Platinum Stopped Cold at Its 50-day Moving Average Again

15 September 2018 — Saturday


The gold price crawled quietly and steadily higher until shortly before 12 o’clock noon China Standard Time on their Friday morning.  From there it traded flat until the 2:15 p.m. CST afternoon gold fix in Shanghai.  From there it rallied a few dollars, with the high tick of the day coming a few minutes before 9 a.m. in London.  A dollar index ‘rally’ began at that juncture — and the gold price was sold unsteadily lower for the remainder of the Friday session, with most of the price damage occurring by 12:45 p.m. in New York.

The high and low ticks were recorded as $1,208.50 and $1,192.90 in the October contract — and $1,213.80 and $1,197.70 in December.

Gold was closed on Friday afternoon at $1,193.10 spot, down $7.80 from Thursday.  Net volume was fairly decent at a bit over 270,000 contracts — and roll-over/switch volume was about 12,200 contracts on top of that.

The silver price action yesterday was joined at the hip with the gold price — and you don’t need the play-by-play on this.  The high came minutes before 9 a.m. in London — and the low tick came just minutes before the trading day ended at 5:00 p.m. in New York.

The high and low ticks in this precious metal were reported by the CME Group as $14.315 and $14.07 in the December contract.

Silver was closed in New York yesterday at $14.03 spot, down 11 cents on the day.  Net volume was pretty decent at around 63,200 contracts — and roll-over/switch volume added up to 3,635 contracts in this precious metal.

The price action in platinum was mostly similar right up until 10 a.m. Zurich time/9 a.m. in London.  The sell-off at that juncture didn’t have much effect, except to cut platinum’s gain up to that point, in half — and also stopped it from blasting through its 50-day moving average for the second day in a row.  It continued to trade sideways from there — and it wasn’t until ‘da boyz’ went to work starting at the COMEX open, that the real spoofing and algo-spinning got started.  Like gold and silver, platinum was sold lower for the remainder of the Friday session — and was closed on its absolute low of the day at $792 spot, down 9 bucks from Thursday — and 18 dollars off its high tick.

The palladium price was up 4 dollars or so by shortly after 11 a.m. CST on their Friday morning — and it hung in there until the other three precious metals got sold lower as well…10 a.m. CEST/9 a.m. BST.  It was sold back to unchanged over the next hour, but then began to tick higher, with the high of the day coming at, or shortly before, the afternoon gold fix in London.  From that point, the price was dealt with rather severely…especially the waterfall decline that occurred at noon in New York, which was similar to the declines in platinum and silver that came at the same time.  After that, it chopped nervously sideways until trading ended at 5:00 p.m. EDT.  Palladium was closed at $975 spot, down 3 dollars on the day — and 10 bucks off its high tick.

The dollar index closed very late on Thursday afternoon in New York at 94.54 — and traded sideways once it began at 6:00 p.m. EDT a few minutes later.  That lasted until around 10 a.m. CST — and it began to crawl lower from there.  The pace of the decline quickened a bit once the 2:15 p.m. afternoon gold fix was done in Shanghai on their Friday afternoon — and it certainly appeared that the usual ‘gentle hands’ showed up on the scene a few minutes before 9 a.m. BST in London.  The 94.36 low tick was printed at that juncture.  The ensuing rally topped out around the 94.98 mark about 2:15 p.m. in New York — and it didn’t do much after that.  The actually high tick was reported at 94.998 — and that came a couple of minutes before 4 p.m. EDT.  The dollar index finished the Friday trading session at 94.95…up 41 basis points from its Thursday close.

It was another day where a manufactured dollar index rally saved it from oblivion, but gave cover for JPMorgan et al to do the dirty in the precious metals…plus copper and WTIC.

And here’s the 6-month U.S. dollar index chart which, as always, I post for entertainment purposes only.

The gold stocks opened flat — and then chopped sideways until a big up/down spike occurred between 11:40 a.m. and 12:05 p.m. in New York trading.  They continued to chop unsteadily sideways around the unchanged mark from there until about 3:25 p.m.  At that point, it certainly appeared as if the day traders were heading for the exits — and the HUI closed lower by 0.64 percent.

The trading action in the silver equities was mostly similar, but the price pattern was far more volatile, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.76 percent.

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

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 only because of Wednesday’s big rally in everything precious metal-related that prevented these charts from finishing in the red yet again.  It’s obvious that the equities outperformed their underlying precious metals.  Click to enlarge.

The month-to-date chart is bad, but it isn’t as bad it first appears, as it wouldn’t take much of a rally to turn this charts ‘all green’ as well.  Click to enlarge.

Of course nothing good can be said about the year-to-date chart — and if you’re looking for the ultimate sign of JPMorgan’s manic efforts to cover its short positions and go long, this is the result.  However, as I pointed out in this space last week, despite sea of red, it should still be noted that the silver equities continue to outperform their golden brethren on a year-to-date basis.  This fact clearly demonstrates that silver — and its associated equities, are going to vastly outperform their golden cousins when the next big rally is allowed to get underway.  I know that’s cold comfort indeed at a time like this, but that’s the essence of the current situation.  Click to enlarge.

As I said last week [and the week before — and the week before that] in this space…they above charts are pretty ugly…with this last swing for the fences by JPMorgan being the worst I’ve ever seen in the eighteen years that I’ve been studying the precious metal market.

Everyone and their dog now knows that JPMorgan is not only out of all its short positions in the precious metals, it’s also long them as well…particularly silver and gold.  With the current “white hot” configuration in the COMEX futures market, it’s highly doubtful that JPMorgan will appear as short sellers of either first and/or last resort once the next serious moving average-breaking rally is allowed to begin.  They sure as hell don’t want to be short when prices blow sky high — and IF they do appear again, it will be at significantly higher prices and, as I also said last week, I really do mean significantly.

The CME Daily Delivery Report showed that 1 gold and 76 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, JPMorgan stopped the lone contract for its client account.  In silver, the three short/issuers were International F.C. Stone, Advantage — and ADM…with 38, 20 an 18 contracts from their respective client accounts.  There were six long/stoppers in total, the largest being JPMorgan with 19 for its own account, plus another 7 for its client account.  Advantage came in second with 21 contracts for its client account — and in third place was HSBC USA with 13 contracts for its own account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in September fell by 55 contracts, leaving just 18 left, minus the 1 contract mentioned just above.  Thursday’s Daily Delivery Report showed that 56 gold contracts were actually posted for delivery on Monday, so that means that 56-55=1 gold contract was added to the September delivery month.  Silver o.i. in September dropped by 108 contracts, leaving 313 still open, minus the 76 contracts mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 146 silver contracts were actually posted for delivery on Monday, so that means that 146-108=38 more silver contracts just got added to September.

Month-to-date, there have been 608 gold contracts issued and stopped — and that number in silver is 5,945.

There were no reported changes in either GLD or SLV yesterday.

There was another tiny sales report from the U.S. Mint yesterday.  They sold 1,000 troy ounces of gold eagles — and that was all.

Month-to-date the mint has sold 15,000 troy ounces of gold eagles — 6,500 one-ounce 24K gold buffaloes — and 1,037,500 silver eagles.  That silver eagle number hasn’t moved since the Mint ran out of stock back on Tuesday, September 4…the last day they reported any sales of that bullion coin.  You would think that in the eight business days since then, that they would have produced and sold more…but no.  And as I said sometime last week, I’ll be very interested in what the sales numbers are, once they do resume.

There was a bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  There was 28,067.823 troy ounces/873 kilobars [SGE kilobar weight] received over at HSBC USA.  The link to that activity is here.

There was some activity in silver as well.  Nothing was reported received — and 632,489 troy ounces in total were shipped out of three different depositories.  There was 411,934 troy ounces shipped out of CNT…200,489 from Canada’s Scotiabank — and 20,018 troy ounces from Brink’s, Inc.  The link to that is here.

It was pretty quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received 162 of them — and shipped out 283.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

Roman Empire, Nero, 54-68,  Aureus (64-65)

Origin: Roman Empire     Material: Gold     Full Weight: 7.03 grams

[Due to runaway inflation caused by the Roman government issuing base-metal coinage but refusing to accept anything other than silver or gold for tax payments, the value of the gold aureus in relation to the denarius grew drastically. Inflation was also affected by the systematic debasement of the silver denarius, which by the mid-3rd century had practically no silver left in it. — Wikipedia]

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, showed slight, but immaterial increases in the commercial net short positions in both silver and gold.

Despite the new engineered price low in silver on Tuesday, the Commercial net short position in this precious metal increased by 2,239 contracts, or 11.2 million troy ounces of paper silver.

As Ted has already pointed out in previous weekly reviews, the short positions of the Big 8 traders is now so comprised by the large number of Managed Money traders now in that group, that their changes each week no longer matter, so I won’t bother with them.

Under the hood in the Disaggregated Report, the brain-dead/moving average-following Managed Money traders reduced their short position by 3,373 contracts — and the non-technical/value investing Managed Money traders reduced their long position by 2,525 contract — and it’s the difference between those two numbers…848 contracts…that represents their change for the reporting week.  The difference between that number — and the Commercial net short position…2,239 minus 848 equals 1,391 contract…was made up by the traders in the other two categories, as both increased their long positions, plus reduced their respective short positions as well.  Here’s the snip for silver from the Disaggregated COT Report, so you can see these changes for yourself.  Click to enlarge.

Ted mentioned the fact that the 30,000 long contracts that the non-technical/value investing Managed Money traders put on in April has now been reduced down to a 12,000 contract long position as of yesterday’s COT Report.  Ted highly suspects [and for very good reason] that this 18,000 contract forced reduction during this latest engineered price decline in silver since June, has been one of the principle reasons that JPMorgan has been able to cover a decent chunk of its remaining 20,000 contract short position over the last few months.

And, while on the subject of JPMorgan, Ted calculates that they most likely added about 1,000 contracts to their existing long position in the COMEX silver market — and that puts them around 3,000 contracts held long as of Tuesday’s cut-off.

The Commercial net long position in silver now sits at 12,374 contracts, or 61.9 million troy ounces of paper silver.

Here is the 3-year COT chart for silver — and the weekly changes are basically immaterial — and what I’ve described all week as just ‘care and maintenance’ courtesy of JPMorgan.  Click to enlarge.

Despite the increase in the Commercial net short position in silver, it’s really not much more of a rounding error in what is already a wildly bullish COMEX futures market configuration.

In gold, the commercial net short position rose by 6,512 contracts, or 651,200 troy ounce of paper gold.

Like for silver, the number of brain-dead/moving average-following Managed Money traders now in the Big traders category, renders their break-down into the Big 4 and Big ‘5 through 8’ category, pretty much meaningless as well.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bit more, as the brain-dead/moving average-following Managed Money traders reduced their short position by 8,561 contracts — and the non-technical/value oriented Managed Money traders reduced their long position by 1,058 contracts.  The difference between those two numbers…7,503 contracts…represents their change for the reporting week.  The difference between that number — and the change in the commercial net short position…7,503 minus 6,512 equals 991 contracts…was made up, as it always is, by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader category.  Here’s the relevant snip from the Disaggregated COT Report for gold.  Click to enlarge.

There is no commercial net short position in gold, nor is there a long position, either…as the difference between the commercial long position and short position is a piddling 13 contracts.  Those contracts are on the ‘long’ side of the ledger, but compared to the 169,200 contract long and short positions currently held by the commercial traders, it’s an obviously meaningless amount.

As I said about silver, I’ll say about the weekly changes in gold…it’s basically ‘care and maintenance’ — and absolutely nothing to worry about.  Of course we would like to have seen the commercial net short positions in gold reduced further, but unless JPMorgan takes the gold price to new lows for this move down, it ain’t going to happen.

Here’s the 3-year COT chart for gold.  The changes are pretty microscopic in the grand scheme of things.  Click to enlarge.

We’re deep into ‘blood out of a stone’ territory here — and the set-up for a moon shot in silver and gold remains undiminished.  And as Ted also pointed out on the phone yesterday, the COT Report, bullish or not, doesn’t help with the timing of the next price move, it only indicates the direction of the next major move.  Both will be determined solely by JPMorgan.

In other precious metals, the brain-dead/moving average-following Managed Money traders decreased their short position in palladium by about 1,000 contracts — and in platinum they decreased their short position by about 2,000 contracts.  The non-technical/value oriented Managed Money traders in platinum increased their long position by around 2,200 contracts.  In copper, the Managed Money traders were basically unchanged, but the traders in the commercial category in copper managed to reduce their short position by a further 3,800 contracts.

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.

But like the COT Report itself, the chart above is basically irrelevant at this point, as well — and for the same reason.  Except for Scotiabank — and maybe one or two U.S. banks…not including JPMorgan…the positions of the Big 4 and Big 8 traders is mostly made up of the brain-dead/moving average-following Managed Money traders now.

For the current reporting week, the Big 4 traders are short 110 days of world silver production—and the ‘5 through 8’ large traders are short an additional 66 days of world silver production—for a total of 176 days, which is a bit under 6 months of world silver production, or about 410.8 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 179 days of world silver production.]

The Big 8 commercial traders are short 39.4 percent of the entire open interest in silver in the COMEX futures market, which is virtually unchanged from the 39.3 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 close to 45 percent.  In gold, it’s now 32.1 percent of the total COMEX open interest that the Big 8 are short, down a hair from the 32.7 percent they were short in last week’s report — and a bit over 35 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 34 days of world gold production, which is down 2 days from what they were short last week — and the ‘5 through 8’ are short another 18 days of world production, which is unchanged from what they were short the prior week, for a total of 52 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 65 percent of the total short position held by the Big 8…which is down 1 percentage point 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 63, 60 and 75 percent respectively of the short positions held by the Big 8.  Silver is down one percentage point from the previous week’s COT Report, platinum is basically unchanged from a week ago, as is palladium.

The set up for Ted’s double cross scenario by JPMorgan of the other commercial/Managed Money traders in all four precious metals is still wildly bullish in the extreme.

And as I keep saying — and will keep on saying…all we’re waiting for now is CME CEO Terry Duffy’s “event” to set it off.  And after all their efforts, it’s virtually inconceivable that JPMorgan will return as short seller of last resort.  But if they do, it will be at prices that we can only dream about at the moment.

It’s another day where decent stories were few and far between and, unfortunately, Doug Noland was a no-show this week.


America’s Economy Is on a “Suicide Mission” — Bill Bonner

The Dow now stands within 500 points of a new all-time high – which would signal a revival of the bull market that began in March 2009… or August 1982, depending on how far back you want to trace it.

Remember, few investors – unless they are lucky or very well-advised – make money trading in and out of small market moves… or by choosing stocks that turn out to be Apple or Amazon.

Instead, they get in at the right time… and stay in… allowing the “primary trend” to take them where they want to go. The primary trend has taken stocks on the Dow from under 1,000 in 1982 to 26,000 today.

And today, many investors expect that trend to continue. They think the economy is strong and that it should get better. After all, that’s what the president of the United States says; who would know better than he?

But Bloomberg’s Smart Money Flow Index tells us that the pros have been getting out for the last six months.

This worthwhile commentary was posted on the Internet site very early on Friday morning EDT — and another link to it is here.

James Grant: This Year the U.S. Treasury Will Issue the Most Debt Relative to GDP Since World War Two

James Grant, of Grant’s Interest Rate Observer, recently spoke at length to Sprott Media about the U.S. national debt, interest rates, and precious metals. In particular, Mr. Grant warns about the mounting volume of federal debt being issued by the U.S. Treasury.

This year… the government will issue… the most government securities as a percentage of GDP since the end of World War II. So the supply of government securities in relation to national production is the highest since the mid 1940s. Although this country is under arms in some degree, but it’s not waging a world war, so this is a very different fiscal picture than what we have been used to.

This 19-minute long interview was conducted in a very noisy environment…lots of voices in the background — and you really have to strain to hear clearly what Jim has to say.  I gave up trying about half-way through.  It was embedded in a story on Internet site on Friday morning sometime — and the first person through the door with it was Brad Robertson.  Another link to it is here.

The [U.S.] dollar is central to the next crisis — Alasdair Macleod

It is now possible to pencil in how the next credit crisis is likely to develop. At its centre is an overvalued dollar over-owned by foreigners, puffed up on speculative flows driven by interest rate differentials. These must be urgently corrected by the European Central Bank and the Bank of Japan if the distortion is to be prevented from becoming much worse.

The problem is compounded because the next crisis is likely to be triggered by this normalisation. It can be expected to commence in the coming months, even by the year-end. When flows into the dollar subside and reverse, bond yields can be expected to rise sharply in all the major currencies. There will also be a number of other unhelpful factors, particularly rising commodity prices, the timing of the Trump stimulus and trade tariffs pushing up price inflation. Coupled with a declining dollar, price inflation and therefore interest rates are bound to rise significantly.

Then there is another problem: when it comes to rescuing the global financial system from the systemic fall-out, not only will the challenge be greater than at the time of the Lehman crisis, but legislative changes, such as confusing bail-in provisions, have made it more difficult to execute.
There is also evidence that during the last credit crisis in 2008, the Russians were tempted to interfere with the Fed’s rescue attempts, potentially crashing the whole U.S. financial system. At that time, they failed to get the support of the Chinese. Now that Russia has disposed of most of its dollar investments in return for gold, and following an escalation of geopolitical conflicts, a new financial crisis may be regarded as an opportunity by America’s enemies to emasculate America’s financial and geopolitical power.

The outlook for the dollar and all dollar-dependent assets is not good. The only protection will be the possession of physical gold and silver, beyond the reach of systemically-threatened banks.

This longish opinion piece/commentary by Alasdair, which I have only partially skimmed, showed up on the Internet site on Friday sometime — and I found it embedded in a GATA dispatch.  Another link to it is here.

Don’t Miss the Signs of Another Slow-Motion Meltdown — Jim Rickards

According to researcher David Eagleman, “The more memory you have of an event, the longer you believe it took.” So yes, time does seem to slow down in a crisis, but it’s a cognitive illusion.

That slowing down effect is important to bear in mind as we encounter the 20th anniversary of the Russia-LTCM financial crisis of September 1998 and the 10th anniversary of the Lehman-AIG financial crisis of September 2008.

For investors, those events were the financial equivalent of falling off a tall building or being strapped in during a plane crash. If you lived through them, you’ll recall some hours that seemed like days and days that seemed like weeks.

Of course, investors recall where they were and what they did during the absolute height of the panics — Sept. 28, 1998 and Sept. 15, 2008.

Most investors may not be aware that these peak panic moments had actually been playing out for over 15 months in both cases. Investors who closely observed the early signs of trouble had ample time to get out of the way of the panic itself.

In fact, most investors were oblivious to the early warnings. That 15-month build-up was a real slow-motion event, not an illusion.

This very interesting commentary by Jim appeared in the public domain over at the Internet site on Friday sometime — and another link to it is here.

Days After 9/11 Tulsi Gabbard Slams “Betrayal of American People” Over Syria

In a rare and unprecedented speech delivered on the House floor just two days after the nation memorialized 9/11, Democratic Hawai’ian Congresswoman Tulsi Gabbard on Thursday slammed Washington’s longtime support to anti-Assad jihadists in Syria, while also sounding the alarm over the current build-up of tensions between the U.S. and Russia over the Syria crisis.

She called on Congress to condemn what she called the Trump Administration’s protection of al-Qaeda in Idlib and slammed Washington’s policies in Syria as “a betrayal of the American people” — especially the victims and families that perished on 9/11.

Considering that Congresswoman Gabbard herself is an Iraq war veteran and current Army reserve officer who served in the aftermath of 9/11, it’s all the more power and rare that a sitting Congress member would make such forceful comments exposing the hypocrisy and contradictions of US policy.

She called out President Trump and Vice President Mike Pence by name on the House floor in her speech:

Two days ago, President Trump and Vice President Pence delivered solemn speeches about the attacks on 9/11, talking about how much they care about the victims of al-Qaeda’s attack on our country. But, they are now standing up to protect the 20,000 to 40,000 al-Qaeda and other jihadist forces in Syria, and threatening Russia, Syria, and Iran, with military force if they dare attack these terrorists.”

And in perhaps a completely unprecedented moment, the Congresswoman accused America’s Commander-in-Chief during her floor speech for acting as “the protective big brother of al-Qaeda and other jihadists“.

This very worthwhile story put in an appearance on the Zero Hedge Internet site at 6:45 p.m. EDT on Friday evening — and another link to it is here.

U.S. Marines Conduct Live-Fire Drills With Syrian ‘Rebels’ In Rare Display Aimed at Russia

On Thursday an anti-Assad group in Syria’s south confirmed to Reuters via its ‘rebel’ commander that it is conducting rare military exercises with American forces in order to “send a strong message to Russia and Iran that the Americans and the rebels intend to stay and confront any threats to their presence,” according to a new Reuters report.

The anti-Assad commander, Colonel Muhanad al Talaa, is part of the Pentagon-backed Maghawir al Thawra group now conducting eight days of “live-fire and ground assault” drills that involve “hundreds” of U.S. troops and allied Syrian insurgents cooperating together.

These exercises have a big importance and have beefed up the defenses of the area and raised the combat capabilities and morale and that of civilians in the area,” Talaa said in a statement from Tanf.

The U.S. appears to be responding to the major Russian naval and amphibious assault drills along Syria’s coast from last week. This also comes after Moscow warned its forces could attack in the area near U.S.-occupied At Tanf in pursuit of al-Qaeda linked jihadists that Russia says hides out under U.S. protected areas.

American forces have enforced a 55 km (35 mile)-radius “deconfliction zone” around its garrison in At Tanf, which has been declared “off-limits” to others.

Meanwhile both Russia and Syria have condemned the presence of the base and others as a clear violation of Syrian sovereignty, and have lodged multiple formal complaints the U.N. Security Council, which have been routinely rebuffed or ignored.

You couldn’t make this stuff up.  One wonders what the American response would be if Mexico tried that in Arizona, or Canada in up-state New York.  Can you spell hypocrisy, dear reader?  This Zero Hedge article was posted on their website at 7:41 a.m. EDT on Friday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.

Argentine Peso Closes at Record Low as IMF Withholds $3 Billion Bailout Tranche

The bad news for Argentina keeps coming.

Shortly after a late selloff pushed the Argentina Peso to a new all time low on a closing basis, Reuters reported that a $3 billion tranche from the IMF that was supposed to be disbursed to Argentina this month under the country’s bailout deal was  postponed while the government hammers out the terms of the standby agreement, the largest in IMF history.

The payment “has been halted until new terms are reached,” said the Reuters source.

With the peso crashing earlier in the year amid fears of a collapsing economy and capital flight, President Macri signed a $50 billion deal with the IMF in June, but he went back to the Fund to renegotiate terms in order to speed up cash disbursements under the agreement. The discussions between Buenos Aires and and the IMF have been ongoing, with the IMF reportedly warning Argentina not to use the funds from the agreement to support the peso.

It is unclear of Argentina has remained in compliance with the request: earlier on Friday the central bank auctioned $200 million in reserves in a bid to stabilize the peso.

Meanwhile, according to Bloomberg, Argentina faces a bleak future no matter what happens: the most likely outcome for the troubled economy is a deep recession followed by political upheaval.

This news item showed up on the Zero Hedge website at 3:25 p.m. on Friday afternoon ED — and another link to it is here.

Trump to Proceed With $200BN More in China Tariffs Despite Talks; Stocks, Yuan Tumble

So much for the optimism that followed the WSJ report that the Trump administration is willing to offer China an olive branch in trade talks in hopes of avoiding further escalation (and which pushed the S&P back over 2,900).

Moments ago Bloomberg reported that President Trump has instructed aides on Thursday to proceed with tariffs on about $200 billion more in Chinese products despite Steven Mnuchin’s attempt to restart talks with Beijing to resolve the trade war.

The announcement of the new round of tariffs – which had been anticipated by most as a late September event – had been delayed as the administration considers revisions based on concerns raised in public comments, Bloomberg sources said.

On Thursday Trump met with his top trade advisers to discuss the China tariffs, including Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer. And as we said on Wednesday, Mnuchin has been the leading voice in the recent overture to the Chinese to re-start trade talks.

As a reminder, before his Thursday meeting, Trump boasted on Twitter that he has the upper hand in the trade feud with Beijing and feels “no pressure” to resolve the dispute.

This longish chart-filled commentary appeared on the Zero Hedge website at 1:10 p.m. on Friday afternoon EDT — and another link to it is here.

Changed [U.S.] Rhetoric is Not a Guide to Changed [U.S.] Policy

Trump, for all his bizarre pronouncements, hot and cold rhetoric toward China, Russia, North Korea, Venezuela, Syria, Iran and others is in reality doing no more than continuing the hegemonic ambitions of post-World War II America. Should he fall under the proverbial bus tomorrow, there may be some changes in the rhetoric, but the policies will remain the same: no real competition allowed.

America is the “exceptional nation” only in the sense that it does not regard itself as bound by the ordinary rules, much less the professed ones. Rules are followed only when it is convenient to do so, and under no circumstances are permitted to hinder the goal of imperial dominance.

The Mandarins of Canberra need to grasp that essential reality. Australia’s economic security and the future lie in Asia as even the most casual analysis of the trade, education, tourism and investment figures over the past four decades attest. Clinging to the delusion of a faithful friend in Washington, who clearly does not have friends, but rather, as Kissinger said, only interests, is a major policy misjudgment.

When the interests of the United States and Australia clash, as is inevitable in the changing geopolitical landscape of the greater Eurasian region, the denouement for Australia will be all the more traumatic because of its inability to learn from the same dictum: have neither friends nor enemies, only interests.

This very worthwhile commentary from Australian-based Barrister at Law, James O’Neil was posted on the Internet site back on September 6 — and it comes to us courtesy of Larry Galearis who sent it to me last Saturday.  I’ve been saving it for this Saturday — and another link to it is here.

Turkey Banks Tap $4.5 Billion Gold Reserves to Shore Up Finances

Commercial lenders in Turkey have pulled as much as $4.5 billion worth of gold reserves since mid-June in an effort to avert a liquidity crisis as the lira plunged.

Weekly holdings reported by the Central Bank of Turkey fell by almost a fifth since June 15 to 15.5 million ounces with the lion’s share — $3.3 billion — of the exodus sparked by the monetary authority’s Aug. 13 move to lower reserve requirements.

The commercial banks were probably switching to more liquid assets, given what has happened to the lira,” Jason Tuvey, a senior emerging markets economist at Capital Economics in London said by phone on Friday. “There’s been concern at the commercial banks over their external debt burden, which has been reflected in the rising bank bond yields.”

Turkish lenders are allowed to meet reserve requirements with bullion deposits, unlike in most other countries.

Turkey is one of the 20 largest sovereign owners of the precious metal and boasts the fifth-biggest consumer demand in the world, according to 2017 data from the World Gold Council. It refines scrap gold into jewelry sold all over the Middle East.

The central bank cut the reserve requirements for banks by 4 percentage points for foreign exchange liabilities over one, two and three years, and by 2.5 percentage points over other maturities. This equated to $3 billion worth of dollar-equivalent gold liquidity, it said in a statement.

This gold-related Bloomberg story found a home on the Internet site on Friday morning at 8:11 a.m. EDT — and it’s something I found on the Sharps Pixley website.  Another link to it is here.

China’s state-owned miner Shandong Gold plans US$768 million in Hong Kong initial public offering

Shandong Gold Mining, one of China’s largest miners of the precious metal, is seeking to raise as much as US$768 million in a Hong Kong initial public offering (IPO) to fund overseas expansion.

The company is offering 327.7 million H-shares at between HK$14.7 and HK$18.4 (US$1.87-2.34), according to its filing to the Hong Kong stock exchange.

The state-owned domestic holding company of Shandong Gold is also listed in Shanghai with a market capitalisation of 43.6 billion yuan (US$6.3 billion).

The firm controls and operates 12 domestic gold mines, and accounted for 6.6 per cent of China’s gold output in 2016,. The country the world’s largest producer of the yellow metal.

Officials said it plans use the funds to partially repay US$972 million worth of debt it took on to buy a half stake in the Veladero Mine, Argentina’s largest mine and the second-largest in South America, from Canadian miner Barrick Gold in June 2017.

This gold-related news item put in an appearance on the South China Morning Post on Friday morning at 7:03 a.m. China Standard Time — 7:03 p.m. EDT in New York on Thursday evening…EDT plus 12 hours.  I found this on the Internet site — and another link to it is here.


Today’s ‘critter’ is Friday’s ‘finch like’ mystery bird — and it turned out to be the purple finch.  I posted two shots of the female in yesterday’s missive — and asked for help, as I’d never seen one before.  I’d seen the male of the species on several occasions, but from a distance.  Three readers came to my rescue.  The first was Mike Ullman, followed by Roy Stephens — and then Dave Stirling yesterday evening.  David passed the photo past his bird freak mother-in-law — and that was her answer as well.  Birds from northern Canada migrate to the southern United States; others are permanent residents.  Not this one, as she was obviously on her way south.  Male coloration varies in intensity with the seasons — and is derived from the berries and fruits in its diet. There are obviously slight colour variations in the female as well.  The first two photos are from the Internet.  Click to enlarge.

And here’s one of my photos of the female from yesterday’s column, so you can compare.  Click to enlarge as well.


Today’s pop ‘blast from the past’ is one I stumbled over when I was poking around on the Internet site earlier this week.  I posted a tune from this rock group very recently, but not this particular one…so I latched onto it for today’s column.  This band hails from San Jose, California — and their heydays were the 1970s.  This was their first big hit in 1972 — and it’s still hugely popular today.  The link is here.

And as an afterthought just now, I thought I’d check to see if there was a bass cover to this tune — and there is.  Here’s my favourite guy…Canada’s own Constantine Isslamow…doing the honours — and I was astonished at both the intricacy and complexity of it.  What’s even more amazing is that musicians can play this sort of music without ever looking at their hands — and sing at the same time.  Wow!  I can barely sign my own name.  The link is here…enjoy!

Today’s classical ‘blast from the past’ is one that I just caught the tail end of on CBC FM the other day, so I thought I’d feature it today.  I seem to remember posting this about a year ago, but it doesn’t really matter.  It’s Brahms Piano Concerto No. 1 in D minor Op. 15 which finally reached completion in 1858 after he’d been working on it for four years.  He was 25 years young at its premiere — and he was soloist.  It had started off life as a sonata for two pianos four years earlier and, with time, was morphed into this.  Here’s the incomparable Maurizio Pollini doing the honours at the keyboard, along with the Staatskapelle Dresden.  Christian Thielemann conducts.  The link is here.

JPMorgan et al wasted little time on Friday putting some distance between the gold price and its current 50-day moving average.  Using the dollar index ‘rally’ that began minutes before 9 a.m. in London as cover, they showed no mercy in that precious metal, or in the other three…stopping platinum from blasting through its 50-day moving average for the second day in a row.  They’ve been doing the same in palladium for the last week or so already, except its the 200-day moving average for it. They hit copper for a few pennies yesterday as well, as it was close to threatening its 50-day moving average, too.

All of the above is certainly visible in the 6-month charts for the Big 6 commodities posted below.  The ‘click to enlarge‘ feature helps a bit with the first four.

So, where to from here — and how soon?

Whatever world ‘event’ that will be used as a trigger to set off this short covering rally for the ages in the precious metals — and all other commodities, has obviously not occurred yet.  But you can rest assured that the U.S. deep state et al are working diligently on that very thing.  Until then, JPMorgan will keep precious metal prices on ice — and in this ‘care and maintenance’ mode that I’ve been going on about for the last week or so.

Does that mean that we can see [temporarily] lower prices from here?  Sure, as JPMorgan is running this show with an obvious iron fist — and they can do whatever they want.

But these record high grotesque and obscene short positions that the brain-dead/moving average-following Managed Money traders have built up in the precious metals since June, has to be resolved — and if JPMorgan doesn’t show up as short seller of last resort, nothing can prevent a melt-up at some point once that key 50-day moving average is allowed to broken to the upside.

And that is the key.  This moving average break-out to the upside won’t be happening by chance.  It will happen only because JPMorgan allows it — and once they do, they’ll sit back and watch the results of their carefully constructed handiwork of the last six months or so.  They didn’t get off the short sides of the precious metals for no reason.  Whatever ‘event’ is coming, they have obviously been warned about it well in advance.

We’re all tired of this.  I know I am — and it’s safe to say that you are as well.  But end it will — and as I’ve said on too many occasions in the past, let’s hope that the world that emerges after this ‘event’, is still fit to live in.

I’m done for the day — and the week — and I’ll see you here on Tuesday.