A Big Increase in Silver Open Interest in September

19 September 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


On the back of an uptick in the dollar index minutes after trading began at 6:00 p.m. EDT on Monday evening, the gold price was sold very unevenly lower until the low tick of the day, such as it was, came shortly after London opened.  It rallied unsteadily higher from there, with some obvious interference at one point, until the afternoon gold fix in London.  At that juncture, the price was just above the $1,200 spot mark, but JPMorgan made short work of that situation — and it was smacked lower a few minutes later.  From there it chopped mostly sideways until trading ended at 5:00 p.m. EDT.

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

Gold was closed in New York on Tuesday at $1,197.90 spot, down $3.20 on the day.  Net volume was nothing special at just under 222,500 contracts — and there was 7,037 contracts worth of roll-over/switch volume on top of that.

Silver was sold down a bit harder shortly after trading began in New York on Monday evening — and from that low, like gold, it rallied into the 2:15 p.m. afternoon gold fix in Shanghai.  It was quietly sold lower by a few pennies going into the London open — and then it was sold down hard to its low of the day minutes later, but began to rally very unsteadily from there.  It was capped around 1 p.m. BST/8 a.m. in New York — and was also hit a bit at the afternoon gold fix in London.  The rally that began at that point was capped around noon EDT — and what little gains that silver had up until that point, mostly vanished by the COMEX close.  The price didn’t do much after that.

The low and highs in this precious metal aren’t worth looking up, either.

Silver was closed on Tuesday at $14.13 spot, down 3.5 cents from Monday.  Net volume was pretty healthy at a bit over 65,500 contracts — and roll-over/switch volume was 3,631 contracts on top of that.

The price path for platinum was almost the same as it was for silver and gold…at least up until a few minutes after the Zurich open.  At that juncture it was sold down to its low of the day — and the subsequent rally, which was pretty decent, had to be stepped on at the 9:30 a.m. open of the equity markets in New York, as the price was about to go vertical.  It was tapped a bit lower at that point, but recovered a bit shortly after.  However, all those brief gains were taken away by the COMEX close — and it didn’t do much after that.  Platinum was closed yesterday at $812 spot, up 14 bucks — and above its 50-day moving average by a few dollars.  It would have obviously closed substantially higher if it had been allowed to trade freely, as a short covering rally was obviously in progress.

Ditto for palladium — and shortly after Zurich opened, it began to head higher.  It then traded flat for a few hours and change — and around 12:30 p.m. CEST in Zurich the rally became far more serious — and had to dealt with shortly before the Zurich close, or it too would have blasted skyward like platinum.  It crawled quietly higher from there into the COMEX close — and then traded flat for the rest of the Tuesday session.  Platinum finished the day at $1,009 spot, up 27 bucks — and above its 200-day moving average by a very decent amount.  Like platinum, heaven only knows what it would have closed at if ‘someone’ hadn’t shown up before the Zurich close like they did.

The dollar index closed very late on Monday afternoon in New York at 94.51 — and spiked up a bit over 10 basis points just minutes after trading began at 6:00 p.m. EDT.  From that point onward it traded very erratically lower, with its Far East low coming right at the 2:15 p.m. CST afternoon gold fix in Shanghai — and the 94.32 low tick of the day was set at 9 a.m. on the button in New York.  It chopped unsteadily higher from there — and the 94.73 high tick was set right at the 1:30 p.m. COMEX close.  It faded a bit from that point as the Tuesday session wound down.  The dollar index finished the day at 94.61…up 10 basis points from Monday.

And here’s the 3-day dollar index chart so you can see how erratic it was, right from the 6 p.m. open in New York on Monday evening.

And, for your entertainment, here’s the 6-month U.S. dollar index chart.

The gold stocks gapped up a percent at the open, but gave that all back, plus more by shortly after 10 a.m. EDT.  They rallied a bit until London closed at 11 a.m. in New York — and chopped erratically sideways from there until trading ended at 4:00 p.m.  The HUI finished higher by 0.46 percent.

The trading pattern in the silver equities was mostly the same as it was for the gold shares — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 0.42 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 1 gold and 147 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  In gold, ADM issued the lone contract — and JPMorgan stopped it for its client account.  In silver, the three short/issuers were ADM, Advantage and Goldman Sachs.  ADM and Advantage issued 73 and 47 contracts from their respective client accounts — and Goldman issued 27 contracts from its in-house trading account.  There were four long/stoppers in total, but the only one that mattered was ADM with 133 for its client account.  In very distant second and third spots were Advantage with 7 — and Morgan Stanley with 4.  JPMorgan picked up the remaining 3 contracts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in September rose by 1 contract, leaving 18 still around, minus the 1 mentioned just above.  Monday’s Daily Delivery Report showed that zero gold contracts were actually posted for delivery today, so gold open interest increased by one contract [net].  Silver o.i. in September jumped by a whopping 772 contracts, leaving 1,019 still open — and it will be interesting to see if this eye-opening increase is still around at 11:30 p.m. EDT tonight, when the new Preliminary Report comes out  — and if it is, who the big short/issuer is.  There was certainly no sign of these contracts in Tuesday’s Daily Delivery Report above.  Monday’s Daily Delivery Report showed that 107 silver contracts were actually posted for delivery today, so that means [if the above o.i. change is correct] that 107+772=879 silver contracts were added to the September delivery month.

I’m not going to jump up and down about this until there’s more water under the bridge, or the new short/issuer comes forth in Wednesday’s Daily Delivery Report.  That many contracts [879] is about 4.4 million troy ounces of physical metal…just under two days of world silver production…seven big truck loads.  Ted may or may not have something to say about this in his mid-week commentary today.


There was a small withdrawal from GLD, as an authorized participant took out 9,464 troy ounces.  A withdrawal of that size usually represents a fee payment of some kind — and if so, it’s the second one in the last seven days.  There were no reported changes in SLV.

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

There was no gold reported received over at the COMEX-approved depositories on the U.S. east coast on Monday, but 60,956 troy ounces was shipped out — and that activity was at Brink’s, Inc.  The link to that is here.

There was some activity in silver…479,251 troy ounces were received — and 32,171 troy ounces were shipped out.  All the ‘in’ activity was at Brink’s, Inc.  — and virtually all of the ‘out’ activity was at CNT.  The link to all this is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They didn’t receive any, but shipped out 2,100 of them.  This occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.

Saxe-Weimar-Eisenach, Carl Augustus, 1775-1828,  1/2 Thaler 1813

Origin: Germany     Mint: Eisenach     Material: Silver     Full Weight: 14.02 grams

I have very few stories for you today, but quite a number that I do have are certainly worth reading.


CRITICAL READS

How to Get Rich in the Swamp — Bill Bonner

The Swamp is the pudding in which the rich plums are hid.

It is also home to the Deep State, the loose confederation of special interests, insiders, and cronies that controls the government.

This is the same Swamp that now casts its dark shadow over the future of the U.S., its economy, and its empire.

Federal debt is increasing two to three times faster than revenues; by 2028, given reasonable assumptions, the national debt will reach $40 trillion.

Assuming a 4% rate, that would mean $1.6 trillion a year in interest – equivalent to about half of this year’s tax receipts.

Obviously, that can’t happen. The U.S. will go to Hell or bankruptcy – maybe both – long before that.

This commentary by Bill showed up on the bonnerandpartners.com Internet site very early on Tuesday morning EDT — and another link to it is here.


The United States Is a Dead Man Walking — Paul Craig Roberts

The American media has never done the job that the Founding Fathers gave it and protected with the First Amendment. But until the criminal Clinton regime, which permitted 6 monopolies to concentrate in 6 hands 90% of the U.S. media, truth could sometimes get out. But no more. The U.S. media is incapable of reporting the most compelling events of our time which could result in the destruction of life on earth. Instead, the presstitutes save their jobs by reporting fake news that serves the interests of the ruling elite.

Currently, Russia, Syria, and Iran are preparing to liberate the last Syrian province that is still in the hands of Washington’s proxy army—Al Qaeda, Al Nursa, and ISIS. Washington has sent U.S. troops to be dispersed among the terrorists that Washington sent to overthrow Syria, thinking the American presence would deter the Russian/Syrian attack on Washington’s terrorists allies. Once again, Washington took advantage of Putin’s hesitancy to make the situation more difficult for him.

Apparently, Washington has succeeded in delaying the final liberation of Syria from U.S.-supported terrorists. However, the Russian military, if not the Russian government, understands that at this late stage in the game, Russia cannot back down without being inundated with massive provocations as the price of its rectitude. This is why there is an armada of Russian navy off the coast of Syria armed with Russia’s new hypersonic missiles against which the U.S. has no defense whatsoever. If it comes to a conflict, it is the Russian government’s choice alone whether any U.S. ship will still be afloat.

The Russian military also has its newest aircraft, far superior to the American junk, armed with the hypersonic missiles. A Russian/ Washington showdown in Syria means a humiliating military defeat for Washington.

This realization makes the Russian government hesitant to use its military power in Syria. The Russian government knows that Washington is insane, that the insane neoconservatives believe in U.S. exceptionalism and indispensability and are committed to American unilateralism. The Russians are aware that Trump, although he intended to reduce tensions, has collapsed to the onslaught from the military/security complex and would be likely to “rescue America’s honor” by pushing the button.

This, I think, could be the reason that the liberation of Idlib province has not begun. This part of Syria might be left in Washington hands as a way of avoiding the end of the world.

This very worthwhile commentary, the first of two in a row by Paul, showed up on his Internet site on Monday sometime — and this must read commentary was sent our way by Roy Stephens — and another link to it is here.


Evidence is No Longer a Western Value — Paul Craig Roberts

Of course, proof, facts, evidence are no longer of any consequence in the Western World. Transparently false accusations can be leveled without any evidence provided, and the lie becomes a fact. “Russiagate” is a perfect example.

Feminist students in Western universities, who find themselves “offended” by scientific fact, denounce scientists for speaking truth that contradicts feminist ideology, and the university administrations, obedient to feminist ideology, haul the scientists before hearings ideologically prepared to declare the scientist, if male, a misogynist.

History is rewritten into fantasy because the historical facts are “offensive” to one “victim group” or the other. Identity politics has birthed a new world: history is whatever serves agendas. Nothing else counts. Truth least of all.

Justice no longer exists in America as 97% of felony convictions result from self-incrimination—plea bargains in which the defendant, innocent or guilty, advised by his attorney that a fair trial is impossible, admits to some offense in exchange for a watered-down sentence. See Roberts and Stratton, The Tyranny of Good Intentions.

Decades ago when there was still some semblance of justice in the American justice system, police had to provide sound evidence for their case in order for the prosecutor to take up the case. The reason was that prosecutorial budgets were limited, and the career interests of prosecutors was to get as many convictions out of their budget as possible. Today, however, when even the innocent prefer to admit a crime rather than run the risk of a trial, prosecutors have endless strings of “convictions” without having to spend days or weeks in trial.

Today prosecutors no longer have to prove a case before a jury. They only negotiate with the defendant’s attorney a crime, whether committed or not, that settles the case.

This sad, but very true commentary from Paul appeared on his Internet site on Monday sometime as well — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Russia reveals the MH17 ‘smoking gun’

Defense Ministry provides missile engine evidence, shifting blame to the Ukrainian military

The Russian Defense Ministry may have finally unveiled the “smoking gun” able to solve the mystery surrounding Malaysia Airlines Flight MH17, shot down on July 17, 2014 over the Donetsk Oblast, a province in eastern Ukraine.

The MH17 crash killed 283 passengers from 10 different countries and 15 crew members. A Joint Investigation Team (JIT) from Malaysia, the Netherlands, Australia, Belgium and Ukraine – but not Russia – seemed to reach a controversial verdict: Moscow did it.

Well, not really, according to a detailed presentation by Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov and Lt. Gen. Nikolai Parshin, head of the Main Missile and Artillery Directorate.

The “breakthrough” seems to have come from a JIT briefing last May, which produced fragments of the engine and nozzle of the 9M38 missile, launched by a Buk missile system, which downed MH17.  According to Parshin: “Once we had the nozzle and engine numbers, we were able to find out the missile’s number.”

So, they were able to establish that the missile was made in Dolgoprudny in 1986 and that it was delivered by rail on December 29, 1986 to military unit 20152 deployed to Ukraine – and never returned to Russia.

This very worthwhile story appeared on the Asia Times website at 2:21 p.m. Hong Kong time on their Tuesday afternoon, which was 2:21 a.m. the same day in Washington — EDT plus 12 hours.  I thank ‘Wojtek from Warsaw’ for bringing it to our attention.  Another link to it is here.


Russia blames Israel for the shooting down of her E.W. aircraft (UPDATED 2x) — The Saker

It is pretty clear what took place yesterday night.  Even if you don’t read Russian, the following chart released by the Russian Ministry of Defense says it all…

Basically, 4 Israeli aircraft were sent on a bombing mission against targets near the Russian facilities in Khmeimim and Tartus (which, by itself, is both stupid and irresponsible).  The Israelis *deliberately* did not warn the Russians until less than a minute before the attack took place, thus the Russians did not have the time to tell the crew of the Il-20 electronic warfare aircraft, which was on approach for a landing, to take evasive action.  When the Syrian S-200 fired their missiles to intercept the incoming missiles, the Israelis F-16 used the Il-20, which has a much bigger radar cross section, to hide themselves resulting in the loss of 15 lives and one aircraft.

Typical Israeli “cleverness”.

The Russian MoD placed the full blame on the Israelis and declared that this attack was “dastardly”, the Israeli actions as “hostile” and said that Russia “reserves the right” to respond with “adequate counter-actions”.

This is one of these rare opportunities when there is, I believe, a viable and logical option to respond: tell the Israelis that from now on any of their aircraft approaching anywhere near the Russian forces will be shot down.

Will the Russians do that?

I doubt it.  Why?  Because of the very powerful pro-Zionist 5th column in Russia.

This rather brief — and twice updated commentary by the Saker was posted on his Internet site yesterday morning sometime — and I thank Larry Galearis for sending it our way.  It’s certainly worth reading if you have the interest — and another link to it is here.


Israel “Expresses Sorrow” Over Russian Plane Downing, But Blames Assad And Iran For Incident

In a series of statements via the official Israel Defense Forces (IDF) Twitter account, Israel has said it “expresses sorrow” over the deaths of the 15 Russian crew members aboard a maritime surveillance plane that was shot down near the Syrian coastal city of Latakia Monday night.

While expressing regret towards the Russian loss of the aircraft and personnel, which was reportedly downed by mistake as Syrian anti-missile defense systems attempted to respond to a barrage of Israeli rockets and airstrikes from over the Mediterranean coastal area, Israel said that ultimately it is the Syrian military that’s responsible.

Israel’s statement begins by saying it “expresses sorrow for the death of the aircrew members” but that the government of Bashar Assad “whose military shot down the Russian plane,” is “fully responsible” for the incident. Israel also made mention of Iran and Hezbollah while assigning blame for the “unfortunate incident“.

The IDF did own up to launching the massive Monday evening attack, which involved strikes on locations across four Syrian provinces, but cast its sustained military action as defensive in nature.

The IDF said it targeted sites “from which systems to manufacture accurate and lethal weapons were about to be transferred on behalf of Iran to Hezbollah in Lebanon.” It further claimed that the weapons were “meant to attack Israel.” The IDF said “these weapons were meant to attack Israel, and posed an intolerable threat against it“.

‘Crocodile tears’, I’m sure…dear reader.  This story was posted on the Zero Hedge Internet site at 5:45 p.m. EDT on Tuesday afternoon — and another link to it is here.


China Retaliates: Beijing to Levy $60bn in Tariffs on U.S. Goods Effective September 24

Just as Donald Trump was further threats aimed at Beijing after he launched another $200BN in tariffs targeting Chinese imports, and warning that “there will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!“, China’s Ministry of Finance issued a statement disclosing that it would retaliate by levying tariffs on another $60BN in U.S. goods (effectively covering all U.S. imports with tariffs), which would take effect from Sept. 24 at 12:01 p.m.

While the retaliation was expected, in what appears to be an olive branch to Trump, Beijing said that it would impose a 10% tariff rate on goods that it previously listed at a 25% rate, and a 5% rate for goods that previously were seen as being in the 10% rate bucket.

China also said that if the U.S. insists on raising tariffs rates on Chinese goods (from 10% to 25% or more), China would respond accordingly, but noted that it hopes to stop trade frictions and hold a constructive dialogue.

It still remains to be seen if China will also cancel trade talks with the U.S. scheduled for later this week, and which the SCMP reported overnight, it most likely will.

This news item put in an appearance on the Zero Hedge website at 9:10 a.m. EDT on Tuesday morning — and I thank Brad Robertson for sending it our way. Another link to it is here.  There was a UPI story about this headlined “China hits U.S with $60B in tariffs to escalate trade war” — and that comes to us courtesy of Roy Stephens.


Palladium market tight but prices sideways

Palladium supplies remain tight, as reflected by backwardation, although U.S. dollar strength has capped gains in the metal, said Mitsubishi.

Backwardation is when nearby contracts are more expensive than deferred and is generally seen as a sight of a tight market since users are paying a premium to get metal immediately.

Outright prices are moving in a sideways direction, however, as the strong dollar caps the upside, Mitsubishi added.

However, the industrial outlook remains positive as long as the U.S. and Chinese economies continues to perform well and neither fall victim to escalating trade tensions between the two countries.

Of course we know why the palladium price is trading sideways…don’t we.  JPMorgan allowed it to rally above its 200-day moving average yesterday, but as I’ve said on numerous occasions…where palladium would be trading from a price perspective in an entirely free market, would take your breath away.  That goes for the other precious metals as well.  This very tiny article was posted on the scrapregister.com Internet site yesterday — and it’s something I found on the Sharps Pixley website.  Another link to it is here.


Metallon May Pay Suppliers in Gold Amid Zimbabwe Cash Shortage

Metallon Corp. is considering paying mining-equipment suppliers in gold because a cash shortage in Zimbabwe is hampering its plan to expand output, Chief Executive Officer Mzi Khumalo said.

Zimbabwe, which abandoned its own currency in 2009 because of hyperinflation, has faced cash shortages for at least the past two years as businesses and individuals moved money offshore and the import bill increased after exports collapsed. The country’s biggest gold miner needs at least $400 million to buy new machinery and upgrade existing equipment as it targets a fourfold increase in production.

Metallon has held talks with equipment suppliers in South Africa and Canada, among other countries, Khumalo, 62, said in an interview at his home in the capital, Harare. Zimbabwean law enables the company to convert leases on claims around its four mines into special mining leases that can then be used to secure financing for its equipment purchases, he said.

We can then enter agreements with banks, various financiers on the basis of gold-backed transactions,” Khumalo said. Suppliers will “get their payment in gold,” he said.

This very interesting gold-related Bloomberg news story put in an appearance on their Internet site at 7:46 a.m. Denver time on Tuesday morning — and I found it in a GATA dispatch from the wee hours on Wednesday morning.  Another link to it is here.


The PHOTOS and the FUNNIES

Yesterday’s ‘critter’ was the purple martin, the largest member of the swallow family — and today I’m featuring the barn swallow, which is a member of that species that we certainly have in these parts — and there are six sub-species in total.  It’s the most widespread species of swallow in the world.  It’s a bird of the open country that normally uses man-made structures to built its nest — and consequently has spread with human expansion.  The photos below are the closest I could find of the species that we have in this area of North America.  Click to enlarge.


The WRAP

Gold and silver prices were obviously kept on a very short leash yesterday…but the powers-that-be decided to let the other two white precious metals rise.  However, as I’ve already pointed out at the top of today’s column, they were only allowed to rally by so much.  Platinum was allowed to close above its 50-day moving average by a hair — and palladium was allowed to close above its 200-day moving average by a decent amount.  It’s now approaching overbought.

Gold is still being forced to crawl along just below its 50-day moving average — and silver’s current price is nowhere near its 50-day moving average, but has Ted has pointed out several times, it’s being carefully kept below its 20-day.

Here are the 6-month charts for the four precious metals, plus copper and WTIC.  Copper closed above its 50-day moving average by a penny or two.  WTIC finished higher as well.  But after the COMEX close it got hit pretty hard, but that fact won’t show up until Wednesday’s doji is in place.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price didn’t do much of anything until 10 a.m. China Standard Time on their Wednesday morning. It began to head higher from there — and that state of affairs last until a minute or so before 2 p.m. CST. It was turned lower going into the afternoon gold fix in Shanghai — and is only up $4.00 the ounce now. Silver followed an almost identical path — and it’s up 4 cents at the moment. Platinum began to crawl higher at 10 a.m. CST as well — and it was turned lower a few minutes before the Zurich open — and is currently up 4 bucks. Ditto for palladium until 10 a.m. CST. It then rallied 4 dollars by noon CST, but is now only up 3 dollars as Zurich opens.

Net HFT gold volume is just under 45,000 contracts — and there’s only 1,157 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is a bit over 10,700 contracts already — and there’s only 137 contracts worth of roll-over/switch volume in that precious metal.

The dollar index dropped a handful of basis points the moment that trading began at 6:00 p.m. EDT in New York on Tuesday evening. It began to head higher — and its current 94.69 high tick came about 9:50 a.m. CST on their Wednesday morning. It chopped quietly lower until minutes before 2 p.m. CST on their Wednesday afternoon — and is off its low tick by a bit — and is currently down 11 basis points about twenty minutes before the London open.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report.  Just looking at the last five trading days on the gold and silver charts above, I would suspect that any changes, either up or down by the Managed Money traders during the reporting week, won’t be material.  Platinum and palladium will certainly show short covering by this same group of traders.  Ted posts his mid-week commentary on his website this afternoon — and whatever he has to say should be considered definitive, as he’s the real authority on all this.

And as I post today’s column on the website at 4:02 a.m. EDT, I see that gold’s rally attempt at the London open was turned lower — and it’s currently up $4.60 an ounce. Silver is higher as well, but struggling — and is up 6 cents at the moment. Platinum is up by 5 dollars — and palladium by 3.

Gross gold volume is coming up on 61,000 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is just over 59,000 contracts. Net HFT silver volume is a bit over 13,800 contracts — and there’s only 194 contracts worth of roll-over/switch volume in that precious metal.

The dollar index continued its downward trend minutes before the London open — and is currently down 21 basis points at 8:40 a.m. BST. But despite this continuing decline, it’s not being allowed to manifest itself fully in precious metal prices.

With things in Syria on a hair trigger, it has finally reached the point that whatever the next event turns out to be…false flag or otherwise… it will certainly start the long-awaited proxy war with Russia that the deep state has been itching for.  If that turns out to be the case, we can only pray that it doesn’t get more serious, or more widespread.

But, alas, I doubt that will be the case.

See you here tomorrow.

Ed