Precious Metals Crushed in An Engineered Blood-Bath

13 March 2020 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price traded quietly and a bit unevenly sideways in Far East trading on their Thursday.  That continued until 1 p.m. GMT in London/8 a.m. in New York — and then the engineered price decline commenced — and ‘da boyz’ set the low tick of the day a minute before noon in New York.  It jumped higher until 1 p.m. EDT — and then was sold quietly lower until just past 4:30 p.m. in after-hours trading — and it jumped up a bit going into the 5:00 p.m. EDT close.

The high and low ticks were reported by the CME Group as $1,651.00 and $1,560.40 in the April contract…an intraday move of a hair over $100.

Gold was closed in New York on Thursday at $1,575.40 spot, down $59.40 on the day.  Net volume was ginormous at a bit under 452,500 contracts — and there was a bit over 113,500 contracts worth of roll-over/switch volume out of April and into future months.  But having said “ginormous“…I must admit that was expecting far more than that considering the size of the price move — and that gold’s 50-day moving average was obliterated intraday.  Maybe the Managed Money traders weren’t as big sellers as I was hoping/presuming.

The silver price, like gold, rallied a bit until shortly after 9 a.m. China Standard Time on their Thursday morning — and then was sold lower until shortly after 11:30 a.m. CST.  It crept higher until 8:30 a.m. in London — and then traded sideways until it slowly began to roll over starting around 11 a.m. GMT.  Like in gold, the real engineered price decline didn’t start until about 1 p.m. GMT/8 a.m. EDT, with the low tick set by ‘da boyz’ a minute before 12 o’clock noon in New York.  After that, it was pretty much the same price pattern as gold going into the 5:00 p.m. EDT close.

The high and low ticks in silver were recorded as $16.91 and $15.505 in the May contract…an intraday move of $1.40.

Silver was closed at $15.795 spot, down 92 cents from Wednesday.  Net volume was ginormous as well at a bit under 127,500 contracts — and there was a hair over 11,000 contracts worth of roll-over/switch volume in this precious metal.

There was quiet selling pressure in platinum almost right from the 6:00 p.m. EDT open in New York on Wednesday evening — and that continued until very shortly before noon in Zurich.  Then ‘da boyz’ really put the hammer down — and the low tick in this precious metal was around 11:40 a.m. in New York.  It bounced higher by a bit until shortly after 1 p.m. EDT – and then was sold quietly lower until shortly before 4 p.m. in after-hours trading.  It didn’t do much after that.  Platinum was closed yesterday afternoon in New York at $764 spot, down an eye-watering 97 bucks from its close on Wednesday.

Palladium was sold lower until around 11:40 a.m. in Shanghai on their Thursday morning as well — and it had a quiet up/down move for the next eight hours.  Then at 1 p.m. in Zurich/8 a.m. in New York, JPMorgan et al. appeared.  The $1,535 low tick was set a few minutes before noon EDT — and it recovered a bunch from there until 1 p.m., before getting sold lower  into the 5:00 p.m. close.  Palladium was closed at $1,743 spot, down an unbelievable $452 dollars from it close on Wednesday — and had an intraday move of 758 bucks in the spot month!

Wow!  And needless to say, I’ll have more on Thursday’s price action in The Wrap.


The dollar index closed very late on Wednesday afternoon in New York at 96.51 — and opened up about 15 basis points once trading commenced around 7:45 p.m. EDT on Wednesday evening, which was 7:45 a.m. China Standard Time on their Thursday morning.  It dropped a bit until around 9:40 a.m. CST — and then didn’t really do much of anything until about fifteen minutes before the London open.  A ‘rally’ commenced at that point that became far more intense starting at 10 a.m. in New York.  The 98.31 high tick was set around 12:20 p.m. EDT — and then fell down a bunch until 2:22 p.m.  From that juncture it chopped quietly sideways until the market closed at 5:30 p.m. EDT.

The dollar index was marked-to-close at 97.47…up 96 basis points from Wednesday.

There was some correlation between the precious metals and the dollar index on Thursday, but it was very anemic — and looked somewhat engineered to me.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the good folks over at the stockcharts.com Internet site.  The delta between its close…97.65…and the close on the DXY chart above, was 18 basis points above the spot close on the Bloomberg chart above.  I’ve never seen that before.  Normally it trades at a discount, as the 6-month chart is a futures chart.  I’m not sure what to make of that.  Click to enlarge as well.

The precious metal stocks, along with everything else, got hammered into the dirt on Thursday — and most of that would have been forced ETF and mutual fund selling…as it has been for the last while now.  There were some traders who sold in a panic in a ‘sell everything’ situation…but one must always, always remember that those stocks sold are now owned by someone else…much stronger hands — and they aren’t about to sell them at a loss.  If I had to guess, I’d say that it was the swamp creatures that inhabit the deep state that have been buying everything precious metal-related as far as equities are concerned.

Here’s the HUI chart — and it got clocked by 11.17 percent.  But it should be carefully noted that the gold shares were headed higher long before the low tick was in for the gold price, which came at noon in New York trading.

The silver equities traded in an identical manner as the gold shares — and they were also heavily bought once the initial gap down was done…right up until silver’s noon EDT low tick of the day.  They  rallied on silver’s rally until around 1:10 p.m. in New York trading — and then were quietly sold lower as the silver price was sold lower as well.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down an eye-watering 13.54 percent. Click to enlarge if necessary.

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

All the silver equities were dogs yesterday, but the least ugly pooch in Thursday’s litter was Wheaton Precious Metals…down ‘only’ 4.33 percent.  You don’t want to hear about the others.


The CME Daily Delivery Report showed that 114 gold and 4 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

In gold, there were only two short/issuers — and the only one that mattered was Citigroup, with 106 contracts out of its client account.  There were seven long/stoppers in total — and the four largest were ADM with 34…Morgan Stanley stopped 27…Scotia Capital/Scotiabank stopped 21 — and Advantage picked up 14 contracts.  Except for Scotia Capital/Scotiabank, who stopped their 21 contracts for their own account, the rest were stopped for their respective client accounts.

In silver, there were three short/issuers — and they’re not worth itemizing.  There were two long stoppers…JPMorgan and ADM, stopping 2 contracts each.  All contracts, both issued and stopped, involved their respective client accounts.

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 rose by another 15 contracts, leaving 127 still around, minus the 114 contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 66 gold contracts were actually posted for delivery today, so that means that 66+15=81 more gold contracts just got added to the March delivery month.  Silver o.i. in March fell by 95 contracts, leaving 540 still open, minus the 4 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 105 silver contracts were posted for delivery today, so that means that 105-95=10 more silver contracts just got added to March.

Total open interest in gold declined by 29,219 contracts yesterday — and in silver that number was 3,160.  I expect that there was far more short covering than that, but the numbers are masked by the fact that the Managed Money traders were also adding short positions at the same time as they were pitching long positions.  Of course we won’t know anything for sure until next Friday’s COT Report, which is more than lifetime away in these market conditions.


Not surprisingly, there were withdrawals from both GLD and SLV on Thursday, as those entities that use these ETFs as trading vehicles — and not long-term investing, were big sellers yesterday.  There was 291,433 troy ounces taken out of GLD — and in SLV there was 1,119,626 troy ounces withdrawn.  Whether or not those precious metals were actually moved anywhere is open to debate, but they certainly have new owners — and Ted would most likely presume that JPMorgan owns it all now.

However, in other gold and silver ETFs on Planet Earth on Thursday, net of any COMEX, GLD & SLV activity, there was a net 356,077 troy ounces of gold added — and there was a net 65,307 troy ounces of silver added as well.

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

Ted told me on the phone yesterday that the mint had temporarily halted silver eagle sales because they’re out of stock.


There was a bit of movement in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received — and 7,041.066 troy ounces/219 kilobars were shipped out.  Of that amount, there was 6,944.616 troy ounces/216 kilobars [SGE kilobar weight] that departed the International Depository Services of Delaware — and the remaining 96.450 troy ounces/3 kilobars [U.K./U.S. kilobar weight] was shipped out of Canada’s Scotiabank.  There was also a paper transfer, as 2,065 troy ounces was moved from the Registered category and back into Eligible over at Brink’s, Inc.  The link to all that activity is here.

There wasn’t a lot of activity in silver, but what there was, was all in the ‘out’ category, as nothing was reported received.  In total, there was 226,748 troy ounces shipped out.  That involved five different depositories — and I shan’t bother breaking it out.  There was a lot of paper movement though, as 1,322,853 troy ounces was transferred from the Registered category and back into Eligible over at Brink’s, Inc. — and Ted would assume that this silver belongs to JPMorgan’s clients — and it’s being transferred back into the Eligible category in order to save on storage charges. The link to all this is here.

There was a bit of movement over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 220 of them — and shipped out 48.  All of this action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Russia, Alexander III. 1881-1894, 10 Rubel 1894

Material: Gold  Full Weight: 12.90 grams  Fine Weight: 11.61 grams  Value: €6,859.00/US$7,667

Surprisingly enough, I don’t have all that many stories, articles and videos for you today.


CRITICAL READS

Fed Injects $198 Billion Via Repos to Unfreeze Paralyzed Funding Markets

Update: shortly after the Fed injected $95BN in liquidity via two term reports (a 2-week and the first 1-month op), it also announced $103.1BN injected via the overnight operation, which means that the Fed has injected a combined $198BN in liquidity as funding markets freeze.

Forget equities: the far more important funding markets are locking up.

Between today’s surge in FRA/OIS which briefly rose to the highest level since the financial crisis, confirming the biggest dollar funding shortage in the inter-bank market in over a decade to the explosion in the 3-month EUR cross-currency basis is 36 basis points wider, the largest move since 2008 on a closing basis which send the global basis swap crashing…

… the Fed has found itself woefully behind the curve. As a result, moments ago, the Fed announced that it has injected the maximum possible liquidity via today’s 2 term repos, including the just announced 1-month, $50bn term repo, for a total of $45BN + $50BN.

As has been the case in the past week, both term repos were oversubscribed, with the 2-week term 1.9x oversubscribed while the 1 month was 1.7x…Click to enlarge.

Unfortunately, these operations do nothing to fix the funding squeeze and the Fed is now dangerously behind the curve meaning Powell will need to unleash a far more aggressive liquidity injection if he wants to unfreeze the funding markets which appear to be locking up by the hour.

Not exactly surprising news.  This Zero Hedge article, the first contribution of the day from Brad Robertson, put in an appearance on their Internet site at 9:00 a.m. on Thursday morning EDT — and another link to it is here.


Bazooka Fired: Fed Unleashes $1.5 Trillion Repo Bailout, Expands “Not QE” to QE5

After increases in its repo facility twice already this week, from $100billion to $150billion to $175billion per day, and adding added a new 1-month term repo facility, the New York Fed just stunned the market and fired its biggest bazooka since Lehman (not coincidentally, just moments before today’s 30Y Treasury auction, as a failed auction would mean, well, game over), by announcing a total of $1 trillion in 3-month repos over two days ($500BN today, $500BN tomorrow), as well as an additional $500BN in one-month repos offered weekly, which means up to $3 trillion in cumulative repos (if fully allotted) may be online by the end of the month.

But wait, there’s more, because the fed also finally threw in the towel on the semantics bullshit it was pulling since Sept 2019 by pretending that “QE” is “NOT QE”, when it officially expanded not-QE/QE4 to Q5, when it announced it would start purchasing coupon Treasuries as part of its POMO operations, which as a reminder, was the official trigger transforming Not QE into QE .

For some context of how that compares to what they have been doing, assuming full allotment on the two $500BN repos…Click to enlarge.

Some parting thoughts following this historic announcement: this was by far the biggest bazooka the Fed has fired since the financial crisis, and… it may not be enough. In fact, stocks are still deep in the red, which means one of two things:

  1.  The Fed’s credibility is now shattered,
  2. The market expects a fiscal bailout, or some MMT-esque combination of both.

Until and unless the markets gets what it needs, the Fed is now a sideshow and in fact, if this bazooka fails, Powell may consider submitting his resignation this week.

This amazing news item was posted on the Zero Hedge website at 1:55 p.m. on Thursday afternoon EST — and comes to us courtesy of Brad Robertson as well.  Another link to it is here.  There was a companion story about this on the forbes.com Internet site headlined “Fed Injects $1.5 Trillion to Prop Up Crashing Markets” — and that comes courtesy of Swedish reader Patrik Ekdahl.


Bazooka Backfires: Stocks Tumble, FRA/OIS Soars After Fed’s Massive Repo Operation Fails to Fix Liquidity Crisis

Maybe the Fed’s repo bazooka was just a water pistol?

Less than an hour after the Fed announced a massive expansion to its repo facilities, adding one $500 billion 3-month repo today, following by an identical repo tomorrow and subsequent weekly $500BN repos (in addition to officially expanding NOT QE to a coupon monetizing QE-5), many are asking if the Fed applied the wrong medicine for two reasons:

The first, and obvious one, is that you can’t fix a viral pandemic with monetary easing… but let’s pretend that’s not an issue for now.

The less obvious, bust just as important reason is that after the Fed announced the results of the first half a trillion dollar repo today, the uptake was a tiny 15.7%.

Indeed, dealers only submitted $78.4 billion in securities for today’s massively upsized 3-month repo operation…which it appears will not be the panacea the Fed may have expected it to be.

As a result, even though today’s total liquidity injection between the two term and one overnight repos earlier, and the 3 month mega-repo just now, the Fed has injected a total of $276.5 billion in liquidity, and yet stocks have tumbled back to session lows as traders realize that what is ailing the market is not access to the Fed’s balance sheet, but an overall recession that will collapse revenues, profits and cash flow, and which the Fed’s liquidity injections are powerless to prevent.

But wait, there’s more: because as stocks sold off, a far more ominous development is that judging by the surge in the FRA/OIS, a closely followed indicator of inter-bank funding, following the Fed’s repo operation the liquidity shortage had nothing to do with extra repo access, and is about to get much worse especially with the Fed having already fired its bazooka.

In other words the Fed tried to fix whatever is causing the structural problem at the heart of the market’s illiquidity, and has so far failed, which means that absent another emergency bailout attempt, we may very soon have a market – and bank – holiday.

Finally, for those asking just what kind of bailout attempt, recall that recently both Eric Rosengren and Janet Yellen said the Fed will have to buy stocks during the next crisis. Well, this is a crisis, and the market collapse will not relent until Powell finally turns Japanese and starts monetizing single names and/or ETFs.

This article appeared on the Zero Hedge Internet site at 3:22 p.m. EDT on Thursday afternoon — and I thank Brad Robertson for sending it.  Another link to it is here.


JPMorgan Capitulates: “One Could Perhaps Pedantically Argue That This is QE

We were right again.

On Jan 24, we wrote an article titled “The Debate Is Over: In Two Months “Not QE” Officially Becomes QE 4,” in which we wrote that by the March 18 FOMC meeting, “the Fed will need to reduce its “demand burden” on the bill market, i.e., there won’t be enough Bills available for the Fed to monetize without it distorting the market, and will extend the purchase program to include short coupons in the process officially ending any debate whether the Fed’s manipulation of the market under the guise of saving repo, is “Not QE”, because it is limited to Bills and thus no duration is taken out of the market, or is “QE 4”, in which the Fed purchases at least some coupon securities in addition to Bills.”

Not only were we right, but the transformation from Not QE to QE-4 (or QE-5, depending on how one counts), took place one week ahead of the FOMC meeting, when today as part of its massive, $1.5 trillion (with a maximum capacity of $5 trillion per month) bazooka in response to the bizarre moves in the Treasury market, the Fed announced that it would – as we predicted – expand its POMO from just Bills to all securities across the fixed income spectrum, including Treasury Inflation-Protected Securities, Floating Rate Notes and, you guessed it, nominal coupons.

And just like that Not QE has become QE-4, as even JPMorgan – which for the longest time was arguing to anyone who bothered to listen that Not QE is not QE 4 and would not become QE 4 – was forced to admit today.

Here is JPM’s Michael Feroli admitting “since today’s announcement moves those purchases further out the curve one could perhaps pedantically argue that this is QE.”

…it would be inaccurate to describe the $1.5 trillion in repo operations as “money pumped into the system” as it is a temporary swap of reserves for government securities which will be unwound in one or three months’ time. We may well be approaching the point when the Fed turns to genuine QE (or large-scale asset purchases), but that won’t happen until the Fed sets the funds rate to zero, which should be next Wednesday at the latest.”

Translation – the head JPM economist was wrong again, but we will give him some credit: Feroli – whose firm was pushing his clients into stocks as recently as two days ago – is right about one thing: genuine QE, or whatever the “non-pedants” want to call it, is coming as soon as next week, and if Yellen has her way and she will, – it will also include stocks and ETFs.

This very interesting article showed up on the Zero Hedge website at 6:40 p.m. EDT on Thursday evening — and another link to it is hereGregory Mannarino‘s post market close rant for Thursday is linked here.


I’m From The Government And I’m Here To Help! — Dennis Miller

Fed Chairman Jerome Powell’s Strategic Plan 2020-23 tells us: “The Federal Reserve Board’s highest priority is to promote a strong economy for the American people by fostering the stability, integrity, and efficiency of the nation’s monetary, financial, and payment systems.

We… remain vigilant. …. We know that our decisions matter for American households and businesses. Our long-standing, nonpartisan tradition is to make decisions objectively, …in the best interests of the American people.”

Readers will take comfort with, “Five core values guide the Board’s decisions and the actions of its employees:”

Integrity. The Board adheres to the highest standards of integrity in its dealings with the public, the U.S. government, the financial community, and its employees.”

We recently outlined the big banks, who own the Fed, have been fined almost $250 billion for criminal activity.

Standards of integrity???” Hang on! My B.S. meter just exploded!

This interesting commentary from Dennis put in an appearance on his website on Thursday sometime — and another link to it is here.


U.S. Throws More Stimulus Money at Economy to Counteract Coronavirus — Bill Bonner

Back in the U.S., the drama is playing out as expected. Mr. Market is taking asset prices down to more reasonable levels. Mr. Jackass Meddler is trying to stop him with, what else, stimulus!

And what does he have to stimulate with? Only more fake money… the same stuff that compromised the U.S. economy’s immune system in the first place.

From CNBC:

Fed Boosts Money It’s Providing to Banks in Overnight Repo Lending to $175 Billion
The Federal Reserve is again increasing the amount of money it’s providing to banks for overnight borrowing, raising the top level now to $175 billion.

In an announcement Wednesday afternoon, the New York Fed said it would boost the top level it provides in overnight operations to at least $175 billion from the $150 billion level it had just set Monday.”

But it’s not just the Fed that is swinging into action. Donald Trump proposed to reduce payroll taxes to zero until after the election. He was thinking out of the box! But it would blow out the federal budget completely. Even his neutered pet Republicans couldn’t swallow that.

Bill’s commentary was posted on the bonnerandpartners.com Internet site sometime on Thursday — and another link to it is here.


I didn’t see a single solitary precious metal-related news item that was worth posting.  None of the stories dealt with what really happened on Thursday…an engineered price decline/bear raid in all of them.  It was all the same drivel, even at Sharps Pixley.


The PHOTOS and the FUNNIES

We hadn’t been on Highway 16 eastbound out of Prince George more than fifteen minutes before we [plus a few others] spotted this female American black bear with her two cubs.  They were certainly a bit further away then I would have liked…even with the 400mm lens buckled on the camera, the photos are just barely OK, as I couldn’t crop them much.  This was the first of ten black bears that we saw before the sun set on September 1.  Click to enlarge.


The WRAP

Hiding behind the fig leaf of collapsing Far East and European stock indexes…a limit down U.S. futures market — and a dollar index ‘rally’…JPMorgan et al. went about their business with ruthless precision on Thursday.  They took no prisoners.

As Ted has been saying since last summer, the commercial traders were either going to get overrun as rising precious metal prices overwhelmed them…or they would have to engineer the Mother of All Price Declines in order to save their skins from the monstrous unrealized margin call hole that they’d got themselves into.

It turned out to be the latter…the same old, same old…all aided and abetted by the CFTC, the CME Group — and the U.S. Justice Department, as they all did nothing.

All the precious metal commentary yesterday from the all so-called precious metal experts, talked about everything except the real reason.  I was not impressed.

But whether or not we’re done to the downside remains to be seen.  We’re certainly there in silver, platinum, copper and WTIC.  Gold’s 200-day moving average is still unbroken — and the palladium market is so tiny that it doesn’t really matter.  It showed in last week’s Bank Participation Report that the bullion banks were basically gone off the short side in palladium — and one would assume that they’re all gone after yesterday’s price pounding.  So in my opinion, it’s only gold that’s the possible fly in the ointment going forward.

Here are the 6-month charts for the four precious metals, plus copper and WTIC.  Surveying the carnage, I note that gold was blasted well below its 50-day moving average on an intraday basis on Thursday — and closed 4 cents above it.  Two weeks earlier the commercial traders closed the gold price two thin dimes above its 50-day moving average.  Such precision is hard to image.  Silver was down more than $1.50 below its 200-day moving average intraday — and closed more than a dollar below it.  Platinum was down over $150 below its 200-day moving average intraday — and was closed more than $120 below it.  And what can I say about palladium.  The chart below shows that it traded in a $664 price range yesterday…was blasted below its 200-day moving average by $120 intraday…but closed well above it.

Copper, despite being hugely oversold already, traded at early November 2016 prices at its intraday low on Thursday.  It’s a fairly safe bet that the Managed Money traders are sitting with a new record short position in copper.  WTIC closed down again today, but its price is so far below any moving average that matters, I’m sure that the Managed Money traders were reluctant to go much more on the short side than they already were at that point.  Click to enlarge.

Of course the devastation in the precious metal shares has been frightening — and as a ‘buy and hold’ investor, I am not a happy camper today.

On Wednesday evening, before ‘da boyz’ began their work on Thursday morning, I received this e-mail from Tennessee subscriber Mike R. who as at the end of his rope.  I’m including our e-mail exchange verbatim

Hello Ed, I hate to come to you so late at night but I am scared as hell as to what is going on. I have hung on, but I do not know if I can take any more of this devastation.  My portfolio  has been massacred in the last three weeks which is not any news to you. I thought I was in good stocks (First  majestic silver, Hecla Mining, Coeur Mining, and Endeavor silver). I like you have maintained an all in position never dreaming we would get to this point particularly with metal prices at the levels they are at.   But I am terrified that we could see another 25% taken from the current prices.  I don’t know Ed,  my mind is going 1000 miles an hour right now. I  know it would be a catastrophe to sell everything, but I don’t know how much more of this I can take. I would appreciate just some thoughts from you that might provide me some calmness and some sensibility.. Thank you Ed

* * * * * * * * * *

Hi Mike,

I’m not any happier than you are…or anybody else that subscribes to my newsletter.

This sell-off in the equities is now being driven by redemptions in mutual funds and ETFs who are being forced to sell whether they wish to or not.  Add into that mix the panic selling by the individual investor.

The underlying precious metals aren’t down very much, but precious metal equities are equities — and they’re being tossed out with the bathwater…baby and all.

These are trying times for everyone…and I’m down about $200k in the last three weeks, so I feel your pain.

Ted has always said that the last spike down would be the scariest of all — and, as always, he’s turned out to be right about that too.

But I can guarantee you that once the bottom is in, whenever it arrives, the rally that’s allowed to develop from there will be one for the record books.  By that time, ‘da boyz’ will own the lion’s share of everything precious metal-related — and they will stand to benefit the most.

This too will pass — and I’m still “all in”.

Ed

Good morning Ed, I got about an hour and a half sleep last night and I imagine you’re probably in the same boat. I read your letter this morning at 4 AM EST and I am so scared Ed. The futures are ugly beyond belief. I was wondering if you wouldn’t mind calling me when you get a chance on my cell phone 865-xxx-xxxx. I promise I will not keep you long I just have to talk to somebody that’s an expert in this field. I have made up my mind that I was going to exit my stocks today at a huge loss, but what the futures indicate I might as well ride them into the dirt. I really don’t think we are going there, but at this point who knows. Thank you Mike R.

We had nice chat on the phone on Thursday — and he felt somewhat better.  I told him take two blue pills and lie down until that panicky feeling went away.

But all kidding aside, these are trying times for everyone — and staying long and strong in the face of these criminal activities that are aided and abetted by the CFTC et al. takes personal courage.

However, the signs are all there that the commercial traders are making their last proverbial swing for the fences in order to save their own hides.  Ted’s of the opinion that they won’t be back on the short side when the next rally is allowed to manifest itself.  Let’s hope he’s right about that.


I got an interesting e-mail from a long-term subscriber yesterday morning, who wished to remain anonymous — and this is what he had to say…

Hi Ed: Many months ago, I mentioned to you the large GAP in June 2019 and that – like a magnet – they usually pull the market back and FILL THE GAP.

I noted a meeting of the biggest NYC bank CEOs at the White House on Tuesday.

I also remember one on Thursday, 11 April 2013.  Check out what happened to gold and silver the next two trading days after that 2013 White House meeting!

So here we are, and the gap gets filled today.”


I thought I’d post the Banking Index chart [BKX] from the stockcharts.com Internet site — and it’s butt-ass ugly.  I’ll also point out that one of our more beloved financial institutions…Deutsche Bank…closed at a new record low on Thursday at $5.53…down 15.05 percent.  It draws closer to insolvency with each passing day — and that’s certainly reflected in the chart below.  I suspect that a lot of other banks are drawing close to that point as well.  Click to enlarge.

Today, at 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.  But in most respects its totally irrelevant after JPMorgan et al. bombed the precious metals in the COMEX futures market yesterday.  But there still may be some useful information in it — and if there is any, Ted will point it out.

This is what he had to say about it in his mid-week commentary to his paying subscribers on Wednesday…of course written long before the slaughter on Thursday…

Seeing as there is such a large managed money long and commercial short position in gold, the sharp reduction in total open interest points to managed money selling and commercial buying, but with no key moving averages penetrated to the downside, it will be curious to see if the managed money traders did sell as much as indicated by the reduction in total open interest. At least in silver, we’ve been below the 50-day moving average and re-penetrated the 200 day moving average Monday and yesterday. The declines in total open interest suggest the chance for substantial positioning changes in both gold and silver.”  — Silver analyst Ted Butler, 11 March 2020


And as I post today’s column on the website at 4:02 a.m. EDT, I note that the gold price edged a few dollars higher once trading began at 6:00 p.m. EDT in New York on Thursday evening.  But at 9 a.m. China Standard Time on their Friday morning it was sold down hard over the next hour.  It has rebounded off that new low tick for this move down — and is up $15.60 the ounce.  The price path for silver was identical, complete with the 10 a.m. CST low, but its subsequent rally was cut off at the knees very shortly before 2 p.m. CST — and it drifted lower until about 3:40 p.m. CST.  It jumped higher at that point, but is still down 5 cents the ounce as London opens.  Platinum crawled quietly and unevenly sideways until a few minutes after 10 a.m. CST — and then began to head higher with some conviction — and is up 51 dollars.  Palladium didn’t do much of anything until minutes before 1 p.m. in Shanghai — and it’s been in rally mode since — and is up $117 bucks as Zurich opens.

Gross gold volume is already way up there at around 132,500 contracts — and minus current roll-over/switch volume out of April and into future months, net HFT gold volume is 108,500 contracts.  Net HFT silver volume is also very heavy for this time of day…a bit over 29,500 contracts — and there’s 1,078 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened down about 2 basis points at 97.45 once trading commenced around 7:45 p.m. EDT in New York on Thursday evening, which was 7:45 a.m. China Standard Time on their Friday morning.  It jumped higher until 8:30 a.m. CST, but then fell down to its current low tick of the day a couple of minutes before 11:55 a.m. over there.   It has been creeping quietly and unevenly higher since — and as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is up 3 basis points.


That’s all I have for today — and since today is Friday — and Friday the 13th to boot…I’m ready for anything.  These are “historic” times — and we’re in totally “uncharted territory“…as Gregory Mannarino correctly pointed out in his market rant further up.  I’ll be very interested in what the central banks of the world pull out of their collective hats over the weekend, especially considering the fact that the next FOMC meeting starts on Thursday.  They’ve lost total control of the markets…all markets…except the precious metals, of course — and they’re desperate to get it back, so don’t underestimate them.

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

Ed