Another Barn-Burner Day in COMEX Silver Movement

07 November 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold quietly lower until 1 p.m. China Standard Time on their Tuesday afternoon.  It began to chop higher from there, but the price was capped at the noon silver fix in London — and when the COMEX opened at 8:20 a.m. EST yesterday morning, JPMorgan et al didn’t waste any time doing the dirty.  The low tick of the day was set a few minutes after the 1:30 p.m. EST COMEX close — and although it began to rally sharply at that point, the gold price wasn’t allowed to get too far.   From 2 p.m. onwards, it didn’t do much.

The high and low ticks were recorded by the CME Group as $1,237.80 and $1,224.90 in the December contract…an intraday move of a bit over one percent.

Gold was closed on Tuesday in New York at $1,226.50 spot, down $4.10 on the day.  Net volume was very quiet for the second day in a row at a bit over 173,000 contracts — and there was a hair under 16,000 contracts worth of roll-over/switch volume in this precious metal.

The silver price was down a penny by shortly after 1 p.m. CST on their Tuesday afternoon — and it rallied a nickel from that point until around 2:30 p.m. over there.  It chopped quietly sideways with a slight positive bias until the COMEX open — and you know the rest, as ‘da boyz’ dealt with silver in an almost identical fashion to gold after that.

The high and low ticks in this precious metal were reported as $14.715 and $14.48 in the December contract.  At its low tick, silver touched its 50-day moving average, but rebounded a few pennies to close just above it.

Silver was closed yesterday at $14.495 spot, down 11.5 cents from Monday.  Net volume was about the same as it was on Monday…around 60,500 contracts — and there was 7,609 contracts worth of roll-over/switch volume on top of that.

Platinum traded sideways until the same 1 p.m. CST time as the previous two precious metals — and its rally lasted until around 12:30 p.m. in Zurich.  It dipped a bit from there — and then retested its prior higher shortly after the COMEX open.  Then it was taken lower in price as well.  Like silver and gold, its low tick was set a minute or two after the 1:30 p.m. COMEX close — and it rallied a small handful of dollars into the 5:00 p.m. EST close.  Platinum finished the Tuesday trading session at $867 spot, up 3 bucks from Monday.

Palladium was down 5 dollars by around 11 a.m. CST — and it began to edge higher shortly after 1 p.m. as well.  It made it back to the unchanged mark by a few minutes before 3 p.m. CST — and traded mostly sideways to down a bit by the COMEX open.  It began to tick lower from there, but the bids got pulled and the spoofing started — and the palladium price crashed a further 27 dollars in less than an hour, starting at 9 a.m. EST.  It chopped unevenly higher from there…and back above $1,100 spot…until around 2:30 p.m. in the thinly-traded after-hours market — and then didn’t do much after that.  Palladium was closed on Tuesday at $1,104 spot, down 18 dollars on the day.

There was nothing free market about that, of course…but the CFTC and the people who mine this stuff will say — and do…nothing.  One wonders if their collective hands shake a little when they reach for their respective paycheques?

The dollar index closed very late on Monday afternoon in New York at 96.33 — and began to edge unevenly higher right from the 6:00 p.m. EST open a few minutes later.  That ‘rally’ lasted until 1 p.m. China Standard Time on their Tuesday afternoon.  It began to chop lower from that juncture, but was turned a higher a minute or so after 9 a.m. in London — and its 96.45 high tick appeared to come shortly after 10 a.m. over there.  The index didn’t do much until a few minutes after 11:30 a.m. GMT — and then down it went, with the 96.15 low tick of the day set around 8:40 a.m. in New York.  It chopped very unsteadily higher from there into the COMEX close — and then traded equally unsteadily lower until trading ended.  The dollar index finished the Tuesday session at 96.27…down 6 basis points from Monday’s close.

It was yet another day where what was happening in the currencies had little bearing on what was going on in the precious metal market…especially once trading began on the COMEX in New York.

Here’s the 6-month U.S. dollar index chart — and the delta between its close…96.12…and the close on the intraday chart above was 15 basis points yesterday.

The gold stocks opened unchanged, but less than fifteen minutes later they were headed lower — and that lasted until around 1 p.m. in New York trading.  They then crept unsteadily higher into the 4:00 p.m. EST close.  The HUI finished down 1.45 percent.

It was almost the same price path for the silver equities, except their respective low ticks came a few minutes after 3 p.m. EST — and they barely made it off that mark by the close.  Nick Laird’s Intraday Silver Sentiment Index closed down 2.09 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 2 gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  I won’t bother breaking these down, but if you wish to look for yourself, 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 November declined by 7 contracts, leaving 6 still open, minus the 2 contracts mentioned just above.  Monday’s Daily Delivery Report showed that 5 gold contracts were actually posted for delivery today, so that means that 7-5=2 gold contracts vanished from the November Delivery month.  Silver o.i. in November dropped by 148 contracts, leaving 277 still around, minus the 2 contracts mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 150 contracts were actually posted for delivery today, so that means that 150-148=2 more silver contracts just got added to November.


There was a small withdrawal from GLD yesterday, as an authorized participant removed 18,918 troy ounces of gold.  There were no reported changes in SLV.

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

There was a tiny bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.  There was 6,430.000 troy ounces/200 kilobars [U.K./U.S. kilobar weight] deposited at Canada’s Scotiabank — and nothing was shipped out.  I won’t bother linking this.

It was another monster day in silver, as 1,199,216 troy ounces were reported received — and 1,691,576 troy ounces was shipped out the door.  In the ‘in’ category, there was one truckload…600,255 troy ounces…received at CNT — and the other truckload…598,961 troy ounces…was dropped off at JPMorgan.  In the ‘out’ category, there was 1,089,719 troy ounces that departed CNT, plus one truckload…600,863 troy ounces…that left Scotiabank.  The remaining 993 troy ounces…one good delivery bar…was shipped out of Delaware.  There was also a paper transfer of 617,163 troy ounces from the Eligible category — and into Registered — and it’s a fairly safe assumption to make that this will be for November deliveries.  The link to all this action is here.

Of course, with yesterday’s truckload deposit, JPMorgan’s silver stash is at a new record high…151.58 million troy ounces.

There was some decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They received 5,250 of them — and shipped out 530 .  All this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Here are two charts that Nick Laird passed around on the weekend, but I haven’t bother posting them until now, as I gave you these sales numbers in last Friday’s column — and there’s not really all that much to see.  They show gold and silver bullion coin sales from the U.S. Mint, updated with October’s data.  The gold eagle sales include gold buffalo sales as well.  Click to enlarge.

I don’t have all that much for you in the way of stories today.


CRITICAL READS

The Worst Part About Election Day: Somebody Wins — Bill Bonner

It hardly matters who you vote for anyway. Technology, evolving myths, and power relationships shape ideas. People always seem to think what they must think when they must think it.

And the Deep State makes policy decisions, no matter what the people think.

Bush, Obama, Trump – can you think of one thing any of them did to seriously challenge the Deep State? Did they cut the budget? Did they bring the troops home?

No? We didn’t think so.

And now, another election… and another big distraction. No matter who wins, the agenda remains the same: more money, power, and status for the insiders; less for you. That will continue until the whole thing blows sky high.

Our guess is that the final blow-up is still a long way off. Because now, with the latest tech innovations, the elite have a new weapon: digital control.

This commentary by Bill was posted on the bonnerandpartners.com Internet site very early on Tuesday morning EST — and another link to it is here.


What This Election Is About — Paul Craig Roberts

I never cease to be amazed at the insouciance of Americans. Readers send me e-mails asking why I ever supported Trump when he was the Establishment’s candidate. If Trump was the Establishment’s candidate, why has the Establishment spent two years trying to destroy him?

The failure to put two and two together is extraordinary. Trump declared war on the Establishment throughout the presidential campaign and in his inaugural address.

As I wrote at the time, Trump vastly over-estimates the power of the president. He expected the Establishment, like his employees, to jump to his will, and he did not know Washington or who to appoint to support his goals. He has been totally defeated in his intention to normalize relations with Russia. Instead, we are faced with both Russia and China preparing for war.

In other words, the same outcome that Hillary would have achieved.

Trump has been so harassed by the Establishment that he is having trouble thinking straight. He was elected by “the deplorables” as the first non-Establishment candidate since when? You have to go back in history to find one. Perhaps Andrew Jackson. Jimmy Carter and Ronald Reagan were not the choice of the Democratic and Republican establishments, and the ruling establishments moved quickly to constrain both presidencies. The Democratic Establishment framed and removed both Carter’s budget director and chief of staff, depriving Carter of the kind of commitment he needed for his agenda. The Bush people that the Republican Establishment insisted be put in positions of power in the Reagan administration succeeded in blunting his reformist economic program and his determination to end the cold war. I fought both battles for Reagan, and I still have the bruises.

This worthwhile commentary by Paul put in an appearance on his Internet site on Monday sometime — and Roy Stephens sent it to me on Tuesday morning.  Another link to it is here.


Dr. Dave Janda interviews your humble scribe

The good doctor and I had a 24 minute chat on all-talk radio WAAM 1600 out of Ann Arbor, Michigan on Sunday.  We discussed the state of the U.S. and world economies — and precious metals, of course.


Iran’s ‘Ghost Ships’ Evade Oil Sanctions By Turning Off Trackers

In anticipation of the U.S. sanctions against Iranian oil exports, which were reimposed by the Trump Administration on Monday (along with additional sanctions on everything from Iranian shipping to banking and insurance), oil tankers bearing the Iranian flag have embraced a stealthy approach to keeping the oil flowing: They’re ‘ghosting’ international trackers by turning off their transponders, rendering the ships impossible to track by anything aside from visual cues.

Iran, which is already suffering from a drop in exports to 1.8 million barrels per day, down from 2.8 million barrels at the peak, is doing everything it can to keep the crude (along with 300,000 barrels of condensate) flowing. Though Iran received a temporary reprieve from the Trump Administration’s sanctions waivers granted to eight of its biggest customers, those waivers are temporary, and they were also granted with the understanding that the applicants would gradually reduce their reliance on Iranian oil.

That means the kingdom is going to need to do everything it can to help any and all customers avoid detection, and possible U.S. sanctions (which could include barring a given country’s largest banks from accessing dollars and the global dollar-based financial system). Already, the ghosting method is proving surprisingly effective: In an interview with Sputnik, the founders of one of the most popular oil-tanker tracking services, tankertracker.com, have been “utterly exhausted” trying to track Iranian ships.

Iran has also employed another strategy from the pre-Iran deal era. The Republica is keeping six ships with a total capacity of 11 million barrels anchored offshore, allowing the “floating storage tankers” to make speedy deliveries to try and mitigate buyers’ anxieties as, once they leave port, the ships will be essentially impossible to track.

This brief news story was posted on the Zero Hedge website at 1:00 a.m. EST on Wednesday morning — and another link to it is here.


E.U. Gold demand advances 10 percent during Q3: WGC

European Gold demand was 51.1 tonnes during the third quarter of this year, up 10% year-on-year, according to the World Gold Council.

Germany, which accounts for more than half of the region’s bar and coin investment – was up 10% to 28.4 tonnes. In late September the euro-denominated gold price fell to a two-and-a-half year low of €32,638/kg.

Unlike the European-ETF market, concerns around Italian debt and its potential to spark a broader financial crisis, prompted safe-haven buying among retail investors.

Having been in the doldrums for several quarters, the U.S. bar and coin market showed signs of life.

Demand reached double-digits – 10.5t, up 74% y-o-y. Growth was largely fuelled by bargain hunting in June, when the gold price dropped from more than US$1,300/oz to close on US$1,250/oz.

The above five paragraphs are all there is to this brief story, filed from New York, that appeared on the scrapregister.com Internet site…most likely on Tuesday, but there’s no dateline.  It’s the first of three stories in a row that I plucked from the Sharps Pixley website yesterday.  Another link to the hard copy is here.


India sees jump in bullion sales, as investors return to gold

Despite overall gold sales remaining subdued in the last two months, bullion sales in the Indian market have seen about 15 percent jump during this period, signalling an early trend of investors coming back to the yellow metal for a safe and steady return in the coming months, according to traders and market analysts.

The total gold sales in October 2018 is estimated to be about 70 tonnes in volume and about Rs 22,000 crore (approx $3 billion) in value, according to the quick estimates by Indian Bullion and Jewellers Association (IBJA). The sales in September 2018 were slightly less than the October figures.

The spurt in bullion demand in the recent months coincides with the on-going turmoil in the Indian equity market, which has seen a fall of over 4,000 points in the flagship BSE S&P index Sensex in the last 3-4 months – impacted by rising crude oil prices, weakening rupee and uncertainty over the prevailing political situation.

This article put in an appearance on the arabianbusiness.com Internet site at 10:06 a.m. Gulf time on their Tuesday morning — and it’s the second story that I picked up from the Sharps Pixley website.  Another link to it is here.


Jewelry sales propel China gold use in first nine months

China’s gold consumption continued to grow in the first three quarters of this year due to strong domestic demand.

The use of gold went up by 5.08 percent from a year ago to 849.7 tonnes in the January-September period, the China Gold Association said today, Xinhua reports.

Gold jewelry sales posted stable growth and contributed nearly two thirds of the total domestic gold consumption, while sales of industrial gold products and others registered the most rapid expansion, at 24.68 percent.

Gold coins, only accounting for around 2 percent of the total domestic gold consumption, grew by 6.47 percent.

This gold-related news item appeared on thestandard.com.hk Internet site at 5:09 p.m. Hong Kong Time on their Tuesday morning, which was 4:09 a.m. in New York — EST plus 13 hours.  I found it on the Sharps Pixley website — and another link to it is here.


Ex-JPMorgan trader pleads guilty to rigging monetary metals, implicates supervisors at bank

An ex-J.P. Morgan Chase trader has admitted to manipulating the U.S. markets of an array of precious metals for about seven years — and he has implicated his supervisors at the bank.

John Edmonds, 36, pleaded guilty to one count of commodities fraud and one count each of conspiracy to commit wire fraud, price manipulation, and spoofing, according to a release today from the U.S. Department of Justice.

Edmonds spent 13 years at New York-based J.P. Morgan until leaving last year, according to his LinkedIn account.

As part of his plea, Edmonds said that from 2009 through 2015 he conspired with other J.P. Morgan traders to manipulate the prices of gold, silver, platinum, and palladium futures contracts on exchanges run by the CME Group. He and others routinely placed orders that were quickly canceled before the trades were executed, a price-distorting practice known as spoofing.

For years John Edmonds engaged in a sophisticated scheme to manipulate the market for precious metals futures contracts for his own gain by placing orders that were never intended to be executed,” Assistant Attorney General Brian Benczkowski said in the release.

But will it make any difference, dear reader!!!  This news item, which was embedded in a GATA dispatch, appeared on the cnbc.com Internet site sometime yesterday morning.  There’s also a link from the Department of Justice about this charge as well — and it’s certainly worth a look, too.  Although I’m posting the link from the gata.org Internet site, the first person through the door with this story yesterday was reader T.A. — for which I thank him.  This is definitely worth reading — and another link to it is here.  The Zero Hedge spin on this his headlined “JPMorgan Gold-Spoofer Admits “Manipulating Precious Metals Markets” For Years” — and the first reader through the door with this story yesterday was Brad Robertson.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the glasswing butterfly — and it’s pretty much self-evident as to how it came by its name. The butterfly is mainly found in Central and northern regions of South America with sightings as far north as Texas and as far south as Chile.   I photographed one of these in Trinidad back in he early 1970s.  Click to enlarge.


The WRAP

With the dollar index not doing much of anything yesterday, it was obvious that precious metal prices, particularly gold and silver, were about to head uncomfortably higher — and after both were capped at the noon silver fix in London, the New York bullion banks not only took everything away during the COMEX trading session on Tuesday, they closed both of them, plus platinum, at new lows since last Thursday’s big rallies.

And as I pointed out further up, silver touched its 50-day moving average at its low tick on Tuesday.  But ‘da boyz’ obviously had the long knives out for palladium, as they’re trying to break this precious metal to the downside — and it just won’t cooperate.

The other two casualties on Tuesday were copper and WTIC, with the former being closed a penny or so back below its 50-day moving average — and the latter getting hammered down to a new intraday and closing low for this move down.  The Managed Money traders lost big money on this move down in WTIC — and will lose even more when the commercial traders turn the price higher — and it’s very oversold at the moment.

Here are the 6-month charts for the Big 6 commodities — and you can easily see the handiwork of JPMorgan et al.  The ‘click to enlarge‘ feature only helps with the four precious metal charts.

And as I type this paragraph, the London open is less than ten minutes away — and I note that even though the dollar index dropped like a rock at the 6:00 p.m. EST open in New York yesterday evening, it had no impact whatsoever on any of the precious metals.  Gold rallied a bit, but was obviously capped shortly before 9 a.m. China Standard Time on their Wednesday morning — and was sold down to its current low tick of the day about two hours later.  It has been chopping unsteadily higher since — and is currently up $3.50 the ounce.  Not surprisingly, silver was forced to follow a virtually identical price path — and its current rally attempt, which began at 3 p.m. CST, shows it up 7 cents at the moment.  Palladium has been chopping quietly and unsteadily higher since yesterday evening in New York — and it’s up 5 dollars.  The palladium price has done virtually nothing during Far East trading on their Wednesday — and is sitting at unchanged as Zurich opens.

Net HFT volume is way up there, so it’s obvious that ‘da boyz’ were out and about on Tuesday evening — and are still around as I type this.  It sits at a bit over 79,000 contracts — and there’s only 866 contracts worth of roll-over/switch volume on top of that.  Net HFT silver volume is heavy as well, at just under 15,000 contracts — and there’s only 635 contracts worth of roll-over/switch volume in that precious metal.

As I stated above, the dollar index fell like a rock the moment that trading began at 6:00 p.m. EDT in New York on Tuesday evening — and was down 30+ basis points in a minute or so.  The usual ‘gentle hands’ appeared and saved it at the 95.90 mark — and it got ramped higher — and up 50+ basis points by around 9:20 a.m. CST in Far East trading on their Wednesday morning.  It revisited its 95.90 low tick at precisely noon CST.  From there it shot back up to the 96.15 mark by around 2:45 p.m. in Shanghai — and it has drifted a bit lower since then — and is down 26 basis points about thirty minutes before the London open.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and the companion Bank Participation Report.  I expect that there will in an increase in the commercial net short positions in all four precious metals when the COT Report comes out…particularly silver, as it blew through — and then closed above its 50-day moving average during the reporting week.  There’s been some improvement since that rally, but not enough to make a material difference.

Ted will certainly have something to say about this in his mid-week commentary later today, as he’s the world authority on all things silver and gold related.  I may ‘borrow’ a few sentences on this subject for my Friday column.

And as I post today’s missive on the website at 4:02 a.m. EST, I see that the gold price continues to edge quietly higher — and is now up $4.00 the ounce as the first hour of London trading draws to a close, but is off its current high tick of the day by more than a dollar. Silver is getting frisky, as it’s now up 13 cents — and one has to wonder how long JPMorgan will allow this situation to last. Platinum has crept higher by another dollar — and is now up 6 bucks. The palladium price has finally picked itself up off the floor — and is up by 5 dollars as the first hour of Zurich trading ends.

Gross gold volume is coming up on 95,000 contracts — and net of roll-over/switch volume, net HFT gold volume is just over 92,000 contracts. Net HFT silver volume is very heavy at something over 19,000 contracts — and there’s still only 660 contracts worth of roll-over/switch volume on top of that. These rallies in silver and gold are not going unopposed.

The dollar index continues to inch lower — and it’s down 35 basis points as of 8:30 a.m. GMT in London.

With the mid-terms in the U.S. now in the history books, it remains to be seen what ‘da boyz’ allow in the way of precious metal prices going forward, as they certainly weren’t letting them to get out of hand yesterday evening as the election results were pouring in.

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

Ed