On The Hot Seat — Jim Cook interviews Ted Butler

22 March 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Once trading began at 6:00 p.m. EDT in New York on Wednesday evening, the gold price began to creep unevenly higher — and the high of the day came about twenty minutes before the London open.  It began to edge quietly and unsteadily lower until a few minutes before 9 a.m. in New York — and then the price pressure became far more pronounced at that point.  The low tick of the day was set a minute before 12:30 p.m. EDT.  It crawled a handful of dollars higher from there until shortly after 2:30 p.m. in the thinly-traded after-hours market — and didn’t do a whole lot of anything from there until the market closed at 5:00 p.m. EDT.

The high and low ticks in this precious metal were recorded as $1,320.20 and $1,302.80 in the April contract.

Gold was closed in New York on Thursday at $1,309.00 spot, down $3.40 on the day.  Net volume was fairly heavy at a hair over 262,000 contracts — and there was a hefty 71,000 contracts worth of roll-over/switch volume out of April and into future months.

In virtually every respect, the silver price was guided along the same price path as gold — and its low tick of the day for it was set at precisely 12:30 p.m. in New York.

The high and low ticks in silver were reported by the CME Group as $15.65 and $15.48 in the May contract.

Silver was closed at $15.445 spot, down 0.5 cents on the day.  Net volume was pretty decent at a bit over 68,500 contracts — and roll-over/switch volume in this precious metal was about 4,200 contracts.

The platinum price crept higher until shortly before 9 a.m. China Standard Time on their Thursday morning — and then didn’t do a whole lot until 1 p.m. CET in Zurich, which was 8 a.m. EDT in New York.  It spiked up a bit at that point, but was capped immediately — and then traded sideways until around 8:45 a.m. EDT.  Then its price was engineered quietly lower — and its low tick came at the same moment as silver’s…12:30 a.m. EDT.  It jumped up a couple of dollars from there before trading flat into the 5:00 p.m. close.  Platinum was closed yesterday at $860 spot, down a dollar on the day.

Palladium was up 12 bucks by 9 a.m. CST — and from there it edged unevenly sideways until it ran into the usual ‘something’ minutes before 9 a.m. in New York…just like platinum.  Its low tick was also set around 12:30 p.m. EDT.  It rallied until the 1:30 p.m. COMEX close — and didn’t do much after that.  Palladium was closed at $1,583 spot, up 5 dollars from Wednesday.

The dollar index closed very late on Wednesday afternoon in New York at 95.76 — and opened up 16 basis points once trading commenced around 7:45 p.m. EDT on Wednesday evening, which was 7:45 a.m. CST on their Thursday morning.  It traded quietly sideways until exactly 3:30 p.m. China Standard Time on their Thursday afternoon — and proceeded to crawl higher starting at that point.  That ‘rally’ accelerated beginning at 9:56 a.m. in New York, which may or may not have coincided with the afternoon gold fix in London — and the 95.84 high tick was set at 12:26 p.m. EDT.  The index began to roll over shortly after that — and it closed at 96.50…up 75 basis points from Wednesday’s close.

All of Wednesday’s dollar index loses were reversed — and then some, with yesterday’s ‘rally’.

Without doubt, that dollar index ‘rally’ in New York was the fig leaf that the powers-that-be used to hammer the precious metals during morning trading in New York.

There are no markets anymore, only interventions.”

Here’s the DXY chart, courtesy of Bloomberg as always.  Click to enlarge.

And here’s the 6-month U.S. dollar index chart from stockcharts.com — and the delta between its close…95.99…and the close on the DXY chart above, was 51 basis points on Thursday.  Click to enlarge.

The gold stocks opened up a bit once trading commenced at 9:30 a.m. EDT in New York on Thursday…but were soon headed very unsteadily lower.  Their respective lows came around 12:45 p.m…which was about fifteen minutes after the low tick was set in the gold price. They edged quietly higher from there — and back into positive territory by a bit until a few minutes after 3 p.m. EDT — and then traded sideways into the 4:00 p.m. close from there.  The HUI finished up 0.41 percent on the day.

It was almost exactly the same for the silver equities, except they rallied more at the open of trading — and a bit more off their 12:45 p.m. EDT low ticks, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 0.56 percent.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index updated with Thursday’s doji.  Click to enlarge as well.

The CME Daily Delivery Report showed that zero gold and 1 lonely silver contract was posted for delivery today within the COMEX-approved depositories on Monday. The silver contract was issued by Advantage — and stopped by the CME Group, which immediately re-issued it as 5 one-thousand ounce COMEX mini silver contracts.  As usual, ADM stopped them all.

The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in March declined by 2 contracts, leaving just 15 left.  Wednesday’s Daily Delivery Report showed that 2 gold contracts were actually posted for delivery today, so the change in open interest and deliveries match.  Silver o.i. in March fell by 56 contracts, leaving 45 left, minus the one contracts mentioned two paragraphs ago.  Wednesday’s Daily Delivery Report showed that 56 silver contracts were posted for delivery today as well, so the change in open interest and deliveries match in this precious metal as well.


For the second day in a row, there were no reported changes in either GLD or SLV.

There was another tiny sales report from the U.S. Mint yesterday.  They sold 1,000 troy ounces of gold eagles — and 500 one-ounce platinum eagles.  That was all.

There was no physical in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  But there was a paper transfer of 4,932 troy ounces from the Registered category — and back into Eligible.  That transaction occurred at JPMorgan.  I won’t bother linking this.

The only activity in silver was one truckload…600,297 troy ounces…that was received at CNT.  Nothing was shipped out.  The link to this is here.

There was a fair amount of movement over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 1,000 of them — and shipped out 5,175.  All this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Karun Treasure is the name given to a collection of 363 valuable Lydian artifacts dating from the 7th century B.C. and originating from Uşak Province in western Turkey.  They were the subject of a legal battle between Turkey and New York Metropolitan Museum of Art between 1987–1993…and were returned to Turkey in 1993 after the Museum admitted it had known the objects were stolen when they had purchased them. The collection is alternatively known as the Lydian Hoard.

The main and the most precious part of the treasure comes from a tomb chamber of a Lydian princess reached through illegal excavations carried out by three fortune-seekers from Uşak’s depending Güre village, at the proximity of which the tomb was located, at the locality called Toptepe. After having dug for days and unable to break through the marble masonry of the chamber door, they had dynamited the roof of the tomb in the night of 6 June 1966, to be the first to see the breathtaking sight of the buried Lydian noblewoman and her treasures after 2,600 years. The treasure looted from this particular tomb was enriched by further finds by the same men in other tumuli of the locality during 1966-1967. The collection was smuggled outside Turkey in separate dispatches through İzmir and Amsterdam, to be bought by the Metropolitan Museum of Art between 1967–1968, at an invoiced cost of $1.2 million for 200 of the pieces within the collection.

The collection made sensational news once again in May 2006 when a key piece, a golden hippocamp, on display in Uşak Museum along with the rest of the collection, was discovered to have been switched with a fake, probably between March and August 2005.

The ‘click to enlarge’ feature doesn’t help with any of these photos.

It was another very quiet day for news stories.  I have a Cohen/Batchelor interview, but I’ll save that for Saturday’s column.


CRITICAL READS

Three Reasons Why America Can’t Get a Grip — Bill Bonner

The U.S. is now an empire. It is controlled by a class of insiders (a.k.a. the Deep State), who benefit from government spending and debt.

They send troops all over the world, financed by debt, which makes them feel like big shots… and rewards their crony friends in the weapons industry.

They offer free education, free medical care, welfare, income redistribution, and every other cockamamie Bread and Circuses program to keep the mob satisfied – also financed by debt – and it helps them stay in power.

A small nation – such as Canada – that didn’t have the world’s reserve currency… and didn’t aspire to be the world’s hegemon… and where people had a realistic idea of what was being spent and why… and a residual sense of shame… might be able to buck its insiders.

But an empire? Its insiders have been corrupted by power. They don’t turn around… they don’t stop and ask themselves: “Are we doing the right thing?” They don’t say “please” or “thank you.” And they don’t abide by the rules of a civilized, win-win society… not even the financial rules.

Instead, they lurch and stumble… from embarrassment to absurdity to catastrophe… until they are defeated… or go broke.

Usually both.

This commentary from Bill showed up on the bonnerandpartners.com Internet site early on Thursday morning EDT — and another link to it is here.


What In The World Is Going On? — Dennis Miller

Is the British government going to ignore the will of their citizens and not leave the E.U.? The E.U.’s immigration policies are sparking political backlash and citizens are taking to the streets. In January, Bloomberg reported, “Mario Draghi Sounds Economic Alarm for the Euro-Area”, citing persistence of geopolitical uncertainties.

What in the world is going on?

It’s time to turn to the international member of our panel of experts, Rob Vrijhof, managing partner of Weber Hartmann Vrijhof & Partners Ltd., Swiss international asset managers, for a worldwide perspective.

DENNIS: Rob, thank you for taking your time to help educate our readers.

It’s impossible to look at the investment markets without factoring in the worldwide political environment.

Before we get into investment details, can you bring us up to date on what’s happening in Europe and the investment implications?

This longish, but very interesting interview was posted on the milleronthemoney.com Internet site on Thursday morning — and another link to it is here.


Armed terrorist cell’: Venezuela’s Interior Minister confirms arrest of Guaido’s aide

Venezuela’s Interior Minister has confirmed the arrest of self-proclaimed ‘interim president’ Juan Guaido’s chief of staff. The opposition claims he was ‘kidnapped’ while authorities say he was the leader of a ‘terrorist cell.’

Roberto Marrero was taken into custody on Thursday as part of the government raid against a “terrorist cell” that plotted to carry out attacks against top Venezuelan politicians, the Minister of the Interior, Justice and Peace, Néstor Reverol, said in a statement.

Together with the Public Prosecutor’s Office, the investigations led to the detention of the citizen, Roberto Eugenio Marrero Borgas, who is directly responsible for the organization of criminal groups,” he said.

The government also released images of two rifles allegedly seized by the Venezuelan Bolivarian National Intelligence Service (SEBIN) during the raid on Marrero’s house.

Guaido had earlier accused the Venezuelan security forces of ‘planting’ weapons at Marrero’s house, while John Bolton, U.S. President Donald Trump’s national security adviser, immediately denounced Marrero’s arrest as “illegitimate” and stressed that the move will “not go unanswered.”

This news item appeared on the rt.com Internet site at 9:53 p.m. Moscow time on their Thursday evening, which was 4:53 p.m. on Thursday afternoon in Washington — EDT plus 7 hours.  The first reader through the door with this story was George Whyte — and another link to it is here.


Trump’s Mideast Bombshell: U.S. Must Back Israeli Sovereignty Over Golan Heights

President Trump has with a single bombshell tweet rattled an already tense and war-torn region by announcing “it is time” for the U.S. to “fully recognize Israel’s sovereignty” over the Golan Heights.

After 52 years it is time for the United States to fully recognize Israel’s Sovereignty over the Golan Heights, which is of critical strategic and security importance to the State of Israel and Regional Stability,” Trump tweeted midday Thursday, marking a dramatic reversal of U.S. policy which has historically alongside global international allies seen it as occupied territory.

The impact has been immediately felt in Israeli politics, where politically embattled Prime Minister Benjamin Netanyahu stands less than three weeks away from his toughest election yet — after a campaign marred by multiple formal charges of corruption and ongoing state investigations.

Trump’s tweet, and apparent willingness to move forward on the White House’s long signaling that it would dramatically shift policy from prior administrations, hands Netanyahu a huge foreign policy victory and boosts his stature domestically, after he recently renewed a diplomatic push with Trump for the U.S. to recognize the Golan Heights as part of Israel.

Beyond Trump’s shock Thursday tweet, it’s unclear if the White House will release additional specifics or a timeline on any formal recognition. Israel fully annexed the Golan Heights in 1981 after capturing it from Syria during the Six-Day War of 1967. The United Nations has never recognized Israeli annexation and settlement there, but has repeatedly condemned it.

Well, dear reader, Finian Cunningham’s commentary/opinion piece on this issue in yesterday’s column headlined “Oil profits grease Trump administration’s move to recognize Israeli annexation of the Golan Heights” was very prescient.  The above news story was posted on the Zero Hedge website at 4:21 p.m. EST on Thursday afternoon — and I thank Brad Robertson for sending it along.  Another link to it is here.


Basel III & Gold: The Big Picture — Mike Maloney

There has been a lot of talk lately about Basel III and a potential return to a gold standard. Find out what it is, and what Mike Maloney feels is happening in today’s latest update.

This 10-minute video presentation from Mike is a very good outline about what may or may not happen when the Basel III rules come into effect at the end of next week.  It was posted on the goldsilver.com Internet site yesterday — and it’s certainly worth watching.  The first person to drop this in my in-box yesterday was Jim Gullo.


U.S. Silver Production The Lowest In More Than 70 Years

With the latest release by the USGS, silver production in the U.S. is now the lowest in more than 70 years.  We have to go all the way back until the year after World War II ended to see U.S. silver production less than it was in 2018.  While many reasons can be attributed to the decline, the main factors are falling ore grades and mine economics.

Unfortunately, there just aren’t too many economic silver deposits in the United States, especially with the high level of environmental and governmental regulations.  Instead of dealing with all the bureaucracy, companies are looking to Mexico and South America to open new silver projects.

Regardless, U.S. silver production declined by more than 100 metric tons last year, or 10% in 2018, mainly due to the ongoing closure of the Lucky Friday Mine in Idaho.  The Lucky Friday Mine has been shut down ever since the United Steelworkers went on strike on March 13, 2017.  However, the drop off in silver mine supply can’t all be blamed on the Lucky Friday Mine.  Domestic silver production has been trending lower for the past two decades.

In 2000, the U.S. produced 63.7 million oz (1,980 metric tons) of silver compared to just 29.7 million oz (923 metric tons) last year.  Thus, U.S. silver production has fallen by more than 50% in less than two decades.  Silver production in the U.S. ramped up significantly during the 1990s due to the McCoy-Cove Silver Mine in Nevada.  At its peak, the McCoy-Cove Mine supplied 20% of the total U.S. silver production.

This chart-filled silver-related article appeared on the srsroccoreport.com Internet site on Wednesday sometime — and I thank Brad Woodward for pointing it out.  Another link to it is here.


Russia back on gold reserve track…adds another million troy ounces — Lawrie Williams

After two months of adding relatively small amounts of gold to its Forex reserves, Russia appears to be back on track in adding 1 million ounces (31.1 tonnes) of gold to its reserves in February according to the latest figures from the country’s central bank.  Russia, according to the IMF’s official statistics, moved ahead of China as the world’s fifth largest national gold holder in January 2018 and has extended its lead over China almost every month since – at least as far as figures reported to the IMF suggest, although officially reported Chinese gold reserve figures are thought to substantially under-represent the true picture!

With the latest addition to its reserves, Russia holds around 2,144 tonnes of gold in its fores reserves as compared with China’s 1,862 tonnes.  If the former keeps adding to its reserves at around 30 tonnes a month it could move ahead of France’s fourth placed 2,436 tonnes by the end of this year and surpass Italy’s 2,451.8 tonnes a month later!  Whether this will then be sufficient to end the country’s gold reserve building exercise, or whether it will then have Germany’s 3,369.7 tonne gold reserve in its sights, remains to be seen.

Russia has all but eliminated U.S. dollar related holdings from its reserve total as a defensive measure against current and potential U.S. economic sanction.  It would appear that expanding its gold holdings, alongside other strong currencies in place of the dollar, is an integral part of its reserve diversification policy.

This commentary by Lawrie put in an appearance on the Sharp Pixley website yesterday morning — and another link to it is here.


Switzerland Gold exports to China, India plunge in February

The most recent trade data show weak exports of gold last month to the key buying nations of China and India, although India’s demand is likely to pick up due to lower prices in the local currency said Commerzbank in a snippet.

Analysts cited data from the Swiss Federal Customs Administration showing that Switzerland exported only 11.4 tons of gold to China and Hong Kong in February. Exports to India totaled 15.8 tons, a year-on-year decline of 43%.

By contrast, figures published nearly two weeks ago by the Indian Ministry of Finance had pointed to a revival of Indian gold demand,” Commerzbank noted.

They indicated that the wedding season saw India import more gold in February than a year earlier (70.7 tons).

Indian gold imports are likely to gain further momentum in the next few months as gold prices in Indian rupees have fallen sharply since mid-February, and the upcoming elections should generate increased gold demand among the rural population, Commerzbank added.

The above five paragraphs are all there is to this gold-related news story that was posted on the scrapregister.com Internet site on Friday sometime — and it’s another article that I found on the Sharps Pixley website.  Another link to it is here.


On The Hot Seat — Jim Cook interviews Ted Butler

Q: A minor analyst recently remarked that he didn’t believe any of the claims you make about market manipulation and called it conspiratorial stuff. What do you say about that?

A: That’s the main reason my arguments have never caught on in a big way. Nobody wants to be associated with a conspiracy. However, I draw my conclusion from government data like the Commitment of Traders report and the Bank Participation report. There’s nothing conspiratorial about the data and my conclusions are factual.

Q: You have cast JPMorgan as the main villain in a market manipulation of silver. Hundreds, maybe thousands of people have queried the main regulator, the CFTC, about this manipulation and they have never responded to anyone. Are they writing us all off as conspiracy nuts?

A: They would probably like to. The Justice Department just indicted a JPMorgan trader for spoofing and indicated their investigation of this highly manipulative tactic was ongoing. Normally this comes under the jurisdiction of the CFTC. Why did they miss or ignore this practice when I told them about it a hundred times? We need an explanation.

Q: JPMorgan would certainly claim they are doing nothing wrong.

A: For ten years they have held the largest short position on the COMEX and in collusion with other banks, they have acted to suppress the price. Meanwhile they have accumulated a vast hoard of physical silver in their own COMEX warehouse and elsewhere. I call this an illegal market manipulation on steroids. Somebody please tell me where I’m wrong.

This must read Q&A between Jim and Ted put in an appearance on the silverseek.com Internet site at 9:10 p.m. on Thursday evening Denver time — and I found it in a GATA dispatch that Chris Powell filed from Saigon on their Friday morning.  Another link to it is here.


The PHOTOS and the FUNNIES

Welcome to Coalmont…on the way to Otter Lake and Tulameen.  The ‘tourist area’ is in the first shot, along with the hotel right across the street, which is open on and off during the summer months.  It was closed when we were there — and just peering in the windows, I could see why.  The town is home to less than 100 people.  The Kettle Valley Railway used to run through this place as well.  The ‘click to enlarge‘ feature only helps with the first shot.


The WRAP

Once in a while you will stumble upon the truth, but most of us manage to pick ourselves up and hurry along as if nothing had happened.” — Winston Churchill


Well, the Plunge Protection Team was busy again on Thursday, trying to reverse all the damage that was done on the Fed news on Wednesday — and for the most part, they were successful.  And as the King Report mentioned in Friday’s column…”There is not much to say about what might occur [on Friday] — and little reason to speculate on probable outcomes, when the market is being rigged and fearlessly manipulated.”  That was obvious across the board in the equity markets, the dollar index, bonds — and the precious metals.

There are no markets anymore…only interventions.”

But I noticed that despite their efforts, they couldn’t/didn’t get gold back below $1,300 spot yesterday — and despite the engineered price declines in all four precious metals, the silver and gold equities managed to squeeze out slightly positive closes.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  You should carefully note that the post-COMEX close high prices on Wednesday afternoon in New York, show up on Thursday’s dojis.  Click to enlarge for all.

And as I post today’s column on the website, the London open is just minutes away — and I see that the gold price traded flat until around noon China Standard Time on their Friday morning — and then dipped lower by a few dollars. But shortly after 1:30 CST on their Friday afternoon, it began to edge higher — and is now up $3.30 the ounce. Silver traded pretty flat until the 2:15 p.m. CST afternoon gold fix in Shanghai — and it too began to creep higher — and is up a whole 7 cents. Platinum got hammered lower two hours after trading began in New York on Thursday evening — and it was down 10 bucks by around 8:20 a.m. CST. But it came roaring back, before trading sideways until shortly after 1 p.m. CST. Like gold, it began to head higher from there — and is back in the green by by 4 bucks. Palladium also go the ‘platinum treatment’ in early Far East trading, but it was back at unchanged two hours later — and began to head sharply higher around 3 p.m. CST — and is now up 3 dollars as Zurich opens.

Gross gold volume is around 49,500 contracts — and minus the current roll-over/switch volume out of April and into future months, net HFT gold volume is pretty light at 33,500 contracts. Net HFT silver volume is about 9,200 contracts — and there’s a tiny 158 contracts worth of roll-over/switch volume in that precious metal.

The dollar index opened down 17 basis points the moment that trading began around 7:45 p.m. EDT in New York, which was 7:45 a.m. in Shanghai. It rallied a bit for the next forty-five minutes, but turned lower at that point — and the dollar index is now down 26 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.


NOTE: Because of the switch over to Daylight Saving Time in North America two Sunday’s ago, I’m not staying up the extra hour to record the first hour of London/Zurich trading.  Britain and Europe don’t go on British Summer Time [BST] and Central European Summer Time [CEST] until this Sunday.  Once they do the switch-over to BST and CEST, then I’ll resume the usual routine of commenting on the first hour of trading in both those markets.


Today, around 3:30 p.m. EDT, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday.  As I mentioned in Thursday’s missive, I wasn’t about to venture a guess as to what might be in it after my horrendous miss on last week’s COT Report.  Silver analyst Ted Butler had this to say about it in his mid-week commentary on Wednesday…”As far as what lies ahead in this week’s COT report to be issued on Friday, price action doesn’t suggest significant changes, although there is typically a surprise or two “under the hood”.As always, my attention will be focused on what I might uncover about JPMorgan’s activities.

With today being the last trading day of the week, I’m wide open for any eventuality as the Friday trading session in the precious metals moves along.  Nothing will surprise me considering the fact that the big April delivery month is coming up for gold — and options and futures expiry for that month will be upon us next week.

Have a good weekend — and I’ll see you here tomorrow.

Ed