JP Morgan Stops 90 Percent of All March Silver Deliveries

17 March 2017 — Friday


After trading flat for the first ninety minutes after the 6:00 p.m. EDT open in New York on Wednesday evening, the gold price rallied five bucks by minutes after 10 a.m. China Standard Time on their Thursday morning.  Then the price moved sideways until shortly after 1:30 p.m. CST, before edging higher into the London session.  That tiny rally was capped and sold down starting shortly before 8 a.m. GMT.  The price went back to doing nothing until 11 a.m. GMT — and began to rally from there until a few minutes before the COMEX open in New York.  It blasted higher from that point, but ran into JPMorgan et al minutes later, who had to use a breathtaking amount of paper gold [20,000+ contracts in ten minutes] to not only cap, but sell gold lower as the New York session moved along.  The New York low came a minute or so before 2 p.m. EDT — and the price didn’t do much after that.

The low and high volume ticks were recorded as $1,218.10 and $1,234.00 in the April contract.

Gold was closed in New York yesterday afternoon at $1,225.80 spot, up $6.10 from Wednesday.  Net volume was over the moon once again at 220,000 contracts.

Here’s the 5-minute gold tick chart courtesy of Brad Robertson, for which I thank him on your behalf.  There was slightly elevated trading volume in morning trading in the Far East, plus a bit in the early going in London.  But, as you can tell, volume began to edge higher about an hour before the COMEX open [06:20 a.m. Denver time] — and culminating in the price smash right at the open.  Volume remained above background even 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 price action in silver was a virtual carbon copy of what happened in gold — and almost tick for tick.  Once the tiny price spike at the COMEX open was dealt with, silver was sold lower for the rest of the New York session — and the low tick was set about one minute before the COMEX close.  It crawled higher from there until shortly after 4 p.m. EDT — and then traded sideways into the close.  ‘Da boyz’ ensured that even though it traded above its 50-day moving average briefly, it not only wasn’t allowed to break out to the upside, or close above it…they had the audacity to close it for a loss on the day as well.

The high and low ticks in this precious metal were reported by the CME Group as $17.585 and $17.255 in the May contract.

Silver was closed yesterday at $17.29 spot, down 3.5 cents on the day.  Net volume was very heavy again at around 65,500 contracts.  And as I mentioned in The Wrap in yesterday’s column, roll-over/switch volume out of May and into July and September, was pretty heavy.

Here’s the 5-minute tick chart for silver — and it resembles the 5-minute gold chart in most ways that matter, including the huge volume in New York to not only cap, but drive the price down for a loss on the day on top of that.  Thirty minutes after the COMEX close, volume dropped off to background for the rest of the New York session.

Like for the 5-minute tick chart for gold, 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 traded in a similar fashion to both silver and gold, with the only real difference being the fact that the high tick was set just before 9 a.m. in Zurich.  It was mostly down hill from there — and even more so in the COMEX trading session, with the low tick coming at the 1:30 p.m. EDT close.  It traded flat after that.  Platinum finished the Thursday session at $955 spot, up 3 dollars on the day.

The palladium price was up 9 dollars by around 9:30 a.m. CST in Shanghai on their Thursday morning — and it traded mostly flat until 9 a.m. in Zurich.  It sagged a bit from there, but at noon CET, it began to head higher, only to run into the short buyers and long sellers of last resort shortly before 9 a.m. in New York.  It was sold lower until a few minutes after 12 o’clock noon EDT — and didn’t do much after that.  ‘Da boyz’ closed palladium at $766 spot, up only 6 bucks on the day.  It was up 14 dollars at its high tick in Zurich.

The dollar index closed very late on Wednesday afternoon in New York at 100.57 — and made it [in rather unsteady fashion] up to its 100.75 high tick shortly before 10 a.m. GMT in London.  It chopped quietly [and mostly] lower from there into the close.  The index finished the Thursday session at 100.25 — and down 32 basis points on the day.

The precious metals were certainly in rally mode yesterday, complete with a declining U.S. dollar index as a tailwind…but the powers-that-be simply wouldn’t allow it to happen.

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

The gold stocks gapped up a bit over two percent at the open, but began to slide immediately.  They were back in negative territory to stay by 11:30 a.m. in New York — and their respective lows came shortly before noon EDT.  They chopped sideways from there — and not even a very decent positive close of the metal itself could lift them back into the black, as the HUI finished lower by 0.61 percent.

The silver equities gapped up about two and half percent at the open, but were back in negative territory to [mostly] stay about forty minutes later.  Then, like the gold shares, they chopped sideways in a very tight range into the close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.35 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that zero gold and 72 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  Macquarie Futures was the only short/issuer worth mentioning, with 70 contracts — and, as usual, JP Morgan stopped 71 contracts…59 for its own account, plus 12 for its ‘client’.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in March rose by 14 contracts, leaving 38 still around.  There were no gold contracts posted for delivery today.  Silver o.i. in March dropped by 177 contracts, leaving 620 left, minus the 72 mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 154 silver contracts were actually posted for delivery today, so that means that 177-154=23 March contracts were covered…most likely JP Morgan letting these particular short/issuers off the delivery hook because they had no physical silver backing them.

This delivery month is unfolding agonizingly slowly — and that’s just another indicator of how tight this delivery month is.  There should be no doubt in anyone’s mind that Ted will have quite a bit to say about this in his weekly review tomorrow afternoon.

Much to my surprise, there was a withdrawal from GLD, as an authorized participant took out 76,172 troy ounces.  I would suspect that this represented a conversion of shares into physical metal — and not ‘plain vanilla’ liquidation, as the current price action doesn’t support that conclusion.  And as of 6:38 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was a tiny sales report from the U.S. Mint yesterday.  They sold 2,000 troy ounces of gold eagles — and that was all.

It was a very quiet day [weather related?] in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received — and only 6,121 troy ounces were shipped out…all of which came from Canada’s Scotiabank.  I won’t bother linking this.

It was one of those very rare days when there was no in/out activity in silver…but it is the second time this month it has happened.  I would suspect that may be weather related as well, but I’m just not sure.  However, there was a transfer of 226,778 troy ounces from the Eligible to Registered over at CNT — and I would certainly suspect that it’s delivery related.

It was another busy day at the Brink’s, Inc. COMEX-approved gold kilobar depository in Hong Kong on their Wednesday.  They only received 300 of them, but a hefty 7,591 were shipped out.  A link to that action, in troy ounces, is here.

Another slow news day — and I hope you’ll find at least one or two items that interest you.


Mortgage rates jump as economy revs up

Rates for home loans jumped in the most recent week as economic data firmed enough to seal a Federal Reserve rate hike, mortgage finance provider Freddie Mac said Thursday.

The 30-year fixed-rate mortgage averaged 4.30{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, up nine basis points during the week. The 15-year fixed-rate mortgage averaged 3.50{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, up from 3.42{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} last week.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.28{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, up five basis points during the week.

Freddie’s survey data was collected before the Fed’s decision was announced Wednesday. That statement was accompanied by commentary that was more dovish than most investors had expected, including a signal that policy makers would likely hike only two more times in 2017, rather than three, helped nudge the 10-year note even lower.

This article appeared on the Internet site at 10:31 a.m. EDT on Thursday morning — and it comes to us courtesy of Richard Saler.  Another link to it is here.

CNBC: Fed Rate Hike Will Cost Consumers $1.6 Billion in Credit Card Interest

The Federal Reserve’s expected interest-rate hike is much more than a soundbite on TV or headline on a website.

For the 157 million Americans who carry a balance on their credit cards, today’s expected Fed action will be bad news, reported.

A quarter-percentage-point increase in the Fed funds rate will cost the 157 million Americans who carry a balance on their credit cards roughly $1.6 billion in extra finance charges in 2017, according to a WalletHub analysis.

The cumulative effect of interest rate hikes is going to begin mounting,” Greg McBride,‘s chief financial analyst, particularly on variable rate loans such as credit cards, home equity lines of credit and adjustable-rate mortgages, which could rise within one to two statement cycles, told

Many credit cards carry a variable rate, which means there’s a direct connection to the Fed’s benchmark rate. The quarter-percentage-point rate hike means you’ll pay an extra $2.50 a year for every $1,000 of debt, according to NerdWallet.

This CNBC ‘news’ item ended up on the Internet site at 12:39 p.m. EDT on Wednesday afternoon — and I thank West Virginia reader Elliot Simon for sharing it with us.  Another link to it is here.

What Will Be Your Deathbed Regrets? — Dennis Miller

While you may have checked off items on your Bucket List, what will be on your deathbed List of Regrets? Bonnie Ware, an Australian nurse, spent several years caring for people in the last days of their lives. On their deathbed many patients opened up to her about their life and regrets. She wrote an article titled, “The Top Five Regrets of The Dying” which was read by over 3 million people in the first year.

She followed up with a book by the same name. Amazon describes it this way:

…By applying the lessons of those nearing their death to her own life, she developed an understanding that it is possible for people, if they make the right choices, to die with peace of mind.

The book is a very moving, emotional, challenging and enjoyable. The top five regrets of the dying:

1. I wish I’d had the courage to live a life true to myself, not the life others expected of me.

2. I wish I hadn’t worked so hard.

3. I wish I’d had the courage to express my feelings.

4. I wish I had stayed in touch with my friends.

5. I wish I had let myself be happier.

This worthwhile commentary by Dennis appeared on his website yesterday — and another link to it is here.

Canadian households owed $2 trillion at the end of 2016

Debt levels continue to hit record highs in this country, but Canadians’ net worth is also rising as the value of assets increases.

The information is contained in a Statistics Canada report released Wednesday on how much Canadians owe, and what they’re buying with their borrowed money.  The average Canadian now owes $22,081 in consumer debt, a figure that doesn’t include any mortgages.

The much publicized debt-to-income ratio — how much we owe, compared to how much we earn — inched up to 167.3 per cent in the fourth quarter of 2016, a new high.

Canadians now owe $1,329.6 billion on their mortgages, and $596.5 billion in consumer debt such as credit cards.

I found this news item on the Internet site.  It’s datelined Wednesday at 9;19 a.m. EDT — and it’s from Zero Hedge via Brad Robertson.  Another link to it is here.

Queen formally approves law giving U.K. P.M. May power to trigger E.U. exit talks

Britain’s Queen Elizabeth on Thursday formally granted Prime Minister Theresa May the power to trigger exit talks with the European Union, approving legislation which passed through parliament late on Monday.

The announcement, made in parliament by speaker John Bercow, confirms that May can begin divorce talks at any time, although her spokesman hinted on Monday that any such decision was likely to come towards the end of the month rather than in the coming days.

The above two paragraphs are all there is to this tiny Reuters story that showed up on their Internet site at 6:54 a.m. EDT on Thursday morning — and it’s another offering from Elliot Simon.

Dutch deliver conventional protest vote

Dutch voters have delivered a conventional kind of protest. The country’s ruling coalition suffered losses in Wednesday’s election as the electorate turned to opposition parties. But right-wing firebrand Geert Wilders picked up fewer seats than forecast. The setback for extremism leaves mainstream politics in the Netherlands more fragmented than ever.

It’s a strange election when losing a fifth of your parliamentary seats is hailed as a resounding victory. Yet that’s what Prime Minister Mark Rutte was celebrating after his VVD emerged as the country’s largest party for the third time running with a projected 21 percent of the vote. The centre-left Labour Party, the junior partner in the coalition, had less to smile about: it is set to lose a staggering 29 of its 38 seats in the lower house.

However, anti-establishment sentiment did not translate into meaningful new support for Wilders, whose attacks on Islam and the European Union invited inevitable comparisons with U.S. President Donald Trump and Britain’s Brexit campaign. Though his Party for Freedom (PVV) is set to end up in second place, it received a lower share of the vote than in 2010, when it finished third.

It’s tempting to view the result as a rejection of the extremist forms of politics that are on the rise across the developed world. Yet Wilders is hardly a new face: he has been in parliament for almost two decades and was contesting his fourth election as head of the PVV. Moreover, mainstream Dutch parties have co-opted parts of his anti-immigrant stance. When the government sparked a diplomatic row by blocking two Turkish ministers from speaking at a rally in Rotterdam last weekend, none of the main political leaders objected.

Meanwhile, political support has splintered. For the first time in recent history, the top three parties combined received less than 50 percent of the vote. This complicates the process of forming a government. Though Rutte should be able to pull together a coalition, he will need the help of at least three partners to secure a majority. They will have to overcome serious differences about the tax burden, healthcare costs and the rise of part-time work. The risk is that the Netherlands enters an extended period of political limbo and emerges with a fragile coalition. Though most voters rejected extremism, their conventional protest is hardly a recipe for stable government.

The above five paragraphs are all there is to this Reuters story, filed from London.  It put in an appearance on their Internet site at 6:51 a.m. EDT on Thursday morning — and it’s the second contribution of the day from Richard Saler.  Another link to it is here.

Farage Interviews French presidential candidate Marie le Pen: “Prison of the E.U.

Nigel Farage interviewed French presidential candidate Marie le Pen this week. It’s a 40-minute interview covering many topics. One key idea stood out: Le Pen discussed the “Prison of the E.U”.

Le Pen is correct, the E.U. is not a free trade union, it is a customs union as well as a prison. “Change everything or we are leaving,” says le Pen.

This longish interview showed up on the Internet site at 6:33 a.m. EDT yesterday morning — and I thank Roy Stephens for finding it for us.  Another link to it is here.

St. Helena Tunnel: Construction Time-Lapse Video [2012 – 2016]

Because I don’t have much in the way of news items, I though I’d slide in this 6-minute video.  This  tunnel construction project was on a stretch of Pacific Highway in New South Wales, Australia between Titenbar and Ewingsdale.  Sydney, the state capital, is about 8.5 hours drive away.

The video switches from one entrance of the tunnel to another, so you can view how construction is going from both ends.  Australian subscriber Roger Truloff sent it along — and I’ve been saving it for a slow news day — and today fits the bill perfectly.  It’s in HD, so full-screen viewing is the order of the day here.

ROSS NORMAN : Rates Up – Gold Up – Why ???

In this environment a little counter-intuitive buying of gold and selling dollar / equities is usually sufficient to frighten them into covering their position. In short, markets end up moving exactly the opposite way to how classic economics would tell us. And the move feeds on itself because of the extreme positioning.

Evidence to support this view is gold’s move over the last few rates increases – the 25 bps increase in December 2015 saw a subsequent 18{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} rise in gold over the following 3 months. Meanwhile the December 2016 rate rise saw an 8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} increase over the next 3 months. Yesterdays rate rise has seen a 2.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} rise in gold so far … and appears to be petering out. What this indicates is that the wonderful ruse by institutions who exploit predictable investor behaviour seems to be running its course.

So where do we go from here – well having been burned by behaving logically, presumably those investors who keep finding themselves “long and wrong” in dollar/equities and “caught short” in gold will be more perspicacious – a posh way of saying more wise and cynical. Ultimately we could just end up not listening at all.

I’m not sure if this commentary by Ross is worth your while or not, but here it is anyway.  It showed up on the Sharps Pixley website yesterday — and I thank Patricia Caulfield for pointing it out.  Another link to it is here.

Russia’s Nornickel says its fund buys palladium from central bank

A fund created by Norilsk Nickel (Nornickel) buys palladium from Russia’s central bank reserves to help meet demand from its customers, the world’s largest producer of the metal said on Thursday.

Demand from Nornickel’s customers is higher than its production of palladium, a metal used mainly in emissions-curbing auto catalysts, Vladimir Potanin, Nornickel’s chief executive and co-owner, told reporters in Moscow.

The central bank enables us to close this deficit,” Potanin said, adding the company only used the central bank’s reserves to fill orders, and not for stockpiling.

The central bank, which holds one of the world’s largest gold and foreign exchange reserves, did not provide an immediate comment. The size of its palladium stock is a state secret.

This Reuters news item, filed from Moscow, appeared on their Internet site at 10:24 a.m. EDT yesterday morning — and I found it on the Sharps Pixley website.  Another link to it is here.

Hoard of gold coins found stashed in Shropshire [U.K.] piano

A hoard of gold found stashed inside an old piano in Shropshire has been revealed to be a collection of sovereign coins.

The discovery was made just before Christmas when the new owners had it retuned. The coins have since been deposited at Ludlow Museum Resource Centre.

An inquest in Shrewsbury heard that the oldest coin within the group was made in 1847, and the youngest in 1915.

The coins could be declared the property of the Crown if its owner or their heirs cannot be traced.

This gold-related news story showed up on the Internet site at 12:01 p.m. GMT on Thursday afternoon, which was 8:01 a.m. in New York — EDT plus 4 hours.  It’s another item I found on the Sharps Pixley website.  There are several photos, plus a brief video clip as well.  Another link to all this is here.


Here’s another photo of dogs and kids taken by Andy Seliverstoff from St. Petersburg in Russia.  The click to enlarge feature helps a lot on this shot.


It was fairly obvious from the price action in Far East trading on their Thursday, plus the rallies going into the COMEX open, that the precious metals really wanted to rally yesterday.  But despite a falling U.S. dollar index, JP Morgan et al were having none of it…especially when you look at the net volume numbers for both silver and gold — and the trading patterns in the 5-minute tick charts for each, especially at the COMEX open.

As I said in yesterday’s column, despite the decent rallies after 2 p.m. EDT on Wednesday on the Fed ‘news’…I could detect the presence of the short buyers and long sellers of last resort on that day — and they were even more obvious in their efforts yesterday.

Here are the 6-month charts for all four precious metals, plus copper once again.  The Thursday dojis also contain the price/volume data from Wednesday afternoon after the COMEX close as well.  The click to enlarge feature helps a bit with the first four charts.

And as I type this paragraph, it’s approaching 7 a.m. GMT in London — and with North America on Daylight Saving Time, and the 5-hour time difference temporarily shrunk to 4, I’m not sure if the LBMA opens at 7:00 a.m. to accommodate New York, or opens at its usual time at 8:00 a.m. GMT.  That issue will solve itself when BST [British Summer Time] kicks in on Sunday morning, March 26.

Not much happened with the gold price during Far East trading on their Friday, as it traded pretty flat, although it has been inching higher during the last few hours — and is up $1.20 the ounce as I write this.  Silver was down a few pennies during Far East trading, but has crawled back to unchanged.  Platinum and palladium were down a dollar or two as well — and at the moment, platinum is still down a buck, but palladium as rallied a bit in the last fifteen minutes or so — and it’s in the plus column by 3 dollars.

Net HFT gold volume is very light at 21,500 contracts — and that number in silver is approaching 7,800 contracts — and there’s no roll-over/switch volume worthy of the name tonight.

The dollar index traded virtually ruler flat throughout the Friday session in the Far East, but began to head lower at 1:35 p.m. China Standard Time — and is down 5 basis points currently.

There’s certainly not much going on at the moment.  The calm before the storm, perhaps.

Today, we get the latest and greatest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday — and what the Managed Money traders were up to in silver — and how much the commercial traders were able to cover in that precious metal during the reporting week, will be top of mind for Ted.  I expect that gold will be back in a bullish configuration once again, minus whatever damage was done on Wednesday and Thursday, which was probably considerable.

Silver analyst Ted Butler had this to say about today’s COT Report in his mid-week commentary on Wednesday…”As far as what I’m expecting in this Friday’s COT Report, I would imagine another reporting week of managed money selling and commercial buying in COMEX gold and silver, based upon the price declines during the reporting week, which took the price of each metal below their respective 50-day moving averages. But it’s important to remember that gold’s market structure was very bullish to begin with — and the expected improvement in Friday’s report will likely only put icing on the bullish gold cake.

The only real question that matters is how many managed money contracts were sold in silver. Any number less than 5,000 to 10,000 contracts of managed money selling would be strong evidence that my crazy premise is still alive. Should it become apparent that the managed money traders are playing a different collective tune than what’s been played for decades, then it should quickly become obvious in price, particularly as word of this starts to circulate.

And as I post today’s column on the website at 4:03 a.m. EDT, I see that prices have grown a bit softer in the last hour or so of trading.  Gold is down 20 cents now — and silver is down 5 cents the ounce.  Platinum is now down 2 dollars — and palladium is back to unchanged.

Net HFT gold volume is up to just over 25,000 contracts, which is still very much on the lighter side — and that number in silver is a hair under 9,000 contracts.

The dollar index, which had been down 8 basis points at its 2:45 p.m. CST low, has suddenly sprung to life — and has ‘rallied’ sharply in the last hour and change — and is now up 9 basis points.  I guess that accounts for the softness in the precious metals over that period.

Place yours bets for the rest of the Friday price action, but keep in my mind as you lay your money down, real or imaginary, that there will be nothing free-market about any price you see.

I always hate to say it…but until that fact changes, nothing changes.

Enjoy your weekend, or what’s left of it if you live just west of the International Date Line — and I’ll see you here on Saturday.


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