JP Morgan Stops 1,550 COMEX Silver Contracts in December

29 December 2016 — Thursday


It was a pretty quiet trading day for gold on Wednesday.  It was up 5 bucks by 3 p.m. China Standard Time on their Wednesday afternoon, but was sold back below unchanged by shortly after 11 a.m. in London.  It traded mostly flat from there until minutes after the equity markets opened in New York.  It then chopped quietly higher until around 2:20 p.m. EST — and then traded sideways from there into the close.

The low and high ticks certainly aren’t worth looking up.

Gold finished the Wednesday session in New York at $1,141.70 spot, up $3.40 from Wednesday’s close.  Net volume was reasonably quiet at just under 107,000 contracts.

The silver price chopped sideways in morning trading in the Far East — and its brief foray above the $16 spot mark around noon in Shanghai, ran into all the usual suspects.  From there it was sold down to its low tick of the day which, like gold, came shortly after 11 a.m. GMT in London.  It chopped higher until it breach the $16 spot mark once again around 3:30 p.m. EST in after-hours trading in New York.  But a thoughtful seller wouldn’t allow it to close there, as it was sold back below that price moments before the markets closed at 5:00 p.m. EST.

The high and low ticks are barely worth looking up.  The CME Group recorded them as $16.14 and $15.865 in the March contract.

Silver was closed at $15.975 spot, up 2.5 cents on the day.  Net volume was relatively quiet at just under 32,500 contracts.

Platinum was up 3 bucks by 9:30 a.m. in Shanghai — and traded flat until shortly before 3 p.m. CST on their Wednesday afternoon.  It began to drift lower from there — and really got hit hard once trading on the COMEX commenced.  The $891 low tick came about fifteen minutes before Zurich closed — and the subsequent rally was capped about forty-five minutes later as it touched the $900 spot mark.  It was sold down a few dollars from there into the 5:00 p.m. close.  Platinum finished the Wednesday session at $897 spot, down 5 dollars on the day.

Palladium was up 5 dollars or so during the Far East trading session on Wednesday, but began to sell off minutes after Zurich opened.  It had a roller coaster price ride after that and, like platinum, wasn’t allowed to close in the green.  Palladium was closed at $666 spot, down 3 bucks from Tuesday.

The dollar index was closed very late on Tuesday afternoon in New York at 103.03 — and began to drift lower from there once trading began at 6:00 p.m.  Its 102.87 low tick came just minutes before 2 p.m. China Standard Time on their Wednesday afternoon.  The subsequent ‘rally’ took the index up to the 103.53 mark by 8:30 a.m. in New York — and it chopped a bit lower from there until 11:30 a.m. EST.  It rallied to its 103.63 high tick by 12:25 p.m. — and then chopped lower until shortly after 3 p.m. EST — and then didn’t do much for the remainder of the day.  The dollar index finished the Wednesday session at 103.22 — up 19 basis points from its close on Tuesday.

And here’s the 6-month U.S. dollar index chart — and you’re free to read into it whatever you wish.

The gold shares opened unchanged, sold off a bit until the London p.m. gold fix was done — and then immediately rallied into positive territory.  They continued to chop higher for the rest of the Wednesday trading session, as the HUI closed up a respectable 2.36 percent.

The silver equities opened down a percent, but were back in positive territory by shortly after the London p.m. gold fix as well.  They spent most of the day in positive territory, but got sold down pretty hard starting around 2:30 p.m. EST — and back into the red.  They rallied weakly from there — and couldn’t quite squeeze a positive close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 0.07 percent.  Call it unchanged.  Click to enlarge if necessary.

The CME Daily Delivery Report finally showed what I’d been waiting for, as 413 gold and 174 silver contracts were posted for delivery within the COMEX-approved depositories tomorrow.  In gold, the big short/issuer was JPMorgan with 401 contracts out of its client account — and HSBC USA issued the other 12.  There were thirteen long/stoppers in total, with the largest three being Canada’s Scotiabank with 143…S.G. Americas with 84 contracts, all for its client account — and JPMorgan  stopped 42 contracts for its own account.  In silver, JPMorgan issues 120 contracts out of its client account as well — and Citigroup issued 53 contracts.  Canada’s Scotiabank stopped 112 contracts for its own account — and the CME Group stopped 42 for delivery into the 1,000 ounce silver contract.  JPMorgan picked up 15 for its own account as well.  All the gory details are in yesterday’s Issuers and Stoppers Report — and that’s linked here.  It’s worth a look if you have the interest.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest for December fell by 83 contracts, leaving 413 still open.  Tuesday’s Daily Delivery Report showed that 38 gold contracts were actually posted for delivery today, so that means that another 83-38=45 short/issuers were let off the December delivery hook.  Silver o.i. in December declined by 41 contracts, leaving 174 still around.  Tuesday’s Daily Delivery Report showed that only 19 silver contracts were actually posted for delivery today, so another 41-19=22 short/issuers in silver were let off the delivery hook in December as well.

And as you’ve probably already figured out for yourself, the remaining open interest…413 contracts in gold — and 174 contracts in silver, are what’s posted for delivery on Friday, as stated in yesterday’s Daily Delivery Report two paragraphs ago.  December deliveries are done.

In December, JPMorgan issued 817 silver contracts out of its client account — and stopped 1,550 silver contracts for its own account. This is what silver analyst Ted Butler had to say about it in his weekly review posted on his website on Christmas Day: “Speaking of JPMorgan, it looks like the bank has decided to curtail stopping (taking) additional large silver deliveries in the December futures contract, now that it is over the posted limit for deliveries. JPM has now taken 1,533 silver deliveries so far, slightly more than the 1,500 (7.5 million oz) supposedly allowed, all in its house or proprietary trading account. Of course, what would be ironclad rules for others are merely guidelines for JPMorgan.

There were no reported changes in GLD yesterday — and as of 6:31 p.m. EST yesterday evening, there were no reported changes in SLV either.

There wasn’t big gold moment over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  Only 4,959 troy ounces were received — and 22,040 troy ounces shipped out.  None of it was in kilobar form — and the lion’s share of the in/out activity was at Brink’s, Inc.  The link to that is here.

There was even less activity in silver, as nothing was reported received — and only 53,091 troy ounces were shipped out the door for parts unknown.  All of the ‘activity’ was at Brink’s, Inc. — and I shan’t bother linking it.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, they reported no in/out activity at all.

I don’t have all that many stories for you today, so that makes you editing job all that much easier.


Antitrust should be used to break up partisan tech giants like Facebook, Google

How much face time will your news story get on Facebook? How many eyes will ogle it on Google? Too often, this is apparently determined not by whether the story is “fake” news or newsworthy, but by whether it’s politically correct. And it’s time to break up the Internet’s left-wing, information-conduit oligopoly.

If “knowledge is power” and “The pen is mightier than the sword,” entities controlling what pens you see are powerful indeed. C that Facebook and Google “account for 75{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of all the referrals major news and entertainment sites now receive,” according to a Politico report in July.

Facebook boasts a 40 percent share of the social media market and 1.5 billion users worldwide, making this Internet “nation” more populous than any country on Earth.  Upwards of 40 percent of American adults get news from the site.

Google accounts for 64 percent of all U.S. desktop search queries. In Europe, the figure is a whopping 90 percent. The company also owns YouTube, the world’s most popular video-sharing website.

How is this power used? Earlier this year, ex-Facebook employees admitted they routinely suppressed conservative news and were ordered to place relatively unpopular but company-favored (read: liberal) stories in their “trending” news section. And trending means mind-bending because people are influenced by what’s “popular.” Make an article appear more or less so and you can cause some readers to embrace it as “consensus” or dismiss it as a fringe view. It snowballs, too: prominent placement makes a piece more popular, which makes it more prominent, which makes it yet more popular, which makes…well, you get the idea.

This news item put in an appearance on Internet site at 12:40 p.m. on Tuesday afternoon EST — and it’s something I plucked from yesterday’s edition of the King Report.  Another link to it is here.

Delta Drops Boeing Dreamliner Order Acquired With Northwest

Atlanta-based Delta reached an agreement with Boeing on the cancellation, without disclosing terms, according to a statement from the carrier Tuesday. The airline is sticking with orders already in progress for 120 narrow-body Boeing 737-900ERs. The 787-8 Dreamliners had been on Delta’s order book since the Northwest Airlines deal.

This business decision is consistent with Delta’s fleet strategy to prudently address our wide-body aircraft needs,” Greg May, Delta’s senior vice president of supply chain management and fleet, said in the statement.

Delta’s decision had been predicted.  “I wasn’t surprised, but I was surprised they took 10 years to do it,” Mann said of the cancellations.

U.S. airlines have been deferring or canceling orders for wide-body jets, the long-haul aircraft that have two aisles. Delta earlier this year deferred taking four Airbus Group SE A350s until 2019 and 2020, instead of the originally scheduled 2018. American Airlines Group Inc. also said this year it would take 22 A350s an average of 26 months later to cut capital expenses.

Delta still has wide-body orders for 25 A350s and 25 smaller A330 planes on its books. The 787s have a list price of $224.6 million, although large discounts are customary for major airlines.

This interesting, but not surprising news item appeared on the Bloomberg website at 3:19 p.m. Denver time on Tuesday afternoon — and it’s from Zero Hedge via Brad Robertson.  Another link to it is here.

The Future of Passports and Citizenship by Investment — Jeff Thomas

Over one billion people presently cross borders each year. In addition, there are over 250 million people who are expatriates – living outside their home country. These numbers are higher than ever before in history and growing. As The Great Unravelling progresses, we will witness a dramatic increase in both statistics. Along the way, we can expect the more restrictive governments, particularly those of the EU and US, to institute limitations on travel for their citizens, in order to keep them captive at home.

So, we can therefore anticipate changes in the issuance of passports. There are two concepts afoot with regard to the future of passports, and they’re direct opposites of each other. The first is for a Global Passport, that all countries would issue and all would share computer information on all passport holders. The other is a proliferation of passports created by an easing of citizenship requirements in small countries, resulting in each individual having the ability to possess several passports, thus diminishing his “ownership” by his home country.

These two concepts are both almost certain to develop considerably in the coming years and for the same reason. As stated, the more restrictive countries are likely to push for a global passport – an Orwellian document that says, “No matter where you are, you travel on our document. We have all your information and we own you.” The more this trend increases in prominence, the more the second trend will increase, in direct reaction. More and more countries will offer citizenship to non-nationals, as the demand for freedom increases amongst oppressed people.

Most of the countries that presently offer “Citizenship by Investment” are small countries – Malta and Cyprus in the Mediterranean, plus five island nations in the Caribbean: Grenada, Antigua & Barbuda, St. Kitts & Nevis, Dominica and, recently, St. Lucia.

A visit to any of the small Caribbean countries will reveal that since the decline of the sugar industry, they have had few choices with regard to future prosperity. Quaint small towns and villages and nice beaches attract a certain amount of tourism, but something greater is needed to support an entire population. Decades ago, St. Kitts & Nevis decided to try Citizenship by Investment. At first, the takers were few, but, in recent years, with much of the world imploding, the programme has attracted greater interest.

This very interesting — and very worthwhile commentary by Jeff was posted on the Internet site on Monday — and is certainly worth reading if you have the interest.  Another link to it is here.

How to Avoid Second Passport Scams and Traps — Nick Giambruno

As they become increasingly desperate, governments around the world and throughout history always turn to more destructive policies, such as capital controls, price controls, people controls, official currency devaluations, wealth confiscations, retirement account nationalizations, and more.

The more a government’s fiscal health declines, the more destructive its policies become. This is what political risk is all about. And it’s no secret political risk is increasing in many parts of the world, particularly in the US, where welfare and warfare spending continues unabated.

This trend is triggering more interest in second passports as people look for ways to become less dependent on their home government. Naturally, this is also causing a surge in second passport scams and traps, which are not always easy to spot.

If and when you pursue a second passport, you absolutely want to make sure you’re taking a legitimate route.

This very interesting commentary by Nick…and a perfect companion piece to Jeff’s article which precedes it…showed up on the Internet site yesterday — and another link to it is here.

Britons Hoard Cash as Economic Uncertainties Prompt Caution

Britons are holding onto their cash in a sign that they may be hunkering down in the face of economic uncertainties, according to the British Bankers Association.

Personal deposits grew an annual 4.8 percent in November, data compiled by the BBA show. They increased by £32.4 billion ($39.7 billion) in the first 11 months of the year, outstripping the £19.8 billion growth in the same period of 2015.

We’ve seen personal deposits, in particular, grow more strongly in recent months as consumers hoard cash in the absence of higher-yielding, liquid investment opportunities,” BBA Chief Economist Rebecca Harding said. “This growth in personal deposits may also suggest that consumers are looking to grow their cash reserves against potential economic uncertainties, such as an expectation of lower wage growth.

The BBA figures also showed that approvals for home loans fell 9 percent in November from a year earlier. In the first 11 months of the year, approvals declined 4 percent.

This Bloomberg story was posted on their Internet site at 3:00 a.m. MST on Wednesday morning — and was updated less than an hour later.  It’s another Zero Hedge piece courtesy of Brad Robertson — and another link to it is here.

Airbus A380 Woes Deepen as Emirates Delay Accelerates Cost Cuts

Airbus Group SE’s struggles with its A380 super-jumbo are deepening as the plane maker delays deliveries of a dozen aircraft over the next two years to Emirates, the double-decker’s biggest buyer, potentially pushing the program into the red.

Handovers of six A380s apiece originally planned for 2017 and 2018 will be shifted to a year later following an agreement between Emirates and engine supplier Rolls-Royce Holdings Plc, Airbus said Tuesday in an e-mailed statement. The plane maker will accelerate cost cuts at the A380 operation to ensure that the “impact on break even in 2017 is minimal.” Airbus said it still plans to keep to a reduced delivery target of about 12 A380s a year as of 2018.

Airbus scaled back its annual production schedule for the A380 in July after failing to secure new orders this year, and it outlined a round of spending reductions aimed at matching revenue and costs for the model in 2017 with 20 scheduled deliveries. The program broke even in 2015 at 27 deliveries. A spokesman declined to comment Wednesday on projected handovers for next year.

This is another Bloomberg/Zero Hedge piece that comes to us via Brad Robertson.  This one was posted on their website at 10:33 a.m. MST on Tuesday morning — and another link to it is here.

New York Times admits Ukraine’s Yanukovich was right not to sign E.U. deal

Three years after the event, the establishment media is finally issuing mea culpas for its self-interested support of ‘Euromaidan,’ the Western-backed ‘regime change’ crusade which destroyed Ukraine.

I was wondering how long this would take. But now that it’s happened let’s raise a Christmas glass to the New York Times and its reporter, Andrew Kramer. Because they’ve finally admitted that those of us who opposed Kiev’s ‘Euromaidan’ movement were right. Furthermore, America’s ‘newspaper of record’ has acknowledged how, despite its own fervent encouragement of the violent coup, former President Victor Yanukovich was correct not to sign a tightfisted free trade deal with the European Union.

The NYT uses the collapse of Ukraine’s once lucrative agriculture industry to illustrate its climb down. Especially the poultry business, which due to miserly E.U. quotas, and the loss of the Russian market, has been decimated.

The sector accounts for about 40 percent of Ukraine’s exports. But tariff-free quotas for most agricultural products, under the trade deal, are tiny,” Kramer writes.

Allocations for honey, for example, were so low that they were filled in the first six weeks of the year. Quotas to export eggs to the Europe Union equate to around 1.5 percent of just (one single company) Avangard’s annual output, let alone that of the entire sector.

This very interesting commentary appeared on the Internet site at 2:00 p.m. Moscow time on their Tuesday afternoon — and I thank Roy Stephens for sharing it with us.  It’s certainly worth reading, even if you’re not a serious student of the New Great Game — and another link to this article is here.

Turkey cuts Syria deal with Russia, confronts Western allies

Turkey and Russia have reached an agreement for a countrywide cease-fire plan to end the conflict in Syria, Turkish and international news outlets reported Dec. 28. The plan, which would come into effect at midnight Dec. 29, imposes a cessation of hostilities on the armed opposition as well as forces loyal to Syrian President Bashar al-Assad. According to Turkey’s semi-official Anadolu Agency, groups that both Ankara and Moscow consider terrorist — meaning Jabhat Fatah al-Sham (formerly known as Jabhat al-Nusra) and the Islamic State — will not be included in the cease-fire.

The Turkish-Russian agreement comes in the wake of a more limited deal between Ankara and Moscow that enabled the withdrawal of civilians trapped in the rebel-held districts in northwestern Syria’s Aleppo. If the comprehensive cease-fire plan holds, the multilateral peace talks that are likely to be held in the Kazakh capital, Astana, next month will have a better chance of ending Syria’s tragic civil war.

To be sure, the cease-fire deal and the Astana talks may not resolve other outstanding issues between Turkey and Russia. As Al-Monitor’s Fehim Tastekin wrote Dec. 26, it is unlikely for Russian President Vladimir Putin to accept a Turkish-backed opposition-held buffer zone in northern Syria. Russian Ambassador Andrei Karlov’s Dec. 19 murder in Ankara puts Ankara into a vulnerable position vis-a-vis Moscow.

The Turkish-Russian cease-fire deal almost eclipsed an equally sensational story. On Dec. 28, Turkish President Recep Tayyip Erdogan accused his Western partners in the anti-IS coalition of supporting the fanatical group along with the Syrian Kurdish Democratic Unity Party (PYD). Erdogan went so far as to claim that he had “evidence” that U.S.-led coalition forces in Syria had given support to both IS and the PYD. Ankara considers the PYD an extension of the Kurdistan Workers Party (PKK), which has been fighting the Turkish government for independence and autonomy since 1984. Turkey, the United States and the European Union list the PKK as a terrorist group.

The American response was anything but low key. At the daily press briefing on Dec. 27, U.S. State Department’s deputy spokesman Mark Toner characterized Erdogan’s claims as “ludicrous” with “no basis for truth.” As can be expected, while pro-government media outlets in Turkey gave serious coverage to Erdogan’s claims, the leading opposition newspaper Cumhuriyet underscored Toner’s response.

This story showed up on the Internet site yesterday sometime — and I thank Roy Stephens for pointing it out.  Another link to this news item is here.

With China Facing Currency, Liquidity Crises, Ex-PBOC Official Urges Use of “Nuclear Option”

But the worst news for China is that the local population is well-aware of the financial problems facing Beijing, and has been scrambling to transfer its cash offshore. As Bloomberg notes, the recent surge in onshore yuan trading volume suggests outflows are quickening, according to Harrison Hu, chief greater China economist at Royal Bank of Scotland. The daily average value of transactions in Shanghai climbed to $34 billion in December as of Wednesday, the highest since at least April 2014, according to data from China Foreign Exchange Trade System.

Which brings us to the January 1 clock reset, and the imminent surge in perfectly legal capital outflows.

In the new year, the new foreign-exchange purchase quota starts, so we expect yuan positions in January to drop significantly,” Liu Dongliang, an analyst at China Merchants Bank Co., wrote in a note this month. “Within the foreseeable future, the market will be pessimistic about funding conditions. It happens to be near year-end now, where money markets are tight, and after New Year’s Day it’s almost Chinese New Year.

Ultimately, trying to keep a lid on the Yuan is a game China will lose, and some are already preemptively admitting defeat. Among them is Yu Yongding, a former academic member of the PBOC’s monetary policy committee, who overnight urged his former PBOC colleagues to engage the “nuclear option” – a sharp, one off devaluation similar to what China did in August of 2015.

In e-mailed comments to Bloomberg, Yongding said that China has a window from now to President-elect Donald Trump’s inauguration to halt FX intervention and let yuan depreciate to its equilibrium level.

This article appeared on the Zero Hedge website at 8:49 p.m. EST last night — and I thank Richard Saler for sending it our way.  Another link to it is here.

Shanghai Gold Exchange limits transaction size to curb manipulation

Shanghai Gold Exchange, the world’s biggest physical bullion exchange, said Wednesday it will curb the amount of gold investors can trade at one time, a move analysts said would limit institutional investors’ influence on prices.

The exchange said in a statement it will halve its limit on transactions to 500 kilograms on some spot gold contracts starting Jan. 1. It did not give a reason for the move and the exchange did not answer calls seeking comment.

The new limit, which would be worth more than $20 million based on current prices, suggests the move is targeted at institutional investors, such as banks and hedge funds.

The move does not affect the amount traders can sell or buy in any one day, but it would likely force traders to carry out big transactions in multiple moves, reducing the potential for “fat finger” erroneous trades or preventing big investors from carrying out rapid-fire buying or selling to influence prices.

This gold-related Reuters article is time-stamped 8:09 p.m. EST yesterday evening — and I found it embedded in a GATA release.  It has obviously been updated since it was first posted, as it arrived in my in-box at 2:22 p.m. EST yesterday afternoon.  It’s certainly worth reading — and another link to it is here.



It as pretty quiet yesterday — and I was happy to see that both gold and silver finished in positive territory, as did the gold shares.  After being prepared for the worst between Christmas and New Years…like we got in 2015…I’m relieved that there are some bright rays of sunshine coming our way as the 2016 calendar year comes to a close.

Here are the 6-month charts for all four precious metals, plus copper, as usual.  It appears that at least in silver and gold, we’re pulling off the bottom.  But as Ted has said — and I have echoed — the treachery of JPMorgan et al is not to be underestimated.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price rallied steadily until shortly before 1 p.m. China Standard Time on their Thursday afternoon.  It chopped sideways for a few hours after that, before beginning to creep higher once again.  At the moment, gold is up $7.70 an ounce.  It was much the same price path for silver — and it’s currently higher by 18 cents the ounce.  Platinum also rallied — and was up 8 bucks by shortly after 9 a.m. in Shanghai — and has chopped sideways since.  It’s higher by 7 dollars.  Palladium’s price path was similar to platinum’s — and it’s up 5 bucks the ounce.

Net HFT gold volume is already very chunky at just under 34,000 contracts — and that number in silver is just over 11,000 contracts.  It’s obvious from these volume figures that these rallies are not going unopposed, as the short buyers/long sellers of last resort are on the job as usual.

The dollar index has been heading steadily lower since its 103.63 high tick at 12:25 p.m. EST on Wednesday afternoon in New York.  It’s back below the 103.00 mark once again — and down 37 basis points as London opens.

I get the distinct impression that the dollar index rally is looking increasingly shaky, which is a statement I made in yesterday’s [and Saturday’s] column.  Even Dow 20,000 is looking iffy after yesterday’s sell-off.  Combine that with a potential devaluation in the yuan between now and January 20th — and it’s obvious that the Plunge Protection Team will have its work cut out for it in the days and weeks ahead.  And that presupposes that they’ll even step in when things begin to head south…or north…as the case may be.

All-in-all it’s shaping up to be an interesting end to the year — and for the first three weeks of January as well.

And as I post today’s column on the website at 4:02 a.m. EST this morning, I note that all four precious metals are off their earlier highs by a bit now that London and Zurich have been open an hour.  I suspect that has everything to do with the fact that the dollar index has stopped falling for the moment — and has rallied a few basis points off its low tick, which came about an hour before the London open.  At the moment, gold is up $6.00 an ounce, silver is up 15 cents, platinum is up only 5 dollars now, put palladium is still up the same 5 bucks it was an hour ago.

Net HFT gold volume is now up to just under 38,000 contracts — and that number in silver is just over 12,000 contracts.  Volume has certainly tapered off in the last hour — and roll-over/switch volume is virtually nonexistent in both metals.

The dollar index got down to the 102.81 mark about forty-five minutes before the London open — and is now up to 102.91 — off that low by 10 basis points, but still down 31 from yesterday’s close.

That’s all I have for today — and absolutely nothing will surprise me when I check the charts later this morning.

See you on Friday.


Print Friendly, PDF & Email