‘Da Boyz’ Show Up With All Guns Blazing

06 January 2017 — Friday


The gold price opened flat when trading began at 6:00 p.m. EST on Wednesday evening in New York.  It began to rally sharply less than an hour later, but ran into ‘resistance’ almost right away.  It struggled higher until about an hour before the London open — and was turned lower a bit over an hour later.  It didn’t do much after that until the COMEX open — and began to rally anew, albeit with even more ferocious price resistance.  The rally topped out at 11:45 a.m. in New York — and it was sold lower until just after the COMEX close.  It traded flat for the remainder of the Thursday session.

The low and high ticks were reported by the CME Group as $1,163.60 and $1,185.90 in the February contract.

Gold was closed in New York on Thursday at $1,180.20 spot, up $17.10 from Wednesday’s close.  Net volume was enormous at just over 237,500 contracts.

Here’s the 5-minute gold tick chart courtesy of Brad Robertson.  There was nothing much in the way of ‘background’ volume for any length of time yesterday.  But, as usual, the really big volume came during the COMEX trading session, which runs from 8:20 to 11:30 a.m. Denver time on the chart below.

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.

It was more or less the same price pattern in silver, but the rallies were much more subdued/managed.  The tiny rally in Far East trading was turned over shortly after London opened — and the low over there came shortly before 10 a.m. GMT.  The subsequent rally, if you wish to dignify it with that name, was capped about thirty minutes earlier than gold, around 11:15 a.m. EST.  A decent chunk of Thursday’s gains were taken away by the COMEX close — and it crawled higher for the rest of the day from there.

The low and high ticks in this precious metal were recorded as $16.455 and $16.76 in the March contract.

Silver finished the Thursday session at $16.545 spot, up 14.5 cents on the day.  ‘Da boyz’ were all over silver yesterday, as volume was very heavy at just under 64,000 contracts.

And here’s the 5-minute silver tick chart courtesy of Brad as well.  There’s not really much to see except for the high volume — but I decided to include it anyway.  Volume dropped off dramatically after 12:30 p.m. MST.

Like the 5-minute gold chart, 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 as well.

Platinum began to rally shortly after the 6:00 p.m. start of trading on Wednesday evening as well but, like silver, its rally was sold lower starting shortly after the London/Zurich open.  It began to crawl higher around noon in Zurich, but really took off once COMEX trading began.  That rally ran into ‘resistance’ almost right away as well and, also like silver, its price was turned lower around 11:15 a.m. EST in New York.  From there it was sold off a bit, before inching lower into the 5:00 p.m. close.  Platinum finished the Thursday session at $966 spot, up 25 bucks on the day and, like the other two precious metals, would have closed materially higher if allowed to do so.

Palladium was up about 7 dollars or so in the first couple of hours of trading after New York opened on Wednesday evening but, like platinum and silver, was turned lower minutes after trading began in Zurich.  The low tick of the day came around 11:30 a.m. Zurich time — and its subsequent rally was rolled over just minutes after the Zurich close.  It chopped very quietly lower from there until minutes before 4:00 p.m. EST in the thinly-traded after-hours market, before rallying a bunch into the close.  Palladium finished the day at $737 spot, down a buck from Wednesday.

The dollar index closed very late on Wednesday afternoon in New York at 102.52 — and within an hour of the open a few minutes later, was down 25 basis points.  It chopped mostly sideways from there until shortly before 1 p.m. China Standard Time on their Thursday afternoon.  It rolled over at that point, hitting its 101.78 low tick shortly before 2:30 p.m. CST.  It appeared to get saved at that point — and proceeded to rally to within 1 basis point of its Wednesday afternoon close, but that’s was as high as it got.  It began to head south with some authority starting minutes after 8 a.m. in New York, with the 101.30 low tick coming around 11:10 a.m. EST.  It didn’t do much after that, as the index finished the Thursday session at 101.40 — and down 112 basis points from its Wednesday close.

With the dollar index crashing yesterday, it was the obvious reason why the powers-that-be didn’t want that event reflected in the prices of gold and silver.  As I’ve been saying for many a moon now…if ‘gentle hands’ weren’t at the ready, the dollar index would have been toast ages ago.

And here’s the 6-month U.S. dollar index chart — and it remains to be seen if it will be allowed to continue to seek out its ‘intrinsic value’.  But things might change without notice if we get a not-at-all-surprising downward revaluation of the yuan sometime in the very near future.

The gold stocks gapped up a goodly amount at the open in New York yesterday — and all the gains that mattered were in by shortly after 11 a.m. in New York, which also happened to be the low tick for the dollar index as well.  from there they chopped mostly sideways for the rest of the Thursday session — and the HUI closed up a very decent 6.25 percent.

The silver equities responded in a similar manner, even though the rally in the metal itself was rather tepid in relation to gold’s.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up a chunky 7.65 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that zero gold and 1 lonely silver contract was posted for delivery within the COMEX-approved depositories on Monday.  That lone silver contract was stopped by Canada’s Scotiabank.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in January rose by 17 contracts, leaving 170 still around. Wednesday’s Daily Delivery Report showed that 13 gold contracts were actually posted for delivery today, so that means that 13+17=30 gold contracts were added to January.  Silver o.i. in January declined by 111 contracts, leaving 355 still open.  Wednesday’s Daily Delivery Report showed that 110 silver contracts were posted for delivery today 111-110=1 short/issuer in silver was let off the delivery hook by the long/stopper holding the other side of their contract.

There was a tiny withdrawal from GLD yesterday…9,023 troy ounces…and, like the tiny withdrawal from SLV on Wednesday, this amount would certainly represent a fee payment of some kind.  And as of 6:40 p.m. EST yesterday evening, there were no reported changes in SLV.

There wasn’t a lot of gold movement over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  They only received 4,147.350 troy ounces/129 kilobars [U.K./U.S. kilobar weight] — and that all went into JPMorgan’s vault.  There was 4,822.500 troy ounces/150 kilobars [U.K./U.S. kilobar weight] shipped out of Canada’s Scotiabank.  The link to this activity is here.

It was much busier in silver, as 1,379,345 troy ounces were received — and 1,552,084 troy ounces were shipped out.  Included in the amounts received/shipped out, was a transfer of 606,264 troy ounces from Canada’s Scotiabank into JPMorgan’s vault.  There was a lot of other activity as well — and the link to all the action is here.

JPMorgan’s visible silver stash on the COMEX is up to 82.98 million troy ounces, just under 46 percent of the silver held by all eight registered depositories.  Ted figures that if they deposit all the silver they took delivery of in December, they should add about another 6 million troy ounces to that total in due course.

By the way, the 1,519,209 troy ounces of silver that was ‘adjusted’ out of existence at the Delaware depository on Tuesday, did not get adjusted back in, in Wednesday’s report.  I’ll still keep an eye on this.

It was pretty quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They received 1,700 of them, but shipped out only 997.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

Here are a couple of charts courtesy of Nick Laird that he passed around late Thursday afternoon Denver time.  They show gold and silver coin sales at The Perth Mint updated with December’s data.  Gold coin sales were very robust, but silver coin sales were rather anemic.  The Click to Enlarge feature works wonders for both charts.

I have a reasonable number of stories for you today — and I hope you’ll find some in here that you feel are worth your while.


Odey’s Hedge Fund Slumps 49.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in Worst Ever Annual Loss

Crispin Odey’s main hedge fund slumped 49.5 percent in 2016, its worst annual decline since it began trading in 1992, according to an investor letter.

The billionaire, who last month complained that “mindless” passive investing was driving out active fund managers, saw his bearish bets against stocks suffer amid a surge in equities. His Odey European Inc. fund lost 3.4 percent in December, the letter shows.

Odey warned in October that U.K. stocks could slump 80 percent as the economy suffered a recession and higher inflation following the Brexit vote. His fund’s loss lags behind a more than 4 percent gain by peers, according to preliminary estimates from data provider Eurekahedge.

Even if his assessment is correct, the problem with ultra-bearish bets is the timing,” said Jacob Schmidt, chief executive officer at investment advisory firm Schmidt Research Partners in London.

He mustn’t be aware that the Plunge Protection Team operates world-wide now — and in just about every market.  This Bloomberg news item appeared on their Internet site at 4:53 a.m. Denver time on Thursday morning — and was updated about ninety minutes later.  I thank Swedish reader Patrik Ekdahl for finding it for us — and another link to it is here.

Kyle Bass Has Found a “Breathtaking” Opportunity With the “Greatest Risk-Reward Profile Ever Encountered

Last February, when Kyle Bass announced the upcoming launch of a dedicated fund to short the Yuan, as part of a bigger macro short unveiled in his report on “The $34 Trillion Experiment: China’s Banking System and the World’s Largest Macro Imbalance”, many were skeptical if not outright mocked the Hayman Capital founder.

One year later, it is those who invested alongside Bass that are laughing, because as Bass writes in his latest letter to investors, “I am pleased to share that the Hayman Capital Master Fund, LP’s estimated net performance for the calendar year of 2016 was +24.83{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}“, or double the S&P’s return including dividends. Putting this return in a longer context, those who have invested with Hayman since the fund’s inception in 2006, this represents an inception-to-date return of +436.75{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} and an annualized return of +16.70{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

So where is Bass now? As he unveiled in his letter, he is sticking with Asia, which he will cover with a brand new Asia-focused fund, his third, “designed to provide investors with nuanced access to perhaps one of the largest imbalances in financial markets history.

However, what we found most notable about Bass’ relatively short letter is the following admissions:

One opportunity in particular has the greatest risk-reward profile we have ever encountered in our decade of being a fiduciary. As investors of ours, you are positioned to take advantage of one of the world’s greatest macro imbalances.

He did not disclose what the opportunity was, but left readers on the following optimistic note: “We expect the next few years to be the best years for macro investing since the late 1990s.

This article showed up on the Zero Hedge website at 1:56 p.m. on Thursday afternoon EST — and is now datelined 6:56 p.m. EST, so it has obviously been revised in the interim — and I thank Richard Saler for pointing it out.  It’s definitely worth reading — and another link to it is here.

Jon Corzine Settles Over MF Global Collapse: Agrees to Lifetime Ban, $5 Million Fine

Three years ago, in February 2013, traders were outraged upon learning that the National Futures Association refused to ban former MF Global chief Jon Corzine from trading with other people’s money, rejecting a motion brought before that body’s board of directors to do so. The decision was a blow to a vocal group within the commodities trading world who – noting that Corzine has not been held accountable by the government for alleged crimes – wanted to see him publicly upbraided by his peers in the market.

All that changed today when Corzine agreed to pay a $5 million civil fine to settle a lawsuit by the U.S. Commodity Futures Trading Commission over the 2011 collapse of the former New Jersey governor’s brokerage, MF Global Holdings. More importantly, under the settlement disclosed on Thursday, Corzine also agreed to be barred for life and never again work for a futures commission merchant, or register with the CFTC in any capacity.

Which means Corzine’s dreams of running a hedge funds are now over.

I am pleased to have reached this settlement to resolve the CFTC’s claims,” Corzine, 70, said in a statement. “As the CEO of MF Global in 2011, I have accepted responsibility for its failure, and I deeply regret the impact it had on customers, employees, shareholders and others.”

‘Sorry’ doesn’t cut it.  This man should be in jail, along with the rest of the crooks on Wall Street.  This Zero Hedge news item was posted on their website at 2:15 p.m. EST on Thursday afternoon — and another link to it is here.

Don’t Race to Your Next Accident — Dennis Miller

In the fall of 2008, the Troubled Asset Relief Program (TARP) bank bailout bill was passed. Immediately, the banks called in my CDs; 70{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of my retirement portfolio was turned into cash. I’d never held that much cash, didn’t know what to do and I was scared. I felt a great sense of urgency. I had to replace the guaranteed income I lost. I immediately signed up for several investment newsletters.

Barack Obama had just won the election. My inbox was flooded with promotions suggesting double and triple digit returns. I needed to buy their newsletter and act now before it’s too late!

In retrospect, I invested too much capital, much too quickly rather than waiting to see how things would shake out. Looking back, I found three different results:

1. Investment advice that was spot on and profitable; but didn’t result in huge gains like they advertised.

2. Investment advice that was wrong and lost money.

3. Investment advice that turned out OK, but the reason had nothing to do with the pundits’ predictions.

This commentary by Dennis was posted on this website yesterday — and another link to it is here.

The Coup Against Truth — Paul Craig Roberts

Vladimir Putin is the secret president of the United States.

Yep. That’s it. The U.S. is now the USSR. It’s all over. Trump is a Communist who took orders from Putin. Trump is a Red. That was his game all along. He’s a billionaire Commie.

Ridicule is effective, and nothing deserves ridicule more than The Washington Post, New York, Times, CNN, and the rest of the presstitutes who pretend to be real journalists. But as I have emphasized, and other real journalists, such as Glenn Greenwald imply, the fake news recklessly promoted by the presstitutes brings with it the threat of thermonuclear war.

For several years Russia and her president have experienced endless demonization. The Russians know that Georgia’s invasion of South Ossetia (done while Putin was at the Beijing Olympics) was a Washington provocation. The Russians know that Washington’s coup in Ukraine (done while Putin was at the Sochi Olympics) was a provocation aimed at seizing Russia’s Black Sea naval base in Crimea and cutting Russia off from the Mediterranean. The Russians know that Washington knows that the charges that Russia hacked Hillary’s emails and the U.S. presidential election are lies. The Russians know that the “Russian threat” created by Washington is a lie along with all of its permutations, such as an impending Russian invasion of Poland and the Baltics. The Russians understand that U.S. ABM bases on Russia’s borders are provocations, as are NATO military exercises on Russia’s borders and in the Black Sea. You can add to this list on your own.

The lies are ubiquitous, have grown more absurd, and are now institutionalized in the U.S. government in the CIA, executive branch agencies, and among many U.S. senators and representatives. That these lies are validated by endless media repetitions throughout the Western world are viewed by Russia as indications that Western populations are being prepared for a military attack on Russia. Putin has warned publicly on many occasions that the Western propaganda is dangerously destabilizing. Yet, as he also notes, no one hears his warnings.

This absolute must read commentary, especially the last few paragraphs, appeared on Paul’s website yesterday — and I thank Roy Stephens for pointing it out.  Another link to it is here.

India’s Cash Woes Are Just Beginning — Mihir Sharma

Give me 50 days, friends,” Indian Prime Minister Narendra Modi asked citizens after he canceled 86 percent of the country’s currency notes. After Dec. 30, if Indians saw his decision as flawed, he promised to “suffer any punishment.” But, he said confidently, if they could bear 50 days of disruption, they would have the “India of their dreams.”

It is now January. While Modi’s deadline has passed, the pain hasn’t. Indeed, it may just be beginning: Measured by the purchasing managers’ index, or PMI, Indian manufacturing actually began to contract last month for the first time in all of 2016. This can’t be blamed on sluggish global demand; the equivalent measure from China suggested that manufacturing there is expanding quicker than expected. Indian companies are suffering from supply-chain disruptions and customers with no cash in their wallets.

True, in some ways things aren’t as bad, at least in metropolitan India, as they were a few weeks ago. The lines at ATMs are shorter and the government even felt comfortable enough to raise the limits for ATM withdrawals from 2,500 rupees a pop to 4,500 rupees (from $37 to $66). But overall cash limits haven’t been eased; most Indians can still only withdraw 24,000 of their own hard-earned rupees — a little over $350 — a week, or 50,000 rupees if one has a business account. That’s simply not enough cash to keep supply chains going.

This opinion piece was posted on the bloomberg.com Internet site on Wednesday evening EST — and I thank West Virginia reader Elliot Simon for sharing it with us.  Another link to this article is here.

China’s choices narrowing as it burns through FX reserves to support yuan

As China’s foreign exchange reserves threaten to tumble below the critical $3 trillion mark, the biggest fear for investors is not whether Beijing can continue to defend the yuan but whether it will set off a vicious cycle of more outflows and currency depreciation.

While the world’s second-largest economy still has the largest stash of forex reserves by far, it has been churning through them rapidly since August 2015, when it stunned global investors by devaluing the yuan and moving to what it promised would be a slightly freer and more transparent currency regime.

China stepped into both its onshore and offshore yuan markets this week to shore up the yuan as it neared the 7 level, sparking speculation that it wants to regain a firm grip ahead of the Jan. 20 inauguration of U.S. President-elect Donald Trump, who has threatened to brand Beijing a currency manipulator.

But if forex reserves continue to be depleted at a fast pace and capital flight continues, some strategists believe China’s leaders may have little choice but to sanction another big “one-off” devaluation.

That could set off competitive currency devaluations by other struggling emerging economies, even as the world braces for greater trade protectionism under Trump.

This Reuters story, filed from Singapore, put in an appearance on their Internet site at 8:19 a.m. EST yesterday morning — and the first person through the door with it was Richard Saler.  It’s definitely worth reading — and another link to it is here.

Chinese Overnight Funding Rate Hits Unprecedented 105{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}

It appears Chinese authorities are deadly serious about crushing shorts and halting speculative outflows as the liquidity freeze in Chinese markets has sent overnight deposit rates to a record 105{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} as one or more bank’s utter desperation for funds looks like a giant fat finger.

Thursday night’s spike is up 45 percentage points from Wednesday’s 60{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} rate…and at the same time, PBOC strengthened the Yuan fix by the most since 2005 to narrow the gap to the massive short squeeze move in offshore yuan.

[“Another extraordinary day in China,” said Gareth Berry, a foreign-exchange and rates strategist at Macquarie Bank Ltd. in Singapore. “It looks like a classic case of a consensus trade blowing up at the start of a new year.

It’s painful to sit on short yuan positions now, given the soaring funding costs,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. — Bloomberg]

One wonders how Kyle’s short position in the yuan is doing.  I’m sure the margin calls are painful — and I’m sure that the People’s Bank of China is gunning for him — and people like him.  This very brief 3-chart Zero Hedge piece appeared on their Internet site at 8:25 p.m. on Thursday night in New York — and it’s worth a quick look.  Another link to it is here.  There was another ZH story about this on Thursday morning as well.  It’s headlined “A Stunned Wall Street Reacts to China’s “Bear-Crushing” Yuan Carnage” — and it’s definitely worth a look as well, if you have the interest.

Barclays Flags ‘Black Swan Threats’ to Commodities This Year

Watch out for the unexpected in commodities in 2017. Barclays Plc said raw materials markets from energy to metals face the high likelihood of disruptions, giving a laundry list of possible threats including a default by Venezuela, riots in Chile and a trade war with China.

The new politics of populism and protectionist trade policies have the potential to disrupt global supply and demand assumptions for various commodities,” analysts including Michael Cohen and Dane Davis wrote in a Jan. 5 report. “We see risks skewed to the upside in 2017, based on a high likelihood of disruption risk.”

Commodities advanced in 2016 to post the first annual gain since 2010 as energy markets rebounded and investors reacted to unexpected political events including Donald Trump’s election win in the U.S. and Britain’s vote to quit the European Union. Barclays said that the markets will surprise in some fashion this year, and the bank’s analysis illustrated the key point that politics are likely to matter just as much as economics.

Commodity market black swan events come in many forms, and the market may take years or an instant to price them in,” the analysts wrote, defining them as extreme events or dynamics that market participants aren’t currently pricing in. “China, Russia, the Middle East and Turkey are likely to surprise the commodity complex in 2017.

This Bloomberg story, complete with an embedded 3:52 minute video interview, appeared on their Internet site at 10:49 p.m. MST on Wednesday evening — and was updated about six and a half hours later.  It’s the second contribution of the day from Patrik Ekdahl — and another link to it is here.

People’s Bank of China — and Gold

Through it’s central bank, the People’s Republic of China holds the world’s 6th largest central bank gold holdings, with over 1800 tonnes of gold held in its official reserves of the People’s Bank of China. These gold reserves holdings are notable for having quadrupled since the early 2000s amid much secrecy. Since mid 2015, however, the Chinese government has embarked on a revised communication policy of releasing monthly updates on the size of its gold holdings. Although there is no official confirmation of gold storage arrangements, it is thought that the Chinese official gold reserves are vaulted in Beijing, China’s capital, and may be under the protection of the Chinese army.

China’s official gold reserves are owned by the People’s Republic of China (PRC) and held and managed by the People’s Bank of China (PBoC). Although the PBoC was founded in 1948, it did not become the central bank of the People’s Republic of China (PRC) until 1983 when the PRC State Council granted the PBoC the functions of a central bank.  The PBoC lists one of its responsibilities and tasks as:

“Holding and managing the state foreign exchange and gold reserves“

Chinese central bank gold reserves have more than quadrupled since the early 2000s, rising from approximately 400 tonnes in 2001 to over 1,800 tonnes today. The actual accumulation pattern of this gold is hard to decipher. This is because from 2001 through to mid-2015, the PBoC only issued 4 public announcements in total addressing the size and growth of it’s gold reserves.

Of course Jim Rickards opinion is that China holds gold reserves several multiples higher than what they’re officially reporting — and it remains to be seen if they ever divulge how much they actually have.  This surprisingly brief commentary showed up on the Singapore-based bullionstar.com Internet site yesterday — and I found it on the gata.org Internet site.  Another link to it is here.

Gold Traders Are Most Bullish Since 2015 on New Year Concerns

There’s one thing almost all gold traders and analysts agree on, now is a great time to own bullion.

Those surveyed by Bloomberg were the most positive they’ve been on the metal’s price outlook since the end of 2015, with 14 saying they’re bullish on the metal, two bearish, and one neutral. Worries over political developments in Europe, and in the U.S. following Donald Trump’s election, as well as expectations of stronger demand ahead of the Lunar New Year were cited as factors.

The euro zone has plenty of crisis triggers over coming months; Indian and Chinese buying remain strong and Trump’s policy threatens inflation,” said Adrian Day, president of Adrian Day Asset Management in Annapolis, Maryland, which oversees $190 million. “All this is positive for gold.

The metal for immediate delivery has risen every day this year, gaining more than 1 percent to about $1,180 an ounce during London trade on Thursday, according to Bloomberg generic pricing. The metal rose 8.1 percent in 2016, its best performance in five years. Demand for gold as gifts in China normally rises before the Lunar New Year, which this year starts at the end of January.

Adrian can be as bullish as he wants, but when the short buyers and long sellers of last resort [which he steadfastly denies do not exist] are running amok in the COMEX futures market as they are now, bullishness doesn’t matter.  This tiny 1-chart/4-paragraph story showed up on the Bloomberg website at 7:13 a.m. Denver time on Thursday morning — and was subsequently updated about ten hours later.  It’s the third and final contribution of the day from Patrik Ekdahl — and I thank him on your behalf.  A link to the Internet version is here.



The powers-that-be were at battle stations with all guns blazing in the precious metal market everywhere on Planet Earth during the Thursday trading session.  There was no way on God’s Green Earth that they were going to allow gold and silver to reflect the horrifying situation developing in the world’s currency markets.

The volume was simply over the moon in both metals, but particularly in gold as Ted pointed out.  With volumes like what we saw yesterday, I would assume that the Big 4 traders, including JPMorgan, have returned as short buyers and long sellers of last resort.  That’s probably because they had no choice in the matter if they wanted to prevent a melt-up in gold and silver prices yesterday.

Ted was amazed that ‘da boyz’ stepped into the silver and gold rallies as quickly as they did, hitting them hard once they broke through their respective 20-day moving averages.  He was also wondering out loud if they would even be allowed to touch, let along break above, their respective 50-day moving averages.  Those two moving averages are tantalizingly close now, but may be a “bridge too far” in the current environment, as JPMorgan et al don’t appear to be taking any prisoners at the moment.

Here are the 6-month charts for all four precious metals, including copper — and you can make up your own mind from what you see.

Of course we’ve had massive deterioration in the Commercial net short position since the beginning of the year — and Ted and I both agreed that today’s Commitment of Traders Report — and companion Bank Participation Report [BPR] to some extent — are ‘yesterday’s news’.  But there may be something that Ted can glean from today’s COT Report that may be missed by others, including me.

Whatever both reports show, I’ll have all of it for you in tomorrow’s column.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price has been under some selling pressure ever since trading began at 6:00 p.m. EST on Thursday evening in New York.  I would guess that it has something to do with the fact that the dollar index has been edging higher during the Far East trading session on their Friday.  At the moment it’s down $6.10 an ounce.  Silver tried to rally in early Far East trading, but that didn’t last long — and it chopped lower until JPMorgan et al spun their algos and pulled their bids just minutes after 1 p.m. China Standard Time on their Friday afternoon.  It’s down 17 cents an ounce.  The platinum price has been edging lower as well — and it’s down 6 bucks currently.  Palladium spent most of the Far East trading session a few dollars higher.  But the rug got pulled on it at 3 p.m. CST — and it’s back to unchanged at the moment.

Net HFT gold volume is very heavy at just under 50,000 contracts — and that number in silver is way up there as well at 18,500 contracts.  The 20-day moving average got taken out to the down side in that engineered price smash, so most of those Managed Money traders that had gone long over the last day or so, had their lights punched out.  There’s no roll-over/switch volume in either gold or silver worth mentioning once again, so all this volume is of the price management variety.

The dollar index has been crawling higher since 6 p.m. on Thursday evening in New York — and it’s up 33 basis points as London opens.

Before we get the COT and BPR from the CFTC website this afternoon, we have to get through the 8:30 a.m. EST job report this morning.  And as I said in my column yesterday, I’m not going to try and handicap this event, as ‘da boyz’ will do as they please as far as what happens to precious metal prices at that time.

And as I post today’s column on the website at 4:00 a.m. EST this morning, I see that all four precious metals have recovered somewhat in the first hour of London/Zurich trading.  Gold is only down $4.10 an ounce at the moment, silver is down only 9 cents now, platinum is down 5 — and palladium is back above unchanged at up 5 bucks.

HFT gold volume is just over 55,000 contracts — and that number in silver is just under 20,500 contracts…so volume has dropped off a bit from it’s torrid pace in Far East trading earlier in the day.  The dollar index is chopping mostly sideways now — and up 28 basis points.

I must admit that I was somewhat taken aback by the ferocity of yesterday’s full frontal assault on gold and silver — especially gold.  I was certainly expecting more of a rally than we’ve already had — and we may have more upside to go before ‘da boyz’ engineer the next price decline, but a rally of any size appears to be out of the question at this juncture.

But, as always, I’d love to be proven spectacularly wrong about that.  However I’ve seen this particular movie too many times over the last sixteen years.  One of these days it may end differently, but you’ll excuse me if I have my doubts at this moment in time.

That’s all I have for today.  Have a good weekend — and I’ll see you here tomorrow.


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