Ted Butler: Why is JPMorgan Above the Law?

25 June 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Gold’s attempted rally at the 6:00 p.m. open in New York on Sunday evening, ran into ‘something’ almost right away — and it was sold quietly lower until around noon in Shanghai on their Monday morning.  It traded quietly sideways until around 9:20 a.m. in London — and then began to edge unevenly higher from there.  It closed in New York at 5:00 p.m. EDT, almost on its high tick of the day.

The low and highs in this precious metal were reported by the CME Group as $1,403.60 and $1,425.10 in the August contract.

Gold finished the Tuesday session at $1,419.20 spot, up $20.20 on the day.  Net volume was monstrous once again at 362,000 contracts — and there was a hair over 15,000 contracts worth of roll-over/switch volume on top of that.

Silver’s tiny rally in Far East trading on their Monday morning ran into the same not-for-profit sellers — and it was forced to chop sideways until 9 a.m. in New York — and it was down 3 cents on the day at that point.  It chopped very quietly higher from there until around 4 p.m. in the thinly-traded after-after hours market in New York — and didn’t do much after that.

The low and high ticks really aren’t worth looking up, but here they are anyway…$15.285 and $15.455 in the July contract.

Silver was closed in New York yesterday at $15.405 spot, up 8.5 cents from Friday.  Net volume was a bit higher than average at a bit under 57,500 contracts, but roll-over/switch volume out of July and into future months was enormous at a bit over 59,000 contracts.

The platinum price was up five dollars or so by shortly after 8 a.m. China Standard Time on their Monday morning — and from that juncture, it chopped very unevenly sideways for the remainder of the day.  Platinum finished the Monday session at $812 spot, up 5 bucks from its close on Friday.

Palladium crept unevenly higher until around 11:30 a.m. CST — and then didn’t do a whole lot of anything until, like silver, began to head higher at 9 a.m. in New York.  That rally was capped and turned lower just before 3 p.m. in after-hours trading, just as it looked like it really wanted to fly.  Palladium was closed at $1,518 spot, up 34 dollars from Friday.

The dollar index closed very late on Friday afternoon in New York at 96.22 — and opened down 4 basis points once trading commenced at 6:30 p.m. EDT in New York on Sunday evening, which was 6:30 a.m. CST on their Monday morning.  From that point it was a quiet, but steady roller coaster ride lower for the entire Monday trading session everywhere on Planet Earth — and the dollar index finished the day at 95.98…almost on its low tick…down 24 basis points from Friday.

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

And here’s the 6-month U.S. dollar index chart from the good folks over at the stockcharts.com Internet site.  The delta between its close…95.49…and the close on the DXY chart above, was 49 basis points on Monday.  Click to enlarge as well.

The gold stocks gapped up a percent and change at the 9:30 a.m. open in New York on Monday morning, but were sold back to unchanged by the 10 a.m. EDT afternoon gold fix in London.  They began to head unevenly higher from there — and the HUI closed on its high tick of the day, up 2.98 percent.

The rally in the silver equities was similar, but even more uneven.  They also ended up closing on their respective highs of the day as well.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 2.83 percent.  Click to enlarge.

Here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, updated with Monday’s doji.  Click to enlarge as well.

The CME Daily Delivery Report showed that 61 gold and 4 silver contracts were posted for delivery today within the COMEX-approved depositories on Wednesday.

In gold, the only two short/issuers were Advantage and ABN Amro, with 53 and 8 contracts out of their respective client accounts.  There were seven long/stoppers in total — and the only one that really mattered was Advantage, as they picked up 47 contracts for their client account.  The CME Group stopped 3 contracts for its own account, which it immediately reissued as 3×10=30 ten-ounce mini COMEX gold contracts.  ADM picked up 16 of them — and Advantage took possession of the other 14…all for their respective client accounts.

The four silver contracts were issued by Advantage out of its client account — and stopped by Scotia[Bank] Capital for its in-house/proprietary trading account.

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 June rose by 33 contracts, leaving 196 still open, minus the 61 contracts mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that only 2 gold contracts were actually posted for delivery today, so that means that 33+2=35 more gold contracts just got added to the June delivery month.  Silver o.i. in June fell by 98 contracts, leaving just 4 left — and those are obviously out for delivery on Wednesday, as per the Monday’s Daily Delivery Report above.  Friday’s Daily Delivery Report showed that 102 silver contracts were actually posted for delivery today, so that means that 102-98=4 more silver contracts just got added to June.


There was a deposit into GLD yesterday, as an authorized participant added 94,354 troy ounces.  There were no reported changes in SLV.

I reported in my Saturday column that both GLD and SLV were owed “copious amounts” of precious metals.  In his Saturday column, Ted figured that SLV was owed around “5 to 6 million ounces“, but that the amount of gold being deposited in GLD looked “about right“.  So I stand corrected on the gold figure.

I gotta ‘fess up here, dear reader.  I made an error in GLD in my Saturday column…a 1 million ounce reporting error to be precise.  The one-day addition on Friday was so large, that I missed the million ounce change.  I reported that GLD added 122,855 troy ounces.  In actual fact, it was 1,122,855 troy ounces.  That’s a lot!  No wonder Ted said that it looked “about right”.  I will be more careful next time.  Lawrie Williams has a story about this in the Critical Reads section further down.

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, June 21 — and this is what they had to report.  Their gold ETF added 28,011 troy ounces — and their silver ETF increased by 233,383 troy ounces.

There was a small sales report from the U.S. Mint on Monday.  They sold 160,000 silver eagles — and that was all.

There was a tiny bit of movement in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  They reported receiving 2,031 troy ounces — and all of that arrived at Manfra, Tordella & Brookes, Inc.  Nothing was shipped out.  I won’t bother linking this amount.

There was very little activity in silver as well.  Nothing was reported received — and only 42,901 troy ounces was shipped out.  That activity was at Canada’s Scotiabank.  But there was a paper transfer of 603,268 troy ounces…one truck load…from the Registered category — and back into Eligible over at CNT.  I would think that Ted would suspect that this silver now belongs to JPMorgan — and the transfer was done to save on storage fees.  The link to this is here.

It was also very quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They didn’t receive any — and only 57 were shipped out.  That activity was at Brink’s, Inc. — and shan’t bother linking it, either.


Here are the usual two charts that Nick passes around every weekend.  They show the amount of physical gold and silver that are in all known depositories, mutual funds and ETFs as of the close of business on Friday, June 21 — and it was a busy week for all of them.  The net amount of gold deposited during the reporting week was 833,000 troy ounces — and that net number in silver was a very hefty 6,747,000 troy ouncesClick to enlarge for both charts.

I have an average number of stories for you today.


CRITICAL READS

America’s Fake Money Will Get Fakier — Bill Bonner

Money is one of the primary measures of value in any society, perhaps the primary one, the principal repository of value. As such, money is a central source of stability, continuity, and coherence in any community. Hence to tamper with the basic money supply is to tamper with a community’s sense of value. By making money worthless, inflation threatens to undermine and dissolve all sense of value in a society.” – Paul A. Cantor

Last week, the Fed said it still had investors’ backs. There would be no rate hike, said the Fed’s Jay Powell. Conspicuous by its absence was the word “patient” from Powell’s remarks. The implication being that rate cuts could be up next.

And then, according to Bloomberg:

Fed Loses Its Patience and Almost Everything You Can Trade Goes Nuts

Stocks rose to records, bonds surged, oil jumped almost 10% and even gold got into the act, as traders celebrated a dovish conversion at the Federal Reserve. One back-of-the-envelope measure shows the rally in everything was the strongest since 2011.”

And:

Bitcoin traded above $11,000 for the first time in 15 months, recouping more than half of the parabolic increase that captured the attention of mainstream investors before the cryptocurrency bubble burst last year.”

What to make of it?

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


More than 7,100 stores are closing in 2019 as the retail apocalypse drags on — here’s the full list

The staggering rate of store closures that has rocked the retail industry over the past couple of years is expected to continue in 2019, with roughly the same level of closures expected this year.

Retailers closed a record 102 million square feet of store space in 2017, then smashed that record in 2018 by closing another 155 million square feet, according to estimates by the commercial real-estate firm CoStar Group.

This year we are predicting more of the same in the retail space,” CoStar senior consultant Drew Myers said.

Retailers have announced more than 7,100 store closures so far this year, according to an analysis by Business Insider.

Here’s a list of all the stores closing this year…

This news story showed up on the businessinsider.com Internet site on Monday sometime — and I thank Swedish reader Patrik Ekdahl for sending it our way.  Another link to it is here.


U.S. lapdog Jeremy Hunt prepping British public for war with Iran, just in case Trump asks

Britain will “stand by” its ally and consider offering military support if the Trump administration decides to go to war with Iran, Jeremy Hunt has confirmed — words from the foreign secretary that are unlikely to come as a shock.

With the U.S. doing its level best to raise tensions with Iran, Hunt has revealed himself to be every bit the pathetic poodle of Washington that Tony Blair and ex-foreign secretary Jack Straw were in 2003 before the invasion of Iraq.

Campaigning for the Tory leadership in Scotland on Monday, Hunt pretended to be “very concerned” about the recent attacks on oil tankers in the Gulf of Oman, which he claimed were “almost certainly” the work of Iran. He offered no new evidence, of course — but then again, he didn’t need it; “instinct” had already told him that the Trump administration’s chief warmongers, John Bolton and Mike Pompeo, were telling him the truth.

U.S. requests for military support would be evaluated on a “case-by-case” basis, Hunt said, adding that the British government wanted to “de-escalate the situation” with Iran. Readers might recall it was only last week that Hunt branded Labour leader Jeremy Corbyn “pathetic and predictable” and accused him of “incredibly dangerous … virulent anti-Americanism” for the sin of calling for de-escalation — so let the level of the foreign secretary’s sincerity be calculated with that in mind.

Hunt was right about one thing, though. Corbyn’s reaction was indeed predictable. When one million gathered for a massive anti-war rally at London’s Hyde Park in February 2003, Corbyn was there, making an impassioned and prophetic speech against the impending invasion of Iraq — a war in which he said there would be “no justice whatsoever” and which would “set off a spiral of conflict, of hate, of misery, of desperation” that would only fuel more terrorism.

This commentary/opinion piece was posted on the rt.com Internet site at 6:04 p.m. Moscow time on Monday afternoon, which was 11:04 a.m. in Washington — EDT plus 7 hours.  It comes to us courtesy of George Whyte — and another link to it is here.


False Flag Time — Jeff Thomas

U.S. Secretary of State Mike Pompeo was quick to state to the press, “Taken as a whole, these unprovoked attacks present a clear threat to international peace and security, a blatant assault on the freedom of navigation and an unacceptable campaign of escalating tension by Iran.” Ah, so this is now a trend.

He provided no evidence or specific details and took no questions from the press. Yet, the Associated Press backed Mr. Pompeo’s claim, stating, “The U.S. blamed Iran for suspected attacks on two oil tankers.”

Interesting… If we read this statement carefully, it’s uncertain as to whether attacks have occurred at all, yet Iran has been blamed in advance of any certainty, in case attacks might have occurred.

For its part, Iran also issued a statement – that it “categorically rejects” the U.S. claim and condemns any attack that may have occurred. Iran stated further that it “stands ready to play an active and constructive role in ensuring the security of strategic maritime passages.” It warned of “U.S. coercion, intimidation and malign behavior” and expressed its concern “over suspicious incidents.”

Well, it appears someone’s fibbing here. We can’t be certain who, but whenever one nation accuses another of an attack but offers no evidence, no details and is unwilling to answer questions, the antennae should go up as to whether it’s a false-flag episode.

False-flag accusations have taken place in the U.S. for quite a long time. In 1692, seventeen-year old Elizabeth Hubbard accused someone of being a witch, providing herself with instant celebrity in her hometown of Salem, Massachusetts. Once in the limelight, Elizabeth pointed out quite a few other witches. Hysteria broke out and over two hundred people were eventually accused, with nineteen being tried and executed.

When the people of Salem calmed down, they realized they’d been rather rash, and the Salem Witch Trials have remained an embarrassment for three hundred years.

This very interesting and worthwhile commentary from Jeff appeared on the internationalman.com Internet site early on Monday morning EDT — and another link to it is here.


Zimbabwe ends decade of dollarisation in new currency reform

Zimbabwe made its interim currency the country’s sole legal tender on Monday, ending a decade of dollarisation and taking a another step towards relaunching the Zimbabwean dollar.

The central bank also hiked its overnight lending rate to 50% from 15% as a part of a set of measures to protect the RTGS dollar introduced in February.

The march towards full currency reform is part of our transitional stabilisation programme,” Finance Minister Mthuli Ncube said in a video posted on Twitter.

This move is really beginning to restore full monetary policy.”

Zimbabwean President Emmerson Mnangagwa, who replaced longtime leader Robert Mugabe after an army coup in November 2017, is trying to repair an economy ruined by hyperinflation and a long succession of failed economic interventions.

Van Der Linde said banning the use of currencies such as the U.S. dollar and South African rand could create panic, since Zimbabwe did not have large foreign-currency reserves to back the RTGS dollar.

This Reuters article, filed from Harare, put in an appearance on their Internet site at 3:17 a.m. EDT on Monday morning — and I found it embedded in a GATA dispatch.  Another link to it is here.


As China’s Banking System Freezes, SHIBOR Tumbles to Lowest in a Decade

One trading day after we reported that China was “Hit By Significant Banking Stress” as SHIBOR tumbled to recession levels, and less than a week after we warned that China’s interbank market was freezing up in the aftermath of the Baoshang Bank collapse and subsequent seizure, which led to a surge in inter-bank repo rates and a spike in Negotiable Certificates of Deposit (NCD) rates…Click to enlarge.

… China’s banking stress has taken a turn for the worse, and on Monday, China’s overnight repurchase rate dropped to its lowest level in nearly 10 years, after the central bank’s repeated liquidity injections to ease credit concerns in small-to-medium banks: The rate fell as much as 11 basis points to 0.9861% on Monday, before being fixed at exactly 1.000%.  Click to enlarge.

Seeking to ease funding strains after the Baoshang collapse and to unfreeze the financial channels in the banking sector, the PBOC has been injecting cash into the financial system to soothe credit risk concerns in smaller banks following the seizure of Baoshang Bank, which sent shock waves through China’s markets.

Also helping drive the rate lower is China’s move to allow brokerages to issue more debt, said ANZ Bank’s Zhaopeng Xing, quoted by Bloomberg. As a result, at least five brokerages had their short-term debt quotas increased by the People’s Bank of China in recent days, according to filings.

The improved access to shorter-term debt will cut costs for brokerages compared with alternative funding sources such as bond issuance. The flip side, of course, is that the lower overnight funding rates drop, the greater the investor skepticism that China’s massive, $40 trillion financial system is doing ok, especially since the last time overnight funding rates were this low, the near-collapse of the global financial system was still fresh and the S&P was trading in the triple-digits.

Commenting on the ongoing collapse in SHIBOR, Commodore Research wrote overnight that “low SHIBOR lending rates are supposed to be supportive and accommodative in nature — but rates are now at the lowest level seen this decade and  are very likely an indication that China is facing significant banking stress at the moment. It is extremely rare for the overnight SHIBOR lending rate to be set as low as 1.00%. This previously had not all been seen this decade, and the last time it occurred was during the financial crisis in 2008 – 2009.”

This worthwhile commentary appeared on the Zero Hedge website at 5:25 p.m. EDT on Monday afternoon — and another link to it is here.


GLD adds massive 35 tonnes of gold Friday — Lawrie Williams

If anything demonstrates the huge change of investor sentiment towards gold, the addition of a massive 34.93 tonnes of gold into SPDR Gold Shares (GLD), the world’s largest gold ETF on Friday provides an extremely strong demonstration  At Friday’s close the amount of gold held by GLD came to 799.03  tonnes – GLD’s gold holdings had fallen back to around 733 tonnes as recently as mid-May.

Indeed the massive single day increase in the GLD gold holding should not have taken gold followers by surprise given the big increase in the gold price over the past week, and reports that CEOs of some of the largest, and most successful, hedge funds had been going on record as singing gold’s praises.  The surprise had perhaps been that over the prior few days GLD intake had been somewhat muted given the gold price performance over the same period, but this had caused some observers to speculate that perhaps the ETF was having problems sourcing enough gold to match any recent increase in investment in the funds.  This seems to be a logical explanation and the eventual success in accumulating the additional gold has perhaps been one of the factors in gold’s recent strength.

Although, as we speculated on Friday, gold was not allowed by the big financial and political powers that be to end the week above the psychological $1,400 level, overnight trade in Asia, and this morning’s in Europe, has been pushing the gold price up towards the $1,410 level.  The big question now is will the American futures markets try to bring the price back down again when they open in just over two hours time.  If there is no immediate pullback then gold could easily be marked up to the $1,420s today and perhaps $1,500 by the end of the northern summer.

This worthwhile commentary by Lawrie put in an appearance on the Sharps Pixley website on Monday morning BST — and another link to it is here.


Can You Buy Gold at a 25% Discount? Yes…If You Buy it in U.S. Dollars — Mike Maloney

If you buy gold in U.S. dollars, you’re in luck, because whether you realize it or not, you have made a killing against almost every other currency in the world.

It may be hard to believe with gold about 25% below its all-time U.S.-dollar high, but 72 different countries have seen gold hit an all-time high in their currencies this year.

Like in Canada. Live north of the United States border, and this is what your gold chart looks like right now.  Click to enlarge.

Want to buy gold in Australian dollars right now? It has never cost more.  Click to enlarge.

But both of those pale in comparison to how well gold has held its value against the Argentine Peso.  Click to enlarge.

This very worthwhile 10-minute video presentation from Mike showed up on the goldsilver.com Internet site on Monday — and I thank Harold Jacobsen for pointing it out.  Another link to it is here.


From Nazis to refineries: How Switzerland has handled the world’s gold

A new book exposes the dark history of gold laundering in Switzerland and the modern challenge of cleaning up a lucrative industry. This is the story of the Alpine nation’s dominance over global gold trade.

Written by Swiss anti-corruption watchdog Mark Pieth, Gold Laundering – the dirty secrets of the gold trade and how to clean up shines a light on the key players in the gold industry, the different risks associated with large-scale versus artisanal mining, and the shortcomings of various international regulations and certification schemes.

How did we get here? In a discussion with swissinfo.ch, Pieth explained the history of how Switzerland came to be at the heart of a highly profitable but opaque trade. These are some of the key historical moments in the Swiss gold story, according to him.

This very interesting commentary/book review was posted on the swissinfo.ch Internet site on Sunday — and it’s something I found on the gata.org Internet site.  Another link to it is here.


OCC Report: JPMorgan Chase and Citibank Control 76 Percent of all Precious Metals Contracts at 5,362 Federally-Insured Banks

As of March 31 of this year, there were 5,362 Federally-insured commercial banks and savings associations in the United States. Just two of these banks, JPMorgan Chase NA and Citibank NA control 75.7 percent of all precious metals derivatives contracts held by all of the 5,362 Federally-insured banks and savings associations. This finding comes from a report released last week by the regulator of national banks, the Office of the Comptroller of the Currency (OCC). (See Table 9 in the Appendix of the OCC report.)

Commercial banks are supposed to be making safe and sound business loans to keep the U.S. economy humming, creating good-paying jobs and making America competitive around the world. But according to the latest OCC report, of the $38.57 billion held in precious metals derivative contracts by all Federally-insured banks and savings associations in the U.S., JPMorgan Chase Bank NA held $17.509 billion and Citibank NA held $11.691 billion. JPMorgan Chase is currently under a criminal probe by the U.S. Department of Justice involving precious metals trades.

Equally concerning, the trading of precious metals derivative contracts by Federally-insured banks has grown exponentially since 2001. At that time it represented less than $5 billion. During the financial crisis in 2008 and 2009, precious metals derivative contracts at the banks were less than $15 billion. They have more than doubled since that time.

The weirdness doesn’t stop there. According to the latest OCC report, JPMorgan Chase Bank NA holds $2.4 trillion in stock (equity) derivative contracts – which represents 64 percent of all stock derivative contracts held by all 5,362 Federally-insured banks in the United States. If you include the stock derivative contracts held by Citibank, Goldman Sachs Bank USA (yes, the Great Vampire Squid is allowed by its regulators to own a  Federally-insured bank) and Bank of America NA, together with the stock derivative contracts held by JPMorgan Chase Bank, you have 93 percent of all equity derivative contracts held by all 5,362 Federally-insured banks in the U.S. (See Table 10 in the Appendix of the latest OCC report.)

And, dear reader, if you include HSBC USA, which doesn’t appear on this OCC list because its overall derivatives position is smaller, then that 93% in the last paragraph would jump to 99+%.  These are the four U.S. banks that show up in every Bank Participation Report — and are almost always the Big 4 traders in the COT Report.  It’s an American-let price management scheme.  This longish, but very worthwhile commentary appeared on the wallstreetonparade.com Internet site yesterday — and I thank I thank Walter Stepko for sharing it with us.  Another link to it is here.


Ted Butler: Why is JPMorgan Above the Law?

There are two final arbiters in matters of commodity and antitrust law in the US. The federal commodities regulator, the Commodity Futures Trading Commission (CFTC), is responsible for resolving civil infractions in regulated futures trading and the Department of Justice, is the final adjudicator for interstate commodity matters on both a civil and criminal basis.

In regards to the CFTC, the public record indicates the agency was involved in investigating and reviewing allegations of a silver price manipulation on multiple occasions both before and after JPMorgan took over Bear Stearns and it became the largest short seller in COMEX silver and gold futures in March 2008 and would remain so until the present time. The agency began a five-year formal investigation of a potential COMEX silver manipulation in September 2008 that ended inconclusively five years later. Any involvement by JPMorgan in potentially manipulating the silver market was never mentioned by the CFTC, as is typical government policy.

However, a recent interview with Bart Chilton, a CFTC commissioner at the time of JPMorgan’s acquisition of Bear Stearns and front line witness to JPM’s ascension to the role of most dominant COMEX silver short seller, basically confirmed that the agency was in a running battle at the time to get JPMorgan to reduce its excessive silver short position. The CFTC’s efforts to get JPMorgan to reduce its manipulative short position were unsuccessful, both at the time and for the following eleven years. Sadly and shockingly, Chilton passed away weeks after his interview of a natural cause he had to know would shortly end his life. There can be little doubt that Chilton wanted to go on the record about JPMorgan and silver before his coming certain demise. There is now a written transcript of Chilton’s last interview with Chris Marcus.  It’s worth reading — and is linked here.

A measured review of the public record and Bart Chilton’s last interview leaves little doubt that the CFTC (accompanied with interest and involvement from the Justice Department at the time) tried and failed to rein in JPMorgan from excessive and manipulative short selling in COMEX silver staring in 2008. Emboldened by its success in rebuffing CFTC and Justice Department efforts to limit its short selling in COMEX silver (and gold) futures contracts to manipulate prices to be artificially depressed, JPMorgan embarked on a new strategy in early 2011, namely, to begin to accumulate as much physical silver and gold as it could to take advantage of the low prices it created by excessive futures short sales.

This commentary from Ted, which is definitely worth reading, was posted on the silverseek.com Internet site on Friday.  Ted never told me about it until yesterday, or I would have posted it in my Saturday column.  Another link to it is here.


The PHOTOS and the FUNNIES

Here are the last three photos from our quick dash to Wells Gray Provincial Park on May 4.  The first is a small unnamed falls just below the Dawson Falls photo that graced Saturday’s column.  The second is just outside the park entrance looking south in the direction of Kamloops.  The last photo is from the Yellowhead Highway looking north in the general direction of Clearwater and Wells Gray, from whence we’d just come.  This photo cost me CAN$84…as that was the amount of the ticket that the nice RCMP constable gave me for pulling a U-turn in the middle of the highway to get this shot.  The guy had no sense of humour at all.  The horizontal gash in the rocks on the mountains on the right is the CN Rail right-of-way.  Click to enlarge.


The WRAP

The illegal we do immediately. The unconstitutional takes a little longer.” — Henry Kissinger


Although I was more than delighted to see gold up on the day, it’s obvious that if you spend a handful of seconds looking at the Monday trace on the Kitco chart at the top of the column, that this is very controlled rise.  No tiny uptick escapes the attention of ‘da boyz’.  And silver isn’t being allowed to get very far at all.

Gold is very overbought…a condition that could last a while.  But the ‘Danger’ flags are still snapping in the ever-increasing COMEX wind, as JPMorgan et al are now loaded up on the short side, as they have been taking the opposite side of the Managed Money traders…as usual, as they puke up shorts and go long.

This state of affairs has been ongoing since the ‘rally’ began some weeks ago.  At some point, ‘da boyz’ will pull the pin on these traders — and flush them out for fun, profit — and price management purposes.  But whatever damage is done during that event, will still leave the bull market in gold intact.  The only question remaining is when they will allow silver to join the party.

But there’s still the remote possibility that some of the commercial traders, particularly the smaller ones, will get into some sort of financial difficulty with margin calls, like Bear Stearns did — and be forced to cover, driving prices higher.  But there’s no sign of that…yet.  And if it does happen, it will be as Ted Butler has been pointing out for the last fifteen years or so…”the very first time.”

Here are the 6-month charts for the four precious metals, plus copper and WTIC — and the changes in gold, silver — and palladium should be noted.  This palladium rally is getting a bit long in the tooth as well.  As I pointed out in Saturday’s COT Report, the Big 4 traders in this precious metal hold 85% of the short positions of the Big 8 traders…so it’s only one or two traders that are keeping palladium prices from exploding to the moon and stars.  One would suspect that JPM is the big short here as well.  Click to enlarge for all.

And as I type this paragraph, the London open is about a minute away — and I see that the gold price began to head unevenly higher almost the moment that trading began at 6:00 p.m. EDT in New York on Monday evening. The price was capped and turned lower shortly after 12 o’clock noon China Standard Time on their Tuesday morning — and the current low tick was set about a few minutes after 2 p.m. CST — and a few minutes before the afternoon gold fix in Shanghai. It’s off its current low by a bit — and up $10.60 an ounce currently. Silver continues to lag — and probably not by chance. Its price path was mostly the same as gold — and even though its off its low tick of the day, it’s only up a penny at the moment. Platinum was up three bucks or so in early morning trading in the Far East, but that’s as high as it was allowed to get and, like gold and silver, was sold lower starting shortly after 12 o’clock noon in Shanghai. It’s also off its low — but now down 2 bucks. Palladium was forced to trade in a similar manner as the other precious metal — and it was driven down to the $1,500 spot mark by a few minutes before 2 p.m. CST. It’s off that low by a bit, but still down 11 dollars as Zurich opens.

Net HFT gold volume is a mind-boggling 176,000 contracts already — and there’s a tiny 2,226 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is way up there as well…in the neighbourhood of 24,500 contracts — and there’s also a bit over 14,500 contracts worth of roll-over/switch volume out of July and into future months already.

The dollar index opened up 2 basis points as soon as trading commenced at 7:45 p.m. EDT in New York on Monday evening. It chopped very quietly and unevenly lower from that juncture — and its current 95.84 low tick was set about 1:55 p.m. CST on their Tuesday afternoon. It has rallied very unsteadily since, by a small handful of basis points — and is down 3 of them as of 7:45 a.m. in London/8:45 a.m. in Zurich. Overall, there’s not much happening in the currencies. All the price action, as is almost always the case, is paper related on the COMEX between the commercials and the Managed Money traders.


With the May delivery month coming to an end on Friday — the roll-over/switch volume out of the July delivery month in silver is now very heavy.  All of the large traders [those holding 150 COMEX contracts or more] that aren’t standing for delivery next month, have to roll or sell their positions by the close of COMEX trading on Wednesday — and the rest have to be out by the same time on Thursday.  First Day Notice for July silver will be posted on the CME’s website around  10 p.m. EST that evening — and I’ll have all that data for you in my Friday missive.

Today at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and you don’t need me to tell you just how horrid it will be.  The big concern for Ted will be how much JPMorgan did or didn’t do during the reporting week.  According to him, we won’t see a new Bank Participation Report until Monday, July 10…instead of Friday, July 7, as the report will be delayed one day because of the July 4th holiday in the U.S.  That report is critical to his understanding of what the Big 4 U.S. deep state banks…JPMorgan, Citigroup, Goldman Sachs and HSBC USA…have been up to.  And that’s a lifetime away in a gold market that is in such dynamic change as it is now.


And as I post today’s column on the website at 4:02 a.m. EDT, I note that gold is up a bit more as the first hour of London trading draws to a close. It’s up $12.80 the ounce — and silver is up 2 cents. Palladium is still down 2 dollars, but palladium has bounced back a bit — and is only down 5 bucks as the first hour of Zurich trading ends.

Gross gold volume is approximately 202,500 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is around 197,000 contracts. Net silver volume is a bit over 26,500 contracts — and there’s about 16,800 contracts worth of roll-over/switch volume out of July and into future months.

The dollar index is now up 1 whole basis point as of 8:45 a.m. BST in London/9:45 a.m. CEST in Zurich…but really hasn’t done much of anything during the first hour of trading on the other side of the Atlantic.

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

Ed