An Outstanding COT Report in Silver

17 November 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crawled quietly higher until around noon CST in Far East trading on their Friday — and then traded sideways until 8 a.m. in New York.  It added a few dollars between there — and 8:30 a.m. EST — and then blasted higher as the dollar index cratered.  That rally ran into ‘resistance’ right away — and the high tick came shortly before the equity market opened in New York on Friday morning.  About fifteen minutes after that it was sold lower until shortly after 10 a.m.  EST — and then didn’t do much for the remainder of the Friday session.

The low and high ticks were reported as $1,213.70 and $1,226.00 in the December contract.

Gold finished the Friday session at $1,221.10 spot, up $8.10 from Thursday’s close.  Net volume was pretty light at a hair over 200,000 contracts — and there was a bit over 37,000 contracts worth roll-over/switch volume out of December and into futures months in this precious metal.

The price activity in silver was almost the same, except it was down a few pennies at the COMEX open.  Its rally got nowhere, either.

The low and high ticks really aren’t worth looking up, but here they are anyway…$14.215 and $14.40 in the December contract.

Silver was closed at $14.39 spot, up 12 cents on the day.  Net volume was fairly decent at a hair under 62,500 contracts — and there was a bit under 17,000 contracts worth of roll-over/switch volume on top of that.

In most respects, the platinum price pattern was almost a carbon copy of what happened in silver, so I shan’t bother with the play-by-play.  Platinum finished the Friday session at $843 spot, up 3 dollars from Thursday’s close.

Palladium traded flat until the Zurich open — and then rallied a bunch of dollars in the next thirty minutes — and from there traded sideways until a few minutes before the COMEX open.  Its rally that began at that juncture got capped at 9 a.m. in New York — and after getting tapped lower by a few dollars, did nothing for the rest of the Friday session.  Palladium was closed at $1,161 spot, up an even 20 dollars on the day.  At its 9 a.m. high tick, it was up at least 30 bucks.  But, like on Thursday, would have closed materially higher if it hadn’t run into ‘something’ at 9 a.m. EST.

The dollar index closed very late on Thursday afternoon in New York at 97.07 — and was down about 20 basis points by around 10:25 a.m. in Far East trading on their Friday morning.  It began to edge higher from there — and was back above the 97.00 mark by a few basis points shortly before 1 p.m. CST in Shanghai.  From that point it chopped quietly lower until around 8:15 a.m. in London — and then chopped equally quietly higher until its 97.04 high tick was set just before 11:30 a.m. GMT.  It headed lower into the COMEX open — and at 8:30 a.m. fell like a rock until the usual ‘gentle hands’ saved it just minutes before the equity markets opened in New York.  The 96.40 low tick of the day was set at that point — and it bounced off that mark on a number of occasions during the reminder of the Friday session, closing at 96.43…down 74 basis points from its Thursday close.

It should be blindingly obvious to all and sundry that the four precious metals weren’t allowed to reflect that precipitous decline in the dollar index yesterday.

And here’s the 6-month U.S. dollar index — and you can read into it whatever you wish…but don’t forget the FOREX markets are just as rigged as everything else.

The gold shares gapped up 2 percent at the open — and the proceeded to chop sideways until a few minutes after 3 p.m.  From that juncture, they were sold quietly lower into the 4:00 p.m. close of trading.  The HUI finished higher by 1.38 percent.

The silver equities also gapped up about two percent at the open — and then wandered sideways until a big buy order, or news of some kind, hit the markets — and they popped up another percent and a half in just a few seconds.  They didn’t do much after that, but did close off their respective highs by a bit.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 2.89 percent.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart 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 everything gold related certainly outperformed the everything silver.  The sole reason for that was because JPMorgan drove the silver price back below its 50-day moving average by a very decent amount during the reporting week.  That happened in gold as well, but quite to the same extent — and the silver equities got sold down far harder during the first two trading days of last week — and were also slower to recover.  It should also be pointed out that gold closed back above its 50-day moving average by the end of the week, but silver did not.  Click to enlarge.

The month-to-date chart looks about the same as the weekly chart — and it does so for the exact same reasons I gave in my discussion of the weekly chart above.  Click to enlarge.

The year-to-date chart, except for palladium, continues to be a sea of red.  But it’s still clear from this chart that the silver equities are ‘outperforming’ their golden brethren over the longer term.  However that’s not saying much, is it?…but that will change.  Click to enlarge.

As I said in this space last week…it’s still JPMorgan’s world in the precious metals market– and they’ll do whatever they want, or until they’re told to step aside.  But things may have changed because of what’s in the latest COT Report — and also the possible fall-out from that DoJ conviction of that ex-JPMorgan precious metal trader last week.


The CME Daily Delivery Report showed that 1 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on the U.S. east on Tuesday.  The single gold contract was issued by Advantage — and stopped by Morgan Stanley, with both transactions involving their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

So far in November there have been 206 gold contracts issued and stopped — and that number in silver is 1,407.

The CME Preliminary Report for the Friday trading session showed that gold open interest in November remained unchanged at 6 contracts still open — and silver’s o.i. in November dropped by 3 contracts, leaving 3 still around.  With the November deliveries down to fumes and vapours, I’m going to stop reporting the above data unless something extraordinary happens between now and first notice day for December deliveries.  I’ll resume my discussion on it at that time.


There was a withdrawal from GLD yesterday, as an authorized participant took out 47,289 troy ounces of gold.  There were no reported changes in SLV.

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

Month-to-date the mint has sold 8,000 troy ounces of gold eagles — 3,000 one-ounce 24K gold buffaloes — and 1,270,000 silver eagles…a silver/gold sales ratio of well over 100 to 1.

It was all zeros in gold over at the COMEX-approved gold depositories on the U.S. east coast on Thursday.

It was much busier in silver, as two truckloads…1,202,733 troy ounces were reported received.  One truck load…601,608 troy ounces…found a home over at Brink’s, Inc. — and the other truckload…601,125 troy ounces…ended up at CNT.  There was no ‘out’ activity.  The link to this is here.

I’ve noted that over the last month or so that more and more silver is being deposited at Brink’s, Inc.  Although nowhere hear the levels of silver that JPMorgan has, it’s now above the other four COMEX silver depositories by a noticeable amount.  I don’t know if it means anything or not, but I thought I’d point it out.  But I do have my suspicions.  Here’s the chart.  Click to enlarge.

It was pretty quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They only received 59 — and shipped out 75.  This activity was at Brink’s, Inc. — and I won’t bother linking it.


The Ardagh Hoard, best known for the Ardagh Chalice, is a hoard of metalwork from the 8th and 9th centuries. Found in 1868 by two young local boys, Jim Quinn and Paddy Flanagan, it is now on display in the National Museum of Ireland in Dublin. It consists of the chalice, a much plainer stemmed cup in copper-alloy, and four brooches, three elaborate pseudo-penannular ones, and one a true pennanular brooch of the thistle type; this is the latest object in the hoard, and suggests it may have been deposited around 900 A.D.

The chalice ranks with the Book of Kells as one of the finest known works of Insular art, indeed of Celtic art in general, and is thought to have been made in the 8th century A.D. Elaborate brooches, essentially the same as those worn by important laypeople, appear to have been worn by monastic clergy to fasten vestments of the periodClick to enlarge.


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday was certainly better in silver than Ted expected, but a bit under in gold.  But the even happier surprises were in the Disaggregated COT Report.

In silver, the Commercial net short position dropped by 14,344 contracts, or 71.7 million troy ounces of paper silver.  Ted was expecting around 11,000 contracts based on changes in open interest.

They arrived at that number by adding 3,385 long contracts, plus they covered 10,959 short positions — and it’s the sum of those two numbers that represents their change for the reporting week.

The position changes of the Big 4 and Big ‘5 through 8’ traders are still immaterial because of the contamination of that data by the large number of Managed Money traders that still inhabit this group.  After this week’s COT Report, it’s safe to say that JPMorgan has fallen out of the Big ‘5 through 8’ category of traders — and it’s most likely Citigroup that holds the largest net short position in silver of all the U.S. banks.  But their position certainly wouldn’t be big enough for them to be a member of the Big 8 category.

Under the hood in the Disaggregated COT Report is where the big surprise lay, as the Managed Money traders were back with a vengeance on the short side, as they accounted for all the weekly change in the Commercial net short position, plus a whole bunch more.  They reduced their long position by a very healthy 3,950 contracts — and they also increased their short position by 16,035 contracts.  It’s the sum of those two numbers…19,985 contracts…that represents their change for the reporting week.

The difference between that number — and the Commercial net short position…19,985 minus 14,344 equals 5,641 contracts…was made up, as it always is, by the traders in the other two categories.  But the lion’s share of that difference…5,310 contracts net…was made up the traders in the ‘Other Reportables’ category, as the ‘Nonreportable’/small traders didn’t do a lot during the reporting week, adding only 331 long contracts net.

Here’s the snip from the Disaggregated COT Report for silver, so you can see these changes for yourself.  Click to enlarge.

The Commercial net short position is back down to a very low number…4,947 contracts…or 24.7 million troy ounces.

Ted pegs JPMorgan’s short position somewhere below 5,000 contracts, as he figured that virtually all the improvement in the COT Report in silver during the reporting week was attributable to only them.

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

Well, in one week, we’ve gone from a very bullish market structure in silver back into the ‘white hot’ bullish category.  Ted also figures that there hasn’t been much, if any deterioration in silver since the Tuesday cut-off.


In gold, the commercial net short position fell by 36,313 contracts, or 3.63 million troy ounces of paper gold.  Ted was expecting something in the mid 40,000 contract range…but this is close enough.

They arrived at that number by adding 27,457 long contracts — and they also reduced their short position by 8,856 contracts — and it’s the sum of those two numbers that represents the change for the reporting week.

Like in silver, the position changes of the Big 4 and Big ‘5 through 8’ traders in gold are still immaterial because of the contamination of that data by the large number of Managed Money traders that still inhabit this group.  If JPMorgan had managed to sneak back into this group over the last month, they’ve disappeared once again now that this week’s COT data is available.

Under the hood in the Disaggregated COT Report, the Managed Money traders made up most, but not all of the changes in the commercial net short position.  They reduced their long position by a further 2,659 contracts — and also added a hefty 29,089 short contracts — and it’s the sum of those two numbers…31,748 contracts…that represents their change for the reporting week.

As in silver, the difference between what the commercial traders bought — and the Managed Money traders sold…36,313 minus 31,748 equals  4,565 contracts…was made up by the traders in the other two categories.  The ‘Other Reportables’ increased their net long position by about 3,500 contracts, but the ‘Nonreportable’/small traders increased their net short position by about 8,000 contracts.  Ted’s guess on Wednesday of an increase in Managed Money shorting in gold of around 45,000 contracts , although low by around 8,000 contracts, was made up for by the addition of 8,000 new shorts by the ‘Nonreportable’/small traders.  I know that Ted will have something to say about this in his weekly review later today.

Here’s the snip from the Disaggregated COT Report for gold so you can see this week’s changes that I just discussed, for yourself.  Click to enlarge.

The commercial net short position in gold is now back down to a piddling 1,823 contracts, or 182,300 troy ounces of paper gold…which is no short position at all.

Here is the 3-year COT chart for gold — and the big week-over-week change should be noted.  Click to enlarge.

We’re back to wildly bullish…”white hot” bullish…in gold as well.

So,  are we done to the downside in price in both these precious metal?  I suspect so, but don’t know for sure.

In my rather extended conversation with Ted on the phone yesterday, he made several comments that I thought worth sharing.  Firstly, JPMorgan’s trading record of never taking a loss on a short position remains intact.  That very fact proves that they are rigging the market for their own benefit.  No other proof is needed.  Secondly, somewhere between two thirds and three quarters of the short position that JPMorgan put on in October were all covered without a loss in just one five-day reporting week.  Ted was wondering how the hell they pulled it off.

Running through the other metals, the Managed Money traders didn’t do much in palladium during the reporting week…increasing their net long position by a tiny 273 contracts.  But as you already know, it’s such a dinky and illiquid market that it doesn’t take much to move it, as total open interest is only 27,460 contracts — and these Managed Money traders are net long a whopping 43 percent of that amount.  These traders didn’t do much in platinum either, increasing their net long position by only 690 contracts in a market where total open interest is 70,152 contracts.  In copper, these Managed Money traders increased their short position by a net 5,600 contracts or so.  Total open interest in copper is 241,052 contracts.  Copper was closed above its 50-day moving average yesterday, so it looks like the commercial traders are about to ring the cash register on them as well.  The banks of the world have virtually no position in copper in the COMEX futures market.


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. Click to enlarge.

But, like the COT Report itself, the chart above is irrelevant at this point as well — and for the same reason. Except for Scotiabank…the positions of the Big 4 and Big 8 traders are 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 103 days of world silver production, down 7 days from what they were short in last week’s report — and the ‘5 through 8’ large traders are short an additional 49 days of world silver production, down 1 day from last week’s report—for a total of 152 days held short, which is five months of world silver production, or about 354.8 million troy ounces of paper silver held short by the Big 8. [In last week’s COT Report the Big 8 were short 160 days of world silver production.]

The Big 8 commercial traders are short 31.7 percent of the entire open interest in silver in the COMEX futures market, which is down from the 34.6 percent that they were short in last week’s COT Report — and all courtesy of JPMorgan. And once whatever market-neutral spread trades are subtracted out, that percentage would be a bit over 35 percent. In gold, it’s 28.4 percent of the total COMEX open interest that the Big 8 are short, down from the 31.5 percent they were short in last week’s report — and something around 35 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 37 days of world gold production, which is down 4 days from what they were short last week — and the ‘5 through 8’ are short another 16 days of world production, which is down 3 days from what they were short the prior week, for a total of 53 days of world gold production held short by the Big 8 — which is down 7 days from what they were short in last week’s report. Based on these numbers, the Big 4 in gold hold about 70 percent of the total short position held by the Big 8…which is up 2 percentage points from last week’s COT Report.

And, once again, don’t forget that like in silver…except for Scotiabank, most of the traders in the Big 4 and Big 8 categories in are Managed Money traders as well — and not the commercial variety.  JPMorgan has now vanished from the Big 8 category in gold as well.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 68, 72 and 76 percent respectively of the short positions held by the Big 8. Silver is down 1 percentage point from the previous week’s COT Report, platinum is up 3 percentage points from a week ago. Palladium is unchanged from last week’s COT Report.

I only have a tiny handful of stories for you today, but there is a 1-hour long audio interview with silver analyst Ted Butler that’s worth your while.


CRITICAL READS

U.S. Household Debt Hits Record $13.5 Trillion as Delinquencies Hit 6-Year High

Total household debt hit a new record high, rising by $219 billion (1.6%) to $13.512 trillion in Q3 of 2018, according to the NY Fed’s latest household debt report, the biggest jump since 2016. It was also the 17th consecutive quarter with an increase in household debt, and the total is now $837 billion higher than the previous peak of $12.68 trillion, from the third quarter of 2008. Overall household debt is now 21.2% above the post-financial-crisis trough reached during the second quarter of 2013.

Mortgage balances—the largest component of household debt—rose by $141 billion during the third quarter, to $9.14 trillion. Credit card debt rose by $15 billion to $844 billion; auto loan debt increased by $27 billion in the quarter to $1.265 trillion and student loan debt hit a record high of $1.442 trillion, an increase of $37 billion in Q3.

This long chart-filled news item appeared on the Zero Hedge website at 12:37 p.m. on Friday afternoon EDT — and I thank Brad Robertson for sending it along.   Another link to it is here.


IMF Sounds the Alarm on Leveraged Lending

Five months after the IMF sounded the alarm over junk bonds, it has now moved on to the credit market bogeyman du jour and overnight joined others such as the Fed, BIS, Oaktree, JPMorgan, and Guggenheim in “sounding the alarm on leveraged loans.”

We warned in the most recent Global Financial Stability Report that speculative excesses in some financial markets may be approaching a threatening level. For evidence, look no further than the $1.3 trillion global market for so-called leverage loans, which has some analysts and academics sounding the alarm on a dangerous deterioration in lending standards. They have a point.

This growing segment of the financial world involves loans, usually arranged by a syndicate of banks, to companies that are heavily indebted or have weak credit ratings. These loans are called “leveraged” because the ratio of the borrower’s debt to assets or earnings significantly exceeds industry norms.

At this late stage of the credit cycle, with signs reminiscent of past episodes of excess, it’s vital to ask: How vulnerable is the leveraged-loan market to a sudden shift in investor risk appetite?  If this market froze, what would be the economic impact? In a worst-cast scenario, could a breakdown threaten financial stability?

It is not only the sheer volume of debt that is causing concern. Underwriting standards and credit quality have deteriorated. In the United States, the most highly indebted speculative grade firms now account for a larger share of new issuance than before the crisis. New deals also include fewer investor protections, known as covenants, and lower loss-absorption capacity. This year, so-called covenant-lite loans account for up 80 percent of new loans arranged for non-bank lenders (so-called “institutional investors”), up from about 30 percent in 2007. Not only the number, but also the quality of covenants has deteriorated.

This is another long Zero Hedge article from Friday.  It was posted on their Internet site at 10:15 a.m. EST — and it’s the second offering in a row from Brad Robertson.  Another link to it is here.


Doug Noland: Canary in the Credit Market’s Coal Mine

What ever happened to “Six Sigma”?  GE was one of the most beloved and hyped S&P500 stocks during the late-nineties Bubble Era. With “visionary” Jack Welch at the helm, GE was being transformed into a New Age industrial powerhouse – epitomizing the greater revolution of the U.S. economy into a technology and services juggernaut.

GE evolved into a major financial services conglomerate, riding the multi-decade wave of easy high-powered contemporary finance and central bank backstops. GE Capital assets came to surpass $630 billion, providing the majority of GE earnings. Wall Street was ecstatic – and loath to question anything. GE certainly had few rivals when it came to robust and reliable earnings growth. Street analysts could easily model quarterly EPS (earnings per share) growth, and GE would predictably beat estimates – like clockwork. Bull markets create genius.

It’s only fitting. With a multi-decade Credit Bubble having passed a momentous inflection point, there is now mounting concern for GE’s future. Welch’s successor, Jeffrey Immelt, announced in 2015 that GE would largely divest GE Capital assets. These kinds of things rarely work well in reverse. Easy “money” spurs rapid expansions (and regrettable acquisitions), while liquidation phases invariably unfold in much less hospitable backdrops. Immelt’s reputation lies in tatters, and GE today struggles to generate positive earnings and cash-flow.

When markets are booming and cheap Credit remains readily available, Wall Street is content to overlook operating cash flow and balance sheet/capital structure issues. Heck, a ton of money is made lending to, brokering loans for and providing investment banking services to big borrowers. That has been the case for the better part of the past decade (or three). No longer, it appears, as rather suddenly balance sheets and debt matter.

This must read Credit Bubble Bulletin was posted on his website in the very wee hours of Saturday morning EDT — and another link to it is here.


Zimbabwe’s Inflation Rate Balloons to 20.85%: The Unofficial Rate Is Likely Higher

Following a spate of recent price hikes that had a 2008 feel and even included price control threats from the government it comes as no surprise that Zimbabwe’s year to date inflation figure has ballooned. According the ZimStat the year to year inflation rate stood at 20.85% in October up from 5.39% in September.

That is a shocking 15% jump. Inflation is measured by tracking changes in a predetermined basket of basic commodities that most people consume in a typical household. This is also known as the Consumer Price Index (CPI).   The CPI for the month ending October 2018 stood at 118,73 compared to 101,97 in September 2018 and 98,24 in October 2017.

Given the composition of the basket used to measure CPI, the surge in the inflation rate can easily be explained by the massive panic buying, hoarding and universal price hikes that followed the policy announcements by the Fiscal and Monetary authorities which were all not [well] received. Social medial played its role as the negative portions of these policies were sometimes taken out of concept and went viral.

Although for the most part the panic buying is not as bad as it was in October prices are still on an upward trend in most shops. Bread prices was officially increased from $1.10 to $1.40. Mazoe Orange crush another family favourite product also saw its price increased to around $4. In the ICT world ZOL increased their internet prices in the face increased cost of doing business. KFC who had closed citing shortage of raw materials came back with eye popping prices of up to $70 fore a meal.

This story put showed up on the techzim.co.zw Internet site on Wednesday sometime — and I lifted it from a Zero Hedge article that Brad Robertson sent my way yesterday morning.  Another link to it is here.


Global Auto Industry Collapse Continues as October E.U. Data Shows No Relief

The outlook for the global automobile market has been increasingly dire lately, especially after a third quarter that saw sales drop in many major markets across the globe, including China. Now, the latest data from Europe suggests that the difficulties may be nowhere close to over despite optimistic fourth quarter guidance by companies like Volkswagen and Daimler AG.

Deliveries of new passenger cars were down 7.4% in the E.U. and the European Free Trade Association in October from the year prior. This adds to a 23% drop that occurred during September according to data from the European Automobile Manufacturers Association, and which was so acute it led to the first negative GDP print for Germany since 2015.

Despite the ongoing sales weakness, which many attribute to one-time events, some analysts – like those at EY Consultancy – still expect the market to turn around in the fourth quarter. They argue that new emissions testing cited by many companies as the reason for disappointing sales, will only have a temporary effect.

At the same time, Citigroup analyst Angus Tweedie thinks the downside is not over for companies like BMW and Daimler AG, according to Bloomberg. In a note titled “The Golden Age Ends With a Crash”, Tweedie wrote that “Heading into 2019 we see few remaining avenues of maneuver, and with volume growth slowing in most markets believe the scale of pressures will become obvious.”

This article put in an appearance on the Zero Hedge website at 2:45 a.m. EDT on Friday morning — and it’s the third and final offering of the day from Brad Robertson.  Another link to it is here.


Afghanistan takes center stage in the New Great Game — Pepe Escobar

In the “graveyard of empires,” Afghanistan never ceases to deliver geopolitical and historical twists. Last week in Moscow, another crucial chapter in this epic story was written when Russia pledged to use its diplomatic muscle to spur peace efforts in the war-torn country.

Flanked by Afghan representatives and their Taliban rivals, Russian Foreign Minister Sergei Lavrov talked about “working together with Afghanistan’s regional partners and friends who have gathered at this table.”

I am counting on you holding a serious and constructive conversation that will justify the hopes of the Afghan people,” he said.

Back in the 1980s, Soviet Union president Zbigniew Brzezinski launched a disastrous war in the country. Thirty years later, Russia is now taking the lead role of mediator in this 21st-century version of the Great Game.  [He’s got that wrong, Z.B. was never the president of Russia. He was national security advisor in the Carter administration – Ed]

This longish, but interesting and in-depth analysis by Pepe showed up on the Asia Times website at 5:27 p.m. Hong Kong Time on their Friday afternoon, which was 4:27 a.m. in Washington — EDT plus 13 hours.  I thank Tolling Jennings for pointing it out — and another link to it is here.


Pence-Xi Showdown at APEC Shows U.S.-China Divide Only Widening

U.S. Vice President Mike Pence traded sharp barbs with Chinese leader Xi Jinping in back-to-back speeches at a regional summit, showing that neither country appears to be giving ground in an escalating trade war.

Xi received applause Saturday when he told the Asia-Pacific Economic Cooperation summit in Papua New Guinea that implementing tariffs and breaking up supply chains was “short-sighted” and “doomed to failure.” He called for a stronger World Trade Organization and defended his signature Belt-and-Road Initiative, saying it’s “not a trap as some people have labeled it.”

Speaking moments later, Pence told delegates the U.S. offers countries in the region “a better option’’ for economic and diplomatic relations than Beijing’s heavy-handed approach. He warned against taking Chinese loans, saying the U.S. “doesn’t drown our partners in a sea of debt” nor offer “a constricting belt or a one-way road.”

The back-and-forth on a cruise ship docked in Port Moresby, the capital, suggested the world’s biggest economies remained far from a deal to end a damaging trade war even after President Donald Trump said he was optimistic about a resolution. Trump and Xi are scheduled to meet a few weeks from now at the Group of 20 summit in Buenos Aires.

This Bloomberg news story showed up on their website at 6:54 p.m. Pacific Standard Time on Friday evening — and was up dated about four and a half hours later.  I thank Swedish reader Patrik Ekdahl for sliding it into my inbox in the very wee hours of Saturday morning EDT — and another link to it is here.


India’s gold imports dip 43% to $1.68 billion in October

Gold imports fell by about 43 per cent to $ 1.68 billion in October due to reasons such as depreciating rupee and subdued demand, a development which could have positive implications for the current account deficit (CAD).

According to the commerce ministry data, gold imports had stood at $ 2.95 billion in October last year. Despite the contraction, trade deficit widened to $ 17.13 billion in October, compared with $ 14.61 billion in the same month last year. The imports mainly take care of demand of the jewellery industry. The exports of gems and jewellery grew by about 5.5 per cent during the month to $ 34.9 billion. As per the data, silver imports grew by 51.7 per cent to $ 526.2 million in October.

India, the world’s second-biggest gold consumer after China, imports about 900 tonnes of gold a year. The domestic currency has depreciated nearly 14 per cent since the beginning of this year. Besides having impact on current account deficit, the sliding rupee has made imports costlier and led to oil prices skyrocketing to record highs.

CAD, the difference between outflow and inflow of foreign exchange, widened to 2.4 per cent of the GDP in the first quarter of 2018-19.

The above four paragraphs are all there is to this brief news story that was posted on thehindubusinessline.com Internet site yesterday — and it’s something I found on the Sharps Pixley website.  Another link to the hard copy is here.


JPMorgan Silver Manipulation Confirmation: James Anderson interviews Ted Butler

This audio interview, which starts at the 4:20 minute mark, and runs for the next 58 minutes, was posted on the youtube.com Internet site very early on Friday evening.  James sent it to me while I was putting today’s Critical Reads section together, so I haven’t had the time to listen to it yet.  But I would think that it’s very much worth your while — and it’s certainly on my ‘to do’ list for the weekend.


The PHOTOS and the FUNNIES

This is another award-winning photo given out by the Natural History Museum in London this year.  It’s from the ‘Animals in their Environment’ category once again — and this one is by Italian photographer Valter Bernardeschi.  It’s entitled “Mister Whiskers”.

Extending his camera ahead of him using two monopod poles and a float, Valter slipped into the icy water to photograph the walruses he had spotted from his dinghy. This caught the attention of some curious youngsters who began to swim towards him. Exhilarated by this peaceful encounter, Valter captured this intimate portrait from a pole’s length away.

These walruses are likely to live for up to 40 years, spending their days trawling the seafloor, using their whiskers and muzzles to find and extract food. Their thick skin protects them from the cold as they forage mainly for molluscs, such as clams. In the Arctic water, blood flow to the surface of their skin is reduced to retain heat.  Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ dates from 1972…46 years ago.  How is that possible?  This number was the only song of this British band that ever charted in the U.S. on Billboard’s Top 100 tunes of that year.  It was classified as ‘hard rock’ back then, but would almost pass as ‘easy listening’ in today’s world.  The link is here.  I’ve posted this before, but it’s been awhile…I think.

Today’s classical ‘blast from the past’ is one that I’ve only posted once before — and it’s time for a revisit.  It did not receive universal acclaim at its premiere in Vienna on December 4, 1881.  The influential critic Eduard Hanslick called it “long and pretentious” and said that it “brought us face to face with the revolting thought that music can exist which stinks to the ear“, labeling the last movement “odorously Russian“.  Hanslick also wrote that “the violin was not played, but beaten black and blue.”

Fortunately, as U.S. columnist Rex Reed once said…”Nobody ever built a monument to a critic“…which is just as well in this case, as this composition is one of the best known violin concertos ever written.

It’s a composition by Pyotr Ilyich Tchaikovsky — and it’s his violin concerto in D major, Op. 35.  Here’s the incomparable Itzhak Perlman along with the Philadelphia Orchestra conducted by Eugene Ormandy.  The recording is from 1985…but that takes nothing away from the performance, as it is superb.  Perlman is at the top of his game.  The link is here.


I must admit that I was not amused by the price action in the precious metals on the big dollar index swoon that began at 8:30 a.m. EDT in New York on Friday morning.  It was obvious that someone was there to stop theses rallies in their respective tracks before the equity markets opened.  But I do take some solace from the fact that this price capping occurred on very little volume in either gold or silver.  However, under normal free-market conditions, the precious metals would off an running if ‘someone’ hadn’t appeared to  trip them up.

Gold closed above its 50-day moving average for the second day in a row, but silver is still a bit under its.  I also noted that copper broke above and close above its 50-day moving average yesterday as well.  And as I commented on in my COT discussion further up, it remains to be seen if the commercial traders ring the cash register on these Managed Money traders or not, as they’re ripe for the picking  That’s even more the case in WTIC.

Here are the 6-month charts for the Big 6 commodities — and there’s not a lot to see except what I just pointed out above.  The ‘click to enlarge‘ feature only helps with the four precious metal charts.

Despite all the happy talk out there, most of the economies of the world are rotten to the core — and continue their slides into recession…if they’re not in one already.  It’s highly doubtful if the October high in the Dow will be exceed in my lifetime, unless for some future hyperinflationary event, which just isn’t on my radar at the moment.

The across-the-board problems in China are top of mind — and the ongoing soap opera that is now the European Union, are not going to improve…ever.  The denouement in China is on the horizon — and could come at any time…whereas the intractable problems with the E.U. is now more of a slow-motion suicide watch, than anything else.

The currency problems in the world are still very much on the front burner — and it’s obvious, at least to me, that with all this talk of a strong dollar going forward as the world’s demand for dollars is ever-increasing, is getting paper thin…at least in the short term.  My take on the intraday dollar index chart, which I watch like a hawk, is that it would crash and burn in an instant if those always-present ‘gentle hands’ weren’t there.

The powers-that-be have their hands full trying to keep things on an even keel, but even they…the IMF, BIS and World Bank et al, admit that there’s big trouble ahead in River City.  And the longer they attempt to stave off the inevitable…ever since the U.S. Treasury and the Fed first rescued the U.S. equity markets back in 1987…the worse it’s going to be when the real end finally arrives.

Of course all this started back in August 1971, when Nixon “temporarily” suspended conversion of the U.S. dollar into gold — and these current world-wide fiat currencies systems are, as I’ve said before on a number of occasions, long past their respective ‘best before’ use dates.

Returning to the current situation in the COMEX futures market in gold.  As Ted pointed out on the phone yesterday, JPMorgan managed to cover two thirds to three quarters of all their short positions in both gold and silver that they’ve been adding since the beginning of October.

We’re back, as I said further up, to a wildly bullish set-up.  And with the possibility that the DoJ will be sticking its nose into what’s happening over at JPMorgan’s metal trading division looming large, one would think that just maybe this last week-long engineered price decline since the DoJ conviction notice first hit the public domain on election day, JPMorgan was covering in a hurry, as the writing could be clearly on the wall for them.

If that’s the case, then we shouldn’t have long to wait.  However, as you’re more than aware, we’ve been at the brink before — and nothing has happened.  And although I was born in Canada, I just know that I was born in Missouri in a previous life, so I’ll believe it when I see it.

That’s all I have for the day — and the week — and I’ll see you here on Tuesday.

Ed