Another Salami-Slicing Session

13 November 2018 — Tuesday


The gold price traded quietly sideways starting at the 6:00 p.m. EST open in New York on Sunday evening — and that state of affairs lasted until 1 p.m. China Standard Time on their Monday afternoon.  Except for an hour or so long ‘rally’ beginning at the London open, it was sold quietly lower until trading ended at 5:00 p.m. EST in New York on their Monday afternoon.

The high and low ticks aren’t worth looking up, but here they are anyway…$1,212.00 and $1,200.60 in the December contract.

Gold was closed in New York on Monday at $1,199.90 spot, down $9.50 from Friday.  Net volume was extremely quiet at a bit under 160,00 contracts — and there was a bit over 37,500 contracts worth of roll-over/switch volume out of December — and into future months.

The silver price wandered around a few pennies either side of unchanged in Far East and morning trading in London on their respective Mondays — and the price was turned quietly lower about forty-five minutes after the noon GMT silver fix.  That quiet sell-off lasted until the London afternoon gold fix…10 a.m. EST — and it traded flat from there until a few minutes after 3 p.m. in the thinly-traded after-hours market.  It was sold down to its low tick of the day an hour or so later…$13.99 spot…but made it back above the $14 spot mark by a penny before trading ended at  5:00 p.m. EST.

The high and low ticks in this precious metal were reported by the CME Group as $14.18 and $13.955 in the December contract.

Silver was closed yesterday at $13.99 spot, down 16 cents from Friday.  Net volume in this precious metal was very quiet as well at a bit over 53,000 contracts — and there was a hair under 16,500 contracts worth of roll-over/switch volume in this precious metal.

Platinum was up 4 bucks by minutes before 11 a.m. China Standard Time on their Monday morning, but was back to a few dollars below unchanged by 9:30 a.m. CET in Zurich.  It was back around unchanged a few hours later — and the selling pressure in this precious metal showed up around 10:30 a.m. in New York…thirty minutes before the Zurich close.  It was sold lower pretty hard at that juncture — and it finished the Monday session right on its $838 spot low tick of the day — and down 13 dollars from Friday’s close.

The palladium price was up a small handful of dollar in mid-morning trading in the Far East, but was back at unchanged by the Zurich open.  It was sold down hard at that point — and then didn’t do much of anything until the COMEX open.  It shot higher from there, but ran into ‘something’ almost right away — and from there it was sold unsteadily lower until the low tick of the day was set shortly after 4 p.m. EST in the thinly-traded after-hours market.  It didn’t do much after that.  Palladium was closed at $1,082 spot — and down 20 bucks from Friday’s close.

The dollar index closed very late on Friday afternoon in New York at the 96.90 mark — and jumped up 15 basis points the moment that trading began at 6:00 p.m EDT in New York on Sunday evening.  It crawled quietly back below the the 97.00 mark over the next four and half hours — and began to head higher about 11:45 a.m. CST on their Monday morning.  From that juncture it was up, up and away until about twenty minutes after the London open.  It chopped quietly lower from that point until a few minutes before 9 a.m. in New York — and it began to ‘rally’ anew, with the 97.69 high tick coming just before 5 p.m. EST.  It backed off a few basis points from there until trading ended.

The dollar index finished the Monday session in New York at 97.64…up 74 basis points from Friday’s close — and it was yet another day where what happened to gold and silver prices had almost no bearing on what was going on in the currency market.

And here’s the 3-day dollar index chart, so you can see the entire Monday trading session starting at 6:00 p.m. EST in New York on Sunday evening, which was 8 a.m. in Tokyo…7 a.m. in Shanghai.

And here’s the 6-month U.S. dollar index chart — and you can read into it whatever you wish.

The gold shares gapped down a bit at the open — and then stair-stepped their way lower until around 11:30 a.m. in New York trading.  They trended a bit higher over the next hour — and then traded flat until shortly before 2 p.m. EST.  They faded a bit from there, closing almost on their low ticks of the day.  The HUI finished down 2.20 percent.

In most respects, the silver equities traded in a similar fashion to the gold stocks, but Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down a hefty 3.44 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in November fell by 9 contracts, leaving 7 still open.  Friday’s Daily Delivery Report showed that 10 gold contracts were actually posted for delivery today, so that means that 10-9=1 more gold contract was added to the November delivery month.  Silver o.i. in November fell by 10 contracts, leaving just 3 left.  Tuesday’s Daily Delivery Report showed that 10 silver contracts were actually posted for delivery today, so the change in open interest and deliveries match.

There was a really big deposit into GLD yesterday, as an authorized participant added 217,541 troy ounces of gold.  I would suspect that this was used to cover an existing short position.  There was a withdrawal from SLV yesterday, as an a.p. removed 939,244 troy ounces.  I would suspect that JPMorgan owns it now.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on in the gold and silver ETFs as of the close of trading on Friday, November 9 — and this is what they had to report.  Their gold ETF declined by a smallish 3,858 troy ounces — and their silver ETF dropped by 54,174 troy ounces.

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

Once again it was all zeros in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.

For a change, it was a lot quieter in silver, as only 262,667 troy ounces were received — and all of that was dropped off at JPMorgan’s vault.  There was only 45,373 troy ounces shipped out.  Of that amount, there was 25,251 troy ounces that left Delaware — and the remaining 20,121 troy ounces departed HSBC USA.  There was also a paper transfer of 601,969 troy ounces from the Eligible category and into Registered at Brink’s, Inc. — and I would think that this would be related to deliveries in November.  The link to this activity is here.

JPMorgan’s COMEX silver stash is now up to 152.33 million troy ounces which, of course, is another new record high.

It was pretty quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They only received 5 of them — and shipped out 117.  This activity, such as it was, occurred at Brink’s, Inc. — and I won’t bother linking this.

The Panagyurishte treasure was unearthed by accident in 1949, during clay digging near the town of Panagyurishte in Bulgaria. It has been dated to the fourth century B.C. The find consists of nine solid gold vessels, decorated with different zoomorphic and anthropomorphic figures, including seven rhyta, a rare amphora-rhyton and a phiale.

The treasure is unique not only for its weight in gold – a total of 6.1 kg, but also for the originality of its shapes and ornamentation, as well as for its exquisite craftsmanship.  Click to enlarge.

I have a decent number of stories for you today.


The Poppies Fell for Two Hours… — Bill Bonner

Irish economist David McWilliams had invited us to participate in the “Kilkenomics Festival.” We have written so much about “Trump’s Trade War,” David must have thought we knew something about it. So he asked us to join a panel discussion.

We’re talking about two different things here,” we clarified, for the sake of the audience.

There’s a trade war, which is largely fake. And there’s the threat of a real war, which a trade war might cause.”

We explained our point of view. Mr. Trump has the most to lose from a trade war with China. His reputation for creating a strong economy… his reputation for forceful and successful deal-making… the fortunes of his major backers, as well as his own personal fortune – all depend on cutting a deal with the Chinese.

He could bring China to its knees, we explained, by blocking Chinese imports to the U.S. But he would enjoy his triumph for only about 10 seconds – the time it would take to notice that the U.S. stock market was crashing.

The U.S. president may be a blowhard and a dumbbell about a lot of things, but not about which side his bread is buttered on. He will want to come back from his meeting with China’s Mr. Xi at the G20 summit in Argentina at the end of this month with a victory announcement… not with a double obituary – one for “his” economy and the other for his career.

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

We Are Heading for Another Tragedy Like World War I — Eric Margolis

I’ve walked most of the Western Front of the Great War, visited its battlefields and haunted forts, and seen the seas of crosses marking its innumerable cemeteries.

As a former soldier and war correspondent, I’ve always considered WWI as he stupidest, most tragic and catastrophic of all modern wars.

The continuation of this conflict, World War II, killed more people and brought more destruction on civilians in firebombed cities but, at least for me, World War I holds a special horror and poignancy. This war was not only an endless nightmare for the soldiers in their pestilential trenches, it also violently ended the previous 100 years of glorious European civilization, one of mankind’s most noble achievements.

I’ve explored the killing fields of Verdun many times and feel a visceral connection to this ghastly place where up to 1,000,000 soldiers died. I have even spent the night there, listening to the sirens that wailed without relent, and watching searchlights that pierced the night, looking for the ghosts of the French and German soldiers who died here.

Verdun’s soil was so poisoned by explosives and lethal gas that to this day it produces only withered, stunted scrub and sick trees. Beneath the surface lie the shattered remains of men and a deadly harvest of unexploded shells that still kill scores of intruders each year. The spooky Ossuaire Chapel contains the bone fragments of 130,000 men, blown to bits by the millions of high explosive shells that deluged Verdun.

The town of the same name is utterly bleak, melancholy and cursed. Young French and German officers are brought here to see firsthand the horrors of war and the crime of stupid generalship.

My Grandfather survived this war, albeit barely — and I’ve heard the stories.  This worthwhile commentary from Eric showed up on the Internet site on Saturday sometime — and it comes courtesy of Larry Galearis.  Another link to it is here.

The American Dream — Jeff Thomas

Many people in Europe and North America are shaking their heads at the rapidly-growing support in their countries for a transition into collectivism. At present, this advance is developing especially rapidly in the U.S.

Since the election of Donald Trump, large numbers of liberal Americans are beside themselves with despair and are responding with vehement collectivist rhetoric.

But, why should this be so? There have been many U.S. presidents who were more conservative in their views than Mister Trump and, in fact, the Deep State, which unquestionably has more control over the future of the U.S. than any president, is clearly moving forward with a collectivist agenda.
Yet, we’re witnessing an anomaly that’s not only unprecedented in U.S. history; its ramifications and the rhetoric that drive it are often irrational beyond the pale.

This commentary by Jeff appeared on the Internet site on Monday morning sometime — and another link to it is here.

German Bundestag MP, Petr Bystron, calls for an end to sanctions against Russia

Dear Mr. Bystron, recently we have met at the International Conference on the Development of Parliamentarism in Moscow recently. In front of representatives of Parliaments from all around the world, international experts and journalists you held a well-received speech, calling for an end to sanctions against Russia. Why?

I demanded an end to sanctions because they have not achieved anything except harming German business. There’s no point to maintaining these useless sanctions any longer.

The Russian-German relations are very complex. On the political agenda, they are burdened with the sanctions which the E.U. countries imposed to Russia, but on the other hand, Germany and Russia cooperate on a strategic project such as North Stream 2. How do you see the prospect of developing further relations between your country and Russia, and also how the United States relations towards the possibility of greater convergence between Germany and Russia?

Of course German companies are still trying to do business with Russia. The sanctions mainly hurt the meat and fruit exporters, as well as the machine tool industry. Exports dropped as much as 60% in the early days of sanctions in these sectors. Naturally, German businesses want to maintain their traditionally good contacts to Russia. North Stream 2 is just one example of this. But it’s no secret there is a lot of pressure from the United States to stop this project. There was a bipartisan initiative in the U.S. Senate in March supported by 39 Senators, urging the government to do everything it can it stop the pipeline. President Trump has come out against North Stream 2 as well.

This interview was posted on Internet site on Sunday sometime — and I thank Roy Stephens for pointing it out.  Another link to it is here.

Russia’s grain exports surge more than 54% this year

Exports of Russia’s wheat and meslin flour expanded by 54.3 percent from January through September of 2018 against the same period a year ago, according to the latest statistics from the Federal Customs Service.

In terms of money, the grain exports reportedly amounted to $6 billion, marking a 62 percent growth. In September alone, the value of grain exports increased by 1.4 percent compared to the same period a year ago and totaled $898.1 million.

The data also showed that imports of grains to Russia dropped 11.1 percent in the first nine months of the year, totaling $245 million. Imports of barley declined by an enormous 94 percent to two million dollars, while purchases of corn by Russian producers fell to $127.6 million, marking a 7.6 percent drop.

On Thursday, Russian agricultural ministry raised the forecast of wheat exports for the current marketing year to 35 million metric tons. In late October, the ministry also increased projections for grain crop to 109 million metric tons from 105 million metric tons, citing improved conditions in Siberia. However, Russian producers managed to harvest 112.7 million tons of grain as of October 25.

Russia has captured more than half of the world’s wheat market in recent years, becoming the world’s biggest exporter of grain, thanks to bumper harvests and attractive pricing. In 2016, Russia became the world leader in wheat exports. Since the early 2000s, its share of the world wheat market has quadrupled.

The above five paragraphs are all there is to this interesting news item that put in an appearance on the Internet site last Friday afternoon Moscow time — and I thank Larry Galearis for sharing it with us.  Another link to the hard copy is here.

Khashoggi’s Last Words Revealed as Turkish Media Plans to Publish Audio Death Tape

A day after President Tayyip Erdogan dropped the latest bombshell related to the Saudi murder of Jamal Khashoggi, saying Turkey had handed over an audio recording of the journalist’s brutal slaying inside the Istanbul consulate to the U.S., Saudi Arabia, Germany, France and Britain, the contents of Khashoggi’s last words have emerged.

Editor for the the Turkish newspaper Daily Sabah, Nazif Karaman, shared some details from the audio tape with Al Jazeera. Karaman said Khashoggi’s last words were:

I’m suffocating… Take this bag off my head, I’m claustrophobic” – according what he confirmed is the authentic audio recording from inside the Istanbul consulate.

Meanwhile at the conclusion of the centennial anniversary of WWI ceremony in Paris President Erdogan’s office confirmed he and President Trump discussed the Jamal Khashoggi killing on the sidelines of the weekend events.

This Zero Hedge article found a home on Internet site on Monday sometime — and I thank Roy Stephens for sending it our way.  Another link to it is here.  There was a parallel story to this in The New York Times yesterday — and it’s headlined “Tell Your Boss’: Recording Is Seen to Link Saudi Crown Prince More Strongly to Khashoggi Killing” — and I thank Roy for that one as well.

BRICS – A Future in Limbo? — Peter Koenig

Today it’s clear that fascist-turned Brazil is out – so we are at RICS. There is not much to argue about. The world’s fifth largest economy, Brazil, has failed and betrayed the concept of the BRICS and the world at large. Whether you consider South Africa as a valid member of the BRICS is also questionable. Much of SA’s social injustice has actually become worse since the end of apartheid. Ending apartheid was a mere political and legal exercise.

Distribution of power and money in SA have not really changed. To the contrary – it worsened. 80% of all land is still in the hands of white farmers. This is what President Cyril Ramaphosa wants to change drastically, by confiscating white farmers land without compensation and re-distribute it to black farmers, who have no formation of how to run these farms. This is not only utterly unjust and will create internal conflicts, the last thing SA needs, but it is also very inefficient, as farming and agricultural production will decline most likely drastically and SA, a potential exporter of farm goods, will become a net importer, a serious hit on South African’s economy.

The principle of redistributing land to the black African society is a solid one. But not by force and not by confiscation without compensation, nor without an elaborate training program for African farmers – to lead to a peaceful transfer – all of which does takes time and cannot happen over-night.

On a recent trip to SA, I spoke to several black people, including especially women from townships, i.e. SOWETO, who said they were better off under apartheid.

It is not a scientific statistic, but the fact that some black people dare say that the system that atrociously discriminated, exploited and raped them, was better than today’s system, is significant. It is a sad testimony to a generation of SA’s democracy.

So, now we are, we could say, down to RIC – Russia, India and China.

This very interesting and worthwhile commentary appeared on the Internet site on Saturday sometime — and it’s the final offering of the day from Larry Galearis.  Another link to it is here.

For The First Time Ever, Bank Of Japan Total Assets Surpass Japan’s GDP

For the first time in history, a central bank has managed to print enough money to buy enough assets to surpass the nation’s annual GDP.

Under the watchful eye of Kuroda, and the overseeing (but independent) hand of Abe, The Bank of Japan’s balance sheet grew to 553.6 trillion yen as on November 10th – that is larger than Japan’s annualized nominal seasonally-adjusted GDP of 552.8 trillion yen (as of the end of June).

Some context for just how crazy this is, here is The Fed vs US GDP…

And putting it all together…

What happens next?

Simply unbelievable.  This story was posted on the Zero Hedge website at 8:57 p.m. EST on Monday evening — and another link to it is here…but everything you need to see is already posted above.

Banque de France wants Paris to compete with London for gold trade — Ambrose Evans Pritchard

Paris has vaulting ambitions to capture a share of the world gold trade from London, reviving its historic role as a top-tier power in the international bullion market.

The Banque de France has teamed up with JP Morgan to offer a full range of swaps, leases, and gold deposits for global central banks and sovereign wealth funds. Global reserve managers will be able to pledge bullion as collateral for deposits or for raising foreign currency on the Paris market.

Sylvie Goulard, the Banque de France‘s deputy governor, called it the spearhead of a sweeping shake-up of the French gold industry and left no doubt that one aim is to challenge the hegemonic position of the City of London in bullion dealing.

While these gold investment services have until now only been offered from London, it recently became possible for the Banque de France to offer them also from Paris. As a result, Paris could gradually re-emerge as a key marketplace for gold,” she wrote in The Alchemist, the in-house journal for the London Bullion Market Association.

While the French plans predate the Brexit referendum, they have taken on fresh salience as President Emmanuel Macron openly strives to peel away some of the Square Mile’s banking, wealth management, euro clearing, and insurance business.

Mme. Goulard said the BdF will act as a “principal” for the first time so that foreign central banks can generate a return from gold transactions without taking on counterparty risk, a crucial service in the ultra-cautious world of reserve managers.

This longish but worthwhile commentary from Ambrose appeared on The Telegraph‘s website on Sunday.  ‘Richard in La La Land’ cut and paste the story — and sent it to me — and I in turn sent it to Chris Powell.  The whole thing is posted in the clear in this GATA dispatch — and another link to it is here.  There was a Reuters story about this headlined “Bank of France partners with JPMorgan to boost gold bullion services: sources” — and I found that news item on the Sharps Pixley website late last night EST.

Sanctions push Iran’s Gold Bar and Coin demand to 5-1/2-year high in Q3

Recent positive momentum continued in Iran during the third quarter of this year. Iran’s Gold Bar and Coin demand hit 21.1 tonnes, the highest since Q2 2013, and accounted for three-quarters of the Middle East market, according to World Gold Council.

Renewed sanctions and the plummeting rial – with expectations for it to fall further – underpinned this flight to gold. VAT-free bars and coins were preferred over jewellery, which is subject to 9% tax.

The Middle East bar and coin market has continued its recent up trend, rising 144% year-on-year and 28% quarter-on-quarter. Gold Bar and Coin demand reached 27.8t, its highest level since Q2 2013, a period when demand spiked in response to a sharp fall in the gold price.

Bar and coin demand in Turkey reacted differently to the mix of financial insecurity and currency weakness.

As the Turkish lira gold price rose in August to a record high of TL273/g, investors liquidated some of their bar and coin holdings to book profits. Net new buying fell to 4.6t, a 69% drop on the same period last year.

The above five paragraphs are all there is to this gold-related news item, filed from Tehran, that was posted on the Internet site yesterday sometime.  I found this on the Sharps Pixley website as well.  Another link to the hard copy is here.

The U.S. Dollar vs. Gold: The Final Showdown — Brent Johnson, CEO of Santiago Capital

This 20:32 minute video presentation from the Cambridge House Silver and Gold Summit, in San Francisco last month, put in an appearance on the Internet site last Thursday.  What Brent fails to mention, like all other main-stream ostriches with their heads buried in the sand, is that the only reason that the precious metals haven’t taken off years ago, is for the simple reason that JPMorgan has its foot on their respective prices.  What the dollar index is doing is totally irrelevant at this stage of the game.  I thank Richard Saler for sending it our way.


This is another award-winning photo awarded by the Natural History Museum in London this year.  It’s from the ‘Animals in their Environment’ category — and entitled ‘Tigerland’ by French photographer Emmanueal Rondeau.

Accompanied by rangers, Emmanuel had climbed 700 metres to set up eight cameras, selecting areas with previous tiger sightings and evidence of recent use such as tracks, scratches and faeces. ‘The forests were nothing like I had ever seen,’ he says. ‘Every species was something new.’ Twenty-three days later, this Bengal tiger gazed directly into one of his cameras.

In the Kingdom of Bhutan, tigers are making a comeback. There are now thought to be 103 tigers living in the wild there – almost a third more than the last count in 1998. As Bhutan has developed, the country has created a network of wildlife corridors from one national park to the next to allow wildlife to roam relatively undisturbed.  Click to enlarge.


It was another salami-slicing day in the precious metals on Monday — and with the dollar index up big on the day, I was somewhat surprised that the price damage wasn’t worse than it was — and that volumes in both silver and gold were extremely light.

Without doubt, the Managed Money traders were dumping long positions for big losses — and piling onto the short side, as Monday’s Preliminary Report indicated that this sequence of events appeared to be occurring.

Copper also closed below its 50-day moving average for the second consecutive day — and the Managed Money traders continue to pour onto the short side in WTIC as well.  As Ted says, it’s the very act of them doing that, that drives prices lower.   And as Ted also pointed out in his weekly review on Saturday…”Remember, on big down days, the commercials are always buyers and the managed money traders are always sellers.  Always.”  [Emphasis mine – Ed]

These traders continue to get their respective clocks cleaned when prices are managed higher…or lower — and you’d think that at least some of them would have figured out by now that their current investing model is not working — and that they’re being screwed over.  But, alas, that’s not the case.

And with the November 15 redemption deadline approaching for all these hedge funds, they’re world is about to go from horrid…to putrid.

Here are the 6-month charts for the Big 6 commodities.  Only platinum and palladium are above their respective 50-day moving averages now.  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 the gold price rallied about four dollars or so by around 10 a.m. China Standard Time on their Tuesday morning — and the then didn’t do much of anything until shortly before 2 p.m. CST. It has been chopping quietly lower since — and is currently up $2.70 the ounce. It has been the same general price pattern for silver — and it’s up 8 cents at the moment. The platinum price chopped quietly higher until noon CST — and hasn’t done much since. It’s up 8 bucks. Platinum rallied until about that time as well, but in a very uneven fashion — and it has been trading sideways in the same manner since — and is now up 9 dollars as Zurich opens.

Net HFT gold volume is coming up on 42,500 contracts, which is nothing special — and there’s 1,360 contracts worth of roll-over/switch volume in that precious metal. Net HFT silver volume is around 13,300 contracts already — and there’s 731 contracts worth of roll-over/switch volume on top of that.

The dollar index began to fade a bit as soon as trading began at 6:00 p.m. EST in New York on Monday evening. That lasted until a few minutes after 12 o’clock noon CST — and it has been chopping quietly generally sideways since, but with a slight positive bias — and is down 7 basis points as of thirty minutes before the London open.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and using the past four reporting days as prologue, the report should make for happy reading.  But we’ve still got today to get through first, so I’ll wait until Wednesday’s missive before I stick my neck out.

And as I post today’s column on the website at 4:03 a.m. EST, I see that the gold price has crept a bit lower — and is only up $1.30 the ounce as the first hour of London trading draws to a close. Silver had a tiny price spike shortly before 9 a.m. over there, but it was quickly batted lower — and is back to up only 6 cents. Platinum and palladium have been edging a few dollars higher during the first hour of Zurich trading, with the former up 7 bucks — and the latter now up 9 dollars, but palladium was up 13 at one point.

Gross gold volume is now up to a bit over 58,000 contracts — and net of roll-over/switch volume, net HFT gold volume is about 54,000 contracts. Net HFT silver volume is now up to just under 17,000 contracts — and there’s 811 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has been trading generally sideways during the last hour — and is currently down 15 basis points as of 8:30 a.m. GMT.

That’s all I have for today, which is more than enough — and I’ll see you here tomorrow.