Another Down Day in All Four Precious Metals

22 December 2016 — Thursday


The gold price didn’t do much yesterday, or perhaps it wasn’t allowed to do much…you choose.  It was up about four bucks at, of just before the London p.m. gold fix — but by the 11 a.m. EST London close, it had been sold back to unchanged.  It traded pretty flat from there for the rest of the New York session.

With gold trading in about an eight dollar price range on Wednesday, the low and high ticks aren’t worth looking up.

Gold finished the day in New York at $1,131.30 spot, down 80 cents from Tuesday’s close.  Net volume was pretty light at a hair under 99,000 contracts.

Silver was sold back below the $16 spot price mark in the first seventy-five minutes of trading after the markets opened at 6:00 p.m. on Tuesday evening in New York.  The price rallied about 20 cents by 12:30 p.m. in Shanghai on their Wednesday afternoon — and then chopped sideways until a few minutes before the London open.  It was sold off a bit until 9:30 a.m. GMT — and then rallied until the noon silver fix.  Shortly after that it was sold back below the $16 spot price once again and, like gold, all the price damage was done by the London close.  The silver price also chopped sideways from there.

The high and low tick in this precious metal was reported by the CME Group as $16.24 and $15.95 in the March contract.

The silver price was closed yesterday at $15.895 spot, down 17.5 cents from Tuesday.  Net volume was a fairly reasonable amount considering the price action, at just over 41,500 contracts.

And here’s the 5-minute tick chart for silver courtesy of Brad Robertson as per usual.  The only thing I saw of interest in this chart was how volume vanished at 12:45 p.m. Denver time on the chart below, which was 2:45 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.

The platinum price chopped rather erratically lower through all of Far East and Zurich trading on Wednesday.  ‘Da boyz’ set the low tick shortly before noon in New York — and the subsequent rally lasted until the 1:30 p.m. EST COMEX close.  The price chopped more or less sideways from there into the 5:00 p.m. close.  It finished the day at $915 spot, down 6 bucks from Tuesday.

The palladium price was forced to follow a similar price path as platinum — and JPMorgan et al continue to slice the salami on this precious metal, taking another 9 dollars off the price, closing it at $656 spot.

The dollar index closed very late on Tuesday afternoon in New York at 103.25 — and it spiked up a bit over 10 basis points in the first hour of trading on Tuesday evening.  An hour and change later it was down about 30 basis points from that interim high — and began to rally anew a few minutes before London opened.  The 103.28 high tick came about 10:25 a.m. GMT in London on their Wednesday morning — and it was all down hill from there to its double-bottom 102.77 low tick, the first of which came at 9:40 a.m. EST in New York — and the second an hour later.  Then it tacked on about 30 basis points by noon — and it chopped quietly lower from there into the close.  The dollar index finished the Wednesday session at 103.00 — down 25 basis points from it’s close on Tuesday.

There was about a 50-basis point decline in the dollar index in a 4-hour stretch starting around 10:20 a.m. in London — and there’s no sign of it in the prices of any of the four precious metals.

That’s why the dollar index is such a farce when it comes to precious metal prices, as those prices are set in the COMEX futures market by ‘da boyz’ regardless of what the dollar index was doing — and yesterday’s price action in all four was proof positive of that.  But once in a while they need to hide what they’re doing if it’s a really big move — and a manufactured dollar rally is the perfect fig leaf to hid behind as the put the boots to the Managed Money traders.

Here’s the 6-month U.S. dollar index chart — and yesterday’s price action is certainly another good reason why I post it for its entertainment value only.

The gold stocks opened a hair above unchanged, but sold off into the red immediately, with the low tick coming about 10:10 a.m. in New York.  They rallied back to just above unchanged by 11:20 a.m. EST — and chopped quietly lower for the rest of the Wednesday session.   The HUI closed down 0.43 percent.

With some rather minor exceptions, it was the same pattern for the silver equities, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 0.78 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that zero gold and 233 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  Macquarie Futures was the big short/issuer with 225 contracts — and the two largest long/stoppers were Scotiabank with 191 contracts — and JPMorgan with another 26 contracts for its own account.  The link to yesterday’s Issuers and Stoppers Report is here.

That makes 1,532 silver contracts that JPMorgan has stopped for its own account so far this month.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in December fell by 27 contracts, leaving 685 still around.  Tuesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, so that means that 27 short/issuers were let off the December delivery hook.  Silver o.i. in December rose by a chunky 173 contracts, leaving 448 still around, minus the 233 mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that only 2 silver contracts were actually posted for delivery today, so that means that 2+173=175 silver contracts were added to the December delivery month.

The rush for physical delivery in silver this month is something to behold — and I would suspect that JPMorgan will be the long/stopper on quite a few more silver contracts before the December delivery month is done.

There was another withdrawal/conversion of shares in GLD yesterday, as an authorized participant took out 114,362 troy ounces.  And as of 6:44 p.m. EST yesterday evening, there were no reported changes in SLV.

There was no gold reported received over at the COMEX-approved gold depositories on the U.S. east coast on Tuesday.  But a chunky 145,451.121 troy ounces/4,524 kilobars [SGE kilobar weight] were reported shipped out of HSBC USA.  The link to that activity is here.

There wasn’t a lot of silver movement yesterday, as only 298,779 troy ounces were received, all of which went into CNT — and 70,021 troy ounces were reported shipped out…all of it out of Canada’s Scotiabank.  The link to that activity is here.

But the action never seems to let up over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 1,027 of them, but shipped out 4,878.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

I have a decent number of stories for you today — and I hope you can find time during this busy holiday season to read the ones that interest you.


Ex-Blackrock Portfolio Manager Sentenced to 12 Months in Prison For Insider Trading

Former Blackrock star portfolio manager Mark Lyttleton, 45, has been sentenced to 12 months in prison after pleading guilty to an “elaborate web of insider trading, using offshore companies, unregistered mobile phones and cash payments.” Lyttleton was arrested at his west London home in 2013 as part of an investigation, known as Operation Rye, by the U.K. Financial Conduct Authority. The ex-portfolio manager, who was based in BlackRock’s London office, ran funds including the BlackRock U.K. Dynamic Fund and the BlackRock U.K. Absolute Alpha Fund, once overseeing as much as £2 billion.

The ex-Blackrocker will now spend Christmas behind bars following his sentencing at Southwark Crown Court on Wednesday for insider trading that netted him £45,000 profit. He was also confiscated of £149,000.

Lyttleton previously pleaded guilty last month to two counts of insider trading. As the Financial Time adds, he admitted using inside information to trade in the securities of Encore Oil and Cairn Energy in a case brought by the City watchdog, the Financial Conduct Authority. Both those companies were on BlackRock’s list of stocks about which employees had received inside information, the FCA said. Lyttleton’s lawyer Paddy Gibbs said he gleaned the information through overhearing colleagues’ remarks.

This interesting, but certainly not surprising news item appeared on the Zero Hedge website at 9:57 a.m. on Wednesday morning EST — and another link to it is here.

JP Morgan, Barclays fined in separate Swiss rate-rigging probes

Switzerland handed out about $100 million in antitrust fines against seven U.S. and European banks for participating in cartels to manipulate widely used financial benchmarks.

JPMorgan Chase & Co. was fined 33.9 million francs ($33 million) for operating a cartel with Royal Bank of Scotland Group Plc for more than a year, with the aim of influencing the Swiss franc Libor benchmark, which is tied to the London interbank offered rate, Switzerland’s competition commission said in a statement Wednesday. RBS received immunity for revealing the existence of the cartel, which operated between March 2008 and July 2009.

RBS and JPMorgan tried to distort the normal course of the pricing of interest-rate derivatives denominated in Swiss franc,” the commission wrote. “They occasionally discussed the future Swiss franc Libor rate submissions of one of the banks and at times exchanged information concerning trading positions and intended prices.

Regulators across the globe have been probing banks’ manipulation of Libor and similar benchmarks that are used to calculate interest payments for trillions of euros of financial products including mortgages. The investigations have so far triggered about $9 billion in fines for a dozen banks in the last four years while more than 20 traders have been charged.

This Bloomberg story, which is now headlined “Seven Banks Fined in Swiss Probes of Rate-Rigging Cartels“…to remove JP Morgan’s name from the headline…was  posted on their Internet site at 12:48 a.m. Denver time on Wednesday morning — and subsequently updated nine hours later.  I found it embedded in a GATA release — and another link to it is here.

CFTC Orders Goldman Sachs to Pay $120 Million Penalty for Attempted Manipulation of and False Reporting of U.S. Dollar ISDAFIX Benchmark Swap Rates

The U.S. Commodity Futures Trading Commission (CFTC) issued an Order today filing and settling charges against The Goldman Sachs Group, Inc., and Goldman, Sachs & Co. (collectively, Goldman or the Bank). The Order finds that, beginning in January 2007 and continuing through March 2012 (the Relevant Period), Goldman attempted, by and through certain of its traders in New York, on many occasions to manipulate and made false reports concerning the U.S. Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX), a global benchmark for interest rate products. Goldman’s unlawful conduct involved multiple traders, including the head of Goldman’s Interest Rate Products Trading Group in the United States, according to the CFTC Order.

The CFTC Order requires Goldman to pay a $120 million civil monetary penalty, cease and desist from further violations as charged, and take specified remedial steps, including measures 1) to detect and deter trading intended to manipulate swap rates such as USD ISDAFIX, 2) to ensure the integrity and reliability of the Bank’s benchmark submissions, and 3) to improve related internal controls. The Order also requires the current supervisor responsible for oversight of various United States interest-rate trading desks at Goldman to provide a certification as to, among other things, the effectiveness of the internal controls and procedures undertaken and implemented by Goldman as a result of this settlement.

This matter, the third enforcement action relating to the ISDAFIX benchmark, demonstrates the breadth of this kind of misconduct across the industry, and within Goldman, the extent of the misconduct across trading desks and product lines,” commented Aitan Goelman, the CFTC’s Director of Enforcement. Mr. Goelman further commented that “the Division will continue to be vigilant and aggressive in protecting the integrity of the ISDAFIX and other important benchmarks relied upon by the markets.

Goldman, through its traders, bid, offered, and executed transactions in interest rate swap spreads, U.S. Treasuries, and Eurodollar futures contracts in a manner deliberately designed—in timing, price, and other respects—to influence the published USD ISDAFIX in order to benefit the Bank in its derivatives positions, according to the Order. In addition, Goldman, through its employees making the Bank’s USD ISDAFIX submissions, also attempted to manipulate and made false reports concerning USD ISDAFIX by skewing the Bank’s submissions in order to benefit the Bank at the expense of its derivatives counterparties and clients.

Why am I not surprised.  This news item was posted on the Internet site yesterday — and it’s the first of two stories that I found embedded in Ted Butler’s mid-week review on Wednesday.  Another link to it is here.

Share buy-backs in Q2 and Q3 of 2016 dive most since 2008 financial crisis

Companies in the S&P 500 spent about $3 trillion since 2011 to buy back their own shares, often with borrowed money. It’s part of a noble magic called financial engineering, the simplest way to goose the all-important metric of earnings per share (by lowering the number of shares outstanding). And it creates buying pressure in the stock market that drives up share prices.

With buybacks, you don’t need to sell one extra iPhone to boost your earnings per share. So the amounts have grown and grown. With ultra-cheap money available to borrow endlessly, companies take on debt and hollow out shareholder equity. It has worked like a charm. Stock prices have soared. Declining revenues and earnings, no problem. But something is happening that hasn’t happened since the Financial Crisis.

Share buybacks in the third quarter plunged 28{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} year-over-year, to $115.6 billion, the biggest year-over-year dive since Q3 2009, according to FactSet. It was the second quarter in a row of declines, from the glorious Q1 this year, when buybacks had reached $168 billion, behind only Q3 2007 before it all came apart.

From that great Q1 2016 to Q3, buybacks plunged 31{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, or by $52 billion.

“Only” 362 of the S&P 500 companies bought back shares in Q3, the second lowest number in three years, with Q2 having been the lowest number.

This article, which is now headlined “What the Heck’s Happening to Our Share Buyback Boom?“, showed up on the Internet site on Tuesday — and it comes to us courtesy of Richard Saler.  Another link to it is here.

Distressed Retailers Scour Loan Fine Print for Debt Tactics

Heavily indebted retailers J. Crew Group Inc. and Claire’s Stores Inc. are delving into their loan agreements to find creative ways to raise or reconfigure their debt. And creditors, who often have the most to lose, may not be able to stop them.

Take the case of preppy clothing maker J. Crew. The New York-based company is said to be seeking to take advantage of a clause in its loan agreement allowing it to shift its brand name, the crown jewel of its intellectual property, to an unrestricted entity in the Cayman Islands. By doing this, it may now be possible for J. Crew to borrow against the assets and use the proceeds to buy back a portion of its roughly $2 billion in debt at a discount.

There may be other situations, but we haven’t seen retail companies using IP assets and investment baskets like this before,” said Steven Ruggiero, head of research at R.W. Pressprich & Co. “They are taking advantage of valuable assets that haven’t been optimally utilized to find new creative ways to create liquidity to extend their existence.

Transferring assets and investments to unrestricted entities can hurt creditors because new secured debt issued against them can get priority over their claims, potentially lowering the value of their holdings and preventing them from being paid first in case of bankruptcy. In industry parlance, they would have been ‘primed’.

This Bloomberg news item showed up on their Internet site at 5:00 a.m. Denver time on Tuesday morning — and was updated three and a half hours later.  I found it in yesterday’s edition of the King Report — and another link to it is here.

Tucker Carlson Talks to NYU Professor Stephen Cohen Over Russia Stealing Election Talk Dangers

This 5:12 minute Fox News video interview was posted on the Internet site yesterday — and I thank Peter Holland for sending it our way.  It’s worth your while if you have the interest.

European Banking Bloodbath Spreads To Spain After Italy Fires €20 Billion “Bazooka” At €360 Billion Problem

Bondholder bail-ins are on the way in Italy as private investors pulled the plug on a bank rescue.

Rome plans a €20 billion bank bailout, but under eurozone rules junior bondholders have to take a hit.

Italian officials and bankers argue a capital injection of €20 billion will be sufficient to stem concerns about Italy’s banks by allowing adequate provisions for bad loans weighing on its economic recovery.

I scoff at the notion €20 billion will come close to curing the problem. Italy’s banks have a combined €360 billion of nonperforming loans that they admit to.

It takes quite a stretch of the imagination to presume €20 billion “bazooka” will plug a €360 billion hole. To do so would require an unbelievable recovery rate on those nonperforming loans.  €20 billion will not be enough. Heck, €120 billion is probably not enough. And on top of it all, between 50,000 and 150,000 job cuts are coming.

This story appeared on Mish Shedlock’s Internet site at 3:50 p.m. on Wednesday afternoon — and it’s the second offering of the day from Richard Saler.  I stole the headline from the Zero Hedge spin on this item — and another link to it is here.

Spanish Bank Declines Keep European Stocks Away From 2016 Gain

Lenders in Spain fell after losing a court ruling, hampering a rally in European stocks that had pushed them closer to erasing its losses for the year.

Banco Popular Espanol SA tumbled 5.8 percent and Banco de Sabadell SA dropped 1.3 percent. A ruling by the European Union’s top court in favor of borrowers means Spanish lenders may have to give back billions of euros to mortgage customers. Switzerland’s Credit Suisse Group AG retreated 2.4 percent as financial firms slipped. The Stoxx Europe 600 Index lost 0.2 percent, paring a decline of 0.4 percent, with the volume of shares changing hands about a third lower than the 30-day average.

  • Italian lenders also fell, with Banca Monte dei Paschi di Siena SpA down 12 percent after earlier tumbling 19 percent. The stock slumped 22 percent in the past thee days on concern it will fail in its efforts to raise €5 billion ($5.2 billion) of funds.
  • Whilst an undertone of traditional year-end bullishness remains, the outstanding issue of Monte dei Paschi’s rescue, be it via bailout or recapitalization, remains a hindrance on extension of the current Santa rally,” Accendo Markets analysts Mike van Dulken and Henry Croft wrote in a note.

All these banks are insolvent — and it’s only because of rampant Q.E. that they have a market ‘value’ at all.  This Bloomberg story was posted on their website at 1:33 a.m. MST on Wednesday morning — and updated nine hours and change later.  I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.

Kremlin Warns of Response to Latest U.S. Sanctions, Says “Almost All Communication With U.S. is Frozen

In response to the latest imposition of U.S. sanctions on Russia, the Kremlin said on Wednesday that the new sanctions would further damage relations between the two countries and that Moscow would respond with its own measures. “We regret that Washington is continuing on this destructive path,” Kremlin spokesman Dmitry Peskov told reporters on a conference call.

As a reminder, on Tuesday the United States widened sanctions against Russian businessmen and companies adopted after Russia’s annexation of Crimea in 2014 and the conflict in Ukraine.

We believe this damages bilateral relations…Russia will take commensurate measures.

Then again, it is difficult to see how sanctions between the two administration could be any more “damaged”: also on Wednesday, the Kremlin said it did not expect the incoming U.S. administration to reject NATO enlargement overnight and that almost all communications channels between Russia and the United States were frozen, the RIA news agency reported.

Almost every level of dialogue with the United States is frozen. We don’t communicate with one another, or (if we do) we do so minimally,” Peskov said.

This Zero Hedge article put in an appearance on their Internet site at 11:36 a.m. EST yesterday — and another link to it is here.

Trump Seen Paying Off for Putin With Sanctions Relief Coming

Hard to fathom only months ago, the lifting of U.S. sanctions against Russia is all but certain for most economists.

The U.S. will start easing its penalties, imposed over the showdown in Ukraine in 2014, during the next 12 months, according to 55 percent of respondents in a Bloomberg survey, up from 10 percent in an October poll. Without the restrictions, Russia’s economic growth would get a boost equivalent to 0.2 percentage point of gross domestic product next year and 0.5 percentage point in 2018, according to the median estimates in the poll.

Donald Trump’s surprise election in November is feeding expectations of a sea change in U.S. policy even after the European Union this week rolled over its economic penalties against Russia for an additional six months. While Trump has given no indication of how he plans to follow up on promises to mend ties with Russia, his chief of staff this month didn’t confirm if the restrictions will be kept. Meanwhile, the U.S. Treasury Department on Monday added more people and entities to its existing sanctions.

It’s still a toss-up whether the U.S. will ease sanctions quickly, with the EU lagging, but the direction of travel is toward easier sanctions or less enforcement, which could reduce financing costs,” said Rachel Ziemba, the New York-based head of emerging markets at 4CAST-RGE. “We think the macro impact would be greater in the medium term than short term as it facilitates a rate easing trend that is already on course. In the longer term, it gives more choice of investment.

This Bloomberg news item is one which I plucked from the previous Zero Hedge article — and decided to post on its own.  If you can make sense of this, especially when you consider it in the context of the previous story, you’re doing better than I am.  It’s datelined Tuesday afternoon at 2:00 p.m. MST — and subsequently updated twenty-four hours later.  Another link to it is here.

E.U. Shoots Itself in the Foot by Prolonging Sanctions on Russia

On December 15, the European Union extended by six months its main economic sanctions on Russia over the conflict in Ukraine.

The decision, to large extent spurred on by U.S. President-elect Donald Trump’s stated willingness to normalize the relations with Moscow, came despite growing pressure among investors and energy interests in Europe, including within Germany itself, for the sanctions to be rolled back.

Several E.U. members had objected to the extension of the restrictive measures but voted «yes» to demonstrate «unity». A demand by Poland that the sanctions be extended for 12 months to signal E.U. condemnation of Russian policy in Syria was rejected. The idea was believed to be wrong by European Commission President Jean-Claude Juncker. It had been also dismissed by E.U. foreign affairs chief Federica Mogherini.

Europe’s internal problems, the ineffectiveness of the measures and the expected shift in the U.S. policy on Russia will probably make the E.U. lift the sanctions in the summer of 2017.

Many countries oppose the «trade war» and the discontent is growing. Imposed almost three years ago, the restrictive measures have failed to achieve any results. «Whoever believes that additional sanctions against Russia can lead to resolution of the drama in Syria, it is highly naive», said President Juncker in an interview with the German TV channel ZDF.

This particularly well written story appeared on the Internet site in the wee hours of Thursday morning Moscow time — and I thank Roy Stephens for pointing it out.  Another link to it is here.

OPEC convinces hedge fund managers but must now deliver promised cuts: Kemp

The balance of risks in the oil market has shifted to the downside from a hedge-fund positioning perspective.

There are no more short positions to squeeze, which removes one important source of upward pressure on oil prices.

Fund managers have closed out all the short positions that were established between mid-October and mid-November.

At the same time, the concentration of so many hedge-fund long positions poses a downside risk to prices if the rally should stall and fund managers try to lock in some profits by liquidating part of their holdings.

Fundamentals may continue to push oil prices higher, but the concentration of long positions will overhang any further gains.

This Reuters story, filed from London, showed up on their Internet site at 4:25 a.m. EST on Tuesday morning — and I found it in Ted’s mid-week column to his paying subscribers yesterday — and this is what he had to say about it…”The only fault I would point out is Kemp’s failure to step back and realize that purely speculative futures positioning setting prices is artificial and manipulative on its face.”  Another link to this news item is here.

Trump win ignites hope for stalled Alaska copper and gold mine

A small Canadian miner is confident that Donald Trump’s U.S. presidential win will let it proceed with an application for a copper and gold mine in Alaska that has been stalled almost three years by environmental regulators aiming to protect the world’s biggest sockeye salmon fishery.

Ronald Thiessen, chief executive officer and president of Northern Dynasty Minerals Ltd, said he expected the U.S. Environmental Protection Agency to announce in the first quarter of 2017 that it will let the application process proceed for the controversial project. He said the company has held discussions with Trump’s transition team, including Myron Ebell, who heads the EPA transition.

Shares in Northern Dynasty, which owns the massive Pebble deposit in southwest Alaska’s Bristol Bay region, have more than doubled since the U.S. election on Nov. 8. The shares surged 23 percent on Nov. 9 alone.

In February 2014, the EPA took the unusual action of blocking a mine before the project owner applied for a development permit. The company has estimated that removing that pre-emptive veto could happen three to four months after an EPA announcement. This would allow Northern Dynasty to seek a deep-pocketed partner and resume permitting the project, one of the world’s biggest undeveloped copper and gold deposits.

This Reuters article put in an appearance on their Internet site at 3:37 p.m. EST yesterday afternoon — and it’s something I found on the Internet site.  Another link to it is here.

Bullion Star’s primer on the U.S. gold reserve

Bullion Star today has posted a primer on the U.S. gold reserve, noting that it hasn’t been audited terribly well in recent decades. More interesting to GATA is that the audits, such as they are, as well as general discussion and news reporting about the reserve never cover the secret gold swaps in which, according to a 2009 admission to GATA by a member of the Federal Reserve’s Board of Governors, the Fed is secretly involved.

The secret March 1999 report of the staff of the International Monetary Fund to the IMF’s board said central banks conceal their gold swaps and leases to facilitate their surreptitious intervention in the gold and currency markets.

This surprisingly short article, for something posted on the Internet site, showed up there yesterday — and I found it embedded in a GATA release.  Another link to it is here.

The Gold Chronicles: December 15th, 2016 Interview with Jim Rickards and Alex Stanczyk

Topics covered include:

* India War on Cash / War on Gold has accelerated
* War on Cash has extended to Argentina, Australia
* Description of the “Bail-In” playbook
* Why owning gold makes sense even when there is a risk of government confiscation, and why multi-jurisdictional diversification is one tool to do so
* Gold conversion during periods of crisis
* How to get the most value out of your gold holdings if there is a crisis
* Crisis are temporary events, they have a lifespan, the most important is how value is preserved during a crisis and who has the most valuable assets on the other side of the crisis

This 66-minute audio interview was conducted on December 15 — and posted on the Internet site on Monday.   I thank Harold Jacobsen for sending it our way — and another link to it is here.

Russia adds 31 tonnes of gold to reserves in November — Lawrie Williams

Russia, which, along with China,  has been reported to be orchestrating a financial alliance to supplant the U.S. dollar as the world’s leading reserve currency, thus reducing its dominance of global trade, obviously sees gold as an integral part of the process.  Its central bank is currently by far the largest known regular buyer of gold globally and has added a further 31.1 tonnes (1 million troy ounces) to its gold reserves in November according to an announcement made by the central bank yesterday – it releases monthly reserve data usually on the 20th of the month.  Indeed Russia has been building its gold reserves pretty consistently for the past 10 years.

Russian central bank reserve figures will be subject to minor adjustment when reported to IMF, but overall they probably add up to just short of 1,600 tonnes – the world’s sixth largest national gold reserve, but still hugely short of the 8,133.5 tonnes as reported to the IMF by the USA.

Only recently Pravda reported that Russia would have to sell some of its gold to allay current account deficit problems…but as we suggested at the time, that doesn’t seem to have affected its central bank buying programme which has just seen the largest two month period of total purchases on record.  However, Russian mines produce over 20 tonnes of gold a month on average so there is scope for both gold buying and gold sales from the country’s own output alone.

The above three paragraphs are all there is to this brief 1-chart commentary from Lawrie that appeared on the Sharps Pixley website on Wednesday sometime — and another link to it is here.


This rather comical photo of a Laysan Albatross was taken on the island of Kauai in the Hawai’ian Islands on Tuesday.   They’re back for the breeding season 2016/17 breeding season, which starts this month…and the first chicks should be hatching about 30 days from now.  Once they get the video cams set up, you can watch the brooding/rearing/fledging process from start to finish at this website.  The click to enlarge feature doesn’t help on this photo.


It’s not enough for the commercials to just rig prices lower at will, as not much is gained if the commercials can’t buy enough contracts to justify the price rig. It does the commercials little real good to simply inflate open profits on short positions if there’s no chance to turn those open profits into realized profits. To the extent that the managed money traders don’t add to short positions in silver, the commercials can’t buy the same number of contracts. This might make the commercials more desperate to rig prices even lower in the hopes of finally inducing additional managed money short selling in silver and I sense we’ve seen just that over the past week. But in the end the prime purpose for price rigging is still lost and even lower prices will eventually blow up in the commercials’ faces.Silver analyst Ted Butler: 21 December 2016

There was no dollar index rally to hide behind yesterday, but that didn’t stop the powers-that-be from closing all four precious metals down on the day, plus closing palladium at a new low for this move down in the process.

Just looking at the 6-month precious metal charts, it’s obvious that both gold and silver would have closed in positive territory yesterday if ‘da boyz’ hadn’t shown up at, or shortly before, the London p.m. gold fix.

Here are the 6-month precious metal charts, plus copper, all updated with yesterday’s price action up to and including the close of COMEX trading at 1:30 p.m. EST.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price chopped sideways until shortly before noon in Shanghai on their Thursday morning, with the current low tick coming about two hours later.  It rallied back to just above unchanged by 3:30 p.m. China Standard Time — and thirty minutes before the London open, but got sold down a bit — and is down 70 cents from its close on Wednesday.  Silver rallied a bit in very early trading in the Far East, but got sold down like gold as well.  Silver’s rally didn’t make it back to the unchanged mark — and it’s down 5 cents the ounce currently.  Platinum was sold lower by a bit, too — and is down 2 bucks.  ‘Da boyz’ continue to work over the palladium price — and they set a new low price tick shortly after 2:30 p.m. in Shanghai.  It rallied off that spike down by a bit — but is still down 2 dollars an ounce.

Net HFT gold volume is sitting at 24,500 contracts — and that number in silver is 7,800 contracts.

The dollar index dropped 10 basis points as soon as trading began at 6:00 p.m. on Wednesday evening in New York.  It struggled back to a hair above unchanged by shortly after 2 p.m. CST, but rolled over immediately — and is back below the 103 mark once again — and down 8 basis points on the day as London opens.

There’s not much to comment on as we wind down for the Christmas/New Years holiday season.  Last year between those two dates, JPMorgan et al did a number on the precious metals — and it remains to be seen whether we’re going to have a replay of that scenario again this year.

As you can tell, ‘da boyz’ have the precious metal market in an iron grip — and are doing pretty much as they please with the price — and that won’t end until JPMorgan walks away from the table as short buyers and long sellers of last resort, leaving the remaining ‘Big 7’ commercial traders holding the bag.

And as I post today’s column on the website at 4:00 a.m. EST this morning, I see that the gold price made it back above unchanged, albeit briefly during the first hour of London trading — and is down 30 cents the ounce at the moment.  Silver is down 3 cent — and platinum and palladium are both down 5 dollars.

Net HFT gold volume is up to 28,500 contracts, which certainly isn’t much of an increase from an hour ago — and that number in silver is approaching 8,500 contracts.  The dollar index is down 11 basis points at the moment, after briefly touching unchanged a few minutes after the London open.

With two days left in the trading week, I don’t envision much happening between now and the close of trading on Friday, except for the fact that JPMorgan et al will most likely continue to slice the salami on the palladium price.

That’s it for today — and I’ll see you here tomorrow.



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