JP Morgan Picks Up Another 1 Million Ounces of Silver

10 January 2017 — Tuesday


The gold price rose and fell a few dollars in Far East trading — and was up a smallish amount by the time London opened on their Monday morning.  It began to head higher from there in a saw-tooth rally pattern that certainly indicated that it was running into resistance as it rose.  The high tick of the day came about a minute after COMEX trading ended — and it was sold off about 5 bucks into the 5:00 p.m. close.

The CME Group recorded the low and high ticks as $1,172.20 and $1,186.40 in the February contract.

Gold was closed on Monday afternoon in New York at $1,180.80 spot, up $8.60 from Friday’s close.  Net volume wasn’t overly heavy, which both Ted and I were glad to see — and it checked in at just over 144,000 contracts.

Here’s the 5-minute gold tick chart courtesy of Brad Robertson.  Volume was reasonably light in afternoon trading in the Far East on their Monday, but you can see, the up-tick in volume starting at 1:00 a.m. Denver time, which was the London open — and the beginning of the rally.  The highest volume spike came at gold’s high tick a minute after the COMEX close — and volume didn’t back off to background until very late in the after-hours market.

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 silver price chopped around a nickel either side of unchanged in Far East trading — and from there followed a very similar price path to gold.  The price spike that began at 11:45 a.m. in New York was capped within minutes — and it was sold down a bit from there before chopping sideways until shortly after 3:00 p.m. in the thinly-traded after-hours market.  Then a not-for-profit seller sold it off about a dime into the close from there.

The low and high ticks in this precious metal were reported as $16.455 and $16.735 in the March contracts.

Silver finished the Monday session at $16.54 spot, up 10.5 cents from Friday’s close — and off its high tick by a goodly amount.  Net volume was about average, however, at just over 39,000 contracts.

And here’s the 5-minute silver tick chart from Brad as well.  There was a bit of volume in early morning Far East trading, but that fizzled out after an hour or so — and didn’t pick up much until the 6:20 a.m. Denver time COMEX open.  It was back to background levels by shortly after the 11:30 a.m. MST COMEX close.

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.

The platinum price chopped quietly higher all through Far East and Zurich trading on their respective Monday’s — and was up about ten bucks by 9 a.m. in New York.  But by the 10 a.m. London p.m. gold fix an hour later, all those gains, plus another dollar, had vanished.  But once Zurich closed at 11 a.m. EST, away it went to the upside until the COMEX close and, like gold and silver, got sold lower in the thinly-traded after-hours market.  Platinum finished the Monday session at $975 spot, up 9 dollars from Friday — and 5 bucks off its high tick.

Palladium’s high tick of the day came an hour or so before the Zurich open on their Monday morning — and by 11 a.m. Central European Time, the price was 11 bucks off its high.  From there it chopped around a few dollars either side of the $755 spot mark for the rest of the day, closing in New York at $757 spot — and up three bucks from its Friday close.

The dollar index closed very late on Friday afternoon in New York at 102.21 — and opened about unchanged when trading began shortly before 4 p.m. EST on Sunday afternoon in New York.  It traded mostly sideways for a while, but then rallied about 25 basis points by shortly before 2 p.m. China Standard Time on their Monday afternoon.  It was down to the 102.19 mark just minutes before 8:30 a.m. in London — and at the London a.m. gold fix two hours later, its 102.52 high tick was printed.  It headed lower from there until it hit the 101.88 mark around 11:35 a.m. in New York.  It appeared that the usual ‘gentle hands’ showed up at that juncture and pulled it back barely above the 102.00 mark within the next hour.  The index rolled over for good starting around 3:15 p.m. — and the dollar index closed at 101.82 — down 39 basis points from Friday — and on its low tick of the day as well.

Here’s the 3-day dollar index chart so you can see Monday’s, plus Sunday’s and half of Friday’s ‘action’…so you can put the recent moves in some perspective.

And here’s the 6-month U.S. dollar index chart — and the jury is still out on whether or not the usual ‘gentle hands’ are going to save it this time or not.

The gold stocks gapped up a bit at the open — and then sagged until around 10:30 a.m. EST.  They then rallied until 11:30 a.m. — and traded sideways until 3 p.m.  At that juncture, the gold price began to head a bit lower — and the day traders hit the ‘sell’ button, driving the shares into negative territory briefly just before the close.  But they rallied a bit from there — and despite gold’s decent gain on Monday, the shares themselves only finished higher by 0.53 percent.

The price action in the silver equities was similar, except the panic sell-off that also started at 3:00 p.m. in New York as silver was sold down a bit, didn’t get them down into negative territory.  But that was cold comfort, as Nick Lairds’ Intraday Silver Sentiment/Silver 7 Index closed up only 0.75 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 23 gold and 124 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, the sole short/issuer was Morgan Stanley out of its client account — and Canada’s Scotiabank stopped 21 for its own account.  In silver, the only short/issuer worth noting was International F.C. Stone, as they came up with 123 contracts out of their client account.  Scotiabank picked up 66 contracts for its own account — and JPMorgan stopped 50 contracts for its clients.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in January fell by 4 contracts, leaving 161 still open, minus the 23 mentioned just above.  Since Friday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, that simply means that 4 short/issuers in gold were let off the delivery hook by the long/stoppers on the other side of their trades.  Silver o.i. in January actually rose by 3 contracts, leaving 358 still around, minus the 124 mentioned in the previous paragraph.  Since Friday’s Daily Delivery Report showed that there were no silver contracts posted for delivery today, either…that means that 3 silver contracts were added to the January delivery month.

And despite the fact that the gold price has been rising in an almost uninterrupted fashion since Christmas Day, there was another withdrawal/conversion of shares in GLD again yesterday.  This time an authorized participant removed a fairly chunky 276,321 troy ounces.  And as of 6:55 p.m. EST yesterday evening, there were no reported changes in SLV.

Since Christmas Day — and with the gold price up about $50 bucks as of yesterday’s close — there have been five consecutive withdrawals from GLD totalling 628,387 troy ounces.  There have been no deposits at all.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on in their gold and silver ETFs as of the close of trading on Friday, January 6 — and this is what they had to report.  They added 6,623 troy ounces of gold — and 105,294 troy ounces of silver.

The U.S. Mint had their first sales report of the 2017 calendar year.  They sold 68,000 troy ounces of gold eagles — 20,500 one-ounce 24K gold buffaloes — and 3,747,500 silver eagles.

I’m still waiting for the 3rd quarter financial statements from the Royal Canadian Mint, which are now more than a month overdue.

There wasn’t much movement in gold over at the COMEX-approved warehouses on the U.S. east coast on Friday.  Nothing was reported received — and only 5,626.250 troy ounces/175 kilobars [U.K./U.S. kilobar weight] were reported received.  That amount came out of Canada’s Scotiabank — and I shan’t bother linking this amount.

It was another busy day in silver, as 964,539 troy ounces were reported received — and all of that went into JPMorgan’s depository.  There was also 964,969 troy ounces shipped out of two different depositories — 605,000 out of CNT, plus 359,969 troy ounces out of Canada’s Scotiabank.  The link to this action is here.

It was also busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They reported receiving 7,087 of them — but shipped out only 587.   Except for one kilobar received at Loomis International, all the of the rest of the in/out activity was at Brink’s, Inc. as per usual.  The link to all that action is here.

Here are some charts that Nick Laird passed around on Friday.  But because I was already ‘full up’ with charts in my Saturday column, they had to wait for today.

The first one shows China’s Gold Reserves updated with December’s data.  It shows that they sold 20.98 tonnes during that month, which is the first sale out of their official reserves that I can remember seeing.  Click to enlarge.

This next chart shows the monthly withdrawals from the Shanghai Gold Exchange for December — and that number was 196.368 tonnes.  For the entire 2016 calendar year, Nick says that 1,970 tonnes were withdrawn.  Click to enlarge.  I have a story about this in the Critical Reads section below.

This charts shows the yearly withdrawals from the Shanghai Gold Exchange [updated with 2016’s data] going back to 2008.  Click to enlarge as well.

Despite the fact that it was the weekend, there weren’t all the many stories once you took out the ones about Trump, the CIA/NSA — and “the Russian’s did it“.


Record 95,102,000 Americans Not in Labor Force; Number Grew 18{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} Since Obama Took Office in 2009

Barack Obama’s presidency began with a record number of Americans not in the labor force, and it’s ending the same way.

The final jobs report of the Obama presidency, released Friday, shows that the number of Americans not in the labor force has increased by 14,573,000 (18.09 percent) since January 2009, when Obama took office, continuing a long-term trend that began well before Obama was sworn in.

In December, according to the Labor Department’s Bureau of Labor Statistics, a record 95,102,000 Americans were not in the labor force, 47,000 more than in November; and the labor force participation rate was 62.7 percent, a tenth of a point higher than in November.

The participation rate dropped to a 38-year low of 62.4 percent on Obama’s watch, in September 2015. It was only 3-tenths of a point higher than that last month.

This story showed up on the Internet site on Friday morning EST — and I found it in yesterday’s edition of the King Report.  Another link to it is here.

The False Economic Recovery Narrative Will Die In 2017

Yes, the narrative of the “new normal” has been around for so long now that many people have simply grown used to it. The assumption is that the fiscal “new normal” has become the fiscal “normal,” and though the fundamentals continue to strain under the weight of poor global demand and historic debt levitated by extraneous fiat stimulus, the masses feel far less fear than is warranted. Hey, why should they? We’ve managed around eight years skating on thin ice, why shouldn’t we expect eight more years of the same?

The banking elites have done the job they set out to do, which was to drive the economy to the very edge of the financial cliff, and then keep it suspended there until the general public became comfortable living next door to the abyss.

And there you have it. The globalist setup continues with mainstream outlets telling Americans that the economy is in ascension as Trump and populists move into positions of power, when in truth the economy is as dire as it ever was if not worse off. To add to the theater, Donald Trump has ventured to take credit for the sharp rise in stocks and the impression of improving economic stats.  In one of his latest tweets just after Christmas, he had this to say:

“The world was gloomy before I won – there was no hope. Now the market is up nearly 10{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} and Christmas spending is over a trillion dollars!”

Now, if you know anything about the true fiscal situation, you would think this statement is a severely idiotic move by Trump.  No incoming president with any sense would try to take credit for the largest equities bubble in history.  But, take credit is essentially what he did.  That said, if you ALSO understand that the globalist narrative is engineered so that conservatives take the blame for the coming crash, AND if you believe that Trump is knowingly participating in this narrative (as I now do after he lied about “draining the swamp” and front loaded his cabinet with banking elites), then Trump’s statement makes perfect sense.  Trump is playing the role of a future bumbling villain, the populist maniac who gets too big for his britches and brings disaster down on people’s heads.

The false recovery narrative will indeed die in 2017, and it will be because the globalists WANT it to die while nationalists are at the helm. This is perhaps the biggest con game in recent history; with conservatives as the fall guy and the rest of the public as the gullible mark. One can only hope that we can educate enough people on this scenario to make a difference before it is too late.

This longish/long commentary from the Internet site on Friday, was picked up by Zero Hedge on Friday evening at 10 p.m. EST — and I thank ‘aurora’ for passing it around early on Saturday morning.  Another link to it is here.

Wall Street Is Starting to Get Nervous About All the Money Pouring Into U.S. Stocks

After President-elect Donald Trump won the election, markets began a decisive shift in essentially all asset classes. Suddenly, everything from bank stocks to emerging-market bonds staged decisive price swings, driven by a stronger dollar, an increase in U.S. growth expectations, worries over the prospect of a more protectionist Trump-led administration and a steeper U.S. yield curve.

A big beneficiary of this dynamic has been U.S. equities, which have now seen nearly $70 billion in inflows since Nov. 8, according to Bank of America Merrill Lynch. Big losers have been emerging market equities and bonds, which have seen more than $10 billion in outflows.

These positions are now vulnerable to a reversal, the firm adds.

Traders [that are] looking to play a pullback on ‘sell the inauguration’ or ‘here comes the Fed’ or ‘Chinese yuan-reversal’ themes should note since the U.S. election the big inflows have been concentrated in U.S. stocks, financials, bank loans, U.S. value stocks, and High Yield,” the team, led by Chief Investment Strategist Michael Hartnett write. “In contrast, Emerging Markets, U.S. growth stocks, Treasuries, Gold and Investment Grade have less vulnerability to profit-taking.”

Bank of America isn’t the first Wall Street name to issue caution. Morgan Stanley and Goldman Sachs Group Inc. sent out warning flags earlier this week, calling for U.S. equities to perform well in the first half of the year, but see a move lower thereafter.

This Bloomberg article appeared on their Internet site on Friday morning Denver time — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to this news item is here.

Consumer Credit Soars, Driven By Near Record Credit Card-Fueled Spending

After several months of tepid growth in the revolving consumer credit, i.e., credit card, space, the latest monthly report from the Fed revealed that Americans went on a credit card-funded shopping spree in November, when total revolving credit exploded higher by a massive $11 billion, the highest November increase on record, and the second highest of the post crash period.

The credit card spending spike may explain why November, i.e., early holiday sales, were strong only to tumble in the second half of the holiday spending season as various retailers have already complained.

The spike in revolving credit was more than matched by non-revolving credit, which as usual bounced by a solid $13.5 billion, bringing the total monthly increase in consumer credit to $24.5 billion, far above the revised October print of $16.2 billion and also well above the consensus estimate of $18.4 billion.

As noted above, the biggest contributor of November credit was credit card debt, which surged by $11 billion, to a grand total of just under $1 trillion, or $992.4 billion.

At the same time non-revolving credit, or car and student loans, rose to $2.758 trillion.

I found this interesting 5-chart story on the Zero Hedge website.  It was posted there at 3:19 p.m. on Monday afternoon EST — and another link to it is here.

Democrats wage anti-Trump offensive for their own gain

This is a first: Donald Trump is guilty of an understatement, of making a molehill out of a mountain. He called the Washington furor over Russian hacking a “witch hunt” when it is actually far more sinister and dangerous.

Witch hunts end. The Washington mob aims to make sure the election never ends and that Trump can never govern.

There are no modern precedents to the scandalous attempts to smear and undermine the president-elect. Nearly nine weeks after his victory and less than two weeks before he takes the oath, the voter-nullification plot is growing more vile.

This is not mere politics. This is half the country going rogue in a fit of madness.

This story put in an appearance on The New York Post website very early on Sunday morning EST — and it’s the second offering of the day that I plucked from yesterday’s edition of the King Report.  Another link to it is here.

Mexico protests: how gas prices lit the flame under a quietly smoldering rage

Marching with a boisterous but peaceful crowd through central Mexico City, Héctor Pérez, a sales manager with an insurance company, rattled off a list of grievances to explain a wave of furious protests which erupted after a rise in the country’s government-set petrol price.

It’s not because we all have cars. When gasoline prices go up, everything else goes up: tortillas, public transportation, everything,” said Pérez.

Pressed a little harder, he voiced another set of reasons for his discontent: President Enrique Peña Nieto and his Institutional Revolutionary party (PRI) justified an agenda of structural reforms with the promise of growth for all – but have instead presided over a stagnating economy.

Meanwhile, a string of high-profile corruption scandals has heightened the perception that the while ordinary Mexicans have seen a gradual decline in spending power, the country’s politicians have grown rich.

This new story, filed from Mexico City, was posted on Internet site at 8:44 p.m. GMT on Monday evening — and I thank Patricia Caulfield for sharing it with us.  Another link to it is here.

No one can afford to stop Britain’s new consumer credit crisis

Consumer debt has raised its ugly head again. According to the latest figures, the total has soared back to a level last seen just before the 2008 financial crash. To the untrained eye, the dramatic increase in spending using credit cards and loans might appear to prefigure a disaster of epic proportions.

Excessive consumer debt played a big part in the collapse of Northern Rock, and looking back, this landmark banking disaster appears to have been the harbinger of an even bigger catastrophe when, a year later, Lehman Brothers fell over.

This is not a view shared by the Bank of England, which says it need only keep a watching brief. Its complacency is born of forecasts of the ratio between household debt and GDP made by the Office for Budget Responsibility. At the moment, the household debt to GDP ratio is around 140{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, compared with almost 170{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in 2008. The OBR’s latest analysis predicts that, over the next five years, the combination of consumer and mortgage debt will rise only gradually and fall well short of its pre-crisis peak.

There is nothing wrong with judging household debt as a proportion of annual national income to gauge sustainability and the likelihood that borrowers can afford to pay it back. There is nothing wrong with it as long as you assume that GDP has been evenly shared out since the crash and that the people doing the borrowing have higher incomes, thanks to the higher GDP, to cope with repayments.

Except that the Bank of England knows most people’s incomes have flatlined for years. It need look no further than official figures, which make it clear that the vast majority have missed out on the gains from GDP growth. Incomes per head have barely recovered since 2008 and are only marginally ahead.

This issue sounds familiar, as similar situations are unfolding in all western nations.  This news item is the second in a row from The Guardian — and this one showed up on their Internet site early on Sunday morning GMT — and it’s the second contribution of the day from Patrik Ekdahl.  Another link to it is here.

Turkish Lira Plunges Over 2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to New Record Low, Yields Rise on Moody’s Warning

The collapse in the Turkish Lira, which has been relentless since last summer’s failed coup, has only accelerated in 2017, and especially this morning, when the Turkish currency tumbled more than 2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} against the dollar – its single worst day since the July 19 military coup attempt – sliding as low as 3.73, down over 5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} so far in 2017, and over 23{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in the past 12 months.

While the broader catalyst are familiar, namely a slowing economy, seemingly daily terrorist attacks, a furious crackdown by Erdogan on government dissent and potential rating downgrades, this morning there have been two additional catalysts that have accelerated the selloff.

First Moody’s, which has the country on junk rating as of last September, issued a warning on the country’s banking system saying heightened security risks would weigh down on the economy and heap further pressure on domestic banks. The rating agency warned that Turkish banks’ bad loan ratio was set to rise to 4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} this year from 3.24{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} “driven by the combination of high inflation, lira depreciation and the general worsening of the investment climate because of security issues and geopolitical tensions”. The caution comes as Turkey faces another downgrade to junk from Fitch later in January, which would see its last investment grade rating stripped away, promptly raising its costs of borrowing even more.

This Zero Hedge news item appeared on their Internet site at 6:12 a.m. on Monday morning EST — and another link to it is here.

China December forex reserves fall less than expected to $3.011 trillion

China’s foreign exchange reserves fell for a sixth straight month in December but by less than expected to the lowest since February 2011, as authorities stepped in to support the yuan ahead of U.S. President-elect Donald Trump’s inauguration.

China’s reserves shrank by $41 billion in December, slightly less than feared but the sixth straight month of declines, data showed on Saturday, after a week in which Beijing moved aggressively to punish those betting against the currency and make it harder for money to get out of the country.

Analysts had forecast a drop of $51 billion.

For the year as a whole, China’s reserves fell nearly $320 billion to $3.011 trillion, on top of a record drop of $513 billion in 2015.

While the $3 trillion mark is not seen as a firm “line in the sand” for Beijing, concerns are swirling in global financial markets over the speed with which the country is depleting its ammunition to defend the currency and staunch capital outflows.

This Reuters news item was filed on their website at 10:25 p.m. EST on Friday evening — and was picked up by CNBC.  It was originally headlined “China foreign exchange reserves fall in December to lowest since February 2011“…but it’s obvious that the ‘thought police’ have been busy.  I thank Richard Saler for sending it our way on Saturday — and another link to it is here.

GATA Points to ‘Proof’ of Gold Price Suppression Intent — Lawrie Williams

It has long been claimed that the gold price, along with virtually every other traded market, is manipulated by financial interests which can lay hands on sufficient funds, or credit, to be able to do so.  That is an unfortunate aspect of the capitalist system and tends to benefit the big money, mostly at the expense of the small investor.

But since its formation in 1998 the Gold Anti-Trust Action Committee (GATA) has gone a stage further with its claims that not only is the gold price manipulated (which suggests it can be pushed up as well and down), but that there is collusion by big money (mainly the bullion banks), central banks and governments to go a stage further and keep the gold price SUPPRESSED, given that a rising gold price is seen by the financial markets as a sign of weakness in the almighty dollar and in the global economy.  That runs counter to the impression that governments wish to portray.

From time to time GATA has also managed to acquire documents which support its point of view in terms of memos from some key figures, particularly from the U.S. Treasury and Federal Reserve, which would appear to support the idea of a gold price suppression policy.  And now it has just been involved in publishing a document, dating back to the early 1970s.

The cable, according to GATA, suggested that the U.S. gold futures market was created in December 1974 as a result of collusion between the US government and gold dealers in London to facilitate volatility in gold prices and thereby discourage gold ownership by U.S. citizens.  That is perhaps an arguable contention as it perhaps rather points out the consequences of a change in U.S. policy in allowing citizens to own gold.

The above-mentioned cable from the U.S. Embassy in the U.K. to the State Department perhaps does not quite provide ‘proof’ of U.S. Government involvement in actual gold price suppression, but is yet another piece of circumstantial evidence that it was certainly aware of the likely effects of the futures market on the gold price pattern and may well have colluded in this as being in its best interests.

This commentary by Lawrie showed up on the Internet site on Saturday — and I found it embedded in a GATA release.  Another link to it is here.

U.N. Experts: Rebels, Criminals, Some Army Exploit Congo Gold

Some army officers, rebel groups and criminal networks in Congo are still illegally exploiting the country’s gold and mineral riches despite government and military bans, U.N. experts said in a report circulated Monday.

The panel of experts monitoring sanctions against Congo said gold remains by far the mineral most used to finance rebel and criminal groups. It names several senior officers implicated in gold exploitation and trade, “on occasion in collaboration with private companies.”

The report to the U.N. Security Council said a gold-tracing program has not yet become operational and efforts for the government to control its natural resources are impeded by “the impunity enjoyed by wrongdoers,” corruption by a wide range of parties, and loopholes in implementing bans and monitoring.

On the key issue of Congo’s vast natural resources, the panel said its preliminary investigations showed that “most gold produced in the country continued to be smuggled through neighboring countries to Dubai, United Arab Emirates.

This AP story was posted on the Internet site at 7:59 p.m. EST on Monday evening — and my thanks go out to West Virginia reader Elliot Simon.  Another link to it is here.

There Is No Limit On Holding Gold in India : Somasundaram

India’s weekly news magazine Outlook offers a fascinating interview with Somasundaram PR, managing director of the World Gold Council’s Indian office, noting that despite recent suggestions to the contrary, there is really no limit in law or regulation on how much gold Indians can own. The interview also details how Indians consider gold just as much a currency as any other — and treat it that way in everyday business transactions.

While the Indian government is constantly hectoring its people to bring their gold into the financial system by paperizing it, the interview suggests that much of their gold is already functioning as both currency and savings. With the Indian rupee depreciating against gold over the last 15 years more than any other currency it’s hard to imagine any practical measures by which the government will separate people from their gold.

The interview appeared on Saturday — and is headlined “There Is No Limit on Holding Gold: Somasundaram“.  It’s posted at Outlook‘s internet site  It’s definitely worth reading — and another story I found on the Internet site.  Another link to it is here.

2016 SGE gold withdrawals lowest for four years — Lawrie Williams

The Shanghai Gold Exchange (SGE) has now released its final report for the year on monthly gold withdrawals, with the December figure falling back below 200 tonnes (in comparison withdrawals totalled just short of 215 tonnes in November).  This brings the total for the year to 1,970.37 tonnes, the first time the figure has been below 2,000 tonnes since 2012, and a fall of 24.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} on last year’s record total of 2,596.37 tonnes.

There are, and no doubt always will be, some arguments among analysts as to whether SGE gold withdrawals are an accurate representation of total mainland China gold demand.  Some – notably Koos Jansen of, who perhaps follows the Chinese gold sector closer than anyone — avers that they are and supports his argument with pointers to Chinese official statistics which would seem to support his analysis.  Meanwhile the big precious metals focused consultancies – Metals Focus (which also supplies the data put out by the World Gold Council), GFMS and CPM Group classify consumption in much narrower terms and come up with various – and often differing – reasons why SGE withdrawals should not be equated to total Chinese gold demand.  What puzzles us with regard to the figures put forward by the latter organisations is that their demand estimates always seem to fall hugely short of known Chinese gold import figures as published in official data from principal conduits Hong Kong, Switzerland, the U.K. and Australia, and not including possible gold imports from other gold producing nations which do not publish the breakdown of their gold exports in country-by-country detail.  At one time one could point to Hong Kong exports to the mainland alone as a proxy for total mainland gold imports, but that’s no longer the case as 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} or more now looks to be going into the mainland directly, bypassing Hong Kong altogether.

But whatever one’s views on the accuracy of SGE gold withdrawal figures as a true representation of Chinese gold demand, they obviously at the very least demonstrate the overall trend and this shows that total Chinese gold demand slipped sharply in 2016 compared with the years immediately preceding – but it still remains very substantial keeping China at the head of the list of global gold imports.  It is also the world’s top gold producer, with annual new mined gold production nearly 70{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} higher than that of No. 2 miner, Australia – or it could now be Russia in second place, we won’t know until the latest global gold production totals are available.  For the last year for which final figures are available – 2015 – China produced some 460 tonnes of gold, Australia 274 tonnes and Russia 269 tonnes.

What the SGE withdrawals figure for the year does confirm though, is that however one calculates Chinese gold demand it has very definitely slipped sharply in the past year – but if we do equate the SGE total to the total Chinese gold off-take, China still takes in over 60{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of global new mined gold output on it own – and, as Koos Jansen points out in his most recent article on bullionstar.comHow The West Has Been Selling Gold Into A Black Hole, what goes into China doesn’t come out again.

This excellent commentary by Lawrie put in an appearance on the Sharps Pixley website on Saturday sometime — and it’s certainly worth reading.  Another link to it is here.



“Just as there is a mechanical feature to positioning on the COMEX for futures contracts, there is also a mechanical feature to physical metal ownership. It is the reality of what will happen to price once a rush to physical metal develops by investors and industrial users alike that is so exciting. No one recognizes this better than the market master (and crook) JPMorgan — and fully explains why the bank came to own a third of all the investable silver in the world. Say what you wish about JPMorgan, but no one would ever accuse it of being dumb or not looking ahead, certainly not me. Don’t listen to what I say, heed what JPMorgan has done.” — Silver analyst Ted Butler: 07 January 2017

I was happy to see precious metal prices higher on the day, as the structure in the COMEX futures market is certainly configured for rallies of some size.  However, the jury is still out on whether this rally in silver [and gold] is Ted’s ‘big one’ or not.

As he’s pointed out on countless occasions, if JPMorgan does not step into the silver or gold market as short buyer and long seller of last resort at some point, then it will be the big one — and it will be self-evident in the price.  All we can do is wait and around and see what happens.

At the moment, we’re still below the 50-day moving averages in both these metals — and even though I’ve mentioned the 20-day moving averages many times last week, the 50-day is the critical one, as is the 200-day.  But first things first.

Here are the 6-month charts for all four precious metals, plus copper, so you can see how the current rallies are progressing.  As I mentioned about the five withdrawals in a row from GLD since Christmas, they certainly fly in the face of the rally in gold that’s been occurring since then.  That’s more than obvious in the first chart.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price chopped sideways once trading began in New York at 6:00 p.m. EST yesterday evening.  It began to head higher as the dollar index rolled over hard after a brief rally — and gold’s high tick in the Far East came shortly before noon China Standard Time on their Tuesday morning.  But once the dollar index began to ‘recover’…the gold price began to chop sideways — and began to head lower around 2:30 p.m. in Shanghai.  Gold is now up only $3.10 the ounce.  It was the same trading pattern in silver — and it’s up a nickel currently.  Platinum struggled to stay above unchanged — and it’s now down 3 bucks going into the Zurich open.  Palladium spent all of the Far East trading session a few dollars either side of unchanged — and is up 2 dollars at the moment.

Net HFT volume in gold is already a bit over 46,000 contracts — and that number in silver is just over 12,000 contracts, so it’s obvious that these morning rallies in the Far East ran into some pretty heavy-duty opposition.  There’s no roll-over/switch volume in either worth mentioning.

The dollar index tried to rally back to the 102.00 mark, but that attempt cratered shortly after 10 a.m. CST.  It fell down to the 101.63 mark by 1:30 p.m. in Shanghai, but began to rally about an hour later — and that’s when the four precious metals began to get sold off.  The dollar index is back to down only 3 basis points as London opens.

Today, at the 1:30 p.m. EST close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and it’s a given that there has been a very decent increase in the Commercial net short positions in both gold and silver since last Tuesday’s cut-off.  But as Ted has been harping on, it’s which Commercial traders have been the short buyers and long sellers of last resort that matters.

And as I post today’s missive on the website at 4:05 a.m. EST this morning, I see that not much has happened during the first hour of trading now that London and Zurich are open.  Gold is $4.00…silver is up 6 cents — and platinum is still down 3 bucks — and palladium is back to unchanged.

Net HFT gold volume is now just north of 54,000 contracts — and net HFT volume in silver is just under 14,000 contracts.  The rally in the dollar index reached the 101.85 mark right at the London open — and has been chopping lower since.  It’s down 8 basis points currently.

As to what may happen for the rest of the trading day on Tuesday, I haven’t a clue…but the current volume levels are certainly something that I didn’t want to see.  Nothing will surprise me when I check the charts later this morning after I roll out bed.

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


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