More Silver Contracts Added to the December Delivery Month

23 December 2016 — Friday


There certainly wasn’t much price action in gold yesterday, although that shouldn’t come as too much a surprise considering the season.  The rally into the London p.m. gold fix, such as it was, wasn’t allowed to get anywhere — and ‘da boyz’ took it all back by 12:20 p.m. in New York trading.  After that, the price chopped sideways in a very tight range until the 5:00 p.m. close.

Since the gold price only traded in a seven dollar price range yesterday, the low and high ticks aren’t worth looking up.

Gold finished the Thursday session in New York at $1,128.30 spot, down $3.00 from Wednesday.  Net volume was pretty light at just over 110,000 contracts.

It was more or less the same price pattern in silver — and it was closed down on the day as well.

Like the gold price, the high and low ticks aren’t worth looking up.

Silver finished the Thursday session at $15.75 spot, down 14.5 cents from its Wednesday close.  Net volume was fairly decent at 39,500 contracts.

The platinum price chopped sideways until 10 a.m. China Standard Time on their Thursday morning — and at that juncture the downside price pressure began, with the Europe low coming during the Zurich lunch hour.  It rallied until 10:30 a.m. — and at that juncture JPMorgan and their algos showed up — and by the time they were done with it, it was closed on its low tick of the day.  Platinum finished the Thursday session at $902 spot, down another 13 bucks, but it was not a new low for this move down.

Palladium followed platinum’s price path for the most part — and a new intraday low was set before New York began to trade.  Its rally attempts in morning trading on the COMEX were all turned aside — and by noon EST the powers-that-be had the price back into negative territory.  Palladium was closed at $653 spot, down 3 dollars on the day.

The dollar index closed very late on Wednesday afternoon in New York at 103.00 — and it headed erratically lower until shortly after 11 a.m. GMT in London.  It chopped higher from there, before jumping to its 103.14 high tick a few minutes before 9 a.m. in New York.  The 102.59 low tick came at the London p.m. gold fix, where it was obviously rescued by the usual ‘gentle hands’.  Most of the ensuing rally was done by minutes after 2:00 p.m. EST — and it inched quietly lower into the close from there.  The index finished the day at 103.09 — up only 9 basis points.

It was the second day in a row where a 50 basis point plunge in the U.S. dollar index wasn’t allow to manifest itself in the precious metal prices to any great extent.

And here’s the 6-month U.S. dollar index…which you can read into whatever you wish.

The gold stocks opened down a bit, but quickly rallied into positive territory until the price was capped around 10:30 a.m. in New York.  From there it sold quietly lower — and back into the red, but began to inch higher starting shortly after 2:30 p.m. EST.  The gold shares closed just off their respective low ticks, as the HUI finished the Thursday session down 0.45 percent.

The price action in the silver equities was mostly the same, except they started the day off in a much deeper hole than their golden brethren.  They also blasted well into positive territory, but couldn’t hold their gains, either — and swiftly sold back into negative territory, as they closed just off their lows as well.  Nick Lairds’ Intraday Silver Sentiment/Silver 7 Index closed down 1.60 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that zero gold and 13 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Canada’s Scotiabank stopped 12 of them.  I shan’t bother linking this activity.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in December dropped by 77 contracts, leaving 608 still open.  Wednesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, so that means the obvious…that another 77 contracts held by short/issuers were let off the December delivery hook.  Silver o.i. in December declined by 217 contracts, leaving 231 still around, minus the 13 mentioned just above.  December’s Daily Delivery Report showed that 233 silver contracts were actually posted for delivery today, so that means that another 233-217=16 silver contracts were added to the December delivery month.

We’re well into the home stretch for the December delivery month — and for the second day in a row there were silver contracts added to December…188 contracts in total.  Someone wants physical delivery real bad — and I’ll be very interested in who the issuers and stopper are for the last 231-13=218 silver contracts still open.  With Tuesday’s deliveries already posted as per the previous paragraph, there are only three delivery days left in the year to get this done, including the 608 contracts still open in gold.

There were no reported changes in GLD yesterday, but an authorized participant deposited 948,172 troy ounces of silver into SLV.  I would suspect that this was used to cover an existing short position.

There was a deposit of similar size into SLV last week — and this is what Ted had to say about it in his weekly review from last Saturday…”There are a number of possibilities explaining the deposit, including it being used to reduce the short position, but all the possibilities point towards JPMorgan being involved.

It was pretty quiet in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Only 17,425.300 troy ounces/542 kilobars [U.K./U.S. kilobar weight] were received — and all of that went into the International Depository Services of Delaware, which is a separate legal entity from the regular ‘Delaware Depository’.  There was 2,155 troy ounces shipped out of two different warehouses — and the link to that activity is here.

It was pretty quiet in silver as well.  Nothing was reported received — and only 359,987 troy ounces were shipped out the door for parts unknown.  All this activity was at Brink’s, Inc. — and a link to that is here.

Not so for the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 4,846 kilobars — and shipped out a chunky 10,399.  I’d dearly love to see the bills of lading on these receipts and shipments, just to get an idea who the parties are that are involved in these movements.  These are very significant amounts of gold that are being moved around.  All of the actions was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

I have very few stories for you today — and that suits me just fine.  You too, I’m sure.


James Rickards says Donald Trump can’t stop the next financial crisis

Jim Rickards sees threats in many places. In his latest book, “The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis,” he paints a picture of how that crisis will unfold. He argues that rather than pumping the financial system with liquidity, as happened in 2008, “elites” will freeze the financial plumbing until the crisis has passed.

That means banks will close, as will exchanges. Money-market funds will be inaccessible. Forget trying to get your hands on money.

Rickards, who was the principal negotiator of the 1998 bailout of Long-Term Capital Management as the hedge fund’s general counsel, calls this new world “ice-nine,” after a fictitious substance in Kurt Vonnegut’s “Cat’s Cradle.” Freezing customer funds in bank accounts is what happened in Cyprus is 2012 and Greece in 2015, he says. In the U.S., the Securities and Exchange Commission adopted a rule in 2014 that lets money-market funds suspend redemptions.

Prefer stockpiling cash? Governments are eliminating high-denomination bills, and Kenneth Rogoff, a former IMF chief economist, has written a book that Rickards describes as “an elite step-by-step plan to eliminate cash entirely.

Then, Rickards says, there are rules on banks and other institutions. Capital controls could be imposed to keep money from fleeing across borders. And the U.S. is still under the state of emergency declared by President George W. Bush days after the Sept. 11, 2001, terrorist attacks and renewed annually since then. Rickards argues that such measures can be applied in any emergency, “including money riots in the event of a financial system breakdown and ice-nine asset freeze.

This interview with Jim was posted on the Internet site at 2:55 p.m. EST on Thursday afternoon — and it covers enough new territory that I consider it a must read.  I thank Ken Hurt for pointing it out — and another link to it is here.

Prostitutes, Broadway tickets and a $17,000 watch — just part of alleged New York pension fund scam

U.S. prosecutors on Wednesday accused a former portfolio manager at New York state’s retirement fund of steering $2 billion in trades in exchange for bribes from brokerage employees, in the latest pay-to-play case to rock the fund.

Navnoor Kang, the ex-director of fixed income at the New York State Common Retirement Fund, was charged in an indictment filed in Manhattan federal court along with Deborah Kelley, a former Sterne Agee Group managing director.

In the charging documents, prosecutors alleged some bribes came in the form of weekend trips to Montreal, which would include prostitutes, nightclub bottle service and narcotics, as well as luxury gifts and cash payments. In one instance in New York, they claimed a broker-dealer named Gregg Schonhorn spent thousands of dollars on the defendant at strip clubs, upscale restaurants, Broadway shows, tickets to the U.S. Open tennis tournament and cocaine and crack cocaine. The defendant was also handed thousands of dollars in cash to pay for prostitutes and strippers as he pleased, prosecutors alleged.

In another instance, and upon the defendant’s request, the documents said Schonhorn bought him a $17,420 Panerai wristwatch from a Madison Avenue store, as well as an $8,000 Rolex. Both parties used the messaging app WhatsApp to keep their communications from being monitored by law enforcement, according to the charging documents.

The rot on Wall Street continue unabated — and this is just the tiny portion that we find out about.  This Reuters article was posted on their Internet site at 12:38 p.m. EST on Wednesday afternoon — and it was picked up by the folks over at CNBC.  It’s something I found in yesterday’s edition of the King Report — and another link to it is here.

Inflation will outrun interest rates in 2017 — Alasdair Macleod

Describing his outlook for 2017, GoldMoney research director Alasdair Macleod today explains why he thinks it will be a good year for gold.

Macleod writes: “This year bulls of precious metals have ridden a roller-coaster of hope followed by disillusionment. Much of the frustration has been due to the bullion banks seizing the opportunity presented by a strong dollar to force closure of their short positions on Comex. Meanwhile, for hedge funds, short-term positioning in gold has been an easy way to play the strong dollar, which is why money managers morphed from earlier bulls to a mixture of bears and don’t-knows. Next year is shaping up to be an entirely different matter.

The defining economic feature of 2017 is almost certain to be increasing rates of price inflation and interest rates that are unlikely to rise by enough to stop it without triggering a debt crisis. These are precisely the conditions that will disfavor government currencies, measured in gold, and have actually been in place to a greater or lesser extent for a considerable time.”

That actual essay title reads “Outlook for 2017” — and it showed up on the Internet site yesterday sometime.  I found it embedded in a GATA release — and another link to it is here.

Deutsche Bank agrees to $7.2 billion mortgage settlement with U.S.

Deutsche Bank has agreed to a $7.2 billion settlement with the U.S. Department of Justice over its sale and pooling of toxic mortgage securities in the run-up to the 2008 financial crisis.

The agreement in principle, announced by Deutsche Bank’s Frankfurt headquarters early Friday morning, offers some relief to the German lender, whose stock was hit hard in September after it acknowledged the Justice Department had been seeking nearly twice as much.

It also highlights the Justice Department’s recent efforts to hold European banks accountable for shoddy securities that contributed to the U.S. housing market collapse.

The department sued Barclays PLC on Thursday over similar claims, after having reached $46 billion in settlements with U.S. banks over the last three years. …

As part of the agreement, Deutsche Bank would pay a civil monetary penalty of $3.1 billion and provide $4.1 billion in consumer relief, such as loan forgiveness. The bank cautioned that there is “no assurance” the two sides will agree on the final documents.

This Reuters article, co-filed from New York and Frankfurt, was posted on their website at 12:06 a.m. EST this morning — and I found it on the Internet site.  Another link to it is here.

China tries to talk down the dollar, saying market ‘too optimistic’ about Trump

After making little headway in talking up the yuan, Beijing has changed tack to talk down the U.S. dollar.

Ma Jun, chief economist at a central bank research bureau, said on Thursday the market was “too optimistic” about U.S. president-elect Donald Trump and his policies.

He said the greenback’s rise since Trump won the presidential election “does not have much fundamental support” and was mainly due to “changes in market expectations”.

Trump’s presidential victory raised speculation of fiscal expansion and fuelled inflationary expectations … These factors have driven up interest rates in the U.S. and naturally led to capital inflows and a stronger dollar,” Ma said. “In my view … these expectations are perhaps too optimistic.

Ma said a stronger dollar could hurt U.S. exports, and a jump in US Treasury yields might have greater “tightening effects” on the U.S. economy than the recent two interest rate hikes by the U.S. Federal Reserve.

This sounds like he’s whistling past the graveyard to me.  I would expect that the yuan is about to be massively devalued at some point in the near future in order to stem capital flight.  And as Jim Rickards pointed out in his latest commentary over at The Daily Reckoning yesterday, they might as well do the deed before Trump becomes president, as he’s already stated that the first thing he’ll do when he assumes the position is label China a “currency manipulator” — and the currency/trade war will be on in earnest.  Then look out below for U.S. equity prices.  This news story appeared on The South China Morning Post website at 10:47 p.m. CST on their Thursday evening, which was 9:47 a.m. on Thursday morning in Washington — EDT plus 13 hours.  It’s another story that I found on the Internet site — and another link to it is here.

PBOC’s Shadow Banking Curbs Risk Deepening Junk Bond Rout

A lifeline for China’s local junk bonds is about to get cut, threatening financing for weaker companies already grappling with mounting defaults.

The People’s Bank of China will include wealth management products that are held off bank balance sheets in its framework for gauging risk to the financial system starting in the first quarter, a newspaper controlled by the central bank said Monday. The monitoring may drag on growth of WMPs that banks authorize third-party asset managers to oversee so they can purchase riskier debt with leverage, according to money manager Shanghai Silver Leaf Investment Co.

Chinese lenders, the nation’s biggest bond investors, often rely on such arrangements to circumvent risk-control rules. Regulators must walk a fine line in reining in investments made on borrowed money amid a broader rout in Chinese debt, after local note failures jumped four-fold this year. That’s heightened concern that any overreach could lead to panic selling, after steps to trim leverage in equities in 2015 contributed to a $5 trillion stock drop.

The yield gap between top-rated and lower-rated bonds may widen in the coming two quarters,” said Shanghai Silver Leaf’s Shanghai-based chief strategist Chen Qi, who had previously been head of China fixed income research at UBS Group AG. “Those weak companies or industries will have more difficulty in financing.”

This Bloomberg news item showed up on their Internet site at 9:00 a.m. Denver time on Tuesday morning — and was updated about 16 hours later.  It comes to us from the Zero Hedge website via Brad Robertson.  Another link to it is here.

India Said to Consider Lowering Gold Import Tax to 6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} From 10{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}

India, the world’s second-biggest consumer of gold, is said to be considering cutting the import tax on the precious metal in order to curb its smuggling, according to people familiar with the matter.

The government is planning to reduce the duty to 6 percent from 10 percent now, said the people, who asked not to be named as they are not authorized to speak to the media.

Gold shipments to India, which accounted for a quarter of global demand in 2015, have fallen due to higher prices in the first half of this year, a crackdown on undisclosed income and the government’s decision to withdraw old high-value bank notes. The government had raised the import tax three times in 2013 to curb inbound shipments, narrow a record current-account deficit and stop a slump in the rupee.

Smuggled gold is cheaper while those who import have to pay high cost.” said Praveen Shankar Pandya, chairman of Gem & Jewellery Export Promotion Council. “Duty structure should be such that it doesn’t encourage smuggling and brings in transparency.

This gold-related news item was posted on the Bloomberg website at 4:39 p.m. Denver time on Wednesday evening — and it’s something I plucked off the Sharps Pixley website yesterday — and another link to it is here.

Dimitri Speck: Deutsche Bank settlement and charts provide market manipulation evidence

Gold researcher and author Dimitri Speck recounts how the daily pattern of the gold price as it traded around the world disclosed the price-suppression scheme of the gold cartel 14 years ago and particularly incriminated the daily London gold price fixing.

Speck’s commentary is headlined “Deutsche Bank Settlement: Seasonal Intraday Charts Provide Evidence for Market Manipulation” and it was posted on the Internet site yesterday — and it’s certainly worth your while, as the two embedded charts speak for themselves.  I found it a GATA release yesterday evening — and another link to it is here.


I’d heard of polecats in my youth, but never thought they existed until I discovered a photo of one on Wikipedia when I was looking for something else the other day.  Despite the name, polecats are more closely related to dogs than cats.  The first is a photo of the European subspecies…the second, an American Polecat.  The other name for the American subspecies is the black-footed ferret.  The Click to enlarge feature only works for the second photo.


It was the second day in a row that, without active intervention after the London p.m. gold fix, all four precious metals would have closed in positive territory.  But it didn’t take much COMEX paper to pound them all down for a loss on the day, as volumes were pretty light across the board.  So anyone with an agenda could move prices around to suit themselves — and that appears to be precisely what they did.

Here are the 6-month charts for all four precious metals, plus copper, once again — and I pointed out earlier, the powers-that-be set a new intraday low price in palladium.

And as I type this paragraph, the London open is less than ten minutes away — and I see that gold rallied a few dollars in morning trading in the Far East on their Friday — and has been trading sideways for the last several hours.  It’s currently up $2.30 the ounce.  Silver was up a nickel or so during the same time period — but is only up a penny at the moment.  Platinum and palladium aren’t doing much, either…with the former up 3 bucks — and the latter by a dollar.

Net HFT gold volume is barely fogging the proverbial mirror at 13,500 contracts — and that number in silver is right at the 5,000 contract mark.  I wouldn’t read a thing into this price action based on this volume.

The dollar index slipped back below the 103.00 mark around 1 p.m. China Standard Time — and hovered just below that mark for a couple of hours, but is now back above it by a bit — but down 5 basis points as London opens.

After what seem like an interminable wait, we finally get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday — and how large the improvements in the Commercial net short positions in gold and silver are, will depend almost entirely on what the Managed Money traders have done during the reporting week.

With almost no long contracts of any quantity left to sell, all eyes will be on how much additional shorting they did in both precious metals, particularly silver.

Along with these numbers, I know that the other key feature for Ted will be the number of short contracts covered by the ‘Big 4’ traders…read JPMorgan.

And it’s useless to speculate what the numbers might show, but I’ll be sitting in front of my computer at 3:30 p.m. EST/1:30 p.m. MST when the CFTC updates that data — and I’ll have all of it for you in my Saturday missive.

And as I post today’s column on the website at 4:02 a.m. EST, I note that the gold price has been creeping higher in the first hour of London trading — and is currently up $3.20 an ounce.  Silver is up 4 cents — and platinum and palladium are now up 4 dollars and 2 dollars respectively.

Net HFT volume is sitting right at the 15,000 contract mark, up only 1,500 contracts in the last hour.  That number in silver is up to 5,470 contracts, an increase of less than 500 contracts from an hour ago.  Absolutely nothing is going on.  It’s as quiet as the proverbial church mouse at the moment.  The dollar index isn’t doing a thing, either — and is down 4 basis points.

Since today is Friday — and the last business day before Christmas — I would guess that trading volume will continue to be mostly of the fumes and vapours variety.  And it also wouldn’t surprise me a bit if the markets in New York closed early.  The only thing remaining to see is if ‘da boyz’ in New York allow these tiny gains to stand — as they took them all away on both Wednesday and Thursday, closing all four precious metals at a loss on those days.

I will have a column tomorrow — and it will be as brief as I can possibly make it.

See you then.


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