World’s Banks Short a Record Amount of COMEX Silver Contracts

26 February 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


It was a very quiet trading session in gold on Monday everywhere on Planet Earth.  It rose and fell three dollars and change in Far East trading — and was back at about unchanged by 9 a.m. in London.  It was sold lower starting at 1 p.m. over there — and that lasted until the COMEX open — and then it jumped higher from that point going into the afternoon gold fix.  It was sold lower from there until shortly before 1 p.m. in New York trading — and crawled back to about unchanged on the day by the close of trading at 5:00 p.m. EST.

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

Gold finished the Monday session in New York at $1,327.10 spot…down 80 cents from Friday’s close.    Net HFT gold volume was pretty quiet at a hair under 175,000 contracts — and there was a bit under 8,500 contracts worth of roll-over/switch volume on top of that.

It was virtually the same price path for silver — and it was obvious that $14.96 spot was a line in the sand for ‘da boyz’ yesterday.

Silver traded in less than a one percent price range on Monday, so I shan’t bother with the high and low ticks in this precious metal, except to point out that the high tick of the day in the March contract was  $15.96 spot.

Silver was closed yesterday at $15.855 spot, down 4 cents on the day.  Net volume was exceedingly light at just over 26,500 contracts but, not surprisingly, roll-over/switch volume out of March and into future months was pretty heavy at around 37,500 contracts.

Platinum edged unevenly higher during the Tuesday session, with the high tick coming about 10:20 a.m. in New York, which was 4:20 p.m. in Zurich.  It was sold a bit lower into the close from the there.  Platinum ended the day at $851 spot, up 10 bucks from Friday’s close.

Palladium was the star of the day once again — and was up 6 bucks or so by 9 a.m. China Standard Time on their Monday morning.  It didn’t do much after that until 2 p.m. CST — and then it began to head higher once again.  Once it hit the $1,500 spot price mark minutes after the Zurich open, it traded below that mark for the next six hours.  But shortly after 9 a.m. in New York it broke above that price to stay — and rallied even more during the last two hours of COMEX trading.  Platinum finished the Monday session at $1,518 spot, up an impressive $44 on the day.

The dollar index closed very late on Friday afternoon in New York at 96.51 — and traded down a few basis points until around 1:40 p.m. China Standard Time on their Monday afternoon.  The decline gained some momentum at that point — and the 96.32 low tick was set at exactly 12 o’clock noon in London…the time of the afternoon silver fix over there.  It began to chop unsteadily higher from that juncture, with the 96.60 high tick coming around 12:08 p.m. in New York.  From there it traded unevenly lower — and back into the red…finishing the Monday session at 96.41…down 10 basis points from Friday.

Here’s the DXY chart courtesy of BloombergClick to enlarge.

Here’s the 6-month U.S. dollar index chart, courtesy of stockcharts.com — and the delta between its close…96.27…and the close on the DXY above, was 14 basis points on Monday.  Click to enlarge.

The gold shares opened flat — and then headed a bit lower for about twenty minutes.  They ticked higher — and back above unchanged by a bit until a few minutes before noon in New York — and then began to fade a bit.  The decline accelerated starting around 2:45 p.m. EST — and that lasted until just before trading ended at 4:00 p.m.  The HUI closed down 1.17 percent.

Nick had some issues with the Silver 7 Index yesterday — and I don’t have a chart for either it, or the 1-year Silver 7 Index.  Hopefully things will be back to normal tomorrow.  But despite the lack of a chart, his Silver Sentiment/Silver 7 Index closed up 0.68 percent on Monday.  Most of that gain came from First Majestic Silver, as they had news yesterday — and that’s linked here and here.


The CME Daily Delivery Report showed that 125 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, of the four short/issuers in total, the two largest were JPMorgan and Advantage, with 79 and 39 contracts out of their respective client accounts.  The largest long/stopper by far was JPMorgan, with 109 contracts in total…101 for clients — plus 1 for its own account.  Advantage was in very distant second place with 9 contracts for its client account.

The lone silver contract was issued by ADM — and stopped by the CME Group.  They immediately reissued that as five 1,000 troy ounce COMEX mini silver contracts — and all five were stopped by Advantage.

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 February declined by 822 contracts, leaving 177 left, minus the 125 mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 779 gold contacts were actually posted for delivery today, so that means that 822-779=43 gold contracts vanished from the February delivery month.  Silver o.i. in February fell by 1 contract, leaving 1 still open, minus the 1 contract mentioned a few paragraphs ago.  I suspect that 1 silver contract out for delivery tomorrow is the end of the February delivery month for silver.


There was a withdrawal reported in GLD yesterday, as an authorized participant took out 37,791 troy ounces.  There were no reported changes in SLV.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, February 22 — and this is what they had to report.  Their gold ETF added 8,386 troy ounces, but there silver ETF fell by 620,767 troy ounces.  It’s a good bet that JPMorgan owns that silver now, as they are the custodian not only for SLV, but for this ZKB silver ETF as well.  How’s that for control?

There was a small sales report from the U.S. Mint on Monday.  They sold 500 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — and 100,000 silver eagles.

Their was a tiny bit of movement in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  There was 2,787 troy ounces reported received at Manfra, Tordella & Brookes, Inc…but then it appears that it was shipped out the door on the same day it arrived.  The only other activity was 160.750 troy ounces/5 kilobars [U.K./U.S. kilobar weight] that was shipped out of Canada’s Scotiabank.  The link to this activity, such as it is, is here.

There was some activity in silver.  There was 600,919 troy ounces…one truck load…received at Brink’s, Inc — and a smallish truckload…513,793 troy ounces…departed CNT.  That was all.  The link to that is here.

The only activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday was the 1,000 kilobars that were shipped out of Brink’s, Inc — and the link to that, in troy ounces, is here.


Here are two charts that I dug up on Nick’s website just now.  They show the 20-year holdings of all know gold and silver depositories, ETFs and mutual funds, plotted against their respective prices over the same time period.  The difference between the gold stocks held — and the silver stocks held, couldn’t be more stark…something I’ve pointed out many times over the years.  Click to enlarge for both.


[NOTE I completely forgot about the new Bank Participation Report for February, which was also posted on the CFTC’s website on Friday…along with the Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, February 5…so here it is now.  I also  added it to my Saturday column at 9:30 p.m. EST on Sunday evening. – Ed]


The February Bank Participation Report [BPR] data is extracted directly from the data in last Friday’s Commitment of Traders Report.  It shows the number of futures contracts, both long and short, that are held by all the U.S. and non-U.S. banks as of Tuesday’s cut-off in all COMEX-traded products.  For this one day a month we get to see what the world’s banks are up to in the precious metals —and they’re usually up to quite a bit.  The February Bank Participation Report covers all of January.

In gold, 5 U.S. banks were net short 75,739 COMEX contracts in the February BPR.  In January’s Bank Participation Report [BPR] these same 5 U.S. banks were net short 71,520 contracts, so there was a bit of an increase…4,219 contracts…since a month ago.  The short position of these Big 5 U.S. banks hasn’t been this high since June of 2018.

Also in gold, 30 non-U.S. banks are net short 51,374 COMEX gold contracts, which is well under two thousand contracts per bank.  In the January BPR, 28 non-U.S. banks were net short 48,209 COMEX contracts…so the month-over-month increase is up a bit as well, by 3,165 contracts.  However, I suspect that there’s at least one large non-U.S. bank in this group.  Scotiabank still holds a fairly hefty short position in gold, but their trading activity in the precious metals has come to a screeching halt.  So I suspect that another foreign bank may have picked up the slack.  Maybe France’s central bank.  But that’s wild-ass speculation on my part

As of this Bank Participation Report, 35 banks [both U.S. and foreign] are net short 26.5 percent of the entire open interest in gold in the COMEX futures market, which is up a hair from the 26.3 percent they were short in the January BPR.

Here’s Nick’s chart of the Bank Participation Report for gold going back to 2000.  Charts #4 and #5 are the key ones here.  Note the blow-out in the short positions of the non-U.S. banks [the blue bars in chart #4] when Scotiabank’s COMEX short position was outed by the CFTC in October of 2012.  Click to enlarge.

In silver, 5 U.S. banks are net short 46,281 COMEX silver contracts in February’s BPR.  I have records going back to July 2014 — and that’s the largest short position in COMEX silver that the U.S. banks have ever held — and not by a small amount, either.  According to Ted in his weekly review on Saturday, JPMorgan now holds around 26,000 contracts of that amount…up quite a bit from the 18-20,000 contracts he estimated they held in the January 29 COT Report.  I suspect that Citigroup holds a very large short position in COMEX silver now as well. In January’s BPR, the net short position of these U.S. banks was 43,606 contracts, so the short position of the U.S. banks is up 2,675 contracts from January.

Also in silver, 22 non-U.S. banks are net short 29,126 COMEX contracts…which is up a bit from the 26,771 contracts that these same non-U.S. banks were short in the January BPR.  That’s the biggest short position that the non-U.S. banks have held in aggregate since November 2017.  I would suspect that Canada’s Scotiabank still holds a goodly chunk of the short position of the non-U.S. banks.  But it’s a possibility that a new player may have emerged on the short side, although that’s only speculation on my part as well.  But even taking that into account, I believe that a number of the remaining 20 or 21 non-U.S. banks are actually net long the COMEX futures market in silver.  But even if they aren’t, the remaining short positions divided up between these other 20 or 21 non-U.S. banks are immaterial — and have always been so.

But, having said all that, the net short positions of both the U.S. and non-U.S. banks are the largest they’ve ever been — and I have records going back to July 2014.

As of February’s Bank Participation Report, 27 banks [both U.S. and foreign] are net short 36.4 percent of the entire open interest in the COMEX futures market in silver—which is down a bit from the 37.8 percent that they were net short in the January BPR — with much, much more than the lion’s share of that held by JPMorgan, Citigroup, Scotiabank..and perhaps one other.

As Ted pointed out on the phone yesterday, the 36.4 percent short position held by these banks only appears smaller since January.  In actually fact, it’s much bigger in absolute terms, as total open interest has increased by quite a bit from January.

Here’s the BPR chart for silver.  Note in Chart #4 the blow-out in the non-U.S. bank short position [blue bars] in October of 2012 when Scotiabank was brought in from the cold.  Also note August 2008 when JPMorgan took over the silver short position of Bear Stearns—the red bars.  It’s very noticeable in Chart #4—and really stands out like the proverbial sore thumb it is in chart #5.  Click to enlarge.

In platinum, 5 U.S. banks are net short 9,947 COMEX contracts in the February Bank Participation Report.  In the January BPR, these same banks were net short 12,495 COMEX contracts…so there’s been a fairly hefty month-over-month decline…20.4 percent.  [At the ‘low’ back in July of 2018, these same five U.S. banks were actually net long the platinum market by 2,573 contracts.] That’s quite a change for the worse in seven months.

Also in platinum, 18 non-U.S. banks are net short 5,478 COMEX contracts, which is down from the 6,864 contracts they were net short in the January BPR…and in percentage terms, that’s a decline of 20.2 percent.  But compared to the short positions of the 5 U.S. banks, the short positions of the non-U.S. banks are mostly immaterial. [Note: Back at the July 2018 low, these same non-U.S. banks were net short only 1,192 COMEX contracts.]

And as of February’s Bank Participation Report, 23 banks [both U.S. and foreign] are net short 19.1 percent of platinum’s total open interest in the COMEX futures market, which is down from the 22.3 percent they were net short in January’s BPR.

Here’s the Bank Participation Report chart for platinum.  Click to enlarge.

In palladium, 4 U.S. banks were net short 7,278 COMEX contracts in the February BPR, which is  up a decent amount from the 6,139 contracts they held net short in the January BPR…18.6 percent.

Also in palladium, 14 non-U.S. banks are net short 1,320 COMEX contracts—which is down 41.9 percent from the 2,272 COMEX contracts that 13 non-U.S. banks were short in the January BPR.

When you divide up the short positions of these non-U.S. banks more or less equally, they’re immaterial, just like they are in platinum…especially when you compare them to the positions held by the 4 U.S. banks.

As of this Bank Participation Report, 18 banks [U.S. and foreign] are net short 29.8 percent of the entire COMEX open interest in palladium.  In January’s BPR, the world’s banks were net short 29.4 percent of total open interest, so there’s been a tiny increase in the concentrated short position of the banks in this precious metal since the prior BPR report.

Here’s the palladium BPR chart.  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007—and they became the predominant and controlling factor by the end of Q1 of 2013.  Click to enlarge.

I don’t wish to read too much into this current Bank Participation Report, as the data in it is a month out of date…BUT the trend is not a positive one in either silver or gold.  I’m certainly not happy about the record high short position held by the world’s banks in COMEX silver and, as I said in my commentary on silver further up…I have records going back to mid-2014 on this.  The second largest short position in silver these banks have held was back in April of 2017 when they were short 75,009 COMEX contracts, compared to the 75,407 COMEX contracts they’re short in February’s BPR.

With an ultra-bearish COMEX set-up like this, there’s no reason why JPMorgan et al couldn’t hammer the silver price into the dirt if they chose to do so.  But so far they haven’t — and I don’t know why.  Maybe the DoJ snooping around the halls over at JPMorgan has something to do with it.  But whatever the reason, there has to be some sort of resolution to this obscene and grotesque state of affairs.  Either it’s the ‘same old, same old‘…or they get overrun.

Monday was another very slow news day, but I’ve also got a few stories that were sent to me over the weekend, so was able to pad the list with those.


CRITICAL READS

Intraday Inversion: 5-year Treasury Prices at Lower Yield Than 2-year Auction Hours Earlier

Today is a memorable day for bond traders: for the first time in years, there were two auctions within 2 hours of each other which came in… inverted.

Following the earlier 2Y auction which as we reported came in surprisingly weak on the Indirect side, with foreign buyers tumbling, at 1 pm the Treasury sold $41 billion in 5Y notes in a relatively strong auction.

The high yield of 2.489% stopped through the When Issued of 2.491% by 0.2 bps and was the lowest since January 2019; However, what was remarkable is that the 5Y yield came in lower than the 2Y yield auction which concluded earlier, and which as we noted at the time, stopped at 2.503%, or more than 1 basis point of inversion.

The internals were less exciting, with the Bid to Cover virtually unchanged from January’s 2.41, printing at 2.40, just above the 2.36 six auction average. There were fewer fireworks in terms of demand, with Indirects taking down 57.7%, which while weaker than last month’s 60.2% and below the 59.5% average, was not nearly as sharp a drop as that observed during the 2Y auction Indirect plunge. Elsewhere, Dealers took down just 19.8%, which was the lowest since August 2017, leaving Directs holding 22.5%, the highest since July 2014 when Directs took down 25.9%.

So overall, a stronger auction than today’s 2Y sale, but again the most memorable consequence is that on the day we had a 2Y and 5Y auction, the two priced inverted, continuing to indicate that nothing in the economy is as well as soaring stocks would make it.

This Zero Hedge article showed up on their Internet site at 1:14 p.m. on Monday afternoon EST — and it comes to us courtesy of Brad Robertson.  Another link to it is here.


“Us vs. Them” Is Always a Scam — Bill Bonner

The idea of big, long market sweeps comes from Dow Theory, as interpreted by Richard Russell. Regular readers of these pages will know this as the “Primary Trend.”

It is very useful from an allocation point of view. You know that stocks will be cheap at some points… and expensive at others. And between ultimate highs and lows will be long movements, taking many years.

So, you stick to the basics, buying and holding when stocks are cheap and becoming more expensive… selling and staying out when they are expensive and working their way down.

We developed our own strategy. We compare the level of the Dow to the price of gold. When the 30 Dow stocks can be bought with five ounces of gold or less, we buy stocks. When that level goes above 15, we switch to gold.

It’s not necessarily the best way to invest, but it’s easy to remember. And back-testing our Dow-to-gold model for 100 years, we see you could have turned $1,000 in 1919 to $43.3 million today. Compare that to $17.7 million from a “buy and hold” strategy.

This longish commentary from Bill was posted on the bonnerandpartners.com Internet site early on Monday morning EST — and another link to it is here.


Conrad Black Exposes the Greatest U.S. Constitutional Crisis Since The Civil War

The most immense and dangerous public scandal in American history is finally cracking open like a ripe pomegranate.

The broad swath of the Trump-hating media that has participated in what has amounted to an unconstitutional attempt to overthrow the government are reduced to reporting the events and revelations of the scandal in which they have been complicit, in a po-faced ho-hum manner to impart to the misinformed public that this is as routine as stock market fluctuations or the burning of an American flag in Tehran.

For more than two years, the United States and the world have had two competing narratives:

  1. that an elected president of the United States was a Russian agent whom the Kremlin helped elect;
  2. and its rival narrative that senior officials of the Justice Department, FBI, CIA, and other national intelligence organizations had repeatedly lied under oath, misinformed federal officials, and meddled in partisan political matters illegally and unconstitutionally and had effectively tried to influence the outcome of a presidential election, and then undo its result by falsely propagating the first narrative.

It is now obvious and indisputable that the second narrative is the correct one.

Despite his faults — which includes a towering ego — I’ve been following the writings of Conrad Black most carefully since I became aware of his presence about forty years ago.  However, he has an intellect that matches that ego — and when he has something to say on an issue such as this, it’s certainly worth your while.  It was posted on the Zero Hedge website on Sunday.  I was going to save it for this coming Saturday, but thought the better of it.  I thank reader M.A. for sending it our way — and another link to it is here.


The Freedom Fairy — Jeff Thomas

For some time, it’s been apparent that the former “free world” countries (the U.S., E.U., Canada, Australia, Japan, etc.) have been on a downward progression – socially, politically and economically.

But, in the last ten years, the awareness of this has become increasingly pronounced. With each successive year, more and more people recognise that all facets of life in these formerly great countries are heading in a decidedly negative direction.

At this point, even those who don’t understand the decline intellectually, feel in their gut that this is not going to end well. Further, they feel it all around them and sense that when the condition becomes critical, it won’t just affect others. When it reaches the crisis stage, they’ll find it right on their own doorstep.

The average person in each of these jurisdictions already no longer trusts either the media, big business or the government and feels that, somehow, they’re all in this together and that they, the electorate, will be the ones who will be the ultimate victims.

This worthwhile commentary from Jeff appeared on the internationalman.com Internet site on Monday sometime — and another link to it is here.


Merkel Draws The Line Against Trump

German Chancellor Angela Merkel has turned the corner on relations with the United States. Her speech at the Munich Security Conference should be considered Germany’s divorce filing from the U.S.-led post-WWII institutional order.

It’s clear that to me now that Merkel’s priorities for what is left of her term in office are as follows:

  1. Carve out an independent path for E.U. foreign policy from the U.S. through the creation of an E.U. army, obviating the need for NATO and…
  2. End U.S. occupation of Germany.
  3. Secure Germany’s energy future, which also secures its political future as the leader of the European Union, by stitching together the continent with Russian energy arteries — Nordstream 2, Turkstream.
  4. Manage the shift away from NATO as a controlling force in Europe’s relationship with Russia which doesn’t serve Europe’s long term purposes.

Merkel will play both sides of the game for as long as she can but Trump and his merry band of Neocon psychotics are determined to stop Nordstream 2. They realize pipelines like these represent near permanent connections between Europe and Russia which the deadens Trump’s desire to maintain the empire through controlling the flow and price of energy.

This very worthwhile commentary by Tom Luongo put in an appearance on the Zero Hedge website early on Saturday morning — and I thank Brad Robertson for pointing it out.  Another link to it is here.


India and Pakistan Rattle Their Nuclear Sabres — Eric Margolis

While Americans were obsessing over a third-rate actor’s fake claims of a racial assault, old foes India and Pakistan were rattling their nuclear weapons in a very dangerous crisis over Kashmir. But hardly anyone noticed that nuclear war could break out in South Asia.

India and Pakistan, both nuclear-armed, have fought four wars over divided Kashmir since 1947, the lovely mountain state of forests and lakes whose population is predominantly Muslim. India controls two thirds of Kashmir; Pakistan and China the rest. This bitter dispute, one of the world’s oldest confrontations, has defied all attempts to resolve it.

The United Nations called on India to hold a plebiscite to determine Kashmir’s future, but Delhi ignored this demand, knowing it would probably lose the vote.

Muslim Kashmiris have been in armed revolt against harsh Indian occupation since the 1980’s. Some 70,000 civilians, mostly Muslims, have died to date. Today, India stations a million soldiers and paramilitary forces in Kashmir to repress popular demands by Muslim Kashmiris for either union with neighboring Pakistan or an independent Kashmiri state.

India’s human rights groups accuse Delhi of grave human rights violations, including torture, murder, rape and collective punishment. Delhi says it is protecting Kashmir’s Hindus and Sikhs from Muslim reprisals, and blames the uprising on what it calls ‘cross-border terrorism’ initiated by old enemy, Pakistan.

This very worthwhile article by Eric…if you’re interested, that is…appeared on the unz.com Internet site on Saturday.  It comes to us courtesy of Larry Galearis — and another link to it is here.


The New York Times and central banks won’t hear of gold market rigging

From GATA’s point of view the problem with mainstream Western news organizations isn’t so much “fake news” as suppressed news.

Since the selection of every serious news story is essentially a political act, heavily influenced by the opinions of its writers and editors, news is not arithmetic. It always will be whatever writers, editors, readers, listeners, and viewers think it is. But at least “fake” news or news presented in a misleading way invites disputation.

As much as The New York Times delights in making President Trump look bad (often enjoying the president’s help), at least the newspaper’s readers know from the Times itself and from other news organizations that the president questions the newspaper’s credibility.

Not so with international currency issues as reported by the Times.

Yesterday the Times published a long essay of analysis by Peter S. Goodman headlined “The Dollar Is Still King. How (in the World) Did That Happen?“…

Explaining the dollar’s persistence, the essay made no mention of surreptitious intervention in the currency and commodity markets by the U.S. government and its brokers. So your secretary/treasurer attempted to raise that point in the essay’s comments section. With about five comments already posted on the essay, your secretary/treasurer submitted this:

Maybe the biggest reason the dollar is still king is that the U.S. government surreptitiously intervenes in the currency and commodity markets and that while documentation of this is available to those who want to look for it — and often has been provided to The New York Times, neither the Times nor other mainstream news organizations will report it, considering it too sensitive politically.”

Over the next 24 hours the Times posted more than 170 comments on the essay before commenting was terminated, but your secretary/treasurer’s comment was not approved, though it was shorter than nearly all the comments approved by the newspaper, was submitted before nearly all of them, contained no offensive language, and was as relevant as many approved comments.

This very worthwhile commentary by Chris showed up on the gata.org Internet site on Saturday — and another link to it is here.


Barrick makes $18 billion hostile bid for Newmont in gold mega-merger

Barrick Gold Corp’s chief executive defended the world’s largest gold producer’s hostile $18 billion bid for Newmont Mining Corp, saying on Monday the deal is “logical” for an industry battling high costs and depleting resources.

Barrick, which recently completed a $6.1 billion acquisition of Africa-focused Randgold Resources, launched its all-stock bid on Monday, encouraging the U.S. rival to ditch a previously announced $10 billion takeover of Canada’s Goldcorp Inc.

This gold industry needs to become more relevant to investors,” CEO Mark Bristow said in an interview on the sidelines of the BMO Global Metals & Mining Conference in Hollywood, Florida.

Bristow, known for his straight-talking and hands-on approach in running Randgold before the merger, said this deal “drives a further rationalization in our industry.”

One has to question what the true motives behind going hostile are: Whether it’s really just to get bigger or it’s all ego-driven,” Newmont CEO Gary Goldberg told Reuters at the BMO conference, adding Newmont shareholders “don’t understand it (and) don’t see the value potential.”

Barrick said its acquisition of Newmont was contingent on the company scrapping the deal to buy Toronto-listed Goldcorp, adding that its offer was a “significantly superior” option for Newmont shareholders.

This Reuters article, from 3:13 a.m. EST on Monday morning, was been completely re-written about six hours later — and also sports a new headline.  I haven’t seen one positive comment about this hostile take-over bid anywhere on the Internet.  I found this gold-related news item in a GATA dispatch yesterday morning — and another link to it is here.  A follow-on Bloomberg story from the gata.org Internet site yesterday evening is headlined “Newmont CEO Calls Barrick Move “Desperate” as Miner Summit Looms“.


Italy to Strengthen Control Over Gold Reserves Amid Venezuela’s Problems With U.K.

Soon after the incident involving the Bank of England withholding Venezuelan gold reserves, an Italian lawmaker suggested clearly defining the state’s ownership over its gold reserves in a new law. His move was supported by Italian representative in the E.U. parliament Marco Zanni, whom Sputnik Italia has asked to comment on the proposed law.

Marco Zanni, an E.U. lawmaker from the Lega party, told Sputnik that the law, recently proposed by member of Italian Chamber of Deputies Claudio Borghi is aimed at defining the ownership status of gold reserves kept in the Bank of Italy. The latter currently holds 2,400 tonnes of the precious metal, which is roughly equals to €90-100 billion, in Italian reserves.

Zanni points out that Italy and its citizens must secure their ownership over reserves that are kept in de-facto private banks. The E.U. lawmaker also added that he had called for the European Central Bank to confirm that member states’ gold reserves are only stored in its system, and not owned by the ECB or any other bank.

The European parliamentarian stressed that no law defines the rights of an entity holding Italian gold reserves right now. Zanni indicated that most of the Italian precious metal is kept in the U.S. and in the Bank of England. The Bank of Italy only annually receives a certificate from these banks, confirming that the gold remains intact. The lawmaker points out that Italy “doesn’t even have the capability of sending an inspection team” that could verify if the gold is indeed still there.

Wow…this was news to me — and to you as well I’m sure, dear reader.  This very interesting story was posted on the sputniknews.com Internet site at 3:44 p.m. Moscow time on their Saturday afternoon, which was 7:44 a.m. in Washington — EDT plus 8 hours.  I found it on the Sharps Pixley website — and another link to it is here.


Palladium hits record high on strike threat

Palladium hit a new record high on Monday as the threat of strikes in the South-African mining industry exacerbated a supply deficit for the metal, while gold held steady as the dollar slipped on signs of a U.S.-China trade deal.

Palladium hit a peak of $1,531 per ounce, and was up 2.2 percent at $1,530.50 an ounce by 1:41 p.m. EST, with the auto catalyst metal having soared more than 80 percent since mid-August on a sustained supply shortage.

At least 15 mining firms in South Africa, home to the world’s biggest platinum group metals deposits accounting for over 90 percent of global output, have received notices of strikes next week in support of colleagues at Sibanye-Stillwater who downed tools over wages and job cuts.

The fundamental issue with palladium is any strike will drive prices through the roof because there is a shortfall with normal production, so any collapse of production will support prices,” said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.

This Reuters story from 8:29 p.m. EST on Sunday evening, was picked up by the folks over at the cnbc.com Internet site — and I found it on Sharps Pixley on Monday evening.  Another link to it is here.


The PHOTOS and the FUNNIES

Here are three more photos taken within an hour’s drive of my new home in Merritt, B.C.  The first one was taken at Spence’s Bridge…that 2-horse town I mentioned in my Saturday missive.  The Nicola River flows into the Thompson River [left side of the photo] just out of sight, behind and below the building in the centre of the picture.  The second photo is a unit [coal] train on the CPR tracks that started in Alberta someplace — and is Vancouver-bound for export to Asia.  The last shot is of the CPR switch yard…such as it is…at Spence’s Bridge.  All three photos were taken within a mile of each other — and from the same road.  Click to enlarge.


The WRAP

[S]poofing is just one of the dirty tricks in the manipulative tool kit of the crooked commercial traders on the COMEX and how it would be a real shame for the DoJ to focus simply on spoofing and miss the big manipulative picture. Late [last] Wednesday night (after the close of most active trading), the commercial crooks employed another of their dirty trading tricks; actually selling small quantities of gold and silver contracts with the express intent (and success) of driving prices lower during the most illiquid period of what is, essentially, 24 hour continuous COMEX trading.

The Wednesday overnight COMEX sell orders were real in that they were intended to be executed (unlike spoofing), but they also had the same net effect as spoofing, namely, they were primarily intended to cause prices to fall. Had these same sell orders been entered instead during the active prime time trading hours of Tuesday and Wednesday, they would have been executed – at much more advantageous prices to the sellers – but wouldn’t have had any effect on driving prices lower. This deliberate and intentional selling at the most illiquid trading times may not have a catchy term, such as spoofing, but it is every bit as manipulative. (I call it “night moves”).

The intent and players behind these “night moves” are unmistakable. The only traders that could possible benefit from sudden sharp moves down are those holding short positions — and there are only a handful of traders holding most of the COMEX gold and silver short positions, so they are easily identified. Thursday’s $20+ drop in gold and 30+ cent drop in silver gave a $500 million (half a billion) temporary reprieve to the 8 big COMEX gold and silver shorts. I know that a half a billion bucks overnight is ample motive for someone in the hole for $1.8 billion to try the “night moves” dirty tool because I’ve seen it pulled off more times than I care to count. The question is – will the Justice Department see it?Silver analyst Ted Butler: 23 February 2019


It was an ultra-quiet trading session on Monday, both from a price and volume perspective…with the only real fireworks coming from the palladium market — and expect more of that if the talked-about strikes in South Africa become a reality.  And most likely because of that news, ‘da boyz’ didn’t make an appearance in either the platinum or palladium markets yesterday.

However, that certainly wasn’t the case in gold and silver…particularly the latter.  As I pointed out at the top of this column, the current Maginot line for the silver price appears to be $16 in the March contact, at least until we’re past First Notice Day for delivery in March silver.

Here are the 6-month charts for the Big 6 commodities — and the changes in both platinum and palladium should be noted.  Click to enlarge.

And as I type this paragraph, the London open is less than ten minutes away — and I note that gold was up a few dollars in early morning trading in the Far East, but that all got taken back — and a bit more, starting at around 1:30 p.m. China Standard Time on their Tuesday afternoon.  It’s down $2.90 currently.  It was the same price activity in silver — and it’s down 3 cents at the moment.  Platinum was up 5 bucks by 11:30 a.m. CST, but was sold a bit lower starting around 3:30 pm. CST — and it’s only up 2 dollars.  Palladium, which was up 20 bucks shortly before 2 p.m. CST, got sank like a rock when the bids got pulled — and it’s now back at unchanged as Zurich opens.

Net HFT gold volume is pretty quiet…coming up on 33,500 contracts — and there’s a piddling 234 contracts worth or roll-over/switch volume in that precious metal.  Net HFT silver volume is pretty quiet at something under 5,800 contracts but, not surprisingly, roll-over/switch volume is pretty heavy already at 5,128 contracts, as the large traders not standing for delivery in March, head for the exits.

The dollar index edged unsteadily lower once trading began at 7:45 p.m. EST in New York on Monday evening — and the current 96.32 low tick came at precisely 11:00 a.m. China Standard Time on their Tuesday morning, so it certainly looks like those usual ‘gentle hands’ appeared at that juncture.  It has been struggling quietly higher since — and is down 3 basis point as of 7:45 a.m. in London/8:45 a.m. in Zurich.


All the large traders in silver [those holding 150 or more March COMEX contracts] that aren’t standing for delivery next month, have to either roll or sell those positions by the close of COMEX trading today.  The remaining small traders in silver have to roll-or sell their contracts by the close of COMEX trading on Wednesday.  First Day Notice for March deliveries in silver will be posted on the CME’s website around 10 p.m. EST that evening — and I’ll have that data for you in my Thursday missive.

And as I post today’s column on the website at 4:02 a.m. EST, I see that gold is off its current low tick by a bit — and is down $2.60 the ounce. Silver is down 6 cents. Platinum got crushed — and it’s now down 5 bucks, from up 2 dollars at the Zurich open. Palladium hasn’t done much in the first hour of Zurich trading — and is sitting at unchanged at the moment.

Gross gold volume is coming up on 43,000 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is a bit over 42,000 contracts. Net HFT silver volume is only 6,400 contracts — and roll-over/switch volume is very heavy already at 8,000 contracts.

The dollar index has been chopping quietly sideways during the first hour of London/Zurich trading — and is down 2 basis points as of 8:45 a.m. GMT/9:45 a.m. CET.

That’s it for yet another day, as ‘da boyz’ work their price magic in the very thinly-traded overnight precious metal market — and I’ll see you here on Wednesday.

Ed