Another New Low Closing Price For Silver

27 April 2017 — Thursday


The gold price spent most of the Wednesday trading session a bit below the unchanged mark, with the low tick of the day — and a new low for this move down — being set fifteen minutes after the COMEX close in New York.  Then it swiftly rallied back into positive territory — and obviously had to be restrained from really taking off to the upside.  All of this activity was most likely a result of Trump’s Tax Reform speech that started the moment that the COMEX closed.  The price was capped around the $1,270 spot mark — and it didn’t do much after that.

The low and high ticks, such as they were, were recorded by the CME Group as $1,260.70 and $1,272.80 in the June contract.

Gold finished the Wednesday session in New York at $1,269.00 spot, up and even 5 bucks on the day.  Net volume was enormous once again at around 224,000 contracts.

Here’s the 5-minute tick chart for gold courtesy of Brad Robertson — and there’s not much to see except for the fact that vast majority of Wednesday’s volume, as is almost always the case, came during the COMEX trading session in New York — and never really fell off to background levels until after 2 p.m. Denver time…4 p.m. in New York.

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

Silver traded pretty flat all through Far East and morning trading in London.  But once the noon silver fix was put to bed, the HFT boyz and their algos went to work — and a new intraday low, plus a new low close for silver were posted again yesterday.  Like gold, the Thursday low tick was printed fifteen minutes after the COMEX close — and the subsequent rally wasn’t allowed a sniff of unchanged after that.

The high and low ticks for silver were reported as $17.625 and $17.29 in the May contract.  Gross volume, as expected, was enormous at a bit over 170,500 contracts.  But when all the large trader switch/roll-over/spread trades were subtracted out, net volume was very quiet at a bit under 30,000 contracts.

Here’s the 5-minute silver tick chart courtesy of Brad as well.  There were some spotty volume spikes in Far East and London trading yesterday, but all the volume that really mattered occurred during the COMEX trading session — and beyond.

The platinum price didn’t do much in Far East trading and, like silver, began to get sold lower shortly after the noon silver fix in London, which was shortly after 1 p.m. in Zurich.  It was bounced off its $942 spot low tick for the first time shortly after the equity market opened in New York — and then again at 1:45 p.m. EDT, when ‘da boyz’ set the lows in both gold and silver.  It rallied a bit after that, but didn’t make it back to unchanged, either — and was closed lower by 4 dollars at $949 spot.

Palladium on the other hand spent most the Far East and morning trading session in Zurich a dollar or so above unchanged — and as platinum was sold lower, palladium took off to the upside.  That rally ran out of gas/got capped at noon in New York — and it briefly touched $810 spot, before being sold lower by a few dollars going into the close.  Palladium finished that Wednesday session in New York at $809 spot, up an even 10 dollars from its Tuesday close.The dollar index closed very late on Tuesday afternoon in New York at 98.84 — and within an hour of the 6 p.m. open on Tuesday evening, began to head lower.  The 98.73 low tick was set around 2:15 p.m. China Standard Time on their Wednesday afternoon, which was forty-five minutes before the London open.  It rallied rather smartly from that juncture — and it’s 99.33 high tick came around 11:35 a.m. in New York.  It fell back a bit into the COMEX close — and then tried to blast higher, but ran into a wave of selling within minutes — and it appeared that ‘gentle hand’s showed up just after 2 p.m. to save it, after it fell back below the 99.00 mark.  [Without doubt, these market shenanigans were a direct result of Trump tax reform news] The subsequent rally rolled over — and within two hours it was back below the 99.00 mark once again — and didn’t do much after that.  The dollar index finished the Wednesday session at 98.99 — up 15 basis points from its Tuesday close.

Once again — and for quite a few days in a row now — what the dollar index was doing had little to do with what was happening in the precious metals.

And here’s the 6-month U.S. dollar index — and you can read into it whatever you wish, which shouldn’t be much.

The gold stocks opened unchanged — and began to head lower shortly after the London p.m. gold fix.  The low was set at 1:45 p.m. when the gold price suddenly shot into positive territory, which certainly [for that brief period] had something to do with what the dollar index was doing.  From there they chopped mostly sideways, even though the gold price rally added a decent amount to its gains in the after-hours market.  The HUI closed higher by 0.49 percent.

For a change it was a bit different with the silver equities.  They chopped sideways a few points either side of unchanged right from the 9:30 a.m. EDT open of the equity markets, although they did dip to their respective lows when JP Morgan et al set that new low price in silver fifteen minutes after the COMEX close.  They roared well into positive territory after that but, like their golden brethren, chopped mostly sideways from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 2.14 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 113 gold and 8 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In gold, the two short/issuers of note were HSBC USA out of its client account with 76 contracts — and Goldman Sachs out of its own account with 33.  There were seven long/stoppers in total — and except for the CME Group, all were for their respective client accounts.  JP Morgan stopped 31, ABN Amro 26 — and ADM 17.  The 22 contracts that the CME Group stopped were most likely to fill the 10 oz. mini gold contract — and that activity will show up in today’s Daily Delivery Report.  In silver, Morgan Stanley issued all 8 contracts out of its client account.  ADM picked up 6 and Citigroup stopped the other 2…all for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in April dropped by 29 contracts, leaving 113 still open.  Of course those 113 contracts are out for delivery as per the paragraph above, so except for the mini contract in gold, the April delivery month is done.  Silver o.i. in April declined by 28 contracts, leaving 8 left — and those are out for delivery tomorrow, so April silver is done as well.

For the month of April, there were 922 gold contracts issued and stopped — and in silver, that number was 925.  That’s amazing considering the fact that April is a traditional delivery month in gold, but it isn’t in silver.  I know that Ted will have lots to say about this in his weekly review on Saturday.

Of course we get the First Day Notice for silver, for delivery in May — and those numbers will be on the CME’s website around 10 p.m. EDT this evening.  And as I’ve pointed out on several occasions during the last week or so, I’m looking forward to these numbers with great interest.

Before moving on to the warehouse stocks, I note that silver’s open interest in May dropped by 14,397 contracts, leaving 17,958 contracts still remaining.  A large chunk of that will disappear in today’s and Friday’s Preliminary Reports — and what’s remaining after that will be a true representation of the potential deliveries in May.  But, having said all that, the remaining open interest even at this late stage, is still pretty high.  As Ted pointed out two months ago, this situation also occurred in the last few days leading up to the March delivery month in silver — and look what happened then.  Will history repeat itself just two months later?  Stay tuned!

There were no reported changes in GLD yesterday, but I’m certainly expecting more withdrawals in the days ahead.  And, for the second day in a row, there was another big deposit in SLV.  This time an authorized participant, who I assume would be JP Morgan, added 2,934,417 troy ounces and, like the big deposit on Tuesday, I would assume that this was used to cover an existing short position.

In the last two business day, just under 5 million troy ounces of silver have been added to SLV.

There was no sales report from the U.S. Mint.

Once again there was hardly any gold movement at the COMEX-approved depositories on the U.S. east coast on Tuesday.  Nothing was reported received — and only 128.600 troy ounces/4 kilobars [U.K./U.S. kilobar weight] were shipped out — and that activity was at Manfra, Tordella & Brookes, Inc.  Once again, I won’t bother linking this small amount.

But it was another frantic day in silver, as 1,776,556 troy ounces were received — and 832,881 troy ounces were shipped out.  Two container loads…1,174,689 troy ounces…were left by the back door over at JP Morgan, bringing their total COMEX silver stash up to 105.6 million troy ounces.  Another container…599,836 troy ounces…was left at CNT — and two good delivery bars were deposited at Delaware.  In the ‘out’ category, there was a container shipped out of Canada’s Scotiabank…594,967 troy ounces — and the remainder…237,914 troy ounces…was shipped out of Delaware.  The link to all of the above silver action is here.

It wasn’t overly busy at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 2,365 of them, plus they shipped out another 1,111.  All of this activity was at Brink’s, Inc. as per usual, and the link to that, in troy ounces, is here.

I don’t have all that many stories for you today — and I’ll happily leave the final edit up to you.


S&P: These Ten Retailers Will File For Bankruptcy Next

Three weeks ago, we reported that Fitch had put together a list of 8 retailers who were likely next in line to file for bankruptcy. The rating agency speculated that distressed legacy “bricks and mortar” outlets such as 99 Cents Only, rue 21, Gymboree and True Religion would follow what has already been a historic surge in retailers filing for Chapter 11 protection and/or shuttering stores. The Fitch list is below:

  •    Sears Holdings Corp (roughly $2.5 billion);
  •    99 Cents Only Stores LLC;
  •    Charming Charlie LLC;
  •    Gymboree Corp.;
  •    Nine West Holdings Inc.;
  •    NYDJ Apparel LLC;
  •    rue21, Inc.; and
  •    True Religion Apparel Inc.

Putting this list in context, over the weekend we presented a chart from Credit Suisse showing that on an annualized basis, some 8,640 – or more – stores would be closed in 2017, the highest number on record.

This longish Zero Hedge piece was posted on their Internet site at 11:01 a.m. EDT on Wednesday morning — and I thank Richard Saler for passing it along.  Another link to it is here.

World’s largest Hooters closing in Las Vegas

The world’s largest Hooters is closing its doors, less than two years after opening at the Palms hotel-casino.

Station Casinos, which owns the Palms, confirmed Tuesday that the restaurant will be closing around mid-May. A new “food and beverage concept” will take its place.

The Hooters bar and restaurant, which is famous for its chicken wings and Hooters Girls, is 15,200-square-feet and could seat more than 500 guests.

When the world’s largest Hooters held its formal grand opening in September 2015, it took over the space formerly occupied by the bar and nightclub Heraea on the Palms casino floor.

What is the world coming to when Hooters can’t make it Vegas???  The above four paragraphs is all there is to this ‘news’ item, which put in an appearance on the Internet site at 4:29 p.m. Denver time on Tuesday afternoon — and I thank Brad Robertson for pointing it out.  Another link to the hard copy is here.

U.S. Consumers Tap Out: Credit Card Defaults Surge to 4-Year High and it’s Getting Worse

Two weeks ago, when JPMorgan launched Q1 earnings season, we noted that while the results were generally good, one red flag emerged: the company’s credit card charge offs rose to just shy of $1 billion, the highest in four years.

It wasn’t just JPM: all other money-center banks reported similar trends, so we decided to look into it.

What we found was not pretty. According to the latest data from the S&P/Experian Bankcard Default Index, as of March 2017, the default rate on U.S. credit cards had jumped to 3.31{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, an increase of 13{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} from a year ago, and the highest default rate since June 2013.

Add to this what CoreLogic warned earlier in the day, namely that that stalwart of any viable business cycle, mortgage performance, has finally started to deteriorate…

While loan performance improved across various loan types throughout the first five years of the expansion, over the last year three of the four major types of loans began experiencing a deterioration in loan performance. The exception to the deterioration in credit performance was real estate, which continues to improve. However, a closer look reveals performance is deteriorating, albeit from pristine levels of performance.

    … While performance for the 2016 vintage is still very good from relative to the last two decades, it is beginning to worsen. Historically, when the mortgage credit cycle begins to deteriorate it continues to do so until the economy bottoms and the credit cycle begins to improve again.

    … and it is becoming clear that the U.S. consumer, responsible for 70{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of U.S. economic growth, has finally rolled over.

This news item showed up on the Zero Hedge website at 8:21 p.m. EDT yesterday evening — and another link to it is here.

Commerce Secretary Ross to announce plan to probe imported aluminum

Commerce Secretary Wilbur Ross is expected to announce a new probe into imported aluminum, a senior administration official told CNBC.  The official said that the probe will be similar to the one the White House launched last week regarding steel.

The probe will be initiated under Section 232, a unique defense industry report that is typically initiated at the request of a particular industry. It’s a formal U.S. government investigation of the effects of imports as they pertain to U.S. national security.

As other countries ramp up their metal production, some provide subsidies to producers, lowering the price of metals exported to the United States. American producers have long complained that these practices undercut their business, making it more difficult for them to compete.

When President Donald Trump signed a similar memorandum asking for a similar probe regarding imported steel, an official told Reuters that the directive would not target a specific country, but is “product oriented.”  But U.S. metal producers have repeatedly pointed fingers at China.

This news item appeared on the Internet site early on Wednesday afternoon EDT — and it’s another offering from Richard Saler.  Another link to it is here.

The Main Highlights In Trump’s Sweeping Tax Reform Proposal

In brief, the tax reform was largely in line with what was leaked and what was expected. Small surprises: the tax bracket for high income earners was 2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} more (at 35{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}) than what Trump campaigned on, and the standard deduction has been doubled so that no married couple pays tax on their first 24k earned, Citi notes.

As expected, no mention of border adjustment taxes. The plan also looks to repeal real estate taxes, alternative minimum tax and the death tax. Territorial taxes are also included.

as Time’s Zeke Miller notes this Trump tax plan is the same as the one released last fall. “If his team has been working on it for the last 6mos, we didn’t see it today.

Additionally, while the proposed tax plan does not raise taxes on hedge fund managers, as Trump vowed during his campaign, courtesy of the cut in LLC tax rates, it will likely lower the taxes many if not all HF managers pay.

And, of course, with the state deduction gone, it means that for many Americans the net effect will be to raise, not lower the amount of tax owed.

This extensive Zero Hedge coverage/commentary was posted on their website at 7:45 p.m. EDT yesterday evening — and another link to it is here.

A key part of Trump’s tax plan is unlikely to benefit most Americans

The White House unveiled President Donald Trump’s updated tax plan on Wednesday, and it was short on details.

It included one line on an aspect of tax reform that Wall Street has been looking forward to: repatriation. There will be a “one-time tax on trillions of dollars held overseas,” a summary of the plan handed out to reporters said. It did not add what the tax rate would be.

Trump promised this because U.S. companies have parked up to $2.5 trillion in cash overseas to avoid the taxes they would have to pay if they repatriated the funds. That’s money that could theoretically be put to work in the U.S. economy through capital investment and job creation.

But even if a lower tax rate prompts companies to return some of that cash, it may immediately benefit shareholders much more than it would encourage investment in the economy.

When repatriation comes, we would expect to see a clearly communicated and orderly distribution of capital through share buybacks, dividends, and to a lesser extent, debt repayments,” said S&P Global Ratings in a note published on April 18. “One other potential aspect: increased M&A activity, using the greater cash stockpiles under the U.S. flag.

Companies could also stoke the cash position on their balance sheets.

This news story appeared on the Internet site around 4 p.m. EDT on Wednesday afternoon — and it comes courtesy of Swedish reader Patrik Ekdahl.  Another link to it is here.

America’s financial war strategy — Alasdair Macleod

America’s renewed desire to escalate military tensions is a front for America’s continual financial war, this time directed at North Korea, Syria and possibly Iran. This is likely to be the opinion of China’s strategic advisors. We analyse the geopolitics and economics behind America’s war strategy from China’s perspective, concluding that it is entering its final phase. China’s exit plan appears to be to tie the pricing of energy and then other major commodities to gold, returning to the pre-1971 status quo, when the dollar was just a settlement link between commodity prices and gold. Except this time, the dollar itself will be side-lined, so far as China is concerned, which will use the yuan instead for its empire, which will be far larger than that of the US in time, measured by GDP.

This long, but absolute must read commentary by Alasdair…which spends a lot of time talking about gold…was posted on the Internet site a week ago — and I thank Larry Galearis for pointing it out.  Another link to it is here.

Peso Plunges as White House Plans NAFTA Withdrawal Executive Order

The Mexican Peso is tumbling (and Loonie extending yesterday’s timber-tariff-driven losses), as Politico reports, the Trump administration is considering an executive order on withdrawing the U.S. from NAFTA, according to two White House officials.

Politico reports that a draft order has been submitted for the final stages of review and could be unveiled late this week or early next week, the officials said. The effort, which still could change in the coming days as more officials weigh in, would indicate the administration’s intent to withdraw from the sweeping pact by triggering the timeline set forth in the deal.

The approach appears designed to extract better terms with Canada and Mexico, and judging bvy the FX market’s reaction, they agree…

Trump in recent weeks has stepped up his rhetoric vowing to terminate the agreement all together.

NAFTA’s been very, very bad for our country,” he said in a speech last week in Kenosha, Wis.

It’s been very, very bad for our companies and for our workers, and we’re going to make some very big changes or we are going to get rid of NAFTA once and for all.”

This 3-chart Zero Hedge story was posted on their website at 11:54 a.m. EDT yesterday morning — and I thank Richard Saler for this one as well.  Another link to it is here.

Trump Now a Captive of the Deep State — Paul Craig Roberts

When the gullible and insouciant American public and the presstitutes who participate in the deceptions permitted the Deep State to get away with the fairy tale that a few Saudi Arabians under the direction of Osama bin Laden, but without the support of any government or intelligence agency, were able to outwit the entirety of the Western Alliance and Israel’s Mossad and deliver the greatest humiliation in history to “the world’s only superpower” by making the entirety of the US government dysfunctional on September 11, 2001, Washington learned that it could get away with anything, any illegal and treasonous act, any lie. The gullible Western populations would believe anything that they were told.

Not only insouciant Americans, but much of the world accepts any statement out of Washington as the truth despite the evidence. If Washington said it, Washington’s vassals in Germany, France, UK, Canada, Australia, New Zealand, Netherlands, Belgium, and Japan assent to the obvious lie as if it were the obvious truth. So do the CIA purchased media of these vassal states, a collection of whores who prefer CIA subsidies to truth.

When Obama inherited the Deep State’s agenda from George W. Bush, he set up Syria’s Assad for regime change by repeating for many months that if Assad used chemical weapons in the “civil war” that Washington had sent ISIS to conduct, Assad would have crossed the “Red Line” that Obama had drawn and would, as the consequence, face an invasion by the U.S. military, just as Iraq had been invaded based on Washington’s lie about “weapons of mass destruction.”

Having burnt this idea into the feeble minds of the Western populations, Obama then arranged for a chemical weapon to be exploded in Syria and blamed it on Assad. Thus, the Red Line had been crossed, the insouciant West was told, and America would now invade.

There’s not much here that we don’t already know, but Paul has such a way with words — and including his ‘insider’ knowledge, this longish commentary is certainly worth reading if you have the interest.  I thank ‘aurora’ for passing it around late last evening — and another link to it is here.

Great-West Lifeco to lay off 13{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of its Canadian workforce

Insurance conglomerate Great-West Lifeco plans to lay off 1,500 Canadian workers this year and next year as part of a cost-cutting plan.

Reductions will come from reducing the temporary workforce, a voluntary retirement program and eliminating positions through a severance program,” the Winnipeg-based company said in a release, citing changing technology and heightened competition to justify the changes.

These are difficult but necessary decisions that we are not taking lightly,” CEO Paul Mahon said. “We are committed to treating all those affected fairly and respectfully, consistent with our values.”

Almost a third of the job cuts, or 450 positions, will come from the company’s Winnipeg headquarters, a spokesperson told CBC News.

On a conference call with analysts to discuss the move, the company said it expects most of the job cuts to be front-loaded, with 1,000 coming in 2017 and the remainder next year.

This news story was posted on the Internet site at 8:27 a.m. EDT on Tuesday morning — and it’s another contribution from Brad Robertson — and another link to it is here.

Canada’s Housing Bubble Explodes as Its Biggest Mortgage Lender Crashes Most in History

Call it Canada’s “New Century” moment.

We first introduced readers to the company we said was the “tip of the iceberg in Canada’s magnificent housing bubble” nearly two years ago, in July 2015 when we exposed a major problem that we predicted would haunt Home Capital Group, Canada’s largest non-bank mortgage lender: liar loans in particular, and a generally overzealous lending business model with little regard for fundamentals. In the interim period, many other voices – most prominently noted short-seller Marc Cohodes – would constantly remind traders and investors about the threat posed by HCG.

Today, all those warnings came true, when the stock of Home Capital Group cratered by over 60{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, its biggest drop on record, after the company disclosed that it struck an emergency liquidity arrangement for a C$2 billion ($1.5 billion) credit line to counter evaporating deposits at terms that will leave the alternative mortgage lender unable to meet financial targets, and worse, may leave it insolvent in very short notice.

As part of this inevitable outcome, one which presages the company’s eventual disintegration and likely liquidation, Bloomberg reports that the non-binding rescue loan with an unnamed counterparty will be secured by a portfolio of mortgage loans originated by Home Trust, the Toronto-based firm said in a statement Wednesday. Home Capital shares dropped by 61{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in Toronto to the lowest since 2003, dragging down other home lenders. Equitable Group Inc. fell 17 percent, Street Capital Group Inc. fell 13 percent, while First National Financial Corp. declined 7.6 percent. In short, the Canadian mortgage bubble has finally burst.

This longish story appeared on the Zero Hedge website at 4:49 p.m. on Wednesday afternoon EDT — and it’s yet another offering from Brad Robertson.  Another link to it is here.

Gold buyers in Mumbai rejoice as jewellers unveil bonanza of offers for Akshay Tritiya

To boost the sale of gold, which has been on decline for quite some time, jewellers in Mumbai have unveiled offers to lure buyers on the occasion of Akshay Trutiya.

Various offers like free silver and gold coins, discounts on making charges, free electronic items on every purchase and lucky draws, which include free cars and mobile phones, have hit the market.

Another incentive for buyers is the fall in gold prices—which reduced to Rs 29,460 per 10 grams compared to Rs 30,600 per 10 grams which it breached last week.

According to Kumar Jain, vice president, Mumbai Jewellers Association, these offers are unheard in the history of bullion market. “After demonitisation and the lacklustre Gudi Padwa festival, economic conditions have improved drastically, and we expect to have a great sale this Akshay Tritiya. Every gold trader is giving out the best offers possible to boost sales,” said Jain.

Vijay Jain, chief executive officer and director,of ORRA Fine Jewellery Private Limited, has similar views. “As compared to the previous year, the consumer sentiment is on an upswing, and we are looking forward to a positive Akshaya Tritiya,” said Vijay Jain.

This is the only gold-related news item that I saw worth posting.  It put in an appearance on the website at 12:33 p.m. IST on their Wednesday afternoon — and I found it on Sharps Pixley.  Another link to it is here.


Today’s critter is the common nighthawk.  It’s a medium-sized nocturnal bird within the nightjar family, whose presence and identity are best revealed by its vocalization.  Yep, you hear these birds long before you see them in the evening sky — and the last one I saw was chasing insects under a lighted canopy at a gas station at 2:00 a.m. in the morning in Las Vegas many moons ago.  I’ve never seen them at this latitude of North America, but they are certainly summer visitors in the extreme southern prairies of Canada — and were a common bird in southern Manitoba when I was a kid.  Once you’ve heard one and then finally pick it out of the evening sky…you never forget what it is.  Here’s a 2:21 clip of that they sound like.


[I]t is now undeniable that the largest COMEX silver short, JP Morgan, is also the largest physical holder of silver as well. Please think about that for a moment. The more than 100 million oz that have been moved into the JPM COMEX warehouse over the past few years, largely following JP Morgan taking delivery on futures contracts in its proprietary (house) trading account, establishes JPM as the world’s largest holder of physical silver. Forget, for the moment, my contention that the bank owns 500 million oz of actual metal in addition to its COMEX holdings – the facts confirm that JP Morgan is the largest physical long and paper short silver holder in the world. Again, this is all from CFTC and exchange data.

What JP Morgan has achieved in amassing its physical silver hoard, in practical market terms, is truly remarkable. And I can’t help but believe that the bank’s acquisition of so much physical silver via COMEX deliveries (leaving out the other 500 million oz it owns) was the only real solution for a problem I identified decades ago – how can the big concentrated silver short position on the COMEX get resolved without a price explosion — and financial destruction for the big shorts? After all, how can you prevent a price explosion if the big short sellers turn buyers for the first time? JP Morgan figured out a way that even I didn’t imagine, until signs of it began to emerge several years ago.

Having inherited and learned how to master the giant COMEX silver short position it got from Bear Stearns in 2008 — and having to nearly choke on it into the price rise in 2011, JP Morgan made the conscious decision at that time to close out its short position in COMEX silver. Not only was the bank sharp enough to figure out and then execute the only possible short covering strategy that wouldn’t cause silver prices to explode immediately – it did so in a manner that will eventually make the bank many tens of billions of dollars to boot. Believe me – I couldn’t make this up if I tried. Silver analyst Ted Butler: 26 April 2017

The powers-that-be set a new intraday low price for gold yesterday, plus they did it in silver as well…along with a close at a new low for this move down.  Obviously we’re not done to the downside just yet, but it’s a certainty that we’re far closer to the end of this, than the beginning.

And it’s too cute for words that the President’s comments on tax reform were made after the COMEX close — and I’m sure that was deliberate.

It’s just too bad that yesterday’s data won’t be in tomorrow’s Commitment of Traders Report, because it occurred the day after the cut-off.

The only fly in the ointment is the fact that the gold price hovers just above its 200 and 50-day moving averages — and I just can’t see JPMorgan et al passing up this nice fat juicy target without a quick HFT/algo-generated engineered price smash to the downside.  Of course silver, along with the other two precious metals, certainly wouldn’t be spared, but once that deed was done, then it might get interesting from there.

Here are the 6-month charts for all four precious metals, plus copper — and the lay of the land in both silver and gold is more than obvious.  The click to enlarge feature helps a bit with the first four charts.

And as I type this paragraph, the London open is less than ten minute away — and I see that gold was sold down about 3 dollars by shortly before 10 a.m. China Standard Time on their Thursday morning.  It traded mostly sideways from there, but starting around 1:45 p.m. in Shanghai, ‘da boyz’ and their HFT buddies appeared — and at the moment, gold is down $5.20 an ounce.  The trading pattern in silver was mostly the same — and it’s down 7 cents.  Platinum and palladium both traded a dollar or so below unchanged during morning trading in Shanghai, but they too have been turned down in price in early afternoon trading over there — and the former is down 4 bucks — and the latter by 3 as Zurich opens.

Net HFT gold volume is approaching 36,000 contracts — and that number in silver is 8,400 contracts, but that’s now in the new front month, which is July.

The dollar index poked its nose above the 99.00 mark briefly just minutes after 9 a.m. CST, but then fell down to the 98.85 mark — and has been chopping around since then — and is currently down 4 basis points as London opens.

My main focus of attention today, besides what ‘da boyz’ do in gold and silver, will be what’s in tonight’s First Notice Day data for silver for May delivery.  I wouldn’t think that JP Morgan has the gonads to go after even more, but you just never know with these crooks.  Whatever the numbers show, I’ll have them for you in tomorrow’s column.

And as I post today’s missive on the website at 4:03 a.m. EDT, I see that the gold price hasn’t been doing much during the first hour of trading in London — and is down $5.40 an ounce currently.  Silver is now down 8 cents — and platinum and palladium are still under price pressure as well, with the latter now down 3 dollars and the former down 5.

Net HFT gold volume is just over 44,000 contracts — and that number in silver is around 10,500 contracts in July, the new front month for silver.

The dollar index dropped down to the 98.84 level, but was halted right at the 8:00 a.m. BST London open.  It has rallied a bit from there — and is down 8 basis points currently.

The large traders had to exit the May contract yesterday — and the rest have to be out by the COMEX close today.  But I doubt very much that this will slow down JP Morgan et al if they decide to continue leaning on the precious metals for the rest of the Thursday session.

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


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