JP Morgan et al Start the Week Off On a Losing Note

07 March 2017 — Tuesday


The gold price didn’t do much in Far East trading on their Monday, chopping around just below unchanged.  It rallied back to unchanged at the London open, but that tiny ‘rally’ wasn’t allowed to get far — and the price was down two bucks and changed by the COMEX open.  ‘Da boyz’ set the low tick a minute or two before the COMEX close — and the smallish rally that manifested itself after that was dealt with as the after-hours trading session moved to its conclusion at 5:00 p.m. EST.

The gold price traded mostly within a ten dollar price range on Monday, so I shall dispense with the high and low ticks again today.

Gold was closed in New York on Monday at $1,225.10 spot, down $9.20 on the day.  Net volume wasn’t overly heavy, relatively speaking, at 148,000 contracts.

The silver price was hit the moment that trading began in New York at 6:00 p.m. EST on Sunday evening — and they had it down a dime and change by shortly after 9 a.m. in Shanghai on their Monday morning.  It didn’t do much until the COMEX open — and then its tiny rally met the same fate as the tiny rally in gold at that instant.  The low tick was placed at 1 p.m. EST — and it rallied into the COMEX close from there — and didn’t do much after that.

The high and low ticks in this precious metal were recorded by the CME Group as $17.995 and $17.735 in the May contract.

Silver finished the Monday session at $17.755 spot, down 19 cents from Friday.  Net volume was reported at just under 48,000 contracts.

Here’s the 5-minute silver tick chart, courtesy of Brad Robertson.  There’s not really a lot to see, except for the fact that with odd volume bump in Far East and London trading, the volume that really mattered occurred during the COMEX trading session — and by shortly after the COMEX close, it died off to next to nothing.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ feature is a must.

The platinum price didn’t do much, or wasn’t allowed to do much in the first two hours of trading on Sunday evening in New York.  Then at 9 a.m. China Standard Time, the price pressure began — and that continued until the 11 a.m. EST Zurich close.  Then the ‘da boyz’ on the COMEX took over — and sold it down to its low of the day between 1 p.m. and a few minutes before the COMEX close.  It rallied a small handful of dollars from there — and then traded sideways for the rest of the day.  Platinum was closed at $976 spot…down 20 bucks from Friday.

Palladium rallied two or three dollar after an hour of trading in New York on Sunday evening — and then traded mostly flat until an hour before the Zurich open.  It crawled lower from there, with the low tick of the Monday session coming shortly after the Zurich close.  It edged higher from there into the COMEX close and, like the other three precious metals, traded sideways for the rest of the thinly-traded after-hours market in New York. Palladium finished the Monday session at $771 spot…down a buck on the day.

The dollar index closed very late on Friday afternoon in New York at 101.34 — and began to chop very quietly higher once trading began at 4:00 p.m. on Sunday afternoon in New York.  It had a pretty vicious 2-hour plus down/up move between the 8:00 a.m. open until around 10:10 a.m. GMT in London.  Once the ‘gentle hands’ had dealt with that, the index continued to chop higher, but in a much broader range — and the 101.75 high tick of the day came a few minutes either side of the 1:30 p.m. EST COMEX close.  It sold off about ten basis points from there, before trading sideways.  The dollar index finished the Monday session at 101.70 — and up 36 basis points from Friday.

Here’s the 3-day dollar index chart, so you can see all of the action on Monday, plus what happened on Sunday and Friday as well.

Here’s the 6-month U.S. dollar index chart for your entertainment.

The gold stocks opened down a percent — and continued lower from there.  The low tick came a minute or so before 12 o’clock noon in New York — and crawled quietly higher from there.  The HUI closed down another 2.99 percent.

It was virtually the same price action for the silver equities, complete with the 11:59 a.m. EST low tick — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 3.42 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that only 1 gold and 11 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In silver, ten of the eleven contracts were issued by HSBC USA — and JPMorgan picked up all eleven…9 for its own account, plus 2 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 March rose by 11 contracts, leaving 57 contracts still open, minus the 1 contract mentioned just above.  Friday’s Daily Delivery Report showed that 1 gold contract was actually posted for delivery today, so that means that 1+11=12 gold contracts just got added to the March delivery month.  Silver o.i. in March dropped by 370 contracts, leaving 2,264 still around, minus the 11 mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 343 silver contracts were actually posted for delivery today, so that means that 370-343=27 March silver contracts were removed/covered.

There was another withdrawal from GLD yesterday, as an authorized participant took out 122,505 troy ounces.  There were no reported changes in SLV.

There was a smallish sales report from the U.S. Mint on Monday.  They only sold 1,000 troy ounces of gold eagles, plus 230,000 silver eagles…which are their first sales in the new month.

There was no in/out activity in either gold or silver on the U.S. east coast on Friday — and I must admit that I was rather intrigued by that.  There have been two days so far in March where there has been no silver movement, in or out, which is surprising considering the all the silver contracts still open for delivery.

There was certainly activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They received 2,700 of them — and shipped out 5,171.  All of this action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

I have a very decent number of stories for you today, including  several longish interviews — and I hope you can find the time to fit the ones in that interest you.


The Bloodletting among Retailers Simply Doesn’t Let Up

Neiman Marcus, the Texas-based luxury retailer with 42 stores around the country and two Bergdorf Goodman stores in Manhattan, is in no immediate risk of bankruptcy, the sources told Reuters on Friday, though it has hired investment bank Lazard Ltd to help restructuring its nearly $5 billion in debt.

When this news emerged, Neiman Marcus unsecured bonds due in 2021 plunged 7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 54 cents on the dollar, according to Thomson Reuters, and its $3 billion term loan fell 5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 77 cents on the dollar.

Earlier this year, Neiman Marcus scrapped its IPO entirely, after having delayed it in 2015 when its difficulties could no longer be swept under the rug. In December that year, it reported its first quarterly sales decline since 2009, with same-store sales dropping 5.6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. There was plenty of red ink. And layoffs commenced.

At the time, CEO Karen Katz blamed the oil and gas bust in which wealthy shoppers in Texas were tangled up. She also blamed the “strong dollar” that prevented foreign tourists from splurging at its stores in the gateway cities Honolulu, San Francisco, Las Vegas, New York, Washington, and Miami.

As so many times in the brick-and-mortar retail fiasco, there’s a private-equity firm behind it: In 2005, Neiman Marcus was subject of a leveraged buyout. It’s now owned by Ares Capital and the Canadian Pension Plan Investment Board. Their hopes of an elegant exit via an IPO have been scrapped.

This news item appeared on the Internet site on Sunday sometime — and my thank out to Richard Saler for sending it our way.  Another link to it is here.

Pepsi Lays Off 20{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} Of Its Philadelphia Workers, Blames Soda Tax

Two weeks ago, we pointed out that when Philadelphia became the first U.S. city to pass a soda tax last summer, city officials were eagerly looking forward to the surplus-tax funded windfall to plug gaping budget deficits (and, since this is Philadelphia, the occasional embezzlement scheme). Then, one month ago, after the tax went into effect on January 1st we showed the tax applied in practice: a receipt for a 10 pack of flavored water carried a 51{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} beverage tax. And since  PA has a sales tax of 6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} and Philly already charges another 2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, the total sales tax was 8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. In other words, a purchase which until last year came to $6.47 had overnight become $9.75.

What happened next? Precisely what most expected would happen: full blown sticker shock, and a collapse in purchases. Just two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 50{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} drop in beverage sales and – adding insult to injury – had started planning for layoffs.

Fast forward just a few days later, when these warnings are becoming reality. According to the Philadelphia Inquirer, with sales slumping as much as 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} because of the new Philadelphia sweetened beverage tax, Pepsi said last week that it will lay off 80 to 100 workers at three distribution plants that serve the city. And since Pepsi employs 423 people in the city, it means that as much as 20{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of its employees will be out of job due to a disastrous ordnance that was meant to provide additional municipal funding and instead will now lead to an increase in unemployment, coupled with a general decline in consumption, not to mention tax revenues for the city of Philadelphia.

This story showed up on the Zero Hedge website at 2:09 p.m. on Monday afternoon EST — and another link to it is here.

Chris Martenson and Max Keiser: Everybody wants to keep pretending…(part 2/2)

I posted Part 1 of this interview interview late last week — and here’s the rest.  It showed up embedded in an item on the Internet site on Saturday — and runs for about 13 minutes.  I thank Judy Sturgis for pointing it out.

Jim Rickards on Complexity, Economic History…and the Coming Financial Crisis

In this episode of Hidden Forces, host Demetri Kofinas speaks with New York Times bestselling author and brilliant financial commentator, Jim Rickards. Jim is the author of multiple New York Times bestsellers including The Death of Money, Currency Wars, and The New Case For Gold. His latest book is The Road To Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis. He is the editor of the Strategic Intelligence newsletter and a member of the advisory board of the Center for Financial Economics at Johns Hopkins. He’s an adviser to the Department of Defense and the U.S. intelligence community on international economics and financial threats and served as a facilitator of the first-ever financial war games conducted by the Pentagon.

Jim and Demetri explore financial history stretching back to some of the earliest economic philosophers, enumerate the deregulation of the financial system from the time of Bretton Woods, through the financial panics in Asia in the late 1990s and the Financial Crisis of 2008. We address one of economics professions’ greatest weaknesses, namely, the desperate need for better modeling. What can complexity theory, Bayesian analysis, and behavioral psychology tell us about our world? How can these theories help improve or replace our broken models? We end with projections about the future and why Jim believes the next crisis is bigger, runs deeper, and is much closer than most of us might imagine.

This interview runs for an eye-popping 90 minutes — and was posted on the Internet site yesterday — and the first person through the door with it was Harold Jacobsen.  If you don’t have time for it just now, it will be in my Saturday column as well.  Another link to it is here.

What Toronto’s Crazy Average House Price Will Buy You Across Canada

To no one’s surprise, Toronto’s house prices hit another record high in February, with the average selling price for a detached home hitting $1.57 million, an increase of 29.8 per cent in one year.

Even the suburbs have joined the $1-million club, with single-family homes in the 905 region averaging $1.1 million in February, the Toronto Real Estate Board reported. That’s a jump of 35.4 per cent in a year. Did we mention Greater Toronto housing is now more expensive than the New York metro area?

The experts are getting nervous. The Bank of Montreal’s chief economist, Douglas Porter, recently declared Toronto to be in a housing bubble. Scotiabank’s CEO, Brian Porter, said last week the city is facing an inevitable housing correction at some point in the future.

No…really?  Ya think???  I thought housing prices in Vancouver were nuts, but this is insane, especially considering their weather in winter.  This news item showed up on the Internet site late on Saturday morning EST — and it comes to us courtesy of Roy Stephens.  Another link to it is here.

Poll Says More than half of Dutch voters now want to LEAVE the European Union

Brussels was facing a full blown popularity crisis as the dynamite survey showed 56 per cent of people in the Netherlands want to quit the political project and revert back to simple commercial ties.

The shock result was published just two weeks before Dutch voters are set to go to the polls to elect their new government, with far-right Eurosceptic politician Geert Wilders leading in the polls.

It also comes a day after Brussels boss Jean-Claude Juncker openly dismissed the idea of taking the E.U. back to its roots as a trading bloc, despite including that scenario as a possibility in his landmark white paper.

Eurosceptics today hailed the poll as proof that people across the continent are finally realising the E.U. has become a “straitjacket” which is leaving the them worse off.

This news story, filed from Brussels, put in an appearance on the Internet website on Friday — and I found it in the Monday edition of the King Report.  Another link to it is here.

Hollande declares his ‘ultimate duty is to prevent a Le Pen victory

Outgoing French President François Hollande said in European newspaper interviews published on Monday that his “ultimate duty” was to prevent a victory of far-right National Front leader Marine Le Pen in this year’s election.

My ultimate duty is to make sure that France is not won over by such a programme, and that France does not bear such a heavy responsibility,” said Hollande of the risk of a Le Pen victory in the election.

He added it was inevitable that the European Union would have countries progressing at “different speeds” and that he saw no reason to call into question Donald Tusk’s role as president of the European Council.

He also said the “euphoria” of financial markets after the election of U.S. President Donald Trump appeared to be “very premature”.

Nothing will guarantee a Le Pen victory more than this statement, dear reader.  This brief AFP story was posted on the Internet site on Monday — and I thank Roy Stephens for sending it our way.  Another link to it is here.  There was another news item about the French elections/leadership that appeared on the Bloomberg website.  That one is headlined “Juppe Exit Leaves Party to Pick Up Pieces in French Race” — and I found it in Tuesday’s edition of the King Report.

Deutsche Bank Board to Meet on $8.5 Billion Capital Raise

Deutsche Bank AG’s supervisory board will meet Sunday to discuss a plan to raise more than 8 billion euros ($8.5 billion) as Chief Executive Officer John Cryan tackles concerns about capital levels, a person familiar with the matter said.

The bank on Friday confirmed a Bloomberg News story that said the lender is planning an equity offering and the sale of part of its asset management unit after failing to find a buyer for its Postbank consumer business, which had been a key pillar of Cryan’s strategy. The bank may now seek to reintegrate Postbank.

While Cryan, 56, has focused on improving internal controls and scaling back capital-intensive debt-trading businesses since taking over in 2015, some investors and clients aren’t convinced the overhaul will restore profitability. Frankfurt-based Deutsche Bank lost market share in the fourth quarter as mounting legal costs fueled concern about its financial strength.

The capital increase is the right way to go,” Andreas Plaesier, an analyst at Warburg Research said by phone. “Timing is important too given the fact that other European banks may need more capital,” he said.

Talk about buying a pig in a poke…and this would be it.  This Bloomberg story put in an appearance on their Internet site at 3:11 a.m. Denver time on Sunday morning — and was subsequently updated an hour later.  I thank Swedish reader Patrik Ekdahl for sharing it with us — and another link to it is here.

The Donbass is breaking away from an agonizing Ukraine — The Saker

Tectonic shifts are continuing to occur in the political landscape of the Ukraine. Last week, following the imposition of a total blockade against Novorussia by the Ukronazis, Russia declared that she will from now on recognize the official documents emitted by the DNR and LNR authorities. This week, the Novorussian authorities have nationalized all the key factories of the Donbass. Furthermore, the Novorussians have now declared that since the Ukrainian authorities are not willing to purchase their coal and anthracite they will from now on export them to Russia. And just to make sure that they cover all their bases, the Novorussians have also declared that from now on only the Russian Ruble will be circulating in the Donetsk and Lugansk people’s republics.

Not to be undone, the Ukronazis have also taken a highly significant step: the Ukrainian Prime Minister has declared that he thinks that the irregular forces currently enforcing the blockade should be considered official border guards (as for these soon to be “border guards”, they have explained that for their main border post shall be called “nightingale” in honor of the Nachtigall battalion of the Nazi Abwehr).

Let’s sum all this up:

1.    The Urkonazis completely close down the unofficial border with Novorussia
2.    Russia recognizes Novorussian documents
3.    The DNR and LNR nationalize all the Ukrainian industry in the Donbass
4.    The Ukronazis declare that the line of contact is now to be considered a border
5.    The Novorussians declare that the Russian Ruble is the only legal currency in Novorussia
6.    The Novorussians will now export their entire production of coal/anthracite to Russia
7.    All the factories in Novorussia will no longer pay taxes to Kiev

I don’t know about you – but to me this sure looks like the DNR and LNR are cutting off their last ties to the Ukraine and the the junta in Kiev appears to go along with this plan.

This commentary by the Saker was posted on his website on Saturday — and it’s certainly a must read for any serious student of the New Great Game.  I thank Larry Galearis for bringing it to our attention — and another link to it is here.

Stephen F. Cohen Interview with Michael Tracey of TYT Politics

TYT Politics reporter Michael Tracey, interviews Stephen F. Cohen, an American scholar and professor emeritus of Russian studies at Princeton University and New York University. Michael and Stephen discuss Donald Trump and Russia.

Larry Galearis had this to say about it…

I found this interview very disturbing in that the hopes for avoiding war with Russia are beginning to fail. Cohen talks but listen between the lines too.

Cohen hoping for a breakdown conflict between CIA factions to change the status quo with leaks to WikiLeaks. He is down to that. He thinks the frenzy has gone so far that ‘Mars’ is unleashed or soon will be. What is going on here, he explains, is a monstrous mindset attack on reason that results in a political lockdown on policy on the mainstreet levels and beyond. Essentially a verbal literate dissident is labeled as a virtual traitor, and going against the narrative anywhere is becoming risky to your financial health. Cohen is essentially saying that the hope is now down to an internal rebel (faction?) that renders a bureaucratic chaos that gets in the way of performance. THAT is complete chaos. Sound like Sci-Fi speculation? Where have you been the last 20 years? I have yet to read a thriller that comes close to what we are facing in reality right now.  And yet the ammunition used to get us here has been propaganda on many fronts. Fiction becomes reality now in our world.

This interview with Stephen runs for 51 minutes — and appeared on the Internet site back on February 28 — and it comes courtesy of Larry Galearis, of course.  Another link to it is here.

China’s Banking System Hits $33 Trillion, Overtaking The Eurozone as World’s Largest

Something historic, if largely unnoticed, took place at the end of 2016: China’s banking system surpassed that of the eurozone, becoming the world’s largest by assets, which according to the FT is a sign of both of the country’s increased influence in world finance and its reliance on debt to drive growth since the global financial crisis. It is also a confirmation that when it comes to interwoven, “Too Big To Fail” financial systems, nothing compares to China and that the onus is on Beijing to keep its banks viable and solvent at all costs.

Chinese bank assets, frequently discussed here and which are also the basis for Kyle Bass’ bearish stance on China, hit $33 trillion at the end of 2016, versus $31 trillion for the eurozone, $16 trillion for the US and $7 trillion for Japan. The value of China’s banking system is now more than 310{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} the size of its GDP, compared to “only” 280{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} for the eurozone and its banks.

Putting China’s banking dominance in context, 4 of the 5 largest global banks are now Chinese.

The massive size of China’s banking system is less a cause for celebration than a sign of an economy overly dependent on bank-financed investment, beset by inefficient resource allocation, and subject to enormous credit risks,” said Eswar Prasad, economist at Cornell University and former China head of the International Monetary Fund.

This Zero Hedge news story showed up on their Internet site at 11:33 a.m. EST on Monday morning — and another link to it is here.  It’s the second offering of the day from Richard Saler.

Cost to produce and distribute Lincoln cent rose during Fiscal Year 2016

The cost to produce and distribute copper-plated zinc Lincoln cents during Fiscal Year 2016 increased about 5 percent over the previous year, remaining above face value.

Fiscal Year 2016 was the 11th straight year for the costs to produce the Lincoln cent and Jefferson 5-cent coin to total above the coins’ face value.

The U.S. Mint’s recently released 2016 Annual Report — covering the federal fiscal year from Oct. 1, 2015, through Sept. 30, 2016 — states the per-coin cost to strike and distribute Lincoln cents registered at 1.5 cents, up from 1.43 cents in FY 2015, but down from the 1.66-cent cost in FY 2014.

The U.S. Mint’s research and development project into alternative compositions for U.S. coins indicates at least two alternative compositions are available for the cent that would bring the cost below face value, but neither would maintain the coin’s reddish color.

Meanwhile, the per-coin cost to strike and distribute Jefferson copper-nickel 5-cent coins, Roosevelt copper-nickel clad dimes and America the Beautiful copper-nickel clad quarter dollars all dropped during FY 2016 compared with the previous fiscal year.

This interesting story appeared on the Internet site on February 25 — and I thank Tolling Jennings for bringing it to our attention.  Another link to it is here.

Ron Paul: Arizona challenges the Fed’s money monopoly

Former U.S. Rep. Ron Paul, R-Texas, announced over the weekend that he will be going to Arizona to support state legislation there to define gold, silver, and other monetary metals as legal tender and exempt transactions in them from capital gains taxes.

Paul’s announcement comes in his commentary headlined “Arizona Challenges the Fed’s Money Monopoly” and it was posted at the Ron Paul Institute’s internet site on Sunday — and I found this embedded in a GATA dispatch.  Another link to it is here.

Newmont joins gold ‘staking rush’ in Canada’s once-fabled Yukon

Newmont Mining today became the latest of the world’s biggest gold miners to invest in Canada’s Yukon territory, the site of a famous gold rush 120 years ago, as miners hunt for rich, new deposits in safe regions.

U.S.-based Newmont, the world’s No. 2 gold producer, unveiled an agreement with small explorer Goldstrike Resources to spend $39.5 million to explore and develop Goldstrike’s Plateau property in the Yukon.
With this deal, Newmont follows moves by rivals Goldcorp Inc G.TO and Agnico Eagle Mines last year into the northwestern Canadian territory at a time when gold miners are loosening their purse strings after five years of belt-tightening when bullion prices fell.

This rather short Reuters news item, filed from Vancouver, was posted on their website at 3:57 p.m. on Monday afternoon EST — and I found it on the Internet site.  Another link to it is here.

Secret of the Kibali Mine: Flying people in — and gold bars out

Randgold Resources Ltd. had to haul heavy equipment more than 1,000 miles to build the roads and hydropower plants needed to construct its Kibali gold mine, the biggest in Democratic Republic of Congo.

The sprawling facility in a remote corner of a country the size of Western Europe is a high-tech operation. In one tunnel deep underground, a $1.3 million, 68-metric-ton remote-controlled digger heaves ore out of a cavernous blast hole. The ventilation system hums as 50-ton loads are slowly humped along the 3-kilometer (2-mile) track back to the surface.

The best-performing gold miner of the past decade, Randgold has built its success on getting complicated projects like Kibali into production on time and within budget. It’s the third major mine the company has brought on stream in five years, and it has indeed been a gold mine: It accounts for about a fifth of the company’s production, which tripled between 2010 and 2015 as revenue doubled to more than $1 billion.

Now, with Kibali nearing full production and no new discoveries since 2011, the miner needs to find guaranteed output growth to impress investors wary of the shrinking pool of large-scale deposits.

This Bloomberg article appeared on their Internet site at 10:00 p.m. MST on Sunday evening — and it’s yet another gold-related news item that I found in a GATA dispatch.  Another link to it is here.

CME and Reuters to stop providing LBMA silver price benchmark

CME Group and Thomson Reuters are to step down from providing the LBMA silver price benchmark auction, the London Bullion Market Association said today, less than three years after they successfully bid to provide the process.

In consultation with the LBMA, CME Group and Thomson Reuters have decided to step down from their respective roles in relation to the LBMA Silver Price auction,” the LBMA said in a members update seen by Reuters.

The two will continue to operate and administer the silver auction until a new provider is appointed, the LBMA said. It will launch a new tender to appoint an alternative provider to operate the process “shortly,” it said.

We would be looking to identify a new provider in the summer, and have the new platform up and running in the autumn,” an LBMA spokesman said.

I asked Ted’s opinion on this — and his answer was short, sweet — and terse…”nothing that happens in London matters“.  Of course, some members of the nut-ball lunatic fringe thought this was worth rhapsodizing on — and they did — and at length.  This Reuters piece, filed from London, put in an appearance on their Internet site at 11:50 a.m. on Friday afternoon EST — and it’s another article that I found on the Internet site.  Another link to it is here.

India’s gold imports surge on pent-up demand

A gold rush in India.  Jewellers across the country seeing a massive surge in people wanting to spend big on the country’s favourite precious metal, despite New Delhi’s recent shock cash crunch.   Imports surged 82 percent in February, compared to the same time last year. That translates to 50 tonnes of gold. Reuters Euan Rocha explains what’s leading the turnaround.

Big factors in the Indian market without a doubt is wedding season. Indian weddings result in a lot of gold consumption in India, nearly half of Indian gold consumption in terms of jewellery demand is driven by weddings and given India is right now in the heart of wedding season, that’s resulting in a huge spurt in the demand as well,” he says. The gold spike comes as India feels some relief from last year’s massive currency crackdown, which saw 500- and 1000-rupee notes scrapped across the country, scrapping almost 90 percent of the cash in circulation practically overnight.

So gold prices globally are currently trading at around a three and a half month high this is despite a decline in Chinese imports in the early months of this year and despite a decline in gold coin sales from the U.S. mint. So having India which is one of the largest consumers and importers of gold in the world pulling in and importing a lot of gold holds really well gold prices moving forward through the rest of the year,” Rocha says. Though all that glitters is not gold, analysts say imports in March could fall, with rising prices potentially driving buyers away.

This 1:37 minute Reuters video clip was posted on their Internet site on Monday at 1:42 p.m. IST — and the transcript is posted above.  I found this on the Sharps Pixley website last night — and another link to it is here.


“Morning Elegance” by British photographer Damien Mauric, one of the winners in the “Wide Angle” category of the Underwater Photographer of the Year 2017 contest. The image was taken in Cabo Pulmo, Baja California, Mexico.  Click to enlarge.


[T]he dramatic price plunge [last] Thursday (which came without the slightest hint of fundamental justification) did generate widespread commentary as being another instance of COMEX price monkey-hammering – which it was. But I have to tell you – I’m still scratching my head that none of the stories that I read had one word about who was doing the buying and selling; all were focused on the gazillion contracts dumped on the COMEX all at once. Unfortunately, I believe that because all the stories emphasize the great quantities of contracts suddenly sold, most reading the stories are left with the opinion that the dastardly COMEX commercials (the banks) were the big sellers. That is flat out wrong. [Emphasis mine – Ed]

Yes, the dastardly banks did cause Thursday’s sudden decline (and every COMEX decline in history), but these sons of guns were the big net buyers, not sellers. The commercial crooks did rig prices lower, through computer price rigging tricks, but strictly for the purpose of setting off technical fund selling (which the commercials then buy).  That’s the scam, in a nutshell. Because it is always technical fund selling and commercial buying on big down days for price, such down days always improve the market structure, not make it more bearish. I know, I know – too many of these improving market structure down days and we’ll all be broke. Still, it’s important to try and understand what’s really going on.

While I certainly didn’t predict Thursday’s sharp selloff, I can’t help but be convinced that it sharpened the focus of the new premise I wrote about on Wednesday – the question about whether the managed money technical funds have wised up to the fact that they have been the pawns in a chess game run by the commercials on the COMEX. A more vulgar, if more modern term for the funds is if they woke up to the fact that they were the banks’ b*****s (rhymes with riches).Silver analyst Ted Butler: 04 March 2017

Although I certainly wasn’t happy to see JPMorgan et al show up in the COMEX futures market on Monday and close all four precious metals down on the day, not much should be read into the price action.  Ted said that no moving averages were broken, except the 50-day in platinum, so there probably wasn’t much in the way of Managed Money selling in either silver or gold.

Of course the shares got it in the neck again, with a lot of the junior producers…which I have a big chunk of my portfolio in…getting hit the hardest.

Here are the 6-month charts for all four precious metals, including copper — and the click to enlarge feature helps a bit with the first four graphs.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price has been chopping around about a dollar either side of unchanged in the Far East on their Tuesday — and is currently down 20 cents at the moment.  Silver was sold down a nickel by 1 p.m. China Standard Time — and then had a vicious 20 cent down/up price spike a few minutes after that, but it only affected the spot price…not more-distant months.  It’s still down 5 cents.  The platinum price ticked quietly lower in Far East trading — and is down 3 dollars as the Zurich open approaches.  Palladium traded pretty flat all day long in the Far East — and it’s currently unchanged.

Net HFT gold volume is pretty quiet at 28,000 contracts — and that number in silver is quiet as well at 6,300 contracts.

The dollar index began to chop lower in a fairly wide range starting at 9 a.m. CST in Shanghai — and at the moment is down 15 basis points as London opens.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report…along with the once-a-month companion Bank Participation Report.  For that one day a month we get to see what the world’s banking system is up to in the futures market in all four precious metals — and it’s usually quite a bit.  It also gives Ted the opportunity to recalibrate JPMorgan’s short position — and I look forward to that number with some interest.

And as I post today’s column on the website at 4:03 a.m. EST, I note that the gold price didn’t do a thing in the first hour of trading in London — and is down 80 cents the ounce.  The other three precious metals have a slid a bit.  Silver is down 7 cents now.  Platinum is now down 4 bucks — and palladium by 2.

Net HFT gold volume is up to around 33,500 contracts — and in silver, that number is 7,400.  There’s not much happening.

The dollar index is off its current low by a bit — and down 8 basis points.  Nothing to see here, either.

I doubt very much that this quiet period will last through the COMEX trading session, because once ‘da boyz’ swing around to their computers, they’re in total control of happens from a price perspective.  And until that changes, nothing changes.

See you tomorrow.



Print Friendly, PDF & Email