JPMorgan’s Last Swing For the Fences?

30 June 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price dipped briefly into negative territory in early Far East trading on their Friday morning — and the swan dive in the U.S. dollar index at 10:30 a.m. China Standard Time wasn’t allowed to manifest itself in the price, as ‘da boyz’ were standing by with whatever paper gold was necessary to cap the price.  The gold price was turned lower at the 2:15 p.m. CST afternoon gold fix in Shanghai — and it really didn’t do much from there until at, or just before, the afternoon gold fix in London.  The tiny rally that developed at that point was capped and sold lower starting at 1 p.m. EDT — and the sell-off continued into after-hours trading as well.

The low and high ticks certainly aren’t worth looking up.

Gold finished the Friday session in New York at 1,252.40 spot, up $4.40 from Thursday’s close.  Net volume was pretty respectable for a Friday in summer, at 209,000 contracts — and roll-over/switch volume was a bit under 15,600 contracts.

The price path for silver was similar, except more ‘volatile’.  It was turned lower at the afternoon gold fix in Shanghai as well — and the low tick, like for gold, came about 9:40 a.m. EDT in New York.  It rallied from there, but ran into ‘resistance’ right away — and also like gold, was sold lower starting just before the COMEX close.

The low and high ticks in this precious metal were reported by the CME Group as $15.91 and $16.12 in the July contract.  In the new front month, September, the low was reported as $16.00 — and the high as $16.22.

Silver was closed on Friday afternoon in New York at $16.09 spot, up 11.5 cents from Thursday.  Net volume was very healthy at 62,300 contracts — and there was a bit over 5,800 contracts worth of roll-over/switch volume in this precious metal.

Like silver and gold, platinum was sold lower until the dollar index did its mid-morning face plant in the Far East on their Friday — and after that, it was forced to trade very much like the silver price.  Platinum finished the Friday session at $852 spot, up 4 dollars on the day.

With some minor variations, palladium traded in a similar manner to platinum for most of the Friday trading session.  That changed at 1 p.m. in New York, as it received the same treatment as gold as silver at that point.  Palladium was closed at $948 spot, up 10 bucks from Thursday.

The dollar index closed very late on Thursday afternoon in New York at 95.29 — and traded mostly sideways until 10:30 a.m. China Standard Time on their Friday morning.  A trap door got opened under the dollar index at that juncture — and that was the start of long stair-step decline that lasted right until the end of trading in New York on Friday afternoon. The 94.48 low tick was set around 4:30 p.m. EDT.  The dollar index shows that it finished the day at 94.52…down 77 basis points from Thursday…but the ino.com DXY chart below doesn’t show the last forty-five minutes of trading data, so this close may not be entirely accurate.

Here’s the 3-day dollar index, so you can see the entire 24-hour move starting at 6:00 p.m. on Thursday evening in New York…including the 10:30 a.m. CST/10:30 p.m. EDT face plant.

And here’s the 6-month U.S. dollar index — and one has to wonder how long this dollar index ‘rally’ will last?

The gold stocks began to rally the moment that trading began at 9:30 p.m. EDT in New York on Friday morning.  Their respective highs came shortly after 1 p.m. — and shortly before the silver price was turned lower in COMEX trading.  The shares crawled quietly lower from there into the close, as the HUI finished up 2.25 percent.

The silver equities followed an almost identical price path as their golden brethren, but Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by only 1.52 percent.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart.  Click to enlarge as well.

Here are the usual charts from Nick that show what’s been happening for the week, month-to-date — and year-to-date.  The first one shows the changes in gold, silver, platinum and palladium for the past trading week, in both percent and dollar and cents terms, as of their Friday closes in New York — along with the changes in the HUI and the Silver 7 Index.

Here’s the weekly chart — and it’s mostly red across the board. But the declines in stock prices weren’t much when compared to the declines in the underlying precious metals themselves — and I certainly take heart from that.  Click to enlarge.

The month-to-date chart is a complete sea of red, even the loses over the last month didn’t amount to much considering how badly the underlying metals got hammered by JPMorgan et al.  Gold was down about 44 bucks for the month — and silver well over a dollar from its high tick. It could have been far worse.  Click to enlarge.

The year-to-date graph still isn’t very happy looking, as ‘da boyz’ now have all four precious metals down on the year.  But, as has been the case right from the start of 2018, the silver equities are still outperforming the gold stocks by a goodly margin — and that’s despite the fact that both gold and silver are down about the same percentage in price year to date.    Click to enlarge as well.

Just like I said in this space last week, where we go from here from a price perspective in both the equities — and their underlying precious metals, is still very much in the hands of JPMorgan et al…but mostly just JPMorgan.  However, with the COMEX futures market structure in all four precious metals as wildly bullish as we’re ever likely to see them, the path of least resistance is higher prices — and that will occur whenever JPMorgan decides, or is told to step aside.  The only thing not known is if ‘da boyz’ will appear as shorts sellers of either first and last resort once again.  I think not, but that’s just my opinion.


The CME Daily Delivery Report for Day 2 of July deliveries showed that 14 gold and 1,583 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, ADM and Advantage issued 8 and 6 contracts out of their respective client accounts — and HSBC USA stopped 7 contracts for its own account, plus Merrill and Advantage picked up 4 and 3 contracts for their respective client accounts. In silver, Of the nine short/issuers in total, the two largest by far were Scotia Capital USA[?] with 827 contracts out of its in-house/proprietary trading account — and Merrill with 432 contracts out of its client account.  In distant 3rd and 4th spots were HSBC USA and ABN Amro, with 99 and 96 contracts out of their respective client accounts.  There were twelve long/stoppers in total — and the three largest were the same as they were on Day 1…Goldman Sachs with 829 contracts for its own account…Australia’s Macquarie Futures with 173 contracts for its house account as well — and JPMorgan with 124 contracts for its client account.  And in distant third and fourth place were HSBC USA and ABN Amro, with 99 and 94 contracts for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The question I have is:  Who the heck is Scotia Capital USA?  I would suspect that they’re a spin-off — and completely separate legal entity from Canada’s Bank of Nova Scotia/Scotiabank.  I’ll wait for Ted’s thoughts on this, if he has any.

The CME Preliminary Report for the Friday trading session showed that gold open interest in July declined by 19 contracts, leaving 199 still open, minus the 14 contracts mentioned two paragraphs ago.  Thursday’s Daily Delivery Report showed that 15 gold contracts were actually posted for delivery on Monday, so that means that 19-15=4 gold contracts disappeared from the July delivery month.  Silver o.i. in July fell by 1,831 contracts, leaving 3,358 still around, minus the 1,583 mentioned above.  Thursday’s Daily Delivery Report showed that 1,888 contracts were actually posted for delivery on Monday, so that means that 1,888-1,831=57 more silver contracts just got added to July.


There was another smallish withdrawal from GLD yesterday, as an authorized participant took out 47,362 troy ounces.  But over at SLV there was a huge deposit.  This time an a.p…most likely with the initials JPM…added 2,070,185 troy ounces.  I would suspect that Ted will have something to say about the goings-on in both these ETFs in his weekly review later today.

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

For the month of June, the mint sold 19,500 troy ounces of gold eagles — 6,000 one-ounce 24K gold buffaloes — and 435,000 silver eagles.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Nothing was reported received — and only 402 troy ounces were withdrawn.  That activity was at Canada’s Scotiabank, which I won’t bother linking.

It was quite a bit busier in silver, as 1,139,598 troy ounces were received — and 596,678 troy ounces were shipped out.  In the ‘in’ category, there was one truck load…599,981 troy ounces…dropped off at CNT — and 452,456 troy ounces were left at Scotiabank.  The remaining 87,160 troy ounces found a home over at Brink’s, Inc.  All of the silver in the ‘out’ category was shipped out of HSBC USA.  In addition to all this physical movement, there was an eye-watering 3,546,332 troy ounces transferred from the Eligible category and into Registered.  The lion’s share of that amount…3,422,734 troy ounces was switched over at CNT — and the remaining 123,505 troy ounces, at Brink’s, Inc.  All of this would be in preparation for July delivery I would think.  The link to all this action is here.

There was decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They only received 200 of them, but shipped out 2,189.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, was way better than even my wildest hopes, as there was the expected improvement in gold…and it wasn’t exactly small — and there was also a huge improvement in silver, which I wasn’t expecting at all.

In silver, the Commercial net short position fell by a very chunky 9,510 contacts, or 47.5 million troy ounces of paper silver.  The decrease wasn’t a total surprise, but the size of it certainly was.

They arrived at that number by adding 1,598 long contracts, plus they reduced their short position by 7,912 contracts as well — and it’s the sum of those two numbers that represents the change for the reporting week.

Ted said that the ‘Big 4’ traders only appeared to have covered about 400 short contracts, but that’s certainly because there’s a big Managed Money trader in this category now.  The ‘5 through 8′ large traders reduced their extreme and record short position by around 1,100 contracts during the reporting week — and Ted’ raptors, the 30-odd small Commercial traders other than the Big 8, added approximately 8,000 new long contracts.

Under the hood in the Disaggregated COT Report, the Managed Money traders made up a bit over half of the weekly change, as they reduced their long position by only 885 contracts, but some of those traders piled in on the short side to the tune of 4,790 contracts — and it’s the sum of those two numbers…5,675 contracts…that represents their change for the reporting week.  The difference between that number — and the Commercial net short position…9,510 minus 5,675 equals 3,835 contracts– and that was made up by the traders in other two categories, as the ‘Other Reportables’ increased their short position by about 1,000 contracts — and the ‘Nonreportable’/small traders increased their short position by around 2,800 contracts.

The Commercial net short position in silver now stands at 245.1 million troy ounces, down a very decent amount from last week’s report.  Ted says that the big Managed Money trader that now inhabits the Big 4 category, masked the fact that JPMorgan most likely covered around 3,000 more contracts of their short position during the reporting week — and that puts their short position at about 30,000 contracts, or 150 million troy ounces of paper silver.  As of this COT Report, JPMorgan owns about 60 percent of the entire Commercial net short position in silver.

Here’s the 3-year COT chart for silver — and the improvement should be noted.  Click to enlarge.

Well, with the Managed Money traders selling only 885 long contracts during the reporting week, it certainly appears that the Managed Money traders hanging onto their long positions aren’t going to be selling them…because they would have done so already if they were going to.  And if that’s the case, the bottom is in for the silver price as of Thursday close.  JPMorgan really was picking up nickels on Wednesday and Thursday, because that’s all that was available.

I certainly look forward to what Ted has to say about all this, as he’s the real authority on it.


In gold, the commercial net short position fell by 19,161 contracts, or 1.92 million troy ounces of paper gold.  I was expecting a reduction, but nothing this size.

They arrived at that figure by adding 10,126 long contracts, plus they reduced their short position by 9,035 contracts as well — and it’s the sum of those two numbers that represents the change for the reporting week.

Ted said that the Big 4 traders covered approximately 2,800 short contracts — and the Big ‘5 through 8’ traders covered about 3,800 short contracts as well. Ted’s raptors, the 42-odd small commercial traders other than the Big 8, added 12,600 long contracts.  So, like in silver, it was Ted’s “all for one — and one for all” scenario, as they all got the memo.

Under the hood in the Disaggregated COT Report it was, also like in silver, only partly due to Managed Money traders, as the increased their long position by 548 contracts, but also added to their short position to the tune of 11,100 contracts — and it’s the difference between those two…10,552 contracts…that represents their change for the reporting week, a bit over half of what the commercial traders bought back.  The difference, as it always is, was made up by the traders in the other two categories, but they went about it in very different fashions, as the ‘Other Reportables’ decreased their long position by about 9,200 contracts — and the ‘Nonreportable’/small trader actually increased their long position by around 700 contracts.  Here’s a snip from the Disaggregated Report so you can see these changes in all three categories for yourself.  Click to enlarge.

The commercial net short position in gold is now down to 9.50 million troy ounces.  And I would suspect, that like in silver, the Managed Money traders are done selling longs — and going short in gold as well.

Here’s the 3-year COT chart for gold.  It was bullish last week at this time — and even more extreme this week.  Click to enlarge.

Since the Tuesday cut-off, there have been two more days of careful salami slicing by JPMorgan et al…but mostly just JPMorgan — and it goes without saying that if we could see a COT Report as of the close of COMEX trading on Thursday, we’d see an even more wildly bullish set-up than we have now.  And that’s just silver and gold I’m talking about.

The COT Report for platinum showed that the Managed Money traders went even further onto the short side during the reporting week, to another new record.  I didn’t think that was possible.  There was a big improvement in palladium as well.  And then there’s copper.  The Managed Money traders really outdid themselves, as they sold 21,308 longs, plus they added 8,757 short positions.  Of course things have gotten even more extreme in these three metals in the two trading days since the Tuesday cut-off.

Unless JPMorgan is prepared to show up as short seller of last resort on the next rallies…whenever they’re allowed to commence…this certainly looks like their last swing for the fences to me.   But if they do decide to step in at some point during the next rally, then they’ve gone to a lot of effort over the last two weeks for no reason at all.

So we wait some more.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 traders are short 144 days of world silver production—and the ‘5 through 8’ large traders are short an additional 87 days of world silver production—for a total of 231 days, which is a bit under 8 months of world silver production, or about 539.1 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were also short 234 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 245.1 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 539.1 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 539.1 minus 245.1 equals 294.0 million troy ounces.  The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 30-odd small commercial traders other than the Big 8, are long that amount.  And if you think that’s preposterous, you would be right about that.

As stated earlier, Ted estimates JPMorgan’s short position at 30,000 contracts, down 3,000 contracts from last week’s report, or 150 million troy ounces of paper silver.  That translates into about 64 days of world silver production.  That number represents about 27 percent of the short position of the Big 8 traders — and about 44 percent of the short position held by the Big 4 traders.  This is simply grotesque.

The Big 4 traders are short 144 days of world silver production — and once you subtract out the 64 days that JPM is short, that leaves 80 days split up between the other three large traders…a bit under 27 days each.  And since those contracts are obviously not split up evenly between them, it’s a certainty that one of these traders has a short position something under 27 days — and the other, more than 27 days.  But whatever those three number are, they can’t add up to more than 80 days.  But it all fairness, it should be pointed out that there’s a Managed Money trader now in the Big 4 category — and this certainly distorts the numbers.  I would think they would be a few days lower than 27 if the Managed Money trader wasn’t there.

The four traders in the ‘5 through 8’ category are short 87 days of world silver production in total — and off their record high short position of last week by two whole days.  They’re short a bit under 22 days of world silver production each, which is down a hair from what each was short in last week’s COT Report.  Back in mid May, these same ‘5 through 8’ small traders were short a bit under 12 days of world silver production each.  Now they’re up to a bit under 22 days short each, which is an increase of more than 80 percent during the last six weeks.

The smallest of the traders in this category holds something less than 22 days — and the largest, something more than that amount.  So it’s a mathematical certainty that the smallest of the Big 4 traders holds a short position of over 22 days, but under 27 days  — and the second smallest of the Big 4…something around the 27 day mark [the average of the remaining ‘Big 3’ traders] of world silver production held short.  That means [another mathematical certainty] that the second largest short in the Big 4 category [Scotiabank?] only has a short position slightly larger than the average of 27 days.  JPMorgan remains, as always, the King Short, with a short position that is a bit more than twice the size of the other three traders in the Big 4 category — and just under three times the size of the traders in the ‘5 through 8’ category.  These are fairly substantial declines from the prior reporting week — and it’s more proof that JPMorgan is covering their short position in silver as fast they can.

By the way, there is very little wiggle room in these numbers — and are 95+ percent accurate.

It certainly appears that the trap is being set for the other commercial traders in gold.  Ted has been talking about this for a few weeks now — and you’ll read more about it in the quote in The Wrap section.  But it now appears, that with another COT Report under our belts, the Big 7 Commercial traders in silver appear destined to suffer the same fate at the hands of the ‘Big 1’ Commercial trader, as a silver trap looks ready to be sprung by JPMorgan as well.

The Big 8 commercial traders are short 49.3 percent of the entire open interest in silver in the COMEX futures market, which is down a hair from the 50.0 percent that they were short in last week’s COT Report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be something approaching 55 percent.  In gold, it’s now 37.6 percent of the total COMEX open interest that the Big 8 are short, down a bit from the 39.0 percent they were short in last week’s report — and a bit over 40 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 41 days of world gold production, which is down 1 day from what they were short last week — and the ‘5 through 8’ are short another 20 days of world production, which is also down 1 day from what they were short the prior week, for a total of 61 days of world gold production held short by the Big 8 — which is down 2 days from what they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold about 67 percent of the total short position held by the Big 8…which is unchanged from last week’s COT Report.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 62, 64 and 75 percent respectively of the short positions held by the Big 8.  Silver is unchanged from the previous week’s COT Report, platinum is down 1 percentage point from a week ago — and palladium is down a hefty 5 percentage points from last week’s report.


Saxony, Frederick Christian, Conventionsthaler 1763

Mint: Dresden     Metal: Silver     Full weight: 27.97 grams

There’s just no news out there that’s worth posting so, once again, I have an embarrassingly small number of stories for you for a Saturday.


CRITICAL READS

Doug Noland: A Decisive Quarter

Booming markets ensure imaginations run wild. Importantly, reality began to gain the upper hand during the quarter. The global Bubble faltered. The world is not robust – there are, indeed, fragilities everywhere. EM is a potential disaster. China is increasingly vulnerable. China and Asian debt has become a huge global risk. I worry about Brazil.

And this age of populism and the “strongman” politician actually does matter to the markets. Trump Tariffs. China ready to “punch back.” Erdogan to dictate Turkish rate policy? The new Italian government to play hardball with the EU. Immigration becoming a pressing political issue from Washington to Frankfurt. A new leftist President in neighboring Mexico. Well, booming markets were content to disregard the global rise of populism, divisiveness and autocracy. Faltering markets will now amplify these troubling trends. All the makings for savage bear markets.

It was A Decisive Quarter: The world became more divided; the “Atlantic Alliance” became more divided; Europe became more divided; Asia became more divided; and the United States turned only more divided. U.S. stock performance during the quarter should not distract from the ominous storm clouds forming globally – in the markets, economically, socially and geopolitically. Global markets were also more divided, though I would expect Contagion from the Periphery to now make more discernable headway toward the Core.

Doug’s Credit Bubble Bulletin was posted on his website in the wee hours of Saturday morning EDT — and is always a must read for me.  Another link to it is here.


E.U.’s sanctions against Crimea extended for another year

The European Union is committing to its policy of perceiving revolutionary determination as its course of legitimacy. Apparently, a referendum gaining nearly 100% popular support isn’t sufficient to qualify for the self determination of a region. Therefore, the E.U. will continue to consider the Crimea as politically a part of the Ukraine. This, of course, means that the E.U. has reason for its sanctions regime against Crimea, which it will be extending for yet another year.

Deutsche Welle reports:

The European Union extended economic sanctions on Crimea and its port city of Sevastopol on Monday. The 28-member bloc imposed the measures after Russia annexed the Black Sea peninsula four years ago.

The E.U. said it remains “firmly committed to Ukraine’s sovereignty and territorial integrity,” reiterating that “it does not recognize and continues to condemn this violation of international law.”

The measures — which will now stay in place until June 23, 2019 — ban the import of products originating in Crimea. They also prevent E.U. nationals or companies based in the bloc from investing or buying real estate in Crimea and Sevastopol, and ban E.U. cruise ships from docking there, except in an emergency.

The move comes three weeks after French lawmakers voted in favor of a resolution to lift parallel sanctions targeting Russia — currently set to expire at the end of next month — over its role in an ongoing conflict in eastern Ukraine. “(The sanctions are) totally ineffective today to solve this international crisis and are dangerous for France’s interests,” said conservative MP Thierry Mariani, who put forward the resolution.

The bulls hit continues on this issue.  I expected the Italians to vote against this — and I wasn’t amused to see them follow the status quo.  This news item appeared on theduran.com Internet site at 6:37 p.m. EDT on Thursday evening — and I thank Larry Galearis for pointing it out — and another link to it is here.


Tales of the New Cold War: Summiteering Eve — John Batchelor interviews Stephen F. Cohen

Part 1:  John Batchelor opens the discussion with a short history of the successes and failures of post war summits between the U.S. and the Soviet Union; what stands out is the multiple times presidents met with Soviet leaders to work out the problems. Most presidents from Eisenhower on had at least one summit, and Cohen concurs and proceeds to address a detailed history of the most important of these meetings to ensure that younger listeners have a good understanding of the importance of them. Cohen points out that wartime summits between the leaders were about that war as allies fighting Germany, but post war they became about avoiding war with each other. This discussion is about the coming summit between Trump and Putin that hopefully will happen sometime in July. And Professor Cohen was at the last summit as an observer/consultant in 1985 in Geneva between Gorbachev and Reagan and brings that perspective to this discussion. Cohen informs us about what a formal summit is like as opposed to a behind closed doors meeting. The former is partly a media event with theatrical trimmings to solve basically three things: to ratify a partnership to solve a national security problem between them, to force cooperation where the politics at home make this difficult, and finally these summits hopefully foster a sympathetic relationship as a media event. They are important as public opinion can be significantly altered, sometimes fundamentally/strategically altered. But the history of these things shows a very mixed result of some successes and failures. Nixon’s summit, for example, won him his legacy with the creation of détente and was a great success.

Part 2: Batchelor opens this session with the Reagan/Gorbachev summit in Geneva. The political background was rocky with the Korean airliner shoot down incident, and even more serious the false alarm of an American nuclear attack that was almost acted upon at the Soviet end. This was the time of “Star Wars” and his two summits during his presidency were successful. He cancelled with Gorbachev a whole category of nuclear weapons. President Bush continued the meetings but the process was complicated by the fall of the Soviet Union. But none of these past presidents, from Eisenhower to Clinton, had the difficulties that Trump is bearing with his summit. Cohen lists them: He has no political support at all at home. This is unprecedented. In addition to this, in Cohen’s opinion, the danger of war between the two countries has never been greater. And Batchelor adds that not only has Trump no support, he has very active opposition from numerous fronts. He then asks what the agenda will be? Cohen in turn wonders if there will be enough trust between the two for discussion and then adds the worry that if there are agreements achieved, can Trump deliver in Washington? This is a danger for both leaders that failure would be a political problem at home for them. Nevertheless, Cohen deems the agenda will include the new nuclear arms race, how to regulate the use of cyber warfare activities, the Syria situation, fighting terrorism, resolving Ukraine by the Minsk Accords, stopping NATO exercises in Europe, and finally to re-staff the embassies in both countries.

****************************

As the pundits have said there are many outcomes possible should a summit come to pass, and commentary about will happen is completely speculative. We have seen the theatre elements already with Trump’s summit with North Korean, Kim and for inexplicable reasons the world collectively breathed a sigh of relief. But we know that Kim is not going to give without receiving in turn, and he likely won’t give up his nukes. Russia will be just as difficult to deal with as Trump’s “America First” slogan, which means “take as much as possible and give little in return” is just as failure prone in North Korea as it will be in Russia. But in Trump’s style of negotiation, allegedly successful in real estate, may prove impotent in summits. The other factor weighing down the probabilities of success is the Russian attitude (as stated in the podcast) that Trump may not be able to produce any concessions due to his opposition in Washington. This will probably see the Russian side as less willing to concede in negotiations. Another factor Russians feel wary about is that Trump’s narcissistic problems will add a component of stubbornness to the already overwhelming suspicions that he is badly informed about both the realities of Russia and also has a weak grasp of the many problems of his own country. We are reminded that facts do not rule Washington diplomacy, mythology does. He is only sure about his own goals – again, “America First” is going to be the style – and he will be prepared as well as this allows. Again this is problematic for success.  The Russians, on the other hand will have a better understanding of both American problems and what they need for their own national security concerns. Trump has not failed yet at a major summit and it he will need, in my opinion, a failure or two in this area in order to bring to him a better sense of realities.

This 2-part audio interview was posted on the audioboom.com Internet site on Tuesday — and I though it best to wait until today’s column for the usual length and content reasons.   As always, I thank Larry Galearis for his always excellent executive summary — and closing commentary.  Each part is about twenty minutes long — and the link to Part 1 is in the headline and here — and the link to Part 2 is here.


No 5th Column in the Kremlin? Think again! — The Saker

Following the re-appointment of Medvedev and his more or less reshuffled government, the public opinion in Russia and abroad was split on whether this was a good sign of continuity and unity amongst the Russian leadership or whether this was a confirmation that there was a 5th column inside the Kremlin working against President Putin and trying to impose neo-liberal and pro-western policies on the Russian people. Today I want to take a quick look at what is taking place inside Russia because I believe that the Russian foreign policy is still predominantly controlled by what I call the “Eurasian Sovereignists” and that to detect the activities of the “Atlantic Integrationist” types we need to look at what is taking place inside Russia.

The Russian 5th column and its typical operations

First, I want to begin by sharing with you a short video translated by the Saker Community of one of the most astute Russian analysts, Ruslan Ostashko, who wonders how it is that a rabidly pro-western and vociferously anti-Putin radio station named “Ekho Moskvy” manages not only to elude normal Russian legislation, but even gets money from the gas giant Gazprom, which is majority owned by the Russian state. Ekho Moskvy is also so pro-Israeli that it has earned the nickname “Ekho Matsy” (Ekho Moskvy means “Echo of Moscow” whereas “Ekho Matsy” means “Echo of the Matzo”). Needless to say, that radio has the unwavering and total support of the U.S. Embassy. It would not be an exaggeration to say Ekho Moskvy serves as an incubator for russophobic journalists and that most of the liberal pro-western reporters in the Russian media have been, at one time or another, associated with this propaganda outfit. In spite of this or, more accurately, because of this, Ekho Moskvy has been bankrupt for quite a while already, and yet – it continues to exist. Just listen to Ostashko’s explanations (and make sure to press the ‘cc’ button to see the English language captions)…

This longish, but interesting commentary from the Saker was posted on his Internet site on Friday sometime — and I’ve only skimmed it.  I’ll read the rest of it this weekend.  It’s another offering from Larry Galearis — and another link to it is here.


Price drop spurs India gold demand, buyers eye bigger dips

Gold demand improved this week in India as prices fell to their lowest level in nearly three months, while demand elsewhere in Asia remained tepid as investors waited for prices to fall further.

There is modest rise in demand from jewellers, but still gold is trading at a discount,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.

Dealers in India were offering a discount of up to $2 an ounce over official domestic prices this week, compared with a premium of $1 last week. The domestic price includes a 10 percent import tax.

Improving retail demand is giving jewellers some confidence. They are placing small orders,” said a Mumbai-based dealer with a private bullion importing bank, adding “falling rupee is still confusing some.

This gold-related Reuters news item, co-filed from Mumbai and Bengaluru, put in an appearance on their website at 4:38 a.m. EDT on Friday morning — and I found it on the Sharps Pixley website.  Another link to it is here.


Silver denarius of Augustus shows famous celestial event

A famous celestial event of antiquity was recorded on an ancient coin.

A silver denarius of Augustus (also known as Caesar Augustus), issued circa 19 to 18 B.C., depicts the so-called Julian star.

The wreathed head of Augustus graces the obverse.

The reverse of the coin shows the “Julian Star,” a bright comet that appeared in the heavens during the summer of 44 B.C., a few months after the assassination of Julius Caesar (March 15, 44 B.C.).

Based on eyewitness descriptions, the comet was clearly visible in the daytime, making it one of the brightest comets on record, the auction firm said. It has never reappeared and may have been destroyed on a suicidal dive into the sun.

The ancients did not understand the nature of comets as celestial ice balls moving within our Solar System, and the apparition was held to signal the ascension of Caesar’s soul to the heavens,” according to the catalog. “This proved quite useful in Octavian’s effort to get the Senate to deify his adoptive father. During his later reign as Augustus, he made extensive use of the comet in state propaganda.”

This news item, complete with a nifty photo, showed up on the coinworld.com Internet site on Friday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the whistling heron, a bird I ran across when I was researching the great white heron/great egret in Friday’s column. It hails from South America — and is not very big…60 cm tall maybe — and a bit over a kilo in weight.


The WRAP

Note: This quote from Ted is from his weekly review last Saturday…a week ago today.

It has now become obvious to me that JPMorgan has embarked on a concerted plan to buy back as many of its gold short positions from other commercials (raptors) as possible over the past month — and not from managed money traders, because the lower prices required to trigger managed money selling would have also attracted raptor buying competition for JPM. By allowing gold prices to trade up to, but not penetrating the key moving averages in gold, JPM was able to buy from the raptors without tripping off managed money buying.

At the same time, due to different market circumstances in silver, while JPMorgan was able to buy back important quantities of gold shorts without much of a gold rally, the silver market realities were such that JPM couldn’t do the same in silver and, in fact, had to resort to selling short silver to keep the price capped while it pulled off its gold short covering. You’ll recall that over the past month (not including the latest reporting week), JPMorgan was the biggest silver short seller, adding 20,000 new shorts, while it was buying back gold shorts. JPM had no choice – it had to cap the price of silver if it hoped to keep gold below its moving averages and buy back gold shorts from the raptors.

With this [past] week’s buyback of both gold and now silver shorts, it appears that JPMorgan is now close to completing its double cross of other commercials in both metals. It is possible for JPM to buy back more of its short positions in both metals at lower prices, but that would require managed money selling, which in turn, would bring out more raptor buying — and buying competition for JPM. In gold, with the managed money net long position at two year lows — and a giant increase in managed money short selling this past reporting week, there wouldn’t appear to be much more managed money selling capacity left.Silver analyst Ted Butler: 23 June 2018


Today’s pop ‘blast from the past’ is one I’ve posted before, but it’s been at least a year or more, so it’s time for a revisit.  It was a monster hit back in 1978 — and is one of those timeless classics that just about anyone can identify right from the opening bar.  The link is here.

The summer solstice in the northern hemisphere was a bit over a week ago — and I forgot all about it for last Saturday’s column.  So here is Italian composer Antonio Vivaldi’s Concerto No. 2 in G minor, Op. 8 RV315 “L’estate” [Summer] which he composed around 1721 — and published in Amsterdam in 1725.  The soloist in this recording is Mari Silje Samuelsen — and the link is here.


I’m not sure much, if anything, should be read into Friday’s precious metal price action, or lack thereof.  But I was less than amused that ‘da boyz’ showed up to put out the precious metal rallies that began at 10:30 a.m. CST — and ended at the afternoon gold fix in in Shanghai.  Volumes were very elevated during that period — and it was obvious that they were throwing whatever COMEX paper at those rallies to ensure that they went away.  After that, gold and silver et al, were basically on ‘care and maintenance’ during the remainder of the Friday session, despite the big decline in the dollar index that was ongoing as the trading day moved along.

But as you already know, dear reader, what’s happening in the currency markets becomes irrelevant when JPMorgan et al are out and about in the COMEX futures market — and we’ve seen ample evidence of that over the last two weeks.

Here are the 6-month charts for all four precious metals, plus copper.  A new intraday low was set in platinum yesterday, along with a tiny new closing low in copper for this move down as well.  The ‘click to enlarge‘ feature helps a bit with the first four.

Not a thing has changed since last week.  The emerging markets are still a mess, both economically and monetarily — and this rising dollar index thingy is only exacerbating the situation for all of them.

Closer to home, there’s lots of happy talk, most of which is of the “whistling past the graveyard” variety.  A look under the hood in the ‘developed world’ economies, regardless of which side of the Atlantic or Pacific you choose, reveals a string of Potemkin villages that no longer fools anyone.  Only central bank largess of endless asset and bond purchases has prevented the implosion of the world’s economic, financial and monetary system.

It is long past being saved — and removal of any of the supporting structure will bring instant contagion, along with equally instant liquidity issues.  The problems with emerging markets are but the thin edge of that wedge — and it will get thicker in a hurry if things continue on as they are.

So, with one eye on a seemingly intractable financial and monetary situation not only in the U.S…but world wide…I’m trying to figure out where JPMorgan fits into all of this, along with their absolutely manic efforts to cover as many of their short positions in gold [and the other precious metals] as they can. They’re certainly doing it for a reason, but a reason not know to us, at least not yet.

I suspect, as I said earlier, that what we’re witnessing is most likely their “last swing for the fences” — and at some point in the not-very-distant future, this price management scheme will come to a rather abrupt end.

JPMorgan would certainly be one of the first to know that — and getting its house in order in preparation for that moment, would be at the top of their “to do” list.  Sticking it to everyone else will be a casualty of such an event — and JPMorgan is never known to come out on the losing end of anything.  They are, as Jim Rickards has said in the public domain on more than one occasion over the years…”the biggest criminal organization the world has ever known“.

So, as I’ve said on more than one occasions, if this scenario I’ve painted is close to being correct, then all we can do is await the ‘event’ that triggers it — and hope that we survive whatever the power-that-be/deep state have prepared for us.

And on that rather unhappy note, I’m done for the day — and the week — and I’ll see you here on Tuesday.

Ed