JP Morgan et al Take No Prisoners on Monday

02 May 2017 — Tuesday


The gold price began to rally the moment that trading began at 6:00 p.m. EDT on Sunday evening in New York but, as usual, that was rolled over within an hour or so — and it was back below unchanged by 9 a.m. China Standard Time on their Monday morning.  It continued to get sold lower until shortly after London opened — and began to inch higher from there.  The price activity became somewhat more volatile once the noon silver fix was in, in London — and then took off higher the moment that the London p.m. gold fix was done at 10 a.m. in New York.  Then ‘da boyz’ and their bag of tricks went to work for real — and the low tick of the day was set at the COMEX close.  It rallied quietly higher from there into the 5 p.m. EDT close of trading.

The high and low ticks were reported as $1,272.40 and $1,254.90 in the June contract.

Gold was closed in New York yesterday at $1,256.10 — down $11.60 from Friday — and was also closed a bit below its 200-day moving average in the process.  Net volume was heavy, but not anywhere near as heavy as volumes were last week, as Monday’s number checked in at 188,000 contracts.

Brad is away this week, so no 5-minute tick charts until next week.

Silver had an identical chart pattern as gold, right up until shortly before 10 a.m. CST on their Monday morning as well.  It then traded virtually ruler flat until the London p.m. gold fix and, also like in gold, JP Morgan et al did the dirty — and you know the rest.  The low tick was placed a minute or so before the 1:30 p.m. EDT COMEX close.

The high and low ticks in this precious metal were recorded by the CME Group as $17.29 and $16.81 in the July contracts.  Silver finished the Monday session at 16.83 spot, down 33 cents.  Not surprisingly, net volume was pretty hefty at a bit over 60,000 contracts.

The platinum price followed a similar price path as silver during Far East and Zurich trading — and the only real difference was that the engineered price decline in platinum began at 9 a.m. in New York and, like gold and silver before it, its low price tick was set at the COMEX close as well.  Platinum finished the day at $929 spot, down 15 dollars on the day.

Palladium’s 6 p.m. EDT rally in New York on Sunday evening met with the short buyers and long sellers of last resort within minutes — and it was down 8 bucks by 11 a.m. China Standard Time on their Monday morning.  It gained back most of that loss by shortly before the COMEX open, but like gold and silver, once the p.m. gold fix was done, it was all down hill from there into it COMEX close low tick.  It rallied a dollar or two from there — and finished the Monday session at $815 spot, down 12 dollars on the day.

The dollar index closed very late on Friday afternoon in New York at 99.02.  It had an immediate down/up move right at the 4 p.m. EDT open in New York on Sunday afternoon when trading began — and was back to the 99.06 mark by shortly after 5 p.m. EDT.  It wandered down to the 99.83 mark around 8:35 a.m. in Tokyo on their Monday morning — and then rallied up to its 99.21 high tick.  That point was reached around 2:35 p.m. in Shanghai on their Monday afternoon – and from there it was mostly down hill to the 98.89 New York low.  That was printed around 10:20 a.m. EDT.  I would suspect that the usual ‘gentle hands’ appeared at that point — and guided the index higher and back above the 99.00 mark to stay.  It finished the Monday trading session at 99.15…which was up 13 basis points from its Friday close.

The ‘rally’ after the London p.m. gold fix was just the fig leaf that the powers-that-be used to do their dirty work yesterday.  And it was a pretty tiny and tattered-looking leaf as well, once you compare the engineered price decline in all four precious metals against what was happening in the dollar index.

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

And here’s the 6-month U.S. dollar index…posted for the usual ‘entertainment’ purposes.

The gold stocks gapped down a bit at the open on Monday — and then kept right on going.  Their respective low ticks were printed around 12:20 a.m. in New York.  They developed a slight positive bias from there — and the HUI closed down 3.12 percent.

It was mostly same for the silver equities — and the chart pattern was very similar to gold’s.  But the surprising part was that Nick Laird’s Intraday Silver Sentiment Index closed down only 2.18 percent.  Click to enlarge if necessary.

The interesting thing about the above two charts is that the precious metals equities began to rally off their respective low ticks long before the actual low ticks came in the precious metals at the 1:30 p.m. COMEX close.

The CME Daily Delivery Report for Day 3 of May deliveries in silver showed that 8 gold and 535 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, there were no issuers or stoppers worth mentioning.  In silver, there were eleven short/issuers in total — and the only two worth noting were International F.C. Stone and ABN Amro with 292 and 192 contracts out of their respective client accounts.  There were fifteen long/stoppers.  ABN Amro was the largest with 202 contracts…HSBC USA was second with 151 contracts — and in  distant third spot was ADM with 54 contracts.  All of these were for their respective client accounts, including the contracts stopped for HSBC USA.  The link to yesterday’s Issuers and Stoppers Report is here.

Month-to-date there have been 2,713 silver contracts issued and stopped — and there’s still 920 contracts left in May open interest.  Silver deliveries this month, unlike in April, are progressing quickly.

The CME Preliminary Report for the Monday trading session showed that gold open interest in May declined by 22 contracts, leaving 413 still around, minus the 8 contracts mentioned above.  Friday’s Daily Delivery Report showed that 12 gold contracts were actually posted for delivery today, so that means that 22-12=10 gold contracts disappeared from May without either making or taking delivery.  Silver o.i. in May dropped by 583 contracts, leaving 1,455 still open, minus the 535 contracts mentioned in the previous paragraph. Friday’s Daily Delivery Report showed that 751 gold contracts were actually posted for delivery today, so that means that another 751-583=168 silver contracts were added to the May delivery month.  That’s a lot!

There was no reported change in GLD yesterday.  But for the third time in five business days, there was a deposit in SLV, as an authorized participant added 1,135,845 troy ounces.  This, without doubt, was deposited to cover an existing short position.

In the last five business days, there has been 6.1 million troy ounces of silver added to SLV — and during that time period, the price has declined by about a dollar, so you just have to know that these deposits had nothing to with the public purchase of SLV shares; as the fund managers, along with Joe Six-Pack, have been selling them by the bucket load over the last two weeks.

And it’s a reasonable assumption that all these SLV [and most likely GLD] shares being dumped by John Q. Public are being bought by JP Morgan and their ilk, so it’s also a reasonable assumption that at some point in time we’re going to see some conversions-of-shares-for-metal in these ETFs that will make your eyes glaze over.

There was a pretty decent sales report to start off the new month, as the U.S. Mint sold 2,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 530,000 silver eagles.

For a change, there was a bit of movement in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  They didn’t report receiving any, but did ship out 23,180.150 troy ounces/721 kilobars [U.K./U.S. kilobar weight] — and that all came out of Canada’s Scotiabank.  The link to that activity is here.

Also for a change, there was very little activity in silver.  Nothing was reported received — and only 42,329 troy ounces were shipped out the door.  There was 40,175 troy ounces from Scotiabank — and 2,154 from HSBC USA.  JP Morgan wasn’t involved — and as Ted commented on the phone yesterday, they may actually be done with their physical silver acquisitions in silver via the COMEX.  But the other shoe yet to drop will be that/those big conversions of share in SLV for physical metal at some point down the road.  I won’t bother linking this amount.

It wasn’t an overly exciting day at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They received 2,470 of them, plus they shipped out another 2,318.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

Here are three charts that Nick Laird passed around on the weekend.  The first one shows Swiss gold imports and exports updated with March’s data.  There was approximately 153 tonnes received — and 140 shipped out.  Click to enlarge.

Charts two and three below show the countries of origin from which the gold was received — and the third chart shows their exports by country of destination.  Click to enlarge for both.

I have a fairly decent number of stories, plus a video interview…so I hope you have time to spend on the ones that interest you the most.


U.S. Economy Grew 0.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in First Quarter, Slowest in Three Years

The U.S. economy expanded at the slowest pace in three years as weak auto sales and lower home-heating bills dragged down consumer spending, offsetting a pickup in investment led by housing and oil drilling.

Gross domestic product, the value of all goods and services produced, rose at a 0.7 percent annualized rate after advancing 2.1 percent in the prior quarter, Commerce Department data showed Friday in Washington. The median forecast of economists surveyed by Bloomberg called for a 1 percent gain. Consumer spending, the biggest part of the economy, rose 0.3 percent, the worst performance since 2009.

The GDP slowdown owes partly to transitory forces such as warm weather and volatility in inventories, which supports forecasts for a rebound as high confidence among companies and consumers and a solid job market underpin growth. Even so, the weakness at car dealers could weigh on expansion, and further gains in business investment could depend on the extent of policy support such as tax cuts.

This Bloomberg news item was posted on their website at 6:30 a.m. Denver time on Friday morning — and I found it in yesterday’s edition of the King Report.  Another link to it is here.

Stockman Slams Trump’s “Dead on Arrival” Tax Plan, Warns Wall Street’s “Delusional” For Believing It

David Stockman has a stern message for investors: They’re living in a fantasy land about Trump.

I don’t know what the stock market is thinking but if they have faith in a giant fiscal stimulus and tax cut then it’s a delusional faith that’s going to be badly disappointed and I think fairly soon,” rages the former director of the Office of Management and Budget under President Reagan, during a recent interview with CNBC.

Stockman said that “Wall Street is totally misreading Washington,” and President Trump’s promises of tax reform will be “dead before arrival.

The president is “essentially a 70-year old kid in a candy store who wants one of everything: More for defense, veterans, border walls, law enforcement, infrastructure and ‘phenomenal’ tax cuts, too—without the inconvenience of paying for any of it,” said Stockman.

Of the proposed tax bill announced this week, he said, “It’s a wonderful fantasy…but there’s no way to pay for the $7.5 trillion cost of the main features.”

This Zero Hedge article was posted on their Internet site at 9:26 a.m. on Monday morning EDT — and I thank Richard Saler for pointing it out.  Another link to it is here.

Where Do You Go in a Hurricane? — Jeff Thomas

As a West Indian, I’ve lived through quite a few hurricanes in my time. My level of responsibility in each varied quite a bit. I was eight years old in my first hurricane and I thought it was great fun, as it was so exciting during the hurricane and, afterward, the landscape had changed so much that I had lots of new places to play.

On the other end of the scale, in 2004, my country, the Cayman Islands, experienced a Category 5 hurricane, with winds up to 200 miles per hour that sat on us without moving for 36 hours. I was responsible for ensuring that safety be provided for scores of my employees prior to the hurricane. After the storm, one of my companies took on the complete rebuilding of the country’s wholesale and retail food distribution facilities in order to ensure that the country’s population would have the most essential commodities—food and water. (A big change in level of responsibility over the years.)

In addition to having spent decades planning for hurricane damage, I’ve also spent decades as an economist, planning for major economic storms. In 1999, I determined that the world would experience what Doug Casey has termed a Greater Depression that would be more devastating than any economic event the world had ever seen. I predicted that it would happen in stages and that the final stage would be the most devastating. I would have been quite pleased to have been incorrect, but unfortunately, my predictions have come to pass. I believe we’re now quite close to the final destruction stage, a period that will lead to the collapse of many of the world’s formerly strongest economies, coinciding with a period of devastating warfare. In both the economic and warfare cases, those who are the world’s major players will believe that they’ll be able to control the extent of devastation and even profit from it, but events will go beyond their control and take on a life of their own.

This very interesting and worthwhile commentary by Jeff showed up on the Internet site yesterday — and it’s certainly worth reading.  Another link to it is here.

The Relentless Push Towards War — Chris Martenson

The only real constant to be found in both European and U.S. politics is war.  A steady feature of both regions for the past 20+ years has been small, lucrative conflicts waged against countries unable to effectively defend themselves.

It doesn’t seem to matter who’s in office in the U.S. — Republican/Democrat, conservative/liberal — there’s a war machine constantly running. My concern is that there’s a building risk that one day that war machine is going to bust apart. And when it does, the long relative peace that the U.S. and Europe have enjoyed (even as they’ve visited a lot of death and destruction elsewhere) will be shattered.

As I’ve written extensively in the past, as was the case with Russia last fall, this push to war includes a series of carefully-crafted talking points being endlessly repeated over the print and airwaves.  It’s an ever-present condition of living in our manufactured reality, where what we are told to care about is beamed at us around the clock  in a rather tediously but emotionally-manipulative way on the “news.”

Today’s big ‘bogeyman’ is North Korea.  Have you wondered why?

The news about North Korea is at a fever pitch.  Again, we have to ask, why now?

This long but must read commentary was posted on the Internet site last Friday.  It’s an absolute must read for any serious student of the New Great Game — and I thank ‘Zoey’ for sending it our way.  Another link to it is here.

Washington Plans to Nuke Russia and China — Paul Craig Roberts

Not everyone likes to hear about the threat of nuclear war. Some find refuge in denial and say that nuclear war is impossible because it makes no sense. Unfortunately, humankind has a long record of doing things that make no sense.

In previous posts in recent years I have pointed out both written documents and changes in US war doctrine that indicate that Washington is preparing a preemptive nuclear attack on Russia and China. More recently, I have shown that Washington’s demonization of Russia and President Putin, the incessant lies about Russian deeds and intentions, and the refusal of Washington to cooperate with Russia on any issue have convinced the Russian government that Washington is preparing the Western populations for an attack on Russia. It is obvious that China has come to the same conclusion.

It is extremely dangerous to all of mankind for Washington to convince two nuclear powers that Washington is preparing a preemptive nuclear strike against them. It is impossible to imagine a more reckless and irresponsible act. Yet this is precisely what Washington has done.

Lt. Gen. Viktor Poznikhir, Deputy Head of Operations of the Russian General Staff has concluded that Washington in pursuit of global hegemony is implementing an anti-ballistic missile system that Washington believes can prevent a Russian nuclear response to a U.S. pre-emptive attack.

Another must read commentary… this one from Paul.  It appeared on his Internet site last Thursday — and I extracted it from a Zero Hedge article that ‘aurora’ passed around on Saturday.  Another link to it is here.

Contagion: Home Capital Bank Run Spreads to Another Canadian Mortgage Lender

As discussed first thing this morning, the fate of Canada’s largest alternative mortgage lender, Home Capital Group, appears to have been decided over the weekend, when in the span of just one week, over 70{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the company’s deposit base had been withdrawn, effectively mothballing the business, leaving just a sale or liquidation as the two possible outcomes even as a $2 billion emergency line of credit keeps the company afloat, at least until HCG’s $12.8 billion in GICS mature some time over the next 30 to 60 days.

Predictably, the news of the ongoing bank run once again spooked shareholders, who sent its stock sliding by 10{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, and wiping out two-thirds of the company’s market cap in under 2 weeks.

A bigger red flag emerged when concerns about possible contagion appeared to have been justified Canada’s Equitable Group, another alternative mortgage lender, said Monday it had started seeing “an elevated but manageable” decrease in deposit balances, traditionally a polite way by management to admit a bank jog is taking place. The company said that customers had withdrawn an average C$75 million each day between Wednesday and Friday, and while the withdrawals so far are modest, and represented 2.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the total deposit base, the recent HCG case study showed how quickly such a bank run could escalate. And while liquid assets remained at roughly C$1 billion after the outflows, the company also announced that it had taken out its own C$2 billion credit line with a group of Canadian banks, just in case the bank run was only getting started.

This Zero Hedge article, based on an embedded and linked Bloomberg story, showed up on their Internet site at 6:47 p.m. EDT yesterday evening — and it it’s the second contribution of the day from Richard Saler.  Another link to it is here.

E.U. sets Britain tough divorce terms, slams budget veto

European Union leaders endorsed stiff divorce terms for Britain on Saturday and warned Britons to have “no illusions” about swiftly securing a new relationship to keep their access to E.U. markets.

At a Brussels summit marked by unusual harmony among the 27 leaders, there was a flash of the cross-Channel acrimony which some fear could wreck any deal when officials accused London of cynically vetoing some E.U. spending and demanded it back down or face disrupting the start of talks next month.

Meeting for the first time since Prime Minister Theresa May triggered the two-year countdown to Brexit in late March, her counterparts took just minutes as they sat down to lunch in Brussels to approve eight pages of negotiating guidelines hammered out by their diplomats over the past month.

They greeted the decision with applause, officials said.

The text will bind Michel Barnier, their chief negotiator, to seek a deal that secures the rights of 3 million E.U. expats living in Britain, ensures London pays tens of billions of euros Brussels thinks it will be owed, and avoids destabilizing peace by creating a hard E.U.-U.K. border across the island of Ireland.

This Reuters article, filed from Brussels, was posted on their website at 2:35 p.m. EDT on Saturday afternoon — and it’s the second story of the day that I lifted from Monday’s edition of the King Report.  Another link to it is here.

Italy Warns Sudden Collapse of Alitalia Would Lead to “Great Shock” For the Economy

That Italy has a bank solvency problem will not come as a surprise to anyone who has been following events in Europe for the past 7 years.

Just yesterday, Italian daily La Stampa reported that four months after the third government bailout of Italy’s third largest bank in as many years, the Italian government may have to inject even more cash than planned into Monte Paschi, the world’s oldest and apparently always insolvent bank.

Stampa cited the outcome of an ECB inspection, focusing on uncertainties from the bank’s planned bad loan reduction. The Italian daily noted that the ECB had communicated results of its inspection to the bank last week, noting that losses are now expected to be well above those calculated until now. Specifically, while the proposed €8.8BN recapitalization would be sufficient to take the bank’s CET1 above the required regulatory level, it would not be sufficient to meet the ECB SREP requirements, raising the risk the government will have to contribute more than the €6.6BN currently envisaged.

But while Monte Paschi continues to be a perpetual drain of taxpayer funds, the most imminent threat facing the Italian economy comes not from the banking sector, but from its just as troubled national airline carrier. Last week, Alitalia said it had exhausted all options after workers voted against job cuts aimed at salvaging the cash-strapped Italian airline, pushing it toward administration for the second time in a decade.

This is yet another Zero Hedge article — and it too is the spin on an embedded and linked Bloomberg article.  It put in an appearance on their Internet site at 3:39 p.m. on Sunday afternoon EDT — and it comes courtesy of ‘David in California’.  Another link to it is here.

China seeks to cement globalization credentials at Silk Road summit

China says its Silk Road initiative is helping create “a new era of globalization” open to all, according to a draft communique for a summit next month on the project, as Beijing burnishes its free trade credentials amid protectionist forces elsewhere.

Leaders from 28 countries will attend the Belt and Road Forum in Beijing on May 14-15, an event orchestrated to promote Chinese President Xi Jinping’s vision of expanding links between Asia, Africa and Europe underpinned by billions of dollars in infrastructure investment.

Although only one Group of Seven leader is due to attend, the forum will be China’s biggest diplomatic event of 2017.

It offers Xi a chance to flesh out China’s global leadership ambitions as U.S. President Donald Trump promotes “America First” and voters in some European nations turn against globalization.

The government is pulling out the stops to make it a success, offering soothing words about sharing the bounty of economic growth and promising inclusivity.

This is the second story about this event that’s shown up in the American press in the last few days, even though they’ve put a negative spin on it.  This Reuters article, co-filed from Shanghai and Beijing, was posted on their website at 6:49 a.m. EDT last Wednesday — and I thank Judy Sturgis for sending it our way.  Another link to it is here.

War on a Lake of Death Will Prove That Men Are Gods — Yoichi Shimatsu

The arena for a coming naval confrontation of epic dimensions, known as the Japan Sea or East Sea to Koreans, is eerily placid in the azure summer yet stormy over the graying winter months when the Siberian high whips the froth and fog into the powdery flakes that bury the coastal mountains in silence. For all its peaceful appearances, the backwaters of Snow Country, with their huddled black-hued wooden homes and verdant rice paddies, the crystal-clear sake and translucent sashimi fanned across exquisitely colored ceramics, is the altar for an Armageddon that will sweep humanity off the face of this doomed planet.

Donald Trump and Kim Jong Un have chosen well the site for the sacrificial rites by which the world’s four strongest military powers will fulfill our divinity-vying forefathers’ nihilism with the will to self-destruction that proves we are not mere mammals but in our very essence demigods.

Serial Conflict or How World Wars Begin

Sending a super-carrier into the Lake of Death will trigger treaties and a lack thereof. The political complexities will then unleash a contagion of bellicose reactions, much like how the 1914 assassination of Archduke Franz Ferdinand by Serb nationalists awakened dormant alliances to their promise of butchery. Thus, World War I may have stumbled at its start yet finally achieved its death toll of 17 million.

There is at present no iron-clad legal guarantees for regional peace around the Sea of Japan. The Korean Armistice Agreement of 1953 has tenuously held the belligerents to avoiding overt and extensive combat. The Democratic People’s Republic of Korea (DPRK) has withdrawn from its terms on several occasions, however, the latest exit starting in 2013. Pyongyang complains that a truce is not a substitute for a peace treaty since it allows the U.S., South Korea and more recently Japan to conduct live-fire exercises near its borders, which at any moment could plunge into an all-out invasion.

Wow!  If I had to pick just one article for you to read in today’s column, it would be this one.  It was posted on the Internet site on Saturday — and I thank Roy Stephens for sharing it with us.  Another link to this absolute must read commentary is here.

Senator McCain: Consequences of U.S. attack on North Korea “horrendous

Senator John McCain, Washington’s perennial war-hawk, has let slip the truth, which is that a U.S. attack on North Korea is a terrible idea.

Talking to CNN, he responded to questions about the merits of a possible pre-emptive strike to prevent North Korea developing an intercontinental ballistic missile capable of reaching the U.S. by saying the following

I think that we have to consider that option as the very last option. And for a number of reasons, and one of the reasons is because there’s artillery on the [demilitarized zone] that can strike Seoul, a city of 26 million people, and the carnage would be horrendous.”

I would add that – accepting this logic – the effect of a North Korean artillery strike on Seoul would be equally “horrendous” if it were carried out in retaliation for a U.S. strike carried out after a North Korean ballistic missile or nuclear weapons test.

Senator McCain in contrast to other war-hawks like Senator Lindsey Graham – who has been saying that a war in the north east Pacific would not be so bad because it would not directly affect the U.S. – or Governor John Kasich -who is calling for an assassination team to ‘take out’ Kim Jong-un and other members of the North Korean leadership – is a former active duty military officer who has actually served in combat during the war in Vietnam.  He also comes from a family with a long history of military service.  He therefore presumably understands rather better the danger of some of the farfetched scenarios for military action than some of the people who are advocating them.

This commentary by Alex Mercouris showed up on website on Sunday sometime — and I thank Roy Stephens for finding it for us.  Another link to it is here.

North Korea says U.S. bomber flights push peninsula to brink of nuclear war

North Korea accused the United States on Tuesday of pushing the Korean peninsula to the brink of nuclear war after a pair of strategic U.S. bombers flew over the area in a training drill with the South Korean air force.

The two supersonic B-1B Lancer bombers were deployed amid rising tensions over North Korea’s dogged pursuit of its nuclear and missile programmes in defiance of United Nations sanctions and pressure from the United States.

The flight of the two bombers on Monday came as U.S. President Donald Trump said he was open to meeting North Korean leader Kim Jong Un in the appropriate circumstances, even though Pyongyang suggested it would continue with its nuclear tests.

South Korean Defence Ministry spokesman Moon Sang-gyun told a briefing in Seoul that Monday’s joint drill was conducted to deter provocations by the North and to test readiness against another potential nuclear test.

This Reuters article, filed from Seoul, put in an appearance on their Internet site at 5:47 a.m. BST this morning in London, which was 12:47 a.m. in Washington — EDT plus 5 hours.  I thank Doug Milne for sending it our way very late last night Denver time — and another link to it is here.

10 countries that threaten world peace more than North Korea

North Korea does not pose a critical threat to the world. But these countries have done — and still very much do.

North Korea is often portrayed as a rogue state which endangers the region and according to some, the world. But North Korea has not engaged in a hot conflict since the ceasefire which ended the Korean War in 1953. There is little evidence that North Korea is actually as menacing as it often pretends to be, let alone as menacing as others claim it is.

The same cannot be said for the following 10 countries…

Not too many surprises in this list, except I would have chosen Britain in #2 spot — and not the Ukraine.  But I may be splitting hairs here.

This short, but worthwhile article appeared on Internet site on Saturday sometime — and I thank Roy Stephens for his second offering in today’s column — and another link to it is here.

Selling the Golden Goose — Jeff Thomas

Venezuela is a naturally rich nation. It’s ranked seventh worldwide for biodiversity and has the world’s largest reserves of oil. This is a country that deserves, more than most, to thrive. However, as in all countries, it passes through economic cycles and, when on a downward curve, would-be leaders take the opportunity to claim that the “greedy rich” have sent the economy into a tailspin (which can sometimes be the case) and that the solution is to adopt a collectivist approach to governance.

In 1989, Venezuela was experiencing a downturn. Riots broke out, followed by two attempted coups in 1992. The following year, President Pérez was impeached for embezzlement of public funds and the red carpet of opportunity was rolled out for the charismatic former coup participant Hugo Chávez. He took office as president in 1998. A new constitution was drawn up in 1999 and, as in so many countries previously, the people enthusiastically welcomed the new collectivist regime.

As in all collectivist experiments, the new entitlements meted out to the population had to be funded somehow and, as is customary, those who create the wealth in Venezuela were required to pay for its distribution to those who were less productive.

In the beginning, this form of theft appears to work well and, not surprisingly, many of the supporters of Mister Chávez saw him as the messiah of the common man. Unfortunately, as is always the case, bleeding the wealth from those who create it makes it increasingly difficult for them to continue to expand the creation of it and, as the wealth continues to be drained, contraction eventually takes place, making the entire nation poorer in every way.

This excellent gold-related commentary by Jeff appeared on the Internet site on Friday I believe — and another link to it is here.

Gold accumulation increases in April in China, India, Russia

Each month, BullionStar‘s chart wrap-ups profile a series of gold market charts from the extensive GOLD CHARTS R US website. Most of the charts featured have recently been updated with the latest data from March 2017 and in some cases data from April 2017. The charts profiled have been selected as to capture the most important trends and developments currently occurring in the world’s major physical gold markets.

On the BullionStar website you will also find a large selection of dynamic charts under the BullionStar Charts menu. The data for these charts cover precious metals, major currencies, stock indices and major stocks, other commodities, and also BullionStar bullion products. The charting functionality within BullionStar‘s charts allows every asset or financial instrument listed to be measured in terms of every other asset or instrument listed.

Shanghai Gold Exchange (SGE) – Gold Withdrawals

March saw 192.25 tonnes of physical gold withdrawn from the vaults of the Shanghai Gold Exchange (SGE). This is the highest monthly withdrawal total so far in 2017, surpassing February’s 179 tonne figure and January’s 184 tonne figure.

SGE gold withdrawals are a suitable proxy for Chinese Wholesale gold demand.

This chart-filled essay shows all the gold-related charts that Nick Laird has published over the last month — and virtually all of them have appeared in my column when Nick first passed them around to all and sundry — including me — as the April month moved along.  You’ve seen them all before, including the new Swiss gold charts I posted further up, but they do make for a quick refresher, so they’re worth a few minutes of your time if the spirit moves you.  This was posted on the Singapore-based Internet site on Monday — and I found it embedded in a GATA dispatch.  Another link to it is here.

China, Russia and India Buying Gold — Mike Maloney

Precious metals expert Mike Maloney points to what large foreign countries are buying and it gold–lots of it. Maloney explains, says, “Between Russia, China and India, their purchases meet or exceed all worldwide production of gold. Whenever they exceed mining supply, the supply has to come from somewhere, and it’s coming from the West. When the dust settles, the East is going to be very wealthy, and the West is going to be poor.

In closing, Maloney says that all the money printing and manipulation only pushed off the real crash into the future. Maloney explains, “These things bought us some time, but they made the eventual crash much, much worse. What we are going to see is that 2008 is going to be a speed bump on the way to the main event. 2000 was a stock market crash. 2007 was a real estate and stock market crash. This crash is going to be stocks, real estate and bonds. Bonds have been in a 32year bull market, and no bull market goes forever. It’s just impossible.”

This 30-minute video interview with Greg Hunter as host, was posted on the Internet site yesterday sometime — and I thank Jim Gullo for sending it along.  Another link to it is here.


Today’s ‘critter’ is a bird that used to frequent this area in reasonable numbers thirty or so years.  They’ve all but disappeared since the European starling showed up in these parts — and that’s the purple martin.  There used to be lots of magnificent-looking purple martin houses throughout the city at one time, but I don’t recall seeing the bird, or their houses, for the last twenty-odd years.


The turnover or physical movement of metal brought into or taken out from the COMEX-approved silver warehouses surged this past week to a level not seen since I first started featuring the data six years ago.  I started tracking the weekly physical turnover around April 2011, the time when the price of silver peaked and began a six year grind down. This past week, nearly 15.4 million oz were physically moved in or out of the six COMEX silver warehouses, as total COMEX silver inventories rose by 2 million oz. to 196.6 million oz (another two decade high).

When annualized (a fancy word for multiplying by 52), the 15.4 million oz of silver physically moved (by men driving forklifts and trucks) into and out from the six active COMEX silver warehouses, comes to 800 million ounces, not that much less than total world annual silver mine production. Another way of stating this is that this week, the physical movement of silver between the six active COMEX warehouses just about equaled world mine production for the week. (Actually, even more on a daily basis, since the COMEX warehouse data is for 5 business days, while mine production is a 7 day affair).

Please remember that I am not talking about paper futures contract trading; the warehouse movement this week involves the physical movement of 15,400 ingots of silver in 1,000 oz bars, weighing about 70 pounds each. There has to be a reason why so much physical silver has moved in and out of the COMEX warehouses non-stop for the past six years. And before you try to come up with that reason, please also consider that the unusually large physical turnover in COMEX silver is strictly unique and specific to silver among all commodities. Silver analyst Ted Butler: 29 April 2017

It was another day where JP Morgan et al were taking no prisoners — and as Ted mentioned on the phone yesterday, they were as blatantly in-your-face about it as they could possible be…knowing perfectly well that neither the CFTC nor the mining companies would raise an eyebrow in protest, as they raped the precious metal industry and their stockholders in broad daylight once again.

And as Ted also pointed out, ‘da boyz’ only toyed with the 200 and 50-day moving averages — and one shudders to think what damage they could do if they really got serious to the downside in that precious metal as well.  But as I pointed out several times last week, the latest being in Saturday’s column, that any engineered price decline in gold would surely allow them to lean even harder on silver.  However, I certainly agree with Ted’s take on this — and that’s that the liquidation cycle in silver looks like it has pretty much run its course, as JP Morgan et al have set nine consecutive new intraday lows, or closes, in a row.

Here are the 6-month charts for all four precious metals, plus copper, once again.  And as you can tell by looking at the RSI trace on the silver chart, it’s now well into oversold territory — and unless we get a big up-tick in price during the Tuesday session, it should show even more oversold when Tuesday’s doji is added after the close of COMEX trading later today.  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 minutes away — and I note that the gold price has traded flat throughout the entire Far East trading session on their Tuesday, wandering around less than a dollar either side of unchanged.  It’s down 50 cents at the moment.  The silver price has been wandering rather aimlessly higher during the same period — and at the moment it’s up 9 cents the ounce.  Platinum is up a couple of bucks, but palladium was sold lower in early afternoon trading in Shanghai — and is currently down 3 dollars as the Zurich open approaches.

Net HFT gold volume is very decent considering the lack of price action — and is approaching 29,000 contracts.  That number in silver is pretty hefty as well, at just over 10,000 contracts.

The dollar index began to slide the moment that trading began at 6:00 p.m. EDT on Monday evening in New York.  It appears to have been ‘saved’ by the usual ‘gentle hands’ a couple of times as it was about slide below the 99.00 mark — and is now back to unchanged at the 99.12 mark as London opens.

Today is the start of the FOMC meeting in Washington — and the smoke goes up the chimney on Wednesday afternoon at 2:00 p.m. EDT…thirty minutes after the COMEX close…which is certainly never a coincidence.  I’ll be amazed if we get a rate hike, but you just never know — and there hasn’t been a word mentioned about it lately that I could see.

Also today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and after yesterday’s blood bath, I have no idea what the powers-that-be have in store, but I doubt very much if a big rally is in the cards…at least if they have anything to say about it.

And as I post today’s column on the website at 2:03 a.m. EDT, I see that the gold price has rolled over a bit in the first hour of trading in London — and is down $1.60 an ounce at the moment.  Silver is still up 9 cents — and platinum is up a buck.  Palladium is trying to rally, but the folks in Zurich are having none of that — and it’s still down 3 dollars the ounce currently.

Net HFT gold volume is just over 35,500 contracts — and that number in silver is just under 12,000 contracts.

The dollar index hasn’t done a lot in the first hour of London/Zurich trading — and is still a bit above the 99.00 mark by a bit — and is down 3 basis points.

There’s not much happening at the moment.

I would suspect, that like on Monday, all the price action that really matters will occur once ‘da boyz’ show up in New York when trading begins on the COMEX at 8:20 a.m. EDT.

That’s all for another day — and I’ll see you here tomorrow.