Author Archives: Ed Steer

Today’s COT Report Should Tell Us a Lot

15 November 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold down a few dollars once trading began at 6:00 p.m. EST in New York on Wednesday evening.  From that point it crept higher until 9 a.m. in London.  It was capped and turned sideways at that juncture — and that lasted until the 10 a.m. EST afternoon gold fix.  It was sold a bit lower from there, but less than an hour later it began to rally a bit before getting capped shortly before noon in New York.  It was sold quietly and unevenly lower until 4 p.m. in after-hours trading — and didn’t do much after that.

Once again, the low and high ticks aren’t worth looking up.

Gold was closed on Thursday afternoon in New York at $1,471.20 spot, up $7.80 from Wednesday.  Net volume was a bit on the heavier side at a bit over 264,000 contracts — and there was a hair under 54,000 contracts worth of roll-over/switch volume out of December and into future months.

The silver price was managed in an almost identical manner as it was for gold…including all the major price inflection points mentioned above, so I’ll pass on the play-by-play.  But it is worth mentioning that silver traded above the $17 spot mark on a number of occasions on Thursday, but wasn’t allow to stay above that price for long…although it did close right on it in the spot month.

The low and high ticks in silver aren’t really worth looking up, either.

Silver was closed at $17.00 spot, right on the button…up 5.5 cents from Wednesday.  Net volume was slightly elevated at a bit under 65,000 contracts — and there was 14,500 contracts worth of roll-over/switch volume out of December and into future months in this precious metal.

If you check the Kitco gold and silver charts above…particularly the gold chart…you’ll notice that there have been rather smallish price ‘events’ at 2 p.m. EST in after-hours trading in New York.  That has occurred in both precious metals for the last three trading days.  I’m not sure what should be read into this, if anything, but it is an anomaly that I’ve not seen before.

The platinum price was sold lower in early morning trading in the Far East on their Thursday, but began to head higher about 10:40 a.m. China Standard Time.  That lasted until around 10:30 a.m. in Zurich trading, but it was capped and turned a bit lower at that point.  Then shortly before 2 p.m. CET/8 a.m. EST, it was sold down to its low of the day, which came around 9:15 a.m. in New York.  It began to head sharply higher about ten minutes before the 11 a.m. EST Zurich close — and that rally was obviously capped less than thirty minutes later.  It was sold a bit lower shortly after that — and from around 12:45 p.m. EST onwards, it traded sideways into the 5:00 p.m. close of trading.  Platinum was closed at $880 spot, up 6 bucks from Wednesday.

Palladium traded flat until minutes before 11 a.m. CST on their Thursday morning.  It began to chop unevenly higher from that juncture and, like platinum, was capped and turned lower around 10:30 a.m. in Zurich.  That sell-off lasted until the 10 a.m. EST afternoon gold fix in London — and it rallied from there until the 1:30 p.m. COMEX close — and it didn’t do much of anything after that.  Palladium was closed at $1,714 spot, up 28 dollars from Wednesday, but 28 bucks off its 10:30 a.m. Zurich high tick, which Kitco recorded as $1,742 spot.

The dollar index closed very late on Wednesday afternoon in New York at 98.37 — and opened down about 3 basis points once trading commenced around 7:45 p.m. EST on Wednesday evening, which was 8:45 a.m. China Standard Time on their Thursday morning.  From that point it proceeded to warder quietly sideways a handful of basis points either side of unchanged — and that state of affairs lasted until 10:20 a.m. in New York.  Then down it went.  The 98.11 low tick of the day was set a minute or so before 2 p.m. EST — it rose and fell another handful of basis points between then and the close of trading at 5:30 p.m.   The dollar index finished the Thursday session at 98.16…down 21 basis points from Wednesday’s close.

The rallies in gold and silver in New York began once the 10 a.m. afternoon gold fix was done for the day — and both metals were capped and turned sideways or lower, long before the 2 p.m. EST low tick was printed.  So if there was correlation between the currencies and precious metal prices, it was more by good luck, than anything else.  There was little correlation at all in Far East and London trading yesterday.

Here’s the DXY chart from Bloomberg as per usual.  Click to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…98.02…and the close on the DXY chart above, was 14 basis points on Thursday.  Click to enlarge as well.

The gold stocks jumped about 1.5 percent in the first fifteen minutes of trading in New York on Thursday morning…but were back at unchanged by around 10:50 a.m. EST.  They rallied until precisely noon when the gold price was capped — and then were sold quietly and unevenly lower until the markets closed at 4:00 p.m.  The HUI closed higher by 0.87 percent.

The price activity in the silver equities was very similar, except their respective highs were in around 12:15 a.m. in New York trading — and their decline at that point was more precipitous than it was for the gold shares.  The actually dipped into negative territory around 3:35 p.m. EST…but recovered a bit by the end of the trading day.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up by 0.41 percent…which is certainly better than the alternative.  Click to enlarge.

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

The three usual laggards in the Silver 7 Index…Peñoles, Buenaventura and Hecla…certainly lived up to their reputations on Thursday, as all three closed lower on the day.  First Majestic Silver was the Silver 7 star, closing higher by 2.48 percent.


The CME Daily Delivery Report showed that 44 gold and 9 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

In gold, there were three short/issuers in total, but the only two that mattered were Advantage and ADM, with 34 and 9 contracts.  There were also three long/stoppers…Advantage with 18, JPMorgan with 17 — and ADM picking up 9 contracts.  All transactions, both issued and stopped, involved their respective client accounts.

In silver, for the second day in a row it was ADM issuing all 9 contracts — and stopping them all as well.

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

The Preliminary Report for the Thursday trading session showed that gold open interest in November fell by 166 contracts, leaving 91 still open, minus the 44 mentioned a few short paragraphs ago.  Wednesday’s Daily Delivery Report showed that 207 gold contracts were actually posted for delivery today, so that means that 207-166=41 more gold contracts just got added to the November delivery month.  Silver o.i. in November rose by 2 contracts, leaving 9 still around, minus the 9 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 7 silver contracts were actually posted for delivery today, so that means that 2+7=9 more silver contracts just got added to November.


There were no reported changes in either GLD or SLV on Thursday.

In other gold and silver ETFs on Planet Earth on Thursday…net of activity on the COMEX — and in GLD & SLV…there was a net 107,590 troy ounces removed in gold…an in silver, there was a net 90,482 troy ounces withdrawn.

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

There was a tiny bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received — and only 321 troy ounces was shipped out…257 troy ounces from Loomis International — and 64.300 troy ounces/2 kilobar [U.K./U.S. kilobar weight] departed Canada’s Scotiabank.  I won’t bother linking this amount.

It was a bit busier in silver.  The only ‘in’ activity was one truckload…603,570 troy ounces…that was received in the Eligible category at CNT.  Once received, the whole shipment was immediately transferred to the Registered category.  There was 96,544 troy ounces shipped out…80,667 from Loomis International…14,940 troy ounces from Brink’s, Inc…and 936 troy ounces [one good delivery bar] departed Delaware.  There was also an additional paper transfer of 19,325 from the Eligible category and into Registered over at Delaware.  The link to all this is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 838 of them — and nothing was shipped out.  This activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are the usual two 2-year charts that Nick passes around on the weekend, which I didn’t have room for until now.  They show the physical gold and silver that are held in all known depositories, mutual funds and ETFs — and updated with their holdings as of the close of business, a week ago today…Friday, November 8.

During that reporting week, there was a net 317,000 troy ounces of gold withdrawn, but in silver, there was a net 2,989,000 troy ounces added.  Click to enlarge for both.

I have an average number of stories/articles for you today.


CRITICAL READS

The Holy-Cow Moment for Subprime Auto Loans; Serious Delinquencies Blow Out — Wolf Richter

Serious auto-loan delinquencies – auto loans that are 90 days or more past due – in the third quarter of 2019, after an amazing trajectory, reached a historic high of $62 billion, according to data from the New York Fed today:

This $62 billion of seriously delinquent loan balances are what auto lenders, particularly those that specialize in subprime auto loans, such as Santander Consumer USA, Credit Acceptance Corporation, and many smaller specialized lenders are now trying to deal with. If they cannot cure the delinquency, they’re hiring specialized companies that repossess the vehicles to be sold at auction. The difference between the loan balance and the proceeds from the auction, plus the costs involved, are what a lender loses on the deal.

The repo business, however, is booming.

This 3-chart news item showed up on the wolfstreet.com Internet site on Tuesday sometime — and I thank Dennis Miller for sharing it with us.  Another link to it is here.   Gregory Mannarino‘s market close rant for Thursday is linked here.


The Fed Has Created the Big Lie for Congress on its Repo Loans while the New York Fed Blocks Freedom of Information Requests

Yesterday Federal Reserve Chairman Jerome Powell testified before the Joint Economic Committee of Congress. Only one Congressman, Kenny Marchant (R-TX), had the courage to ask Powell about the Fed’s intervention in the repo loan market beginning on September 17. Since that time the Fed has been pumping hundreds of billions of dollars each week (that the New York Fed creates electronically out of thin air) into its 24 primary dealers on Wall Street. These primary dealers are not commercial banks that might be inclined to use the funds to make loans to local businesses or to consumers to buy a house and help their local economies. No, 23 of the 24 primary dealers are stock brokerage firms and investment banks that engage in leveraged bets in the stock, bond, commodities, and derivatives markets. The 24th is a foreign bank. (See primary dealer list below.)

There is nothing in the legislation that created the Fed, the Federal Reserve Act, that allows it to be the lender-of-last-resort to the trading houses on Wall Street. The Fed’s Discount Window, which is legally allowed to make emergency or seasonal loans, is restricted by law to just deposit-taking banks – not Wall Street trading houses.

And yet, bailing out Wall Street is exactly what the Fed has been doing since September 17 of this year and what it did secretly to the tune of $29 trillion during the financial crisis from December 2007 to the middle of 2010. The Fed does have some leeway in an emergency situation but that has to be brief and defined. The Fed has announced that it’s planning to keep its current money spigot to Wall Street flowing into at least January of next year. But according to Powell’s testimony to Congress yesterday, there’s no pressing crisis on Wall Street. Powell stated that “The core of the financial sector appears resilient, with leverage low and funding risk limited relative to the levels of recent decades.”

Powell knows that it’s a fallacy to say that leverage is low on Wall Street. It’s only low if one ignores the hundreds of trillions of notional (face amount) derivatives residing at the mega Wall Street banks.

This longish, but worthwhile commentary was posted on the wallstreetonparade.com Internet site on Thursday sometime — and I found it on the gata.org Internet site.  Another link to it is here.


One Bank Finally Admits the Fed’s “NOT QE” is Indeed QE… And Could Lead to Financial Collapse

After a month of constant verbal gymnastics (and diarrhea from financial pundit sycophants who can’t think creatively or originally and merely parrot their echo chamber in hopes of likes/retweets) by the Fed that the recent launch of $60 billion in T-Bill purchases is anything but QE (whatever you do, don’t call it “QE 4”, just call it “NOT QE” please), one bank finally had the guts to say what was so obvious to anyone who isn’t challenged by simple logic: the Fed’s “NOT QE” is really “QE.”

In a note warning that the Fed’s latest purchase program – whether one calls it QE or NOT QE – will have big, potentially catastrophic costs, Bank of America’s Ralph Axel writes that in the aftermath of the Fed’s new program of T-bill purchases to increase the amount of reserves in the banking system, the Fed made an effort to repeatedly inform markets that this is not a new round of quantitative easing, and yet as the BofA strategist notes, “in important ways it is similar.”

But is it QE? Well, in his October FOMC press conference, Fed Chair Powell said “our T-bill purchases should not be confused with the large-scale asset purchase program that we deployed after the financial crisis. In contrast, purchasing Tbills should not materially affect demand and supply for longer-term securities or financial conditions more broadly.” Chair Powell gives a succinct definition of QE as having two basic elements: (1) supporting longer-term security prices, and (2) easing financial conditions.

Here’s the problem: as we have said since the beginning, and as Bank of America now writes, “the Fed’s T-bill purchase program delivers on both fronts and is therefore similar to QE,” with one exception – the element of forward guidance.

It is, however, BofA’s conclusion that we found most alarming: as Axel writes, in his parting words:

some have argued, including former NY Fed President William Dudley, that the last financial crisis was in part fueled by the Fed’s reluctance to tighten financial conditions as housing markets showed early signs of froth. It seems the Fed’s abundant-reserve regime may carry a new set of risks by supporting increased interconnectedness and overly easy policy (expanding balance sheet during an economic expansion) to maintain funding conditions that may short-circuit the market’s ability to accurately price the supply and demand for leverage as asset prices rise.

In retrospect, we understand why the Fed is terrified of calling the latest QE by its true name: one mistake, and not only will it be the last QE the Fed will ever do, but it could also finally finish what the 2008 financial crisis failed to achieve, only this time the Fed will be powerless to do anything but sit and watch.

This long 1-chart commentary put in an appearance on the Zero Hedge website at 2:43 p.m. on Thursday afternoon EDT — and another link to it is here.


Fed Braces For Year End Repo Turmoil: Announces $55 Billion in 28, 42-Day Repos to Flood System With Cash

Just moments after we reported that according to Bank of America, the U.S. financial system’s reliance on repos could “short-circuit the market’s ability to accurately price the supply and demand for leverage as asset prices rise“, and implicitly, facilitate the next financial crisis because  “the Fed has entered unchartered territory of monetary policy that may stretch beyond its dual mandate“, the Fed confirmed just how reliant both it, and the entire U.S. financial system is on the repo market, when it released its latest term repo schedule, one which for the first time included 28 and 42-day repos which would mature into the new, 2020 year, yet which amount to just a total of $55 billion collectively, an amount which we fear will be far too little to meet year-end liquidity demands, and represents just the first shot in the Fed’s scramble to flood the system with year-end liquidity. Meanwhile, the New York Fed is maintaining its $120BN in overnight repos indefinitely.

Indicatively, this is just how “temporary” the Fed’s overnight repos…Click to enlarge.

… and term repos have become: Click to enlarge.

Appropriately, the Fed admitted that it is starting to freak out about year-end liquidity just minutes after we published a scathing critique of the Fed’s “repo regime” by BofA…

When the time comes for the Fed to unwind its “temporary” repos, we hope it will be more successful then when it tried to “renormalize” monetary policy, which lasted for a few months and then the Fed admitted defeat in a dramatic U-turn, and is now cutting rates instead.

This worthwhile article from the Zero Hedge Internet site was posted there at 3:38 p.m. EST on Thursday afternoon — and another link to it is here.


The Rich’s Reputation Keeps Getting Worse — Bill Bonner

The stock market is hitting new high after new high. But the economy is slipping.

Wall Street and the rich flourish; Main Street and the middle classes fall behind. Capitalists get rich; the proletariat gets nothing. That has been the main story line in the U.S. for the last 30 years.

Pretax corporate profits – the actual earnings of America’s biggest businesses – have gone nowhere since 2012. But the Dow is up by more than 100%.

                                         Battle of the Billionaires

A big story in the papers lately is that arch-capitalist Michael Bloomberg may enter the Democratic race. If so, the election of 2020 could turn into a Battle of the Billionaires. Trump vs. Bloomberg.

But they have more in common than just money. They’re both New Yorkers. And both believe in the power of Big Government to make the world a better place.

But today, we focus on the money – on Wall Street, not Main Street. More specifically, we look at the rich. Not with our mouths open, drooling in envy, struck dumb by their private jets and gaudy mansions. Nor in a spirit of revulsion or revenge.

We have nothing against them. Nor do we particularly admire them.

This interesting commentary from Bill appeared on the bonnerandpartners.com Internet site early on Thursday morning EST — and another link to it is here.


Global Debt Surges Above $250 Trillion as U.S., China Lead Way

Global debt hit a fresh record above $250 trillion in the first half of 2019, with China and the U.S. accounting for more than 60% of new borrowing, the Institute of International Finance said.

Borrowing by governments, households and non-financial business now accounts for more than 240% of the world’s gross domestic product, and it’s growing faster than the global economy, the Washington-based IIF said in a report published Thursday.

In developed countries, it’s governments that account for the bulk of borrowing over the past decade, the IIF said. In emerging markets, companies have taken the lead — but more than half of corporate debt in those countries is likely held by state-owned businesses.

The report cited limits and risks attached to debt-fueled economic growth. It said that emerging markets that have increasingly relied on foreign-currency borrowing — including Turkey, Mexico and Chile — may be exposed to risks if growth slows further.

This brief 1-chart Bloomberg article was posted on their website at 9:20 a.m. Pacific Standard Time on Thursday morning — and I found it embedded in a GATA dispatch yesterday.  Another link to it is here.


In swaps we trust? Disappearing dollars drive currency trading dependence

As dollars dry up, global finance is growing increasingly dependent on opaque currency trading to keep cash flowing.

Banks and other short-term dollar borrowers are becoming ever more reliant on the $3.2 trillion-a-day foreign exchange swap market, data shows, leaving them dangerously exposed should U.S. lenders stop feeding the system, even if only temporarily.

Swaps users had a scare in September, when the U.S. Federal Reserve had to pump cash into markets as rates in the $2.2 trillion U.S. “repo” market spiked and spilled into FX swap markets, sending the premium to borrow dollars shooting higher.

It affected us in the FX swaps market a great deal. There was a lot of panic around, spreads widening, increased volatility,” said James Topham, a Forex forwards trader at Canadian bank BMO, adding that on Sept. 16 “unusually large and persistent” dollar borrowing was evident from clients.

Such reminders of potential disruptions to the “plumbing” of money markets, best exemplified during the 2008 financial crisis, have regulators on guard for anything that could trigger a repeat.

This Reuters story, filed from London, put in an appearance on their website at 12:40 a.m. EDT on Thursday morning — and I found it on the gata.org Internet site.  Another link to it is here.


Is Investing In Foreign Currency Still A Good Idea? — Dennis Miller

In 2008, I began investing in foreign currency. The Fed created trillions of dollars out of thin air, high inflation was sure to follow.

With the help of friend Chuck Butler, I bought FDIC insured foreign currency Certificates of Deposit (CD) through Everbank. I also bought Exchange Traded Funds (ETF) and sent money offshore; investing in stocks and bonds denominated in non-US currencies.

Let the Carter year inflation games begin. I was NOT going to allow the government to destroy our life savings.

In 2008, total government debt was under $9 trillion. The U.S. Debt Clock tells us it has skyrocketed to over $23 trillion, $186,576 for every taxpayer in the U.S.

The investments were earning interest and dividends; we could be patient. Despite record government spending and the Fed creation of $4 trillion out of thin air, the anticipated inflation never came.

What happened?

Inflation occurs when the world no longer wants to hold your currency and dumps it like a hot potato.

Argentina experienced horrendous inflation, destroying much of the wealth of the country. Despite paying double-digit interest rates, no one wanted Argentine money.

What about parity? Why didn’t investors leave the dollar when interest rates dropped and the Fed printed trillions?

This interesting commentary from Dennis showed up on his Internet site on Thursday morning sometime — and another link to it is here.


A few short comments about the Fascist coup in Bolivia — The Saker

These are the folks who just came to power:

They are all members of some kind of Fascist “Christian” cult.

Trump loves this.  He called it a “significant moment for democracy in the Western Hemisphere” and then he proceeded to threaten two more Latin American states by saying “these events send a strong signal to the illegitimate regimes in Venezuela and Nicaragua that democracy and the will of the people will always prevail. We are now one step closer to a completely democratic, prosperous, and free Western Hemisphere”.

In fact, he has a very good point.  What this latest coup signals to all patriotic Latin Americans who want to see their continent free from U.S. oppression is this: if you want to openly defy the diktats of the Empire, make absolutely sure the commanders of your armed forces are loyal to you.  Furthermore, you should never forget that the most powerful weapon of the Empire is not its bloated and mostly clueless military force, but its ability to use corruption to obtain by the printing press what they cannot seize by brute force.

So far, Venezuela, Cuba and Nicaragua have been successful in their resistance against Uncle Shmuel.  Likewise, there seems to be an internal (and covert) “hidden patriotic opposition” inside the Brazilian military (at least according to my Brazilian contacts) which might limit the damage done by the impeachment of Dilma Rousseff and the coup against Lula da Silva (for example, the Brazilian military has declared that they will not allow Brazil or Brazilian forces to be used in an attack against Venezuela).

This rather brief commentary from The Saker put in an appearance on his Internet site on Tuesday — and I thank Larry Galearis for sending it along.  Another link to it is here.


Serbia Buys Nine Tonnes of Gold to Heed President’s Crisis Advice

The biggest former Yugoslav republic is following Hungary and Poland, where officials boosted gold reserves in 2018 to create a bulwark against crisis. Central Bank Governor Jorgovanka Tabakovic, a member of Vucic’s Progressive Party, said the October 9-11 purchases raised the bank’s gold holdings to 10% of total reserves and made good on a suggestion from the president in May.

We have completed gold purchase transactions and Serbia is safer today with 30.4 tonnes of gold worth around €1.3 billion ($1.4 billion),” Tabakovic told reporters in Belgrade Thursday. “For now, we have no plans to buy more.”

The acquisition is the latest in a series of moves by Serbia to shore up its financial stability by changing the structure of its foreign debt and increasing the share of dinars and euros, Tabakovic said. The central bank paid €395 million ($434.3 million) for the gold, $1,503 an ounce, the governor said.

This gold-related Bloomberg news item was posted on their Internet site at 6:11 a.m. PST on Thursday morning — and I found it it in a GATA dispatch yesterday morning.  Another link to it is here.


The PHOTOS and the FUNNIES

Stepping back from the edge of the bench/plateau just a few kilometers north of Ashcroft on July 14…the first photo shows the field of freshly cut alfalfa my vehicle is parked on, with the Thompson River valley/canyon as a background…complete with the CN rail yard.  Turning the camera around 180 degrees shows that the year’s first cut is underway.  If this land wasn’t irrigated it would be sagebrush, bunch grass and rattlesnakes like the hills/mountains around it.  The third photo shows the freshly-cut alfalfa being cut up for silage.  These flat benches/plateaus all along the river are remnants of the lake bed that existed here after the last ice age more than ten thousand years ago.  Since that time, the river has carved out what you see here.  Click to enlarge.


The WRAP

The Thursday trading session certainly appeared to be of the ‘care and maintenance’ variety — as the rallies in gold, silver, platinum weren’t allowed to get far, regardless of what time of day they occurred.  Of course palladium is in a world of its own — and within certain broad parameters, it’s allowed to trade somewhat more freely…its leash being far longer than it is for either silver or gold.  But it’s still on a leash.

Here are the 6-month charts for the four precious metals, plus copper and WTIC.  The precious metals were all allowed to close higher on the day.  But copper was closed back below its 50-day moving average…it’s fifth consecutive down day in a row.  And for the eighth day in a row, WTIC was prevented from closing above its 200-day moving average.

Don’t forget that there are no markets anymore…only interventions…and that applies to the commodities complex as well.

And as I type this paragraph, the London/Zurich opens are less than a minute away — and I see that both gold and silver have been sold steadily but rather indiscriminately lower since trading began at 6:00 p.m. EST in New York on Thursday evening. Gold is currently down $7.30 an ounce — and silver is down 15 cents as London opens. Platinum chopped quietly sideways until shortly after 1:30 p.m. China Standard Time on their Friday afternoon. It was stair-stepped lower in price from there — and is currently down 4 dollars. Palladium was up 10 bucks by 1:30 p.m. CST and, like platinum, ‘da boyz’ showed up at that juncture — and now have it down 5 bucks as Zurich opens.

Net HFT gold volume is pretty heavy already at around 54,500 contracts — and there are 2,946 contracts worth of roll-over/switch volume out of December and into future months. Net HFT silver volume isn’t exactly light either at contracts — and there are only 378 contracts worth of roll-over/switch volume in that precious metal.

The dollar index opened down 1 basis point at 98.15 once trading commenced around 7:45 p.m. EST on Thursday evening in New York, which was 8:45 a.m. China Standard Time on their Friday morning. Its low tick, such as it was, came at noon in Shanghai — and it has been creeping very quietly higher since — and is up 2 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich. Basically the dollar index is doing nothing.


I spoke with Ted at length [and took extensive notes] about this new “Pledged” category that appeared under the HSBC USA banner in the COMEX warehouse stocks…linked here for reference.  This is not something new, as he’d been involved with this sort of thing a long time ago, but at the brokerage level…not on the COMEX warehouse level.  It involves warehouse warrants/receipts that have been deposited as collateral for a margin position, which may or may not involve gold.  He said the number doesn’t really tell you much, because it doesn’t specify whether it’s the bank’s position, or a position held by a customer.  He said that it’s not a big deal in the grand scheme of things…”much ado about nothing” most likely — and his biggest concern was that the usual Internet commentators on this would go on about it like they did for the Eligible vs. Registered categories in the past, which has now [thankfully] been abandoned…and the EFP [Exchange for Physical] numbers that they’re going on about now.

So what Ronan Manly found on the CME’s website about “Pledged” gold was absolutely correct — and here’s the quote that was in his article in Thursday’s column…”Performance Bonds, also known as margins, are deposits held at CME Clearing to ensure that clearing members can meet their obligations to their customers and to CME Clearing.”

Nothing more should be read into it than that, at least for the moment.

Today, around 3:30 p.m. EST, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday — and it should be a goody.

Here’s what silver analyst Ted Butler had to say about it in his mid-week commentary for his paying subscribers on Tuesday “As far as what Friday’s new COT report will indicate, I will be shocked if there isn’t very substantial managed money selling and commercial buying in both gold and silver…Even more than the substantial overall positioning changes I expect to be reported, what I believe will be even more important will be the details involving, among other things, what JPMorgan may have done relative to the other large commercial shorts, how many new short positions were added by the managed money traders — and what, if anything, the big concentrated longs may have done….One thing to keep in mind when viewing the new COT report is that any substantial short covering by the 7 big shorts in gold and silver will indicate that these shorts were bought back at realized losses for the first time ever.


And as I post today’s missive on the website at 4:02 a.m. EST, the first hour of London/Zurich trading has ended. I note that gold and silver both ticked a bit higher in price in London — gold is down $4.70 the ounce — and silver is down 13 cents. Platinum is down only 3 dollars now — but palladium is still down 5 bucks.

Gross gold volume is around 72,500 contracts — and minus current roll-over/switch volume, net HFT gold volume is 65,500 contracts. Net HFT silver volume is a bit over 20,000 contracts — and there’s still only 468 contracts worth of roll-over/switch volume out of December and into future months.

The dollar index has given back what tiny gains it had — and is sitting back at unchanged as of 8:45 a.m. in London/9:45 a.m. in Zurich. It’s still doing nothing.


Since today is Friday, it will be interesting to see what ‘da boyz’ have in store for all the markets, as the there is no price discovery allowed in anything anymore.

I hope you have a great weekend — and I’ll see you here tomorrow with all the COT details.

Ed

All Four Precious Metals Close Higher

14 November 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price edged unevenly higher once trading began at 6:00 p.m. EST in New York on Tuesday evening — and that lasted until the 2:15 p.m. China Standard Time afternoon gold fix in Shanghai.  About an hour and change later it was sold lower — and the low tick of the day, such as it was, came around 8:40 a.m. in London, which was the high of the day for the U.S. dollar index.  It rallied a bit until 10 a.m. GMT — and then chopped very unevenly sideways for the remainder of the Wednesday session.

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

Gold finished the Wednesday session at $1,463.40 spot, up $7.70 on the day.  Net volume was very heavy at just under 301,500 contracts — and there was 58,500 contracts worth of roll-over/switch volume out of December and into future months.

The silver price traded quietly and very erratically higher in Far East and most of London trading — and the high tick of the day came around 12:45 p.m. in London/7:45 a.m. in New York.  At that juncture the price poked its nose above the $17 spot mark, but was hauled lower immediately.  That sell-off lasted until around 8:50 a.m. EST.  It crept very quietly and unevenly higher from there until 2 p.m. in after-hours trading.  Like gold,it jumped a bit higher during the next ten minutes — and obviously ran into ‘something’.  From that point, it was sold a bit lower into the 5:00 p.m. close.

The low and high ticks in silver were reported by the CME Group as $16.72 and $17.00 in the December contract.

Silver finished the Wednesday trading session in New York at 16.945 spot, up 21 cents on the day.  Net volume was fairly heavy at just under 76,000 contracts — and there was a bit over 27,000 contracts worth of roll-over/switch volume out of December and into future months in this precious metal.

The platinum price crawled quietly and unevenly higher until shortly after 10 a.m. in Zurich trading.  From that point it wandered quietly sideways until the trading day ended at 5:00 p.m. EST in New York.  Platinum finished the day at $874 spot, up 7 dollars from Tuesday’s close.

After a down up/dip in morning trading in the Far East on their Wednesday, the palladium price began to head higher — and that state of affairs lasted until a very few minutes after 10 a.m.  in Zurich  It was all quietly and unevenly down hill from there until 3 p.m. in New York — and it tacked on a few more  dollars shortly thereafter, before trading flat until the market closed at 5:00 p.m. EST.  Palladium finished the Wednesday session at $1,686 spot, up 5 bucks from its close on Tuesday.

The dollar index closed very late on Tuesday afternoon in New York at 98.31 — and opened up 2 basis points once trading commenced around 7:45 p.m. EST on Tuesday evening.  From that juncture it didn’t do anything until about twenty minutes after the 2:15 p.m. CET afternoon gold fix in Shanghai.  It rallied a handful of basis points to its 98.45 high tick, which came around 8:35 a.m. in London.  All of that gain was gone, plus a bit more, by 9:55 a.m. GMT.  From that point it edged very quietly and unevenly higher until 12:10 a.m. in New York, but gave all of that gain up by the 5:30 p.m. close of trading.  The dollar index finished the Wednesday session in New York at 98.37…up 6 basis points from Tuesday’s close.

All in all, it was a ‘nothing’ sort of day in the currencies, but all four precious metals were allowed to close higher on the day regardless.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the fine folks over at the stockcharts.com Internet site.  The delta between its close…98.23…and the close on the DXY chart above, was basis points on Wednesday.  Click to enlarge as well.

The gold stocks gapped up 1.5 percent at the 9:30 a.m. open in New York on Wednesday morning.  They added a bit more to that amount by around 10:45 a.m. EST — and then traded in an down/up manner until around 2:10 p.m.  From there they sold off a bit going into the 4:00 p.m. EST close.  The HUI finished higher by 1.18 percent.

In all respects that mattered, the silver equities traded in a mostly similar manner as their golden brethren.  But their rallies at the 9:30 a.m. open in New York weren’t quite as enthusiastic.  Then from 2:10 p.m. onwards, as did the gold shares, the silver equities sold off rather severely — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up a piddling 0.21 percent.  Considering the nice gain in the underlying precious metal, I was expecting better.  Click to enlarge.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, updated with Wednesday’s dojis.  Click to enlarge as well.

Of the three laggards in the Silver 7 Index, Peñoles and Hecla closed up tiny amounts — and Buenaventura closed lower by 1.38 percent.  First Majestic Silver closed down a tiny amount as well…0.85 percent.  I was underwhelmed.


The CME Daily Delivery Report showed that 207 gold and 7 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, of the two short/issuers in total, the only one that mattered  was HSBC USA with 200 contracts out of its in-house/proprietary trading account.  There were four long/stoppers in total — and the largest by far was JPMorgan, with 141 contracts.  In second and third place were Advantage and ADM, with 37 and 17 contracts.  All contracts stopped were for their respective client accounts.

In silver, ADM was the sole short/issuer.  They were also the only long/stopper.

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

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in November rose by 24 contracts, leaving 257 still around, minus the 207 mentioned a few short paragraphs ago.  Tuesday’s Daily Delivery Report showed that 4 gold contracts were actually posted for delivery today, so that means that 24+4=28 more gold contacts just got added to November.  Silver o.i. in November declined by 20 contracts, leaving just 7 left…minus the 7 contracts mentioned a few short paragraphs ago.  Tuesday’s Daily Delivery Report showed that 27 silver contracts were actually posted for delivery today, so that means that 27-20=7 more silver contracts were just added to the November delivery month.  Those are most certainly the same 7 contracts that are out for delivery on Friday — and mentioned in the Daily Delivery Report above.


There was another withdrawal form GLD yesterday.  This time an authorized participant removed a fairly small 10,252 troy ounces.  Normally a withdrawal of this size would represent a fee payment of some kind.  If true, it’s a pretty chunky one…although I must admit it’s been a very long time since I’ve seen a withdrawal of this size from GLD, so that may in fact be the case.

There was a big withdrawal from SLV, as an a.p. took out 2,523,328 troy ounces.  And whether this withdrawal was of the “plain vanilla” variety…or a conversion of SLV shares for physical metal…I’m sure Ted would suspect that either way, JPMorgan owns it all now.

In other gold and silver ETFs on Planet Earth on Wednesday…net of COMEX inventory movements — and the goings-on in GLD and SLV…there was a net 26,295 troy ounces of gold withdrawn, but in silver, there was a net 47,684 troy ounces added.


There was a sales report from the U.S. Mint on Wednesday.  They sold 6,500 troy ounces of gold eagles — 65,000 silver eagles — and 2,500 one-ounce 24K gold buffaloes.  Those gold buffalo sales were the first ones so far in November.

There wasn’t much activity in gold over at the COMEX-approved depositories on Tuesday.  Nothing was reported received — and only 225.050 troy ounces/7 kilobars [U.K./U.S. kilobar weight] was shipped out.  That occurred at Canada’s Scotiabank.  There was also a paper transfer from the Eligible category — and into Registered over at HSBC USA…19,999 troy ounces.  The link to this is here.

In silver, there was one truckload…600,811 troy ounces…received at Canada’s Scotiabank — and that was all the ‘in’ activity there was.  There was 567,084 troy ounces shipped out…541,113 troy ounces from CNT…24,889 from the International Depository Services of Delaware — and the remaining 1,081 troy ounces [one good delivery bar] from Delaware.  There was also a paper transfer of 69,212 troy ounces from the Eligible category — and into Registered over at CNT.  This amount, plus the paper transfer in gold yesterday, looks destined for delivery in November.  The link to all this silver activity is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 871 of them — and shipped out 905.  Except for the 371 kilobars dropped off at Loomis International, the remaining in/out activity was at Brink’s, Inc.  The link to that is here.


Here’s another 2-part chart that Nick passed around on Sunday.  It shows Silk Road Gold Demand updated as of the end of September 2019.  During September, there was total silk road demand of 173.8 tonnes.  Although impressive, if you check Part 2 at the bottom of this chart…Global Production vs. Monthly Demand…you’ll see that Silk Road demand has taken a big hit since the beginning of the year.  That’s almost entirely due to the fall-off in demand in India and China.  Click to enlarge.

It was another fairly quiet news day — and I don’t have much in the way of stories/articles for you again today.


CRITICAL READS

October Budget Deficit Surges 34% to $134 Billion, Worst in Five Years

One month after the Treasury reported that in fiscal 2019 the U.S. budget deficit hit $984 billion, a 26% increase from a year earlier, and the largest annual deficit since 2012’s $1.1 trillion, today the U.S. Treasury released the latest monthly deficit data which revealed that in October, the first month of Fiscal 2020, the U.S. deficit shortfall hit $134 billion, a $34 billion, or 34%, increase to the $100 billion deficit in October 2018, bigger than the average forecast of $130 billion.  Click to enlarge.

October’s deficit was the biggest in five years, just shy of the $136.5 billion in October 2015, and sets the U.S. on the path to surpassing a $1 trillion deficit for the first time in eight years.

In the first month of fiscal 2020, income of $246 billion dropped 2.8% from a year earlier, while spending of $380 billion jumped 7.6%. The biggest sources of income were individual income taxes ($126 billion), social insurance and retirement ($90 billion), while the biggest outlays were social security ($89 billion), national defense ($71 billion), medicare ($56 billion) and health ($51) billion, while the U.S. Treasury spent $33 billion on interest on the Federal debt, roughly the same that it spent on veterans’ benefits, education, and agriculture combined.

Addressing Congress earlier on Wednesday, Fed Chairman Jerome Powell said that “the federal budget is on an unsustainable path” that ultimately could limit lawmakers’ ability to support the economy in a downturn. During the question-and-answer period before the Joint Economic Committee, Powell said lawmakers can’t ignore deficits and that it’s important for the economy to grow faster than debt. Alas, one look at the CBO’s long term debt forecast chart below, suggests that by that definition, the U.S. is probably doomed.  Click to enlarge.

This news item was posted on the Zero Hedge website at 3:24 p.m. on Wednesday afternoon EST — and another link to it is hereGregory Mannarino‘s post market close rant for Wednesday is linked here.


Fed Will Not Disclose Which Banks Are Receiving Repo Cash For at Least Two Years

If you want to know which investment houses have been getting the infamous “repo” loans from the Federal Reserve Bank of New York in recent weeks, as GATA has wanted to know, you’ll have to wait two years, according to a letter received from the bank today in response GATA’s request for the information.  Click to enlarge.

The delay, the New York Fed’s letter says, is authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Perhaps more interestingly, the New York Fed’s letter, signed by Corporate Secretary Shawn Elizabeth Phillips, contends that the bank is exempt from the federal Freedom of Information Act but tries to comply with its spirit.

Such a claim of exemption was not made by the Federal Reserve’s Board of Governors during GATA’s FOIA lawsuit against it in 2011, in which GATA sought access to the board’s gold-related documents. GATA technically won the case when U.S. District Judge Ellen Segal Huvelle ruled that one such document was illegally withheld and ordered the board to disclose it to GATA and pay the organization court costs of $2,670:

What kind of system of government is it when every week an entity created by ordinary legislation can create enormous amounts of a nation’s currency and disburse it to unidentified parties without any oversight by the people’s elected representatives, news organizations, and ordinary citizens? It sure doesn’t sound like “the land of the free and the home of the brave.”

This GATA dispatch from Chris Powell appeared on the Zero Hedge website at 6:10 p.m. EST on Wednesday evening — and it’s definitely worth your time.  Another link to it is here.


A Lagging Economy is Following Trump to the 2020 Ballot Box — Bill Bonner

Our dreary job is getting drearier and drearier.

We used to lighten it up with jolly mockery. “Laugh and know,” was the Roman poet Martial’s formula. You only really understand the absurdities, vanities, and stupidities of the world when you can laugh at them. Then, they are entertaining rather than irritating.

But now, it’s getting harder and harder to ridicule the great and the good. The most lunkheaded of them are given Nobel prizes… appointed to head the IMF… or elected president!

Sarcasm is mistaken for earnest praise. And our mockery falls short; they mock themselves better than we ever could.

                                         Parody in New York

Of course, Dear Readers will know what’s on our mind: President Trump’s self-parody at the Economic Club of New York yesterday.

As you know, we had been on the edge of our seats. We thought he would blow his own horn, in a fanfare of triumphalism, announcing a great victory in the trade war, which would send the stock market higher. Instead, he largely dodged the trade issue and took the occasion to present a whole orchestra of off-key musicians, sour notes, and noisy nonsense.

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


Russia to cut share of U.S. dollar in National Wealth Fund, mulls other currencies

Russia will reduce the share of the U.S. dollar in its National Wealth Fund and is considering investing in other foreign currencies including the Chinese yuan, Deputy Finance Minister Vladimir Kolychev said on Wednesday.

Kolychev confirmed a Reuters report from earlier this month that Russia was planning to diversify its foreign currency holdings in 2020.

Kolychev said the move was in part meant to shield Russian reserves from external risks. He did not give an exact figure for what the U.S. dollar’s share would be trimmed to in the National Wealth Fund.

The U.S. unit made up about 36% of the National Wealth Fund, or $124.5 billion, as of end-October, according to Reuters calculations based on finance ministry data.

Geopolitical risks are one of the key factors in determining the structure of the National Wealth Fund,” he told reporters on the sidelines of a conference in central Moscow.

I can say with certainty that the U.S. dollar share will be smaller,” Kolychev said. “Different currencies are being considered… including the yuan.”

This Reuters article, filed from Moscow appeared on their Internet site at 4:24 a.m. EST on Wednesday morning — and I found it on the gata.org Internet site.  Another link to it is here.


John Hathaway in Conversation with Anthony Vaccaro

This interview with John took place at the Precious Metals Summit in Zurich this past weekend…the same one where Grant Williams presented — and that I feature in Wednesday’s column.

I haven’t had the chance to watch it yet, so you’re on your own with this one.  It runs for about 42 minutes — and was posted on the gowebcasting.com Internet site on Monday.  I found it on the Sharps Pixley website — and another link to it is here.


The PHOTOS and the FUNNIES

We’re still in Ashcroft on July 14 — and now on the north side of the Bonaparte River.  Photo 1: “Rattlesnake and Kozy” Roads…you couldn’t dream up a street sign like that…how incongruous — and I just had to save it for posterity.  Note the top of the bench/plateau at the top of the photo.  Kozy Road ends less than 100 meters past this sign — and then it’s a very steep climb on an unmaintained clay/gravel road to the top.  I saw the road on Google Earth the day before — and there was no stopping me once I saw it was there, as I knew the view would be spectacular.  It was.  Photos two and three were taken from a few hundred meters apart…the first looking generally east up the Thompson River — and the second…mostly south.  CP rail is in the foreground — and the CN rail yard further back, share the same side of the river for obvious reasons when you look at the bluff I’m standing on.  You can’t see the town at all in the third shot, as it’s hidden by the bench in the foreground.  But if you look closely, you can just make out where the Bonaparte River empties into the Thompson in the center right of the shot.  Click to enlarge.


The WRAP

We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K.” — Eddie George, Governor Bank of England, in a conversation with the CEO of Lonmin, September 1999


It was an up day in all four precious metals on Wednesday.  Unfortunately — and for whatever reason, that fact didn’t show up in their respective equities — and I’m not sure why.

I’ve always harboured some suspicion that the-powers-be buy boatloads of precious metal shares when their being beaten into the dirt — and then sell them into the subsequent rally in order to prevent them from rising too far too fast.  But it’s way too soon to tell whether this going on or not…or is already happening.  But as I said before, it’s something that I look out for.

Here are the 6-month charts for the Big 6 commodities — and as I’ve already mentioned, all four precious metals closed higher on the day.  Copper was closed at a new low for this move down — and WTIC didn’t do much of anything.  Click to enlarge.

And as I type this paragraph, the London open is less than a minute away — and I note that the gold price was sold a few dollars lower the moment that trading began at 6:00 p.m. EST in New York on Wednesday evening. It has been edging quietly higher since — and is up $2.50 the ounce at the moment. The silver price was sold a bit lower by around 9:20 a.m. China Standard Time on their Thursday morning, but rallied back to a bit above unchanged by shortly after 11 a.m. CST. It has been chopping quietly sideways since — and is sitting at unchanged as London opens. Platinum had a broad but shallow down/up move in Far East trading — and is currently back at unchanged as well. The palladium price chopped quietly sideways until 11 a.m. CST — and then began to head higher. That lasted until 3 p.m. in Shanghai, but was sold a bit lower after that, but then took off higher just minutes before the Zurich open — and it’s up 20 dollars the ounce as Zurich opens.

Net HFT gold volume is about 51,000 contracts — and there’s only 1,514 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is 14,000 contracts — and there’s only 475 contracts worth of roll-over/switch volume on top of that.

The dollar index opened down about 4 basis points once trading commenced around 7:45 p.m. EDT in New York on Wednesday evening, which was 8:45 a.m. China Standard Time on their Thursday morning. It was up 4 basis points or so by minutes before 2 p.m. CST — and has slid since then. And as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is down 2 basis points. In most respects that matter, the dollar index really isn’t doing much of anything at the moment.


Starting with Monday’s COMEX inventory report for gold on the CME’s website, I noticed a new category pop up under HSBC USA.  It was called “Pledged” gold.  For as long as I can remember, there was only the Registered and Eligible categories — and when it showed up, it only had a hair over 100 troy ounces in it….one good delivery bar.  Because the amount was so small, I didn’t bother with it.

But yesterday when I was checking the the warehouse stocks…which I do every day…that number had jumped up to 237,553 troy ounces…a bit over 8 tonnes.  That’s a lot of gold.

Ronan Manley over at the Singapore-based bullionstar.com Internet site had a lengthy article about it headlined “Pledged Gold – Shrinking the Pool of Registered Inventory” — and in it he had this to say…”Pledged is a new gold inventory category representing COMEX gold warrants which have been deposited with CME Clearing as performance bond collateral, in other words margin collateral. CME defines performance bonds as follows:

Performance Bonds, also known as margins, are deposits held at CME Clearing to ensure that clearing members can meet their obligations to their customers and to CME Clearing.””

I fired off an e-mail to Ted as soon as I saw the numbers — and I haven’t had a reply.  I’ll certainly be talking to him about this later today — and I’ll let you know what he had to say.


And as I post today’s column on the website at 4:02 a.m. EST, I see that gold and silver have ticked a bit higher during the first hour of London trading. But then at 8:40 a.m. GMT, both jumped up a fair amount. Gold is currently higher by $6.40 an ounce — and silver by 13 cents. Platinum is now up a dollar — and palladium is up 17 dollars as the first hour of Zurich trading ends.

Gross gold volume is a bit over 73,000 contracts — and minus the current roll-over/switch volume, net HFT gold volume is around 66,500 contracts. Net HFT silver volume is around 16,500 contracts — and there’s 1,000 contracts worth of roll-over/switch volume out of December and into future months.

The dollar index has continued its quiet descent during the last hour — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, it’s now down 6 basis points.

That’s it for yet another day — and I’ll see you here tomorrow.

Ed

Another Positive Day For the Precious Metal Equities

13 November 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price opened about unchanged once trading began at 6:00 p.m. EST on Monday evening in New York.  It then traded flat until shortly after 1 p.m. China Standard Time on their Tuesday morning.  It was sold down about 7 bucks or so by around 2:40 p.m. CST — and then traded very unevenly sideways with a slight positive bias until 2 p.m. in after-hours trading in New York.  It then jumped back above unchanged by about five dollars, but most of that gain was taken away starting a few minutes before 3 p.m.  The low tick — and a new intraday low for this move down, was set around 10:40 a.m. EST.

The low and high for gold were recorded as $1,449.50 and $1,457.80 in the December contract.

Gold was closed on Tuesday afternoon in New York at $1,455.70 spot, up 30 cents on the day.  Net volume was very heavy at a bit over 328,000 contracts — and there was a monstrous 107,000 contracts worth of roll-over/switch volume out of December and into future months.

The silver price chopped unevenly sideways in morning trading in the Far East on their Tuesday — and ‘da boyz’ turned the silver price lower at the same time as they did for gold…shortly after 1 p.m. China Standard Time on their Tuesday afternoon.  It was an erratic price ride lower from there — and also like gold, silver’s low tick of the day was set at around 10:40 a.m. in New York.  It also rallied at 2 p.m. EST in after-hours trading and, like gold, most of that gain vanished by the 5:00 close of trading.

The high and low ticks in silver were reported by the CME Group as $16.875 and $16.665 in the December contract.

Silver was closed in New York yesterday at $16.735 spot, down 11 cents from Monday.  Like in gold, silver set a new intraday low price — and also a new low close for this engineered price decline lower.  Net volume was fairly decent at just over 70,500 contracts — and there was just under 26,000 contracts worth of roll-over/switch volume out of December and into future months.

The platinum price crept quietly and a bit unevenly higher until 1 p.m. CST — and very shortly after that the price pressure began in that precious metal as well.  The low tick of the day was set at the 10 a.m. EST afternoon gold fix in London — and it was bounced off that price numerous times until shortly before 1 p.m. in New York trading.  It ticked a few dollars higher over the next two hours, before selling off a dollar or so into the 5:00 p.m. close.  Platinum was closed at $867 spot, down 5 bucks from Monday.  Platinum was also closed at a new low for this move down — and very close to its 200-day moving average.

Palladium had an up/down move of about 13 dollars in early morning trading in the Far East on their Tuesday — and then traded flat until a few minutes after 1 p.m. CST.  It began to rally quietly and somewhat unevenly higher from that juncture — and the high tick of the day was set around 8:30 a.m. in COMEX trading in New York.  It was sold unevenly lower until 11:30 a.m. EST — and gained a handful of dollars back around 1 p.m.  From there it traded sideways until the market closed at 5:00 p.m. EST.  Palladium finished the Tuesday session in New York at $1,681 spot, up 14 dollars from its Monday close.

The dollar index closed very late on Monday afternoon in New York at 98.20 — and opened up a couple of basis points once trading commenced around 7:45 p.m. EST on Monday evening, which was 8:45 a.m. China Standard Time on their Tuesday morning.  From that point it wandered very unevenly higher until the high tick was set at 10:40 a.m. in New York…which just happened to be the low ticks of the day in both silver and gold.  It was sold lower until around 12:45 p.m. EST — and chopped very quietly and unevenly higher into the 5:30 p.m. close from there.  The dollar index finished the Tuesday session at 98.31…up 11 basis points from Monday’s close.

I suppose a case could be made that silver and platinum followed the machinations of the dollar index on Tuesday…but certainly not gold or palladium.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…98.15…and the close on the DXY chart above, was 16 basis points on Tuesday.  Click to enlarge as well.

The gold shares ticked higher by a bit once trading began at 9:30 a.m. in New York on Tuesday morning, but then they sold off until around 10:45 a.m. EST…about five minutes after gold hit its low tick of the day.  They began to head higher from there — and manged to close in positive territory by a decent amount, as the HUI finished up 1.02 percent on the day.

It was the same trading pattern for the silver equities — and they managed to finish the Tuesday trading session in the green as well.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 0.87 percent.  Click to enlarge.

The silver equities have gained back everything they’ve lost, plus a bit more, since the engineered price decline began in silver six trading days ago.

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

The three usual laggards…Peñoles, Buenaventura and Hecla…were no help to the Silver 7 Index…as they all closed lower on the day.  First Majestic Silver closed higher by 3.52 percent.


The CME Daily Delivery Report showed that 4 gold and 27 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.

In gold, there were three short/issuers in total, so I’m not going to bother to itemize them.  The sole long/stopper was JPMorgan — and all 4 were for its client account.

In silver, there were three short/issuers in total.  The two largest were ADM and Advantage, with 18 and 8 contracts.  The sole long/stopper of all 27 contracts was ADM.  All transactions, 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 Tuesday trading session showed that gold open interest in November declined by 7 contracts, leaving 233 still open, minus the 4 contracts mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 9 gold contracts were actually posted for delivery today, so that means that 9-7=2 more gold contracts were just added to November deliveries.  Silver o.i. in November rose by 22 contracts, leaving 27 still around, minus the 27 mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 5 silver contracts were actually posted for delivery today, so that means that 22+5=27 more silver contracts were just added to November — and those are obviously the ones that are our for delivery on Thursday as per the above Daily Delivery Report.


There was another decent withdrawal from GLD on Tuesday, as an authorized participant took out 131,894 troy ounces.  There were no reported changes in SLV.

In other gold and silver ETFs on Planet Earth on Tuesday…minus the goings-on in COMEX warehouse stocks, GLD & SLV…there was a net 31,763 troy ounces of gold withdrawn — and there was a net 129,646 troy ounces of silver withdrawn as well.

Once again there was no sales report from the U.S. Mint.

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday was 289.350 troy ounces/9 kilobars [U.K./U.S. kilobar weight] that was received at Delaware.  Nothing was reported shipped out.  I won’t bother linking this.

There was a bit more activity in silver, as 8,289 troy ounces was received at Delaware — and there was a smallish truckload…529,596 troy ounces…shipped out of Canada’s Scotiabank.  The link to that is here.

There was no in/out activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.


Here’s a chart that Nick Laird passed around on Sunday.  It shows the withdrawals from the Shanghai Gold Exchange, updated with October’s data.  During that month there was a very skinny 91.15 tonnes taken out.

If you look at the ‘Monthly Withdrawals‘ insert chart at the bottom, you’ll see that SGE withdrawals have been in a steep downward trend for the last seven months.  Click to enlarge.

It was another very quiet news day — and I don’t have much for you.


CRITICAL READS

A Trade War Win Won’t Boost the U.S. Economy Enough — Bill Bonner

The big news leading up to today was that the president was going to make an important announcement.

If The Donald announces a victory, stocks are likely to rise. But there is no plausible trade war victory that would boost the value of America’s capital stock appreciably.

And the stock market is already at all-time highs. (Trump’s trade advisor, Peter Navarro, says the Dow could hit 30,000 in 2020!) Buy! Buy! Buy!

Unemployment is at all-time lows. And the economy is still rolling along – at the same 2.5% growth rate it did under Obama.

But let’s squint and look beyond the headline news.

In the first place, the dollar and the stock market no longer accurately record the real value of America’s industries. In terms of America’s most reliable money – the dollar before 1971 – even with recent gains, the typical stock owner has less than half as much real wealth as he had in 1999.

And even that is more a feature of the Federal Reserve’s cheap-money policies, buybacks, and other financial shenanigans than it is a real measure of what corporate America is worth.

Bill’s daily commentary put in an appearance on the bonnerandpartners.com Internet site early on Tuesday morning EDT — and another link to it is hereGregory Mannarino‘s post market close rant for Tuesday is linked here.


Now That We’ve Incentivized Sociopaths…Guess What Happens Next — Charles Hugh Smith

“Sociopath” is a word we now encounter regularly in the mainstream media, but what does it mean? Here is a list of 16 traits, many of which are visible in lionized corporate and political leaders and entrepreneurs.

One key trait is a lack of moral responsibility or conscience; the sociopath feels no remorse if he/she takes advantage of people or exploits them.

Sociopaths are masters of superficial charm, intelligence and confidence, and adept at massaging or misrepresenting reality up to and including outright lying to persuade others or get their way.

Like all psychological syndromes (manic depression, autism, bipolar disorder, etc.), there is a wide spectrum of sociopathological traits, some of which may offer some adaptive benefits (and hence their continued presence in the human genome). In other words, an individual can have a few of the traits in greater or lesser proportions.

Thus the modern BBC Sherlock Holmes (played by Benedict Cumberbatch) describes himself as a “high-functioning sociopath” (though many contest this diagnosis of the original Holmes in Arthur Conan Doyle’s stories).

There may be no way to excise the incentives for sociopathy, because the incentives all favor the sociopaths’ most fertile ground: the Federal Reserve’s money spigot of nearly free money for the most sociopathological financiers and corporations; amoral, conscience-free greed; the worship of short-term gains, regardless of consequences, and the extreme profitability of rigged games and The Big Con PR (“we’re only evil when it’s profitable, which is, well, all the time“.)

As long as central banks create and distribute trillions in conscience-free credit to conscience-free financiers and corporations, the incentives for sociopathy only increase, and the incentives for everyone else to opt out increase proportionately.

What happens next? The dead wood of sociopathy is ignited by a random lightning strike, and the entire financial system (and the economy it feeds) burns to the ground in an uncontrollable conflagration of blowback, consequence and karma.

This worthwhile commentary by Charles was posted on the Zero Hedge website at 8:30 a.m. EST on Tuesday morning — and another link to it is here.


Farage’s “Big Ask” May Save Brexit as Johnson Concedes — Tom Luongo

Nigel Farage is the face of Brexit. From the start of this political career he’s gone for the “Big Ask,” as his friend Donald Trump would put it, get the U.K. out of the European Union.

Everyone in the Western political establishment hates him because of this.

The British Deep State is old, vast and powerful still.

Johnson is a face for that and Farage knows it.

Over the past year he has been prophetic in his analysis of how the Conservatives have maneuvered to betray the U.K.’s departure from the European Union.

For more than a week since announcing the Brexit Party’s electoral strategy, Farage has been under enormous pressure from all quarters to stand down many of his candidates and not fight the Tories.

The Tories cannot form an alliance with an outsider like Farage. That would be damning to them, conceding they are the past.

Farage is hated in British political circles more than Jeremy Corbyn. He has cost them elections, prestige, power and most importantly, their air of legitimacy.

So Johnson could never give Nigel what he and millions of Brexit voters wanted. This validates my analysis of him as a keeper of the political status quo. And that he is using Brexit cynically to maintain it.

Smartly, Farage did not act like a second class citizen here. He had to lead with his best. But leadership takes many forms.

So, after the Tories made their initial push to attack Farage personally, taking a page out of the Alinsky playbook, by saying it’s all about his ego and his unwillingness to compromises, Farage outmaneuvered them by falling on his sword twice.

First by not standing at an MP, putting country before himself. And, second, by standing down his candidates to the delight of Leavers all over the U.K.

This Brexit thingy would make for a great soap opera plot if it weren’t so serious.  This worthwhile [if you have the interest] commentary from Tom showed up on the Zero Hedge website at 3:30 a.m. on Tuesday morning EDT — and another link to it is here.


Trump Expected to Delay Decision on E.U. Auto Tariffs

After months of threats, the deadline for the White House to impose new tariffs on cars and auto parts manufactured in the E.U. is fast approaching. And according to Bloomberg, the Trump Administration will – for now, at least – opt to maintain the status quo.

This isn’t a surprise: Commerce Secretary Wilbur Ross, in an interview with Bloomberg TV earlier this month, signaled that a postponement was likely.

Our hope is that the negotiations we’ve been having with individual companies about their capital investment plans will bear enough fruit that it may not be necessary to put the 232 fully into effect, may not even be necessary to put it partly in effect,” Ross said, referencing the national-security investigation under Section 232 of a 1962 trade law.

We’ve had very good conversations with our European friends, with our Japanese friends, with our Korean friends, and those are the major auto producing sectors,” Ross said in Bangkok, where he’s attending a regional summit. South Korea was earlier exempted from any future tariffs because it renegotiated the U.S.-Korea Free Trade Agreement, or KORUS, last year.

Last year, Trump infuriated European leaders by declaring American imports of steel and aluminum a security threat and imposing levies of 25% and 10%, respectively, on shipments from around the world, including the E.U. That prompted the bloc to retaliate with tariffs on American goods such as Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey.

And next time, the bloc has threatened tariffs on a much wider array of U.S. imports to the E.U. The 28-country bloc has argued that it doesn’t pose a threat to U.S. national security and shouldn’t be targets of American tariffs.

Washington has already hit the E.U. with duties on its steel and aluminum exports using the same national-security justification (the administration staunchly refused to exempt the E.U. from the steel and aluminum tariffs, though imports from the bloc are relatively insignificant. Every year, car imports from the E.U. are worth roughly 10x the steel and aluminum trade.

Imposing new tariffs on cars wouldn’t juts be a nuisance – it would be a declaration of war, seriously impacting the American relationship with the E.U.

This story appeared on the Zero Hedge website at 6:00 a.m. on Tuesday morning EDT — and another link to it is here.


Ridiculous“: $1 Trillion In Orders For $7 Billion Chinese Bond

In recent years, hardened bond market cynics snickered when insolvent European nations such as Italy or Greece saw 4, 5, or more times demand for their bond offerings than was for sale, whispering to themselves that such oversubscriptions for potentially worthless debt assure a very unhappy ending. Yet not even the biggest cynics were prepared for what just happened in China.

When Shanghai Pudong Development Bank sold $7 billion in convertible bonds last month, investors placed more than $1 trillion worth of orders, making this a 140 times oversubscribed offering, enough to shock even the most seasoned China investor, the Financial Times reports.

That $1 trillion in bids was almost as large as the entire stock-market capitalisation of Apple or Microsoft — the two biggest companies in the world. “It was a ridiculous amount,” said Gerry Alfonso, head of research at Shenwan Hongyuan Securities in Shanghai. It is also a testament to how desperate the world has become in chasing yields and return, as well as just how much excess liquidity there is in the market at the moment

While new issue oversubscriptions have become the norm in recent years, this absurd case had several Chinese market unique characteristics, reflecting a surge in issuance of such equity-linked instruments in China — a rise helped by what the FT called “an unusual embrace of the product by policymakers better known for cracking down on financial innovations to ensure stability.”

Here’s the punchline: Shanghai Pudong’s insane 140x oversubscription is not even the biggest on record. As the FT notes, before regulators banned buyers from bidding through multiple accounts in March, it was not unusual for convertibles to be even more heavily over-subscribed. As such, the largest issuance on record of nearly $6bn, from China CITIC Bank, was about 5,500 times oversubscribed, according to local media. That means that there were $33 trillion in orders for the bond offering, roughly three times the size of China’s entire economy.

Wow!  “Irrational Exuberance” it is!  This Zero Hedge article was posted on their Internet site at 8:45 p.m. on Tuesday evening EST — and another link to it is here.


“CRIKEY!! (What’s Going on With Gold?) — Grant Williams

This video presentation by Grant Williams occurred at the Precious Metals Summit in Zurich on Monday — and I would make the assumption that it’s the same video presentation that he made at the New Orleans Investment Conference ten days ago or so.

Of course he doesn’t mention anything about the ongoing precious metal price management scheme by the U.S. bullion banks, but this 33-minute video is definitely worth watching nonetheless.  He’s a great speaker — and the accompanying graphics are as slick at they come.  I watched it from beginning to end.

I found this on the Sharps Pixley website yesterday afternoon — and another link to it is here.


The PHOTOS and the FUNNIES

On July 15 we were driving to Ashcroft — and the purpose of the trip was to find where the Bonaparte River emptied into the Thompson River just north of the town.  I had to use Google Earth to find the road that led to it, because it wasn’t on any road map.  These four photos were taken along that road.  The first is of this very large horse…Clydesdale or Percheron type…in a field, not tethered — and the gate to the pasture was wide open. I took the photo from a safe distance.  The second photo was taken from the same spot, except looking north across the Bonaparte river valley to the bench beyond — and the photos from that vantage point will be in tomorrow’s column.  The last two photos were taken at the bridge over the river — and as we soon found out, the confluence was not accessible because one had to cross private property to get to it. There was no road access at all.  Click to enlarge.


The WRAP

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.” — H.L. Mencken


There were new intraday lows in gold, silver and platinum on Tuesday.  Both copper and WTIC closed a bit lower as well.  The silver price is now bordering on oversold according to its RSI trace on the 6-month chart below — and gold and platinum are getting pretty close as well.

And it was yet another day where the precious metals shares closed higher after rallying sharply off their lows.  The silver equities have gained back all they’ve lost since the engineered price decline in silver began six trading days ago…despite the fact that silver is now lower by $1.30+ per ounce.

Here are the 6-month charts for the four precious metals, plus copper and WTIC — and the above mentioned changes should be noted.  Click to enlarge.

And as I type this paragraph, the London/Zurich opens are less than a minute away — and I note that the gold price began to wander quietly higher as soon as trading began at 6:00 p.m. EST in New York on Tuesday evening. That lasted until the 2:15 p.m. China Standard Time afternoon gold fix in Shanghai — and it has been sold lower since. It’s up only $4.50 an ounce currently. The rally in silver has been even more impressive — and its price was capped a very few minutes before 3 p.m. CST. It’s off that current high tick by a decent amount — and is up 15 the ounce. Platinum has been wandering quietly and very unevenly higher in Far East trading — and it’s up 5 bucks at the moment. After a brief dip in early morning trading in Shanghai, palladium has been climbing steadily higher since but, like the other three precious metals, is off its high tick by a bit — and is up 11 dollars as Zurich opens.

Net HFT gold volume is around 51,500 contracts — and there’s only 832 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is fairly chunky already at around 19,500 contracts — and roll-over/switch volume out of December and into future months is a tiny 832 contracts.

The dollar index opened up 2 basis points at 98.33 once trading commenced around 7:45 p.m. EST on Tuesday evening, which was 8:45 a.m. CST on their Wednesday morning. It has been chopping quietly and unevenly sideways since — and is up 5 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.


Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and it should be sight for sore eyes.  As I mentioned in The Wrap in yesterday’s column, I was hoping that we would see now low closes in gold and silver on Wednesday — and I got my wish, so it will just be more icing on the cake.

But that doesn’t mean that we’re done to the downside — and nothing will surprise me going forward in the very near term.  But it’s safe to say that we’re much closer to the bottom of these engineered price declines than we are to their tops.


And as I post today’s column on the website at 4:02 a.m. EST, I see that ‘da boyz’ are busy attempting to erase all of the gains that gold and silver put on during the Far East trading session.  And as of the first hour of London/Zurich trading ends, gold is up $4.40 — and silver is up 12 cents an ounce.  Platinum is up 7 bucks, but palladium has resumed its price trend higher — and is now up 25 dollars.

Gross gold volume is coming up on 70,500 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is around 65,500 contracts.  Net HFT silver volume is a bit over 21,500 contracts — and there’s still only 521 contracts worth of roll-over/switch volume in this precious metal.

The dollar index began to ‘rally’ about twenty minutes after the 2:15 p.m. afternoon gold fix in Shanghai.  That ‘rally’ topped out minutes before 8:30 a.m. in London — and is now up 9 basis points as of 8:45 a.m. in London/9:45 a.m. in Zurich.  It’s obvious that JPMorgan et al. used this ‘rally’ to push silver and gold prices lower.

That’s all I have for today — and I’ll see you here tomorrow.

Ed

Another Up Day For the Silver Equities

12 November 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price began to crawl unevenly higher once trading began at 6:00 p.m. EST in New York on Sunday evening — and was up about four bucks or so by shortly before 10 a.m. China Standard Time on their Monday morning.  It traded sideways from that juncture until the 2:15 p.m. CST afternoon gold fix over there — and then crept higher until a few minutes before 11 a.m. in London  It was sold quietly lower until the afternoon gold fix…10 a.m. EST…and then ‘da boyz’ showed up.  The low tick was set a minute or so before the 11 a.m. EST London close.  It jumped sharply higher until noon in New York — and then edged a bit higher until the 1:30 p.m. COMEX close.  It was sold a bit lower until trading ended at 5:00 p.m. EST.

The high and low ticks were reported by the CME Group as $1,467.40 and $1,448.90 in the December contract.

The gold price was closed in New York on Monday at $1,455.40 spot, down $2.60 from Friday.  Net volume wasn’t overly heavy at just under 256,000 contracts — and there was around 63,500 contracts worth of roll-over/switch volume out of the December and into future months.

The silver price followed the same general price path as gold on Monday, with the only noticeable difference being that the price edged a bit higher between the COMEX open and the afternoon gold fix in London.  After that, the price activity was the same…including the low tick which, like gold, came a minute or so before the 11 a.m. EST London close.

The high and low ticks were recorded as $16.91 and $16.63 in the December contract.

Silver, like gold, set a new intraday low for this engineered price decline — and was closed at $16.845 spot, up 7.5 cents from  Friday.  Net HFT gold was on the heavier side, but not overly so, at about 71,500 contracts — and there was 22,500 contracts worth of roll-over/switch volume in this precious metal.

The platinum price traded very unevenly sideways in Far East and most of Zurich trading on their respective Mondays.  That ended a minute or so before 2 p.m. CET, which was a few minutes before 8 a.m. in New York.  Then it was sold lower as well, with the low tick coming a minute or so before the 11 a.m. EST Zurich close…as it did for both silver and gold.  It gained back about 6 bucks by noon in New York — and from that point it ticked quietly lower until the market closed at 5:00 p.m. EST.  Platinum was closed at $872 spot, down 14 dollars from Friday — and below its 50-day moving average for the second day in a row.

The palladium price jumped higher the moment that trading began at 6:00 p.m. in New York on Sunday evening, but virtually all of that had been taken back less than an hour later — and from that juncture it wandered quietly sideways, with a slight negative bias until a minute or so after 10 a.m. in Zurich.  ‘Da boyz’ showed up in this precious metal at that juncture.  The low tick came around 11:40 a.m. in New York — and it gained back above ten dollars of that loss within the next thirty minutes.  From that point it edged quietly lower until 4 p.m. EST — and didn’t do a thing after that.  Palladium was closed at $1,667 spot, down 57 dollars from Friday — but 35 dollars off its low tick of the day, according to Kitco.  It was also closed back below its 50-day moving average.

There was a big data feed error in silver, platinum and palladium on the Kitco charts when trading started at 6 p.m. EDT on Sunday evening in New York — and I see that the folks over at kitco.com Internet site had the good sense to make it right once the business day started on the U.S. east coast on Monday morning.


The dollar index closed very late on Friday afternoon in New York at 98.35 — and opened up about  2 basis points once trading commenced at 6:30 p.m. EST on Sunday evening, which was 7:30 a.m. China Standard Time on their Monday morning.  Its 98.38 high tick, such as it was, came around 9:12 a.m. CST — and it was quietly and unevenly down hill from there until the 98.13 low was set sometime between 8:15 and 8:30 a.m. in New York.  It crept quietly and unevenly higher from there until around 4:35 p.m. EST — and then shed a few basis points going into the 5:30 p.m. close.  The dollar index finished the Monday session at 98.20…down 15 basis points from Friday’s close.

Once again, yesterday’s engineered price declines were a strictly GLOBEX/COMEX paper affair, as there was zero correlation between what was going on in the currencies vs. precious metal prices.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…98.03…and the close on the DXY chart above, was 17 basis points on Monday.  Click to enlarge as well.

The gold stocks rallied a bit at the open until the 10 a.m. EST afternoon gold fix in London — and then fell back below unchanged by a bit shortly after that.  Around 10:30 a.m. they began to head unevenly higher until a few minutes after 2 p.m. in New York trading.  At that point the gold price was turned a bit lower — and the shares followed.  But the HUI managed to close up 0.58 percent.

The silver equities followed an identical price paths, but both their morning rallies in New York were far more impressive.  Their respective highs also came at 2 p.m. EST when the silver price was capped and turned lower.  But Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by an impressive 2.13 percent.  Click to enlarge if necessary.

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

As I stated in my Saturday column, there are obviously in-the-know deep-pocket buyers in the market on these engineered price declines.  And because of that, it certainly appears that once the final low is in…whenever that may be…it will be all sails set for higher prices.

Of the three laggards…only Peñoles closed down on the day — and only by a tiny fraction of a percent.  Buenaventura closed higher by 1.38 percent.  But Hecla was the star, finishing the Monday session up 5.63 percent.  First Majestic Silver closed higher by 4.39 percent.


The CME Daily Delivery Report showed that 9 gold and 5 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, the two short/issuers were ADM and Advantage, with 5 and 4 contracts.  The two long/stoppers were JPMorgan and Advantage, with 7 and 2 contracts.  All contracts, both issued and stopped, involved their respective client accounts.

In silver, the two short/issuers were ADM and Advantage as well, with 4 and 1 contracts — and ADM stopped them all.  All of these contracts, both issued and stopped, also involved their respective client accounts.

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 November declined by 21 contracts, leaving 240 still around, minus the 9 contracts mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 30 contracts were actually posted for delivery today, so that means that 30-21=9 more gold contracts were just added to the November delivery month.  Silver o.i. in November dropped by 25 contracts, leaving just 5 left, minus the 5 mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 30 silver contracts were actually posted for delivery today, so that means that 30-25=5 more silver contracts were just added to November.


There were no reported changes in either GLD or SLV on Monday.

The bi-monthly changes in short interest in both SLV and GLD were posted on The Wall Street Journal’s website on Monday.  These figures are as of the close of trading on Thursday, October 31.  The short interest in SLV fell from 14.02 million shares/troy ounces, down to 10.37 million shares/troy ounces…a decline of 26.04 percent — and that’s on top of the 32.64 percent decline from the prior 2-week reporting period.  The short interest in GLD rose from 936,000 troy ounces, up to 989,000 troy ounces, an increase of 5.57 percent — and that’s on top of the 10.73 percent increase from the two weeks prior…October 15.  These percentages are pretty low — and certainly nothing negative should be read into them.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs for the week ending on Friday, November 1 — and this is what they had to report.  There was 3,865 troy ounces of gold withdrawn, plus 259,489 troy ounces of silver was withdrawn as well.

In other gold and silver ETFs on Planet Earth on Monday…minus the activity in COMEX stocks, GLD, SLV and ZKB…there was a net 2,298 troy ounces of gold withdrawn, but there was a net 15,490 troy ounces of silver added.


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

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  Nothing was reported received — and 49,465 troy ounces was shipped out.  There was 39,311 troy ounces shipped out of HSBC USA…6,462.150 troy ounces/201 kilobars [U.K./U.S. kilobar weight] departed the International Depository Services of Delaware.  The remaining 3,692 troy ounces left Canada’s Scotiabank.  The link to that is here.

In silver, there was nothing reported received as well, but 711,120 troy ounces was shipped out.  One fairly large truckload…641,330 troy ounces…left Brink’s, Inc. — and the remaining 69,789 troy ounces departed CNT.  The link to that is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, they didn’t report receiving any, but did ship out 1,306 of them.  All this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are two charts that Nick passed around on Sunday evening.  They show gold and silver imports into India, updated with September’s dataDuring that month, they only imported 26.25 tonnes of gold — and only 264.5 tonnes/8.51 million troy ounces of silver.  Both numbers are down drastically from five months ago in gold — and three months ago in silver. Click to enlarge for both.

I don’t have all that many stories/articles/videos for you today.


CRITICAL READS

The Truth About the Fed’s Rate Cuts (Wait For the Final Frame) — Mike Maloney

In part of his commentary, Mike can’t figure out why the Swiss National Bank has increased their money supply so much…much more than the Fed — and for longer.  The reason is simple.  If they didn’t, their exports would be priced out of the market because their currency  would appreciate dramatically the moment they did.

This brief 9:23 minute video presentation from Mike was posted on the youtube.com Internet site on Monday afternoon sometime — and it’s definitely worth watching.  I thank Judy Sturgis for sending this our way — and another link to it is hereGregory Mannarino‘s post market close rant on Monday is linked here.


Manhattan’s Retail Industry is Imploding Before the Holiday Season

Retail rents in Manhattan have fallen again, this time before the holiday season, an ominous sign that consumer health is deteriorating. Maybe retail spending this holiday season will be somewhat disappointing; after all, President Trump was seen on Twitter on Monday asking his 66.5 million followers to spend more of their money as the stock market rose to new highs. Any time the government asks its citizens to spend money, it usually means trouble ahead.

Average asking rents across Upper Fifth Avenue, especially between 42nd and 49th streets, saw one of the steepest drops in retail rents in Q3, falling 25% YoY, reported Bloomberg, citing a new report from Jones Lang LaSalle Inc.

As shown below, Lower Fifth, Broadway, Madison Avenue, SoHo, and Herald Square retail rents over the same period were in free fall. This is a reflection of the weakening consumer base ahead of the holiday season. There were several outliers, Upper Fifth and Times Square retail rents over the same period marginally declined. Meanwhile, the Meatpacking district saw rents jump 7.3% in Q3 YoY.   Click to enlarge.

Across Manhattan’s retail industry, average rents plunged, on average, 8% in Q3 YoY.

Patrick Smith, vice chairman at JLL’s retail brokerage, said declining rents in some of NYC’s most popular shopping districts indicate declining consumer traffic.

A random walk down Manhattan and you’ll find, nowadays, streets overwhelmed with vacant retail shops, as landlords begging for tenants slam rents lower.

The Real Deal has said Manhattan’s Upper East Side is “facing a retail vacancy epidemic.

Manhattan’s retail rents and retail vacancy problems could be a sign that the broader economy is faltering. If so, this would be terrible news for the consumer, which powers 70% of GDP. This could all mean a recession is ahead.

This not very surprising news item showed up on the Zero Hedge website at 3:07 p.m. EST on Monday afternoon — and another link to it is here.


Negative Yielding Bonds Turn into Punishment Bonds — Wolf Richter

After peak negative-yield-absurdity in August, bond prices fell – the “bond bloodbath” – and the mountain of bonds with negative yields has plunged by $5 Trillion, or by 30%, despite rate cuts.

The 10-year U.S. Treasury yield rose on Friday to 1.94%. That’s still very low, and below inflation as measured by core CPI (2.4%), but it’s up nearly 50 basis points from the lows at the end of August.

During this time, the Fed has cut its interest rate target twice, by a total of 50 basis points, and short-term Treasury yields have fallen by about that much. With the one-month yield now down to 1.56% and the 10-year yield up at 1.94%, the yield curve has un-inverted and steepened.

U.S. debt isn’t the only place where long-term yields have been rising despite major central banks’ action or at least verbiage on the rate-cut and QE side. The rise in long-term yields despite ultra-low or negative shorter-term yields has reverberated around much of the world.

When yields rise, bond prices fall, and what has been going on has been described as “bond bloodbath.” That term may be pushing it, considering what a real bond bloodbath could look like.

But for holders of long-term bonds that they bought with negative yields, it is a very unpleasant experience when prices of those negative-yielding bonds also drop. That’s what they’re facing now.  And if those August buyers want to sell these bonds, they will also have a capital loss.

This worthwhile commentary from Wolf put in an appearance on the wolfstreet.com Internet site on Saturday — and I thank Larry Galearis for pointing it out.  Another link to it is here.


All It Takes Is a Slip-Up…or a Nudge — Jeff Thomas

Just prior to a war, the majority of people in the nations that are about to become involved tend to assume that another nation is threatening theirs, whist their own leaders are doing all they can to avoid conflict. This is almost never the case.

The “etiquette” of starting wars is for leaders to claim to their people that the last thing they want is war, but the enemy is goading them into armed conflict and, at some point, retaliation becomes “unavoidable.”

The reason for this etiquette is that, almost invariably, the people of a nation have no desire to go to war.

But if that’s the case, why is world history filled with warfare taking place on a regular basis?
Well, truth be told, there are two groups of people who tend to relish war – the military and the political leaders.

I’ve often quoted Randolph Bourne as saying, “War is the health of the state.” He was quite correct. The larger the nation, the greater the need political leaders have for warfare. After all, there’s no situation in which a people feel more greatly that they need their leaders to take charge, than in a time of war.

Political leaders, after all, thrive on taxation and the oppression of basic rights. And they can get away with taxing a people more heavily during a war. They can also remove basic freedoms “temporarily” in order to keep the people “safe.”

Then, when the war is over, taxes never seem to return to their previous low and freedoms never fully return. With each conflict, the state ratchets up its power over the people.

This interesting commentary from Jeff put in an appearance on the internationalman.com Internet site on Monday sometime — and another link to it is here.


Bolivian President Evo Morales resigns amid election protests

Bolivian President Evo Morales has resigned after nearly 14 years in power, amid turmoil following his disputed re-election last month.

The head of the army had called on him to go after protests over his election win.

Auditors found irregularities with the poll but Mr Morales said he had been the victim of a coup.

He said he was leaving to help protect families of political allies, after their homes were burned down.

In a televised address, Mr Morales urged protesters to “stop attacking the brothers and sisters, stop burning and attacking“.

As this BBC story hints at, it’s doubtful that he “resigned” under his own free will.  I’m sure that it was just a cover for a military coup — and it certainly would come as no surprise if the U.S. deep state was behind it.  Swedish reader Patrik Ekdahl sent this along early on Friday afternoon EST — and another link to it is here.


India’s Factory Output and Electricity Demand Plunge to Decade Lows Amid Economic Downturn

The economic slowdown in India is gaining momentum, new government data Monday shows India’s factory output fell to the lowest level in eight years, resulting in power demand across heavily industrialized states plunging to 12-year lows.

Asia’s third-largest economy saw industrial production fall to 4.3% in September YoY, the lowest print since Oct. 2011.  Click to enlarge.

Industrial production recorded the second straight month of declines in factory output as the automobile crisis in the country deepens.

India’s economic growth slipped to a six-year low of 5% for the April-June period as the automobile industry faces a severe downturn. Consumer demand in recent quarters has also weakened, along with a slowdown in government spending.

The industrial slowdown has resulted in a 13.2% drop in India’s power demand for the October period on a YoY basis, a 12 year low according to the data from the Central Electricity Authority (CEA).

The slowdown seems to be deep-rooted, especially in the industrial sector. That would certainly increase the anxiety with regard to growth prospects in the current year,” said N R Bhanumurthy, a professor at the National Institute of Public Finance and Policy in New Delhi.

Energy consumption in heavily industrialized states, including Maharashtra and Gujarat, led the declines with -20% demand drop in October, over the past year.

India’s infrastructure output contracted 5.2% last month, one of the worst prints in 14 years, as economists are troubled that aggressive government spending is failing to produce a soft landing in the economy.

The epicenter of the crisis is situated in the heart of the automobile sector, something we warned about several months ago.

This news item showed up on the Zero Hedge website at 10:45 p.m. on Monday night EDT — and another link to it is here.


Bankers in $220 Billion Scandal Offered Gold to Hide Client Cash

At the height of the Danske Bank A/S dirty-money scandal, the lender started offering gold bars to wealthy clients to help them keep their fortunes hidden, according to documents seen by Bloomberg.

The bank’s Estonian branch, which was already wiring billions of client dollars to offshore accounts, told a select group of customers, mostly from Russia, that they could now also convert their money into gold bars and coins, according to the documents, which date back to the middle of 2012.

Aside from offering a hedge against risk, Danske pitched gold as a way for clients to achieve “anonymity,” according to the documents. It also said that using gold ensured “portability” of assets, according to an internal presentation dated June 2012.

A spokesman for Danske Bank declined to comment. In Danske’s September 2018 tell-all report on its non-resident unit, the bank listed the services it provided to clients. Aside from payments, these included setting up foreign-exchange lines, as well as bond and securities trading. The bank didn’t list the sale of gold bars.

Danske Bank, which is being investigated across Europe and in the U.S. after failing to screen about $220 billion that gushed through its non-resident unit in Estonia from 2007 to 2015, has now shuttered the operations at the heart of the scandal. That’s after local authorities kicked Danske out, as the scope of the affair became clear.

Jakob Dedenroth Bernhoft, a Copenhagen-based lawyer who specializes in compliance and money laundering issues, said, “It puzzles me that the bank’s own report on the case didn’t discover this. This is a service that is completely against all anti money-laundering laws. It is definitely suspicious.”

This Bloomberg article appeared on their Internet site at 9:00 p.m. PST on Saturday evening — and was updated at 2 a.m. on Monday morning Pacific Standard Time.  I found it embedded in a GATA dispatch — and another link to it is here.


World’s major gold miners target copper porphyries

Something has changed in the gold industry. During high gold-price periods the trend was to produce as much as possible – in many cases, irrespective of higher extraction costs per ounce. In a way you can’t blame them for making hay while the sun shone. The gold price rose for 12 consecutive years, hitting an all-time high of $1,907 an ounce in that heady summer of 2011. Why wouldn’t it continue?

Their lack of cost control came back to haunt the major gold miners when prices crashed in 2013, along with their market values.

During the decade-long gold run (2001-11), gold giants like Newmont, Barrick, Goldcorp and Newcrest tried to out-mine each other with the annual ounce count being the main driver of shareholder returns and CEO bonuses.

According to McKinsey’s research, between 2000 and 2012, annual capital expenditures by gold mining companies increased 10-fold, with the aggregate spend exceeding $125 billion. Two thirds of projects exceeded budgets by 60%, and half experienced delays of one to three years.

As new mines started up and existing ones were outfitted with the latest equipment, reserves started to thin out. At the time, it was thought the best way to replace reserves, along with brownfield exploration (tapping existing or historic mines), was through mergers and acquisitions (M&A); between 1998 and 2012, 42% of gold companies’ reserves growth came via M&A.

From 2000 to 2010, the industry saw over 1,000 acquisitions with a combined value of $121 billion, versus just $27 billion from 1990 to 2000. It was an all out acquisition spree, growth at any cost, growth just for growth sake. Quality of the acquisition sometimes seemed to be of secondary importance.

The problem was all these acquisitions were done at the height of the gold market when nobody thought the hype could end. Examples included Goldcorp buying Canplats at a 41% premium to its share price, and Newcrest offering Lihir Gold shareholders the same percentage premium for an $8.5 billion acquisition.

Their sins would soon find them out. By 2012 the gold party was over.

For gold companies, there needed to be a major shift in their thinking. How could they remain profitable, having gorged themselves for 10 years on acquisitions and capital expenditures, conducting their business like it was a Roman orgy, but now working with a gold price that had almost been cut in half? The answer was aggressive cost-cutting and debt reduction.

This very long, but interesting and worthwhile essay was posted on the mining.com Internet site last Friday.  Normally, I would save such an article for Saturday’s column, but it’s a slow news day, so here it is now.  I thank Australian reader Garry Robinson for sending it our way — and another link to it is here.


Central banks only hold gold for traditional reasons. B.S.? — Lawrie Williams

I append the following quote, which was accompanied by a chart, in the Charts that make you go hmm.. section from Grant Williams’ excellent latest ‘Things that make you go hmm…’ newsletter   as it truly emphasises a point I’ve been trying to make here several times over the past few months.

Grant’s observation was as follows:  “Central Banks only hold gold because of tradition (if you believe their nonsense), so it probably comes as some surprise to many that, between them, they have bought more of this ‘traditional’ asset in the first half of 2019 than they have done in any other 1H on record. It’s enough to make the skeptics of the world think they might be concerned about something but… well that would be directly opposed to their assurances that everything is under control so… it’s probably nothing. Just tradition…”  Do I detect a sharp degree of sarcasm here?  Well one would be foolish not to!

It is apparent that the Powers That Be, not only speak with forked tongues, but are beginning to build their gold reserves in prospect of improving their positions ahead of any forthcoming global financial reset which seems to be approaching rapidly.  For most of these central banks it is a case of ‘too little too late’ though.

It also makes the then U.K. Chancellor, Gordon Brown’s decision to sell off half the U.K.’s gold holdings at the bottom of the market some 20 years ago – a timing now irreverently known as ‘Brown’s bottom – a particularly abject move’.  This was, in hindsight, a remarkable misjudgement by a U.K. political leader, and subsequent Prime Minister, who professed economic prudence and was the self-proclaimed ‘saviour of the world’s economy’ over his role in the implementation of quantitative easing post the 2008 great financial crisis.  The U.K. now languishes as the world’s 18th largest national holder of gold as reported to the IMF with a holding hugely below many countries with considerably smaller GDPs.  If the U.K. had held on to its gold it would currently be in around 9th place in this gold hierarchy, although still hugely behind some of its more prudent European neighbours like Germany, Italy and France, three of the E.U.’s economic powerhouses.

This worthwhile and interesting commentary from Lawrie was posted on the Sharps Pixley website on Monday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

It’s July 14 — and we’re heading north on the Trans-Canada Highway from Spences Bridge towards Ashcroft.  It’s the driest (most arid) place in all of Canada (with the exception of the High Arctic). The first two shots from along the highway looking up the Thompson River.  The river is virtually inaccessible for over 90 percent of its length.  The last two shots are of the town of Ashcroft as seen from the west side of the river.  The last photo was taken just to the right of the third photo — and shows part of the ‘industrial area’ of the town.  The long, greyish line that runs across the top third of this photo is B.C. Highway 97C…to the Highland Valley Copper Mine, Logan Lake and, finally, MerrittClick to enlarge.


The WRAP

It was another day of salami slicing in the precious metals on Monday — and all set new intraday and closing lows for this engineered price decline during the New York trading session.  In palladium it was more like an axe than a knife.

But it was also another day where gold and silver shares vastly outperformed their underlying precious metals, because those who know what is about to follow have been buying up every stock that’s being sold in a panic…plus more.  This is particularly true of the silver shares — and has been the stand-out feature ever since this ‘wash, rinse, spin’ cycle began a week ago today.

And because of all of this counterintuitive share price action, I’m of the opinion that the rally of the lows of this engineered price decline will be far more substantial.  Unless, of course, they’re going to use these shares to sell into that upcoming rally to blunt their advance — and I’ll be watching for that possibility.

Here are the 6-month charts for the four precious metals, plus copper and WTIC — and all the various intraday and closing lows in the precious metals should be noted.  Copper had a down day as well — and WTIC was hauled back below its 200-day moving average the moment it had the audacity to cross it.  Click to enlarge.

And as I type this paragraph, the London/Zurich opens are less than a minute away — and I see that the gold price traded quietly sideways once trading began at 6:00 p.m. EDT on Monday evening in New York. That all changed a few minutes after 1 p.m. China Standard Time on their Tuesday afternoon — and it was sold lower from there, with the current low tick set shortly after 2:30 p.m. CST. It has edged a bit higher since, but was then turned sideways minutes after 3 p.m. CST — and is down $3.90 the ounce. It was the exact same price action in silver, but it was turned lower shortly after 3 p.m. CST as well — and is down 4 cents currently. Platinum stair-stepped its way higher in price in Far East trading and, like silver and gold, began to head lower very shortly after 1 p.m. in Shanghai trading. It has been trading sideways since 3:15 p.m. CST, but is still up 4 dollars the ounce at the moment. Palladium had a $13 up/down move in morning trading in the Far East — and then traded flat until 1 p.m. CST — and has been edging quietly higher since — and is up 10 dollars as Zurich opens.

Net HFT gold volume is fairly heavy already at a bit under 55,500 contracts — and there’s 2,689 contracts worth or roll-over/switch volume in this precious metal. Net HFT silver volume is a bit under 15,500 contracts — and there’s only 225 contracts worth of roll-over/switch volume out of December and into future months.

The dollar index opened up 2 basis points at 98.22 around 7:45 p.m. EST in New York on Monday evening, which was 8:45 a.m. China Standard Time on their Tuesday morning. It has had a 6 basis point up/down/up move since — and as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is up 7 basis points.


The central banks of the world have totally failed to generate the inflation required to inflate the world’s debts away through debt purchase/money printing.  All the signs are beginning to point at an attempt to inflated commodity prices to generate inflation that way.  It’s a little too soon to say that it’s ‘game on’ in that arena, but the ‘Gold Card’ is their last card in the financial and monetary deck.  Loath to play it they are, but there’s nothing else they can do…unless they want to start depositing money directly into everyone’s bank account.  That would never happen of course, as it would be a 100 percent sign that fractional reserve banking has failed.  It already has, but why be that conspicuous about it.  I’ll have more on this in Saturday’s column.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and not that I really want it, but I’d like to see another down day during the New York trading session.  That will make Friday’s report an even bigger blockbuster than it’s already going to be.

Is there even more room to the downside from here?  There’s no reason why not, as JPMorgan et al. continue to hold precious metal prices in their iron grip.  And as I’ve said on too many occasions to count….until that changes, nothing changes.


And as I post today’s column on the website at 4:02 a.m. EST, I note that at the end of the first hour of London and Zurich trading, gold hasn’t done much over the last hour — and is now lower by only $3.00 the ounce. Silver really got smoked during the first hour of London trading. It’s off its current low tick by a decent amount — and is down only 10 cents. Platinum as been hammered back to up a dollar — and palladium was also sold lower during the first hour of Zurich trading, but is off that low by a bit — and up 7 dollars currently.

Gross gold volume has jumped up to about 85,500 contracts — and minus roll-over/switch volume, net HFT gold volume is around 77,000 contracts. Net HFT silver volume is now up to a bit over 19,000 contracts — and there’s still only 354 contracts worth of roll-over/switch volume on top of that.

The dollar index has edged a few basis points higher during the last hour — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, the index is now up 13 basis points.

I’m all done for the day — and I’ll see you here tomorrow.

Ed

The Silver Stocks Close Up On the Day…Again

09 November 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price certainly didn’t do much of anything in Far East trading on their Friday, as it crawled down to its Far East low of the day around 9:15 a.m. China Standard Time.  It then crept higher until shortly after trading began in London — at that point ‘da boyz’ appeared.  They set the low tick of the day around 12:15 p.m. GMT — and it rallied unevenly higher and back to the unchanged mark around 11:25 a.m. in New York.  They showed up once more at that juncture — and the price was sold quietly lower until shortly after 4 p.m. EST in after hours trading.  It didn’t do much after that.

The high and low ticks were recorded as $1,473.90 and $1,457.00 in the December contract.

Gold was closed in New York on Friday afternoon at $1,458.80 spot, down $9.60 from Thursday.  Net volume was extremely heavy, but not anywhere near what it was on Thursday, at 371,500 contracts — and there was 83,000 contracts worth of roll-over/switch volume in this precious metal.

Once again the silver price was managed lower in an identical fashion as gold’s engineered price decline, so I shan’t bother with the play-by-play.

The high and low ticks in silver were recorded as $17.095 and $16.66 in the December contract.

Silver was closed yesterday afternoon in New York at $16.77 spot, down 32 cents on the day.  Net volume was very heavy at just under 115,500 contracts — and there was a bit under 23,500 contracts worth of roll-over/switch volume out of December and into future months.

Platinum got the same treatment as gold and silver at 9 a.m. China Standard Time on their Friday morning — and from there it didn’t do much of anything until shortly after the Zurich open.  From that point it was sold quietly and unevenly lower until the low tick of the day was set shortly after the 8:30 a.m. EST COMEX open.  It rallied a bit until shortly after 11:30 a.m. in New York trading…just like silver and gold — and was then sold quietly lower until trading ended at 5:00 p.m. EST.

It was mostly the same for palladium…but only up until very shortly before 2 p.m. in Zurich/8 a.m. in New York.  The long knives came out at that point– and by the time ‘da boyz’ set the low tick, it was down to around $1,714 spot by a few minutes past 12 o’clock noon in New York.  Then minutes before the COMEX close, it began to head sharply higher.  That wasn’t allowed to last too long — and from about 2:15 p.m. onward, it was sold very quietly lower until the market closed at 5:00 p.m. EST.  ‘Da boyz’ closed palladium at $1,724 spot…down 54 dollars on the day — and 34 bucks off its Kitco-posted low tick of the day.

The dollar index closed very late on Thursday afternoon in New York at 98.14 — and opened basically unchanged once trading commenced around 7:45 p.m. EST on Thursday evening, which was 8:45 a.m. China Standard Time on their Friday morning.  It really didn’t do much of anything from that point until a very few minutes after the 8:00 a.m. London open.  A quiet, choppy and uneven ‘rally’ began at that point — and that continued until a very minutes before trading ended at 5:30 p.m. in New York.  The dollar index finished the Friday session at 98.35…up 21 basis points from Thursday’s close…even though the trace on the DXY chart below shows it closed at 98.40

Of course one would be hard pressed to hang yesterday’s engineered price declines in the precious metals on what was happening in the currency market, as the sell-offs began long after the dollar index headed higher.  That’s because the currency market is just as managed as every other market these days, because don’t forget “There are no markets anymore, only interventions.”

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

And here’s the 5-year U.S. dollar index chart, courtesy of the fine folks over at the stockcharts.com Internet site.  The delta between its close…98.20…and the close on the DXY chart above, was 14 basis points on Friday.  Click to enlarge as well.

The gold shares gapped down a tiny bit at the open — and then took off higher and back into positive territory starting at the 10 a.m. EST afternoon gold fix in London.  That topped out about twenty minutes later — and about forty-five minutes after that, they began to quietly sag back below unchanged by a bit.  The HUI closed down only 0.54 percent.

The price path for the silver equities was almost identical, except their price actions were somewhat more robust…especially the 10 a.m. rally in New York.  They were sold back to unchanged by 12:20 p.m. EST — and then rallied a bit until shortly before 2 p.m…before fading a hair in the last hour of trading.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.49 percent.  Click to enlarge if necessary.

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

It certainly appears that this engineered price decline is bringing out the deep-pocket buyers once again.  To have the gold shares close lower by a marginal amount — and the silver equities actually close up on the day, has to be viewed as a very bullish development going forward.  There’s no other way to read that.


Here are the usual three charts from Nick that show what’s been happening for the week, month — and year-to-date. The first one shows the changes in gold, silver, platinum and palladium for the past trading week, in both percent and dollar and cents terms, as of their Friday closes in New York — along with the changes in the HUI and the Silver 7 Index.

Here’s the weekly chart — and it’s it’s a sea of red, thanks to the engineered price declines that began on Tuesday.  But the stand-out feature is the fact that silver equities were only down 1.24 percent on the week — and that was in the face of a 7.25 percent decline in the underlying precious metal.  Most of the HUI loses came on Thursday.  Click to enlarge.

Here’s the month-to-date chart.  It only contains one extra day worth of data — and that was Friday, November 1…so it’s not a lot different looking that the weekly chart.  For that reason I shan’t comment on it further.  Click to enlarge.

Here’s the year-to-date chart.  It’s still all green across the board, of course — and the most notable feature is that the silver equities are now outperforming their golden brethren — and that’s solely because of what happened during this past week.  Click to enlarge.

The usual ‘wash, rinse, spin’ cycle by the Big 7/8 commercial traders returned with a vengeance starting on Tuesday — and there’s no way of knowing when they will be done.  It all depends on how many of these brain-dead/moving-average-following Managed Money traders they can convince to not only puke up their long positions, but slam onto the short side as well.  However, judging from the CME’s Preliminary Reports this week, this process is going swimmingly well.  Next week’s COT Report will tell us a lot.


The CME Daily Delivery Report showed that 30 gold and 30 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, of the four short/issuers in total, the three biggest were Advantage, Dorman Trading and ADM…with 12, 10 and 7 contracts — and all out of their respective client accounts.  Of the three long/stoppers in total, the only two that mattered were JPMorgan and Advantage…picking up 25 and 4 contracts for their respective client accounts.

In silver, the three short/issuers were ADM, Advantage and Morgan Stanley, with 16, 9 and 5 contracts.  Of the three long/stoppers in total, the only two that mattered were ADM and Dorman Trading, picking up 19 and 10 contracts.  All contracts, both issued and stopped, involved their respective client accounts.

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

So far this month, there have been 1,285 gold contracts issued/reissued and stopped — and that number in silver is 478 contracts.

The CME Preliminary Report for the Friday trading session showed that gold open interest in November declined by 121 contracts, leaving 261 still open, minus the 30 mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 134 gold contracts are actually posted for delivery on Monday, so that means that 134-121=13 more gold contracts just got added to November.  Silver o.i. in November rose by 27 contracts, leaving 30 still around, minus the 30 mentioned a few paragraphs ago — and those are most likely the same 30 contracts that are out for delivery on Monday.  Thursday’s Daily Delivery Report showed that 3 silver contracts were actually posted for delivery today, so that means that 27+3=30 more silver contracts were just added to the November delivery month.


There was a huge withdrawal from GLD on Friday, as an authorized participant removed 423,963 troy ounces.  There were no reported changes in SLV.

In the other gold and silver ETFs on Planet Earth on Fridaysans what happened at the COMEX — and in GLD & SLV…there was a net 19,987 troy ounces of gold added — and there was a net 54,896 troy ounces of silver added as well.

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

Month-to-date the mint has sold 1,000 troy ounces of gold eagles — and 165,000 silver eagles.

There was a tiny bit of activity in gold over at the COMEX-approved depositories on Thursday.  Nothing was reported received — and only 160.750 troy ounces/5 kilobars [U.K./U.S. kilobar weight] were shipped out of Canada’s Scotiabank.  There was also a small paper transfer of 289.350 troy ounces/9 kilobars [U.K./U.S. kilobar weight] from the Registered category — and back into Eligible over at the International Depository Services of Delaware.  I won’t bother linking this.

There was some activity in silver.  One truckload…600,759 troy ounces…was deposited at CNT — and a smallish truckload…497,658 troy ounces…departed Brink’s, Inc. — and that’s all the activity there was.  A link to that is here.

There was a bit of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received 110 of them — and shipped out 1.  This occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.

Roman Empire, Maxentius, 306-312, Follis, Rome

Material: Bronze     Full Weight: 4.62 grams     Price: €55.00/USD$61


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, November 5 showed that the CFTC corrected the big mistakes in the Nonreportable/small trader categories in last Friday’s COT Report.  But that correction also changed other parts of the COT Report as well.  So what we are left with is still not current in some categories — and it’s impossible to calculate the commercial net short positions again for the second week in a row.

But in my telephone conversation with Ted yesterday he was able to calculate the approximate changes in the commercial net short position over the last two reporting periods combined, using yesterday’s COT Report data, combined with last week’s.

Over the last two weeks, including the big engineered price declines on Tuesday…the cut-off date for yesterday’s COT Report…he calculates  that the commercial net short position in gold rose by around 22,000 contracts — and in silver it rose by about 3,000 contracts.

The reason that Tuesday’s big price decline didn’t cancel out the prior two weeks worth of COT data — and show decreases in the commercial net short positions in both gold and silver…which is what I expected/hoped for, is because of the massive [and I mean massive] amount of Managed Money buying and commercial selling that occurred on some of the other nine reporting days in both precious metals, particularly in gold.

If you don’t understand this completely, I wouldn’t worry about it because, as I said in Friday’s column, this COT report was already very much “yesterday’s news” — and that’s even more the case since we now have Friday’s engineered priced declines under our belts.

Fortunately, Ted was able to come up with some hard data in the categories that weren’t affected.  Firstly he calculated [using the latest Bank Participation Report] that JPMorgan’s short position in silver is now down to about 16,000 contracts/80 million troy ounces…about 5,000 contracts less than last week.  He also calculated that JPMorgan’s short position in gold was around 50,000 contracts, or 5 million troy ounces.

As one can imagine, both these numbers have been significantly reduced since the Tuesday cut-off.

He was also able to determine that his scenario of a new whale showing up in the silver market [and in gold] was still intact.

If one could see a Commitment of Traders Report for positions held at the close of COMEX on Friday, it would show a wildly different landscape than the one that the latest two COT Reports show.  But there are still two more reporting days left before Tuesday’s cut-off — and more engineered price declines are most likely penciled in by ‘da boyz’ before that date.

But, according to Ted, the errors in the last two week’s COT Reports didn’t affect the concentration numbers of the Big 4 and Big 8 traders in silver or gold, so I have some of that data for you.


Here’s Nick Laird’s “Days to Cover” chart, updated with the COT data for positions held at the close of COMEX trading on Tuesday. It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX. Click to enlarge.

For the current reporting week, the Big 4 traders are short 140 days of world silver production — and the ‘5 through 8’ large traders are short an additional 71 days of world silver productionfor a total of 211 days that the Big 8 are short, which is seven months of world silver production, or about 492 million troy ounces of paper silver held short by the Big 8.

As I mentioned in my COT commentary in silver above, Ted figures that JPMorgan is short around 16,000 COMEX silver contracts…down around 5,000 contracts from last week’s COT Report. 16,000 COMEX contracts…is 80 million troy ounces of paper silver, which works out to around 34 days of world silver production the JPMorgan is short.

Based on these numbers and the current Bank Participation Report, it appears that JPMorgan’s short position in silver is still the largest as of Tuesday’s cut-off…but has shrunk considerably since, leaving Citigroup as No. 1.  I would suspect that JPMorgan is not even be in the Big 4 trader category anymore after Friday’s price action — and may be firmly ensconced in the ‘5 through 8’ group.

The Big 4 traders in silver are short, on average, about…140 divided by 4 equals…35 days of world silver production each.  The four traders in the ‘5 through 8’ category are short around 71 days of world silver production in total, which is 17.75 days of world silver production each, on average.

The Big 8 commercial traders are short 43.3 percent of the entire open interest in silver in the COMEX futures market, which is up a hair from the 42.5 percent they were short in last week’s report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be something around the 50 percent mark.  In gold, it’s now 40.8 percent of the total COMEX open interest that the Big 8 are short, down a bit from the 43.6 percent they were short in last week’s report — and a bit over 45 percent, once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 63 days of world gold productionThe ‘5 through 8’ are short another 35 days of world productionfor a total of 98 days of world gold production held short by the Big 8.  Based on these numbers, the Big 4 in gold hold about 64 percent of the total short position held by the Big 8.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 66, 72 and 78 percent respectively of the short positions held by the Big 8…the red and green bars on the above chart.


But the companion Bank Participation Report is pristine and unaffected by what happened in the last two COT Reports.  However, the data it contains is very much “yesterday’s news” as well — and as I said in yesterday’s column, I’ll go through the numbers…”but with little enthusiasm.”

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

[The November Bank Participation Report covers the time period from October 1 to November 5 inclusive.]

In gold, 4 U.S. banks are net short 107,948 COMEX contracts in the November’s BPR.  In October’s Bank Participation Report [BPR] these same 4 U.S. banks were net short 94,438 contracts, so there was an increase of 13,510 COMEX contracts from a month ago.

JPMorgan, Citigroup and HSBC USA would hold the lion’s share of this short position.  But as to who other U.S. bank might be that is short in this BPR, I haven’t a clue, but it’s a given that their short position would not be material.

Ted mentioned on the phone yesterday that JPMorgan is short around 50,000 contracts of the total net short position held by these 4 U.S. banks as of Tuesday’s COT Report.  That’s just about 46 percent of the total short interest held by the 4 U.S. banks.

Also in gold, 32 non-U.S. banks are net short 94,722 COMEX gold contracts.  In the October’s BPR, 28 non-U.S. banks were net short 96,587 COMEX contracts…so the month-over-month change shows a reduction of a rather immaterial 1,865 contracts.

At the low back in the August 2018 BPR…these same non-U.S. banks held a net short position in gold of only 1,960 contacts!

However, as I always say at this point, I suspect that there’s at least two large non-U.S. bank in this group, one of which would include Scotiabank.  It’s certainly possible that it could be the BIS in the No. 1 spot.  But regardless of who this second non-U.S. bank is, the short positions in gold held by the remaining 30 non-U.S. banks are immaterial.

As of this Bank Participation Report, 36 banks [both U.S. and foreign] are net short 29.4 percent of the entire open interest in gold in the COMEX futures market, which is down a bit from the 31.5 percent they were short in the October BPR.

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

In silver, 4 U.S. banks are net short 28,448 COMEX contracts in November’s BPR.  In October’s BPR, the net short position of these same 4 U.S. banks was 34,176 contracts, so the short position of the U.S. banks is down 5,728 contracts month-over-month — and most assuredly that decrease comes courtesy of JPMorgan, which Ted pointed out was down to about 16,000 contracts held short by them.

As in gold, the three biggest short holders in silver of the four U.S. banks in total, would be JPMorgan, Citigroup and HSBC USA.  Whoever the remaining U.S. bank may be, their short position, like the short position of the smallest U.S. bank in gold, would be immaterial in the grand scheme of things.

Also in silver, 23 non-U.S. banks are net short 41,978 COMEX contracts in the November BPR…which is up a tiny bit from the 40,719 contracts that 24 non-U.S. banks were short in the October BPR.  I would suspect that Canada’s Scotiabank [and maybe one other, the BIS perhaps] holds a goodly chunk of the short position of these non-U.S. banks.  I believe that a number of the remaining 21 non-U.S. banks may actually net long the COMEX futures market in silver.  But even if they aren’t, the remaining short positions divided up between these other 22 non-U.S. banks are immaterial — and have always been so.  This is a JPMorgan-run operation as short seller of last resort…end of story.

As of November’s Bank Participation Report, 28 banks [both U.S. and foreign] are net short 31.0 percent of the entire open interest in the COMEX futures market in silver—down a decent amount from the 35.3 percent that they were net short in the October BPR.  And much, much more than the lion’s share of that is held by JPMorgan, Citigroup, HSBC USA, Scotiabank — and maybe one other non-U.S. bank, which I suspect may be the BIS.

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

In platinum, 5 U.S. banks are net short 22,383 COMEX contracts in the November Bank Participation Report.  In the October BPR, these same banks were net short 19,056 COMEX contracts…so there’s been a decent increase month-over-month…3,327 contracts worth.

[At the ‘low’ back in July of 2018, these same five U.S. banks were actually net long the platinum market by 2,573 contracts. That’s quite a change for the worse since then.]

Also in platinum, 20 non-U.S. banks are net short 21,234 COMEX contracts in the November BPR, which is up a bit from the 18,701 COMEX contracts that these same 20 non-U.S. banks were net short in the October BPR.  It’s obvious that the banks of the world have been going short against all comers during platinum’s big rally in October.

[Note: Back at the July 2018 low, these same non-U.S. banks were net short only 1,192 COMEX contracts.]

And as of November’s Bank Participation Report, 25 banks [both U.S. and foreign] are net short a grotesque 47.5 percent of platinum’s total open interest in the COMEX futures market, which is up a bit from the 44.3 percent they were net short in October’s BPR.

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

In palladium, 4 U.S. banks are net short 6,530 COMEX contracts in the November BPR, which is virtually unchanged from the 6,631 contracts that these same 4 U.S. banks were net short in the October BPR.

Also in palladium, 14 non-U.S. banks are net short 1,899 COMEX contracts—which is down a bit from the 2,477 COMEX contracts that 13 non-U.S. banks were short in the October BPR.

But when you divide up the short positions of these 14 non-U.S. banks more or less equally, they’re completely immaterial…especially when compared to the positions held by the 4 U.S. banks.

And as you already know, palladium is very tiny market — and these numbers attest to that.

As of this Bank Participation Report, 18 banks [both U.S. and foreign] are net short 30.6 percent of the entire COMEX open interest in palladium…down big from the 38.5 percent of total open interest that the world’s banks were net short in October.

Here’s the palladium BPR chart.  And as I point out every month, you should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this precious metal until the middle of 2007—and they became the predominant and controlling factor by the end of Q1 of 2013 — and are even more so today.  Click to enlarge.

JPMorgan et al. are facing some rather serious and long-term headwinds…not only in the currencies, but in foreign bank and ETF gold purchases.  These headwinds are becoming ever more pronounced with each passing week…including this week.

But that fact hasn’t prevented them from engineering a price decline of some size during the last four trading days, so they’re iron grip on precious metal prices remains unchanged.

But, as always — and because of their massive physical holdings in both silver and gold, JPMorgan continues to be in a position to double cross the rest of the short holders in both silver and gold if they so choose.  Whether they will they or they won’t, remains to be seen.

I have an average number of stories and articles for you today, plus two longish audio/vision interviews as well.


CRITICAL READS

Gold Suffers Worst Week in 3 Years as Fed Balance Sheet Explodes

Remember, this is ‘Not’ QE…

The Fed has expanded its balance sheet for 10 straight weeks (by almost $280 billion) – the biggest such expansion since April 2013, the peak of QE3…  Click to enlarge.

Since the started ‘Not QE’ POMO…Click to enlarge.

This was Gold’s worst week since Nov 2016 (Trump Election)…

And then there’s this…

This long and chart-filled commentary appeared on the Zero Hedge website at 4:00 p.m. EST on Friday afternoon — and another link to it is here.


Sears to Close a Third of Its Remaining Stores as Iconic Retailer Fades Away

Transformco, the shell company that bought bankrupt retailer Sears Holdings Corp. earlier this year, disclosed late Thursday that the “difficult retail environment and other challenges” have led to the decision to close an additional 96 stores by Feb. 2020.

Following the closures (51 Sears and 45 Kmart stores), Transformco will operate only 182 stores, a 57% decline of its Sears and Kmart footprint from 1Q19 of 425 stores.

The latest 96 closures are in addition to the 100 stores we reported last month.

In 2014, Sears operated 2,000 Sears and Kmart stores across the country have seen significant declining sales as consumer trends evolve to more e-commerce shopping.

As for the overall retail space, our report from Sept. specified how 2019 store closures already outpaced all of 2018. And to make matters worse, it’s likely the consumer will underperform this holiday season, adding to further stress for retailers.

This Zero Hedge story showed up on their Internet site at 10:35 a.m. EST on Friday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.


David Stockman on How the Deep State Really Works

International Man: Last year, President Trump took the unusual step of bypassing his advisors to announce his intention to withdraw all U.S. troops from Syria quickly. The decision rattled Washington and the mainstream media. It caused former Defense Secretary Mattis to resign.

Almost a year later, the U.S. has withdrawn only a token number of soldiers. It still has thousands of troops occupying the part of the country where oil fields are located. What is going on here?

David Stockman: Well, that’s the Deep State at work.

Donald Trump is all by his lonesome. He’s home alone in the Oval Office. Now, half of it, he can blame himself. If he hires someone, a known idiot like John Bolton, what does he expect is going to happen except that everything he wanted to do is going to be undermined.

Nevertheless, he can’t seem to find anybody who can articulate on a day-to-day basis a pathway to the more restrained America First posture that he had in mind.

He’s surrounded by people who constantly countermand his orders. You have James Jeffery, the U.S. Ambassador and special envoy to Syria saying, “Well, Trump didn’t mean that when he said he wanted the troops out of Syria.”

We have the same thing with North Korea. Trump finally said, here we are, 66 years after the armistice and we still don’t have a peace treaty, and we’re still occupying the Korean peninsula, which is of no interest to our national security one way or the other.

This Q&A with David appeared on the internationalman.com Internet site on Friday sometime — and it’s certainly worth reading if you have the interest.  Another link to it is here.


Our Doom Index Hasn’t Been This High Since 2008 — Bill Bonner

Big news this month,” begins a note from our research director, Joe Withrow. “Our Doom Index ticked up to 9.”

The last time this happened, all Hell broke loose a few months later…

Major banks went broke, and Wall Street needed to be bailed out by the Federal Reserve. General Motors and Chrysler, too, would have gone under without federal help. And in September of 2008, Fed chief Ben Bernanke told Congress that “we may not even have an economy on Monday” if it failed to pass its TARP (Troubled Asset Relief Program) bill soon.

When the dust finally settled in March of 2009, stock market investors had lost half their money… and 7 million people had lost their homes.

In gold terms, the losses were even more severe… and part of a more revealing picture.

Stock investors were on top of the world in the spring of 1999 – which was probably the all-time peak for the U.S. too. Thereafter, it was downhill in almost every way.

From the high, when it took over 40 ounces of gold to buy the Dow, stocks fell all the way until October of 2011, to under 7 ounces – a loss of 82%.

Bill’s worthwhile Friday commentary was posted on the bonnerandpartners.com Internet site early on Friday morning EST — and another link to it is here.


Doug Noland: Extraordinary Monetary Disorder

M2 money supply has increased $796 billion y-t-d to $15.245 TN. With two months to go, 2019 M2 growth is on track to easily exceed 2016’s record $854 billion expansion. Recent M2 growth is nothing short of spectacular. M2 has jumped $329 billion in ten weeks, about an 11.5% annualized pace. Over 26 weeks, M2 surged $677 billion, or 9.3% annualized. One must go all the way back to the restart of QE in late 2012 to see a comparable surge in the money supply. Since the end of 2008, M2 has inflated $7.027 TN, or 86%.

Money Market Fund Assets (MMFA) have similarly exploded this year. Total MMFA have increased $517 billion year-to-date (to $3.555 TN), an almost 20% annualized rate. Like M2, six-month growth in MMFA has been extraordinary: expansion of $472 billion, or 35% annualized.

With MMFA at the highest level since 2009, bullish market pundits salivate at the thought of a wall of liquidity coming out of cash holdings to chase a surging equities marketplace. A Tuesday Wall Street Journal article (Ira Iosebashvili) is typical: “Ready to Boost Stocks: Investors’ Multi-trillion Cash Hoard: Nervous investors have socked $3.4 trillion away in cash. But stocks are rising and their nerves are calming, leading bulls to view the huge cash pile as a sign that markets have room to go higher.”

I have that same uncomfortable feeling I had in 2007 – just a lot worse. The global financial system is self-destructing. Reckless monetary policies have inflamed late-cycle excess. I believe the scope of speculative leverage is much greater these days – on a global basis. The Fed in 2007 (and into ’08) extended a dangerous mortgage finance Bubble. Central bankers these days are prolonging catastrophic global financial and economic Bubbles. The global economy is much more fragile today, with a faltering Chinese Bubble posing an Extraordinary risk. Highly synchronized global financial Bubbles are a risk much beyond 2008. Moreover, central bankers have used precious resources to sustain Bubbles, ensuring much greater fragilities will be countered by limited policy capabilities.

We will now await the catalyst for an inevitable bout of de-risking/deleveraging. There could be a few Lehmans lurking out there – in Asia if I was placing odds. China remains an accident in the making, with another ominous week in Chinese Credit. And near the top of my list of possible catalysts would be a surge in global yields. Sinking bond prices are problematic for highly leveraged holdings. Indeed, it is no coincidence that “repo” market issues erupted the week following a sharp reversal in market yields.

It’s possible that a de-risking/deleveraging cycle commenced in early-September. The Fed’s eight-week $270 billion balance sheet expansion accommodated some deleveraging. But at some point the Fed will apparently settle into $60 billion monthly T-bill purchases – that won’t be much help in a de-risking environment. Stocks are fired up at the prospect of a year-end melt-up. The surprise would be a global bond market beat down – the downside of Extraordinary Monetary Disorder.

Doug’s very worthwhile commentary appeared on his Internet site in the wee hours of Saturday morning — and another link to it is here.


Grant Williams: A Reset of the System Is Inevitable

Authored by Adam Taggart via PeakProsperity.com,

While at the New Orleans Investment Conference this past weekend, Chris Martenson and I had the great pleasure of sitting down with Grant Williams, publisher of the economic blog Things That Make You Go Hmmm and principal of Real Vision TV.

There will be no smooth transition back to sustained economic growth, he warns…

Instead, the distortion of today’s excessive asset prices will require a systemic reset to fix. Either by a deflationary event that destroys the malinvestment, or by an inflationary event that destroys the currency.

Either way, a shock to the system awaits us:

This 56-minute audio interview was conducted at the New Orleans Investment Conference on November 2 — and was posted on the Zero Hedge website at 3:01 p.m. on Friday afternoon EDT.  I thank Brad Robertson for sending it our way — and another link to it is here.


Moodys Downgrades U.K. Outlook to Negative on “Brexit Paralysis

Moody’s downgraded its outlook on Britain’s debt (currently rated Aa2) to negative from stable after the market close on Friday, saying Brexit had been a catalyst for an erosion in the country’s institutional strength, perceived “material deterioration” in U.K. governance, and that the country’s ability to set policy has weakened in the Brexit era along with its commitment to fiscal discipline.

The outlook cut represents a catch down to its competitors: the U.K. is currently rated AA by S&P and AA- at Fitch Ratings, with both companies having the U.K. on negative watch.

It would be optimistic to assume that the previously cohesive, predictable approach to legislation and policymaking in the U.K. will return once Brexit is no longer a contentious issue, however that is achieved,” the ratings agency said adding that “the increasing inertia and, at times, paralysis that has characterized the Brexit-era policy-making process has illustrated how the capability and predictability that has traditionally distinguished the U.K.’s institutional framework has diminished.”

The decline in institutional strength appears to Moody’s to be structural in nature and likely to survive Brexit given the deep divisions within society and the country’s political landscape,” Moody’s added.

The decision to put the U.K. on negative outlook even as Moody’s affirmed Britain’s Aa2 long-term issuer and senior unsecured ratings comes one month before an election that is likely to determine the future of Brexit. While the election will have a big impact on Brexit, this week has seen both sides escalate their spending pledges, drawing election battle lines with plans to end a decade of U.K. austerity.

This Zero Hedge story was posted on their website at 6:09 p.m. on Friday evening EST — and another link to it is here.


Mr. Machiavelli Headed For Big Win in Britain — Conrad Black

The United Kingdom election on December 12 will be of great importance to the Western world. The departure of Britain from the European Union will be like the secession of California from the United States, or British Columbia from Canada, a serious blow.

The return of the United Kingdom to close cooperation with the United States and Canada would enable three of the G7 countries to join forces, with a combined GDP of more than twice China’s — substantially greater than the continuing E.U. and with a better economic growth rate.

Such a shift will provide, though leftist commentators (who abound in swarms of Old Testament plague-proportions all over the Western world) will studiously deny it, a reliable public policy barometer pointing away from fetishistic globalism toward realism in alliances, capitalist economics, and Anglo-American values generally.

The British political parties are an unusually mixed smorgasbord. The Brexit Party seeks to scrap Prime Minister Boris Johnson’s deal and “crash out,” as the detractors of that policy call it, not pay a farthing to Europe on departure and not be in any hurry to rush into a free trade agreement with Europe either. But their star attraction, founder Nigel Farage, is not standing for election.

This commentary from Lord Black, which was originally printed in the National Post, showed up on The New York Sun‘s website on Friday sometime — and it comes to us courtesy of Roy Stephens.  Another link to it is here.


China Auto Sales Fall 6% in October as Global Auto Recession Shows No Signs of Slowing

China has been spearheading the global recession in the automotive industry and, as one more month has come to pass, there are still no signs of the bleeding letting up.

As the U.S. and China continue to grapple with solving “Phase 1” of the allegedly upcoming trade deal, pressure remains on the automobile industry globally. For October, China retail passenger vehicle sales were lower by 6% year over year to 1.87 million units, according to the Passenger Car Association. October SUV retail sales also fell 0.7% y/y to 853,130 units.  Click to enlarge.

Additionally, individual OEM data for China for October has also started to trickle in. Names like Toyota, Nissan and Mazda all posted low single digit drops for the month, while Honda was able to squeeze out a positive month.

Meanwhile, to add insult to injury, China’s Passenger Car Association said on Friday that NEV deliveries fell for a fourth straight month, down 45% in October as a result of subsidy cuts occurring while the global consumer remains under pressure.

China is considering cutting back on subsidies for electric vehicles, which have been the sole silver lining (if you can even call it that) over the last 12-18 months for the industry. The country has accounted for about half of the world’s sales of EVs and the last time the government cut subsidies, it triggered the first drop in EV sales on record.

That drop could arguably come at the most devastating time for China and the rest of the global auto industry, should it happen now.

This story put in an appearance on the Zero Hedge website at 10:05 p.m. EST on Friday night — and another link to it is here.


Building Empires Out of Gold — Grant Williams Interviews James Turk

James Turk is widely respected as one of the true legends of the gold market, with over 40 years in the business. In conversation with Grant Williams, James looks back on his career, which is entwined with the modern history of gold, examining the potential for the next break to the upside and what comes next when empires of money end. Filmed on May 16, 2017, in London.

This 60-minute interview is two and a half years old.  Some of what they talk about is certainly dated, but the commentary that isn’t is certainly worth your while if you have the interest — and I’ve watched/listened to most of it.  Reader Judy Sturgis sent it our way earlier in the week — and for obvious reasons it had to wait for my Saturday missive.  It was posted on the youtube.com Internet site on October 15 — and another link to it is here.


India’s gold imports fell 46% in Oct, 4th straight month of decline, on weak demand

Gold imports by India fell for a fourth month in October even as the biggest buying day failed to lift sluggish demand in the world’s second-largest market.

Imports fell 46% from a year earlier to 20.8 tons in October, according to a person familiar with the data, who declined to be named as the information isn’t public. Still, that’s higher than September’s 13.5 tons, the lowest monthly inflow in at least three years, data compiled by Bloomberg shows.

Total inbound shipments declined 14.5% from year earlier to 541.4 tons during the first 10 months of 2019, the person said. Finance Ministry spokesman Rajesh Malhotra wasn’t immediately available for comment.

Consumption in India is forecast to drop to the lower end of a 700 to 750 ton range this year, the lowest since 2016, as a surge in prices coupled with a weak economy keeps buyers away, according to the World Gold Council.

This gold-related news item was posted on the business-standard.com Internet site  on Thursday evening IST — and I found it on the Sharps Pixley website.  Another link to it is here.  Then there was this Reuters story from Sharps Pixley on Friday headlined “Asia Gold-India discounts drop to 5-month low as buying resumes


The PHOTOS and the FUNNIES

On July 14 we were off to Ashcroft via B.C. Highway 8 and the Trans-Canada Highway.  The first shot was taken from the Trans-Canada looking east up the Nicola valley that Highway 8 winds through from Merritt.  The Nicola River feeds into the Thompson River, just out of frame on the left.  The next two shots are taken from further up the highway.  The CN train adds some colour to the third photo.  If you notice the winding dirt/gravel road scratched into the mountainside above the train…well, that’s a photo shoot for another day — and what a day that was, as it was a white-knuckle trip that neither one of us will forget…or repeat!  Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ is another one of those 1-hit wonders from the 1970s.  This one was a big hit in both the U.S. and Canada way back in 1975.  It was composed by their lead singer upon discovering that their bass player had been secretly working with other bands.  But he did return in time to play on the song — and the rest, as they say, is history.  The link is here.  Not surprisingly, there’s a bass cover to this tune — and here’s Canada’s own Constantine Isslamow doing the honours.  The link is here.

Today’s classical ‘blast from the past’ is one I’ve not featured before — and if I have, I’ve forgotten. It’s the very short polanaise from the Russian opera “Eugen Onegin“….created from the book of the same name, which was written by Alexander Pushkin.  The incidental music was composed by Tchaikovsky — and was premiered in Moscow on 29 March 1879…with Nikolai Rubinstein [of all people] conducting.  This is an older recording featuring the Berlin Philharmonic — and video sucks, but the audio superb.  The link is here.  And if you wish to hear the waltz from that opera, which is also outstanding, the link to that is here.


It was another day of precious metal price management in the COMEX/GLOBEX futures markets on Friday — and new intraday and closing lows were set in all four of them once again.  JPMorgan et al. were harvesting the Managed Money longs for fun, profit and price management purposes — and I have no idea as to how long this particular sequence will take to play out.

The Big 7 traders certainly reduced their margin call loses during the reporting week — and although I didn’t talk to Ted about it on the phone yesterday, I suspect they reduced them by $1+ billion dollars.

But under the surface  Ted’s silver [and gold] whales are still there — and despite the fact that silver got hammered into the dirt over the last four trading days, their respective equities only closed down 0.62 percent month-to-date — and closed in positive territory yesterday.  Big deep-pocket buyers are obviously out and about.

It wasn’t as happy looking in the gold equities — and the main reason for that is their poor performance on Thursday, when they closed lower by a bit over 4 percent.  Other than that, they’ve been hanging in their pretty well.

Here are the 6-month charts for the four precious metals, plus copper and WTIC — and I’ll point out here that any price activity that occurred after the COMEX close on Friday, doesn’t appear on their respective dojis.  Copper gave back almost all of its Thursday gains — and WTIC was halted at its 200-day moving average for the fourth day in a row.  Click to enlarge.

Well, it’s now pretty much a universal opinion from all pundits that this economic, financial and monetary regime that we’ve lived under since Nixon yanked the world off of what was left of the gold standard in August 1971, is very long in the tooth — and that some sort of denouement is at hand.

Of course I’ve been going on about this for quite a while now in my Saturday rant…but the signs are everywhere that the proverbial brick wall is right in front of us.  All that awaits us is the event that will set it in motion, or be allowed to set it in motion.

As you are most likely tired of hearing by now, it’s been my long-held opinion that when this reset does come, it will be by design, rather than by circumstance — and I’m wondering out loud whether or not this engineered price decline in the precious metals is being carried out in advance of just such of an event.  But nobody knows for sure.

Ted feels that when this particular ‘wash, rinse, spin…repeat’ cycle is over with, the Big 7 traders won’t be going short the next rally after being so far in the hole on margin calls on the last big price run-up.  But it remains to be seen if they get out whole or not.  For them to do that, they would have to engineer price far lower than they are now.

But can they, or will they?

And whether JPMorgan was actively involved in the sell-off this week, it’s a given that they were aggressively covering short positions — and going long.  They certainly reduced their silver short position by a bunch in October — and you can bet your entire net worth that they’ve been one of the tallest hogs at the COMEX trough this past week…scarfing up everything they can.

But with physical gold and silver positions that would make one’s eyes glaze over, they will emerge out of whatever financial debacle that manifests itself, even bigger and more powerful than they are now.

The banks run the world — and the worlds largest that inhabit the ‘hallowed halls’ of the IMF and BIS certainly know the time line of what’s coming down the pipe.  All us mere mortals can do is hang on tight to our precious metals portfolios — and hope for the best.

I’m still “all in”.

I’m also done for the day — and the week — and I’ll see you here on Tuesday.

Ed

‘Da Boyz’ Took No Prisoners on Thursday

08 November 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price traded ruler flat in Far East trading on their Thursday — and that state of affairs lasted until around 3:20 p.m. China Standard Time.  It was tapped lower by about six bucks at that juncture — and then crept quietly lower until around 11:30 in London.  From that point it crawled higher until the equity markets opened in New York at 9:30 p.m. EST — and then JPMorgan et al. made their grand entrance.  The low tick of the day was set at precisely noon — and it edged quietly and unevenly higher until around 3:20 p.m. in after-hours trading — and didn’t do much of anything after that.

The high and low ticks in gold were recorded by the CME Group as $1,493.60 and $1,461.40 in the December contract.

Gold was closed in New York on Thursday at $1,468.40 spot, down $21.90 from Wednesday.  Net volume was astronomical at a bit under 522,500 contracts — and there was an eye-watering 160,000 contracts worth of roll-over/switch volume on top of that.  Wow!

In all matters that counted for anything, the silver price was guided on an identical price path as gold, except ‘da boyz’ set its low tick at 11:45 a.m. EST — and the rest is the same.

The high and low ticks in silver were reported as $17.645 and $16.91 in the December contract.

Silver was closed on Thursday afternoon in New York at $17.09 spot, down 50.5 cents.  Net volume was over the moon at 142,500 contracts — and there was a bit over 27,000 contracts worth of roll-over/switch volume in this precious metal.

The platinum price traded flat until 1 p.m. CST on their Thursday afternoon — and the crept higher until a few minutes after 11 a.m. CET in Zurich.  It chopped and flopped around from there until ‘da boyz’ appeared very shortly before 10:30 a.m. in COMEX trading in New York — and they showed no mercy.  Like in silver, the low tick of the day was set at 11:45 a.m. EST — and it was allowed to rally from that point until the 1:30 p.m. COMEX close.  From there, it was sold a few dollar lower in the thinly-traded after hours market.  Platinum was closed at $907 spot — and back below its 50-day moving average…down an even 20 bucks from Wednesday.

The palladium price wandered quietly and unevenly higher until at, or a few minutes before the afternoon gold fix in London.  It was sold lower — and back below unchanged by a few dollars by around 11:45 a.m. in New York.  It jumped higher from there, but was obviously capped and sold down a bit at that juncture — and didn’t do much in the very thinly-traded after-hours market.  Palladium was closed at $1,778 spot, up 6 dollars from Wednesday — and miles off its Kitco-reported $1,815 spot high tick.

The dollar index closed very late on Wednesday afternoon in New York at 97.95 — and opened unchanged once trading commenced around 7:45 p.m. EST on Wednesday evening, which was 8:45 a.m. China Standard Time on their Thursday morning.  It crept a bit higher until 11:20 a.m. CST — and then traded flat until about 3:20 p.m. over there, before heading quietly lower.  The 97.82 low tick was printed around 11:15 a.m. in London — and it then began to ‘rally’.  The 98.23 high tick came around 12:45 p.m. in New York — and it edged quietly lower until 2:45 p.m.   It proceed to trade sideways from there until the market closed at 5:30 p.m. EST.  The dollar index finished the day at 98.14…up 19 basis points from Wednesday’s close.

That tiny gain wasn’t much of a fig leaf for JPMorgan et al. to do the dirty behind, but they were brazen enough to do it anyway, as there is no rule of law, or regulators standing in their way.

Half of the dollar index gains were in by the time ‘da boyz’ stepped on gold and silver prices at 9:30 a.m. in New York — and they didn’t show up in platinum until an hour after that.  So to say that these three precious metals were responding to a rising dollar index is pure bulls hit — and you don’t need me to tell you that this was all paper game in the COMEX futures market.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…97.99…and the close on the DXY chart above, was 15 basis points on Thursday.  Click to enlarge as well.

The gold stocks ticked down a percent and change at the 9:30 open of the equity markets in New York on Thursday morning.  They continued lower until a few minutes before 12 o’clock noon EST — and then traded flat until a few minutes before the 1:30 p.m. COMEX close — and they then crawled a bit higher until trading ended at 4:00 p.m. EST.  The HUI got crushed for 4.06 percent, as there were no white knights around yesterday.

The silver equities also gapped down a percent and a bit at the open yesterday morning, but quickly chopped higher until around 10:25 p.m. EST in New York trading, as it was obvious that there was a BIG buyer loading up on all the silver shares that were being sold in a panic.  From that point they crashed to their lows of the day — and that came shortly after 11 a.m.  From that juncture they worked their way quietly higher until a few minutes before 3 p.m. when silver’s quiet after-hours rally got capped — and they sagged a bit going into the 4:00 p.m. EST market close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down only 2.05 percent.  Click to enlarge if necessary.

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

As I mentioned just above, there was nobody there to save the gold stocks on Thursday for some reason, but it was more than obvious that there was huge buying in the silver equities.  Peñoles actually closed up 0.43 percent on the day…as did Pan American Silver…higher by 3.57 percent!  Buenaventura closed down only 1.41 percent.  Hecla got smoked — and despite the stellar Q3 numbers from First Majestic Silver, it closed down 4.81 percent.  Coeur and Wheaton Precious Metals also closed lower, but not by a lot.


The CME Daily Delivery Report showed that 134 gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

In gold, of the four short/issuers in total, the three largest were International F.C. Stone with 49 from its in-house/proprietary trading account — and ADM and Advantage, with 42 and 35 contracts from their respective client accounts..  There were three long/stopper in total, but the only one that mattered was JPMorgan, picking up 114 contracts for its client account.  Advantage was in very distant second place with 12 contracts — Scotia Capital/Scotia bank picked up the remaining 8 contracts for its own account.

In silver, ADM issued all 3 contracts — and Advantage stopped them all.  Both transactions 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 November dropped by 185 contracts, leaving 382 still around, minus the 134 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 55 gold contracts were actually posted for delivery today, so that means that 185-55=130 gold contracts vanished from the November delivery month.  Silver o.i. in November declined by 43 contracts, leaving only 3 left, minus the 3 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 45 silver contracts were actually posted for delivery today, so that means that 45-43=2 more silver contracts just got added to November.


There was a withdrawal from GLD yesterday, as an authorized participant removed 47,108 troy ounces.  There were no reported changes in SLV.

In the other gold and silver ETFs on Planet Earth on Thursday…minus the goings-on in COMEX warehouse stocks, GLD & SLV…there was a net 116,082 troy ounce of gold added — and there was a net 165,862 troy ounces of silver added.

One again, there was no sales report from the U.S. Mint.

There was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.

There was a bit of movement in silver, as 599,319 troy ounces…one truckload…was reported received — and that ended up at CNT…which I’ve always considered to be a subsidiary of JPMorgan.  There was 104,815 troy ounces shipped out…100,906 troy ounces from Loomis International — and the remaining 3,909 troy ounces left Brink’s, Inc.  The link to this is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  There was 1,090 reported received — and only 5 shipped out.  All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.

Saxe-Coburg-Gotha, Ernest I., 1826-1844, Thaler 1827

Origin: Germany     Mint: Saalfeld     Material: Silver     Full Weight: 29.36 grams     Value: €1,645.00/USD$1,820

It was a very slow news day yesterday — and I only have a very tiny handful of stories for you.


CRITICAL READS

Student, Auto Loans Hit New Record High, Even as Consumers Unexpectedly Paid Down Credit Cards

After a torrid summer which saw a surge in revolving (i.e., credit card) debt in July and a near record surge in non-revolving credit in August, in September consumer credit growth crumbled, as Americans only added $9.5 billion to their total debt, which rose less than the $15 billion expected, from $4.140 trillion to $4.149 trillion.  Click to enlarge.

While the increase in non-revolving credit, which was $10.6 billion, was on the low side, it wasn’t necessarily remarkable. However, it was the $1.1 billion drop in revolving credit that was curious, as this was just the second consecutive decline in credit card debt (i.e., repayments), since April 2018.

And while U.S. consumers appeared to be repaying their credit card debt after a rather aggressive binge earlier in the year, when it comes to student and auto loans, there were no surprises, with the former increasing by $33 billion in the third quarter, when auto loans increased by $21 billion, both series hit new record highs, to wit: student loan is now $1.639 trillion, and auto loans are now $1.194 trillion, both all time highs.

This brief 3-chart Zero Hedge article appeared on their Internet site at 3:20 p.m. EST on Thursday afternoon — and I thank Brad Robertson for sending it along.  Another link to it is hereGregory Mannarino‘s post market close rant for Thursday is not available, as he’s taking a “few days off — and might have something on the weekend” according to an e-mail that Roy Stephens got from him very late last night PST.


Fed Interference Hinders Americans’ Happiness — Bill Bonner

A noiseless course,” is what Thomas Jefferson proposed to the nation in 1802, “not meddling with the affairs of others, unattractive of notice, is a mark that society is going on in happiness.”

Two hundred and sixteen winters have come and gone since that sage advice was offered. As we approach the next one, it might be time to wonder: Huh?

                                                     What Went Wrong?

You’d think that those two centuries would have given us plenty of time to practice.

If Jefferson’s counsel were basically right, and we had been paying attention, by now we’d be so far advanced in happiness that there would be a smile on every pair of lips.

And yet, looking around, we see frowns and scowls… turned-down mouths… pouty, sulky, angry… and most of all… obnoxious.

What went wrong is our subject for today. But it is so obvious, we scarcely need to mention it. You, Dear Reader, already know the answer.

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


European Commission Warns of Dire Future Unless Germany Issues Much More Debt

One day after the IMF, whose former boss is now head of the ECB, warned Europe to “prepare for the worst” and put in place emergency plans for an economic slump strongly urging Europe to implement a major fiscal response (translated: Germany should issue much more debt), the European Commission published its own economic forecasts which as Bloomberg’s Richard Breslow said “make for a dour reading.”

Specifically, the European Commission cut its euro-area growth and inflation outlook even as Germany appears to be careening into a recession with its manufacturing engine contracting sharply for over a years…

… amid global trade tensions and policy uncertainty, warning that Europe’s economic resilience won’t last forever.  Click to enlarge.

The Commission sees economic momentum remaining subdued through 2021, if not entering an outright recession, and forecasting GDP growth of 1.2% for that year. Meanwhile, at 1.3%, inflation is projected to remain far below the European Central Bank goal of just below 2% over the medium term.

So what is the European Commission’s advice? It’s the same as that of the IMF, and now former ECB head, Mario Draghi: spend more! Because apparently a crisis that was the result of too much debt can only be fixed with even more debt.

Using available fiscal space actively would allow member states not only to provide a fiscal stimulus amid the sharp slowdown in manufacturing that threatens to spill over to the labor market, but also to refresh and modernize the public capital stock, thereby boosting potential growth,” the Commission’s report said.

So far, the message has fallen on deaf ears. German Finance Minister Olaf Scholz said on Thursday the country is in a “stable economic situation” adding that “we will have more growth in the next years. If the trade tensions worldwide will be reduced, this will have a real impact on better growth.”

This news item showed up on the Zero Hedge website at 9:50 a.m. on Thursday morning EST — and it’s another contribution from Brad Robertson — and another link to it is here.


Greg Hunter interviews G. Edward Griffin

G. Edward Griffin, author of the wildly popular book about the Federal Reserve “The Creature from Jekyll Island: A Second Look at the Federal Reserve,” says the bankers know the debt bubble is going to pop.  Griffin explains, “I think their thinking is, hey, we are at the end and let’s just grab all we can so when the system collapses, we will be okay.  That is kind of a crude way of putting it, but I think they are going for broke because they know it is broke, and there is not much they can do about it.”

So, what’s the plan by the bankers?  Griffin says, “I think I know.  They are waiting for the big collapse to come.  They will personally be okay because they will have amassed hard assets.  They are trying to hold all the gold, all the silver, all the real estate and all the stuff that has value.  They want all the tools, factories and food supplies, but everything else, based on numbers, paper and debt, that will collapse.  So, they will be able to pick up everything for pennies on the dollar.”

Since it’s such a slow news day, I thought I’d toss in this 40-minute video interview with Ed Griffin, with host Greg Hunter.  I read that book about fifteen years ago and, like many others, it changed my perspective forever.   But I should point out that I haven’t had time to listen to it yet, so you’re sort of on your own with this one.  I thank Elliot Simon for pointing it out — and another link to it is here.


China’s Gold Buying Spree Comes to a Halt After 10 Months

China just hit the pause button on its gold-buying spree.

The People’s Bank of China kept holdings level 62.64 million ounces in October, unchanged from a month earlier, according to data on its website on Thursday. That holding pattern follows 10 straight months of accumulation that have boosted the nation’s stockpile by more than 100 tons.

Central-bank purchases have been an important feature of the global market this year, with official sector demand helping to support gold prices and offset a drop in demand from consumers. The backdrop to Beijing’s accumulation has been the nagging trade-war with the U.S., which has hurt growth.

Of course China is just reporting gold that they have already purchased — and are bringing it into the public eye when it suits them, so not too much should be read into this very brief 3-paragraph Bloomberg story that put in an appearance on their website at 1:02 a.m. PST on Thursday morning.  I found it embedded in a GATA dispatch — and another link to it is here.


The PHOTOS and the FUNNIES

The following Saturday…July 13…we took a small container of cut-up vegetables down to McArthur Island Park  in Kamloops to see if we could entice the local yellow-bellied marmot population that inhabit the dike along the north bank of the Thompson River.  As you can see, it was a roaring success, as they came running from all directions the moment they spotted the handouts.  They cleaned us out in less than ten minutes.  We went back a week or so later with more than triple the amount of vegetables — and that filled up all comers…adults and young ones alike.  Just looking at them you can tell that they haven’t missed too many meals.  Click to enlarge.


The WRAP

There were certainly signs that ‘da boyz’ were out and about around forty-five minutes before the London open.  But they saved their real firepower until the 9:30 a.m. EST open of the equity market in New York on Thursday morning — and dealt with platinum and palladium about an hour later.  Their efforts in the first three precious metals was spectacularly successful, but palladium is in a supply/demand deficit that no amount of paper could affect that much.

The dollar index ‘rally’ was half done by the time JPMorgan et al. stepped on silver and gold prices — and getting somewhat long in the tooth by the time they got around to platinum and palladium.  So any so-called ‘expert’ in the precious metals that brings up that canard, you can safely ignore…plus anything else they might have to say on the subject of precious metals as well.

This was the work of the Big 8 traders, with or without the help of JPMorgan, doing their damnedest to get out of this multi-billion dollar margin call hole that they dug for themselves several months ago.  It was all paper trading in the COMEX futures market — and is unfolding in one of the two ways that Ted Butler said it would.  It’s depressing…yes, but in some ways inevitable.  Ted also says that he thinks that this will be the last time they ever go short again — and we can only hope that he’s right about that too.

Here are the 6-month charts showing the damage in the three precious metals just mentioned. Palladium is the outlier, as always.  Copper closed up 6 cents — and right on its 200-day moving average.  WTIC gained back everything it lost on Wednesday, breaking above its 200-day moving average as well.  But it got hauled lower and was closed right on it.  Click to enlarge.

And as I type this paragraph, the London/Zurich opens are less than a minute away — and I note that the gold price has been wiggling quietly sideways throughout all of Far East trading on their Friday, but has ticked a bit higher since 2 p.m. CST — and is up $2.60 the ounce. The silver price traded sideways until 9 a.m. China Standard Time — and then got smacked down twenty cents. It recovered a bunch of that in very short order, but has also recovered a bit in the last hour or so — and is down only 5 cents currently. ‘Da boyz’ handled platinum’s price in the exact same manner as silver at the same 9 a.m. CST time — and it’s only down 2 bucks now. Ditto for palladium — and it’s down 2 dollars as well.

Net HFT gold volume is already pretty decent at a bit under 56,000 contracts — and so far there’s only 1,220 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is way up there at a bit over 25,000 contracts — and there’s 1,122 contracts worth of roll-over/switch volume on top of that.

The dollar index opened about unchanged around 7:45 p.m. EST in New York on Thursday evening, which was 8:45 a.m. China Standard Time on their Friday morning. It has been chopping very quietly sideways since — and is back at unchanged as of 8:45 a.m. GMT in London/9:45 a.m. CET in Zurich. Nothing to see here, at least for the moment.


So, are we done to the downside?  I don’t know, but I doubt it.  However, nobody really knows for sure. We’ll only know when we see the bottom in the rear-view mirror…as Ted is wont to say from time to time.

Today, around 3:30 p.m. EST we get the latest Commitment of Traders and Bank Participation Reports — and they are all very much “yesterday’s news” — and in spades, as Thursday’s price action isn’t in them.  I’ll still do my commentary on both of them, but with no enthusiasm.


And as I post today’s missive on the website at 4:02 a.m. EST, the first hour of London and Zurich trading have ended — and ‘da boyz’ leaned on the prices of all four precious metals shortly after their respective opens an hour earlier. Gold is now up only $2.20 the ounce — and silver is down 6 cents. Platinum is now down 11 dollars — and palladium by 8.

Gross gold volume is up there at 75,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is about 72,000 contracts. Net HFT silver volume is a bit over 27,000 contracts — and there’s 1,221 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has been chopping quietly sideways around the unchanged mark for the last hour — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, the index is up 2 whole basis points.


That’s if for today.  Let’s see what the Big 8 traders have in store for us as the Friday trading session moves along…especially in New York.

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

Ed

The Silver Equities Gain Back All Their Tuesday Losses…Plus More

07 November 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crawled very quietly and a bit unevenly higher in Far East trading on their Wednesday — and the London high tick came at the 10:30 a.m. GMT morning gold fix.  From that point it was sold back to unchanged by shortly after the noon GMT silver fix.  It crept higher from there, before running into ‘something’ a few minutes before 12 o’clock noon in New York.  It was sold a few dollars lower until trading ended at 5:00 p.m. EDT.

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

Gold was closed in New York on Wednesday at $1,490.30 spot, up $7.10 on the day.  Net volume was reasonably heavy at a bit over 279,000 contracts — and there was 35,500 contracts worth of roll-over/switch volume on top of that.

The silver price wandered quietly sideways in a very right range in Far East trading — and its London high [such as it was] also came at the morning gold fix over there.  It was sold down a few pennies going into the noon GMT silver fix — and then got smacked for a bit over a dime at that juncture.  From there it crawled higher until 9 a.m. in New York…then was sold a dime or so lower into the 10 a.m. EDT afternoon gold fix in London.  The silver price crawled quietly higher until 3:30 p.m. in after-hours trading — and didn’t do a thing after that.

The low and high ticks in silver were recorded by the CME Group as $17.36 and $17.63 in the December contract.

Silver finished the Wednesday session in New York at $17.595 spot, up 5 cents from Tuesday’s close.  Net volume was very heavy at a bit over 92,500 contracts — and there was 9,500 contracts worth of roll-over/switch volume in this precious metal.

The platinum price was sold quietly and very unevenly lower in Far East trading on their Wednesday — and that state of affairs lasted until the 2:15 p.m. afternoon gold fix in Shanghai was put to bed.  It made it back to just about unchanged in mid-morning trading in Zurich, but was sold back to its low of the day once again by around 1:40 p.m. CET/7:40 a.m. EST.  From that juncture it chopped very quietly and very unevenly higher until shortly after 2 p.m. in the thinly-traded after-hours market  in New York — and didn’t do much of anything after that.  Platinum was closed at $927 spot…unchanged on the day — and you just have to know that it wasn’t accidental.

The palladium price was sold quietly lower until shortly before 11 a.m. China Standard Time on their Wednesday morning — and then it didn’t so much of anything until shortly after the Zurich open.  It crawled quietly higher from that point until it ran into ‘something’ at the 9:30 a.m. open of the equity markets in New York.  It was sold quietly lower until around 12:40 p.m. EST — and then tacked on a few dollars until 2 p.m. in the very thinly-traded after-hours market.  It didn’t do a thing after that.  Palladium was closed at $1,772 spot, up 17 dollars on the day — and miles off its Kitco-recorded $1,805 spot high tick.

The dollar index closed very late on Tuesday afternoon in New York at 97.98 spot — and opened down about 4 basis points once trading commenced around 7:45 p.m. EST on Tuesday evening, which was around 8:45 a.m. China Standard Time on their Wednesday morning — EST plus 13 hours…now that we’re back on Standard Time here in North America.

From there, it wandered very unevenly lower until the 97.78 low tick was set somewhere around 8:30 a.m. in New York.  Fifteen minutes after that a ‘rally’ commenced — and its 97.98 high tick…Tuesday’s close…was set at 2:05 p.m. From there it chopped a few basis points lower going into the 5:30 p.m. EST close.

The dollar index finished the Wednesday session at  97.95…down 3 basis points from Tuesday’s close.

There was some correlation between the dollar index and gold and silver price on Wednesday, but that all ended at the noon silver fix in London…7 a.m. EST in New York.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…97.76…and the close on the DXY chart above, was 19 basis points on Wednesday.  Click to enlarge as well.

The gold stocks jumped up about one percent at the open…sagged a bit until a few minutes after the afternoon gold fix in London…and then headed higher.  Their highs came at 12:30 p.m. in New York trading — and they drifted quietly lower into the 4:00 p.m. EST close from there.  The HUI finished higher by 1.58 percent.

In all respects that mattered, the silver equities followed an almost identical path as their golden cousins, except they crept a bit higher in the last forty minutes of trading.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up by 2.21 percent.  Click to enlarge if necessary.

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

Most of the big gain in the Silver 7 Index yesterday came courtesy of SSR Mining Inc./Silver Standard Resources, which was up 7.91 percent in New York.


The CME Daily Delivery Report showed that 55 gold and 45 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, the sole short/issuer was Advantage out of its client account — and the only one of the three long/stoppers that mattered was International F.C. Stone, with 49 contracts for its in-house/proprietary trading account…something I haven’t seen for a long time.  Scotia Capital/Scotiabank picked up 3 contracts for its own account as well.

In silver, the two short/issuers were Advantage and JPMorgan, with 32 and 13 contracts out of their respective client accounts.  There were five long/stoppers in total, with Scotia Capital/Scotiabank picking up 20 contracts for its own account.  Then came JPMorgan, Morgan Stanley — and Advantage, with 9, 8 and 7 contracts…all for their respective client accounts.

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

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in November rose by a rather hefty 531 contracts, leaving 567 contracts still around, minus the 55 mentioned a few short paragraphs ago.  Tuesday’s Daily Delivery Report showed that 22 gold contracts were actually posted for delivery today, so that means that 531+22=553 more gold contracts just got added to the November delivery month.  Silver o.i. in November also rose…by 31 contracts, leaving 46 still open, minus the 45 mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 1 lonely silver contract was posted for delivery today, so that means that 31+1=32 more silver contracts were added to November.


There were no reported changes in GLD on Wednesday.  However, there was a pretty chunky deposit into SLV, as an authorized added 2,803,992 troy ounces.

In other gold and silver ETFs on Planet Earth on Wednesday…minus the goings-on in the COMEX, GLD and SLV, there was a net 76,241 troy ounces withdrawn.  There was a net 259,910 troy ounces of silver withdrawn as well…with virtually all of that coming out of Deutsche Bank.

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

The only physical activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday was 32.151 troy ounces/1 kilobar [SGE kilobar weight] that departed Brink’s, Inc.  There was some paper activity, as 6,172.800 troy ounces/192 kilobars [U.K./U.S. kilobar weight] was transferred from the Registered category — and back into Eligible over at the International Depository Services of Delaware.  I won’t bother linking this.

For a change, there was no in/out activity at all in silver.  Days such as this are rarities.

There was a bit of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  Nothing was reported received — and 100 kilobars were shipped out.  This occurred at Brink’s, Inc. — and the link to that is here.


Here are two more charts that Nick passed around on Saturday that I didn’t have the space for until today.  They show gold and silver bullion coin sales from The Perth Mint, updated with October’s data.  During that month they sold 32,469 troy ounces of gold coins — and 1,394,615 troy ounces of silver bullion coins.  Click to enlarge for both.

Just as a point of interest, the U.S. Mint sold 14,500 troy ounces of gold bullion coins in October, which was less than half of what The Perth Mint sold.  The U.S. Mint sold 1.113 million troy ounces of silver bullion coins in October — and The Perth Mint bested that number by a bit over 25 percent.

I have an average number of stories/articles for you today.


CRITICAL READS

U.S. Productivity Unexpectedly Plunges For the First Time Since 2015 as Labor Costs Surge

U.S. Productivity unexpectedly posted the first decline in almost four years and labor costs accelerated in Q3, suggesting a pickup in efficiency earlier this year was more of a temporary shift.

Non-farm business employee output per hour decreased at a 0.3% annualized rate in the third quarter, well below the expected rise of 0.9% and the first decline since December 2015.  Click to enlarge.

The report showed the decline in productivity resulted from a 2.1% increase in output against a 2.4% rise in hours worked.

Driving this decline was surging unit labor costs (+3.6%) following 2.4% in the prior period…Click to enlarge.

From a year earlier, productivity rose 1.4%, down from 1.8% in the prior period. Unit labor costs were up 3.1% year-over-year, which could be a sign that a tight job market is filtering through to what companies are spending on wages.

This brief news item was posted on the Zero Hedge website at 8:37 a.m. EST on Wednesday morning — and it comes to us courtesy of Brad Robertson.  Another link to it is hereGregory Mannarino‘s post market close rant for Wednesday is linked here.


Dangerous Liaisons: New York Fed and JPMorgan’s Incestuous Relationship

The Federal Reserve Bank of New York (New York Fed) is just one of the 12 regional Federal Reserve banks around the country. But it has amassed enormous powers for itself since the Federal Reserve was created in 1913. Three of those powers dwarf all others: the ability to create money electronically at the push of a button; the accepted right to meddle in the markets; and the supervision of some of the largest bank holding companies in America.

After Wall Street blew itself up under the indulging and incompetent supervision of the New York Fed in 2008 and it was exposed that the Fed had secretly created $29 trillion in electronic money to bail out zombie banks – most of that funneled out by the New York Fed – most rational folks would have assumed that Congress would have stripped it of supervisory and money-printing powers for bailouts. Insanely, that did not happen and here we are today with the same deeply-conflicted New York Fed creating its own money to dole out $690 billion a week in super-cheap loans to unnamed securities firms while buying up $60 billion a month in the debt of the United States. (The Fed doesn’t want you to call the $60 billion a month QE4 because that would strongly suggest that this is just Stage II of the continuing 2008 bailout of Wall Street and that QE-Infinity is coming.)

In addition to the unprecedented power that the New York Fed has grabbed for itself, it has a strange, incestuous and unexplained relationship with JPMorgan Chase.

For starters, JPMorgan Chase is one of the largest shareholders in the New York Fed. Yes, each regional bank of the Federal Reserve is privately owned by their member banks, the same banks being “supervised” by that regional bank. If that sounds like an insurmountable conflict of interest, it is.

This rather longish commentary, which definitely falls into the must read category, was posted on the wallstreetonparade.com Internet site on Wednesday sometime — and I found it on the gata.org Internet site late last night.  Another link to it is here.


SoftBank’s Fall Foreshadows More Business Collapses to Come — Bill Bonner

I don’t think it makes any difference who we elect,” said a friend over dinner. He was speaking of France. But it could be said of the U.S. too. “The problems don’t go away just because you elect a new guy.”

But our friend was exaggerating. Problems caused by a leader can be eliminated by the scaffold or the voting booth.

The trouble is, the main problems facing the U.S. economy were not caused by President Trump. He has made them worse, but his Democratic opponents are proposing even dumber programs.

Donald Trump faced two major challenges when he fluked into the White House. He had to drain The Swamp (with a balanced budget and “normal” Federal Reserve policies)… and he had to bring the military-industrial-Deep State complex to heel (cut its boondoggle spending; stop the winless wars). He did neither.

And so, the U.S. continues down its long, twisty, sappy road to Hell.

But at least it’s entertaining…

This worthwhile commentary from Bill appeared on the bonnerandpartners.com Internet site early on Wednesday morning EST — and another link to it is here.


IMF Warns Europe to Make Emergency Plan for Economic Slump

Germany stuck to its stance that Europe’s economic engine will pull through its current trough without a spending jolt, countering increasingly dire warnings from the International Monetary Fund.

Europe needs to come up with emergency plans, since monetary policy has all but exhausted its arsenal and risks spread, the fund warned.

Given elevated downside risks, contingency plans should be at the ready for implementation,” the IMF said in its Regional Economic Outlook for Europe. “A synchronized fiscal response” may be necessary, the fund said in the report, highlighting the dangers from trade protectionism, a chaotic Brexit and geopolitics.

The stark warning comes after the latest data showed that the euro-area economy is proving more resilient than anticipated, driven by robust expansion in countries such as France. Still, Germany probably went into a technical recession during the last quarter, and the labor market in the continent’s biggest economy started to deteriorate.

This Bloomberg article showed up on their website at 4:30 a.m. PST [Pacific Standard Time] on Wednesday morning — and was updated about two hours later.  I thank Swedish reader Patrik Ekdahl for pointing it out — and another link to it is here.  There was a parallel story to this from CNBC headlined “European economy to grow at its lowest rate since 2013, IMF says” — and that comes courtesy of Patrik as well.


U.S. Constructing Two New Bases in Syria’s Oil-Rich Region: Report

Turkey’s state-run media is reporting the United States is planning two new military bases in Syria’s oil-rich Deir ez-Zor province, which are currently under construction, after U.S. special forces convoys were seen patrolling the area in the past days.

Anadolu Agency, citing local sources, said the bases were under construction as evidenced by the influx of heavy equipment:

“While the footage captured by Anadolu Agency showed that much construction equipment is being put into action, it was learnt the U.S. has sent 250 to 300 additional soldiers, armored vehicles, heavy weapons and ammunition to the region.”

The reported added: “The military bases are being built in the 113th Brigade area and near al-Sur region,” according to the sources.

Days ago Russia accused the United States of stealing what rightfully belongs to the Syrian government and people, with Russian Defense Ministry spokesman Igor Konashenkov alleging earlier that U.S. government agencies received over $30 million a month in oil production in Syria.

In response to Tuesday’s Turkish media reports on the establishment of two new American military bases east of the Euphrates, Russian Deputy Foreign Minister Sergey Vershinin said, “Any actions whatsoever – we are not talking about anything in particular now – that the United States undertake to keep themselves militarily present in Syria are unacceptable and illegal from our point of view and under international law.”

Multiple images have surfaced in the past days confirming that the Pentagon has indeed launched a “secure the oil” policy, though not every of Syria’s oil and gas fields east of the Euphrates have witnessed U.S. forces enter.

This Zero Hedge story put in an appearance on their Internet site at 4:15 a.m. on Wednesday morning EST — and it’s another offering from Brad Robertson.  Another link to it is here.


Texas voters approve sales tax exemption for state-vaulted monetary metals

Proposition 9: Authorizes the Texas Legislature to exempt from ad valorem taxation precious metal held in a precious metal depository located in the state.

For: 874,369 (51.71%)
Against: 816,511 (48.29%)

I was somewhat amazed that this proposition passed with such a tiny majority, because I thought the mind-set of the citizens of the Lone Star State was wider than that, but obviously not.  But at least it passed, so one should be thankful for small mercies, I suppose.  This story was posted on the San Antonio Current website at 8:19 a.m. CST on Wednesday morning — and I found it embedded in a GATA dispatch yesterday.  Another link to it is here.


Gold ETF investors more than make up for jewellery buyers put off by rising prices

Rising gold prices have deterred jewellery buyers, with global demand slumping to the lowest in nearly a decade in the third quarter, according to the World Gold Council.

But this was more than made up for by investors of physical gold-backed exchange traded funds (ETFs), which meant overall gold demand was moderately higher, said the industry body representing leading miners.

Jewellery demand was hampered by the continued strength in gold price … as well as by consumer concern over the health of the global economy,” the London-based council said. “Overall sentiment towards gold [however] remained positive.”

Gold price gained 5 per cent during the quarter, driven by two interest rate cuts in the United States, an easing of European monetary policy via resumption of bond-buying and a global economic slowdown.

This gold-related news item from the South China Morning Post is basically a summary of the three World Gold Council articles that put in an appearance in my Wednesday column.  It was posted on their Internet site at 4:00 p.m. HKT on their Wednesday afternoon, which was 3:00 a.m. in New York — EST plus 13 hours.  I thank Bill Moomau for sending it our way — and another link to it is here.


A Startup Is Cashing In on India’s $1 Trillion Gold Stash

When Vijay Mhatre needed cash to make up a shortfall for his son’s engineering school tuition, he pledged his wife’s necklace and bangles. Instead of going to the nearest pawnbroker or bank, the 55-year-old called Rupeek Fintech Pvt Ltd., summoning a representative of the online gold lender to his 650-square-foot Mumbai apartment and sidestepping the ignominy of being seen pawning the family jewelry.

A motorcycle-borne loan agent from the startup arrived within the hour. He used a computer vision-aided testing kit to appraise the metal’s purity. A team 600 miles away crunched data to complete the background check and process the loan electronically. About 30 minutes later, 200,000 rupees ($2,800) had been deposited in Mhatre’s bank account by one of Rupeek’s partners, an Indian private lender called Federal Bank. The startup’s 24/7 control room turned on the risk-monitoring system to track the agent, ensuring he securely deposited the jewelry at the bank’s nearest vault.

Indians stockpile more of the precious metal than citizens of any other country, and their hoard is seven times the amount of gold mined globally in 2018. Now, Bangalore-based Rupeek is giving the centuries-old business of gold lending an internet-aided makeover to help Indians cash in on the 25,000 tons of the metal the World Gold Council estimates they’ve stashed away.

Backed by two of Silicon Valley’s most powerful venture capital firms, Sequoia Capital and Accel, the startup allows people to borrow money against their hoard, often built up from wedding gifts or inherited from their families. “Indians have a mind-boggling $1 trillion worth of gold sitting in their homes, several times the gold in Fort Knox,” says Sumit Maniyar, Rupeek’s founder and chief executive officer.

“The industry is tainted by bad practices,” Maniyar says. “People have the impression that gold loan companies are evil and snatch their gold away.” Yet, Maniyar says, his startup can barely keep up with demand. Monthly lending rose from $1.5 million in January to $16 million in September. Rupeek declined to give specific revenue and profit figures.

These sort of business dealings only convert a microscopic amount of India’s gold into cash — and since most of the loans are paid back and the gold objects get returned, it really isn’t a drain on India’s gold.  But it’s an interesting photo-filled Bloomberg article that put in an appearance on their website at 9:00 a.m. PST on Wednesday morning — and I found it in a GATA dispatch last night.  Another link to it is here.


Grant Williams: Day of Reckoning is Coming – Why a Gold Standard Will Return

The parallels between today’s economy of unicorn IPOs and the Roaring Twenties just before the Great Crash are easy to miss for those without a knowledge of history. Grant Williams, the experienced financier and co-founder of Real Vision Group, identifies similar trends of extreme monetary policies and social unrest over inequality. He argues the day of reckoning will eventually come for financial institutions that go against human nature, at which point a gold standard will need to be reinstated to contain the resulting chaos.

[This story appeared in my Wednesday column, but I had the wrong link, so here it is once more. – Ed]  I’ve mentioned that possibility on several occasions over the years…the latest being in my Sunday interview with Dr. Dave Janda.  But Grant Williams has a better way with words than I — and he really lays it out in this interview with Brien Lundin of goldnewsletter.com fame.  The interview runs for the first 14 minutes — and was conducted on October 29 — and showed up on the marketsanity.com Internet site on Tuesday.  I thank Judy Sturgis for sending it our way.  It’s definitely worth your while — and another link to it is here.


The PHOTOS and the FUNNIES

Only two photos today…the last from our outing back on July 7.  We managed to outrun the rain clouds without much difficulty, but they caught up to us on B.C. Highway 8 as we traveled east from Spences Bridge to Merritt.  The sun was in its ‘golden hour‘ phase in the first photo — and the clouds didn’t look all that threatening.  The second was taken about twenty minutes later — and a bit further down the Nicola River Valley.  The clouds are far more ominous.  That’s my daughter standing on the rail bed of the long-defunct Kettle Valley Railway.  From there, it rained all the way back home. It’s only 66 kilometers/41 miles between the two towns, but it’s a 50-minute trip on this scenic, but very winding highway.  Click to enlarge.


The WRAP

It was fairly quiet yesterday.  There was a floor under the gold and silver markets minutes after the noon gold fix in London — and both were capped and turned a hair lower around noon in New York.  So it looked like another version of the usual ‘care and maintenance’ type of day.

I was more than happy to see the gold shares make back almost all of their Tuesday losses on Wednesday.  But the silver equities did much better…gaining all of their losses back, plus a decent bit more, as it seems to be fairly obvious that the equities were being well bid.

But as I pointed out in my discussion on the Silver Sentiment/Silver 7 Index earlier on, the lion’s share of this gain came from SSR Mining Inc./Silver Standard Resources, as it closed higher by 7.91 percent.

I would certainly like to know what percentage of all the precious metal equities are owned by the deep state and their ilk, as I’m sure it’s considerable.  I’ve always had it in the back of my mind that it would take a hundred or less of these players to quietly buy up 50.1 percent of the largest twenty or so gold and silver miners on Planet Earth.  That would give them effective control over not only the physical market, but the extraction of these metals as well.

But then again, maybe I’m looking for that proverbial black bear in a dark room that’s not there.

Here are the 6-month charts for the Big 6 commodities.  There’s not much to see in the four precious metals.  However I note that all of the gains that copper and WTIC racked up on Tuesday, were all taken away, plus a hair more by the close of COMEX trading on Wednesday.  Click to enlarge.

And as I type this paragraph, the London/Zurich opens are less than a minute away — and I note that the gold price traded quietly sideways until around 3:20 p.m. China Standard Time on their Thursday afternoon.  Along with the dollar index, it was turned sharply lower at that juncture — and it’s down $4.30 the ounce.  It was the same for silver — and it’s down 6 cents.  ‘Da boyz’ left platinum and palladium alone on Thursday…so far — and both began to tick higher around 1 p.m. CST, with the former up 2 dollars — and the latter by 6 as Zurich opens.

Net HFT gold volume is coming up on 56,000 contracts — and there’s 3,138 contracts worth of roll-over/switch volume in this precious metal.  Net HFT silver volume is fairly chunky already at a bit over 15,500 contracts — and there’s minuscule 79 contracts worth of roll-over/switch volume on top of that.

The dollar index opened basically unchanged at 99.95 at around 7:45 p.m. EST on Wednesday evening in New York, which was 8:45 a.m. China Standard Time on their Thursday morning.  It crept a handful of basis points higher until 11:20 a.m. CST — and then edged a bit lower until 3:20 p.m. CST.  It fell out of bed by a bit at that time — and as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is now down 4 basis points.


Of course the fact the precious metal market is as quiet as a church mouse at the moment, doesn’t mean that ‘da boyz’ can’t show up either on a dollar index ‘rally’…or for no reason at all for that matter.  That’s what happened in gold, silver and platinum on Tuesday — and there’s nothing stopping them from stepping in again at any time of their choosing.  [I typed this paragraph about two hours before the London open — and as it turned out, that appears to be what has happened. – Ed]

As Ted pointed out in his mid-week commentary to his paying subscribers on Wednesday, the CFTC still hasn’t corrected the glaring errors in last Friday’s Commitment of Traders Report.  And if they haven’t done so by now, they’re not likely to.  Ted, understandably, wasn’t a very unhappy camper about that.  I expect that they’ll change the figures when this Friday’s COT numbers are posted — and that’s the first thing I’ll be checking when I look at the Disaggregated COT Report that afternoon.


And as I post today’s column on the website at 4:02 a.m. EST, it’s less than a minute before the first hour of trading ends in both London and Zurich — and I see that both gold and silver are off their earlier 3:20 p.m. CST lows. Gold is down only $3.50 an ounce — and silver by only 2 cents. Platinum is now up 5 bucks — and palladium is higher by 8 dollars.

Gross gold volume is getting up there at around 78,500 contracts — and minus roll-over/switch volume out of December and into future months, net HFT gold volume is a bit under 72,000 contracts. Net HFT silver volume has crept higher as well — and is sitting at a bit over 18,000 contracts — and there’s still only 147 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has been chopping sideways since its 3:20 a.m. CST tumble — and is down 6 basis points as of 8:45 a.m. in London/9:45 a.m. in Zurich.

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

Ed

‘Da Boyz’ Appeared At the Noon Silver Fix in London

06 November 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold down around four dollars about thirty minutes after the market opened at 6:00 p.m. EDT in New York on Monday evening.  From that juncture it edged a few more dollars lower until the noon silver fix in London…7 a.m. EST.  ‘Da boyz’ showed up — and sold it lower.  They then reappeared at the COMEX open — and once again at the afternoon gold fix in London.  The selling ended around 11:35 a.m. EST — and it drifted a bit higher, but was then sold down to its low of the day around 3:50 p.m. in after-hours trading.  It recovered a dollar or so from there going into the 5:00 p.m. close.

The high and low ticks in gold were reported by the CME Group as $1,511.90 and $1,480.70 in the December contract.

Gold was closed in New York on Tuesday at $1,483.20 spot, down $26.40 on the day.  Net volume was past Jupiter at around 447,500 contracts — and roll-over/switch volume out of December and into future months was sky high as well at 147,000 contracts.

The only difference between the engineered price decline in silver was that the low tick in that precious metal was set a few minutes before 12 o’clock noon in New York.  The rally off the low was a bit more robust, but even that tiny gain mostly vanished in the thinly-traded after-hours session.

The high and low ticks in silver were recorded as $18.085 and $17.52 in the December contract.

Silver was closed at $17.545 spot, down 49 cents from Monday.  Net volume was over the moon at around 132,500 contracts — and there was a bit over 10,500 contracts worth of roll-over/switch volume in this precious metal.

Platinum was up 3 bucks by the 2:15 p.m. CST afternoon gold fix in Shanghai on their Tuesday afternoon — but by shortly after 1 p.m. in Zurich, it was down a couple of dollars on the day.  ‘Da boyz’ showed up in this precious metal at that point — and the low was set a few minutes after the 8:20 a.m. EST COMEX open in New York.  After an up/down rally that took it back to its low by around 11:45 a.m. EST, it crept a bit higher until around 1:30 p.m. in the thinly-traded after-hours market.  It then proceeded to trade sideways until the market closed at 5:00 p.m. in New York.  Platinum was closed at $927 spot, down 6 dollars on the day.

The price pattern in palladium was similar in most ways as it was for platinum — and it seemed to follow along out of sympathy with what was happening in that precious metal.  From its approximately 9:20 a.m. EST low tick, it crawled quietly higher until around 1 p.m. — and traded flat for the remainder of the New York session.  Palladium finished the day at $1,755 spot, down 4 bucks from Monday’s close.  Kitco recorded the high and low in this precious metal as $1,792 and $1,715…which is certainly the hallmark of an illiquid and very thinly-traded market.

The dollar index closed very late on Monday afternoon in New York at 97.51 — and opened up about 4 basis points once trading commenced around 7:45 p.m. EST on Monday evening, which was 8:45 a.m. China Standard Time on their Tuesday morning.  It crept higher from there until minutes after 11:30 a.m. CST — and then crawled lower until five minutes after the 8:00 a.m. London open.  An obviously engineered ‘rally’ began at that juncture — and the 98.01 high tick was set around 11:35 a.m. in New York.  It drifted quietly lower from there — and finished the Tuesday session at  97.98…up 47 basis points from Monday’s close.

The dollar index ‘rally’ was already well under way by the noon silver fix in London — and gold and were only down tiny amounts at that point, which was when JPMorgan et al. appeared.  The rest of the dollar index rally was used as cover for the ensuing pounding that gold and silver took in COMEX trading in New York.  We’ve seen this movie before plenty of times.

Here’s the DXY chart, courtesy of Bloomberg as always.  Click 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…97.81…and the close on the DXY chart above, was 17 basis points on Tuesday.  Click to enlarge as well.

The gold shares gapped down about 2.5 percent once trading commenced at 9:30 a.m. in New York on Tuesday morning.  From there they chopped unevenly sideways until the low tick in gold was set around 11:40 a.m. EST.  The crept quietly higher until around 3:20 p.m. — and then traded flat into the 4:00 p.m. EST close from there.  The HUI finished down only 1.57 percent yesterday.

The silver equities gapped down more than three percent at the New York open yesterday morning.  But from there it was a quiet, but somewhat uneven trip higher for most of the remainder of the Tuesday session.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down only 0.91 percent.  Click to enlarge.

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

Considering how badly that gold and silver got slaughtered on Tuesday, the shares performed exceedingly well — and Coeur [CDE] actually closed up on the day.  Most of Nick’s Silver 7 closed only a hair lower from their closes on Monday.  However the biggest loser was First Majestic Silver, as it closed down 4.79 percent.


The CME Daily Delivery Report for Day 5 of November deliveries showed that 22 gold and 1 silver contract was posted for delivery on Thursday.

In gold, the two short/issuers were Advantage and ADM with 20 and 2 contracts.  Of the four long/stoppers in total, the three biggest were Advantage, JPMorgan and Morgan Stanley, with 10, 8 and 3 contracts.  All contracts, both issued and stopped, involved their respective client accounts.

In silver, the lone contract was issued by Advantage — and stopped by Morgan Stanley.  This activity was in their respective client accounts.

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

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in November dropped by 101 contracts, leaving just 36 open, minus the 22 mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 120 gold contracts were actually posted for delivery today, so that means that 120-101=19 more gold contracts were just added to November.  Silver o.i. in November declined by 8 contracts, leaving 15 still open, minus the lone contract mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 10 contracts were actually posted for delivery today, so that means that 10-8=2 more silver contacts were just added to the November delivery month.


There was a deposit in GLD yesterday, as an authorized participant added 37,687 troy ounces.  There were no reported changes in SLV.

In other gold and silver ETFs on Planet Earth on Tuesday…sans the goings on at the COMEX and GLD & SLV…there was a net 16,728 troy ounces removed — and in silver there was a net 61,624 troy ounces added.  All of that silver was deposited at Sprott.

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

The only physical activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday was 200 troy ounces that departed HSBC USA.  There was also a paper transfer that involved that bank as well.  There was 39,206 troy ounces that was transferred from Registered — and back into the Eligible category.  I won’t bother linking this.

For the second day in a row, there wasn’t much activity in silver.  Nothing was reported received — and only 116,126 troy ounces was shipped out.  Of that amount, there was 110,153 troy ounces shipped out of CNT — and the remaining 5,973 troy ounces departed Delaware.  The link to this is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They received 545 of them — and shipped out 445.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are two charts that Nick Laird passed around on Saturday.  They show U.S. gold and silver bullion coin sales, updated with October’s data.  For the month, they sold 14,500 troy ounces of gold bullion coins — and 1,113,000 troy ounces of silver bullion coins.

The gold sales include gold eagles and gold buffaloes — and the silver sales include silver eagles, plus the 5-ounce ‘America the Beautiful’ coin sales.  As you can tell, bullion coin sales have been abysmal since JPMorgan left the building a bit over two and a half years ago.  Click to enlarge for both.

I have an average number of stories/articles for you today, including several worthwhile videos.


CRITICAL READS

Job Openings Plunge to 18-Month Low as Slide in Quits Confirms Job Market Slowdown

Two months ago we concluded our analysis of the July Jolts by reminding readers that “JOLTS is 2 months delayed, so we wouldn’t be surprised if the next few months JOLTs is where the real ugliness lies.” That’s precisely what happened.

Just in case the last few declining payrolls reports weren’t sufficient to indicate that the U.S. labor market is cooling rapidly, the latest JOLTS released today by the BLS confirmed that U.S. workers are going through a decidedly rough patch, as the total number of job openings tumbled, and after last month’s 7.051 million total was revised sharply higher to 7.301 million, it tumbled again, sliding by 277K to 7.024 million, below the 7.063 million expected, and the lowest number in 17 months, since March 2018.  Click to enlarge.

Yet even with the slowdown in job openings, there was still more than 1 million more job opening than unemployed workers; in fact there have now been more U.S. job openings than unemployed workers for a record 19 consecutive months.

This brief, but chart-filled article appeared on the Zero Hedge website at 10:33 a.m. EDT on Tuesday morning — and it comes to us courtesy of Brad Robertson.  Another link to it is here.


U.S. Services Sector Slump Hits 3-Year Lows, Worst Jobs Cuts Since 2009

U.S. Manufacturing surveys (PMI and ISM) both agreed that October saw a modest rebound (despite ISM still in contraction) and analysts expected Services surveys to show a similar improvement, but that was not to be…

  • U.S. Manufacturing PMI 51.3 – expansion (up from 51.1 prior)
  • U.S. Manufacturing ISM 48.3 – contraction (up from 47.8 prior)
  • U.S. Services PMI 50.6 – expansion (down from 50.9 prior and below 51.0 exp) – weakest since Feb 2016
  • U.S. Services ISM 54.7 – expansion (up from 52.6 prior and above 53.5 exp)

So, once again – a mixed picture – up in ISM and down in PMI…Click to enlarge.

Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:

Although October saw signs of manufacturing pulling out of its recent soft patch, the far-larger service sector remained in the doldrums as inflows of new work failed to grow for the first time since 2009.”

With inflows of new work drying up, firms are relying on previously-placed orders to sustain current output growth, meaning the rate of expansion could weaken further in coming months if demand doesn’t revive.”

Finally, Williamson notes that taken together, the manufacturing and service sector surveys consequently suggest that the U.S. economy got off to a disappointing start in the fourth quarter, consistent with GDP growing at an annualized rate of less than 1.5%.

Another chart-filled Zero Hedge story.  This one was posted on their website at 10:06 a.m. EST on Tuesday morning — and it’s from Brad as well.  Another link to it is hereGregory Mannarino‘s post market close rant for Tuesday is linked here.


Leveraged-Loan Downgrades Spike, Collateralized Loan Obligations Get Cold Feet, Selloff in B-Rated Loans Ensues — Wolf Richter

Sell first, ask questions later.”

The $1.2-trillion U.S. leveraged loan market is starting to get downgrade-indigestion. So far this year through October 11, of the 1,460 leveraged loans in the S&P/LSTA Index, 282 issues were downgraded, already exceeding the 244 downgrades for the entire year of 2018, and blowing past the 33 downgrades in 2017, according to LCD of S&P Global Market Intelligence.

On a rolling three-month basis, the ratio of downgrades-to-upgrades spiked to 4.9, by far the highest ratio since the Financial Crisis. In the chart below via LCD, a value greater than 1 (horizontal green line) means downgrades exceed upgrades. A value below 1 means upgrades exceed downgrades.

Collateralized Loan Obligations get cold feet.

The hot-button issue at the moment with leveraged loans is a one-step downgrade from B-, or a 2-step downgrade from B (“highly speculative”), to  triple-C (“substantial risk,” see my cheat sheet for corporate bond and loan credit ratings by ratings agency).

It’s a hot-button issue because managers of Collateralized Loan Obligations (CLOs) currently purchase about three-quarters of the leveraged loans that banks are syndicating and hold about 55% to 60% of all leveraged loans outstanding, according to LCD. But CLOs have limits as to how much in CCC-or-below-rated loans they can hold.

This somewhat thick, but very worthwhile commentary from Wolf put in an appearance on the wolfstreet.com Internet site on Monday.  It goes right to the heart of the credit market — and it’s something I spoke about in The Wrap section of Saturday’s column.  I thank Richard Saler for pointing it out — and another link to it is here.


Fed Admits $190 Billion PER DAY Injected Into Financial Markets! Who Gets the Fed Repo Money?

This 13-minute video clip gives you the Reader’s Digest version of repos, the Fed — and the Primary Dealers.  It’s a bit thick near the beginning for a minute or so, but after that it’s very well explained.  I found it useful — and I hope you do too.  It showed up on the youtube.com Internet site on Monday sometime — and I thank ‘Robert in Denver’ for sending it our way.  Roy Stephens sent me another video on repos and reverse repos from the youtube.com Internet site — and it’s headlined “Financial Collapse – REPO and MBS Future Disaster In The Making?“.  It runs for 22 minutes — and it’s an even better and more detailed description then was given in the first video.  It got this in my in-box too late to rewrite this particular news item, putting the best one first.  But I’ve now looked at half of this second video — and it’s a must watch if you have the interest.


Dalio: “The World Has Gone Mad and the System is Broken

I say these things because:

  • Money is free for those who are creditworthy because the investors who are giving it to them are willing to get back less than they give. More specifically investors lending to those who are creditworthy will accept very low or negative interest rates and won’t require having their principal paid back for the foreseeable future. They are doing this because they have an enormous amount of money to invest that has been, and continues to be, pushed on them by central banks that are buying financial assets in their futile attempts to push economic activity and inflation up.
  • At the same time, large government deficits exist and will almost certainly increase substantially, which will require huge amounts of more debt to be sold by governments—amounts that cannot naturally be absorbed without driving up interest rates at a time when an interest rate rise would be devastating for markets and economies because the world is so leveraged long. Where will the money come from to buy these bonds and fund these deficits? It will almost certainly come from central banks, which will buy the debt that is produced with freshly printed money. This whole dynamic in which sound finance is being thrown out the window will continue and probably accelerate, especially in the reserve currency countries and their currencies—i.e., in the US, Europe, and Japan, and in the dollar, euro, and yen.
  • At the same time, pension and healthcare liability payments will increasingly be coming due while many of those who are obligated to pay them don’t have enough money to meet their obligations. Right now many pension funds that have investments that are intended to meet their pension obligations use assumed returns that are agreed to with their regulators. They are typically much higher (around 7%) than the market returns that are built into the pricing and that are likely to be produced. As a result, many of those who have the obligations to deliver the money to pay these pensions are unlikely to have enough money to meet their obligations.
  • Because the “trickle-down” process of having money at the top trickle down to workers and others by improving their earnings and creditworthiness is not working, the system of making capitalism work well for most people is broken.

This set of circumstances is unsustainable and certainly can no longer be pushed as it has been pushed since 2008. That is why I believe that the world is approaching a big paradigm shift.

This must read commentary by Ray showed up on the linkedin.com Internet site on Tuesday — and I thank Judy Sturgis for pointing it out.  Another link to it is here.


Consistently Spending More Than a Nation Can Afford Causes Its Fall — Bill Bonner

The means of defense against foreign danger have been always the instruments of tyranny at home.”

If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy.”
– James Madison

And now, we come to the end… and the beginning.

We end our series on the Persecution and (political) Assassination of Donald J. Trump, as performed by the morons, flim-flammers, and bunglers of the Deep State.

But also, through the open door in front of us, we see what might be the future…

We remind readers: It is not the exceptional tryst with the hat-check girl… nor a once-in-a-while bender… that ruins a man. It is a pattern of mistakes and bad judgment, usually over many years.

Nor is it the occasional deficit… or the ups and downs of an inconstant economy… that create a Venezuela… a Soviet Union… or a Zimbabwe. Instead, it is a systemic or habitual application of dumbbell ideas over a long period.

America won’t be the first nation ruined by a corrupt elite, runaway spending, and a too-powerful military. The formula is classic.

From ancient Rome to modern Venezuela, the path is clearly marked, well lit, and well trod.

This very worthwhile commentary from Bill, filed form Paris, put in an appearance on the bonnerandpartners.com Internet site early on Tuesday morning EST — and another link to it is here.


Total gold supply [including recycling] rose 4% in Q3 — World Gold Council

Although I put the World Gold Council in the same category as spores, fungus — and slime moulds, this very informative article posted on the gold.org Internet site, is just chock full of data.  It’s definitely worth your time.  It was posted on the Sharps Pixley website on Tuesday sometime — and another link to it is here.  There were two more WGC stories on the Sharps Pixley website.  The first is headlined “Y-t-D central bank net purchases 12% higher than in 2018” — and the second “Gold investment doubled y-o-y” — and both are worth your while, as well.


Grant Williams: Day of Reckoning is Coming – Why a Gold Standard Will Return

The parallels between today’s economy of unicorn IPOs and the Roaring Twenties just before the Great Crash are easy to miss for those without a knowledge of history. Grant Williams, the experienced financier and co-founder of Real Vision Group, identifies similar trends of extreme monetary policies and social unrest over inequality. He argues the day of reckoning will eventually come for financial institutions that go against human nature, at which point a gold standard will need to be reinstated to contain the resulting chaos.

I’ve mentioned that possibility on several occasions over the years…the latest being in my Sunday interview with Dr. Dave Janda.  But Grant Williams has a better way with words than I — and he really lays it out in this interview with Brien Lundin of goldnewsletter.com fame.  The interview runs for the first 14 minutes — and was conducted on October 29 — and showed up on the marketsanity.com Internet site on Tuesday.  I thank Judy Sturgis for her second contribution to today’s column.  It’s definitely worth your while — and another link to it is here.


The PHOTOS and the FUNNIES

After leaving Hat Creek Ranch and the rain behind on July 7, we headed back home to Merritt…south down the Trans-Canada Highway to Spences Bridge…then turning left on B.C. Highway 8.  The first shot was taken looking east, with the Nicola River in the foreground.  The right-of-way of the now-defunct Kettle Valley Railway runs across the center-right of the shot.  We also saw these female bighorn sheep — and their young ones from earlier in the year are getting pretty fair sized.  The ewe in the last shot was standing along side the road.  No telephoto lens was necessary — and I didn’t have to crop it much, either.  Click to enlarge.


The WRAP

Well, the Big 8 commercial traders, with or without JPMorgan’s help, didn’t take any prisoners yesterday.  The engineered price declines in both began at the noon silver fix in London, which was four hours after the equally engineered dollar index ‘rally’ began at 8 a.m. GMT.  Platinum and palladium were also sold lower, but it wasn’t with the same enthusiasm as ‘da boyz’ reserved for silver and gold.

The only positive thing about yesterday’s price action was the fact that the precious metal stocks, especially the silver equities, were well bought, as it was obvious that very deep pockets were buying every precious metal share that was being dumped in a panic.  I suspect that a lot of the selling was of the margin call variety.

Here are the 6-month charts for the Big 6 commodities.  Both gold and silver were smashed below — and then closed below their respective 50-day moving averages.  Platinum was sold lower for the second day in a row — and it’s obvious that the palladium price has been rolled over as well.  Copper was up a few pennies.  WTIC was up a bit too, closing right on its 200-day moving average.  But there was Zero Hedge story out long after the COMEX close on Tuesday afternoon that was headlined “WTI Slides After Bigger-Than-Expected Crude Build“…so the close on WTIC could be quite a bit lower by the end of the Wednesday session.  Click to enlarge.

And as I type this paragraph, the London open is less than a minute away — and I see that the gold price rallied a few dollars and change in the first two and a half hours since trading began at 6:00 p.m. EST in New York on Tuesday evening. And from 9:30 a.m. China Standard Time onwards on their Wednesday morning, it has been trading quietly sideways — and is up $2.40 an ounce. Silver came under a bit of selling pressure since a few minutes after 9 a.m. CST. It’s off its spot low tick by a bit — and down 5 cents as London opens. Platinum was sold a bit lower in Far East trading as well, but is off its low — and down 5 bucks. Palladium was sold quietly lower until shortly before 11 a.m. CST — and it hasn’t done much since — and is currently down 7 dollars as Zurich opens.

Net HFT gold volume is around 54,000 contracts — and there’s only 1,494 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is a tiny bit over 23,000 contracts already — and there’s a piddling 297 contracts worth of roll-over/switch volume on top of that.

The dollar index opened down a bit more than 4 basis points at 97.95 once trading commenced at 7:45 p.m. EST in New York on Tuesday evening, which was 8:45 a.m. China Standard Time on their Wednesday morning. Its current low tick was set at 11:30 a.m. CST — and it has been wandering very unevenly higher since — and is down 9 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.


Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report and companion Bank Participation Report — and one would expect that it will show improvements in the commercial net short positions in both silver and gold.  You would think that it be a decent amount in both, but there were days earlier in the reporting week where the open interest in both gold and silver were up by fairly chunky amounts.  For that reason I’m going to reserve judgement on what the improvements might be.

Ted posts his mid-week commentary for his paying subscribers on his Internet site this afternoon — and I’ll be more than interested in what he has to say.  I’ll borrow a few sentences for my Friday column.


And as I post today’s missive on the website at 4:02 a.m. EST, I note that nothing much has happened with the gold price as the first hour of London trading draws to a close. It’s now up $2.90 — and silver is down only 3 cents. Platinum and palladium are edging a bit higher as well, with the former down 2 dollars and the latter by 5 as the first hour of Zurich trading ends.

Gross gold volume is now up to around 68,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is a bit under 65,000 contracts. Net HFT silver volume is 25,000 contracts — and there’s still only 338 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has ticked lower in the last hour — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, it’s down 16 basis points.


Whether or not there’s more to come to the downside in both gold and silver remains to be seen.   But as long as this dollar ‘rally’ continues, I expect that Big 7 will continue to press their advantage, as [according to Ted] they’re still many billions of dollars in the hole on their current short positions.  I’m sure we won’t have long to wait in order to see what their plans are.

That’s it for yet another day — and I’ll see you here again tomorrow.

Ed

Gold & Silver Yawn on the Jobs Report

02 November 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crept lower until shortly after 3 p.m. China Standard Time on their Friday afternoon — and then rallied a bit until around 8:30 a.m. in London.  It again crawled lower from there until the job numbers hit the tape at 8:30 a.m. in New York.  The tiny price spike lower at that juncture was bought immediately — and it crept higher until it spiked up a bit at the afternoon gold fix in London.  It was quietly down hill from there until 3 p.m. EDT in after-hours trading — and it edged higher into the 5:00 p.m. EDT close.

The low and high ticks aren’t really worth looking up, but here they are anyway…$1,505.40 and $1,519.00 in the December contract.

Gold finished the Friday session in New York at $1,514.10 spot, up $1.40 from Thursday’s close.  Net volume was very chunky at 353,000 contracts — and there was a fairly hefty 31,500 contracts worth of roll-over/switch volume in this precious metal.

Silver was guided on its price path in a similar fashion as gold’s.  So closely in fact that it’s hard to tell the charts apart at first glance — and for that reason I’ll spare you the play-by-play.

The low and high price ticks in this precious metal were reported by the CME Group as $17.935 and $18.16 in the December contract.

Silver closed on Friday afternoon in New York at $18.080 spot, up 0.5 cents on the day.  Net volume was very healthy at 79,000 contracts — and there was 13,000 contracts worth of roll-over/switch volume on top of that.

The platinum price traded flat until around 9:40 a.m in New York on Friday morning — and then began to head rather sharply higher.  That rally was obviously capped and turned lower very shortly before 12:30 p.m. EDT — and its sell-off lasted until a few minutes before 2 p.m. in the thinly-traded after-hours market.  It crawled a few dollars higher into the 5:00 p.m. close from there.  Platinum was closed at $948 spot, up 18 bucks on the day — and ten dollars off its Kitco-reported high tick.

The palladium price didn’t do much until about thirty minutes before the Zurich open on their Friday morning.  At that juncture, the price pressure began.  Its low of the day came on another one of those vicious down/up spikes that occurred at the release of the job numbers at 8:30 a.m. in Washington.  It had a bit of a wild and very choppy rally from there until the price was capped for good a few minutes after the Zurich close.  From that juncture it was forced to chop unevenly sideways until trading ended at 5:00 p.m. EDT.  Palladium was closed at $1,792 spot, up 12 dollars on the day, but 32 bucks off its Kitco-reported high tick of the day.

The dollar index closed very late on Thursday afternoon in New York at 97.35 — and opened down about 5 basis points once trading commenced around 7:45 p.m. EDT on Thursday evening, which was 7:45 a.m. China Standard Time on their Friday morning.  After a quick rise to about unchanged, it sank lower until around 9:55 p.m. CST — and from there it traded sideways until an up/down move starting at the London open, set the 97.12 low tick at 8:10 a.m. GMT.  Then it went on a wild psychotic ride that ended back around its London low tick — and that occurred about 11:10 a.m.  in New York…ten minutes after the London close.  [During that mêlée, the 97.45 high tick of the day was set around 8:50 a.m. in New York.]  From 11:10 a.m. EDT onwards it rose, then fell about 20 basis points, ending the day close to its low tick, at 97.24…down 11 basis points from Thursday.

Good luck finding much, if any, correlation between what the precious metals and currencies were doing during the Friday trading session.

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

And here’s the 5-year U.S. dollar index chart, courtesy…as always…from the good folks over at the stockcharts.com Internet site.  The delta between its close…97.04…and the close on the DXY chart above, was 20 basis points on Friday.  Click to enlarge as well.

The gold stocks were sold down a bit over two percent once trading began at 9:30 a.m. in New York on Friday.  From there they wandered very unevenly and equally unsteadily higher for the remainder of the Friday session.  Despite gold’s positive close, they couldn’t manage that feat themselves, as the HUI closed down 0.69 percent.

The silver equities also got slammed at the 9:30 a.m. open in New York on Friday morning, but they never really looked back after that, although the rally was equally as erratic as the one in the gold shares.  They managed to close in positive territory, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed in the green by 0.61 percent.  Click to enlarge if necessary.

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

With the month of November only one day old, I won’t bother with the month-to-date chart, as I’ve already gone through this data just above.

But here’s the weekly chart — and it’s rather happy looking.  For once, the silver equities vastly outperformed the underlying precious metals — plus gold and the HUI.  Click to enlarge.

And here’s the year-to-date chart once more — and it’s virtually unchanged from what it looked like when I posted it Friday’s column.  Silver — and its equities, continue to underperform for all the reason you know already…along with the underperformance of the three laggards year-to-date.  Although up, the HUI isn’t exactly setting the world on fire, either.  Click to enlarge.

The usual ‘wash, rinse, spin’ cycle was a ‘no show’ again this week — and the minor sell-offs we did see in both silver and gold didn’t amount to much — and have mostly regained all their losses.  Both closed above their 50-day moving averages by a hair on Friday, but not enough to call significant.  Can the Big 7 traders do the dirty to the downside — and if so, how far can they get?  We’ll find out in due course…but the headwinds their facing are now hurricane force — and I don’t wish them well.


The CME Daily Delivery Report for Day 3 of November deliveries showed that 144 gold and 16 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, there were four short/issuers in total, but the only two that mattered were Advantage and Marex Spectron, with 120 and 22 contracts out of their respective client accounts.  There were four long/stoppers in total — and the two biggest were Advantage with 90 for its client account — and Scotia Capital/Scotiabank with 45 for its in-house/proprietary trading account.

In silver, the two short/issuers were JPMorgan and Advantage, with 15 and 1 contracts out of their respective client accounts.  There were five long/stoppers in total — and the two biggest hardly matter…Morgan Stanley and ADM, with 6 and 5 contracts for their respective client accounts.

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

So far this month there have been 924 gold contracts issued/reissued and stopped — and that number in silver is 389.

The CME Preliminary Report for the Friday trading session showed that gold open interest in November fell by 232 contracts, leaving 186 still open, minus the 144 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 379 gold contracts were actually posted for delivery on Monday, so that means that 379-232=147 more gold contracts just got added to the November delivery month.  Silver o.i. in November declined by 60 contracts, leaving just 16 left, minus the 16 mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 71 silver contracts were posted for delivery on Monday, so that means that 71-60=11 more silver contracts were added to November.


There was another withdrawal from GLD on Friday, as an authorized participant removed 28,266 troy ounces.  There were no reported changes in SLV.

In the other gold and silver ETFs on Planet Earth on Fridaysans what happened with COMEX warehouse stocks, GLD & SLV…there was a net 76,155 troy ounces of gold added.  But in silver, that number showed a net withdrawal of 56,690 troy ounces — and that was only because of a very large 596,722 troy ounces withdrawal from GoldMoney.

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

There was some decent activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  There was 96,453.000 troy ounces/3,000 kilobars [SGE kilobar weight] received at the International Depository Services of Delaware.  This is the second time in the last five business days that this exact amount of gold has been added to this depository.  In my Tuesday column I said that this…”is not a depository one normally sees this kind of activity.”  I don’t know what it means, if anything…but I thought I’d mention it, as it’s way out of the ordinary.  Nothing was reported shipped out — and the link to that is here.

There was some activity in silver.  Nothing was reported received — and 569,852 troy ounces was shipped out.  Of that amount, there was 497,440 troy ounces that departed Delaware — and 72,411 troy ounces left Canada’s Scotiabank.  The link to that is here.

There was a fair amount of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 2,393 of them — and shipped out 5.  Except for the 393 kilobars received at Loomis International, the remainder of the in/out activity was at Brink’s, Inc.  The link to all this, in troy ounces, is here.

Roman Empire, Constantine I, the Great, 307-337. Follis

Obv. Bust with bust and armour     Rev.  The Capitoline Wolf suckling Romulus and Remus

Material:  Bronze     Full Weight:  2 grams     Price:  €50/USD$56


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, October 29 was so obviously misreported, that even I spotted it right away.

The numbers in the ‘Nonreportable’/small trader categories in all four precious metals were particularly egregious — and showed blow-out increases in their short positions which can’t possibly be right.

Reporting errors this large in one category obviously affects the long and short position changes in the other categories as well, so no part of this report is believable.

Ted sent an e-mail off to the CFTC shortly after 4 p.m. EDT once he got off the phone talking to me.  Whether they’ll do anything about it right away, or even over the weekend, remains to be seen.  I would expect that they probably won’t change it until Monday.

But if they do change it on the weekend — and after I’ve filed today’s column, I will send out a special edition by e-mail — and change Saturday’s column to include it.  Otherwise it will have to wait until Tuesday.

I have a very decent number of stories/article and videos for you today — and most of them are ones that I’ve been saving for my Saturday column for the usual reasons….length and/or content.


CRITICAL READS

Huge October Payrolls Beat: 128K Jobs Added as Black Unemployment Rate Hits All-Time Low

With Wall Street expecting the first double-digit payrolls report since May, largely as a result of over 40K G.M. jobs not accounted for due to the strike, and with some whispers even hinting at a negative print, moments ago the BLS surprised once again, reporting that in October, the U.S. added 128K jobs, a huge beat to the 85K expected, with the September payrolls report revised sharply higher to 180K from 136K.

The change in total nonfarm payroll employment for August was revised up by 51,000 from +168,000 to +219,000, and the change for September was revised up by 44,000 from +136,000 to +180,000. With these revisions, employment gains in August and September combined were 95,000 more than previously reported.  After revisions, job gains have averaged 176,000 over the last 3 months.

The report includes a strike-driven 41,600 decline in automaker payrolls and 20,000 temporary census workers leaving their jobs. The result of the strike led to a 36K drop in manufacturing jobs, the biggest drop since 2009, although a similar rebound is expected next month now that the G.M. strike is over.

As has been the case for much of the past decade, job gains were led by low-wage jobs in leisure and hospitality, education and health services and professional and business services. Construction and finance also posted modest gains. Even retail jobs rose, registering back-to-back gains for the first time in more than a year following seven straight declines.

In response, Treasury yields, the dollar and S&P futures all spiked as December rate cut odds slumped, amid renewed speculation that the economy is once again on an stronger footing.

You’ll excuse me if I don’t join in celebrating this positive news, because despite all this happy BLS info, the dollar index gave up all its gains — and gold crawled back into positive territory by the close yesterday.  The stock indexes only gained because there was huge short covering involved.  Let’s see what happens on Monday.  This Zero Hedge article appeared on their Internet site at 8:36 a.m. on Friday morning EDT — and it’s the first offering of the day from Brad Robertson.  Another link to it is hereGregory Mannarino‘s post market close rant for Friday is linked here — and it comes to us courtesy of Brad Robertson.


Total U.S. Debt Surpasses $23 Trillion For the First Time

After total U.S. debt was stuck at $22 trillion for five months, from March until August, until a deal was cobbled together by Congress to once again raise the debt ceiling, the obligations of the Federal government have soared fast and furious, and in just the past three months, total U.S. debt increased by $1 trillion, surpassing $23 trillion as of Hallowe’en 2019: truly a scary testament to America’s insatiable thirst for debt.

Putting this increase in context: since Nov 8, 2016, when Donald Trump was elected U.S. president, and when US debt was $19.8 trillion, the federal debt has increased by $3.2 trillion.  Click to enlarge.

Furthermore, as we reported last week, the U.S. debt is expected to increase by well over $1 trillion annually for the foreseeable future: while deficit for 2019 came in just under $1 trillion, at $984 billion, it is expected to grow by over $1 trillion each year for the foreseeable future.

Reaching $23 trillion in debt on Halloween is a scary milestone for our economy and the next generation, but Washington shows no fear,” said Michael A. Peterson, CEO of the conservative Peter Peterson Foundation. “Piling on debt like this is especially unwise and unnecessary in a strong economy.”

One final piece of bad news: according to the CBO’s baseline forecast, the U.S. debt picture is dismal and only set to get far worse. The chart below hardly needs any explanation.  Click to enlarge.

This news story showed up on the Zero Hedge website at 7:25 p.m. EDT on Friday evening — and another link to it is here.


Is a U.S. Recession Coming? with Raoul Pal

Due to the precarious construction of the recent economic expansion, the resulting damage of a recession could be unusually devastating. In this deep-diving presentation, Raoul Pal presents many specific indicators of weakness, speaks to the potential market impact, and explains how a “doom loop” could quickly take matters from bad to catastrophic. He also suggests steps that savvy investors could take to prepare themselves.

This 1 hour and 5 minute video presentation from realvision .com was recorded on July 8…but it’s just as relevant now as it was back then, if not more so.  I was particularly impressed with his presentation of the catastrophe-in-the-waiting in the corporate debt market — and his discussion on that begins at the 38:20 minute mark — and is not to be missed.  I thank Gordon Foreman for sending this along on Thursday — and for obvious reasons, it had to wait for today’s column.  Another link to it is here.


James Rickards: The Next Financial Crash is Coming

This 1 hour 5 minute video interview was one that I posted in my column earlier in the week because it was a slow news day.

And as I said of this interview on Wednesday…”The video interview lasts for 1 hour and 4 minutes — and quite a bit of it you’ve heard before.  But there is some new stuff in here that made it worth watching — and I’ve seen it from start to finish.  The further you get into this interview, the better it gets — and there aren’t too many flies on the two gentleman who are hosting it.  Any interview is improved by the quality, knowledge and experience of the persons doing the interview — and that’s certainly the case here, as the questions cut right to the chase.”  It’s certainly worth watching.

I’m posting it again in case you didn’t have time for it during the week.  It showed up on the youtube.com Internet site on Sunday sometime — and another link to it is here.


Doug Noland: Music to the Market

This long expansion is notable for the lack of large financial imbalances…” “Leverage in the financial system… is low by historical standards…” “…Funding risk which is the risk of runnable funding, and that risk is also quite low…” “We don’t see bubbles…” As for the household sector, “we don’t see leverage”; “very good shape financially”; and “in a very good place.” “That leaves businesses which is where the issue has been.”

Sound analysis would today have central bankers downplaying consumer price inflation, while elevating financial stability as the overarching priority. It’s Music to the Markets that the Fed apparently sees no stability risk on the horizon that would pressure the Fed into pulling back on monetary stimulus. This is a momentously misguided.

The mortgage finance Bubble period was dominated by the rapid expansion of household mortgage debt. There were huge excesses involved in both the financial sector’s intermediation of mortgage risk and with speculative leverage. Today’s “notable… lack of large financial imbalances” completely ignores federal government debt said this week to have reached $23 TN, up from about $9.5 TN to end 2008. Moreover, there’s overwhelming analytical support for the view that today’s global sovereign debt markets are history’s greatest episode of asset inflation, distorted markets and speculative price Bubbles.

We’re now a decade into the “global government finance Bubble.” Fundamental excesses have unfolded in sovereign debt and central bank Credit. When Chairman Powell states, “That leaves businesses…”, he is using a conventional analytical framework ignoring the government sector and the central bank. Both have employed unprecedented leverage during this cycle, a massive Credit expansion that continues to support the purported soundness of the household and financial sectors. In contrast to the previous Bubble, the nucleus of the current Credit boom is money-like instruments (i.e. Treasuries and central bank Credit) that have been issued in outrageous quantities without the need for risk intermediation through the financial sector.

That the Fed would move to expand its balance sheet by hundreds of billions with the stock market at record highs, financial conditions loose, and the economy in expansion, clearly conveys, once again, that the Federal Reserve has no tolerance for market adjustment or correction. Why do we need a multi-trillion “repo” market, anyways? Is it compatible with a financial stability mandate that the Fed openly nurtures speculative leveraging? Silly me: with consumer prices slightly below target – and the U.S. economy “in a good place” – no need to be concerned with egregious speculative leverage at the heart of the financial system. Nothing but Music to the Markets.

Doug’s weekly commentary was posted on his Internet site in the very wee hours of Saturday morning — and another link to it is here.


Weapons of the Deep State, Part 4: The Warfare State — David Stockman

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist.” — President Dwight D. Eisenhower, Jan. 17, 1961.

On Jan. 17, 1961, President Eisenhower gave the nation a dire warning about what he described as a threat to democratic government.

He called it the military-industrial complex, a formidable union of defense contractors and the armed forces…

A never-ending state of warfare designed to prop up private industry, influence the electorate, and grab ever-increasing amounts of power.

But the Deep State’s seed for eternal warfare was planted decades prior to Ike’s warning after the first World War…

In 1917, President Woodrow Wilson opened the Pandora’s Box of federal debt monetization by permitting the Fed to own government debt.

That was a step strictly forbidden by the stringent 1913 enabling statute, drafted by the legendary maestro of sound money, Congressman Carter Glass.

And with this perversion of sound money principles, Wilson “drafted” the printing press of the newly minted Federal Reserve for war finance duty.

No commentary by David is a short read — and this one isn’t either.  But it’s a must read in my opinion.  I found it on his deepstatedeclassified.com Internet site.  It’s not dated, but it sounds very recent to me.  I thank Brad Robertson for sharing it with us and, for obvious reasons, it had to wait for today’s missive.  Another link to this very worthwhile commentary is here.


The monetary lessons from Germany — Alasdair Macleod

Germany suffered two currency collapses in the last century, in 1920-23 and1945-48. The architect of the recovery from the former, Hjalmar Schacht, chose to cooperate with the Nazi successors to the Weimar Republic, and failed. In that of the second, Ludwig Erhard remained true to his free market credentials and succeeded. While they were in different circumstances, comparisons between the two events might give some guidance to politicians faced with similar destructions of their state currencies, which is a growing possibility.

Introduction

Let us assume the next credit crisis is on its way. Given enhanced levels of government debt, it is likely to be more serious than the last one in 2008. Let us also note that it is happening despite the supposed stimulus of low and negative interest rates, when we would expect them to be at their maximum in the credit cycle, and that some $17 trillion of bonds are negative yielding, an unnatural distortion of markets. Let us further assume that McKinsey in their annual banking survey of 2019 are correct when they effectively say that 60% of the world’s banks are consuming their capital before a credit crisis. Add to this a developing recession in Germany that will almost certainly lead to both Deutsche Bank and Commerzbank having to be rescued by the German government. And note the IMF recently warned that $19 trillion in corporate debt is a systemic timebomb, and that collateralised loan obligations and direct exposure to junk held by the US commercial banks is approximately equal to the sum of their equity.

Then we can say with some confidence that a major credit crisis is developing, and that it will almost certainly be far greater than Lehman. We can also say that the money-printing by central banks to rescue both the banking system and government finances will be on a far greater scale, likely to destabilise the purchasing power of government currencies. If that happens, interest rates will then be forced higher as prices for everything begin to rise uncontrollably, irrespective of central bank interest rate policies. And where they depend on budget deficits being covered by additional issues of government stock, Government finances will be in crisis. It will threaten the ending of unbacked currencies based only on the faith and credit of governments whose spending is spiralling out of control.

None of Alasdair’s commentaries are a quick read, either — and this one is no exception.  I haven’t read it all yet, but it’s on my ‘do do’ list over the weekend.  It was posted on the goldmoney.com Internet site on Thursday — and I found it in a GATA dispatch.  For obvious length reasons, it had to wait for my Saturday column — and another link to it is here.


China wins over U.S. in WTO dispute as Trump talks trade deal, approved for $3.6 billion in retaliatory sanctions

With U.S. President Donald Trump touting the completion of a trade deal, China has won the World Trade Organization’s permission to impose $3.6 billion worth of retaliatory sanctions against the U.S.

The case, originating from 2016, extends through a U.S.–China trade war in which Washington has imposed tariffs of 25 percent on at least $250 billion of Chinese goods, with Beijing placing tariffs at 5-25 percent on around $110 billion of U.S. products.

Just days ago, the U.S. president claimed that “phase one” negotiations with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in Chile were looking to “probably be ahead of schedule.” Trump also noted that the first phase of this deal would include a very large portion of what Washington and Beijing hoped to agree on. [Unfortunately, this summit in Chile was cancelled earlier this week. – Ed]

The WTO ruling may give Beijing some clout. The organization’s appeals judges agreed that the U.S. was not in full compliance with a WTO ruling after Washington placed tariffs on Chinese solar panels, steel cylinders and wind towers.

In China’s big win, the WTO is allowing the country to impose higher tariffs than currently allowed by the global trade body, as well as giving China more freedom to target U.S. products and sectors of its own choosing.

China’s willingness to seek approval from the WTO, rather than impose such sanctions on its own terms, shows that Beijing is willing to take a measured approach to resolution. Trump has previously threatened to withdraw from the WTO if the organization doesn’t “shape up.”

This story put in an appearance on the rt.com Internet site at 6:35 p.m. Moscow time on their Friday evening, which was 11:35 a.m. in Washington — EDT plus 7 hours.  I thank Larry Galearis for pointing it out — and another link to it is here.


Migrating Russian eagles run up huge data roaming charges

Russian scientists tracking migrating eagles ran out of money after some of the birds flew to Iran and Pakistan and their SMS transmitters drew huge data roaming charges.

After learning of the team’s dilemma, Russian mobile phone operator Megafon offered to cancel the debt and put the project on a special, cheaper tariff.

The team had started crowdfunding on social media to pay off the bills.

The birds left from southern Russia and Kazakhstan.

The journey of one steppe eagle, called Min, was particularly expensive, as it flew to Iran from Kazakhstan.

Min accumulated SMS messages to send during the summer in Kazakhstan, but it was out of range of the mobile network. Unexpectedly the eagle flew straight to Iran, where it sent the huge backlog of messages.

The price per SMS in Kazakhstan was about 15 roubles (18p; 30 US cents), but each SMS from Iran cost 49 roubles. Min used up the entire tracking budget meant for all the eagles.

LOL!  You couldn’t make this stuff up!  This hilarious and rather heart-warming news item appeared on the bbc.com Internet site back on October 25 — and I received it from Swedish reader Patrik Ekdahl too late for it to make its way into last Saturday’s missive…so here it is now.  Another link to it is here.


DoJ seeks to intervene in CFTC action against precious metals traders accused of spoofing

Less than two months have passed since the United States Commodity Futures Trading Commission (CFTC) launched a lawsuit against traders Michael Thomas Nowak and Gregg Francis Smith accusing them of spoofing.

Now, the Department of Justice is seeking to put the CFTC action on hold. This is indicated by documents filed with the Illinois Northern District Court on October 31, 2019, and seen by FinanceFeeds.

Robert Zink, Chief of the Fraud Section of the Criminal Division of the DOJ (i) seeks leave to intervene in the civil action; and (ii) moves for a stay of the CFTC action through the conclusion of the parallel criminal prosecution – United States v. Smith, et al., Case No. 19 CR 669 (N.D. Ill.).
In its Motion, the DOJ notes that the criminal case includes both defendants to this civil case – Michael Nowak and Gregg Smith – and substantially the same conduct, events, and time period.

The government argues that the requested stay would benefit the Court and all parties by minimizing redundant litigation, narrowing the scope of discovery and issues to be adjudicated in this case, and relieving Nowak and Smith of the choice of having to choose between potentially invoking their rights against self-incrimination in this civil case (which invocation could be used against them in this case) or testifying in this case (which testimony could be used against them in the criminal case).

Further, according to the DOJ, a stay is needed to preclude Nowak and Smith from impermissibly taking advantage of the civil discovery process to circumvent the limitations on criminal discovery that protect the integrity of criminal prosecutions, and to allow the defendants the ability to focus their resources on defending the pending criminal case.

This news item was posted on the financefeeds.com Internet site at 8:36 a.m. GMT on Friday morning — and I found it on the Sharps Pixley website.  Another link to it is here.


China gold imports still low…but counterbalanced — Lawrie Williams

So far this year, according to official figures, China has imported just over 760 tonnes of gold, putting it on track for an annual level of only a little over 1,000 tonnes – well below the 1,408 tonnes imported in 2018, but sill very significant for the global gold supply/demand situation..  The final three months of the year may see a pick-up in imports ahead of the Chinese New Year holiday – a time of gift giving – but this is probably unlikely to lift bullion imports much above the projected level.

Despite the fall-off in gold imports, given that China is currently comfortably the world’s largest gold producer,demand from the public may not be affected too seriously. Although amounts taken into official reserves may be.  There is reported evidence too that some Chinese gold investors are switching interest from buying bullion to purchasing gold ETFs instead, an option which had not proved particularly popular when the ETFs were originally set up.

The level of Shanghai Gold Exchange gold withdrawals for October is due to be published in a couple of weeks’ time and this may give additional data pointing to Chinese consumption.  Year to date so far SGE gold withdrawals are substantially below those of the previous few years.

As we have pointed out here before, the high levels of accumulations of physical gold by the world’s gold ETFs is more than counterbalancing the apparent fall-off in Chinese demand, while continued central bank buying at an enhanced level will also be helping to keep gold’s fundamental supply and demand in balance, or positive.  Perhaps the biggest disappointment for gold investors though is that global gold production has yet to start falling as had been predicted by many experts.  At the moment it appears to be increasing marginally, or at best plateauing with the current higher gold prices helping keep some older mines, which could have been forced to close, open for another year or so with sufficient production increases in countries like Australia and Russia – the world’s No. 2 and 3 gold miners, continuing to increase, albeit by relatively small amounts;  But eventually the dearth of any new major gold discoveries, reduced exploration expenditures by the gold majors and the lack of new capital availability for new gold mega-projects will, in combination,take their toll and global production will indeed turn down (peak gold), but this taking longer to materialise than many gold followers had expected.

This worthwhile commentary by Lawrie appeared on the Sharps Pixley website on Friday sometime — and another link to it is here.


Gold market manipulation update, November 2019 — Chris Powell

Remarks by Chris Powell, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
Friday, November 1, 2019

Since we gathered here a year ago the gold and silver markets feel much stronger.

The central bank-instigated smash-downs that used to depress prices for weeks or even months are failing to keep prices down for more than a few days.

This chart-filled speech is one that Chris gave to a packed house at the Hilton New Orleans Riverside Hotel late on Friday afternoon CDT.  The illustrations and charts that go with the presentation are linked at the top of the speech — and here.  The link to the entire text of Powell’s speech is linked here — and it’s worth your while.


The PHOTOS and the FUNNIES

Here are the last four photos from our brief stop at Hat Creek Ranch on July 7…just before the weather really turned ugly.  The first shot was of three people dressed up in period costumes outside the only only roadhouse still standing along the Caribou Wagon Road used by the gold rush travellers of the 1860s.  The young kid on the far right…probably 15 or 16 years young…proudly [and slightly boastfully, I’m sure] confided in us that he was a ‘real’ cowboy…but was doing this gig for extra money.  We believed him.  The third shot was taken inside the kitchen — and it was pretty much original…as were all the rooms in the roadhouse, along with the furnishings they contained.  The third photo shows the roadhouse along the caribou wagon road — and one of the original stage coaches that used to ply the route.  On the very left of the shot is an old double-pull/double-throw cast iron pump, complete with wooden trough.  I hadn’t seen such a thing since my childhood back in Manitoba in the mid 1950s.  The last shot is of lunch at the restaurant, just before the rains came.  Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ is yet another 1-hit wonder from the 1970s.  Last week it was Scotsman Gerry Rafferty and ‘Baker Street.  This week it’s north up the English Channel, then make a right turn in the middle of the North Sea, through the Skagerrak — and sooner or later you run into Sweden.  It ain’t ABBA, but it was a Number 1 hit from Blue Swede back in 1974 — and the link is here.  I was amazed that there was a bass cover to this, but there was, complete with tabs — and that’s linked here.  If I ever come back in another life, it would be my wish that I would return as a kick-ass bass player!

Today’s classical ‘blast from the past’ was one I stumbled over when I was searching for Felix Mendelssohn’s incidental music for William Shakespeare’s “A Mid Summer Night’s Dream” which I featured in last week’s column.  It’s also by Mendelssohn — and it’s somewhat off the beaten path.  But I know it well — and it’s a wonderful piece, so you’ll just have to indulge me on this one.  It’s his Octet in E-flat Major, Op. 20…which he composed in the autumn of 1825 when he was just 16 years old — and as a gift for his friend and violin teacher Eduard Ritz.

This iteration was recorded at the Rockport [Massachusetts] Chamber Music Festival in 1971 — and is comprised of two string quartets playing the work together…which is normally how it’s performed.  The video quality is only so-so…but the audio is fine.  The link to it is here.  Enjoy.


With both gold and silver trading in sync — and in a very tight trading range on Friday, I’m not going to try reading into the price action what may or may not be there.  However, I will note that the sell-off on the jobs news was almost a non-event…something that would have never happened in years gone by — and the recovery of those loses…such as they were…were complete by the time trading ended at 5:00 p.m. EDT.

But it was fairly obvious that the powers-that-be were watching over the precious metal market yesterday — and they weren’t overly subtle at times.  But I was somewhat surprised that the Big 7 traders didn’t hammer gold and silver substantially lower on the jobs report numbers…as they were tailor-made for such an event.

It’s most unfortunate that yesterday’s COT data was obviously misreported.  But assuming that there was an increase in the commercial net short positions in both silver and gold as Ted Butler suggested would be the case, it goes without saying that both are in more negative territory than they were last week at this time.  Of course we’ve had further price increases since the Tuesday cut-off — and that just piles it on a bit more.

But whether we are still in for another engineered price decline so the Big 7 can have any hope of covering even a portion of the financial margin call hole that they’ve dug for themselves, remains to be seen.  And as I just stated above, I was surprised that they were no-shows at 8:30 a.m. in New York.

I also get the impression that JPMorgan is not an active participant in whatever engineered price declines that we are seeing.  However, they are certainly feeding on whatever long contracts they can buy — and whatever short positions they can cover, while that decline is going on.

But setting that aside for the moment, the very bearish COMEX structure that currently exists, MUST be resolved one way or another…either in a short covering panic, or an engineered price decline of eye-watering and Biblical proportions.  That’s baked in the cake.  As Ted has said on many occasions…there is just no other way.  Of course they could close the COMEX, negating all contracts, both long and short…but that’s so far out there in left field that it can’t be seriously considered…unless there was some sort of monetary and/or financial emergency.  But it is one more way out.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  I will point out that the price action that occurred after the COMEX close in all four precious metals does not appear on their respective Friday dojis.  The only one of the Big 6 commodities worth noting was WTIC, as it closed up a couple of bucks.  Click to enlarge.

Despite the happy jobs report — and the positive closes in the stock markets yesterday, the Potemkin village that the Fed and the deep state have built over the years was done solely to deceive the sheeple out there into thinking that the situation is better than it really is.

It is not.  It is rotten to the core…as the real U.S. economy continues to slip-slide away at an ever-increasing rate.

The sudden resurrection of the repo market by the Fed a month or so ago is another straw in the wind that there’s big trouble in River City.  There is just no liquidity in the U.S. financial system — and since the Fed won’t divulge the entities that are receiving funds through its overnight and term repos, the jury is still out on who is on the receiving end of the Fed’s largess.  Most think it’s the Wall Street banks and investment houses — and that may be partially true.  But there could be some insurance companies, pension and hedge funds, along with some large public corporations that are on the receiving end of this money as well.  The right people in Congress have to ask these questions — and so far they aren’t.

And with this repo thingy now extended until the end of Q2/20…can POMO [Permanent Open Market Operations] be that far behind?  As Bill King of King Report fame now states in every daily column since the Fed put repos back on the table…”The Fed is in some stage of panic over something that is not entirely clear.

Although the record high student loan and car loan debt is certain to become problematic at some point, it’s the corporate debt issue that overhangs everything…especially the triple B debt.  Doug Noland and others…including Raoul Pal in his video commentary in the Critical Reads section above…have pointed out the fact that the credit agencies have become loath to mark down all the triple B debt that is already junk status, for fear of imploding the junk bond market, which would take the rest of the corporate bond market with it.  They don’t want to be held responsible for sending the U.S. [and world] economies into recession, or worse.

It’s going to end up as the worst case scenario anyway — and all they’re doing is delaying the inevitable.  This will ensure that the final denouement will degenerate into the worst-case scenario in almost the blink of an eye the moment that some out-of-left-field event sets it all in motion.

This will seize up the markets…all markets…in rather short order.

At that point in time, if not sooner, the value of the U.S. dollar will become the first casualty — and the first beneficiary will be the precious metals.  The stealth run on them that began in January of 2016 will be on in earnest…topping every safe haven run that has come before.

As this scenario rapidly unfolds, it will become crystal clear to all that not only will the U.S. financial system crumble in this situation, it will take the rest of the world with it.

There’s no ‘if’ to this scenario…none whatsoever.  It’s only the ‘when’ that’s not known.  But as I stated last week…this event is coming as sure as night follows day.

And for that reason alone, as I keep saying every week in this space, I’m still quite content to be “all in” — and fervently hope that it will be enough.

I’m done for the day — and the week — and I’ll see you here on Tuesday.

Ed

Gold & Silver Closed Higher: But ‘Da Boyz’ Were Still Around

01 November 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price jumped up a handful of dollars between 9 and 10 a.m. China Standard Time on their Thursday morning, but was back at close to unchanged on the day shortly before 1 p.m. CST.  From that point it began to work its way quietly and very unevenly higher for the remainder of the day.  The high tick came around 10:35 a.m. in New York trading — and once it recovered from the sell-off after that around noon EDT, the quiet climb continued.

The low and high ticks were reported as $1,496.00 and $1,516.70 in the December contract.

Gold finished the Thursday session in New York at $1,512.70 spot, up $17.30 from Wednesday’s close.  Not surprisingly, net volume was very heavy at a bit under 363,000 contracts, as the gold price broke above — and closed above its 50-day moving average yesterday.  Roll-over/switch volume was a bit over 29,000 contracts.

The price activity in silver was similar in most respects to gold, but several attempts were made to sell it back below the $18 spot mark…once in late morning trading in London — and the other in New York once the afternoon gold fix was done for the day.  But, as in gold, the price managed to creep higher starting around noon EDT — and closed above it…albeit not by much.

The low and high ticks in silver were recorded by the CME Group as $17.795 and $18.185 in the December contract.

Silver was closed at $18.075 spot, up 24.5 cents from Wednesday — and back above its 50-day moving average by a few pennies.  Not surprisingly, net volume was pretty heavy in this precious metal as well, at just under 98,000 contracts — and there was a bit over 6,700 contracts worth of roll-over/switch volume on top of that.

The platinum price was up by three bucks by shortly before 10 a.m. CST on their Thursday morning — and then traded very flat until shortly before noon in Zurich.  After a brief up/down move, it began to head noticeable higher staring about fifteen minutes before the COMEX open.  The price was capped at, or just before, the afternoon gold fix in London — and shortly after that, the price had been engineered back to unchanged on the day.  But from around 11:35 p.m. EDT onwards it managed to crawl a bit higher until trading ended at 5:00 p.m. in New York.  Platinum was closed at $930 spot, up 7 bucks from Wednesday.

The palladium price was up 16 dollars or so by around 11:15 a.m. CST on their Thursday morning, which was yet another new high for this white metal.  It ticked a bit lower until 3 p.m. CST — and then the selling pressure became far more substantial, with the low tick of the day coming shortly before the 1:30 p.m. EDT COMEX close.  It jumped up a bunch of dollars from there — and was closed at $1,780 spot, down 11 dollars from Thursday…and 54 bucks off its Kitco-reported high tick of the day.

The dollar index closed very late on Wednesday afternoon in New York at 97.65 — and opened down a rather substantial 20 basis points once trading commenced around 7:45 p.m. EDT on Wednesday evening.  From that juncture it chopped quietly lower until its 97.22 low tick was set at 10:25 a.m. GMT in London.  It then chopped a bit higher until 10:20 a.m. in New York — and slid unevenly lower until trading ended at 5:30 p.m. EDT.  The dollar index finished the Thursday session at  97.35…down 30 basis points from its close on Friday.

If there was any correlation between the currencies and the precious metals on Thursday, I failed to see it.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the good folks over at the stockchart.com Internet site.  The delta between its close…97.15…and the close on the DXY chart above, was 20 basis points on Thursday.  Click to enlarge as well.

The gold shares opened unchanged in New York at 9:30 a.m. — and began to head higher immediately.  Their highs came around 10:40 a.m. — and then swooned [along with the gold price] from there until the gold price turned higher at noon EDT.  From that juncture they edged quietly and unevenly higher until trading ended at 4:00 p.m. EDT.  The HUI closed up 2.68 percent.

The silver equities followed a mostly similar price path as the gold stocks, except their sell-off didn’t start until 11 a.m. in New York trading — and that event was far more severe than what happened with the gold shares.  But once silver began to head higher [along with gold] at noon EDT, the shares turned higher immediately.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 2.53 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.

And since yesterday was the final trading day in October, I thought I’d include Nick’s month-to-date chart for all things precious metal relatedClick to enlarge.

And while I’m at it, here’s the year-to-date chart as well.  Click to enlarge.

The CME Daily Delivery Report for Day 2 of the November delivery month showed that 379 gold and 71 silver contracts were posted for delivery on Monday.

In gold, there were four short/issuers in total — and the three largest were JPMorgan, Advantage and Marex Spectron…with 278, 72 and 21 contracts out of their respective client accounts.   There were five long/stoppers in total — and the two biggest by far were Morgan Stanley, with 223 contracts in total…221 for its own account, plus 2 for its client account — and Advantage, with 120 contracts for its client account.  In very distant third spot was Marex Spectron, with 21 contracts for its client account.

In silver, the two short/issuers were ABN Amro and Advantage, with 68 and 3 contracts from their respective client accounts.  Of the four long/stoppers, Australia’s Macquarie Futures was by far the biggest, with 41 contracts for its in-house/proprietary trading account.  In distant second and third place came Advantage and ADM, with 12 and 11 contracts for their 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 November dropped by 314 contracts, leaving 418 still open, minus the 379 contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 401 gold contracts were actually posted for delivery today, so that means that 401-314=87 more gold contracts were just added to the November delivery month.  Silver o.i. in November declined by 228 contracts, leaving 76 still around, minus the 71 contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 302 silver contracts were actually posted for delivery today, so that means that 302-228=74 more silver contracts just got added to November.


There were no reported changes in either GLD or SLV on Thursday.

In other gold and silver ETFs on Planet Earth on Thursday…minus any activity in COMEX, GLD & SLV stockpiles…there was a net 6,054 troy ounces of gold removed — and in silver there was a net 423,492 troy ounces added, with more than 95 percent of that amount ending up at Deutsche Bank.

There was a small sales report from the U.S. Mint to round out the month of October.  They sold 167,000 silver eagles — and that was all.

For the month of October in total, the mint sold 11,500 troy ounces of gold eagles — 3,000 one-ounce 24K gold buffaloes — 1,110,500 silver eagles — and 55,200 of those ‘America the Beautiful’ 5-ounce silver coins.

There was no in/out activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.

There was some activity in silver.  One truckload was received…602,223 troy ounces…and all of that ended up at CNT.  There was only 81,049 troy ounces shipped out…80,024 troy ounces from the International Depository Services of Delaware — and 1,025 troy ounces from Delaware.  There was a fairly large paper transfer from the Eligible category and into Registered…1,398,810 troy ounces…and that happened at CNT.  I would suspect that this has something to do with November silver deliveries.  The link to this is here.

There was also activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 1,129 of them — and didn’t ship any out.  This occurred at Brink’s, Inc. — and the link to this, in troy ounces, is here.

Roman Empire: Constans II, 337-350,  Centenionalis

Material: Bronze     Full Weight: 5.87 grams     Value: €165.00/USD$183

It was a fairly quiet news day — and I don’t have all that much for you.


CRITICAL READS

Chicago PMI Plunges to Worst Drop in 39 Years

After a brief, hope-filled, bounce in August, October’s Chicago PMI is a $hit $how, plunging from 50.4 in August to 43.2 (contraction) in October (well below the 48.0 expected).  Click to enlarge.

This is the biggest 8-month drop since July 1980…

Under the hood:

  • Prices paid rose at a slower pace, signaling expansion
  • New orders fell at a faster pace, signaling contraction
  • Employment fell at a slower pace, signaling contraction
  • Inventories fell at a slower pace, signaling contraction
  • Supplier deliveries rose at a faster pace, signaling expansion
  • Production fell at a slower pace, signaling contraction
  • Order backlogs fell at a faster pace, signaling contraction

This is unpossible… haven’t the people living in Chicago looked at the stock market recently?

This brief 2-chart Zero Hedge news story showed up on their website at 9:50 a.m. EDT on Thursday morning — and it’s the first offering of the day from Brad Robertson.  Another link to it is hereGregory Mannarino‘s post market close rant is linked here — and I thank Roy Stephens for sending it along.


The Fed’s Dilemma Is Our Problem! — Dennis Miller

Pundit Bill Bonner predicts:

Most likely, the stock market will crash sometime before the 2020 election. We can’t know when.
…. The end of the stock market boom, too, is unpredictable. But each passing day brings us a day closer to when it will crash and burn.”

Bonner’s prediction is in line with our 2017 article, “An Economic Showdown Is Looming”. I suggested the Fed, part of the deep state, was setting up President Trump to be another Herbert Hoover. The deep state wants the market to crash so they can crush capitalism and further consolidate federal government control.

Fed Chair Yellen announced the Fed would begin raising rates in 2015. After one early increase and she held off until after the election. Despite Ms. Yellen’s vehement objections to the politics of holding off on rate increases before the election, it sure looked political.

This interesting, but longish commentary from Dennis was posted on this Internet site on Thursday morning sometime — and another link to it is here.


Donald Trump, Deep State Challenger or Friend? — Bill Bonner

The high drama continues… That is, Part 3 of The Persecution and Assassination of Donald J. Trump, as portrayed by the grifters, retards, and incompetents of The Swamp.

Lt. Col. Alexander Vindman, in full dress regalia, gave out the word that he didn’t think it was right to ask the Ukrainians to dig up dirt on the Bidens.

The New York Times:

In hours of questioning on Tuesday by Democrats and Republicans, Colonel Vindman recounted his alarm at the July 25 call, saying he “did not think it was proper” for Mr. Trump to have asked Mr. Zelensky to investigate a political rival, and how White House officials struggled to deal with the fallout from a conversation he and others considered problematic.”

As to the merits of the impeachment case against Donald Trump, it is not for us to say.

Of interest, however, is what Lt. Col. Vindman was up to in the first place… and what role it plays in the decline of America…

This worthwhile commentary from Bill, filed from Poitou in France, showed up on the bonnerandpartners.com Internet site early on Thursday morning — and another link to it is here.


Editorial: President Trump, Brexit Matchmaker

The best summary of Brexit that we’ve encountered is the interview that just went up on Youtube between Nigel Farage and President Trump. It’s remarkable for the relaxed, even affable tone between the erstwhile leader of the United Kingdom Independence Party and a sitting president of America. And for the way Mr. Trump stresses the British American future — and suddenly turns political matchmaker.

Mr. Farage, of whom we’ve become a fan, began by asking Mr. Trump whether he is disappointed that Brexit didn’t happen by today’s deadline. Mr. Trump allowed that he as well as Prime Minister Johnson and Mr. Farage are all disappointed. He noted that he’d endorsed Brexit just before the referendum, in sharp contradistinction to President Obama and Secretary Clinton. Mr. Trump had the keener eye.

Mr. Trump then acknowledged that it’s been a long time since that day. Mr. Farage responded that it’s been a difficult situation for Mr. Johnson. The premier had vowed to bring some energy to the job but then invested it in trying to rescue a version of Theresa May’s deal with the Europeans. Mr. Farage asked whether Mr. Johnson had spoken with Mr. Trump about the details. Mr. Trump allowed that he had.

The president, though, quickly moved to the opportunity, once Britain exits from the E.U., to expand its trade with America. He clearly grasps — and articulates — that by getting tangled in the negotiations with Europe over a “deal,” Britain risks being unable to carry on separate talks with America. “This deal, under certain aspects of the deal, you can’t do it. . . I mean, we can’t make a trade deal with the U.K.”

This editorial appeared on The New York Sun‘s website on Friday sometime — and I thank Roy Stephens for sharing it with us.  The 28-minute video commentary between Farage and Trump is embedded.  Another link to it is here.


Negative interest rates are essential for Swiss economy, nation’s central banker says

Negative interest rates are “essential” for the Swiss economy and will not be reversed without a significant change in global economic conditions, Thomas Jordan, head of the Swiss National Bank, warned today.

Mr. Jordan’s remarks come amid mounting concern in Switzerland that the country’s nearly five-year long rate-setting experiment — aimed at curbing the appreciation of the franc and protecting exports — is beginning to create severe structural problems.

The SNB’s benchmark rate, set at minus 0.75 percent, is the lowest of any central bank in the G10 economies. Yields on 10-year Swiss government bonds have been negative for almost a year.

Some economists have warned that the policy distorts capital allocation in the economy, artificially skewing investors’ and consumers’ perceptions of risk in subtle but potentially substantial ways. Banks’ margins have shrunk dramatically, while cheap credit has begun to inflate asset prices in some parts of the economy. …

The rest of this Financial Times of London article from Thursday sometime, is tucked away behind their pay wall — and the above four paragraphs appeared on the gata.org Internet site yesterday afternoon EDT.  Another link to the article on the ft.com Internet site is here.


Nord Stream 2…a Russian-led gas pipeline in Europe will soon exist

The construction of a disputed natural gas pipeline in Europe will be completed within months, analysts told CNBC Thursday, despite fierce opposition from the U.S. and division in the European Union.

After months of delays, Denmark’s energy agency announced Wednesday that it had given the green light to allow Nord Stream 2 — an undersea pipeline that will allow Russia to bypass Ukraine when delivering gas to Europe — to build its pipes in Danish waters.

The decision comes as a blow to U.S. efforts to prevent the completion of the Russian-led project, after repeated warnings it will increase European dependence on Russian energy.

We are pleased to have obtained Denmark’s consent to construct the Nord Stream 2 Pipeline,” Samira Kiefer Andersson, a Nord Stream 2 official, said in a statement on Wednesday.

We will continue the constructive cooperation with Danish authorities to complete the construction of the pipeline,” Andersson added. Click to enlarge.

Nord Stream 2 is a pipeline currently under construction from Russia to Germany via the Baltic Sea.

This CNBC story appeared on their website at 9:47 a.m. EDT on Thursday morning — and has a headline change since it was first posted.  I thank George Whyte for pointing it out — and another link to it is here.


Trump Loses More than Just the Battle Over Nordstream 2 — Tom Luongo

For the past three years the U.S. has fought the construction of the Nordstream 2 pipeline from Russia to Germany every inch of the way.

The battle came down to the last few miles, literally, as Denmark has been withholding the final environmental permit on Nordstream 2 for months.

The U.S., especially under Trump, have committed themselves to a ‘whole of government approach‘ to stop the 55 bcm natural gas pipeline from making landfall in Germany.

I’ve literally documented every twist and turn of Nordstream 2 over the past few years at Seeking Alpha — and my former Newsletter at Newsmax.

Never once did I think this day wouldn’t come where the U.S. would eventually shut the pipeline down. The reason is simple. Europe, and specifically Germany, need the gas and there is no compelling reason for Germany to cave in the end if it wants to survive the 21st century a first world economy.

In a sense, this pipeline is Germany’s declaration of independence from seventy-plus years of U.S. policy setting. Never forget that Germany is occupied territory with more than 50,000 U.S. troops stationed there.

This very interesting and very worthwhile commentary from Tom was posted on his Internet site on Wednesday — and I snatched it from the Zero Hedge website in the wee hours of Thursday morning.  Another link to it is here.


Chinese Bank on Verge of Collapse After Sudden Bank Run

First it was Baoshang Bank , then it was Bank of Jinzhou, then, two months ago, China’s Heng Feng Bank with 1.4 trillion yuan in assets, quietly failed and was just as quietly nationalized. Today, a fourth prominent Chinese bank was on the verge of collapse under the weight of its bad loans, only this time the failure was far less quiet, as depositors of the rural lender swarmed the bank’s retail outlets, demanding their money in an angry demonstration of what Beijing is terrified of the most: a bank run.

Local business leaders, political cadres and banking executives rallied Thursday at the main branch of Henan Yichuan Rural Commercial Bank, just outside the central Chinese city of Luoyang, where they stood one by one before a microphone to pledge their backing for the bank, as smiling employees brandished wads of cash before television cameras to demonstrate just how much cash, literally, the bank had.

It was China’s latest, and most desperate attempt yet to project stability and reassure the public that all is well after rumors spread that the bank’s chairman was in trouble and the bank was on the brink of insolvency. However, as the WSJ reports, it wasn’t enough for 31-year-old Li Xue, who showed up for the third day Thursday to withdraw thousands of yuan of her mother’s life savings after hearing from fellow villagers that Yichuan Bank – which is the largest lender in Yichuan county by the number of branches and capital, and it is also a member of PBOC’s deposit insurance system, according to the local government – was going under.

Just like any self-respecting Ponzi scheme, the bank’s branch managers tried to persuade her to keep her money with them until March, when her mother’s three-year deposits would mature, yielding more than 10,000 yuan in interest. And then, just like any Ponzi scheme, to sweeten the offer, the bank managers also offered her even higher-yielding products, plus supermarket gift cards, just to keep her money there.

The bank run at Yichuan Bank, located in China’s landlocked province of Henan, makes it at least the fourth bank that authorities have rushed to rescue this year. It won’t be the last.

This Zero Hedge news item put in an appearance on their Internet site at 3:14 p.m. on Thursday afternoon EDT — and it’s the second offering of the day from Brad Robertson.  Another link to it is here.  Then there’s this ZH story from Thursday evening EDT headlined “Credit Crisis Unfolds in China as Steelmaker Default Sparks Contagion Fears


Gold: The “Third Rail” of Capital Allocation — John Hathaway

What are the best gold equities to own right now? Legendary investor John Hathaway of the Tocqueville Gold Fund sits down with Dan Tapiero of DTAP Capital to discuss gold’s recent breakout and to review his favorite companies in the space. Hathaway lays out the bullish macro environment for the yellow metal, walks through the difficulties of building new mines and the impact on global supply, and notes why he expects more M&A activity in the sector. He also expands on current opportunities for investors and explains just how inexpensive gold stocks are right now. Filmed on October 15, 2019 in New York.

Well, dear reader, I had the time to watch the whole interview from beginning to end on Thursday — and there wasn’t one mention about the real price driver in gold — and that’s the almost 50-year price management scheme going on in the COMEX futures market.

I posted this interview yesterday, but only the transcript, as I couldn’t link the video interview because it was behind a subscription wall.  But Neil West sent me a realvision.com link that did work for me.  So if you want to hear the actual words come out of John’s mouth, there’s a link in the headline — and here.  Other than that, I found no precious metal-related news items that I thought worth posting.


The PHOTOS and the FUNNIES

After passing through Ashcroft on July 7 under quickly deteriorating weather conditions, we headed to Hat Creek Ranch…”one of the few sections of the original Cariboo Wagon Roads still accessible to the public.”  Most of the structures are the original buildings used by the Gold Rush travellers of the 1860’s. It’s a touristy sort of place now, but interesting.  The last photo shows the original roadhouse, the only one still in existence on the trail.  Click to enlarge.


The WRAP

I was more than happy to see gold and silver prices close higher on the day on Thursday, as were you I’m sure.  But it’s obvious from the saw-tooth price patterns in both, along with their associated volumes, that ‘da boyz’ were ever vigilant.  That price interference was also visible in the platinum and palladium price arenas as well.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  The closes above silver and gold’s respective 50-day moving averages should be noted.  Copper was closed down about a nickel — and WTIC was closed back below its 50-day moving average once again for the second day in a row.  Click to enlarge.

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 — and you already know, I wasn’t about to stick my neck out as to what might be in it.

But silver analyst Ted Butler had this to say in his mid-week commentary on Wednesday: “The key 50-day moving averages were penetrated to the upside [last] Friday in both gold and silver (only intraday in gold), but traded below the averages Monday and Tuesday on some reduction in total open interest. Therefore….I expect more than decent managed money buying and commercial selling to be reported in Friday’s new COT report (although I would love to be wrong).

I’ve had several readers ask me what percentages I have in all the stocks that I own — and I’m assuming that since a few have asked, I’m sure more would like to know…so here it is.  The list below only adds up to a bit over 89 percent.  The remaining 11 percent is in Sprott’s precious metal mutual fund and Bullion Management Group’s physical gold bullion fund.  I have a lot of shares in some of the tinier holdings…Excellon, First Mining Gold — and Impact Silver, etc…but because their share prices are so low, they don’t add up to much…at least not yet…but some day hopefully.  The ‘click to enlarge’ feature doesn’t help.  [NOTE:  This is NOT investment advice!!!  Do your own due diligence!!! — Ed]

And as I post today’s column on the website at 4:02 a.m. EDT, the London open is less than a minute away — and I note that the gold price crept a few dollars lower until around 10:30 a.m. China Standard Time on their Friday morning — and then didn’t do much until short after 3 p.m. CST. It ticked a bit higher at that juncture — and is down only $1.50 the ounce. It was the same price path for silver. It has edged a bit higher since 2 p.m. CST — but is still down 2 cents as London opens. The platinum price followed silver’s pretty closely — and it’s down a dollar. The palladium price has been crawling unevenly sideways throughout all of Far East trading on their Friday, but was sold lower starting around 3:30 p.m. CST — and is down 5 bucks as Zurich opens.

Gross gold volume is a bit over 47,500 contracts — and minus the tiny amount of roll-over/switch volume there is, net HFT gold volume is around 46,000 contracts. Net HFT silver volume is a bit over 12,500 contracts — and there’s a minuscule 115 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened down 5 basis points at 97.30 once trading commenced around 7:45 p.m. EDT on Thursday evening in New York, which was 7:45 a.m. China Standard Time on their Friday morning — and after a brief uptick that ended at 8:30 a.m. CST, the index slid lower until about 9:55 a.m. CST. It has been trading quietly sideways since, but began to tick up a bit starting around 3:15 p.m. CST. And as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is down 11 basis points.

That’s all I have for today.  Have a good weekend — and I’ll see here tomorrow.

Ed