide it holds enough silver and let the price rise? The answer is only when it has to. By virtue of its massive physical holding of silver, which is more than 550 million oz (and growing), JPMorgan has as much incentive to rush the price resolution as you would have to end early the imaginary poker game. JPMorgan has been guaranteed to win the real silver game of a lifetime ever since its physical holdings came to exceed its COMEX paper short position, a threshold it crossed in late 2011 or early 2012. Ever since then, JPM has sat back, content to add to its physical silver holdings at decreasing prices, because it knew it must win in the end.

This absolute must read commentary by Ted was posted on the silverseek.com Internet site at 1:15 p.m. Denver time on Thursday afternoon — and another link to it is here.


Here are last two of the finalists for the 2016 Comedy Wildlife Photography Awards.  I thank Scott Otey for sending them to me way back on October 24 — and I hope you’ve enjoyed them.  The Click to Enlarge feature only helps for the first shot.


Yesterday’s price action was, as Ted Butler said on the phone yesterday, strictly a COMEX paper affair — using the ‘rally’ in the dollar index as cover.

It was also another day where JPMorgan et al were going full out to cover as many short positions as they could.  Most of the damage came at the expense of the Managed Money traders who were pitching their remaining longs — and piling onto the short side.  But the other trading categories, such as the Nonreportable/small traders were following suit as well — and  ‘da boyz’ were standing right beside all of them buying every long sold, plus taking the long side of every short being put on.

I’d pay a decent sum to know what a Commitment of Traders Report looked like at the close of COMEX trading yesterday.

But there is a limit to how much blood can be gotten from these traders — and since the bullion banks know what their positions and sell stops are, they also know how much the Managed Money traders et al have left — and whether it’s worth their while to go after the remainder.  They’ve certainly been gunning for them in the 22-hour period between 2:00 p.m. EST on Wednesday — and noon yesterday.

Here are the 6-month charts for all four precious metals, plus copper — and as you can see, the last doji on each of the four precious metals contains all the price carnage since the Fed ‘news’.

But is it over, you ask?

I would think so, but as I said in The Wrap section of Thursday’s column…”one should not underestimate the treachery of these crooks“…or words to that effect… and we saw them at work again yesterday.  If the bottom isn’t in now, it’s not that far off, because the price cannot be forced lower by JPMorgan et al unless there is a trader willing to sell a long position, or go short at these prices.  The very act of doing one or the other of these trades is what causes prices to decline…no other reason.  That’s why I made the comment about “how much blood is left in these stones“.

I think at this juncture it’s safe to look ahead at what may happen when the next rally begins — and whether or not the Big 8 in general, or JPMorgan in particular, is prepared to enter the rally as short buyer and long seller of last resort as the rally begins to run away to the upside.  As Ted has been pointing out for years…that’s all that matters…and he would be right about that.

And as I type this paragraph, the London open is less than ten minutes away — and I see that gold traded mostly in positive territory, but without much enthusiasm, until around 1:30 p.m. China Standard Time on their Friday afternoon.  At that juncture it began to rally a bit — and is up $5.80 an ounce.  Silver traded mostly flat until 1 p.m. in Shanghai — and it’s been crawling higher, although it has flat-lined in the last hour.  It’s up 13 cents currently.  Platinum has been moving generally higher throughout the entire Far East trading session as well — and is up 11 bucks at the moment.  But ‘da boyz’ appear to working over the palladium price at the moment, as it’s down 9 dollars.

Net HFT gold volume is pretty hefty already at 32,000 contracts — and that number in silver is sitting right at 10,000 contracts, which is a very decent number.

The dollar index has been quietly inching lower since it began trading in New York at 6:00 p.m. EST yesterday evening, but took a bit of a header in the last few minutes — and is now down 24 basis points as London opens.

Today we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday — and it’s already “yesterday’s news” in every respect.  And as silver analyst Ted Butler said in his Wednesday commentary…”As far as what this week’s COT report may show, it’s now more a question of analyzing the details than in making predictions. The commercial net short position in gold would appear to have again shrunk a bit considering the new salami slice price lows during the reporting week, but that pattern didn’t appear in silver. The main consideration is not how many commercial contracts were bought, as the commercials would buy as many as they could.  The real question is how many managed money contracts were lured into sale, both in long liquidation and in new shorting. I wouldn’t know how to predict that.

We’ll find out at 3:30 p.m. EST this afternoon — and I’ll have all the details in my Saturday missive.

And as I post today’s column on the website at 4:05 a.m. EST this morning, I note that the gold price has been crawling sideways to a bit lower for the last few hours — and is up only $4.00 now that London and Zurich have been open for an hour.  Silver is down a bit from an hour ago — and up 9 cents the ounce at the moment.  But seconds after I typed that, the price got smacked back below $16 the ounce — and is sitting at $15.92 — and is now down 3 cents an ounce.  Platinum is only up 7 bucks now — but palladium is now down 11 dollars.

Net HFT volume in gold is sitting right at the 38,000 contract mark — and that number in silver is up to 11,700 contracts.  The dollar index is back below the 103.00 mark by a bit — and down 19 basis points.

It took the powers that be only twenty-two hours to take the COT structure from bullish to wildly bullish.  Of course we won’t know how ‘wildly bullish’ it is until next Friday’s Report, but it was obvious that they were in some sort of hurry to get this over with — and they certainly succeeded.  Now we just have to sit here and wait for whatever they have planned next, as “there are no market anymore, only interventions.

See you tomorrow.


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