24 November 2018 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
Not surprisingly, the precious metals did nothing on Thursday with the U.S. shut tight for Thanksgiving. When trading resumed at 6:00 p.m. EST in New York on Thursday evening, the gold price was up a dollar and small change by shortly before 1 p.m. China Standard Time on their Friday morning. The selling pressure began about thirty minutes later — and the low tick of the day was set a few minutes after 8:30 a.m. EST. From that juncture it rallied until the equity markets opened an hour later in New York. It was capped and turned lower at that point — and that tiny sell-off lasted until noon — and then the gold price didn’t do anything until the markets closed at 1:45 p.m. EST.
The high and low ticks aren’t worth looking up.
Gold was closed in New York on Friday at $1,222.30 spot, down $3.30 from Wednesday. Not surprisingly, net volume…both Thursday and Friday combined…was pretty light at just under 168,500 contracts, but roll-over switch volume was pretty decent at a bit under 67,000 contracts.
The silver price traded almost ruler flat until 1:30 p.m. CST on their Friday afternoon and, like gold, began to edge lower in price from there. The rug got pulled out from under the silver price a few minutes before 3 p.m. CST — and it dropped a bunch from there until a few minutes before the London open. It chopped quietly sideways until exactly 1:00 p.m. GMT in London/8:00 a.m. in New York — and at that point it had a rather interesting up/down/up move that lasted until around the 9:30 a.m. open of the New York equity markets. It traded mostly sideways from there into the 1:45 p.m. EST close.
The high and low ticks in this precious metal were recorded by the CME Group as $14.52 and $14.165 in the December contract. That up/down/up move I spoke of in the previous paragraph obviously only occurred in the spot market.
Silver was closed on Friday at $14.26 spot, down 23.5 cents on the day — and back below its 50-day moving average once more. Net volume…Thursday and Friday combined…was only 60,500 contracts — and there was a hair under 39,000 contracts worth of roll-over/switch volume out of December and into future months in this precious metal.
And it should be noted that the Managed Money traders really got whip-sawed on this up/down move through silver’s 50-day moving average which began on Wednesday. One wonders how much they lost on that one-day trade?
Like for silver, the platinum price chopped quietly sideways until 1:30 p.m. China Standard Time on their Friday afternoon — and then down it went as well. That sell-off ended at the Zurich open — and it rallied a few dollars right away, before chopping sideways until 2 p.m. CET/8 a.m. EST. It was sold down hard from that point until shortly before 9 a.m. in New York — and a few minute later at 9 a.m. it was in rally mode, but wasn’t allowed to get far. Then at noon, it was sold lower once again until trading ended at 1:45 p.m. EST in New York. Platinum was closed at $838 spot, down 8 bucks on the day.
Palladium was down about four dollars by around 2 p.m. CST on their Friday afternoon — and at that juncture, the selling pressure became more intense, culminating in a ‘no bid’ situation at noon in New York. The price cratered below $1,100 spot to its low tick of the day a few minutes later. It bounced a decent amount right away, but was quietly sold lower until the market closed at 1:45 p.m. in New York. Palladium finished the Friday session at $1,104 spot, down 29 dollars on the day, but was down about 10 dollars more than that at its low tick.
As I’ve mentioned on several occasions over the last week or so, it appears that some not-for-profit seller is trying to break the palladium price lower, despite the robust supply/demand fundamentals in this precious metal. Their efforts on Friday, in a very illiquid market, worked to perfection.
With such light volumes in all four precious metals on Friday, it was very easy for anyone with an agenda to move prices lower — and they did just that.
The dollar index closed very late on Wednesday afternoon in New York at 96.73 — and began to head lower as soon as trading began at 6:00 p.m. EST a few minutes later. It fell off a cliff in early morning trading in London on their Thursday morning, but ‘gentle hand’s were there — and recovered most of that loss by noon EST in New York. It continued to grind quietly lower from that point — and the 96.40 low tick came around 2:35 p.m. China Standard Time on their Friday afternoon. It crawled higher from there until about 8:25 a.m. in London, then blasted 25 basis points higher in just a few minutes. From that juncture it chopped unsteadily higher until the 96.98 high tick was set minutes before 2:30 p.m. in New York on Friday afternoon. From there it edged a bit lower as the trading day came to an end. The dollar index closed yesterday at 96.94…up 44 basis points from Thursday’s close — and up 21 basis points from Wednesday’s close.
Here’s the intraday chart for Friday…
And here’s the 3-day dollar index chart so you can see all of Thursday’s action as well…starting at 6:00 p.m. EST in New York on Wednesday evening.
And here’s the almost 1-year U.S. dollar index chart as well. The delta between its close…96.82…and the close on the intraday chart above, was 12 basis points on Friday. Click to enlarge.
The gold shares opened down — and continued lower until a few minutes after 12 o’clock noon in New York. They ticked a bit higher into the 1 p.m. EST close from there. The HUI finished down another 2.48 percent.
It was the same for the silver equities, except minutes before 10:30 a.m. in New York trading, someone obviously dumped big positions in one or more of the seven stocks that make up Nick’s Silver 7 Index. Once that sell-off was done, they crawled lower until noon, just like the gold stocks. At that point, some obvious bottom-fishing appeared — and they rallied a bit into the close as well. Nick Laird’s Intraday Silver Sentiment/Silver 7 index got clocked for 5.26 percent. Click to enlarge if necessary.
And here’s Nick Laird’s 1-year Silver Sentiment/Silver 7 Index. Click to enlarge as well.
And as ugly as the charts are above, it should never be forgotten…as I’ve pointed out before…there were ‘strong hands’ buyers for every single precious metal share that was sold on Friday.
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 despite the fact that silver and gold finished the week about unchanged, their respective equities got hit pretty hard, with most of the damage coming during the Friday trading session. The silver equities would have actually finished higher on the week if you subtract out what happened yesterday. Click to enlarge.
The month-to-date chart show the gold shares outperforming their silver brethren by a very wide margin. All four precious metals are still in the green for the month. 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. That’s very cold comfort at the moment…but things will change for the better at some point. It’s only the ‘when’ part that I’m not sure of. Click to enlarge.
As I said in this space last week — and the week before…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. However, this DoJ criminal investigation into JPMorgan’s trading activities in the precious metals certainly has the potential to change things in a hurry. We’ll just have to wait and see, as the wheels of justice are very slow to turn at times.
The CME Daily Delivery Report showed that 1 gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. I won’t bother breaking down these piddling amounts, 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 Friday trading sessions showed that gold open interest in November fell by 5 contracts, leaving just 4 left, minus the 1 contract mentioned just above. Wednesday’s Daily Delivery Report showed that 5 gold contracts were actually posted for delivery on Monday, so the change in open interest and the deliveries match. Silver o.i. in November declined by 26 contracts, leaving just 2 left, minus the 2 silver contracts mentioned in the previous paragraph. Wednesday’s Daily Delivery Report showed that 26 silver contracts were actually posted for delivery on Monday…so the change in open interest — and deliveries, match in this precious metal as well. With those 2 contracts out for delivery on Tuesday, the November delivery month in silver looks like it’s done.
Not surprisingly, there were no reported changes in either GLD or SLV on Friday.
There was no sales report from the U.S. Mint on Friday, either.
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.
There was no in/out activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.
But it was an entirely different story in silver, as they had another blow-out day on Wednesday, as 1,832,962 troy ounces were reported received — and another 1,194,448 troy ounces were shipped out. In the ‘in’ category, there was one truckload…629,057 troy ounces…left at Brink’s, Inc. The other two truckloads…1,203,904 troy ounces…were dropped off at HSBC USA. All of the ‘out’ activity, two truckloads…1,194,448 troy ounces…was shipped out of JPMorgan, which was a surprise — and I would think that Ted might have something to say about this in his weekly review later today. A link to all this action is here.
There was a smallish amount of activity in gold over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday. They reported receiving only 30 of them — and shipped out 445. All this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Nick Laird sent around a lot of charts this past week — and the ones I didn’t have space for in this week’s columns to date, are ending up here in my Saturday missive. I’m posting them in the order I received them. The last one, the withdrawals from the Shanghai Gold Exchange, arrived in my in-box on Thursday.
The first two show the weekly transparent gold and silver activity in all know depositories, mutual funds and ETFs, as of the close of trading on Friday, November 16. For that reporting week, there was 1,234,900 troy ounces of gold added on a net basis — and also on a net basis, there was 189,000 troy ounces of silver removed from these same depositories. Click to enlarge for both.
These next three charts show the imports and exports of gold into and out of the U.K…updated with September’s data. During that month they imported 44.0 tonnes — and shipped out 115.8 tonnes. This first chart shows the net imports and exports doing back five years — and updated with September’s data. Click to enlarge.
The first chart below shows the countries [and amounts] that they received gold from — and the second shows what countries they shipped gold to, along with the tonnage to each country. Click to enlarge for both.
Here are the same three charts showing U.S. gold imports and exports…updated with September’s data as well. For that month, the U.S. imported 16.5 tonnes — and shipped out 63.2 tonnes. Click to enlarge for all three.
And last, but certainly not least, are the withdrawals from the Shanghai Gold Exchange, updated with October’s data. During that month, there was 142.94 metric tonnes taken out. And it should be carefully noted that since the Shanghai Gold Exchange was founded, there has been 16,756 metric tonnes of gold reported withdrawn. That’s a lot. Click to enlarge.
As I pointed out in my Thursday column, there was no Commitment of Trader Report on Friday because of the Thanksgiving holiday in the U.S. It comes out on Monday at 3:30 p.m. EST — and I’ll have all that in my Tuesday column.
I only have a tiny handful of stories for you today.
Doug didn’t have a commentary this morning per se, obviously because of the Thanksgiving holiday in the U.S.
But he does have a very long market wrap-up, plus a list of all the relevant stories that he posts on his website each day of the week. It’s very interesting and informative in its own right, so it’s worth a look if you have the interest.
Citigroup Inc and JPMorgan Chase & Co will pay $182.5 million to settle U.S. investor litigation claiming they violated antitrust law by conspiring with other banks to rig a key European interest rate benchmark.
A preliminary settlement addressing the banks’ alleged manipulation of the European Interbank Offered Rate, or Euribor, was filed on Wednesday night with the U.S. District Court in Manhattan, and requires a judge’s approval.
Five banks have reached $491.5 million of settlements in the case, including earlier settlements of $170 million by Deutsche Bank AG, $94 million by Barclays Plc and $45 million by HSBC Holdings Plc.
Euribor is the euro-denominated equivalent of Libor, a benchmark for setting rates on hundreds of trillions of dollars of credit cards, student loans, mortgages and other debt.
Investors including the California State Teachers’ Retirement System (CalSTRS) pension fund accused banks of rigging Euribor and fixing prices of Euribor-based derivatives from June 2005 to March 2011 to profit at their expense.
Just coffee money for these guys. This Reuters story, filed from New York, showed up on their Internet site at 7:26 a.m. EST on Friday morning — and it was updated about four hours later. I found it in a GATA dispatch — and another link to it is here.
One week after even the IMF joined the chorus of warnings sounding the alarm over the unconstrained, unregulated growth of leveraged loans, and which as of November included the Fed, BIS, JPMorgan, Guggenheim, Jeff Gundlach, Howard Marks and countless others, it appears that investors have finally also joined the bandwagon and are now fleeing an ETF tracking an index of low-grade debt as credit spreads blow out and cracks appear across virtually all credit products.
Not only has the $6.4 billion BKLN Senior Loan ETF seen seven straight days of outflows, with investors pulling $129 million on Wednesday alone and reducing the fund’s assets by 2% to the lowest level in more than two years, but over 800 million has been pulled in last current month, the biggest monthly outflow ever as investors are packing it in.
Year to date, the shares of the largest ETF backed by the risky debt are down 1.7% and reached their lowest since April 2016; the ETF’s underlying benchmark, the S&P/LSTA Leveraged Loan Index, has also been hit recently and is down 0.6% YTD.
What is more concerning is that what has been a mere trickle of selling appears to be evolving into a full blown liquidation: some 29 million shares of BKLN, worth $654 million, traded on Tuesday – mostly on the downside – resulting in a record trading day for the fund and more than eight times its average daily turnover for the past five years.
This worthwhile news item appeared on the Zero Hedge website at 2:44 p.m. on Friday afternoon EDT — and another link to it is here.
Negotiations over the post-Brexit political statement had appeared to show some progress on Thursday ahead of this weekend’s make-or-break summit of E.U. leaders, sparking a jump in the pound even as more sign of opposition to May’s draft Brexit deal emerged. Though some might have sensed that there could be trouble ahead when media reports about the statement indicated that it included no references to Gibraltar despite Spain’s threats to blow up the talks if the issue wasn’t addressed.
As it turned out, this read turned out to be correct, as the pound has now reversed nearly all of those gains, and then some, as the E.U. Sherpas hammering out the ‘political statement’ that will accompany the Brexit withdrawal treaty have apparently reached an impasse over the issue of the post-Brexit treatment of Gibraltar. According to Bloomberg, the Sherpas have failed to reach a deal over Gibraltar, jeopardizing the entire statement, and possibly May’s draft Brexit deal itself, which Spain has vowed to oppose unless it receives assurances that it will have the opportunity to bilaterally negotiate with the U.K. over the issue during the transition period.
This interesting, but longish news item was posted on the Zero Hedge website at 7:41 a.m. EST on Friday morning — and I thank Brad Robertson for sharing it with us. Another link to it is here.
The ECB, through its army of official mouthpieces, has begun warning of the potentially calamitous consequences for Italian bonds when its QE program comes to an end, which is scheduled to happen at the end of this year.
During a speech in Vienna on Tuesday, Governing Council member Ewald Nowotny pointed out that Italy’s central bank, under the ECB’s guidance, is the biggest buyer of Italian government debt. The Bank of Italy, on behalf of the ECB, has bought up more than €360 billion of multiyear treasury bonds (BTPs) since the QE program was first launched in March 2015.
In fact, the ECB is now virtually the only significant net buyer of Italian bonds left standing. This raises a key question, Nowotny said: With the ECB scheduled to exit the bond market in roughly six weeks time, “who will purchase the roughly €275 billion of government securities Italy is forecast to issue in 2019?”
With foreigners shedding a net €69 billion of Italian government bonds since May, when the right-wing League and anti-establishment 5-Star Movement took the reins of government, and Italian banks in no financial position to expand their already bloated holdings, it is indeed an important question (and one we’ve been asking for well over a year).
This worthwhile commentary put in an appearance on the wolfstreet.com Internet site on Thursday sometime — and I thank Richard Saler for pointing it out. Another link to it is here. There was a companion story to this from Bloomberg — and it’s headlined “Bank of Italy Warns of Risk in Low Growth, High Public Debt“. I found this story on Doug Noland’s website.
Tales of the New Cold War: After five years of American directed isolation, Russia’s diplomatic achievements — John Batchelor interviews Stephen F. Cohen
Part 1: Batchelor’s dramatic introduction this week describes the newest escalation of Cold War events with the massive war game efforts by NATO called “Trident Venture”, war games so extensive as to be unimaginable even several years ago. This effort involved most of the troops in European NATO, warplanes, warships, and tanks over an area extending from Iceland to Finland. He also described a bipartisan report prepared by the Committee of National Defence Strategy to be delivered to the Pentagon. It concludes that at this time the United States is not prepared to go to war with Russia and must prepare for it. They, for example, cite military deficiencies in Europe, Indo Pacific, and the Middle East, and call for “quality and quantity enhancements” in the Marine Corp, Army, Air Force, Navy, Cyber security, and Nuclear areas, to name only some of the concerns.
Professor Cohen briefly summarized this New Cold War as the intent to isolate Russia, but has, with Putin’s diplomatic efforts to counter this, utterly failed, and the Western escalation we see today comes out of the frustration of losing the New Cold War. He points out differences from the First Cold War in that there was no attempt to isolate the Soviets, but rather to compete with them in the world. It also differs, for example, with the U.S. use of sanctions that have impacted Russia negatively. But the sanctions have not worked in weakening Putin or isolating Russia. Au contraire Russia has restructured its economic efforts and became more self-sufficient. Diplomatic wins in the M.E., Far East, China, and even in Europe are obvious to readers who keep track, and Cohen even mentions the differences between nationalist sentiments in Russia as being more appealing to other states.
Part 2: Batchelor poses the question: “What has Russia gained from American isolation policies of two presidencies and what advantages has she found?” The professor begins by outlining the wars – often dangerous ones that Russia has been able to negotiate effective solutions – like in Syria. Russia has gained a real triumph here while the U.S., and its censure of Trump over Russiagate, is denied influence at the peace talks. Cohen’s conclusion is that while Russia was only “isolated” in being alone in denying that “Assad must go”, and yet Russia’s position is something that Europe has come to accept as well. Russia also presides over the ongoing hostilities between Serbia and Kosovo and seeks peace here, and recently Russia is mediating a peace between the Taliban and the present Afghan government – another great achievement. Russia is perhaps the most active diplomatic country in the world and Cohen sees this as another failure for Washington. Washington, in effect has isolated itself. Batchelor embellishes these thoughts, concludes American foreign policy “lacks common sense”, and that the politics responsible are ideological.
The last segment explores Putin’s form of nationalism and how that works in Russia. Batchelor opens with observations of Putin’s past where, during the siege of Leningrad, he lost a brother, and as a result his focus has been on the defence of Russia as his main priority. Cohen’s response (in agreement with Batchelor) was that in spite of this Putin was still European in his thinking, but Russia’s foreign policy is that of a Eurasian country. This involves, according to Cohen, three distinct points: preservation of Russian sovereignty, a Russia first policy (the concept of Rodina), and most important, a foreign policy must be ecumenical – open to all countries that want to partner with Russia. The latter is hugely different from the American way.
One can summarize the diplomatic positions of Russia and the United States as two countries at odds in the Great Game because the United States is both a poor winner and a poor loser; Russia, on the other hand is both a good winner and a good loser. As a good loser, for example, its policy is to change enemies into allies (as described in the podcast with recent history between Russia and Turkey). The United States, however, treats its allies very badly and its enemies worse. Upon reading the National Defence Strategy Committee Report, it is clear that the policy makers have no idea what they are doing wrong diplomatically and therefore recommend doubling down in the only area they see the need, the military/security area. But they do acknowledge great difficulties ahead in doing this. The NDS report acknowledges, for example, that it does not have the resources to respond militarily and adequately to simultaneous multiple flash points (Korea and the Middle East). In other words the empire is over extended and is strategically failing while the opposition is gaining strength and influence over a wide spectrum. Russian and Chinese allies are not continually looking for the exits, but also get a real economic return on the alliances and agreements. U.S. allies have to suffer the problems of an indifferent empire that can only be described as narcissistic, hostile and self-serving. The U.S. needs more money for a military rebuild and– huge costs are to come from the tax-payer, and even defaults on social security, cuts in health care and reductions in funds for infrastructure are possible in order to accomplish the goals of the report. One can also assume some social unrest as well.
But it is also accurate to point out that there is some recognition in the report about the dangers of nuclear war. We, however, can assume that the United States going to war with Russia or China will not involve troops on the ground – even with a very large military upgrade. These countries are simply too large and (especially China) heavily populated. The naivety and danger of the NDS report is in the acceptance of war as a priority of U.S. foreign policy. To actually prepare for war is tantamount to guaranteeing an end to the world we know. We should also be reminded that this is a report going to Pentagon experts that know the dangers of going to war with nuclear powers and therein lies the hope that more sober minds will prevail against this. At this time the United States has not moved to a major military mobilization – nor has Europe, in spite of the modest NATO build up. When the U.S. decides to go to war we will all notice the signs in advance.
After an absence of many weeks, the Cohen/Batchelor interview returns in its usual 2-part/20 minute audio format. As always, I thank Larry Galearis for his excellent executive summary — and closing comments. The link to Part 1 is in the headline — and here. The link to Part 2 is here.
Russia is continuing to add strongly to its gold reserves with its central bank announcing it bought another 28 tonnes of gold for its reserves in October. That brings the year to date total to around 227 tonnes – already substantially more than it has bought in previous calendar years with a couple of months to go!
This gold accumulation has taken place while U.S.-imposed sanctions are in force and as a counter measure Russia has reduced the dollar-related part of its Forex holdings to the bare minimum and is, no doubt, following a policy to replace this part of its reserves with other key currency-related holdings and with gold. As the world’s third largest gold producer – and it is vying with Australia for the No. 2 spot – it has no problem in buying gold from its domestic gold mining companies. The latest purchases bring its total gold holding to around 2,065 tonnes – the world’s fifth largest reported national gold holding after the USA, Germany, Italy and France, and is closing ground on the latter two fast. We say ‘reported’ holding as we have long expressed doubt on the official Chinese figure of 1,842.6 tonnes – the figure which it has been reporting to the IMF for two full years now. Followers of the gold market will no doubt remember that China has a track record of reporting zero increases in its gold reserves for several years and then announcing a very big increase, doubtless accumulated over the non-reporting years, and there is even speculation that these then-reported totals substantially understate the nation’s true holdings.
Other central banks have also been increasing their gold reserves on a fairly regular basis this year. These include Kazakhstan, India, Mongolia, Kuwait, Qatar and Turkey and the World Gold Council is looking for overall central bank purchases this year to be the strongest for some time. All this is adding to overall gold demand at a time when newly mined production is plateauing, or perhaps even turning downwards (peak gold). Once the anticipated decline sets in it is likely to accelerate as exploration for gold has sharply diminished over the past three years or so as mining companies have mostly been cutting costs. Major capital projects are also few and far between as banks have been loath to lend on multi-billion dollar projects any more.
The above three paragraphs are all there is to this brief commentary from Lawrie that was posted on the Sharp Pixley website on Thursday — and another link to it is here.
China’s consumption of Gold increased by 5 percent year-on-year in the first three quarters of this year to almost 850 tons. The price downtrend since April has further boosted strong demand in China.
The China Gold Association reported that, Gold consumption via the jewelry sector increased steadily; reaching nearly 540 tons in the first three quarters, up around 7 percent year-on-year.
Use of Gold for industrial purposes rose the most, around 25 percent year-on-year, to 82 tons on the back of strong demand from electronic product manufacturers.
Consumption in the Gold coins segment also rose by 6 percent year-on-year to 18 tons.
Gold consumption is expected to continue its uptrend in the fourth quarter of this year on the back of strong demand and growth in high-end sectors like jewelry, and the industry is moving to produce more retail products to meet customer needs.
Gold consumption in China had reached 1,089 tons in 2017, up 9.41 percent, with demand for jewelry, bars and industrial-use yellow metal surging.
The above five paragraphs are all there is to this short gold-related news item that appeared on the scrapregister.com Internet site on Friday. I found it on the Sharps Pixley website — and another link to it is here.
The PHOTOS and the FUNNIES
This is another award-winning photo given out by the Natural History Museum in London this year. It’s also from the ’10 years old and younger’ photographer category — and this one, entitled “The Victor” — and was taken by Adam Hakim Hogg of Malaysia.
Fascinated, Adam watched a furious life and death battle between this tree lizard and an aggressive Malaysian jewel centipede. It was only after the fight was over that Adam remembered he had his camera. Working quickly, he jumped into the ditch and crawled towards the lizard for this eye-level portrait of it standing victorious over its conquest.
The horn-like spines that protrude from this lizard’s eye sockets are the inspiration for its common name – the Titiwangsa horned tree lizard. These reptiles are highly sought after by poachers looking to sell them illegally to the pet trade. This practice causes huge distress to the lizards and leaves a gap in the local ecosystem. Click to enlarge.
“It has now been two weeks since the DoJ announced the criminal guilty plea of the ex-trader from JPMorgan for spoofing and manipulating the prices of silver, gold and other precious metals from 2009 to 2015. I continue to think of little else and still feel it is the most significant development in silver in my decades of closely studying the market. Until yesterday, little new has been said about the guilty plea announced on November 6, either in the press or by the commodities regulators, the CFTC or the CME Group, or by JPMorgan. Additionally, relatively little has been written about the guilty plea in Internet circles since the days immediately following the announcement.
Yesterday, however, it was reported by Bloomberg that the Justice Department asked a judge overseeing a civil antitrust case against JPMorgan to postpone the case for six months “to protect the integrity” of its ongoing criminal probe. To someone (me) already consumed with little else but thinking about the original announcement on November 6, the new development put my mind into overdrive. Nothing could indicate more that the Justice Department is deadly serious about pursuing the matter of a silver price manipulation and JPMorgan’s involvement, or so it would seem to me.
Admittedly, these developments have hit home with me to a degree not likely to resonate as strongly with others. After all, I have been alleging an ongoing COMEX silver price manipulation for more than 30 years, zeroing in on JPMorgan over the past 10 years. How would you feel if your main purpose in life (away from family), was always consistently denied or ignored by those directly involved or overseeing the matter, and suddenly showed strong signs of being picked up by the premier adjudicator of the rule of law?” — Silver analyst Ted Butler…21 November 2018
Today’s pop ‘blast from the past’ dates back to 1966…fifty-two years ago if you’re keeping score. It was the year I graduated from high school — and I remember this tune very well, as it was a big hit in the fall of that year. The band included the then 18-year old Stevie/Stephen Winwood, who would reach iconic stature in the music industry in his lifetime. I may have posted this before, but if I did, it was ages ago. The link is here.
Today’s classical ‘blast from the past’ is one that took me at least a decade to warm up to after I’d heard it for the first time. But now I recognize and appreciate it for the genius work that is — and it has now become one of the staples of the violin concerto repertoire, but not all violinists are up to performing it.
This is the only concerto that Finnish composer Sibelius wrote. It’s in D minor — and is one of the most technically demanding concertos in the repertoire. To say that it was not well received at its premier in Helsinki on February 8, 1904…would be an understatement.
Much of the violin writing is purely virtuosic, but even the most showy passages alternate with the melodic. This concerto is generally symphonic in scope, departing completely from the often lighter, “rhythmic” accompaniments of many other concertos. The solo violin and all sections of the orchestra have equal voice in the piece.
Although the work has been described as having “broad and depressing” melodies, several brighter moments appear against what is essentially a dark melodic backdrop.
Here’s the incomparable Sarah Chang doing the honours. The Radio Philharmonic Orchestra [RFO] from Hilversum, Netherlands accompanies — and Jaap van Zweden conducts. The link is here.
The powers-that-be were certainly all over the precious metals in the very thinly-traded markets on Friday. All of Wednesday’s and Thursday’s gains in gold were reversed. In silver, all of Wednesday’s/Thursday’s gains disappeared as well — and then some. Ditto for platinum — and palladium got hammered. Copper didn’t do much, but natural gas had a wild intraday ride — and WTIC…wow! Except for natural gas, where the Managed Money shorts have already been decimated, the Managed Money shorts in silver, gold and crude oil are going to be in a world of hurt as well when these markets are allowed to rally.
We’re still on ‘care and maintenance’ in gold and silver as far as I can tell, because their respective prices really haven’t been allowed to do much of anything since the middle of July. But despite that fact, there have been very dramatic — and wildly bullish changes in COMEX futures positioning in both precious metals during that time period. Even without a COT Report in hand, Ted may have something to say about it in his weekly review this afternoon.
Here are the almost 1-year charts for the Big 6 commodities, plus natural gas one more time. The ‘click to enlarge‘ feature helps with all seven graphs today.
Here’s the 5-year chart for the Dow Jones Industrial Average — and not one of the original companies that made up the Dow when it was first calculated back in 1896 is in it. But it’s still a good proxy to show what the top of the biggest stock market bubble in history looks like — and it’s overvalued by 50 percent, if not more…and in some cases, far more. It would crash and burn in an instant if it wasn’t being actively supported by the various Plunge Protection Teams and central banks of the world.
The RSI indicator appears to show that the next major move will be down — and it will be interesting to see if that’s allowed to occur. The ‘click to enlarge’ feature does not help with this chart.
The next FOMC meeting is still a ways away…December 18/19…and it will be equally interesting to see if the markets can be held together for that long. All signs are that the Fed intends to announce another interest rate increase — and it’s a given that Mr. Market won’t be happy about that…nor will the bond markets.
With G.E. and Ford leading the way, the bodies in the Commercial bond market are starting to float to the surface — and it won’t take much to drive a lot of that paper into junk, or close to junk, status. Once that process starts in earnest, it will turn into a bloodbath in short order — and there’s a Zero Hedge piece in my column in the Critical Reads section further up that goes into it in fine details.
Then there’s Italy starting in 2019 — and there’s commentary about that in the Critical Reads section as well…plus other news items about this that have appeared in my column over the last month or so.
And precious metal prices still sit there, still under the thumb of JPMorgan, and still very much in ‘care and maintenance’ mode…but now with the DoJ now on their trail. What will come of that, one wonders — and how soon? However, it seems as the pace of that investigation is gaining more traction — and a re-read of Ted’s quote above, plus the embedded link, would seem to be in order here.
But the pain for us precious metal shareholders continues unabated — and that pain is only exceeded by the collective silence of the precious metal producers that sit there and do nothing on our behalf, or even on theirs. I have never seen such cowardice, or such dereliction of fiduciary responsibilities to their shareholders, including themselves.
And as I’ve said on countless occasions — and will again here, no price management scheme has ever lasted forever. This one won’t either. But whatever ‘event’ will be used as a backdrop for JPMorgan to release precious metal prices, is obviously still in the future.
But with the DoJ breathing down their necks, one would think that this event is not too far off.
That’s it for the day — and the week — and I’m still ‘all in’.
See you on Tuesday.