Author Archives: edsteer

The Precious Metals Show Some Signs of Life

03 April 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped unevenly sideways once trading began at 6:00 p.m. EDT on Monday evening in New York — and the low tick of the day was set a few minute before 1 p.m. China Standard Time on their Tuesday morning.  From there it rallied quietly and nervously for the remainder of the Tuesday session, closing on its high tick of the day…such as it was.

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

Gold finished the day at $1,292.10 spot, up $4.80 on the day.  Net volume was relatively quiet at 187,500 contracts — and roll-over/switch volume was a bit under 10,000 contracts on top of that.  And it should also be mentioned that gold’s low tick in Far East trading yesterday, was a slight new intraday low for this move down.

Silver was down a nickel or so by 1 p.m. CST on their Tuesday afternoon.  It edged back to unchanged by the 2:15 p.m. afternoon gold fix in Shanghai.  It was back below the $15 spot mark by 9 a.m. in London — and then didn’t do much until 1 p.m. GMT/8 a.m. EDT.  It was sold down a dime or so by minutes after 8:30 a.m. in COMEX trading in New York — and that was its low tick of the day.  It rallied a bit until shortly before 10:30 — and then inched unevenly higher until trading ended at 5:00 p.m. EDT.  Like for gold, silver also closed on its high of the day…such as it was.

The low and high ticks in this precious metal, like yesterday, are barely worth looking up…but here they are anyway…$14.905 and $15.09 in the May contract.

Silver finished the Monday session at $15.085 spot, up one whole cent on the day.  Net volume was nothing out of the ordinary at 54,500 contracts — but roll-over/switch volume was pretty heavy at just under 16,500 contracts. A tiny new intraday low in silver was set yesterday as well.

Platinum was up 2 bucks by the 2:15 p.m. afternoon gold fix in Shanghai on their Thursday afternoon and, like silver and gold before it, was sold lower until a few minutes after 10 a.m. in Zurich.  It edged unevenly higher until the equity markets opened in New York yesterday morning — and then was sold back into negative territory by the 1:30 p.m. EDT COMEX close.  From that juncture, it stair-stepped its way higher until trading ended at 5:00 p.m.  Platinum closed at $849 spot on Tuesday, up 1 whole dollar from Monday.

Palladium traded very unevenly sideways in the Far East on their Tuesday — and was down about 6 bucks by 10 a.m. CEST in Zurich.  Its low tick was set an hour and change later — and it crept up a bit in price until the 8:20 a.m. EDT COMEX open.  Then it blasted higher until a short seller of last resort appeared a few minutes later and, like platinum was sold sharply lower until 11:30 a.m. in New York.  From that point it rallied back to above unchanged — and most of the gains that mattered were in by the 1:30 p.m. COMEX close.  From there, it chopped quietly sideways for the remainder of the Tuesday session.  Palladium was closed at $1,411 spot, up 10 dollars on the day.

The dollar index closed very late on Monday afternoon in New York at 97.23 — and opened up 10 basis points once trading began at 7:44 p.m. EDT in New York on Monday evening, which was 7:44 a.m. in Shanghai.  It chopped quietly sideways, with a very slight positive bias, until the 10 a.m. EDT afternoon gold fix in London.  The ensuing tiny rally topped out at the 97.52 mark around 11:50 a.m. in New York — and then chopped unsteadily lower until trading ended at 5:28 p.m. EDT.  The dollar index finished the Tuesday session at 97.36…up 13 basis points from Monday’s close.

It was yet another day where there was no correlation between what was happening in the currency markets — and price moments in the precious metals.

Here’s the DXY chart from BloombergClick to enlarge.

Here’s the 6-month U.S. dollar index chart, courtesy of the folks over at stockcharts.com — and the delta between its close…96.92…and the close on the DXY chart above, was 44 basis points on Tuesday.  Click to enlarge.

The gold shares opened unchanged — and then chopped very unsteadily higher from that juncture, with their respective highs came a few minutes after the 1:30 p.m. COMEX close.  They headed very unevenly lower from there until around 3:35 p.m. in New York trading — and then notched a bit higher into the 4:00 p.m. EDT close from there.  The HUI finished up on the day by 0.64 percent.

The silver equities opened down about half a percent — and then were all over the map after that.  Their respective highs, such as they were, came shortly after 1 p.m. EDT, but they quickly sank back into the red, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.48 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report for Day 4 of the April delivery month showed that 131 gold and 20 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.

In gold, of the six short/issuers in total, the largest was Advantage with 59…followed by JPMorgan and Marex Spectron with 29 and 26 contracts.  All were issued from their respective client accounts.  There were seven long/stoppers in total.  Citigroup stopped 69 for its own account, JPMorgan stopped 21 for its client account — and in third place was HSBC USA, picking up 19 contracts for its own account as well.

In silver, of the four short/issuers, Marex Spectron was the largest with 11 — and ADM and Advantage issued 4 contracts apiece.  Of the three long/stoppers JPMorgan and Morgan Stanley picked up 16 and 3 contracts for their respective client accounts.

Marex Spectron just stopped a bunch of gold and silver contracts during the first three delivery days in April — and here they are reissuing some of that.

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 April fell by 1,120 contracts, leaving 1,334 still around, minus the 131 mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 1,131 gold contracts were actually posted for delivery today, so that means that 1,131-1,120=11 more gold contracts were just added to the April delivery month.  Silver o.i. in April fell by an even 100 contracts, leaving 97 still open, minus the 20 contracts mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 121 silver contracts were actually posted for delivery today, so that means that 121-100=21 more silver contracts just got added to April.


For the second day in a row there was a withdrawal from GLD.  This time an authorized participant took out 151,102 troy ounces.  There was also a small withdrawal from SLV…133,839 troy ounces…and a withdrawal of that size usually represents a fee payment of some kind.

There was another smallish sales report from the U.S. Mint.  They sold 500 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — 500 one-ounce platinum eagles — and 276,500 silver eagles.

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday was 5,002 troy ounces that was shipped out of Canada’s Scotiabank.  Nothing was reported received.  But there was some paper activity, as 89,768 troy ounces was shifted from the Eligible category — and into Registered…47,726 troy ounces at HSBC USA — and the remaining 42,041 troy ounces was at Canada’s Scotiabank.  These transfers are certainly related to the April delivery month.  The link to all this is here.

It was much busier in silver, as 1,197,608 troy ounces…two truckloads…was reported received, but only 101,640 troy ounces were shipped out.  All of the ‘in’ activity was at CNT.  Most of the ‘out’ activity was at Brink’s, Inc…96,716 troy ounces.  The remaining 4,923 troy ounces departed CNT.  There was also 894,009 troy ounces transferred from the Registered category — and back into Eligible.  Of that amount…796,285 troy ounces was transferred at CNT — and the remaining 97,723 troy ounces was transferred at Brink’s, Inc.  Ted would suspect that these transfers, particularly the one at CNT, represents silver that JPMorgan took delivery of in March, but is keeping in other warehouses, because their silver depository is full.  He may or may not broach this subject in his mid-week commentary this afternoon.  The link to all this activity is here.

There was decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They reported receiving 2,390 of them — and shipped out 1,372.  All of this occurred at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Here are two charts that Nick passed around on Monday.  They show U.S. Mint sales, updated with the March data.  So far this year, sales have been a bit higher in Q1 of 2019 than they were were over the same time period last year…but that’s not saying a whole heck of a lot.  Click to enlarge for both.

Another quiet news day — and I don’t have much for you once again.


CRITICAL READS

Durable Goods Orders Slump in Feb – Weakest Annual Growth in 16 Months

After a modest rebound from October’s collapse, Durable Goods Orders were expected to slide lower once again in February but the drop (down 1.6% MoM) was slightly better than expected (down 1.8% MoM).

Additionally, January’s data was revised lower (from +0.3% to +0.1%).  Click to enlarge.

On a year-over-year basis, durable goods headline data rose at only 1.844% – the weakest since Oct 2017.

Capital Spending proxy (Cap Goods Non-Defense, Ex-Air) slipped 0.1% (worse than expected) for the third time in four months, suggesting corporate investment remains subdued amid a slowing global economy and uncertainty over the trade war with China.

Critically, non-defense aircraft and new parts orders plunged 31.1% MoM – and this is before Boeing’s impact.

This brief 4-chart article from Zero Hedge comes courtesy of Brad Robertson.  It appeared on their Internet site at 8:39 a.m. on Tuesday morning EDT — and another link to it is here.


Recession Signs Everywhere — John Mauldin

This month, the Federal Reserve joined its global peers by turning decisively dovish. Jerome Powell and friends haven’t just stopped tightening. Soon they will begin actively easing by reinvesting the Fed’s maturing mortgage bonds into Treasury securities. It’s not exactly “Quantitative Easing I, II, and III,” but it will have some of the same effects.

Why are they doing this? One theory, which I admit possibly plausible, was that Powell simply caved to Wall Street pressure. The rate hikes and QT were hitting asset prices and liquidity, much to the detriment of bankers and others to whom the Fed pays keen attention. But that doesn’t truly square with his 2018 speeches and actions. The Fed’s March 20 announcement suggests more is happening.

I think two other factors are driving the Fed’s thinking. One is increasing recognition of the same slowing global growth that made other central banks turn dovish in recent months. The other is the Fed’s realization that its previous course risked inverting the yield curve, which was violently turning against its fourth-quarter expectations and possibly toward recession (see chart below, courtesy of WSJ’s “Daily Shot”). That would not have looked good in the history books, hence the backtracking.

On the second point… too late. The yield curve inverted, and recession forecasts became suddenly de rigueur among the same financial punditry that was wildly bullish just weeks ago.

My own position has been consistent: Recession is approaching but not just yet. Yet like the Fed, I am data-dependent and the latest data are not encouraging. Today, we’ll examine this and consider what may have changed.

This loooong commentary from John put in an appearance on the Zero Hedge website at 4:25 p.m. on Tuesday afternoon EDT — and it’s worth your while…if you have the time, that is.  I thank Brad Robertson for sending it our way — and another link to it is here.


A Message From the Future: Thanks a Lot… You Jerks — Bill Bonner

Remember, yesterday and today, we let the shades speak.

We make no predictions. Nor do we connect any dots.

Instead, we merely stand back and marvel at the gall… the conceit… the shameful, egotistical, self-dealing of it. We’re talking about the vanity of the living.

And rather than pass judgement ourselves, we call upon the dead… and the unborn… to do the talking. Yesterday, we heard from the ghosts of the past. Today, the phantoms of the future tell their tale:

Thanks. I’ll get right down to it. Thanks a lot… you jerks.”

You’re supposed to leave your children and grandchildren a richer, safer world. You are doing neither.”

This commentary from Bill was posted on the bonnerandpartners.com Internet site sometime ealry on Tuesday morning EDT — and another link to it is here.


China Sends Over 120 Troops to Venezuela In Defiance of U.S. Warnings

It doesn’t appear last Friday’s strong warning from national security adviser John Bolton for countries “external to the Western Hemisphere” to keep their militaries out of Venezuela had the intended effect. Bolton’s and other White House statements saying “Russia has to get out” came following Russian Air Force planes landing in Caracas with about 100 troops, which the Kremlin said were there as “specialists” servicing existing defense equipment contracts.

And now according to Al-Masdar News, citing defense analyst photographs and local reports, “more than 120 soldiers from the Chinese People’s Liberation Army arrived at Venezuela’s Margarita Island to deliver humanitarian and military supplies to the government forces.”

The military flight appears to have touched down on Sunday, two days after a prior Chinese cargo plane delivered 65 tons of medicine and other aid to Venezuela. The Chinese troops are also there ostensibly to assist with the humanitarian mission, but it appears Beijing is also now alongside the Russians pushing back against Washington ultimatums to stay out of Venezuela, after repeatedly condemning any external coup plotting against President Nicolas Maduro.

We strongly caution actors external to the Western Hemisphere against deploying military assets to Venezuela, or elsewhere in the Hemisphere, with the intent of establishing or expanding military operations,” Bolton had warned in his statement.

Early in the now months-long crisis since Maduro’s reelection, Paul Craig Roberts predicted the following:

“If Russia and China quickly established a military presence in Venezuela to protect their loans and oil investments, Venezuela could be saved, and other countries that would like to be independent would take heart that, although there is no support for self-determination anywhere in the Western World, the former authoritarian countries will support it. Other assertions of independence would arise, and the Empire would collapse.”

And we previously highlighted the not so minor issue of China over the past decade lending over $50 billion to Caracas as part of an oil-for-loan agreements program. It underscores just how quickly what appears a new White House full court press for regime change could bring Washington again into indirect conflict with both China and Russia.

Good luck with their regime change plans now, dear reader.  This Zero Hedge news story showed up on the Zero Hedge website at 12:46 p.m. EDT on Tuesday afternoon — and it’s another contribution from Brad Robertson.  Another link to it is here.


Brexit: PM asks Corbyn to help break deadlock

Theresa May will ask the E.U. for an extension to the Brexit deadline to “break the logjam” in Parliament.

The PM says she wants to meet Labour leader Jeremy Corbyn to agree a plan on the future relationship with the E.U.

But she insisted her withdrawal agreement – which was voted down last week – would remain part of the deal.

Mr Corbyn said he was “very happy” to meet Mrs May, and would ensure plans for a customs union and protection of workers’ rights were on the table.

The cross-party talks offer has angered Tory Brexiteers, with Boris Johnson accusing ministers of “entrusting the final handling of Brexit to Labour“.

The 3-ring Brexit circus continues.  This article appeared on the bbc.com Internet site yesterday afternoon London time — and I thank Swedish reader Patrik Ekdahl for sending it our way.  Another link to it is here.


The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

It was a state secret and the source of a kingdom’s riches. It was so important that U.S. military planners once debated how to seize it by force. For oil traders, it was a source of endless speculation.

Now the market finally knows: Ghawar in Saudi Arabia, the world’s largest conventional oil field, can produce a lot less than almost anyone believed.

When Saudi Aramco on Monday published its first ever profit figures since its nationalization nearly 40 years ago, it also lifted the veil of secrecy around its mega oil fields. The company’s bond prospectus revealed that Ghawar is able to pump a maximum of 3.8 million barrels a day — well below the more than 5 million that had become conventional wisdom in the market.

As Saudi’s largest field, a surprisingly low production capacity figure from Ghawar is the stand-out of the report,” said Virendra Chauhan, head of upstream at consultant Energy Aspects Ltd. in Singapore.

The Energy Information Administration, a U.S. government body that provides statistical information and often is used as a benchmark by the oil market, listed Ghawar’s production capacity at 5.8 million barrels a day in 2017. Aramco, in a presentation in Washington in 2004 when it tried to debunk the “peak oil” supply theories of the late U.S. oil banker Matt Simmons, also said the field was pumping more than 5 million barrels a day, and had been doing so since at least the previous decade.

This interesting article put in an appearance on the Bloomberg website at 4:34 a.m. PDT on Tuesday morning — and was updated about twelve hours later.  I thank Patrik Ekdahl for this story as well — and another link to it is here.


Draft law to bring international gold reserves back to Romania passes in the Senate

Romanian senators adopted a draft law introduced by PSD leader Liviu Dragnea and senator Serban Nicolae to force Romania’s National Bank (BNR) to bring almost all of Romania’s gold back from reserves being held at the Bank of England in London, according to profit.ro.

The supporters of this project say that the BNR should no longer pay the fees to hold the gold abroad, considering that Romania has reached the status of a functional economy.

The project will now be sent to the Chamber of Deputies for debate. The Legislative Council says that such a change of the BNR statute needs endorsement from the Central European Bank.

Of the reserve, the BNR can store gold abroad only with the purpose of obtaining revenue. Gold held by the BNR abroad cannot exceed 5 percent of the total amount of gold reserve,” the project reads. The current estimate is that 65 percent of Romania’s gold is being held abroad.

This gold-related news item showed up on the business-review.eu Internet site at 8:15 a.m. CEST on their Tuesday morning — and I found it on the Sharps Pixley website.  Another link to it is here.


Perth Mint’s gold sales jump 68 percent in March

The Perth Mint said on Monday its gold products sales in March surged about 68 percent from the previous month, touching the highest level since November last year.

Sales of gold coins and minted bars in March rose to 32,757 ounces from 19,524 ounces in February, the mint said in a blog post.

Silver sales last month jumped 60.2 percent from the previous month and touched their highest since October last year at 935,819 ounces.

In March, benchmark spot gold prices posted their second straight monthly decline, falling about 1.6 percent, hurt by a strong dollar.

The Perth Mint refines more than 90 percent of newly mined gold in Australia, the world’s second-largest gold producer behind China.

This tiny Reuters story, posted on their website on April 1, was picked up by the finance.yahoo.com Internet site — and it’s another precious metal-related news item I found on the Sharps Pixley website.  Another link to the hard copy is here.


The PHOTOS and the FUNNIES

Here are the last three photos from our brief stop at Harrison Lake/Hot Springs.  We took a drive around the lake as far as we could get — and I took this first shot along the shore looking about NNW.  Click to enlarge.

These second two shots were taken along the same road beside  the lake.  These are frozen waterfalls…water that seeps out of the rock during the winter months and freezes as it attempts to run to the ground.  And as impressive as these ice waterfalls are, I’ve seen much bigger ones.  The lake is just out of frame across the road on the left.  Click to enlarge for both.


The WRAP

I was happy to see a bit of life in the precious metals yesterday.  And it should be pointed out once again that ‘da boyz’ set new intraday lows in both silver and gold yesterday, but only by tiny amounts.  I also note that WTIC traded above — and closed above its 200-day moving average on Tuesday as well.

Here are the 6-month charts for the four precious metals, plus copper and WTIC — and these changes should be noted…if you’re interested, that is.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price has been chopping quietly sideways ever since trading began at 6:00 p.m. EDT in New York on Tuesday evening — and is currently sitting an unchanged. The silver price didn’t do much until a few minutes after 8 a.m. China Standard Time on their Wednesday morning. It then crept higher until around noon in Shanghai — and has been edging quietly sideways since — and is 5 cents the ounce. Platinum began to rally at the same time as silver — and its choppy rally has it up 8 bucks currently. Palladium has been chopping quietly sideways in Far East trading…with a slightly positive bias…and as Zurich opens, it’s up 3 dollars.

Net HFT gold volume is a bit under 32,000 contracts — and there’s only 319 contracts worth of roll–over/switch volume on top of that. Net HFT silver volume is about 10,600 contracts — and there’s 865 contracts worth of roll-over/switch volume in that precious metal.

The dollar index opened down 6 basis points when trading began at 7:44 a.m. EDT on Tuesday evening in New York. It began to sink quietly lower almost immediately — and the current low tick was set at 2:04 p.m. CST on their Wednesday afternoon. It has crept a few basis points higher since then — and as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich, the dollar index is down 19 basis points.


Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and companion Bank Participation Report.  Even without those tiny new intraday lows in both gold and silver on Tuesday, both reports will show big improvements in the commercial net short positions — and the short positions of the world’s banks.

And as I post today’s column on the website at 4:02 a.m. EDT, I see that gold was sold a bit lower starting just before the London open — and it’s currently down $1.00 the ounce. Silver is up 6 cents. Platinum is now up 9 dollars, but palladium is up by only 2.

Gross gold volume is 44,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is a bit over 43,000 contracts. Net HFT silver volume is a bit over 12,000 contracts — and there’s 1,130 contracts worth of roll-over/switch volume on top of that.

The dollar index has rolled over a bit since before the London open — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, it’s down 28 basis points.

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

Ed

Russia Adds 1 Million Ounces of Gold to Its Reserves in August

21 September 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price really didn’t do much on Thursday, which is certainly amazing considering how badly the dollar index got hammered in the early going.  It traded flat until around 9 a.m. China Standard Time on their Thursday morning — and by 11 a.m. CST, it was up a couple of bucks and change. — and from there traded sideways for a bit, before healing lower starting a few minutes before 1 p.m. CST on their Thursday afternoon.  The low tick of the day came at 9 a.m. in London — and it began to head a bit higher starting right at the noon silver fix.  It ran into ‘opposition’ almost the moment that COMEX trading began in New York — and the rally ended with the high tick of the day being set at the afternoon gold fix, which was right at gold’s 50-day moving average.  It was sold lower from there until 11:45 a.m. EDT.  From there it crawled higher into the 1:30 p.m. EDT COMEX close.  It was sold a bit lower over the next hour, before edging a bit higher into the close.

Despite all the words in the previous paragraph, the low and high ticks aren’t worth looking up for the third day running.

Gold finished the Thursday session in New York at $1,206.90 spot, up $3.20 on the day.  Net volume was nothing special once again at a bit over 223,000 contracts — and roll-over/switch volume amounted to 9,900 contracts on top of that.

The silver price also traded flat until 9 a.m. China Standard Time — and it really wanted to sail from there, but was obviously capped a few minutes after 10 a.m. CST as the price appeared to go ‘no ask’.  At that point, it very briefly broke above its 20-day moving average [in the December contract] by two cents.  It was hauled lower immediately — and then, also like gold, it was sold down hard starting at the London open.  The price pattern from there was similar in most respects to gold’s for the remainder of the New York trading session.

The high and low ticks in this precious metal were reported by the CME Group as $14.385 and $14.21 in the December contract.

Silver was closed at $14.305 spot, up 8 cents from Wednesday.  Not surprisingly, net volume was pretty heavy at 83,300 contracts — and roll-over/switch volume in this precious metal was only 1,579 contracts.  It’s taking a fair amount of paper silver these days to keep it below its 20-day moving average — and this has been going on most of the week.

Platinum was up a few dollars in Far East trading, but was sold down to its low tick of the day starting at 10 a.m. CEST in Zurich trading.  The low tick of the day was set about an hour later — and it chopped unevenly higher from there until about 3:30 p.m. in the thinly-traded after-hours market in New York.  And it should be very obvious from the the saw-tooth price pattern, that its rally was being actively managed.  Platinum was closed on the Thursday at $833 spot, up 11 bucks.

Palladium was up 6 dollars by 10 a.m. in Zurich and, like platinum, it was then sold down a tiny bit to its low tick of the day.  Its quiet rally after that ran into ‘something’ about 10:30 a.m. in New York — and it was sold lower until noon EDT.  It gained some of that back by 1 p.m. — and traded ruler flat from there until trading ended at 5:00 p.m. EDT.  Palladium finished the Thursday session at $1,049 spot, up 16 bucks.

It was yet another trading day where palladium [and platinum] would have close materially higher, if allowed.  The same can be said of silver and gold as well.

The dollar index closed very late on Wednesday afternoon in New York at 94.55 — and then proceeded to trade flat for the first ninety minutes or so after trading recommenced at 6:00 p.m. EDT on Wednesday evening.  It then headed lower — and was down 10 basis points by 11 a.m. China Standard Time on their Thursday morning.  It rallied a very small handful of basis points until a few minutes before 1 p.m. CST — and then began to head lower from there.  That decline accelerated minutes after 12 o’clock noon in London — and it appeared that the usual ‘gentle hands’ showed up just minutes after the COMEX open in New York.  The 93.83 low tick was set at that juncture.  The ensuing ‘rally’ lasted until precisely noon EDT — and it headed lower from there, making it back almost to its low of the day 3:30 p.m.  From that point it inched higher into the close.  The dollar index finished the Thursday session in New York at 93.91…down 64 basis points from Wednesday’s close.

Once again it was more than obvious that JPMorgan et al didn’t allow precious metal prices to reflect that fact.

And here’s the 6-month U.S. dollar index chart.  The dollar index is down about 300 basis points since mid August, but you’d never know it by looking at the gold and silver price charts in The Wrap section of today’s column.

The gold stocks gapped up a percent at the open in New York on Thursday morning, but immediately after that began to head lower.  Their collective lows were set a few minute before noon EDT — and they rallied quietly but unsteadily higher for the remainder of the day, closing down 0.14 percent.  Call it unchanged.

With a minor variation in the first thirty minutes of trading on Thursday morning, the silver equities followed their golden brethren like a shadow — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index also closed unchanged…up 0.01 percent.  Click to enlarge if necessary.

 

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

The CME Daily Delivery Report showed that zero gold and 28 silver contracts were posted for delivery today within the COMEX-approved depositories on Monday.  In silver, the only short/issuer that mattered was Advantage with 27 from its client account.  The two long/stoppers were JPMorgan and ADM with 18 and 10 contracts for 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 September remained unchanged at 17 contracts.  Wednesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today.  Silver o.i. in September fell by 297 contracts, leaving 983 still open.  Wednesday’s Daily Delivery Report showed that 707 silver contracts were actually posted for delivery today, so that means that another 707-297=410 silver contracts were added to the September delivery month.


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

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

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

It was certainly more interesting in silver.  There was 697,117 troy ounces received — and all of that [much more than a truck load] went into HSBC USA’s warehouse.  There was 534,719 troy ounces shipped out…303,900 from CNT — and the remaining 230,819 troy ounces departed Brink’s, Inc.  But the real eye-opener was the 6,700,703 troy ounces that was transferred from Registered category — and back into Eligible over at CNT.  The link to all this activity is here.

There was some decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving exactly 5,000 of them — and shipped out only 125.  All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Since yesterday was the 20th of the month — and it fell on a weekday, the good folks over at The Central Bank of the Russian Federation updated their website with their August data — and they reported adding 1 million troy ounces/31.1 metric tonnes of gold to their reserve during that monthThat brings their total declared gold holdings up to an even 2,000 metric tonnes/64.3 million troy ounces.

The 800,000 troy ounces that Russia’s central bank purchased in July, plus the million ounces they bought in August, is far in excess of the amount of gold that they actually mined during those two months.

Where might this extra gold be coming from, you ask?  Well, there are only two possible places:  They’re either buying it on the open market, or they have been purchasing far more of their domestic gold production than they’ve been reporting, but are just now moving it into ‘official’ reserves.

With all that money they have laying around after dumping just oodles of U.S. treasuries in recent months, that’s certainly what I’d be doing with it.

Here’s Nick Lairds’ most excellent chart updated with August’s data.  Click to enlarge.

Another day where I don’t have all that many stories for you, but I do have a Cohen/Batchelor interview today.


CRITICAL READS

The Kavanaugh Scandal: Another Deep State Distraction — Bill Bonner

The papers are full of fire and brimstone concerning Supreme Court nominee Brett Kavanaugh… and what happened in a boozy bedroom long ago.

The New York Times calls it “an explosive charge”…

It was 36 years ago. The accusation: There was a party, alcohol. A 17-year-old boy was drunk and started groping a 15-year-old girl, pinning her down and covering her mouth so she couldn’t scream. Today, she doesn’t remember some of the details. He insists it didn’t happen at all.

Poor Christine Blasey Ford – the accuser – decided to do her public duty. Why she thought the Senate should know about Mr. Kavanaugh as a 17-year-old is not clear.

But she set off an uproar… at least, a Washington-style uproar, circa 2018.

We’ve never met Mr. Kavanaugh. Nor have we followed his career or parsed his legal decisions. But we’ve been in a bedroom more than once. And we were once 17 years old.

And if every public servant were disqualified on the basis of what he got up to in high school, Washington would be empty.

This very worthwhile commentary by Bill put in an appearance on the bonnerandpartners.com Internet site very early on Thursday morning — and another link to it is here.


Investors Beware Of Central Bank Deception! — Dennis Miller

Chuck Butler’s recent Dow Theory Letter article (behind paywall), “Central Bank Frustrations” was an eye-opener. Chuck removes any illusions about “trusting” central bankers. He quotes former Fed Chairman Ben Bernanke:

Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.”

Soon after, the housing market crashed due to subprime loans.

Fed Chairman Bernanke called this “collateral damage”.

Chuck supplies facts and lets us arrive at our own conclusions:

So, let’s look at the Fed’s track record, shall we? Did you know that in 105 years, the Fed has never accurately forecast a recession?

This commentary by Dennis appeared on his Internet site on Thursday morning — and another link to it is here.


Tales of the New Cold War: 1 & 2: What Vladimir Putin is not — John Batchelor interviews Stephen F. Cohen

Part 1: This is an important podcast that covers the very recent Syrian event involving the shoot down of the Russian military plane by a Syrian S-200 anti air missile late Monday. And John Batchelor opens the discussion with this news item. While Putin did say the shoot down was the “result of a series of tragic events and chance circumstances”, he also said that the investigations would continue and there would be no retaliatory reaction. But there would be changes made in how the Syrian air defences would respond in future and that these changes “would be noticed”. He also corrected the much stronger accusations of the Syrians and his own military that Israel had caused the tragedy. For Professor Cohen this was a reminder that every day is fraught with danger in this New Cold War and every day the American mainstream media is filled with anti Putin vilification – the NYTimes and Washington Post, for example, recently published eight stories like this in one day.  And this process has now been institutionalized in the MSM. This institution can thus be broken down into 8 different aspects: Putin as the usurper of Yeltsin, Putin as despot, Putin as a Stalinist, Putin as organizer of a kleptocracy, Putin kills people who threaten him (because he is ex-KGB and still a thug), Putin as a fascist, white supremacist, Putin as the foreign aggressor, and Putin as hostile to America. Each of these is given detailed inspection and discussion from the historical perspective by both pundits.

But most of these aspects is soundly defeated by historical facts; most are preposterous (and overwhelmingly dependent for credibility on the naivety and ignorance of the American public. L.) Briefly it was Yeltsin who was the enemy of a fledgling democracy and Putin reclaimed that process when he was legally appointed to his position; Putin was anti-Stalin (built Wall of Grief) and Putin reigned in the oligarchs and did not help the worst of them. (Putin has actually made it illegal for any Russian corporation that would put profits ahead of hurting the Russian people. L.)

Part 2: The list and discussion continues with Putin as a kleptocracy was more a Yeltsin creation, and Putin slowly took back what Yeltsin privatized, enough, as Cohen explains, to save his people. The relationship is still uneasy and Putin is still watchful for abuses, but Russia has grown and recovered and the people hold Putin responsible for that Russian recovery and their salvation. But here Batchelor makes a very fine point that American society is a much more the highly developed kleptocracy than Russia (and the people also know who is responsible for the decline. – L.) Next, Putin was an ex-KGB analyst – which is no more evil than a CIA specialist – and Cohen considers this history as “turning him into a European man”. Cohen considers the accusation that Putin is a fascist and white supremacist is ludicrous. Putin is the successful leader of the most multi-ethnic nations of the world and, as Cohen states, a master race worldview would be impossible politically for a modern Russian leader. However, the view that Putin is anti-American. is at least now true. Is Putin aggressive? His whole pattern of dealing with provocation by the West has been reactive, not aggressive. His main critics accuse him of not being aggressive enough – as, for example, dealing with the latest incident of the loss of his plane in Syria.

********************************

It is sometimes frustrating to listen to a historian of the calibre of Stephen F. Cohen and a learned pundit like John Batchelor spend so little time on a single event like the shoot down of a Russian plane that could have caused a war.  But as an historian’s discussion they are more focused on the series of events leading up to the event than any single isolated news event. But the Syrian situation is very complicated for the Russian leader. Has Putin been damaged politically and geopolitically from his overly generous (perhaps) reasonableness with Israel and even U.S. adversaries?

What are his options given the podcast discussion? Putin has stated that there will be an appropriate response that will be quite noticeable in the air defence area in Syria. At a guess this means bolstering the quality of Syrian air defences – perhaps with the addition of S-300 anti-air systems that would provide the means to 1) avoid a similar event, 2) provide deniability for the Russian Israeli “lobby”(a.k.a. – fifth column group) to claim Putin’s actions are anti-Israeli, and 3) provide a more “aggressive” reaction for his own war party adherents who accuse him of being too non aggressive. He has additional problems, as every time Israel, or the U.S., or other U.S. satrap allies open fire on Syrians and Russians– how much provocation can he ignore when his own ally is attacked? Is the agreement with Turkey to delay (?) the attack on Idlib also a ploy to avoid a direct military confrontation with the U.S. that might lead to war? Does his lack of aggression suggest weakness to Washington thereby encouraging an escalation of provocations? Or does it mean he should stall as much as he can to hope for a change in diplomacy with Washington? These are serious questions that surely must plague the Russian leader, and the background history is certainly vital for understanding the scope and complexity of Syria. I urge readers to also listen to the podcast as much of the events of the U.S. MSM institution confusions are discussed in much greater detail.

This 2-part audio interview showed up on the audioboom.com Internet site on Tuesday — and I thank Larry Galearis for his always excellent executive summary, plus his own read on the situation at the end.  Each part is twenty minutes long.  The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.  If I remember, this will be posted in Saturday’s column as well, if you don’t have time for it just now.


Putin’s Hesitation Has Lost Syria’s Idlib Province — Paul Craig Roberts

The provocations that Putin invites are now escalating. Peter Ford, former British ambassador to Syria, points out that Washington has quickly taken advantage of Putin’s hesitancy in Syria to escalate the pretexts on which Washington will launch a military attack on the Syrian forces. Formerly Washington’s pretext was to be a false flag “chemical attack” that would be blamed on Syria. Washington’s new pretext precludes the liberation of Idlib as Washington has declared that any attempted liberation of the province from Washington’s terrorist allies will result in a U.S. military attack on Syria. Indeed, even a refugee flow whether or not caused by a Syrian attack is deemed to be a “humanitarian issue” that justifies a U.S. military attack on Syria. President Trump’s Special Envoy for Syria, James Jeffrey, just announced that the United States will not tolerate an attack, period.

Clearly, the Syrian/Russian liberation of Idlib from Washington’s terrorists cannot now happen, unless Putin is willing to establish such air superiority over Syria, backed up by Russian weapons, that the U.S. would be incapable of launching an attack. Washington’s escalation of its provocations means that Putin would have to accept the risk of destroying any US attack forces that were sufficiently reckless to test the defenses.

Another puzzle is Putin’s decision to pacify Erdogan by substituting a demilitarized zone in Idlib instead of liberating the province. How did Putin and Erdogan reach the fantasy conclusion that the US and its terrorist allies in Idlib province would cooperate with their demilitarization plan? Has Russian foreign policy dissolved into self-delusion?

We are watching unfold my concern that the acceptance of provocations results in more provocations and that the provocations escalate in their danger. What will Putin do now? If he backs down again, he can expect a yet more dangerous provocation until the only choice becomes surrender or nuclear war.

This brief, but very worthwhile commentary by Paul was posted on his website on Thursday sometime — and it’s courtesy of Larry Galearis as well.  Another link to it is here.


U.S. Accelerates Talks With North Korea After Kim-Moon Summit

U.S. Secretary of State Michael Pompeo called Wednesday for a new round of talks with North Korea with the goal of ridding the North of nuclear weapons by the end of Donald Trump’s first term, saying he was heartened by progress made at a summit this week between the two Koreas.

In a statement, Pompeo said the U.S. welcomed Kim Jong Un’s promise to dismantle a missile test site — under the eye of international inspectors — and move to shutter North Korea’s main Yongbyon nuclear production site if the U.S. takes what the North calls “corresponding measures.”

Pompeo signaled that reciprocation may be coming.

On the basis of these important commitments, the United States is prepared to engage immediately in negotiations to transform U.S.-DPRK relations,” Pompeo said, referring to North Korea by its formal name, the Democratic People’s Republic of Korea.

Pompeo invited North Korean Foreign Minister Ri Yong Ho to meet him in New York next week on the sidelines of the United Nations General Assembly and for North Korean officials to meet his envoy for the issue, Stephen Biegun, starting a process toward denuclearization by 2021 and a “lasting and stable peace regime on the Korean Peninsula.”

That’s language that both sides have used to describe a treaty to end the Korean War, which was never formally declared over. North Korea has sought such an accord, but the U.S. has been reluctant to do so for fear it would add to pressure to remove the thousands of American troops

Of course, dear reader, that would be the ultimate goal at the end of this peace/reunification process.  This Bloomberg story, was posted on their Internet site at 9:07 p.m. Denver time on Wednesday evening, but was updated 24 hours later, complete with a new headline.  The old one read “North Korea agrees to dismantle a key missile test site under the watch of international inspectors“.  Another link to it is here.


Global growth may have peaked, OECD says

In its latest interim outlook released Thursday, the OECD has projected global growth to settle at 3.7 percent in both 2018 and 2019. That level sits just below levels recorded prior to the financial crisis ten years ago.

The recently appointed chief economist of the OECD, Laurence Boone, told CNBC‘s Charlotte Reed on Thursday that the world economy on the whole was “hitting a plateau” and there was evidence of increased divergence between different economies.

Boone highlighted rising protectionism, emerging market vulnerability, politics, and finance as four main risks behind the tapering off in growth rates.

The OECD report has called for a gradual normalization of monetary policy but said it should be at a varying degree across different economies.

Speaking to CNBC, Boone said the normalization of policy in the United States was pushing the dollar upwards and creating a drag on emerging market economies.

These guys are a bit behind the times, as global growth peaked years ago.  This article showed up on the cnbc.com Internet site very early on Thursday morning EDT — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.


Central bank demand for gold reaches 3-year high

Central banks’ demand for gold reached a three year high, rising 8% during the first half of 2018 compared to the same period last year, according to a World Gold Council market update on central bank buying activity released today.

Data reveals that 2018 H1 marks the strongest year for central bank gold buying since 2015 ­– a total of 193.3 tonnes of gold have been added to central bank reserves so far, compared to 178.6 tonnes during the same period in 2017.

Emerging market central banks have played a key role, with Russia, Turkey and Kazakhstan accounting for 86% of central bank purchases in the first half of 2018.

An IMF Financial Statistics Report reveals that Egypt recently bought gold for the first time since 1978, and that India, Indonesia, Thailand and the Philippines have re-entered the gold market after years-long absences.  And Bloomberg reported that the Bank of Mongolia has purchased 12.2 tonnes of gold so far this year.

The World Gold Council believes that many emerging market central banks are turning their attention to gold as after years of exposure to the U.S. dollar, and as a natural currency hedge against other reserve currencies.

This gold-related news item is worth a few minutes of year time.  It put in an appearance on the mining.com Internet site early on Thursday afternoon EDT — and my thanks go out to Mark Barooshian for sending it our way.  Another link to it is here.


The Real Story:  Bear Stearns and JPMorgan — Ted Butler

There is compelling new proof of a silver (and gold) price manipulation. The evidence connects the investment bank JP Morgan Chase, the dominant force in world commodity trading, the U.S. Commodity Futures Trading Commission (CFTC), the primary commodity regulator, and the U.S. Treasury Department, the arranger of every conceivable bailout.

This week, I received a copy of a letter, dated October 8, sent from the CFTC to a California Congressman, Gary G. Miller. It discussed allegations of a silver market manipulation because of the data in the monthly Bank Participation Report. The data in that report for August showed that one or two U.S. banks held a massive short position in COMEX silver futures of 33,805 contracts, or more than 169 million ounces. This is equal to 25% of annual world mine production, and was up more than five-fold from the prior month’s report. After this position was established, silver prices fell more than 50%, in spite of a widespread shortage in retail forms of investment silver. Never before had there been a such a large concentrated position in any market, including every manipulation case in the CFTC’s history. Concentration and manipulation go hand in hand. You can’t have one without the other.

The letter was sent to me by a reader who had the foresight to write to his Congressman. Of course, the CFTC denied that a silver manipulation existed, as they always have. This proves that the Commission responds much quicker to a member of Congress than it does to hundreds of ordinary citizens and investors. In the future, should you decide to write to the CFTC, be sure to do so through your elected representatives.

What was remarkable (and disturbing) about the letter was that it strongly confirms an analysis I presented in an article dated September 2, titled, “Fact Versus Speculation”. In that article, I speculated that the shocking increase in the silver short position by one or two U.S. banks was related to the takeover of Bear Stearns by JP Morgan in March.

This must read commentary by Ted was posted on the investmentrarities.com Internet site back on 10 November 2008.  Several or my subscribers have asked how Ted knows that JPMorgan took over the silver short position of Bear Stearns way back then.  The answer lies in this commentary, plus in the embedded and hyperlinked article mention just above. Another link to this very worthwhile commentary is here.


The PHOTOS and the FUNNIES

Today’s critter is “Glaucus atlanticus“…a species of sea slug, a pelagic aeolid nudibranch, a shell-less gastropod mollusk in the family Glaucidae.  They float upside down by using the surface tension of the water to stay up, where they are carried along by the winds and ocean currents.  Humans handling the slug may receive a very painful and potentially dangerous sting.  Click to enlarge.


The WRAP

It was another day where JPMorgan was at battle stations keeping gold below its 50-day moving average — and silver below its 20-day.  They were successful, but they left no room for error — and in morning trading in the Far East on their Friday, silver punched above its 20-day moving average by a few more pennies, before being hauled lower.  How long they’re prepared to keep this up remains to be seen, but the walls, ceiling and floor are closing in from all directions.

Here are the 6-month charts for all four precious metals and, once again, I provide the 6-month silver chart showing its 20 and 50-day moving averages, so you can see how fine a line that JPMorgan is actually walking.  Platinum is heading towards overbought territory, but palladium is already hugely overbought — and would actually be even more overbought than that if the powers-that-be weren’t holding it back.  The ‘click to enlarge‘ feature helps with the first four only.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price traded mostly sideways during the first two hours after it began at 6:00 p.m. EDT on Thursday evening in New York.  It spiked up to its 50-day moving average briefly around 10:20 a.m. CST on their Friday morning, but was sold down from there — and has been chopping quietly sideways since.  At the moment, gold is up $1.90 an ounce.  Silver crawled unsteadily higher — and was up a dime by shortly before 2 p.m. CST on their Friday afternoon — and obviously above its 20-day moving average.  It has been sold lower since — and is up only 4 cents currently.  Platinum and palladium didn’t do much in Far East trading.  The former is up a dollar — and the latter is down 2 bucks as Zurich opens.

Gross gold volume is coming up on 43,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is 41,000 contracts.  Net HFT silver volume is about 16,800 contracts — and there’s only 391 contracts worth of roll-over/switch volume in that precious metal.

The dollar index traded virtually ruler flat until precisely 2:00 p.m. CST — and began to edge a bit higher at that juncture — and twenty minutes before the London open, it’s now up 5 basis points.

Today, around 3:30 p.m. EDT, we get the latest and greatest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday.  As I mentioned in this space yesterday, the above charts for both silver and gold indicates that any changes will be immaterial, although there will certainly be short covering/long buying by the brain-dead/moving average-following Managed Money traders in both platinum and palladium…especially the latter.

I’m off to bed, as I have an early-morning meeting today — and I want to be fully awake for it, so I’m signing off an hour earlier than normal.

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

Ed

JPMorgan’s Last Swing For the Fences?

30 June 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price dipped briefly into negative territory in early Far East trading on their Friday morning — and the swan dive in the U.S. dollar index at 10:30 a.m. China Standard Time wasn’t allowed to manifest itself in the price, as ‘da boyz’ were standing by with whatever paper gold was necessary to cap the price.  The gold price was turned lower at the 2:15 p.m. CST afternoon gold fix in Shanghai — and it really didn’t do much from there until at, or just before, the afternoon gold fix in London.  The tiny rally that developed at that point was capped and sold lower starting at 1 p.m. EDT — and the sell-off continued into after-hours trading as well.

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

Gold finished the Friday session in New York at 1,252.40 spot, up $4.40 from Thursday’s close.  Net volume was pretty respectable for a Friday in summer, at 209,000 contracts — and roll-over/switch volume was a bit under 15,600 contracts.

The price path for silver was similar, except more ‘volatile’.  It was turned lower at the afternoon gold fix in Shanghai as well — and the low tick, like for gold, came about 9:40 a.m. EDT in New York.  It rallied from there, but ran into ‘resistance’ right away — and also like gold, was sold lower starting just before the COMEX close.

The low and high ticks in this precious metal were reported by the CME Group as $15.91 and $16.12 in the July contract.  In the new front month, September, the low was reported as $16.00 — and the high as $16.22.

Silver was closed on Friday afternoon in New York at $16.09 spot, up 11.5 cents from Thursday.  Net volume was very healthy at 62,300 contracts — and there was a bit over 5,800 contracts worth of roll-over/switch volume in this precious metal.

Like silver and gold, platinum was sold lower until the dollar index did its mid-morning face plant in the Far East on their Friday — and after that, it was forced to trade very much like the silver price.  Platinum finished the Friday session at $852 spot, up 4 dollars on the day.

With some minor variations, palladium traded in a similar manner to platinum for most of the Friday trading session.  That changed at 1 p.m. in New York, as it received the same treatment as gold as silver at that point.  Palladium was closed at $948 spot, up 10 bucks from Thursday.

The dollar index closed very late on Thursday afternoon in New York at 95.29 — and traded mostly sideways until 10:30 a.m. China Standard Time on their Friday morning.  A trap door got opened under the dollar index at that juncture — and that was the start of long stair-step decline that lasted right until the end of trading in New York on Friday afternoon. The 94.48 low tick was set around 4:30 p.m. EDT.  The dollar index shows that it finished the day at 94.52…down 77 basis points from Thursday…but the ino.com DXY chart below doesn’t show the last forty-five minutes of trading data, so this close may not be entirely accurate.

Here’s the 3-day dollar index, so you can see the entire 24-hour move starting at 6:00 p.m. on Thursday evening in New York…including the 10:30 a.m. CST/10:30 p.m. EDT face plant.

And here’s the 6-month U.S. dollar index — and one has to wonder how long this dollar index ‘rally’ will last?

The gold stocks began to rally the moment that trading began at 9:30 p.m. EDT in New York on Friday morning.  Their respective highs came shortly after 1 p.m. — and shortly before the silver price was turned lower in COMEX trading.  The shares crawled quietly lower from there into the close, as the HUI finished up 2.25 percent.

The silver equities followed an almost identical price path as their golden brethren, but Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by only 1.52 percent.  Click to enlarge if necessary.

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

Here are the usual charts from Nick that show what’s been happening for the week, month-to-date — 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 mostly red across the board. But the declines in stock prices weren’t much when compared to the declines in the underlying precious metals themselves — and I certainly take heart from that.  Click to enlarge.

The month-to-date chart is a complete sea of red, even the loses over the last month didn’t amount to much considering how badly the underlying metals got hammered by JPMorgan et al.  Gold was down about 44 bucks for the month — and silver well over a dollar from its high tick. It could have been far worse.  Click to enlarge.

The year-to-date graph still isn’t very happy looking, as ‘da boyz’ now have all four precious metals down on the year.  But, as has been the case right from the start of 2018, the silver equities are still outperforming the gold stocks by a goodly margin — and that’s despite the fact that both gold and silver are down about the same percentage in price year to date.    Click to enlarge as well.

Just like I said in this space last week, where we go from here from a price perspective in both the equities — and their underlying precious metals, is still very much in the hands of JPMorgan et al…but mostly just JPMorgan.  However, with the COMEX futures market structure in all four precious metals as wildly bullish as we’re ever likely to see them, the path of least resistance is higher prices — and that will occur whenever JPMorgan decides, or is told to step aside.  The only thing not known is if ‘da boyz’ will appear as shorts sellers of either first and last resort once again.  I think not, but that’s just my opinion.


The CME Daily Delivery Report for Day 2 of July deliveries showed that 14 gold and 1,583 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, ADM and Advantage issued 8 and 6 contracts out of their respective client accounts — and HSBC USA stopped 7 contracts for its own account, plus Merrill and Advantage picked up 4 and 3 contracts for their respective client accounts. In silver, Of the nine short/issuers in total, the two largest by far were Scotia Capital USA[?] with 827 contracts out of its in-house/proprietary trading account — and Merrill with 432 contracts out of its client account.  In distant 3rd and 4th spots were HSBC USA and ABN Amro, with 99 and 96 contracts out of their respective client accounts.  There were twelve long/stoppers in total — and the three largest were the same as they were on Day 1…Goldman Sachs with 829 contracts for its own account…Australia’s Macquarie Futures with 173 contracts for its house account as well — and JPMorgan with 124 contracts for its client account.  And in distant third and fourth place were HSBC USA and ABN Amro, with 99 and 94 contracts for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The question I have is:  Who the heck is Scotia Capital USA?  I would suspect that they’re a spin-off — and completely separate legal entity from Canada’s Bank of Nova Scotia/Scotiabank.  I’ll wait for Ted’s thoughts on this, if he has any.

The CME Preliminary Report for the Friday trading session showed that gold open interest in July declined by 19 contracts, leaving 199 still open, minus the 14 contracts mentioned two paragraphs ago.  Thursday’s Daily Delivery Report showed that 15 gold contracts were actually posted for delivery on Monday, so that means that 19-15=4 gold contracts disappeared from the July delivery month.  Silver o.i. in July fell by 1,831 contracts, leaving 3,358 still around, minus the 1,583 mentioned above.  Thursday’s Daily Delivery Report showed that 1,888 contracts were actually posted for delivery on Monday, so that means that 1,888-1,831=57 more silver contracts just got added to July.


There was another smallish withdrawal from GLD yesterday, as an authorized participant took out 47,362 troy ounces.  But over at SLV there was a huge deposit.  This time an a.p…most likely with the initials JPM…added 2,070,185 troy ounces.  I would suspect that Ted will have something to say about the goings-on in both these ETFs in his weekly review later today.

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

For the month of June, the mint sold 19,500 troy ounces of gold eagles — 6,000 one-ounce 24K gold buffaloes — and 435,000 silver eagles.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Nothing was reported received — and only 402 troy ounces were withdrawn.  That activity was at Canada’s Scotiabank, which I won’t bother linking.

It was quite a bit busier in silver, as 1,139,598 troy ounces were received — and 596,678 troy ounces were shipped out.  In the ‘in’ category, there was one truck load…599,981 troy ounces…dropped off at CNT — and 452,456 troy ounces were left at Scotiabank.  The remaining 87,160 troy ounces found a home over at Brink’s, Inc.  All of the silver in the ‘out’ category was shipped out of HSBC USA.  In addition to all this physical movement, there was an eye-watering 3,546,332 troy ounces transferred from the Eligible category and into Registered.  The lion’s share of that amount…3,422,734 troy ounces was switched over at CNT — and the remaining 123,505 troy ounces, at Brink’s, Inc.  All of this would be in preparation for July delivery I would think.  The link to all this action is here.

There was decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They only received 200 of them, but shipped out 2,189.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, was way better than even my wildest hopes, as there was the expected improvement in gold…and it wasn’t exactly small — and there was also a huge improvement in silver, which I wasn’t expecting at all.

In silver, the Commercial net short position fell by a very chunky 9,510 contacts, or 47.5 million troy ounces of paper silver.  The decrease wasn’t a total surprise, but the size of it certainly was.

They arrived at that number by adding 1,598 long contracts, plus they reduced their short position by 7,912 contracts as well — and it’s the sum of those two numbers that represents the change for the reporting week.

Ted said that the ‘Big 4’ traders only appeared to have covered about 400 short contracts, but that’s certainly because there’s a big Managed Money trader in this category now.  The ‘5 through 8′ large traders reduced their extreme and record short position by around 1,100 contracts during the reporting week — and Ted’ raptors, the 30-odd small Commercial traders other than the Big 8, added approximately 8,000 new long contracts.

Under the hood in the Disaggregated COT Report, the Managed Money traders made up a bit over half of the weekly change, as they reduced their long position by only 885 contracts, but some of those traders piled in on the short side to the tune of 4,790 contracts — and it’s the sum of those two numbers…5,675 contracts…that represents their change for the reporting week.  The difference between that number — and the Commercial net short position…9,510 minus 5,675 equals 3,835 contracts– and that was made up by the traders in other two categories, as the ‘Other Reportables’ increased their short position by about 1,000 contracts — and the ‘Nonreportable’/small traders increased their short position by around 2,800 contracts.

The Commercial net short position in silver now stands at 245.1 million troy ounces, down a very decent amount from last week’s report.  Ted says that the big Managed Money trader that now inhabits the Big 4 category, masked the fact that JPMorgan most likely covered around 3,000 more contracts of their short position during the reporting week — and that puts their short position at about 30,000 contracts, or 150 million troy ounces of paper silver.  As of this COT Report, JPMorgan owns about 60 percent of the entire Commercial net short position in silver.

Here’s the 3-year COT chart for silver — and the improvement should be noted.  Click to enlarge.

Well, with the Managed Money traders selling only 885 long contracts during the reporting week, it certainly appears that the Managed Money traders hanging onto their long positions aren’t going to be selling them…because they would have done so already if they were going to.  And if that’s the case, the bottom is in for the silver price as of Thursday close.  JPMorgan really was picking up nickels on Wednesday and Thursday, because that’s all that was available.

I certainly look forward to what Ted has to say about all this, as he’s the real authority on it.


In gold, the commercial net short position fell by 19,161 contracts, or 1.92 million troy ounces of paper gold.  I was expecting a reduction, but nothing this size.

They arrived at that figure by adding 10,126 long contracts, plus they reduced their short position by 9,035 contracts as well — and it’s the sum of those two numbers that represents the change for the reporting week.

Ted said that the Big 4 traders covered approximately 2,800 short contracts — and the Big ‘5 through 8’ traders covered about 3,800 short contracts as well. Ted’s raptors, the 42-odd small commercial traders other than the Big 8, added 12,600 long contracts.  So, like in silver, it was Ted’s “all for one — and one for all” scenario, as they all got the memo.

Under the hood in the Disaggregated COT Report it was, also like in silver, only partly due to Managed Money traders, as the increased their long position by 548 contracts, but also added to their short position to the tune of 11,100 contracts — and it’s the difference between those two…10,552 contracts…that represents their change for the reporting week, a bit over half of what the commercial traders bought back.  The difference, as it always is, was made up by the traders in the other two categories, but they went about it in very different fashions, as the ‘Other Reportables’ decreased their long position by about 9,200 contracts — and the ‘Nonreportable’/small trader actually increased their long position by around 700 contracts.  Here’s a snip from the Disaggregated Report so you can see these changes in all three categories for yourself.  Click to enlarge.

The commercial net short position in gold is now down to 9.50 million troy ounces.  And I would suspect, that like in silver, the Managed Money traders are done selling longs — and going short in gold as well.

Here’s the 3-year COT chart for gold.  It was bullish last week at this time — and even more extreme this week.  Click to enlarge.

Since the Tuesday cut-off, there have been two more days of careful salami slicing by JPMorgan et al…but mostly just JPMorgan — and it goes without saying that if we could see a COT Report as of the close of COMEX trading on Thursday, we’d see an even more wildly bullish set-up than we have now.  And that’s just silver and gold I’m talking about.

The COT Report for platinum showed that the Managed Money traders went even further onto the short side during the reporting week, to another new record.  I didn’t think that was possible.  There was a big improvement in palladium as well.  And then there’s copper.  The Managed Money traders really outdid themselves, as they sold 21,308 longs, plus they added 8,757 short positions.  Of course things have gotten even more extreme in these three metals in the two trading days since the Tuesday cut-off.

Unless JPMorgan is prepared to show up as short seller of last resort on the next rallies…whenever they’re allowed to commence…this certainly looks like their last swing for the fences to me.   But if they do decide to step in at some point during the next rally, then they’ve gone to a lot of effort over the last two weeks for no reason at all.

So we wait some more.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s 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.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 traders are short 144 days of world silver production—and the ‘5 through 8’ large traders are short an additional 87 days of world silver production—for a total of 231 days, which is a bit under 8 months of world silver production, or about 539.1 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were also short 234 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 245.1 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 539.1 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 539.1 minus 245.1 equals 294.0 million troy ounces.  The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 30-odd small commercial traders other than the Big 8, are long that amount.  And if you think that’s preposterous, you would be right about that.

As stated earlier, Ted estimates JPMorgan’s short position at 30,000 contracts, down 3,000 contracts from last week’s report, or 150 million troy ounces of paper silver.  That translates into about 64 days of world silver production.  That number represents about 27 percent of the short position of the Big 8 traders — and about 44 percent of the short position held by the Big 4 traders.  This is simply grotesque.

The Big 4 traders are short 144 days of world silver production — and once you subtract out the 64 days that JPM is short, that leaves 80 days split up between the other three large traders…a bit under 27 days each.  And since those contracts are obviously not split up evenly between them, it’s a certainty that one of these traders has a short position something under 27 days — and the other, more than 27 days.  But whatever those three number are, they can’t add up to more than 80 days.  But it all fairness, it should be pointed out that there’s a Managed Money trader now in the Big 4 category — and this certainly distorts the numbers.  I would think they would be a few days lower than 27 if the Managed Money trader wasn’t there.

The four traders in the ‘5 through 8’ category are short 87 days of world silver production in total — and off their record high short position of last week by two whole days.  They’re short a bit under 22 days of world silver production each, which is down a hair from what each was short in last week’s COT Report.  Back in mid May, these same ‘5 through 8’ small traders were short a bit under 12 days of world silver production each.  Now they’re up to a bit under 22 days short each, which is an increase of more than 80 percent during the last six weeks.

The smallest of the traders in this category holds something less than 22 days — and the largest, something more than that amount.  So it’s a mathematical certainty that the smallest of the Big 4 traders holds a short position of over 22 days, but under 27 days  — and the second smallest of the Big 4…something around the 27 day mark [the average of the remaining ‘Big 3’ traders] of world silver production held short.  That means [another mathematical certainty] that the second largest short in the Big 4 category [Scotiabank?] only has a short position slightly larger than the average of 27 days.  JPMorgan remains, as always, the King Short, with a short position that is a bit more than twice the size of the other three traders in the Big 4 category — and just under three times the size of the traders in the ‘5 through 8’ category.  These are fairly substantial declines from the prior reporting week — and it’s more proof that JPMorgan is covering their short position in silver as fast they can.

By the way, there is very little wiggle room in these numbers — and are 95+ percent accurate.

It certainly appears that the trap is being set for the other commercial traders in gold.  Ted has been talking about this for a few weeks now — and you’ll read more about it in the quote in The Wrap section.  But it now appears, that with another COT Report under our belts, the Big 7 Commercial traders in silver appear destined to suffer the same fate at the hands of the ‘Big 1’ Commercial trader, as a silver trap looks ready to be sprung by JPMorgan as well.

The Big 8 commercial traders are short 49.3 percent of the entire open interest in silver in the COMEX futures market, which is down a hair from the 50.0 percent that they were short in last week’s COT Report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be something approaching 55 percent.  In gold, it’s now 37.6 percent of the total COMEX open interest that the Big 8 are short, down a bit from the 39.0 percent they were short in last week’s report — and a bit over 40 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 41 days of world gold production, which is down 1 day from what they were short last week — and the ‘5 through 8’ are short another 20 days of world production, which is also down 1 day from what they were short the prior week, for a total of 61 days of world gold production held short by the Big 8 — which is down 2 days from what they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold about 67 percent of the total short position held by the Big 8…which is unchanged from last week’s COT Report.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 62, 64 and 75 percent respectively of the short positions held by the Big 8.  Silver is unchanged from the previous week’s COT Report, platinum is down 1 percentage point from a week ago — and palladium is down a hefty 5 percentage points from last week’s report.


Saxony, Frederick Christian, Conventionsthaler 1763

Mint: Dresden     Metal: Silver     Full weight: 27.97 grams

There’s just no news out there that’s worth posting so, once again, I have an embarrassingly small number of stories for you for a Saturday.


CRITICAL READS

Doug Noland: A Decisive Quarter

Booming markets ensure imaginations run wild. Importantly, reality began to gain the upper hand during the quarter. The global Bubble faltered. The world is not robust – there are, indeed, fragilities everywhere. EM is a potential disaster. China is increasingly vulnerable. China and Asian debt has become a huge global risk. I worry about Brazil.

And this age of populism and the “strongman” politician actually does matter to the markets. Trump Tariffs. China ready to “punch back.” Erdogan to dictate Turkish rate policy? The new Italian government to play hardball with the EU. Immigration becoming a pressing political issue from Washington to Frankfurt. A new leftist President in neighboring Mexico. Well, booming markets were content to disregard the global rise of populism, divisiveness and autocracy. Faltering markets will now amplify these troubling trends. All the makings for savage bear markets.

It was A Decisive Quarter: The world became more divided; the “Atlantic Alliance” became more divided; Europe became more divided; Asia became more divided; and the United States turned only more divided. U.S. stock performance during the quarter should not distract from the ominous storm clouds forming globally – in the markets, economically, socially and geopolitically. Global markets were also more divided, though I would expect Contagion from the Periphery to now make more discernable headway toward the Core.

Doug’s Credit Bubble Bulletin was posted on his website in the wee hours of Saturday morning EDT — and is always a must read for me.  Another link to it is here.


E.U.’s sanctions against Crimea extended for another year

The European Union is committing to its policy of perceiving revolutionary determination as its course of legitimacy. Apparently, a referendum gaining nearly 100% popular support isn’t sufficient to qualify for the self determination of a region. Therefore, the E.U. will continue to consider the Crimea as politically a part of the Ukraine. This, of course, means that the E.U. has reason for its sanctions regime against Crimea, which it will be extending for yet another year.

Deutsche Welle reports:

The European Union extended economic sanctions on Crimea and its port city of Sevastopol on Monday. The 28-member bloc imposed the measures after Russia annexed the Black Sea peninsula four years ago.

The E.U. said it remains “firmly committed to Ukraine’s sovereignty and territorial integrity,” reiterating that “it does not recognize and continues to condemn this violation of international law.”

The measures — which will now stay in place until June 23, 2019 — ban the import of products originating in Crimea. They also prevent E.U. nationals or companies based in the bloc from investing or buying real estate in Crimea and Sevastopol, and ban E.U. cruise ships from docking there, except in an emergency.

The move comes three weeks after French lawmakers voted in favor of a resolution to lift parallel sanctions targeting Russia — currently set to expire at the end of next month — over its role in an ongoing conflict in eastern Ukraine. “(The sanctions are) totally ineffective today to solve this international crisis and are dangerous for France’s interests,” said conservative MP Thierry Mariani, who put forward the resolution.

The bulls hit continues on this issue.  I expected the Italians to vote against this — and I wasn’t amused to see them follow the status quo.  This news item appeared on theduran.com Internet site at 6:37 p.m. EDT on Thursday evening — and I thank Larry Galearis for pointing it out — and another link to it is here.


Tales of the New Cold War: Summiteering Eve — John Batchelor interviews Stephen F. Cohen

Part 1:  John Batchelor opens the discussion with a short history of the successes and failures of post war summits between the U.S. and the Soviet Union; what stands out is the multiple times presidents met with Soviet leaders to work out the problems. Most presidents from Eisenhower on had at least one summit, and Cohen concurs and proceeds to address a detailed history of the most important of these meetings to ensure that younger listeners have a good understanding of the importance of them. Cohen points out that wartime summits between the leaders were about that war as allies fighting Germany, but post war they became about avoiding war with each other. This discussion is about the coming summit between Trump and Putin that hopefully will happen sometime in July. And Professor Cohen was at the last summit as an observer/consultant in 1985 in Geneva between Gorbachev and Reagan and brings that perspective to this discussion. Cohen informs us about what a formal summit is like as opposed to a behind closed doors meeting. The former is partly a media event with theatrical trimmings to solve basically three things: to ratify a partnership to solve a national security problem between them, to force cooperation where the politics at home make this difficult, and finally these summits hopefully foster a sympathetic relationship as a media event. They are important as public opinion can be significantly altered, sometimes fundamentally/strategically altered. But the history of these things shows a very mixed result of some successes and failures. Nixon’s summit, for example, won him his legacy with the creation of détente and was a great success.

Part 2: Batchelor opens this session with the Reagan/Gorbachev summit in Geneva. The political background was rocky with the Korean airliner shoot down incident, and even more serious the false alarm of an American nuclear attack that was almost acted upon at the Soviet end. This was the time of “Star Wars” and his two summits during his presidency were successful. He cancelled with Gorbachev a whole category of nuclear weapons. President Bush continued the meetings but the process was complicated by the fall of the Soviet Union. But none of these past presidents, from Eisenhower to Clinton, had the difficulties that Trump is bearing with his summit. Cohen lists them: He has no political support at all at home. This is unprecedented. In addition to this, in Cohen’s opinion, the danger of war between the two countries has never been greater. And Batchelor adds that not only has Trump no support, he has very active opposition from numerous fronts. He then asks what the agenda will be? Cohen in turn wonders if there will be enough trust between the two for discussion and then adds the worry that if there are agreements achieved, can Trump deliver in Washington? This is a danger for both leaders that failure would be a political problem at home for them. Nevertheless, Cohen deems the agenda will include the new nuclear arms race, how to regulate the use of cyber warfare activities, the Syria situation, fighting terrorism, resolving Ukraine by the Minsk Accords, stopping NATO exercises in Europe, and finally to re-staff the embassies in both countries.

****************************

As the pundits have said there are many outcomes possible should a summit come to pass, and commentary about will happen is completely speculative. We have seen the theatre elements already with Trump’s summit with North Korean, Kim and for inexplicable reasons the world collectively breathed a sigh of relief. But we know that Kim is not going to give without receiving in turn, and he likely won’t give up his nukes. Russia will be just as difficult to deal with as Trump’s “America First” slogan, which means “take as much as possible and give little in return” is just as failure prone in North Korea as it will be in Russia. But in Trump’s style of negotiation, allegedly successful in real estate, may prove impotent in summits. The other factor weighing down the probabilities of success is the Russian attitude (as stated in the podcast) that Trump may not be able to produce any concessions due to his opposition in Washington. This will probably see the Russian side as less willing to concede in negotiations. Another factor Russians feel wary about is that Trump’s narcissistic problems will add a component of stubbornness to the already overwhelming suspicions that he is badly informed about both the realities of Russia and also has a weak grasp of the many problems of his own country. We are reminded that facts do not rule Washington diplomacy, mythology does. He is only sure about his own goals – again, “America First” is going to be the style – and he will be prepared as well as this allows. Again this is problematic for success.  The Russians, on the other hand will have a better understanding of both American problems and what they need for their own national security concerns. Trump has not failed yet at a major summit and it he will need, in my opinion, a failure or two in this area in order to bring to him a better sense of realities.

This 2-part audio interview was posted on the audioboom.com Internet site on Tuesday — and I though it best to wait until today’s column for the usual length and content reasons.   As always, I thank Larry Galearis for his always excellent executive summary — and closing commentary.  Each part is about twenty minutes long — and the link to Part 1 is in the headline and here — and the link to Part 2 is here.


No 5th Column in the Kremlin? Think again! — The Saker

Following the re-appointment of Medvedev and his more or less reshuffled government, the public opinion in Russia and abroad was split on whether this was a good sign of continuity and unity amongst the Russian leadership or whether this was a confirmation that there was a 5th column inside the Kremlin working against President Putin and trying to impose neo-liberal and pro-western policies on the Russian people. Today I want to take a quick look at what is taking place inside Russia because I believe that the Russian foreign policy is still predominantly controlled by what I call the “Eurasian Sovereignists” and that to detect the activities of the “Atlantic Integrationist” types we need to look at what is taking place inside Russia.

The Russian 5th column and its typical operations

First, I want to begin by sharing with you a short video translated by the Saker Community of one of the most astute Russian analysts, Ruslan Ostashko, who wonders how it is that a rabidly pro-western and vociferously anti-Putin radio station named “Ekho Moskvy” manages not only to elude normal Russian legislation, but even gets money from the gas giant Gazprom, which is majority owned by the Russian state. Ekho Moskvy is also so pro-Israeli that it has earned the nickname “Ekho Matsy” (Ekho Moskvy means “Echo of Moscow” whereas “Ekho Matsy” means “Echo of the Matzo”). Needless to say, that radio has the unwavering and total support of the U.S. Embassy. It would not be an exaggeration to say Ekho Moskvy serves as an incubator for russophobic journalists and that most of the liberal pro-western reporters in the Russian media have been, at one time or another, associated with this propaganda outfit. In spite of this or, more accurately, because of this, Ekho Moskvy has been bankrupt for quite a while already, and yet – it continues to exist. Just listen to Ostashko’s explanations (and make sure to press the ‘cc’ button to see the English language captions)…

This longish, but interesting commentary from the Saker was posted on his Internet site on Friday sometime — and I’ve only skimmed it.  I’ll read the rest of it this weekend.  It’s another offering from Larry Galearis — and another link to it is here.


Price drop spurs India gold demand, buyers eye bigger dips

Gold demand improved this week in India as prices fell to their lowest level in nearly three months, while demand elsewhere in Asia remained tepid as investors waited for prices to fall further.

There is modest rise in demand from jewellers, but still gold is trading at a discount,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.

Dealers in India were offering a discount of up to $2 an ounce over official domestic prices this week, compared with a premium of $1 last week. The domestic price includes a 10 percent import tax.

Improving retail demand is giving jewellers some confidence. They are placing small orders,” said a Mumbai-based dealer with a private bullion importing bank, adding “falling rupee is still confusing some.

This gold-related Reuters news item, co-filed from Mumbai and Bengaluru, put in an appearance on their website at 4:38 a.m. EDT on Friday morning — and I found it on the Sharps Pixley website.  Another link to it is here.


Silver denarius of Augustus shows famous celestial event

A famous celestial event of antiquity was recorded on an ancient coin.

A silver denarius of Augustus (also known as Caesar Augustus), issued circa 19 to 18 B.C., depicts the so-called Julian star.

The wreathed head of Augustus graces the obverse.

The reverse of the coin shows the “Julian Star,” a bright comet that appeared in the heavens during the summer of 44 B.C., a few months after the assassination of Julius Caesar (March 15, 44 B.C.).

Based on eyewitness descriptions, the comet was clearly visible in the daytime, making it one of the brightest comets on record, the auction firm said. It has never reappeared and may have been destroyed on a suicidal dive into the sun.

The ancients did not understand the nature of comets as celestial ice balls moving within our Solar System, and the apparition was held to signal the ascension of Caesar’s soul to the heavens,” according to the catalog. “This proved quite useful in Octavian’s effort to get the Senate to deify his adoptive father. During his later reign as Augustus, he made extensive use of the comet in state propaganda.”

This news item, complete with a nifty photo, showed up on the coinworld.com Internet site on Friday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the whistling heron, a bird I ran across when I was researching the great white heron/great egret in Friday’s column. It hails from South America — and is not very big…60 cm tall maybe — and a bit over a kilo in weight.


The WRAP

Note: This quote from Ted is from his weekly review last Saturday…a week ago today.

It has now become obvious to me that JPMorgan has embarked on a concerted plan to buy back as many of its gold short positions from other commercials (raptors) as possible over the past month — and not from managed money traders, because the lower prices required to trigger managed money selling would have also attracted raptor buying competition for JPM. By allowing gold prices to trade up to, but not penetrating the key moving averages in gold, JPM was able to buy from the raptors without tripping off managed money buying.

At the same time, due to different market circumstances in silver, while JPMorgan was able to buy back important quantities of gold shorts without much of a gold rally, the silver market realities were such that JPM couldn’t do the same in silver and, in fact, had to resort to selling short silver to keep the price capped while it pulled off its gold short covering. You’ll recall that over the past month (not including the latest reporting week), JPMorgan was the biggest silver short seller, adding 20,000 new shorts, while it was buying back gold shorts. JPM had no choice – it had to cap the price of silver if it hoped to keep gold below its moving averages and buy back gold shorts from the raptors.

With this [past] week’s buyback of both gold and now silver shorts, it appears that JPMorgan is now close to completing its double cross of other commercials in both metals. It is possible for JPM to buy back more of its short positions in both metals at lower prices, but that would require managed money selling, which in turn, would bring out more raptor buying — and buying competition for JPM. In gold, with the managed money net long position at two year lows — and a giant increase in managed money short selling this past reporting week, there wouldn’t appear to be much more managed money selling capacity left.Silver analyst Ted Butler: 23 June 2018


Today’s pop ‘blast from the past’ is one I’ve posted before, but it’s been at least a year or more, so it’s time for a revisit.  It was a monster hit back in 1978 — and is one of those timeless classics that just about anyone can identify right from the opening bar.  The link is here.

The summer solstice in the northern hemisphere was a bit over a week ago — and I forgot all about it for last Saturday’s column.  So here is Italian composer Antonio Vivaldi’s Concerto No. 2 in G minor, Op. 8 RV315 “L’estate” [Summer] which he composed around 1721 — and published in Amsterdam in 1725.  The soloist in this recording is Mari Silje Samuelsen — and the link is here.


I’m not sure much, if anything, should be read into Friday’s precious metal price action, or lack thereof.  But I was less than amused that ‘da boyz’ showed up to put out the precious metal rallies that began at 10:30 a.m. CST — and ended at the afternoon gold fix in in Shanghai.  Volumes were very elevated during that period — and it was obvious that they were throwing whatever COMEX paper at those rallies to ensure that they went away.  After that, gold and silver et al, were basically on ‘care and maintenance’ during the remainder of the Friday session, despite the big decline in the dollar index that was ongoing as the trading day moved along.

But as you already know, dear reader, what’s happening in the currency markets becomes irrelevant when JPMorgan et al are out and about in the COMEX futures market — and we’ve seen ample evidence of that over the last two weeks.

Here are the 6-month charts for all four precious metals, plus copper.  A new intraday low was set in platinum yesterday, along with a tiny new closing low in copper for this move down as well.  The ‘click to enlarge‘ feature helps a bit with the first four.

Not a thing has changed since last week.  The emerging markets are still a mess, both economically and monetarily — and this rising dollar index thingy is only exacerbating the situation for all of them.

Closer to home, there’s lots of happy talk, most of which is of the “whistling past the graveyard” variety.  A look under the hood in the ‘developed world’ economies, regardless of which side of the Atlantic or Pacific you choose, reveals a string of Potemkin villages that no longer fools anyone.  Only central bank largess of endless asset and bond purchases has prevented the implosion of the world’s economic, financial and monetary system.

It is long past being saved — and removal of any of the supporting structure will bring instant contagion, along with equally instant liquidity issues.  The problems with emerging markets are but the thin edge of that wedge — and it will get thicker in a hurry if things continue on as they are.

So, with one eye on a seemingly intractable financial and monetary situation not only in the U.S…but world wide…I’m trying to figure out where JPMorgan fits into all of this, along with their absolutely manic efforts to cover as many of their short positions in gold [and the other precious metals] as they can. They’re certainly doing it for a reason, but a reason not know to us, at least not yet.

I suspect, as I said earlier, that what we’re witnessing is most likely their “last swing for the fences” — and at some point in the not-very-distant future, this price management scheme will come to a rather abrupt end.

JPMorgan would certainly be one of the first to know that — and getting its house in order in preparation for that moment, would be at the top of their “to do” list.  Sticking it to everyone else will be a casualty of such an event — and JPMorgan is never known to come out on the losing end of anything.  They are, as Jim Rickards has said in the public domain on more than one occasion over the years…”the biggest criminal organization the world has ever known“.

So, as I’ve said on more than one occasions, if this scenario I’ve painted is close to being correct, then all we can do is await the ‘event’ that triggers it — and hope that we survive whatever the power-that-be/deep state have prepared for us.

And on that rather unhappy note, I’m done for the day — and the week — and I’ll see you here on Tuesday.

Ed

New Intraday Lows Set in Both Gold and Platinum Yesterday

22 May 2018 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped quietly lower, as the dollar index ‘rallied’ during Far East trading on their Monday.  Once the 2:15 p.m. CST afternoon gold fix was put to bed in Shanghai, ‘da boyz’ took gold down to its low tick of the day, which came minutes after the London open.  It chopped quietly higher from there — and any rally attempt that looked remotely serious, was dealt with in the usual manner.  It even gained a bit in the thinly-traded after-hours market — and was allowed to close up a few dimes on the day.

The low and high ticks really aren’t worth looking up, but here they are anyway…$1,281.20 and $1,292.00 in the June contract.

Gold was closed in New York on Monday at $1,292.20 spot, up 30 cents from Friday.  Net volume at the London open on their Monday morning, which was almost it’s low price tick of the day, was pretty hefty at 85,000 contract — and net volume for the entire Monday session was a bit under 258,500 contracts, plus a bit over 56,000 contracts worth of roll-over/switch volume on top of that.  It should be carefully noted that JPMorgan et al set a new intraday low in gold for this move down.

Silver was down about 7 cents by 11 a.m. China Standard Time yesterday morning — and it proceeded to trade virtually ruler flat from there until just before 1:30 p.m. CST.  Then it was sold lower as well — and ‘da boyz’ set the low tick of the day in silver the same time as they did for gold…minutes after the London open.  Like gold, silver began to rally from that juncture — and really took off shortly after the COMEX open in New York.  But ‘da boyz’ where there to ensure it didn’t get far – and by the afternoon gold fix in London, had the price back in line.  It inched quietly higher until late in the after-hours trading session — and then didn’t do much after that.

The low and high ticks in silver were recorded by the CME Group as $16.28 and $16.535 in the July contract.

Silver finished the Monday session at $16.49 spot, up 6.5 cents from Friday’s close.  Net silver volume at the London open, silver’s low tick, was 11,800 contracts — and for the complete Monday session, it was a tiny bit under 58,000 contracts, plus a hair over 5,000 contracts worth or roll-over/switch volume as well.

It should come as no shock that ‘da boyz’ set platinum’s low price tick at the same time as they did for silver and gold.  It only recovered a few dollars after that, but once the COMEX opened…away it went.  At 1 p.m. in New York, the platinum market appeared to go ‘no ask’ — and the short sellers of last resort had to step in to provide the necessary “liquidity” the moment the price touched $900 spot…or heaven only knows what platinum would have closed at if they hadn’t.  The price wasn’t allowed to do much after that, but did rally almost back to its high of the day in the very thinly-traded after-hours market.  Platinum was closed at $899 spot, up $14 on the day.  JPMorgan et al set a new intraday low in platinum for this move down at the Zurich open yesterday.

And ditto for palladium’s low tick.  But from that low, it chopped very quietly higher until minutes after the Zurich close.  Then the price activity got far more lively and, once again, JPMorgan et al had to show up as short sellers of last resort, or palladium would have blasted back through $1,000 spot like a hot knife through soft butter.  It was sold down a bunch of dollars into the COMEX close, then, like platinum, it rallied a small handful of dollars into the 5:00 p.m. EDT close of trading.  Palladium finished the Monday session at $988 spot, up 26 bucks on the day.  Palladium rallied above — and closed above, both its 50 and 200-day moving averages yesterday.

The dollar index closed very late on Friday afternoon in New York at 93.67 — and when trading began shortly before 6 p.m. EDT on Sunday afternoon in New York, it continued to rally quietly but unsteadily higher from its London open low on Friday morning.  The 94.06 high tick of the day came at precisely 9:00 a.m. BST in London trading on their Monday morning, which was about forty-five minutes after the low ticks in all four precious metals were set by ‘da boyz’ — and all four were headed higher by then.  The index began to chop lower from there, but at exactly 10:00 a.m. EDT…the afternoon gold fix in London…someone goosed the dollar index.  The respite in the dollar index decline ended shortly before London closed — and it chopped steadily lower until the 93.51 low tick of the day was set around 4:30 p.m. in New York.  It traded flat from there into the close.  The dollar index finished the Monday session at 93.52 — and down 15 basis points from Friday.

The ‘rally’ in the dollar index looked just as manufactured as the low ticks in the precious metals.

Here’s the intraday dollar index for Monday, so you can see the precision of those turning points for yourself.

And here’s the 3-day dollar index, so you can see the trading on Sunday evening in New York — and Monday morning in the Far East.

And here’s the 6-month U.S. dollar index.  After yesterday’s currency action, this dollar index rally is looking rather shaky — and very overbought.  So it remains to be seen how much more support those ‘gentle hands’ are going to provide going forward.

The gold shares opened about unchanged — and then for no reason that made sense to me, sank to their respective lows by 11 a.m. EDT in New York trading.  They rallied from there — and back to unchanged by a few minutes before 2 p.m. — and then didn’t do a thing after that.  The HUI closed lower by 0.03 percent, so call it unchanged.

It was mostly the same for the silver equities, although their rallies lasted until 2:30 p.m. — and were in positive territory by a reasonable amount.  They chopped sideways from there until some kind soul dumped a fairly large position into the market around 3:25 p.m. EDT — and dropped the stocks back to barely above unchanged on the day.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.34 percent.  Click to enlarge if necessary.

Here’s the 1-year Silver Sentiment/Silver 7 Index from Nick.  Click to enlarge as well.

The CME Daily Delivery Report showed that 35 gold and 13 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, ADM issued 32 — and Advantage the other 3…both from their respective client accounts.  There were six long/stoppers in total.  JPMorgan was in first spot with 19 contracts — and R.J. O’Brien and Advantage were tied in second spot with 6 contacts each.  All contracts stopped involved everyone’s client account.  In silver, the two short/issuers were ABN Amro and Advantage with 11 and 2 contracts.  The largest long/stopper was HSBC USA with 8 — and JPMorgan and Advantage were tied in second spot with 2 contracts each.  All issued and stopped contracts involved everyone’s 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 May rose by 5 contracts, leaving 92 still around, minus the 35 mentioned just above.  Friday’s Daily Delivery Report showed that 1 gold contract was actually posted for delivery today, so that means that 1+5=6 more gold contracts were added to the May delivery month.  Silver o.i. in May declined by 14 contracts, leaving 172 still open, minus the 13 contracts mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 27 silver contracts were actually posted for delivery today, so that means that another 27-13=14 silver contracts were added to May.


There was a decent sized withdrawal from GLD yesterday, as an authorized participant took out 104,243 troy ounces.  There were no reported changes in SLV.

There was a decent-sized sales report from the U.S. Mint for a change.  They sold 4,500 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — and 230,000 silver eagles.  Considering the current price action, I would suspect that purchases of this size weren’t made by John Q. Public.

Once again, there was no in/out activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.

There wasn’t must activity in silver, although JPMorgan picked up another 150,483 troy ounces, which was all the ‘in’ activity there was.  That’s the third 150,000 troy ounce deposit into JPMorgan in the last week — and Ted was wondering why such strange amounts.  So was I.  There was 135,289 troy ounces shipped out…80,092 troy ounces from Canada’s Scotiabank — and 55,197 troy ounces from Malca-Amit USA.  The link to that activity is here.

It was pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They reported receiving 5,791 of them — and shipped out only 116.  All of this action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are the usual two charts that Nick Laird passes around on the weekend.  They show the transparent gold and silver holdings of all known depositories, ETFs and mutual funds, updated as of the close of business last Friday.  Gold is up a tiny bit from last week — and the reason for the big decline in silver is because of a 3.6 million ounce withdrawal from SIVR, the worlds’ second-largest silver ETF, during the reporting week…something that Ted Butler pointed out in his weekly commentary on Saturday.  Click to enlarge for both.

I have quite a few stories for you today.


CRITICAL READS

Are Americans The “Bad Guys”?  — Bill Bonner

After the fall of the Berlin Wall, the U.S. stood alone. It was the “end of history,” as one public intellectual proposed.

America was #1 – the ne plus ultra of the 20th century. By comparison, the whole rest of the world was just one big “sh*thole.” And the U.S. could blast any part of it back to the Stone Age.

Power was unbalanced and disproportionate. It was take… with no give. It was live… but not letting the other guy live.

We could invade Iraq, but the Iraqis couldn’t invade us. We could target extremists for drone assassination while we slept in peace.

And why not?

Paraphrasing former Secretary of State, Madeleine Albright: “What good was it to have so much power if we didn’t use it?

Therein lay the fatal temptation…

This very worthwhile commentary by Bill was posted on the bonnerandpartners.com Internet site early on Monday morning EDT — and another link to it is here.


Credit Card Delinquencies Spike Past Financial-Crisis Peak at the 4,788 Smaller U.S. Banks

In the first quarter, the delinquency rate on credit-card loan balances at commercial banks other than the largest 100 – so at the 4,788 smaller banks in the US – spiked in to 5.9%. This exceeds the peak during the Financial Crisis. The credit-card charge-off rate at these banks spiked to 8%. This is approaching the peak during the Financial Crisis.

A sobering set of numbers the Federal Reserve Board of Governors released this afternoon.

But overall, across all commercial banks, including the largest banks with the largest credit-card loan balances outstanding, the delinquency rate was 2.54% (not seasonally adjusted). This overall rate was pushed down by the largest 100 banks, whose combined delinquency rate in Q1 was 2.48%.

These large banks have been offering appealing incentives to consumers for years, and they’ve been going after consumers with the higher credit ratings, and they’ve been following good underwriting practices – having not yet forgotten the lesson from the last debacle – and this conservative approach is now helping to keep losses down.

This commentary by Wolf Richter put in an appearance on the wolfstreet.com Internet site last Friday sometime — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Maduro wins another term as Venezuela’s president

Nicholas Maduro has won reelection in an election process that the U.S. and its allies refuse to acknowledge as legitimate, together with the Venezuelan opposition candidate, Henri Falcon. Maduro won with over 68% of the popular vote, while Falcon received considerably less.

Falcon, perhaps taking a cue from Hillary Clinton, seems as if he just won’t concede the fact that the people of Venezuela just didn’t want him to govern them.

This election was something like a battle between Washington and the people of Venezuela. Washington has long considered that no election in Venezuela can be considered legitimate unless the outcome is for a pro-Washington candidate.

In this case, Falcon appears to be Washington’s man, and reports of the U.S. State Department and other politicians slamming the outcome of this election installing a patriotic candidate, saying that the elections were somehow rigged or illegitimate will be hitting the headlines of mainstream media outlets right and left. Despite the fact that the elections process entertained many international observers…

This news item showed up on theduran.com Internet site at 10:24 a.m. EDT on Monday morning — and it comes to us courtesy of Roy Stephens.  Another link to it is here.  There was a companion story about Venezuela that I picked up on Zero Hedge.  It’s headlined “Trump Bars Purchases of Debt, Receivables Owed to Venezuela, PDVSA“.


Investing in Collapse — Jeff Thomas

For years, I’ve been writing about Venezuela, describing it as the “movie” by which we can view the future of other jurisdictions that are presently in decline.

The reason is that declining nations follow the same pattern, time and time again, over the centuries. This is not coincidence. The pattern exists because human nature never changes, regardless of the era or the locale. Political leaders make the same mistakes as their forebears, and the people of a nation react in kind.

For this reason, countries have a sort of “shelf life.” They rise in prominence, due to work ethic and productivity. They then go through a period of abundance, which eventually deteriorates, due to complacency and apathy. Finally, they collapse into a period of bondage.

If we recognize that this pattern has played out countless times over the millennia, we can track any given country and assess where it is at present, in the pattern. For example, Europe and North America are presently in the last stages prior to collapse, Venezuela is in the process of collapse and Cuba is in the post-collapse recovery.

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


Germany will ‘fight’ for its interests in face of Trump’s ‘America First’ policy, says Economic Minister

It’s no secret that Germany has many deep ties with America that seem to be completely unbreachable. But in the face of Trump’s ‘America first’ policy, those ties are feeling some strain. America first, by definition, means that America’s interests, across all sectors, get the top priority above those of all others, and even in spite of them, with heavy emphasis on the ‘spite’ part.

The manner in which Trump’s foreign policy has progressed during his tenure so far indubitably shows forth his loyalty to this program, which perceives that whatever America wants, it will get, regardless of how it impacts others, and everybody else is expected to just grin and bear it.

But that’s not how you treat your friends, and not how a partnership really works. America has a strong social and cultural policy with equality at its base in just about every human perspective and interaction, at least, insofar as the words go, but in action, it’s an ideal that is quickly losing ground on the value of actions, even at a time when equality is taking on a new emphasis in America’s cultural capital of Hollywood.

America’s foreign policy is enacting an approach that sees the world as a global chess game, and every other player is viewed as an opponent to be bested, a game where America wins at the loss of everyone else, the ‘better end of the deal’. It’s completely different from the party line that Washington has put forward for decades, where fairness, equality, and respect were put forward as motivating factors for international activities and agreements, even if, oftentimes, America still acted like it was purely out to advance its own interests. America still put on a nice face with nice words as a costume for their self interested global influence.

Today, American actions haven’t really changed all that much, in a way, but what has changed is the philosophy that it overtly advances. Now, under President Donald Trump, it brazenly tells the world that America will do and get what it wants, and everyone else must be good little boys and girls and play along, even if it means that they will lose. In Trump’s mind, it’s called ‘winning’, and in order to win, someone must lose.

Even America’s strongest allies have been reluctant to acknowledge America’s self interested global policies, because as long as they got something for it, they were okay with it. But lately, they’re not getting as much for it, if anything at all.

This longish, but worthwhile commentary was posted on theduran.com Internet site at 6:52 a.m. EDT on Saturday morning — and I thank Larry Galearis for pointing it out.  Another link to it is here.


European national sovereignty under threat over Iran — Eric Zuesse

They need to decide whether they seek a world of nations that each is sovereign over its own territory but over no other (and this would not be a world at war); or whether they seek instead a world in which they are part of the American empire, a world based on conquests — NATO, IMF, World Bank, and the other US-controlled international institutions — and in which their own nation’s citizens are subject to the dictatorship by America’s aristocracy: the same super-rich individuals who effectively control the U.S. Government itself (see this and this — and that’s dictatorship by the richest, in the United States).

Iran has become this fateful fork-in-the-road, and the immediate issue here is America’s cancellation of the Iran nuclear deal that America had signed along with 6 other countries, and America’s consequent restoration of economic sanctions against Iran — sanctions against companies anywhere that continue trading with Iran. First, however, some essential historical background on that entire issue:

The U.S. aristocracy overthrew Iran’s democratically elected Government in 1953 and imposed there a barbaric dictatorship which did the bidding of the U.S. and allied aristocracies, by installing the Pahlavi Shah there, just as they had earlier, in 1932, installed the Saud King in Saudi Arabia — which land never ever had known democracy.

As Wikipedia says of Ibn Saud, who became King in 1932, “After World War I, he received further support from the British, including a glut of surplus munitions. He launched his campaign against the Al Rashidi in 1920; by 1922 they had been all but destroyed,” with Britain’s help. Similarly, the U.S. and its British Imperial partner installed Pahlavi as Iran’s Shah in 1953. This was done by U.S. President Dwight David Eisenhower.

This is another longish but worthwhile commentary from theduran.com Internet site.  This one was posted there at 12:20 a.m. on Monday morning EDT — and I thank Roy Stephens for this one as well.  Another link to it is here.


Hilarity in NIRP Zone: Italian 2-Year Yield Still Near 0%, as New Government Proposes Haircut for Creditors and Alternate Currency, Markets on “Knife Edge” — Wolf Richter

The ECB’s Negative Interest Rate Policy has been the funniest monetary joke ever.

The distortions in the European bond markets are actually quite hilarious, when you think about them, and it’s hard to keep a straight face.

Italian assets were pummeled again on mounting concern over the populist coalition’s fiscal plans, with the moves rippling across European debt markets,” Bloomberg wrote this morning, also trying hard to keep a straight face. As Italian bonds took a hit, “bond yields climbed to the highest levels in almost three years, while the premium to cover a default in the nation’s debt was the stiffest since October,” it said. “Investors fret the anti-establishment parties’ proposal to issue short-term credit notes – so-called ‘mini-BOTs’ – will lead to increased borrowing in what is already one of Europe’s most indebted economies.

This comes on top of a proposal by the new coalition last week that the ECB should forgive and forget €250 billion in Italian bonds that it had foolishly bought.

The proposals by a government for a debt write-off, and the issuance of short-term credit notes as a sort of alternate currency are hallmarks of a looming default and should cause Italian yields to spike into the stratosphere, or at least into the double digits.

And so Italian government bonds fell, and the yield spiked today, adding to the prior four days of spiking. But wait…!!!

This amazing article by Wolf Richter appeared on the wolfstreet.com Internet site on Monday sometime — and falls firmly into the “you can’t make this stuff up” category.  It’s certainly worth reading if you have the interest — and I thank Richard Saler for bringing it to our attention — and another link to it is hereZero Hedge had a parallel news item on this headlined “Italian bonds, banks bloodbath as ‘Mini-BoT’ massacre continues“.


God Help Turkey“: FX Confiscation Rumors Launch Lira Meltdown as Yields Explode

While Turkey may have repatriated all of its gold held at the New York Fed, or at least moved it from New York to the BIS tower in Basel as we reported overnight, what markets are far more concerned about is the ongoing inactivity by the central bank to arrest the record collapse in the Turkish Lira and the just as record surge in Turkish 10Y yields, which in light of Erdogan’s threats on the “independent” central bank, which is now terrified to hike rates, is perhaps understandable.

It is therefore also understandable why, as Bloomberg reports this morning, one brokerage is looking for help from a higher power: “God help Turkey” Istanbul-based broker Alnus Yatirim said in the sign-off to its morning note to clients on Monday. “We’re faced with a central bank that is watching the market when it needs to lead and direct it.”

Yatirim has a point: on today’s Bloomberg EM Bloodbath chart, the TRY is once again the worst performing currency against the USD…

The brokerage predicted that the TRY could fall to 4.58 per dollar by the end of this week – or rather the start as it is already there now, give or take – and 4.75 next week.

The market is testing whether the central bank’s verbal interventions are a bluff or not, Alnus said. Without policy action, the damage is likely to spiral, it said, citing the $222 billion of net debt held by Turkish non-financial companies in overseas currencies. Each 1 cent depreciation in the currency adds about 5 billion liras to the cost of Turkey’s foreign borrowings, it said.”

Adding to an already dire picture, overnight rumors emerged that the government will seize foreign currency deposits although Turkey’s banking regulator chief Mehmet Ali Akben said such speculation is “absurd,” Sabah newspaper reported. “Such a decision is neither discussed or a work has been done on it” he said noting that banks’ rollover ratio is around 110%, and adding that they have no problem in foreign borrowing (“for now” he forgot to add).

This Zero Hedge news story was posted on their website at 10:22 a.m. yesterday morning EDT — and it’s the second contribution in a row from Richard Saler.  Another link to it is here.  A brief parallel piece showed up on the Bloomberg website very late yesterday morning Denver Time — and it’s headlined “Greece Moves Closer to Bailout Exit After Deal With Creditors“.  I thank Swedish reader Patrik Ekdahl for that one.


Tehran eyes path ahead after U.S. withdrawal from nuclear pact — Pepe Escobar

The Trump administration’s withdrawal from the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), has monopolized the highest levels of government in Tehran around the clock since the decision was announced on May 9.

Prime Minister Mohammad Javad Zarif, who met yesterday with the European Union’s energy chief Miguel Arias Canete, reiterated that mere words of support from the Europeans are not enough. The JCPOA joint commission meets in Vienna this coming Friday to analyze all options ahead.

EU diplomats in Brussels told Asia Times that, contrary to rumors, the European Union is not considering offering financial aid to Tehran in exchange for concessions towards a possible new nuclear deal.

What Brussels is desperate to achieve before the first U.S. sanctions kick in from August is to devise a mechanism to contest the dominance of extraterritorial American law – and reassure President Hassan Rouhani, who allegedly has “limited” trust that France, Britain and Germany will affirm an independent foreign policy.

Tehran, meanwhile, is considering conducting all its trade and commercial transactions in euro and yuan.

This commentary by Pepe put in an appearance on the Asia Times Internet site at 4:59 p.m. Hong Kong time on their Monday afternoon, which was 4:59 a.m. EDT in Washington on the same day — EDT plus 12 hours.  I thank Tolling Jennings for sharing it with us — and another link to it is here.


Strongest sanctions in history’: Pompeo issues 12 demands to Iran, vows ‘unprecedented pressure

Tehran will struggle to “keep its economy alive” if it does not comply with a list of 12 U.S. demands, including Iranian withdrawal from Syria, Secretary of State Mike Pompeo vowed on Monday.

Speaking at the Heritage Foundation, a right-wing Washington think tank, Pompeo laid out a list of 12 “basic requirements” for Iran. The demands call on Iran to withdraw from Syria, “release all U.S. citizens,” end support for Houthi rebels in Yemen, stop “enrichment” of uranium, and promise never to process plutonium. Iran must also allow “unqualified access to all nuclear sites throughout the country,” Pompeo said.

He promised that the U.S. would impose the “strongest sanctions in history” if Iran failed to comply with these demands.

Pompeo said that “the sting of sanctions will be painful” and Iran will struggle to “keep its economy alive” if Tehran “does not change its course from the unacceptable and unproductive path it has chosen.”

Thanks to our colleagues at the Department of Treasury, sanctions are going back in full effect and new ones are coming … These will indeed end up being the strongest sanctions in history,” Pompeo said.

The secretary of state also pledged that the U.S. “will track down Iranian operatives and their Hezbollah proxies operating around the world, and we will crush them. Iran will never again have carte blanche to dominate the Middle East.”

Speaking directly to the Iranian people, Pompeo claimed that “President [Hassan] Rouhani and Foreign Minister [Javad] Zarif… are your elected leaders. Are they not the most responsible for your economic struggles?” He added: “The United States believes you deserve better.”

Pompeo also said he’s sure that over time, Washington’s allies will warm to the Trump administration’s now unpopular stance on Iran.

Spoken like the true sociopathic/psychopathic deep state personality type the he is. This news story appeared on the rt.com Internet site at 1:31 p.m. Moscow time on their Monday afternoon, which was 6:31 a.m. in Washington — EDT plus 7 hours.  I thank Patrik Ekdahl for bringing it to our attention — and another link to it is here.  There was a UPI article about this headlined “Mike Pompeo vows to place ‘strongest sanctions in history’ on Iran”  — and I thank Roy Stephens for pointing it out.


U.S. and China agree to abandon trade war

The announcement came after high-level talks in the U.S. capital and followed months of tensions over what President Donald Trump has blasted as an unfair commercial relationship between the two economic giants.

Vice-Premier Liu He, who led Chinese negotiators in Washington said: “The two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other,” state-run news agency Xinhua reported Sunday.

Liu called the agreement a “necessity”, but added: “At the same time it must be realised that unfreezing the ice cannot be done in a day, solving the structural problems of the economic and trade relations between the two countries will take time.”

An earlier joint statement issued in Washington said Beijing would “significantly” increase its purchases of American goods, but offered few details.

This was the surprise story of the weekend.  This news item put in an appearance on the france24.com Internet site on Sunday sometime — and I thank Roy Stephens for sending it our way.  Another link to it is here.  Patrik Ekdahl sent along a companion piece to this from the BBC — and it’s headlined “U.S. and China halt imposing import tariffs“.


Russia continuing to increase gold reserves…adds 18.66 tonnes in April — Lawrie Williams

Despite U.S. sanctions impacting on some elements of Russia’s foreign trade, the country’s central bank is continuing with its seemingly inexorable increase in its gold reserves.  Indeed recent reports suggest that, in part because of the strong oil price the country is currently running a balance of payments surplus regardless which it may well turn into gold – particularly as the nation’s annual gold production level is seen as increasing as well – even if global gold output is flat or falling!  There may also be a political element involved in turning to gold, and reducing reliance on U.S. dollars in its forex reserves.

In April, therefore, the country’s central bank reports adding the rounded figure of 600,000 ounces (or 18.66 tonnes) to its gold reserve total bringing the overall figure as will be reported to the IMF (Russia is one of the few countries reporting its gold reserve changes on a month by month basis) to around 1,909.5 tonnes – the world’s fifth largest reported national holding and now some 67 tonnes higher than China’s reported holding.  However we remain extremely sceptical about the Chinese figure as stated given that the Asian dragon has reported zero increases in its reserves for fully 18 successive months (See: China’s official gold reserves unchanged – again).  We think the Chinese position, as reported, extremely unlikely – indeed the country has a strong past track record of only reporting its reserve increases at multi-year intervals.

This gold-related story by Lawrie was posted on the Sharps Pixley website on Saturday sometime — and another link to it is here.


Gold frequently disappoints Jim Grant, but does he understand why?

Interviewed this week by the TF Metals Report‘s Craig Hemke for the “Ask the Expert” segment at Sprott Money News, James Grant of Grant’s Interest Rate Observer, an advocate of gold, said he doubts that central banks intervene against the price of the monetary metal. Grant’s comments on gold in the interview begin at the 13:20 mark here.

Grant’s comments were disappointing…first for their inconsistency — and second for indicating ignorance of basic details.

The gold price, Grant said in the interview, is the reciprocal of faith in central banking, and he recalled that former Federal Reserve Chairman Paul Volcker once remarked to him that, for this very reason, he was always rooting for the gold price to go down.

But Grant added that he doesn’t think central banks even care about gold anymore, and that the risk central banks would assume in intervening against gold would be much worse than any benefit they would get from it. He said that as an investor in gold he is always expecting a higher price and is frequently disappointed.

Grant is generally acknowledged to be a brilliant guy, so might there be powerful reasons for the gold price not to be performing up to his expectations?

Grant knows perfectly well that that the gold price is being managed, but would never say a word about it when he’s being interviews by the main stream media, as he knows what would happen if he did.  He’d never be invited back.  This worthwhile commentary by GATA secretary/treasurer Chris Powell showed up on their Internet site on Saturday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

I’m always surprised at how quickly waterfowl include me as part of the scenery once I’ve sat quietly for a few minutes — and it’s amazing what will swim by, or come on shore in front of me.  Of course I had to sneak up on the pair or redhead ducks in the first shot, but the male blue-winged teal acted like I wasn’t even there.  Click to enlarge for both.


The WRAP

I commented in my Saturday missive that I was somewhat disappointed that JPMorgan et al didn’t take gold down to a new intraday low during Friday’s trading day, because they were within dimes of doing so.  But they waited until Monday in Far East trading to do it instead.  Now that it’s “mission accomplished”…it remains to be seen if they will push the price even lower to get more Managed Money long selling — and short buying.  They may, but if I had to bet the usual hypothetical ten bucks on that, I’d say that they’re done, although I certainly reserve the right to be wrong about that.  But the fact that they allowed the gold price to close in positive territory means that my theoretical bet appears pretty safe.  And as I’ve already pointed out, ‘da boyz’ set a new intraday low in platinum as well, so they’ve got the Managed Money traders even deeper on the short side in that precious metal as well.

The other thing worth mentioning is that JPMorgan et al halted silver’s rally right at its 50-day moving average — and I was also very encouraged by the share price action in both precious metals yesterday.

Here are the 6-month charts for all four, plus copper and WTIC — and you can review yesterday’s price action for yourself.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price was sold off a few dollars in Tuesday morning trading in the Far East — and is down $3.60 the ounce at the moment.  Silver has followed a similar price path, of course — and it’s down 5 cents.  Ditto for platinum…it’s down 4 bucks, but palladium has rebounded from down a few dollars — and is now sitting at unchanged as Zurich opens.

Net HFT gold volume is a bit over 54,000 contracts — and there’s about 4,100 contracts worth of roll-over/switch volume as well.  Net HFT silver volume is 8,100 contracts — and there’s about 425 contracts worth of roll-over switch volume in that precious metal.

The dollar index declined a bit in early morning trading in the Far East — and its current 93.48 low tick was set around 8:40 a.m. CST on their Tuesday morning — and then didn’t do much until precisely 2:00 p.m. China Standard Time on their Tuesday afternoon.  It has jumped higher since then — and it’s now up 17 basis points as London opens.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report.  Based on the first four days of the reporting week that ended yesterday, there certainly will be improvements in the commercial net short positions in both gold and silver…plus platinum.  Let’s hope it remains that way for the remainder of the Tuesday session.

And as I post today’s column on the website at 4:02 a.m. EDT, I note that the gold price has rallied a bit since London opened — and is only down 30 cents currently. It’s the same for silver — and it’s now up 4 cents. Platinum is now up a dollar — and palladium is up 5 bucks, but obviously running into ‘resistance’.

Gross gold volume is a bit over 85,000 contracts now — and net of roll-over/switch volume, net HFT gold volume is a bit over 74,000 contracts. Net HFT silver volume is a bit over 11,000 contracts — and there’s 430 contracts worth of roll-over switch volume in that precious metal.

The dollar index’s meteoric rise that started at 2 p.m. CST, crashed and burned starting the moment that London opened — and the dollar index is now down 10 basis points as the first hour of trading over there draws to a close.

As wildly bullish as the COT Report was on Friday, it’s even more wildly bullish now, particularly in silver — and all that we have to do is wait until ‘da boyz’ allow precious metal prices to rally.  At that juncture, we’ll find out pretty quick if JPMorgan turns into the short seller of last resort once again.

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

Ed

‘Da Boyz’ Stop Another Price Break-Out Dead in Its Tracks

14 March 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price zoomed a bit higher in the first hour and change on Monday evening in New York — and ‘da boyz’ obviously had to step in at that point.  It was sold quietly lower from that juncture — and the low tick was set shortly after 9 a.m. GMT in London.  It inched higher from there until the CPI numbers were released at 8:30 a.m. in New York.  The gold price blasted higher, but that was only allowed to last a few minutes — and it was blasted lower at, or just after, the afternoon gold fix in London, which was 10 a.m. EDT in New York — and obviously 2:00 p.m. GMT, so the LBMA is obviously operating as if it was on British Summer Time [BST] already, in order to be in sync with New York.  The gold price rallied back to its high of the day from there, but was carefully kept below its 50-day moving average — and from shortly before noon EDT, the price chopped sideways into the 5:00 p.m. close.

Despite the activity on the Kitco chart below, the low and high ticks aren’t worth looking up.

Gold was closed in New York on Tuesday afternoon at $1,325.90 spot, up $3.30 on the day.  Net volume was pretty heavy at a hair under 274,000 contracts — and roll-over/switch volume was decent as well, at just under 49,000 contracts.

JPMorgan et al kept the silver price on the same short leash as gold — and for the most part, their price paths were identical.

The low and high ticks were recorded by the CME Group as $16.465 and $16.69 in the May contract.

Silver finished the day at $16.555 spot, up 5.5 cents from Monday’s close.  Net HFT volume was a bit over 66,000 contracts, plus another 3,300 contracts worth or roll-over/switch volume on top of that.

Platinum’s price was managed in the same fashion as gold’s, so I’ll spare you the play-by-play.  It finished the Tuesday session in New York at $964 spot, up 2 bucks.

Palladium, was the outlier, as its rally on the CPI news at 8:30 a.m. EDT was only partially capped — and it continued to chop quietly higher until ‘da boyz’ put the kibosh on it at precisely 12:00 o’clock noon in New York trading.  Then from 1 p.m. onwards, it was sold lower into the close, finishing the day at $985 spot — and up 12 dollars on the day.  It was up 21 bucks at its high — and all set to blast through $1,000 spot until the powers-that-be showed up.

The dollar index closed very late on Monday afternoon in New York at 89.92 — and dipped down to the 89.84 mark at 8:30 a.m. China Standard Time on their Tuesday morning.  It appeared to get saved by the usual ‘gentle hands’ at that juncture — and it ‘rallied’ without enthusiasm to its 90.11 high tick of the day which came right at the 8:00 a.m. GMT London open.  It was back the 90.00 mark by time the CPI numbers hit the tape — and the ‘gentle hands’ appeared about ten minutes later. They appeared again at precisely 10:00 a.m. EDT at the afternoon gold fix in London — and as the dollar index got ramped higher, the precious metals were blasted lower.  That flamed ‘rally’ flamed out about fifteen minutes later — and the dollar index began to fall like a stone once again, with the 89.59 low tick coming at exactly 1:00 p.m.  EDT.  It ‘rallied’ a bit from there, but rolled over again around 4:00 p.m. — and finished the Tuesday session at the 89.68 mark…down 24 basis points on the day.

Yesterday’s dollar price action should leave little doubt in your mind that those ‘gentle hands’ prevented an all out crash in the U.S. dollar index yesterday…and the day before…and last week…last month….etc.

And here’s the 6-month U.S. dollar index which, by now, you should know is pure bulls hit…as is the daily DXY chart…and the Dow…and the precious metals…and interest rates…etc.

The gold stocks rallied until shortly before the afternoon gold fix in London — and then were sold into negative territory as the dollar index ‘rallied’ and the gold price got smacked.  They rallied back into positive territory about an hour later — and made every attempt to stay there, but finally gave up the ghost around 3 p.m. EDT.  They then drifted back into negative territory by a bit going into the end of the trading day.  The HUI finished lower by 0.17 percent.

Not so for the silver equities — and although they got sold lower after the London gold fix/dollar ramp job as well, they never got back below unchanged.  They chopped unsteadily higher for the entire New York trading session after that.  Nick Laird’s intraday Silver Sentiment/Silver 7 Index closed up 1.41 percent — and just about on its high tick of the day.  Click to enlarge if necessary.

And here’s the 1-years Silver Sentiment/Silver 7 Index chart.  Click to enlarge.

The CME Daily Delivery Report showed that 2 gold and 248 silver contracts were posted for delivery within the COMEX-approved warehouses on Thursday.  In gold, the short/issuer was ADM from its client account — and the sole long/stopper was JPMorgan for its client account as well.  But the surprise was in silver, as the two short/issuers that mattered were JPMorgan and Australia’s Macquarie Futures, with 200 and 40 contracts out of their respective in-house/proprietary trading accounts.  There were ten long/stoppers in total — and of that number, there were six long/stoppers of interest…Goldman Sachs and HSBC USA with 65 and 47 contracts for their respective in-house/proprietary trading accounts…and the CME Group with 37 contracts for its own account as well…obviously to be broken down for the 1,000 ounce mini-silver contract, which I’ll get to momentarily.  The last three long/stoppers of note were JPMorgan and Advantage, with 32 contracts each — and both for their respective client accounts.  Lastly comes ADM with 28 contracts for its client account as well.

The 37 contracts stopped by the CME Group were immediately broken up and immediately re-issued as single good delivery bar contracts…1,000 troy ounces each.  37 contracts times 5 bars per contract equals 185 contracts.  They were all stopped by ADM for its client account.

The thing I find surprising about this is that I don’t seem to remember the CME Group ever delivering into the silver mini contract at this time of the month before.  Normally it’s the last, or second from last delivery day — and I’m wondering what the significance of that might be.  Maybe it’s nothing, but I though I’d mention it, because it is out of the ordinary.  The link to yesterday’s Issuers and Stoppers Report is here — and it’s certainly worth a look if you have the interest.


The CME Preliminary Report for the Tuesday trading session showed that gold open interest in March fell by 6 contracts, leaving 537 still open, minus the 2 mentioned just above.  Monday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, so that means that 6 more gold contracts disappeared from the March delivery month by mutual consent between the short/issuers and long/stoppers involved.  Silver o.i. in March rose by 3 contracts, leaving 402 still around, minus the 248 mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 6 silver contracts were actually posted for delivery today, so that means that 6+3=9 more silver contracts were just added to March deliveries.

There were no reported changes in either GLD or SLV yesterday.

There was a small sales report from the U.S. Mint yesterday.  They sold 145,000 silver eagles — and that was it.

For the second day in a row, there was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.

There was a lot more activity in silver, as 1,227,412 troy ounces were received, but only 24,053 troy ounces were shipped out.  One very large truck load…624,745 troy ounces…was left at Brink’s, Inc. — and the other truck load…602,667 troy ounces…ended up at JPMorgan.  That brought their COMEX silver stash up to a new record of 136.2 million troy ounces.  In the ‘out’ category, there was 20,022 troy ounces shipped out of HSBC USA — and the other 4,031 troy ounces departed CNT.  The link to all this activity is here.

It was a huge day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They reported receiving 9,976 of them — and shipped out another 4,531.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

It was a fairly quiet news day — and I only have a handful of stories for you again today.


CRITICAL READS

Consumer Prices Accelerate As Apparel, Car Insurance Costs Jump

January’s Core CPI spiked rates over 12bps but since then they have fallen back to almost unchanged and rallied into today’s February print, suggesting a miss.

However, February CPI printed higher than January, rising 2.2% YoY as expected. However, Core CPI slowed from January to 1.8% (as expected). Drops in new and used vehicles, food, and fuel prices helped steady the consumer cost rise.

Under the hood, sub-components show a very mixed message…

The index for all items less food and energy increased 0.2 percent in February. The shelter index increased 0.2 percent, with the indexes for rent and owners’ equivalent rent both rising 0.2 percent and the index for lodging away from home unchanged.

The apparel index continued to rise, increasing 1.5 percent in February following a 1.7-percent rise in January. The index for motor vehicle insurance also continued to increase sharply, rising 1.7 percent in February.

This chart-filled Zero Hedge story appeared on their Internet site at 8:39 a.m. EDT on Tuesday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.  There was a Bloomberg item on this headlined “Guts of U.S. CPI Data Show Key Inflation Gauge Weakest in Years” — and I found that in this morning’s edition of the King Report.


Trump replaces Secretary of State Rex Tillerson with CIA chief

Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!” Trump tweeted.

Tillerson just finished a diplomatic trip to Africa and spoke to British Foreign Secretary Boris Johnson Monday, telling him the U.S. government is “outraged” about the poisoning of former Russian spy Sergei Skripal.

White House press secretary Sarah Sanders told reporters Trump had asked Tillerson to step aside.

Tillerson said his job would terminate at midnight March 31 and that he plans to effectively delegate duties to his deputy, John Sullivan, in the meantime.

What is most important is … an orderly and smooth transition,” Tillerson said.

The U.S. ‘deep state’ makes yet another move to consolidate its power.  This UPI article, courtesy of Roy Stephens, showed up on their website at 3:59 p.m. EDT yesterday afternoon — and another link to it is here.  And here’s the spin on this story from the politically incorrect Paul Craig Roberts.  It’s headlined “What Secretary of State Tillerson’s Firing Means” — and it’s certainly worth reading.  It comes to us courtesy of Larry Galearis.


Stephen Hawking dies aged 76

He died peacefully at his home in Cambridge in the early hours of Wednesday, his family said.

The Briton was known for his work with black holes and relativity, and wrote several popular science books including A Brief History of Time.

At the age of 22 Prof Hawking was given only a few years to live after being diagnosed with a rare form of motor neurone disease.

The illness left him in a wheelchair and largely unable to speak except through a voice synthesiser.

Apple’s co-founder Steve Wozniak said: “Stephen Hawking’s integrity and scientific dedication placed him above pure brilliance,”

Satya Nadella, Microsoft chief executive, said: “We lost a great one today. Stephen Hawking will be remembered for his incredible contributions to science – making complex theories and concepts more accessible to the masses.

He’ll also be remembered for his spirit and unbounded pursuit to gain a complete understanding of the universe, despite the obstacles he faced.”

This sad story was posted on the bbc.com Internet site early this morning GMT — and it comes courtesy of Swedish reader Patrik Ekdahl.  Another link to it is here.


Skripal crisis: Russia rejects U.K. ultimatum; demands chemical samples — Alex Mercouris

Russia has now publicly responded to the British government’s ultimatum – set out in Theresa May’s statement yesterday – that unless Russia provides a ‘credible response’ to the British inquiry about Russia’s custody of Novichok chemicals by close of business today, then the British government will treat the attack on Skripal as the action of the Russian state.

Russian Foreign Minister Sergey Lavrov has dismissed Britain’s claim of Russia’s involvement in Skripal’s poisoning as “nonsense”.  He has also said that Britain has refused Russia’s offer of cooperation to solve the case, and has also refused what he called Russia’s “legal request” for samples of the chemical used to attack Skripal so that Russia can carry out its own tests.

Latest reports also say that the Russians have summoned the British ambassador to the Russian Foreign Ministry.

That the Russians have rejected yesterday’s British ultimatum will surprise no-one.  I would however point out how completely bizarre this whole situation has become.

The Russians are being asked to provide proof of their innocence – already a bizarre request – whilst being denied the evidence which supposedly ‘proves’ their guilt.

As usual, not a shred of evidence to back up these accusations.  You couldn’t make this stuff up.  This story was posted on theduran.com Internet site at 3:22 p.m. EDT on Tuesday afternoon — and I thank Roy Stephens for pointing it out.  Another link to it is here.


Russia hits back as Britain gains support over poisoning of former spy Sergei Skripal

Russia has issued a thinly veiled threat after Britain gave it a deadline to answer accusations of involvement in a poisoning attack in Salisbury, but U.S. and E.U. allies have expressed support for Britain condemning the attack.

Prime Minister Theresa May had given Russia until midnight on Tuesday to explain how a Soviet-era nerve agent was used against a former Russian double agent.

Denying it had played any part in the attack, which left 66-year-old former spy Sergei Skripal and his 33-year-old daughter fighting for their lives, Russia said it would ignore the ultimatum until London handed over samples of the nerve agent used and complied with international obligations for joint investigations of such incidents.

Any threats to take ‘sanctions’ against Russia will not be left without a response,” the Russian foreign ministry said in a statement. “The British side should understand that.”

Speaking in an interview on state television, foreign ministry spokeswoman Maria Zakharova warned the U.K. not to threaten Russia.

Bearing in mind what the President [Vladimir Putin] said [in his State of the Nation Address], no-one can appear in his or her country’s parliament to say ‘I give Russia 24 hours,’” she told the Rossiya-1 television channel.

This news item was posted on the Australian website abc.net.au on Wednesday afternoon ‘down under’ time — and I thank Australian reader Garry Robinson for pointing it out.  Another link to it is here.  The Zero Hedge spin on this, which is definitely worth reading, is headlined “Russia Threatens U.K.: “One Does Not Give 24Hrs Notice to a Nuclear Power”” — and I thank Brad Robertson for his final contribution to today’s column.


Hungary’s Central Bank to Repatriate Its Gold From London

The leadership of the Hungarian National Bank (MNB) has decided to bring back home Hungary’s gold reserves.

Up to now, 100,000 ounces (3 tonnes) of the precious metal were stored in London, which is in total worth some 33 billion forint ($130 million) at current gold prices.

The decision seems to be in line with international trends as storage of gold reserves out of the country is now considered risky by more and more central banks. Austrian, German, and Dutch central banks are among those who have recently decided to repatriate their gold reserves. According to MNB, this may also further strengthen market confidence towards Hungary.

The highest amount Hungary has ever had was around 65-70 tonnes at the beginning of the 70s. At the end of the 1980s, however, a decision was made to decrease gold reserves to the lowest possible level and rather to invest in sovereign debts, which as a consequence of the collapse of the Bretton Woods system are considered safer, more liquid and potentially of higher yields. At the beginning of 2010 this tendency changed again and central banks started to accumulate gold as a potential response to the financial crisis.

This gold-related news item…via Sharps Pixley…was in my Friday column, so it’s not new ‘news’ for you, dear reader…but it was the only precious metal-related story on Zero Hedge on Tuesday — and there was nothing worthwhile on Sharps Pixley, either.  So in case you missed it, here it is again.  I thank Richard Saler for sharing it with us — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the masked lapwing, also known as the masked plover and often called the spur-winged plover or just plover in its native range.  It’s a large, common and conspicuous bird native to Australia, particularly the northern and eastern parts of the continent, New Zealand and New Guinea.  Click to enlarge.


The WRAP

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.Ernest Hemingway


There should be little doubt in anyone’s mind that ‘da boyz’ were watching over the precious metal market with more than the usual care and attention yesterday because of the CPI numbers.  That was also true of the currencies as well — and it should also come as no great shock that the ‘da boyz’ in the precious metals market — and the ‘gentle hands’ in the currency markets are either one in the same, or joined at the hip.

Here are the 6-month charts for all four precious metals, plus copper and WTIC as well.  As I pointed out before, JPMorgan et al stopped the gold price from blasting through its 50-day moving average yesterday — and it’s not much of a stretch to think that they did the same for silver on Tuesday as well.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

And since the afternoon gold fix was at the same time as it usually was in New York…10:00 a.m. EDT…that means that the LBMA had the afternoon gold fix in London an hour earlier than normal…3:00 p.m. GMT, instead of 4:00 p.m. GMT.  Based on that, I’ll make the assumption the they open in London an hour earlier this week…7:00 a.m. GMT, instead of 8:00 a.m. GMT — and it will stay that way until they go on British Summer Time this Sunday.

So, as I type this paragraph, the LBMA ‘open’ is less than ten minutes away…and the equity market in both London and Europe won’t open for another hour. I see that after getting sold off a couple of dollars by around 9 a.m. CST on their Wednesday morning, the gold price rallied unevenly higher, before running into obviously ferocious resistance just before 2 p.m. over there. Gold was up almost 4 bucks at that point, but is now down 20 cents the ounce. It was the same price pattern for silver — and after being up 9 cents, is up only 2. Ditto for platinum and palladium, with the former up 2 bucks — and the latter by 2 dollars as well.

Net HFT gold volume is coming up on 50,000 contracts, with just under 2,000 contracts worth of roll-over/switch volume as well. Net HFT silver volume is about 8,900 contracts, with light roll-over/switch volume…just under 700 contracts worth.

The dollar index didn’t do much until around 9:30 a.m. China Standard Time on their Wednesday morning — and then it took a bit of a dive until shortly before 11 a.m. over there. Then after a bit of an up/down move to its current 89.56 low tick, the index has begun to ‘rally’ anew — and is back at unchanged currently.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and although we had rallies yesterday in both silver and gold, they were summarily dealt with — and no damage to any moving average was done.  So if there was deterioration in the commercial net short position in either of those two precious metals, it was minimal…hopefully.

Based on that — and eye-balling the last five days of price activity on the 6-month charts posted above, I’ll speculate that whatever increases in the commercial net short positions that manifested themselves in last Friday’s COT Report, should be fully negated and, hopefully, a bit more than that.  However, I wasn’t overly happy with the preliminary open interest change in gold in last night’s Preliminary Report from the CME Group, so I might be off in that precious metal.  Of course Ted is the real authority on all this — and I look forward to what he has to say on this matter in his mid-week commentary this afternoon.

And as I post today’s column on the website at 4:02 a.m. EST, the LBMA has, hopefully, been open for about an hour — and I note that the gold price is down a bit more…$1.00 the ounce. Silver is up a penny — and platinum and palladium are now up 3 dollars and 5 dollars respectively.

Gross gold volume is around 61,500 contracts — and net of roll-over/switch volume, net HFT gold volume is about 58,500 contracts. Net HFT silver volume is a hair over 10,000 contracts — and there’s about 680 contracts worth of roll-over/switch volume on top of that, which is unchanged from an hour ago.

The dollar index hasn’t done much in the last hour — and is up 2 basis point at the moment.

That’s all I have for today — and I’ll certainly be watching this U.K./Russia thingy with great interest…along with a sense of foreboding.

I’ll see you here tomorrow.

Ed

Except For Gold…The Big 6 Commodities Were Closed Lower Again

10 February 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much of anything anywhere on Planet Earth on Friday, but I suppose the reality of the situation was that it wasn’t allowed that luxury.

The gold price traded in a ten dollar price range yesterday — and the high and low ticks aren’t worth looking up.

Gold was closed in New York on Friday at $1,315.70 spot, down $2.60 on the day.  Net volume was pretty heavy at just under 293,000 contracts.

Silver didn’t do much until shortly after 3 p.m. China Standard Time on their Friday afternoon.  Then it began to head unsteadily lower, with every tiny rally running into the usual resistance from “all the usual suspects”.  The low tick — and a new intraday low for this move down, was set at 1 p.m. EST — and once the COMEX closed, it rallied quietly until trading ended at 5:00 p.m. in New York.

The high and lows in this precious metal were reported by the CME Group as $16.405 and $16.13 in the March contract.

Silver finished the Friday session at $16.33 spot, down 6 cents on the day — and a new low close for this engineered price decline.  Net volume was 73,000 contracts, plus there was about 36,000 contracts worth of roll-over/switch volume on top of that amount.

Platinum rose and fell five bucks between 6 p.m. EST on Thursday evening — and shortly before 11 a.m. CST on their Friday morning.  It then chopped quietly sideways until the COMEX open at 8:30 a.m. in New York.  The spoofing got started — and the algos got spun — and the $955 low tick came shortly before 1 p.m. EST.  It was bounced off that low tick a number of times until the COMEX closed and, like silver, rallied until trading ended at 5:00 p.m.  Platinum was down 15 bucks at its low tick, but closed down by ‘only’ 7 dollars at $963 spot.

Palladium was up four or five dollars by the Zurich open — and then jumped up a bunch more between 10 a.m. and 12 o’clock noon CET over there.  From that juncture it was sold down to its low tick of the day, which came shortly after the Zurich close — and like platinum and silver, rallied quietly until trading ended at 5:00 p.m. EST in New York.  Palladium finished the Friday session at $969 spot, up 17 bucks on the day.

The dollar index closed very late on Thursday afternoon in New York at 90.28 — and chopped quietly sideways until 1 p.m. China Standard Time on their Friday afternoon.  It began to edge lower from there, only to get ‘saved’ for the fifth day in a row in the hour preceding the London open.  And except for a 2-hour 25-basis point slide between noon in London — and 9 a.m. in New York, it chopped higher until the 90.56 high tick was set around 12:45 p.m. in New York.  It began to chop lower from there at a similar pace to what it had risen earlier — and the dollar index finished the Friday session at 90.35 — up 7 basis points on the day.

But, like every other day this week, it would have crashed and burned if allowed to seek its true ‘intrinsic value’.

And here’s the 2-year U.S. dollar index chart — and you can read into this whatever you wish.  But while you’re doing that, just remember that this graph is a total fabrication by the powers-that-be…as is most every other chart in this column.

The gold shares gapped down a bit at the open — and kept right on going until shortly before the COMEX close.  Then they made a couple of rally attempts after that as gold rallied in after-hours trading — and closed a decent amount off their respective low ticks of the day.  Thank heavens for that, as the HUI closed down 2.04 percent as it was.

The price pattern for the silver equities looked very similar to their golden brethren, except the sell-off was far more severe.  At their 1:30 p.m. lows, they were down about 5.7 percent, but their subsequent rallies pared that loss, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down ‘only’ 3.49 percent.  Click to enlarge if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index — and it ain’t lookin’ that hot.  Click to enlarge…if you dare!

I get the distinct impression that at least one or two mutual funds were unloading a broad range of large and small gold and silver producers et al on Friday, because the loses were so evenly spread across the entire spectrum of equities.  This was not individual investors acting on their own.  I got an e-mail from John McFarland stating that opinion as well.


Here are the usual charts from Nick that show what’s been happening for the week, month-to-date — 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 even uglier this week than it was last week.  There’s just no other words for it.  Click to enlarge.

And here’s the month-to-date chart — and it’s even less happy looking.  Click to enlarge.

And year-to-date — and all the gains in the precious metal equities since the rallies began back in mid December, have vanished.  Click to enlarge as well.

Here, with a few minor changes, is what I said about this disgraceful situation when I wrote in this spot last Saturday.

No matter how obvious the price management scheme in the precious metals is, you can take it to the bank that the executives of these mining companies that we own shares in will say and do nothing.  And neither will the World Gold Council, The Silver Institute…or the CME Group or the CFTC.  Virtually all the large mining companies are members of, or closely associated with, those first two groups — and would never say or do anything to upset their peers.  That disease also infects the major keynote speakers that I see at every precious metals conference I attend.  As stockholders, we have been completely abandoned by all parties that are supposed to be looking out after our best interests.  Instead of that, they’ve willfully fed us to the wolves.


The CME Daily Delivery Report showed that 50 gold and 16 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, the only two short/issuers that mattered were Scotiabank with 28 contracts out of its own account — and R.J. O’Brien with 20 from its client account.  The only long/stopper that mattered was, drum roll please, JPMorgan with 49 for its in-house/proprietary trading account.  In silver, International F.C. Stone issued 15 contracts — and JPMorgan stopped 15 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in February declined by 110 contracts, leaving 1,199 still around, minus the 50 contracts mentioned just above.  Thursday’s Daily Delivery Report showed that 141 gold contracts were actually posted for delivery on Monday, so that means that 141-110=31 more gold contracts were added to the February delivery month.  Silver o.i. in February rose by 16 contracts, leaving 157 still open, minus the 16 contracts mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that zero silver contracts were posted for delivery on Monday, so that means that a net 16 contracts were added to February.


There was another withdrawal from GLD yesterday — and it was a pretty big one, as an authorized participant removed and/or took ownership of 180,257 troy ounces.  There were no reported changes in SLV.

The folks over at the shortsqueeze.com Internet site updated the short positions in both SLV and GLD as of the close of trading on Wednesday, January 31 — and this is what they had to report.  The short position in SLV declined by only 6.4 percent…from 10,975,500 shares/troy ounces, down to 10,269,500 shares/troy ounces.  It was similar in GLD, as the short position in it dropped by 6.0 percent…from 1,719,630 troy ounces, down to 1,616,410 troy ounces.

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

Month-to-date the mint has sold 1,500 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — and 225,000 silver eagles.  Retail investor interest is basically non-existent.

However, I got an amazing e-mail from Tolling Jennings yesterday — and the significance of it was not lost on me, as it immediately unfolded in one of those ‘Eureka’ moments that we’ve all had from time to time.  It was a link to a story headlined “United States Mint has 12 authorized purchasers for bullion coin issues“.

You may remember two or three years back that the mint would not release their list of ‘authorized purchasers’ — and even a ‘Freedom of Information’ request through government channels was turned down for ‘national security’ or some other such equally ridiculous reason.

And why was that, you ask?

Well, Ted Butler had figured out that JPMorgan was the ‘big buyer’ of silver and gold coins, not only from the U.S. Mint, but also silver and gold maple leafs from the Royal Canadian Mint for about four or five years running.  He also assumed that they weren’t buying through any of these ‘authorized purchasers’ at all, but had applied for and become an ‘authorized purchaser’ from the U.S. Mint themselves, to save on the fees charged…cutting out the middleman.

As JPMorgan discovered in hindsight, this turned out to be a grave mistake — and with sober second thought, they had to hide that fact from the general public — and the U.S. Mint went along with it, probably with the approval of their bosses over at the U.S. Treasury Department.  But once JPM’s name had been removed as an authorized participant by the mint, then the coast was clear for them to breeze forth with their freshly polished up “transparency”.

And if you have a better explanation, I’d love to hear it.

So would Ted.

There wasn’t much activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  There was 2,225.057 troy ounces received — and 12,938 troy ounces shipped out.  Of the ‘in’ amount, there was 2,000.000 troy ounces/200 – 10 oz. gold bars deposited at Delaware — and 225.057 troy ounces/7 kilobars [SGE kilobar weight] left at Brink’s, Inc.  Of the ‘out’ activity, there was 11,009 troy ounces shipped out of Brink’s, Inc. — and the remaining 1,929.000 troy ounce/60 kilobars [U.K./U.S. kilobar weight] departed Canada’s Scotiabank.  The link to that activity is here.

It was busier in silver.  JPMorgan picked up another truck load…598,011 troy ounces…and one good delivery bar…1,027 troy ounces…was dropped off at Delaware.  That puts JPMorgan’s COMEX silver stash at another new record high…129.1 million troy ounces.  In the ‘out’ department, there was 443,771 troy ounces that was shipped out of Brink’s, Inc.  The link to all this is here.

It was yet another very busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 2,300 of them, but shipped out a very chunky 8,496 to parts unknown.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday came in almost exactly as Ted Butler said they would — and there were also a few surprises as well.

In silver, the Commercial net short position dropped by 16,650 contracts, or 83.2 million troy ounces of paper silver.

They arrived at that number by increasing their long position by 6,977 contracts, plus they covered 9,673 short contracts — and the sum of those two numbers was the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by approximately 2,900 contracts — and the ‘5 through 8’ large traders decreased their short position by around 3,800 contracts.  Ted’s raptors, the 44-odd small Commercial traders other than the Big 8, increased their long position by about 10,000 contracts.

Under the hood in the Disaggregated Report, it was all Managed Money  — and a lot more, as they not only sold 11,615 long contracts, they also increased their short position by 11,794 contracts as well — and the sum of those two numbers…23,409 contracts…was their change for the reporting week.  The difference between that number and the Commercial net short position…23,409 minus 16,650 equals 6,759 contracts…was made up by the traders in the other two categories…the ‘Other Reportables’ and the ‘Nonreportable’/small trader category…with the traders in the ‘Other Reportables’ category making up the lion’s share of that difference.

Here’s a snip from the Disaggregated COT Report for silver, so you can see what I see when I’m looking at this report every week.  Click to enlarge.

The big surprise in the Disaggregated COT Report was the sale of those 11,615 long contracts — and it’s obvious from the size of the change that most of these sales were by non-technical Managed Money traders, the ones I  call the “unblinking” longs.  Both Ted and I were expecting/hoping that this number would not exceed 3-4,000 contracts, which would take the Managed Money long position back to its old base number of about 46,000 contracts.  That didn’t happen — and as Ted pointed out, it appeared that some of these non-technical traders made some permanent portfolio adjustments — and that trend may have also extended into the next reporting week as well, if the big drops in silver open interest since the cut-off are any indication.  Ted is the real authority on this — and I look forward to what he has to say in his weekly missive this afternoon.

The Commercial net short position in silver is now down to 153.2 million troy ounces of paper silver.  Ted pegs JPMorgan’s short position at 28,000 contracts…giving them all the improvement in the Big 4 traders in this COT Report.  And with the new Bank Participation Report in hand, Ted said he could certainly make a case for JPMorgan’s short position to be three or four thousand contracts higher than that, but the entrance [for the first time] of a sixth U.S. bank into the COMEX futures market in silver, gave him pause.

Here’s the 3-year COT chart for silver — and its configuration is very bullish.  Click to enlarge.

Of course it has grown even more bullish since Tuesday’s cut-off — and as I said to Ted on the phone yesterday afternoon…what I wouldn’t pay to see what the COT Report looked like after the COMEX close on Friday.


In gold, the commercial net short position fell by 19,625 contracts, or 1.96 million troy ounces of paper gold.

They arrived at this number by adding 3,960 long contracts — and they also reduced their short position by 15,665 contracts.  The sum of those two numbers was the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by a hefty 9,200 contracts — and the ‘5 through 8’ large traders also decreased their short position by an even heftier 11,400 contracts.  And if those huge drops weren’t surprise enough, Ted was shocked [as was I] that his raptors, the 48-odd small commercial traders other than the Big 8, actually sold 1,000 contracts of their huge long position during the reporting week.  Normally during these engineered price declines, the raptors pile in big on the long side…like they did in silver to the tune of 10,000 contracts this week…but not this week in gold.  I didn’t discuss this with Ted, but I’m wondering if they got some sort of notice from on high that they should back off during this reporting week.  Needless to say that I’ll be more than interested in what the raptors did during this reporting week, but that won’t be known until next Friday’s report.

Under the hood in the Disaggregated COT Report it was, as is almost always the case, all Managed Money traders…plus more.  They reduced their long position by a monstrous 24,220 contracts, but only added a piddling 413 contracts on the short side…another surprise — and it’s the sum of those two numbers…24,633 contracts…that was their change for the reporting week.  Like in silver, the difference between that number and the commercial net short position…24,633 minus 19,625 equals 5,008 contracts, was made up by the traders in the other two categories, with the largest chunk going to the traders in the ‘Other Reportables’ category.

Considering the huge decline in the Managed Money long position during the reporting week, it was more than surprising that they didn’t add to their short position far more aggressively than they did.  That still might occur, but it probably won’t be more evident until JPMorgan et al engineer the gold price below its 50 and 200-day moving averages.

Here’s the snip from the Disaggregated Report for gold, so you can see what these three groups of traders were up to.  Click to enlarge.

The commercial net short position in gold is now down to 20.55 million troy ounces — and still very much in bearish territory.

And here’s the 3-year COT chart for gold — and although it does look a bit better, the down-side price potential is still very much in place.

Although the internal structure of the COMEX futures market in all four precious metals has much improved since the Tuesday cut-off, the 50 and 200-day moving averages in gold remain unbroken — and hang over the market like the proverbial sword of Damocles.  And with China closed for their New Year’s celebrations for a week starting on February 16…’da boyz’ may wait until that market is closed before doing the dirty.

As Ted pointed out on the phone — and is evident in the numbers presented above, there were strange goings-on in this report.  I’m sort of wondering if a couple of them might be related to Scotiabank’s departure as a player in both silver and gold.

There are lots of pieces in motion in this great gold and silver chess game that’s going on, most of which is hidden from our sight.  But when all the motion stops — and the pieces are aligned in the correct order…then look out above!


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s 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.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 are short 120 days of world silver production—and the ‘5 through 8’ large traders are short an additional 56 days of world silver production—for a total of 176 days, which is just under 6 months of world silver production, or about 427.6 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 190 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 153.2 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 427.6 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 427.6 minus 153.2 = 274.4 million troy ounces.  The reason for the difference in those numbers is that Ted’s raptors, the 44-odd small commercial traders other than the Big 8, are long that amount.

As I also stated in the above COT Report analysis, Ted pegs JPMorgan’s short position at about 28,000 contracts, or around 140 million troy ounces, down 15 million ounces from what they were short in last week’s COT Report.  140 million ounces works out to around 58 days of world silver production that JPMorgan is short — and that would be a minimum number.  That’s compared to the 176 days that the Big 8 are short in total.  JPM holds about 33 percent of the entire short position held by the Big 8 traders.

As Ted also mentioned, he could make a case that JPMorgan’s silver short position is still 31,000 contracts, or 64 days of world silver production

It’s more than obvious that Scotiabank has been actively reducing their short position in the COMEX futures market for the last year and change.  Based on the COT data, Scotiabank’s short position is around 23 days of world silver production — and could actually be a lot less than that.  They may not even be a member of the Big 4 anymore, but may have slipped all the way down into the ‘5 through 8’ category.  I’m sure they’ve covered a certain portion of it during the normal course of business, but it’s equally obvious that JPMorgan has taken up some of the slack, as have some of the other traders in the Big 8 category.

JPMorgan has been forced by circumstance to pick up Scotiabank’s trading/price management duties in silver and gold.  So JPMorgan is by far the No. 1 silver short on Planet Earth — and likely to remain that way indefinitely.  Of course they have 675+ million troy ounces of physical silver [and counting!] stashed away to cover that, so they are in no danger.  That can’t be said of the remaining Big 7, unless JPMorgan plans to bail out some, or all of them.  And if that’s the case…at what price?  I get the feeling, as I said last week, that it wouldn’t come cheap.

The two largest silver shorts on Planet Earth—JPMorgan and one other, which may or may not be Scotiabank, are short about 81 days of world silver production between the two of them—and that  81 days represents a bit over 67 percent of the length of the red bar in silver in the ‘Days to Cover’ chart…two thirds of it.  The other two traders in the Big 4 category are short, on average, about 19.5 days of world silver production apiece, which is exactly unchanged from last week’s report.

The four traders in the ‘5 through 8’ category are short, on average…14 days of world silver production each, which is down 2 full days from what each was short in last week’s COT Report.  That’s a big drop!

This is just more proof of the fact, if any was needed, that it’s only what JPMorgan does in the COMEX silver market that matters, as it’s only their position that ever changes by any material amount.

The Big 8 commercial traders are short 41.7 percent of the entire open interest in silver in the COMEX futures market, which is a big decline from the 46.6 percent they were short in last week’s COT Report.  Once whatever market-neutral spread trades are subtracted out, that percentage would be over 45 percent.  In gold, it’s now 46.8 percent of the total COMEX open interest that the Big 8 are short, down a bit from last week’s report — and a hair over 50 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 64 days of world gold production, which is down 4 days from what they were short last week — and the ‘5 through 8’ are short another 25 days of world production, which is also down 4 days from what they were short the prior week, for a total of 89 days of world gold production held short by the Big 8 — which is down 8 days from the 97 days they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold 72 percent of the total short position held by the Big 8…which is up 2 percentage point from last week’s COT Report.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are 68, 69 and 77 percent respectively of the short positions held by the Big 8.  Silver is up 2 percent points from the previous week’s COT Report — and platinum is down 2 percentage point from last week — and palladium is about unchanged from what it was in last week’s COT Report.


The February Bank Participation Report [BPR] data is extracted directly from the above Commitment of Traders Report.  It shows the COMEX 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.  For this one day a month we get to see what the world’s banks are up to in the COMEX futures market, especially in the precious metals—and they’re usually up to quite a bit.

In gold, 6 U.S. banks were net short 114,088 COMEX contracts in the February BPR, which is well over 50 percent of this week’s commercial net short position shown in the above COT Report.  In January’s Bank Participation Report [BPR], that number was 106,147 contracts, so they’ve increased their collective short positions by a rather immaterial 8,000 contracts.  Four of the six U.S. banks would certainly include JPMorgan, HSBC USA and Citigroup — and Goldman.  As for who the fifth and sixth U.S. banks might be—I haven’t a clue, but I doubt very much if their positions, long or short, would be material.

Also in gold, 28 non-U.S. banks are net short 64,513 COMEX gold contracts, which isn’t much per bank.  In the January BPR, 29 non-U.S. banks were net short 53,078 COMEX contracts, so the month-over-month change shows an increase of about 11,400 contracts.  I suspect that there’s at least one large non-U.S. bank in this group that might hold a third of this short position all by itself — and the remaining contracts, divided up between the remaining 27 non-U.S. banks, would be immaterial.  I used to think it might have been Scotiabank, but that may not be the case anymore as they exist stage left.  But with 27 non-U.S. banks in this category, an 11,400 contract increase spread out more or less equally, wouldn’t be much per bank, either.

As of this Bank Participation Report, 34 banks [both U.S. and foreign] are net short 33.3 percent of the entire open interest in gold in the COMEX futures market, which is a small increase from the 31.8 percent they were short in the January BPR.

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

In silver, 6 U.S. banks are net short 31,460 COMEX silver contracts in February’s BPR — and Ted figures that JPMorgan is the proud owner of 28,000 contracts worth, but as stated in the COT discussion in silver, he could make a case that it was 31,000 contracts as well.  This means that some of the remaining 5 U.S. banks obviously have to be net long the silver market in order for the numbers to work out — and they are long to the tune of 3,615 COMEX silver contracts.  In January’s BPR, the net short position of these U.S. banks was 29,934 contracts, an increase of about 1,500 contract since the last reporting month.

Also in silver, 19 non-U.S. banks are net short 17,378 COMEX contracts…down from the 21,517 contracts that 22 non-U.S. banks were short in the January BPR.  I would suspect that Canada’s Scotiabank holds a goodly chunk of this amount all by itself, but down a substantial amount from a year or so ago.  That most likely means that a number of the remaining 18 non-U.S. banks might actually be net long the COMEX silver market by a bit.  But even if they aren’t, the remaining short positions divided up between these other 18 non-U.S. banks are immaterial — and have always been so.

It should be noted that the short position of the U.S. banks in silver rose in the February BPR, while the short position of the non-U.S. banks fell.  That is the obvious sign the Scotiabank is quietly covering their massive silver short position, or transferring it to others — and obviously U.S. banks.  And January was the first month on record where the number of U.S. banks involved in the COMEX futures market in silver rose to 6.

As of February’s Bank Participation Report, 25 banks are net short 23.8 percent of the entire open interest in the COMEX futures market in silver—which is down a decent amount from the 26.7 percent that they were net short in the January BPR — with much, much more than the lion’s share of that held by JPMorgan.

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 20,817 COMEX contracts in the February Bank Participation Report.  In the January BPR, ‘3 or less’ U.S. banks were net short 13,341 COMEX platinum contracts, so there’s been a huge increase in the short position of the U.S. banks in question during the last reporting month.

I suspect that, like in silver and palladium, JPMorgan holds virtually all of the platinum short position by itself.

Also in platinum, 17 non-U.S. banks are net short 8,589 COMEX contracts, which is up about 1,700 contracts from the 6,869 contracts they were net short in the January BPR.

As you can see from the number of banks and number of contracts involved in the U.S./non-U.S. categories…this price management scheme platinum is a “Made in America” show as well.

And as of February’s Bank Participation Report, 22 banks were net short 32.3 percent of the entire open interest in platinum in the COMEX futures market, which is up huge from the 24.7 percent they were collectively net short in the December BPR.  It’s obvious that the banks, especially the U.S. banks, having been shorting this current rally in platinum all the way up.  Click to enlarge.

In palladium, 4 U.S. banks were net short 12,021 COMEX contracts in the February BPR, which is down a decent amount from the 13,379 contracts they held net short in the January BPR.  And to show you how lopsided the short position is in palladium, these four U.S. banks hold a total long position of only 31 contracts in the January BPR…but in the February BPR the long position held by the U.S. banks had ‘blown out’ to 524 contracts.

Also in palladium, 12 non-U.S. banks are net short 3,096 COMEX contracts—which is down substantially from the 5,304 COMEX contracts that 13 non-U.S. banks were short in the January BPR.  When you divide up the short positions of these non-U.S. banks more or less equally, they’re mostly immaterial…especially when you compare them to the positions held by only 4 U.S. banks.

But, having said all that, as of this Bank Participation Report, 16 banks are net short 46.8 percent of the entire COMEX open interest in palladium…which is a monstrous amount…and more than the short positions held by  the Big 8 traders in silver — and equal to the Big 8 short position held in gold.  In January’s BPR, the world’s banks were net short 48.9 percent of total open interest…a record high number, so it has only improved by a bit in the last month.

Here’s the palladium BPR chart.  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007—and they became the predominant and controlling factor by the end of Q1 of 2013.  I would still be prepared to bet big money that, like platinum and silver, JPMorgan holds the vast majority of the U.S. banks’ short position in this precious metal as well.  Click to enlarge.

As I say every month at this time, there’s a maximum of four U.S. banks—JPMorgan, HSBC USA, Goldman and maybe Citigroup—along with Canada’s Scotiabank…and they’re getting out of Dodge—that are the tallest hogs at the precious metal price management trough.

JPMorgan is now the largest silver short holders on Planet Earth in the COMEX futures market — and by more than the proverbial country mile.  JPMorgan’s short position now towers above all of the rest of the Big 7 traders…including Canada’s Scotiabank.


Before hitting today’s stories, I have more commentary from Bill King from the Friday edition of his King Report.  In it, he had this to say…

SPHs, which had been down as much as 23.00 in Wednesday night trading, rallied to an 11.00 gain during Thursday’s European open.  The standard manipulation in the normal window of intervention appeared.
 
As European trading progressed, SPHs tumbled 21 handles due to a hawkish BoE interest rate outlook.

However, the manipulators, out of desperation instead of their usual larcenous urges, crafted a 29.50 SPH rally to influence the NYSE open.
 
As soon as the NYSE opened, the selling began – and it was furious.  The two manipulations, one might have been a pump & dump, failed as stocks and SPHs tumbled.
 
The overnight SPH low (2645.25) was obliterated during the first two hours of trading.  This is a very, very bad development for stocks that astute traders monitor daily (overnight SPH high & low).
 
Similar to Wednesday, stocks rallied in the early afternoon as bond yields rose smartly.  The US 30-year hit 3.15%; the 10-year hit 2.86%.
 
After the VIX fix at 14:15 ET, stocks tumbled with the S&P 500 Index violating its panic low of 2593.07 on Tuesday by 13 handles.  Major indices closed at their session lows.  This is abysmal technical action.
 
The S&P 500 Index all-time high is 2872.87 in January 26, 2018.  A 10% decline, conventional wisdom’s correction threshold, would put the index at 2585.58.  This should have been very strong support.  In fact, one would expect a monstrous ‘V’ rally of this level.
 
Because the breach of the 10% decline threshold occurred near the close, the usual suspects did not have the time to provoke a ‘V’ rally and maintain the notion that the decline is just a ‘healthy correction’.  END

I have an average number of stories for you today…plus the Cohen/Batchelor interview.


CRITICAL READS

Jim Rogers Says Next Bear Market Will Be Worst in His Life

Jim Rogers, 75, says the next bear market in stocks will be more catastrophic than any other market downturn that he’s lived through.

The veteran investor says that’s because even more debt has accumulated in the global economy since the financial crisis, especially in the U.S. While Rogers isn’t saying that stocks are poised to enter bear territory now — or making any claim to know when they will — he says he’s not surprised that U.S. equities resumed their selloff Thursday and he expects the rout to continue.

When we have a bear market again, and we are going to have a bear market again, it will be the worst in our lifetime,” Rogers, the chairman of Rogers Holdings Inc., said in a phone interview. “Debt is everywhere, and it’s much, much higher now.

The plunge in equity markets resumed Thursday, as the S&P 500 Index sank 3.8 percent, taking its rout since a Jan. 26 record past 10 percent and meeting the accepted definition of a correction. The Dow Jones Industrial Average plunged more than 1,000 points, while the losses continued in early Asian trading Friday as the Nikkei 225 Stock Average dropped as much as 3.5 percent.

This Bloomberg article showed up on their Internet site at 6:37 p.m. Denver time on Thursday evening — and was updated about four hours later.  It comes from Zero Hedge via Brad Robertson — and another link to it is here.


U.S. Debt Bomb Exacerbating Stock Market Panic! — Jim Rickards

This 3:51 minute video interview hosted by Stuart Varney over at Fox Business was posted on the youtube.com Internet site on Thursday — and I thank Harold Jacobsen for bringing it to our attention.


Contagion: Credit Crashes to 14-Month Wides Amid Soaring Outflows

Thursday saw rate vol start to accelerate, and today we see credit markets start to snap as equity market volatility contagion is spreading.

In fact, credit market volatility is spiking – and is above the Aug 2015 highs (higher relative to stocks where VIX remains below those levels)…

This is the biggest spike in High Yield bond spreads since Aug 2015’s crash and raises relative funding costs to their highest since Dec 2016…

It’s not just equities that are seeing fund outflows surge.

Junk bond ETFs have seen only 2 days of inflow in 2018, and outflows are accelerating as prices plunge.  IG bond ETFs have also seen outflows for 6 of the last 7 days…

Judging from the discount to NAV, there is more ‘physical’ selling to come in corporate bonds (as managers use JNK as their overlay, then selectively sell into illiquid markets…and one might wonder how much longer the S&P will hold its gains?

This chart-filled story was posted on the Zero Hedge website at 12:49 p.m. EST on Friday afternoon — and I thank Richard Saler for pointing it out.  Another link to it is here.


Subprime and Short Vol — Doug Noland

For nine long years now, CBB analysis has posited “the global government finance Bubble,” “The Moneyness of Risk Assets” and the “Granddaddy of all Bubbles” theses. I believe the Bubble has likely been pierced. The spectacular blowup of all these “short vol” products is a replay of subprime in the summer of 2007 – just so much bigger and consequential. The “insurance” marketplace has badly dislocated, concluding for now the environment of readily available cheap market protection.

Structured finance was instrumental in ensuring the marginal subprime buyer could access the means to keep the Bubble inflating, even in the face of inflated home prices increasingly beyond affordability. These days, all these structured volatility products have been key to enormous pools of “money” chasing inflated securities prices increasingly detached from reality.

The risk versus reward calculus has rather quickly deteriorated for risk-taking and leveraging. Markets have turned much more volatile and uncertain – equities, fixed-income, currencies and commodities. The cost of market “insurance” has spiked, the Treasury market safe haven attribute has been diminished and various market correlations have increased, certainly including global equities markets. “Risk Off” has made a rather dramatic reappearance. How much leverage is lurking out there in global securities and derivatives markets?

Next week is tricky. I would generally expect at least an attempt at a decent rally prior to options expiration. But at the same time, my sense is that market players are especially poorly positioned for the unfolding “Risk Off” backdrop. A break of this week’s trading lows would likely see another leg down in the unfolding bear market. And with derivatives markets already stressed, major outflows from the ETF complex would be challenging for less than liquid markets to accommodate.

Too many years of central bank-induced over-liquefied markets incentivized excess, from Wall Street to Silicon Valley to Washington to Beijing to Tokyo and Frankfurt. Markets at home and abroad completely failed as mechanisms to discipline, to self-adjust and to correct.

There will be a very steep price to pay.

This absolute must read commentary by Doug put in an appearance on his website in the wee hours of Saturday morning EST — and another link to it is here.


Moody’s Threatens U.S. Downgrade Due to Soaring Debt, “Fiscal Deterioration”

Back in 2011, Standard & Poors’ shocked the world, and the Obama administration, when it dared to downgrade the U.S. from its vaunted AAA rating, something that had never happened before (and led to the resignation of S&P’s CEO and a dramatic crackdown on the rating agency led by Tim Geithner).

Nearly seven years later, with the U.S. on the verge of another government shutdown and debt ceiling breach (with the agreement reached only after the midnight hour, literally) this time it is Warren Buffett’s own rating agency, Moody’s, which on Friday morning warned Trump that he too should prepare for a downgrade form the one rater that kept quiet in 2011. The reason: Trump’s – and the Republicans and Democrats – aggressive fiscal policies which will sink the U.S. even deeper into debt insolvency, while widening the budget deficit, resulting in “meaningful fiscal deterioration.”

In short: a U.S. downgrade due to Trumponomics is inevitable. And incidentally, with today’s 2-year debt ceiling extension, it means that once total U.S. debt resets at end of day – unburdened by the debt ceiling – it will be at or just shy of $21 trillion.

We expect if not a full downgrade, then certainly a revision in the outlook from Stable to Negative in the coming  months.

This news item put in an appearance on the Zero Hedge website at 9:48 a.m. EST on Friday morning — and another link to it is here.


Soros and the £400k Question: What constitutes ‘foreign interference’ in the U.K.’s democracy? — Neil Clark

You’d have to have a real sense of humor failure not to laugh. The news that U.S. billionaire Soros donated £400k to an anti-Brexit group came on the day that YouTube said they found no evidence of Russian interference in Brexit.

Repeat After Me (with robotic arm movements): “Unproven Russian involvement in Brexit – terrible! Impose more sanctions on Moscow!  A £400k check from an American billionaire for an anti-Brexit campaigning group – that’s no problem; it’s helping our democracy!

You don’t have to own a brand new £999 state-of-the art Hypocrisy Detector from Harrods, to pick up on the double standards. Just having a few functioning brain cells and thinking for yourself will do. For months in the U.K. we’ve been bombarded with Establishment-approved conspiracy theories – peddled in all the ’best’ newspapers – that Russia somehow ‘fixed’ Brexit. Getting Britain to leave the E.U. was all part of a cunning plot by Vladimir Putin, aka Dr. Evil, to weaken Europe and the ‘free world.’

Even West End musical composer Andrew Lloyd-Webber, who knows quite a bit about phantoms, seemed taken in by it. “By quitting Europe, I fear that we are hastening Putin’s dream of the break-up of the EU – and with it, potentially, western civilisation,” the noble Lord declared in July.

Never mind that we don’t have a single statement from Putin or other senior Kremlin figures saying that they actually supported Brexit. These Establishment Russia-bashers know exactly what The Vlad is thinking.

And never mind that RT and Sputnik, which we are repeatedly told are “propaganda arms of the Russian government,” ran articles by pro- and anti-Brexit writers. The same people who told us Iraq had WMDs in 2003 were absolutely sure it was those dastardly Russkies who had got Britain to vote ‘leave.’ The irony is of course that there was significant foreign interference in Brexit. But it didn’t come from Moscow.

This longish, but worthwhile commentary/opinion piece was posted on the rt.com Internet site on 4:32 p.m. Moscow time on their Friday afternoon, which was 8:32 a.m. in Washington — EST plus 8 hours.  I thank George Whyte for sending it along — and another link to it is here.


Europe ready to defy the U.S. if economic sanctions imposed on Iran

The E.U. is mulling its options in the event of a U.S. withdrawal from the Joint Comprehensive Plan of Action, the 2015 multinational nuclear deal struck with Iran. Various European nations have been exploring ways of increasing business with the middle eastern country since the deal was struck, and are invested in making sure that the deal sticks and that sanctions are not reimposed.

The parties to the Joint Comprehensive Plan of Action (commonly referred to as the JCPOA) agreed to lift all nuclear-related sanctions on Iran if they would apply strict limitations on their nuclear program. The U.S., China, Russia, France, Britain, Germany and Iran struck the accord in July of 2015, the implementation of which began in January of 2016.

The U.S. President, Donald Trump, however, has overtly expressed his opposition to the deal, which was negotiated by Barack Obama, Trump’s predecessor, and has repeatedly threatened to “terminate” it. In January, he extended the waivers of economic sanctions against Tehran for 120 days “for the last time.

In spite of Trump’s position on the matter, the European parties, together with Russia and China are committed to the pact, on which they will not renegotiate, and view it as working quite well in its present iteration. Iran has expressed that they will not agree to any further obligations than those which they have already agreed to under the JCPOA, and will not renegotiate the deal. Therefore, Trump’s concerns can only be considered by U.S. Congress and will have no legal jurisdiction over the nuclear deal, Tehran or the International Atomic Energy Agency.

This article appeared on theduran.com Internet site at 5:20 p.m. EST on Friday afternoon — and it comes courtesy of Roy Stephens.  Another link to it is here.


Tales of the New Cold War: The Origins of Russiagate & Questions to be asked — John Batchelor interviews Stephen F. Cohen

Part 1:  This week we hear a great journalist and a historian discuss what are probably the beginnings of the greatest political scandal(s) in United States history. These are the increasingly infamous events around the FISA Memo, Russiagate, illegal acts of major politicians and heads of departments, and indiscreet minions in government. Again email evidence in addition to media efforts is very important for revealing who was behind Russiagate. But Cohen reminds us of his prediction at the beginning of this ordeal, fully a year and a half ago, that he considered the better name than Russiagate should be “Intellgate”. His point is that since no collusion was found with Trump and Putin, “there was “no Russia in Russiagate”, but there were lots of nefarious behaviour in Washington. A good example, he points out were the people like Glen Simpson and his “Fusion Operation” that was behind the “Steele Dossier”. However, equally guilty, notes Cohen, were the early FBI operations to defame Trump even before the election. This Steele Dossier was very quickly accompanied by the Intelligence Community Assessment released by “17 Intelligence Agencies” (sic) that “verified” the latter. But the important question for Cohen about these events is when did the Russiagate operation actually begin? With the collapse of the Steele Dossier “evidence” the Trump adversaries attempted to find earlier “proof” of Trump’s guilt.  But Cohen maintains John O. Brennan began the earliest effort of this conspiracy (my word), when he passed on “suspicious information about Trump” to the FBI. That joins James Clapper of the FBI with this plot and by extension also to Comey, head of the FBI. But it was Brennan who shared the Steele Dossier with then President Obama.

Part 2:  Cohen returns to the Steele Dossier and effectively debunks it. He mocks the description by Steele having Kremlin contacts and from this condemned the whole “report” – although about this Steele was not questioned, and there were inconsistencies in the story about how the information was received from these contacts. The information that Brennan first sent to the FBI was therefore not from Russian sources but were from British or Ukrainian sources. This connects to the Department of Justice, to an Assistant Attorney General, Bruce Ohr, whose wife, a Russian expert, was helping to research and put together the Steele Dossier. Another dossier was also being researched by Hillary Clinton people and all ended up in the Steele Dossier with Steele as the “author”. Due to the flurry of dubious accusations over the Steele accusations, we are starting to see the lawsuits begin. Nevertheless, Cohen has some major questions remaining about Russiagate and its purpose(s):  Was Russiagate the product of the entire intelligence community and not just the FBI; is the entire intelligence leadership rogue, or just the FBI; were those people close to Trump (Paul Manafort, for example) attacked because they were actually under suspicion, or was it for political reasons only; was Brennan’s involvement a product of consolidating his position with the CIA when Clinton became president; what was Obama’s role in Russiagate; Comey’s actions as FBI director are confusing given he was in a no win situation in his indecisive behaviour to ward’s Clinton prior to the election and to Trump after the election; and finally, Cohen asks whether we are really facing a massive cover-up?

I have been waiting impatiently for a really good journalist and first-rate historian’s interpretations of what Russiagate and the unwinding revelations of the FISA memo mean. This is surely it. Both pundits chronologically join up the dots of the criminal activities of people who created and pushed this narrative and how important the FISA revelations mean for them. What is ahead for Washington is likely in the answers to the five questions posed by Cohen at the end of his talk. My very small quibble is with the question about a cover up. We are already seeing it in the reactions in most of the MSM, political comments from Democrats (and not a few Republicans), the Mueller investigation and the Council on Foreign Relations. There is so much invested by the neocons and the Deep State in this narrative that they will not (can not?) give up, and that should give people an inkling of how much potential damage is ahead for these people and the Washington government institutions. We should speculate that all the Intelligence Agencies and the DOJ are controlled by the Deep State since the top echelons have been active in building the foundation of Russiagate, or shielding the participants, or using it geopolitically (Europe). The bright note here – a no gain, no pain point of view – is that since there is no “Russia in Russiagate” (wonderful line, that), then the whole excuse for war with Russia may be damaged. Basically we are all a little safer that this sinister stupidity is revealed for what it is…

This 2-part audio interview, with each part running about twenty minutes, was posted on the audioboom.com Internet site on Tuesday.  As always, I thank Larry Galearis for the excellent executive summary you see above.  The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.


Professor Stephen F. Cohen: Rethinking Putin –- a review by the Saker

I have recently had the pleasure of watching a short presentation by Professor Stephen F. Cohen entitled “Rethinking Putin” which he delivered on the annual Nation cruise on December 2, 2017 (see here for the original Nation Article and original YouTube video). In his short presentation, Professor Cohen does a superb job explaining what Putin is *not* and that includes: (but, please do watch the original video before proceeding).

The key thesis is this: Putin began as a pro-Western, European leader and with time he realigned himself with a much more traditional, Russian worldview. He is more in line with Russian voters today.

Professor Cohen concluded by addressing two topics which, I presume, his audience cared deeply about: he said that, contrary to Western propaganda, the so-called ‘anti-gay’ laws in Russia are no different from the laws of 13 U.S. states. Secondly, that “by any reckoning, be it flourishing inside Russia or relations with Israel, by general consent of all, nobody denies this, Jews under Putin in Russia are better off than they had ever been in Russian history. Ever. They have more freedom, less official anti-Semitism, more protection, more official admiration for Israel, more interaction, more freedom to go back and forth”.

This is all very interesting important stuff, especially when delivered to a Left-Liberal-Progressive US audience (with, probably, a high percentage of Jews). Frankly, Professor Cohen’s presentation makes me think about what Galileo might have felt when he made his own “presentations” before the tribunal of Inquisition (Cohen’s articles and books are now also on the modern equivalent of the Index Librorum Prohibitorum). In truth, Professor Cohen is simply true to himself: he opposed the crazies during the old Cold War and now he is opposing the same crazies during the new Cold War. His entire life Professor Cohen was a man of truth, courage, and integrity – a peacemaker in the sense of the Beatitudes (Matt 5:9). So while I am not surprised by his courage, I am still immensely impressed by it.

I posted the 28-minute embedded video [referred to in the opening paragraph] in my column some time ago, but the Saker resurrects it in this longish but worthwhile commentary about Cohen that showed up on his Internet site on Thursday sometime.  I thank Larry Galearis for pointing it out — and another link to it is here.


Modern imperialism goes on trial, and is found guilty — Neil Clark

Imperialism – which today is usually referred to by the euphemism ‘liberal interventionism’ – went on Trial at the Waterside Theatre in Derry, Northern Ireland this week.

Five passionate and well-informed speakers, who included the former British Ambassador to Syria Peter Ford, detailed the carnage and chaos that has been unleashed around the globe by the aggressive, warmongering policies of the U.S. and its closest allies.

The event could have been called ‘War on Trial.’ It might have been called ‘Regime Change on Trial.’ Or ‘Economic Sanctions on Trial.’ But it was – thanks to organizer Gregory Sharkey – called ‘Imperialism on Trial’ and, as the first speaker, the writer and broadcaster John Wight declared, that in itself was highly significant.

For the truth is the ‘I’ word is the elephant in the room in contemporary discourse. We’re not supposed to acknowledge its existence. Imperialism, according to the dominant Establishment narrative, ended when the European empires gave their colonies independence in the 1950s and 60s. In fact, the ‘old’ imperialism was only replaced by a new variant which is even more destructive, and certainly more dishonest. At least the British Empire admitted it was an empire.

Today’s U.S.-led neoliberal empire, which has Britain as its junior partner, does no such thing. Entire countries have been destroyed, with millions killed, and it’s been done under a ‘progressive’ banner trumpeting concern for ‘human rights’ and ‘enhancing freedoms.’

This very worthwhile commentary by Neil, with four embedded video clips, was posted on the rt.com Internet site last Saturday, but for length and content reasons, had to wait for today’s column.  I thank George Whyte for his second contribution to today’s column — and another link to it is here.


For the First Time Turkey Ranks Among the top 10 Countries in the World with the Largest Reserves of Gold

Turkey’s gold reserve is 564.80 tons, according to statistics from the World Council on Gold.

By this indicator, Turkey ranks for the first time among the top 10 countries in the world with the largest reserves of precious metal, moving from 10th India.

The world’s largest gold reserves are the U.S. with 8,133 tonnes, followed by Germany and Italy. Gold in Turkey’s total gold-currency reserves is about 18.3%.

Last year, Ankara twice increased its gold by 30.1 tonnes and 33.9 tonnes respectively.

The above four paragraphs are all there is to this brief gold-related news item that put in an appearance on the novinite.com Internet site on Friday.  I found it on the Sharps Pixley website — and another link to the hard copy is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the sandhill crane.  I was getting the tires rotated on my vehicle yesterday — and while I was waiting, I was reading a story in a sports magazine that there actually is a hunting season for these birds, which I find personally abhorrent.  But that’s just my opinion, as they’re magnificent creatures.  I have my own photos of these things, but I don’t have the time to dig them out right now.  The ones here are borrowed from the Internet.  Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ comes from a movie soundtrack that I was listening to while I was bottling wine earlier this week.  It’s the theme song from the 1985 movie “St. Elmo’s Fire“.  It was written and produced by David Foster, who did to the recording industry what George Lucas did to the film industry with “Star Wars“…he changed everything.  The link is here.  Enjoy!

Today’s classical ‘blast from the past’ dates from c. 1809/11 and was Beethoven’s last piano concerto…No. 5 in E flat major, Op. 73.  The premiere performance of the “Emperor Concerto” took place at the Palace of Prince Joseph Lobkowitz in Vienna on 13 January 1811.  Here’s the New York Philharmonic with British-born virtuoso pianist Stephen Hough at the keyboard.  The link is here.


Except for gold, there were new closing lows or new interim day lows set in all of the Big 6 commodities yesterday, as ‘da boyz’ went about their business of getting the Managed Money traders off the long side — and as maximum short as they can get them.

And as bad as things are for the precious metals at the moment, there’s still that proverbial “Sword of Damocles” overhanging gold, as the two critical moving averages, the 50 and 200-day, remain untouched.  And if JPMorgan et al still have them in their sights — and there’s no reason to suppose that they haven’t, then the pain in the other precious metals, particularly silver, is not over yet.

I wish there was a way to sugar-coat this, but there isn’t, so I won’t bother trying.

Here are the 6-month charts for all of the Big 6 commodities, so you can see what I mean with your own eyes.  The ‘click to enlarge‘ feature helps a bit with the first four.

The powers-that-be have certainly been busy this week, as their attempts to prevent the total collapse of the world’s equity and bond markets are now so obvious, that every pundit out there is commenting on it — and the quotes from Bill King that precede the Critical Reads section pretty much sums it up.

Their work in the COMEX futures market has certainly taken away the safe haven status that would normally be found in the precious metals and other commodities at times like this.  But they can only keep this up for so long, because at some point, the markets simply will not be denied in seeking their intrinsic values…up, in the case of precious metals and commodities in general…and down, for everything paper.

The economic, financial and monetary systems world-wide are in the process of coming totally unglued, regardless of what the world’s central banks and various Plunge Protection Teams do going forward.  It is simply too big to fix this time — and whether or not Jim Rickards gold-back IMF SDRs put in an appearance at some point, the world as we’ve know it all our lives, is coming to an end.

Not to be forgotten in all this is the U.S. deep state.  With their backs to the proverbial wall, I’ll put absolutely nothing past them, either at home…or abroad…or both.

These are very dangerous times and, unfortunately, all we can do is watch from the sidelines — and hope that our carefully-made nests of precious metals and their equities will see us through all this.

There’s no doubt in my mind that they will, but until JPMorgan et al either get over run, or are instructed to stand aside…either of which has a 100 percent probability of happening…it’s going to be a very rough road ahead until that day dawns.

I’m done for the day — and the week — and I look forward to the Sunday night opening in the Far East with a certain amount of trepidation.

See you on Tuesday.

Ed

All Four Precious Metals Get Closed at New Lows on Wednesday

08 February 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price began to rally quietly, but somewhat unevenly higher once trading began at 6:00 p.m. EST on Tuesday evening in New York — and the high tick of the day was set shortly before the London open, which was shortly after the dollar index got turned higher.  The price rolled over a bit lower from there — and except for a one-hour long rally going into the afternoon gold fix, ‘da boyz’ ran the price down to its low tick of the day, which came at precisely 1:30 p.m. EST…the COMEX close.  It began to crawl quietly higher starting at 2 p.m. in the thinly-traded after-hours market — and that continued right into the 5:00 p.m. EST end of trading.

The high and low tick were reported as $1,334.80 and $1,313.50 in the April contract.

Gold finished the Wednesday session in New York at $1,318.10 spot, down $5.60 on the day, as ‘da boyz’ set a new intraday low for this engineered price move down.  Net volume was extremely heavy at a bit over 326,000 contracts.

It was mostly the same for silver.  It rallied a bit until 11 a.m. China Standard Time on their Wednesday morning — and then chopped sideways until the marginally higher high tick of the day was set shortly after 3 p.m. CST when the dollar index hit its low of the day.  It was sold quietly lower from there — and then got bumped down a bit more after the noon silver fix was put to bed in London.  JPMorgan et al worked their magic once COMEX trading began — and the down/up spike low tick of the day was placed about two minutes before the COMEX close.  Then it gained a few pennies in after-hours trading.

The high and low ticks in this precious metal were recorded by the CME Group as $16.73 and $16.21 in the March contract.

Silver was closed yesterday at $16.34 spot, down 27.5 cents, but was down 39 cents at its low tick.  Net volume was extremely heavy at something under 95,500 contracts, as the Managed Money traders were obviously pouring onto the short side.  There was a fair amount of roll-over/switch volume as well.

The price pattern in platinum was similar in most respects to what happened in gold and silver, so I’ll dispense with the play-by-play.  Platinum’s low of the day was set by ‘da boyz’ at the COMEX close, of course — and it recovered a few dollars from there.  It finished the Wednesday session in New York at $978 spot, down 11 bucks on the day — and another new low for this engineered move down.

Palladium chopped sideways until the Zurich open — and at that juncture, the selling pressure began — and the low tick was set about thirty minutes before the Zurich close.  It popped up ten bucks almost right away — and then traded sideways for the remainder of the day.  Palladium was closed at $978 spot, down 25 dollars from Tuesday, but off it’s low tick by 6 or 7 bucks.

The salami slicing continues in all four precious metals.

The dollar index closed very late on Tuesday afternoon in New York at 89.67 — and began to chop quietly lower from there.  And, for the third day in a row, gentle hands appeared less than an hour before the London open.  The low tick at that point was printed at 89.47.  It chopped quietly higher until 11 a.m. in London — and then didn’t do a lot until another ‘rally’ began at the afternoon gold fix in London, which was 10 a.m. EST in New York.  That ‘rally’ topped out a few minutes before the COMEX close — and it faded a small handful of basis points from there until trading ended.  The dollar index finished the day at 90.34…up 67 basis points on the day.

If you think this sudden ‘strength’ in the U.S. dollar index has an odour to it, you would be right about that.

I’m including the 3-day dollar index chart in today’s column so you can see how these out-of-the-blue dollar index rallies begin shortly before, or at, the London open every day so far this week.  This is the ‘gentle hands’/PPT in action in the currency markets.  They were there at the afternoon gold fix yesterday as well.

There are no markets anymore, only interventions.” — Chris Powell, April 2008

And here’s the 6-month U.S. dollar index — and I’ll bite my tongue about it for the second day in a row, as I’ve already said my piece two paragraphs ago.

The gold stocks opened down a bit, but were back in positive territory by the afternoon gold fix in London, as the gold price rallied for an hour going into the fix.  The shares began to chop lower in a fairly broad range until shortly after 1 p.m. in New York trading — and for the most part, they chopped quietly sideways into the close after that.  The HUI finished down 1.15 percent.

The silver equities opened down a bit as well, but then rallied into positive territory right away, but only for about fifteen minutes — and were headed lower even before the afternoon gold fix was done.  Then, like the gold stocks before them, they were sold down to their lows by shortly after 1 p.m. as well — and they didn’t do a lot after that.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index was closed down a chunky 3.52 percent.  Click to enlarge if necessary.

I would suspect that there was some forced sales due to margin calls in selected constituents of the Silver 7 Index yesterday, with Coeur Mining being the old one that I could see that came close to filling the bill…down 4.02 percent…as all the other major silver stocks I track, didn’t close anywhere near that percentage loss.

And here’s the 1-year Silver Sentiment/Silver 7 chart.  Click to enlarge.

The CME Daily Delivery Report showed that 55 gold and 60 silver contracts were posted for delivery within the COMEX-approved depositories on Friday…so those 214 silver contracts that got added to the February delivery month yesterday, turned out to be the real deal!  In gold, of the five short/issuers in total, the largest by far was Canada’s Scotiabank with 39 contracts out of their in-house/proprietary trading account. [Don’t forget that Scotiabank doesn’t have a client account.]  And it should come as no surprise at all that JPMorgan stopped 54 of those contracts for its own account.  In silver, the sole short/issuer of those 60 contracts was International F.C. Stone — and JPMorgan stopped 56 of them for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

It’s amazing to watch JPMorgan grab every gold and silver contract they can get their hands on…for itself, or its clients.  What do they know, that we don’t…at least not yet.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in February fell by 202 contracts, leaving 1,426 left, minus the 55 mentioned two paragraphs ago.  Tuesday’s Daily Delivery Report showed that only 113 gold contracts were actually posted for delivery today, so that means that another 202-113=89 gold contracts vanished from February at the mutual consents of both the short/issuers and long/stoppers involved.  Silver o.i. in February declined by 13 contracts, leaving 585 still open, minus the 60 contracts mentioned two paragraphs ago.  Tuesday’s Daily Delivery Report showed that exactly 13 silver contracts were posted for delivery today, so the decline in open interest and the deliveries match for a change.


There was another withdrawal from GLD yesterday, as an authorized participant removed/took ownership of 75,900 troy ounces.  And as of 6:32 p.m. EST yesterday evening, there were no reported changes in SLV.

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

There was a bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  They received only 2,399 troy ounces, all of which went into Delaware — and there was 36,858 troy ounces shipped out — and that was from JPMorgan’s vault.  The link to this activity is here.

There was some activity in silver as well.  There was 726,931 troy ounces deposited, but nothing was shipped out.  Another truck load…605,120 troy ounces…was left at JPMorgan — and the remaining 121,810 troy ounces was dropped off at Delaware.  The link to all that is here.

It was very busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 6,221 of them, plus they shipped out 8,463.  All of this action was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Before hitting the stories for today, here’s some commentary by Bill King that I lifted from yesterday’s edition of his King Report.  Bill’s no dummy — and he’s been around the proverbial block a number of number of times — and this is what he had to say about the equity market price action on Monday and Tuesday…

The Monday night low for SPHs was 2,529, a decline of 92 handles, almost 4%!  This is the biggest overnight tumble since the triple-digit crash on the night that Trump was elected.
 
Six minutes before the NYSE opened, SPHs traded at 2,579.  Ten minutes after the open, they hit 2,641.  The 63-handle jump in 16 minutes was obviously impact trading/manipulation/plunge protection.
 
Within twenty-two minutes of the NYSE open, SPHs hit 2680, up 72.00 and 151 points above the overnight low of 2529.  We ask you, “Is this natural market action?  Is this how real buyers behave?” 
 
Ergo, there were two massive ‘V’ rallies from the last hour of Nikkei trading to the first 22 minutes of NYSE trading on Tuesday.  ‘V’ rallies are the signature of impact trading/manipulation/plunge protection.
 
The 64-handle (2.4%) SPH rally from 14:30 EST to 15:10 EST looks a manipulation to disabuse real sellers, short-VIX hedgers and traders from dumping stocks during the final hour of trading – or it was the first leg of a ‘pump & dump’ scheme.
 
Let this sink in for a minute: There was a 2.3% S&P 500 Index rally that occurred within 40 minutes.  Once again, this is not natural market activity.
 
We warned in yesterday’s missive that the plunge protection operation usually occurs after the Nikkei closes.  This is when SPHs have their thinnest market.  Yesterday’s rescue operation started during the last hour of trading in Japan.  From midnight EST until 4.23 EST, SPHs rallied 115.50.  Obviously this was manipulation and a rescue operation.  END

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


CRITICAL READS

Icahn calls U.S. stock nosedive “rumblings of an earthquake“: CNBC

Billionaire activist investor Carl Icahn warned on Tuesday that investors have exposure to “way too many derivatives” and called the stock market’s nosedive just “rumblings of an earthquake.”

The market is really not a place for the average person to be playing around with derivatives,” Icahn said on CNBC. “Today, you have these triple-leveraged ETFs (exchange-trade funds) that are crazy.

U.S. stocks swung wildly between positive and negative territory on Tuesday, a day after the Dow and S&P 500 indexes saw their biggest one-day declines in more than six years, while a world stock index dropped more than 1 percent. The pullback followed a rapid run-up in the start of the year and strong 2017 gains.

Icahn said investors should not use the markets like a casino. “… that’s a huge mistake. This casino is on steroids.

This Reuters article, filed from New York, was posted on their website at 11:14 a.m. on Tuesday morning EST — and I found it in yesterday’s edition of the King Report.  Another link to it is here.


Gundlach: Market Unwind Will Be “Turbulent, Not Just a Few Days

Doubleline CEO Jeffrey Gundlach echoed earlier calls by analysts from SocGen and Morgan Stanley, saying that the “low rate-low volatility” market environment went on for so long that now “the unwind will be turbulent and not over in a couple of days.In other words, don’t buy the dip.

In addition to his discussion of bitcoin and volatility, Gundlach also touched on what many agree was the proximal catalyst for last Friday’s market plunge which in turn triggered this week’s vol eruption: “Clearly, the market gets shaky when the 10-year hits 2.85 percent,” Gundlach told Reuters.  “Just look at this week, and today. Makes one consider what could be coming if 10s push over 3 and 30s (30-year Treasury bond) over 3.22 percent.

During his January webcast, Gundlach correctly predicted that if the 10-year U.S. Treasury note yield went above 2.63%, U.S. stock investors would be spooked. The 10-year yield is currently trading around 2.84%, and its spike today on the heels of the “deficit-busting” Senate agreement which would lift spending caps by $300 billion above current levels, sent the markets into the red after an impressive morning rally.

In little comfort for equity bulls, Gundlach said it is “hard to love bonds at even a 3 percent yield.  Rising interest rates are a problem — and the U.S. is in debt and there is massive bond supply.

This news item showed up on the Zero Hedge website at 7:46 p.m. EST yesterday evening — and another link to it is here.


Biggest Bubble Ever Meets Biggest Pin: Casino Markets — Bill Bonner

The markets were noisy yesterday. A third day of wildly gyrating prices left stocks and bonds in retreat… as the financial press shouted out its outsized fears… and its calming little lies.

This morning, we’re beginning to see some green figures again. Tokyo and London are up slightly.

We still don’t know whether this will turn into the major plunge we anticipated. But already, it has delivered a message: Watch out!

We’re not the only ones who are worried. Bloomberg caught up with billionaire investor Carl Icahn:  “Passive investing is the bubble right now, and that’s a great danger,” he said.  “When you start using the market as a casino, that’s a huge mistake,” he added.

Eventually, Icahn reckons, the bubble will implode and lead to a crisis bigger than in 2009.

This worthwhile commentary by Bill was posted on the bonnerandpartners.com Internet site on Wednesday sometime — and another link to it is here.


Credit Card, Student And Auto Debt All Hit Record Highs In December

The U.S. consumer closed out 2017 with a credit bang.

While we reported last month that in November U.S. credit card debt had just surpassed the previous all time high hit in July 2008 just before all hell broke loose when Lehman filed for bankruptcy two months later, there was a slight chance that in December this number had declined after the record surge in November credit-funded spending (which was just revised from $28BN to $31BN0.

Well, that did not happen, and while December total consumer credit increased by less than the expected $20BN, it was still an impressive $18.45BN, of which $5.1billion was credit card debt and $13.3 billion non-revolving – or student and auto loans.

More importantly, with the latest $5.1 billion increase in revolving, or credit card, debt the total is now $1.027.9 trillion, the highest number on record.

Meanwhile, non-revolving credit which with the exception of one definition change month, has never gone down, also hit a new all time high of $2.813 trillion, a monthly increase of $13.34 billion.

So for anyone still wondering why the U.S. economy closed 2017 with an upward GDP burst, here is your answer. The problem is that with the personal savings rate just shy of all time lows…… and with U.S. consumers deep in the red on their household debt, just what will keep the U.S. economic expansion going from this point on is far less clear, especially if the stock market has now peaked, as recent events suggest.

This rather short Zero Hedge article was posted on their website at 3:21 p.m. EST yesterday afternoon — and I thank Brad Robertson for sharing it with us.  Another link to it is here.


Biggest Ever Debt & Dollar Crisis Coming: Greg Hunter interviews Peter Schiff

Money manager Peter Schiff says the wild swings in the market are because of massive central bank money printing and exploding debt. What in the heck is going on?  Schiff explains, “The real question is what was going on when the markets were going up?  That’s what made no sense.  The fact that they are coming back down to earth makes a lot more sense.  I think the catalyst for this move (in the stock market) is, ironically, the tax cuts we got because that put the bigger deficits in the spotlight.  Now, the deficits are going to go off the charts because we have to replace the lost tax revenue with more debt.

What about the economy improving under Trump? Schiff says, “Growth hasn’t really picked up, it’s actually slower.  This is all nonsense.  The economy is not improving.  Nothing is happening other than we are going into huge debt.  We got tax cuts, and we borrowed the money to pay for them.”

Schiff predicts in the next recession, the Fed will go back to printing even more money. Schiff contends, “There is no question in my mind because the alternative is politically unacceptable to anybody, which would be a worse financial crisis than 2008.  When we go back into recession, when we are in a bear market, they are going to go back to the only formula that they think works.  They can’t do rate cuts because rates are so low, they can really cut them very much.  So, the only real stimulus they can reach for is QE (money printing), but it’s not going to work this time.  We are going to overdose on QE.  There are no more bubbles that they can blow.

This 27:37 minute video interview was posted on the usawatchdog.com Internet site yesterday — and it comes to us courtesy of Brad Robertson.  Another link to it is here.


Robo-Brokers Froze as Market “Flash Crashed” –- Open the Pod Bay Doors Hal

* Volatility (VIX) Has Largest Move In History 117%!

* Nomura Bank Offers 4 Cents on the Dollar to Those Who Bet on No Volatility

* Sentiment Changes: Once Complacent Investors Now Jumpy and Nervous

This 58-minute audio commentary, of which I’ve only listed to part of, was posted on the mcalvany.com Internet site on Tuesday sometime.

Judy Sturgis sent it our way, with the comments that it was an… “Excellent interview.   Well worth a listen.   I am sure your readers will find this thoughtful.”  I was certainly impressed with what I heard — and I hope your are too…if you have the time to listen to it all, that is.  Another link to this audio interview is here.


Dutch lender Rabobank to pay $369 million in money-laundering case

Dutch lender Rabobank’s California unit agreed Wednesday to pay $369 million to settle allegations that it lied to regulators investigating allegations of laundering money from Mexican drug sales and organized crime through branches in small towns on the Mexico border.

The subsidiary, Rabobank National Association, said it doesn’t dispute that it accepted at least $369 million in illegal proceeds from drug trafficking and other activity from 2009 to 2012.

It pleaded guilty to one count of conspiracy to defraud the United States for participating in a cover-up when regulators began asking questions in 2013.

The penalty is one of the largest U.S. settlements involving the laundering of Mexican drug money, though it’s still only a fraction of the $1.9 billion that Britain’s HSBC agreed to pay in 2012.

This story appeared on the abcnews.go.com Internet site at 7:14 a.m. EST on Wednesday morning — and I thank West Virginia reader Elliot Simon for sending it along.  Another link to it is here.


Deutsche Bank Shares Plunge to Crisis Level

Deutsche Bank AG fell to the lowest level since a crisis of confidence in 2016 after its fourth-quarter earnings flop prompted analyst downgrades.

MainFirst’s Daniel Regli lowered his recommendation on the stock to the equivalent of sell on Wednesday, citing the bank’s “damaged franchise as well as a need for substantial restructuring, including the closure of several businesses.” Neil Smith at Bankhaus Lampe cut his target price but kept his buy recommendation.

Shares of the bank have lost 11 percent since Friday, when the Frankfurt-based company reported revenue at a seven-year low and declines at businesses from transaction banking to equity derivatives. The sell-off across global equity markets added to the slump, though many of its European competitors posted gains on Wednesday as Deutsche Bank slipped an additional 0.4 percent.

Deutsche Bank struggled to stem its share-price slide and maintain client confidence after the U.S. Department of Justice requested $14 billion in September 2016 to settle a probe tied to sales of mortgage-backed securities. The German lender reached a $7.2 billion agreement in December of that year.

The goal of forging a safer bank with more reliable earnings streams is not yet clearly in sight,” Moody’s Investors Service analysts led by Peter Nerby wrote in a note to clients Monday. “There are still structural impediments blocking a quick path to restored profitability,” Moody’s said, citing “chronic revenue weakness in key markets and business lines.

This Bloomberg article was posted on their Internet site at 8:30 a.m. Denver time on Wednesday morning — and was updated about four and a half hours later.  I thank Swedish reader Patrik Ekdahl for sharing it with us — and another link to it is here.  The Zero Hedge spin on this story is far less charitable — and is headlined “Deutsche Bank Tumbles to 2016 Lows Amid Reports of HNA Technical Default“.  It’s worth reading if you have the interest.  I thank Brad Robertson for that one.


Ukrainian factory Azovmash losses thousands of workers to Russia

Despite being portrayed as the ‘aggressor’ many Ukrainians move to Russia in search of employment.

Thousands of workers from one of the largest machining factories in Ukraine, Azovmash in Mariupol, Donetsk Region, have fled to Russia, suggesting there may be truth in the revolutionary idea that if you pay workers fairly, and give them safe homes without the occasional threat of artillery fire, they are overall satisfied. Politnavigator reports, (in Russian):

I spoke with the Deputy Director of Azovmash. A large enterprise, once it had a workforce fifteen thousand people. Now, barely one thousand remain. I asked: where is everyone? He said to me: “Evgeni, you will not believe it – they took them by bus loads to the Russian Federation.” Whole families, whole workshops departed for Russia. Because they were given apartments, they were given a normal salary, no one ran after them with a grenade launcher wearing a balaclava. They instead got work, and a predictable future. said Evgeni Murayev, Verkhovna Rada deputy.

Who would have thought people don’t want to be chased around by balaclava-wearing “gentlemen” throwing grenades at them. At least they weren’t chased around by women in balaclavas throwing chickens at them (Google it…or don’t…better yet…don’t).

In all seriousness, this is excellent commentary to raise against the argument that Russia invaded Ukraine to attack and destroy the people. Generally speaking, people don’t run towards their attackers in order to start new lives. Millions of Ukrainians have moved to Russia because they speak the same language, form the same culture, and largely represent the same East Slavic people group. It is fair to note, however, that Mariupol in Donbass, is part of Eastern Ukraine, the half of the country that is very Pro-Russian.

This article put in an appearance on the russiafeed.com Internet site about 7:30 p.m. Moscow time on their Wednesday evening — and it comes to us courtesy of Roy Stephens.  Another link to it is here.


Nine straight years of record annual gold mine production

According to the World Gold Council’s Gold Demand Trends report released Tuesday primary gold production hit another record in 2017 after nine years of annual growth in output.

Overall mine production totalled 3,268.7 tonnes or just over 105 million troy ounces in 2017 which was only slightly higher than in 2016 as new mine starts in recent years have mostly served to fill the gap left by production losses elsewhere according to the WGC report. Compared to 2010, global gold output has surged by 525 tonnes or nearly  17m ounces.

The WGC, an industry body, estimates that output in China – the world’s top producer – fell 9% last year, only the second annual drop in production since 1980. China, which overtook South Africa as the number one miner of the metal in 2007, produced 455 tonnes of the yellow metal in 2016 according to U.S. government figures.

Stricter environmental regulations in China relating to cyanide in tailings imposed in 2017 resulted in the closing of some marginal operations over the course of the year. In February last year Beijing announced plans to reduce the number of gold mines to around 450 from more than 600 before and shutting down40 tonnes of outdated production capacity by the end of 2020.

First of all you have to believe what that the World Gold Council is telling us about world gold production.  And once you get past that, then you have to believe their source data from GFMS.  But no matter how much positive spin they try to put on this, the fact of the matter is that world gold production has been in more or less terminal decline since its high in 2009.  The embedded chart tells all.  It was posted on the mining.com Internet site — and I plucked it from the Sharps Pixley website last night.  Another link to this gold-related news item is here.


The PHOTOS and the FUNNIES

I was driving down the freeway today — and spotted a bird I hadn’t seen in these parts for years.  The cold must have driven them south this winter, as that’s the only time you ever see them either in the city, or this far south.  It’s the snowy owl.  From its white and black speckled feather pattern, it could tell it was a young bird, but still a treat to see.  Click to enlarge.


The WRAP

Remarkably, there already exists, in a very real sense, cryptocurrencies connected to precious metals in the form of ETFs, including SLV and GLD, and others. In essence, the race to develop a cryptocurrency connected to gold and silver has already been run — and run quite successfully, I might add. Admittedly, there has been no great recent rush to silver and gold ETFs, other than the rush to stealthily acquire physical silver and gold by JPMorgan, using SLV and GLD, as well as the COMEX, as its acquisition vehicles of choice.

But that’s my whole point, namely, that the coming collective investment rush into precious metals has not commenced due to the rotten price performance since 2011. JPMorgan, being the market master (and master criminal) that it is, has been harvesting and accumulating massive amounts physical silver and gold since then, while simultaneously being the single entity most responsible for the low silver and gold prices by virtue of it also being the largest paper COMEX short. Just as the early adopters of Bitcoin made the most money, JPMorgan stands to make the most in the coming rush to silver and gold, along with those holding the metals.

All that’s missing at this point is a lift off in price to a level that will set off the coming collective investment buying wave. That’s the main lesson of the recent stock market and cryptocurrency volatility – once the preconditions are in place, all it takes to get the ball rolling is price action. Once JPMorgan gets what it feels is enough physical metal in its hands, the game will begin. Judging by what other markets have done, the silver and gold rush will not end without a complete rewriting of history.Silver analyst Ted Butler: 07 February 2018


Well, ‘da boyz’ were taking no prisoners yesterday, as they set new low closes in all four precious metals, along with the other two card-carrying members of what I call the Big 6 commodities…copper and crude oil.

The 50 and 200-day moving averages in gold still remain unbroken, but ‘da boyz’ are in full control of the precious metals, regardless of what’s happening in the currency and equity markets, so I’m expecting their imminent demise.  And if not the 200-day, certainly the 50-day.

Subscriber Paul Fillion had this comment yesterday…”Wonder if they are saving the gold smash for the Chinese New Year…[starts February 16 over there – Ed]…when their markets will be closed for something like a week? Just a thought. Seems like they are waiting for something.”  That may be the case, but they certainly got a big head start on it yesterday — and I was wondering out loud on the phone with Ted that it seemed like the powers-that-be postponed this major assault until after the cut-off for this Friday’s COT Report…which is an old trick of theirs.  Ted certainly didn’t disagree with that notion.

Here are the 6-month charts for all four precious metals, plus copper and…it’s been a while…WTIC.  All six had their prices engineered lower on Wednesday, as the Managed Money traders in all six were tricked into dumping more longs and adding to short positions…which is the sole reason for these price declines.  The ‘click to enlarge‘ feature helps a bit with the first four.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price was sold quietly lower…to a new intraday low for this move down…until around 12:40 p.m. China Standard Time on their Thursday afternoon.  It has been inching unevenly higher since — and is currently down $6.00 an ounce.  The silver price was also lower in morning trading in the Far East — and its new intraday low was set at the same time as gold’s.  It has rallied as well — and is now down 2 cents at the moment.  Ditto for platinum — and it’s down 3 bucks.  Palladium was down 9 bucks by 1 p.m. CST, but it too has rallied a bit since — and is down only 4 dollars as Zurich opens.

Net HFT gold volume is already pretty healthy at somethin over 71,000 contracts — and that number in silver is way up there as well at 18,100 contracts.  There’s no question that the Managed Money traders are dumping longs and going short in droves in all four precious metals — and that will only accelerate in gold once the 50-day moving average is penetrated.  We’re but a chip shot away from that right now.

The dollar index has been chopping around in a 20 basis point range ever since trading began at 6:00 p.m. EST in New York on Wednesday evening — and it’s currently down 12 basis points as London opens.

With new interim lows already set in all four precious metals during early trading on Thursday, it’s obvious that ‘da boyz’ are still hard at work — and where the bottom is won’t be know until…as Ted Butler says…we see it in the rear-view mirror.  And if JPMorgan et al are gunning for gold’s 200-day moving average, there’s still lots of work for them to do.  It only remains to be seen how long they’re going to take to do it.

So we wait some more.

And as I post today’s column on the website at 4:04 a.m. EST, I note that three of the four precious metals have trended lower during London and Zurich trading. Gold is down $8.00…silver is now down 7 cent…platinum by 6 bucks — and palladium is now down only 2 dollars.

Gross gold volume is approaching 96,000 contracts — and net of roll-over/switch volume, net HFT volume is a bit over 85,000 contracts. Net HFT silver volume is now up to about 20,800 contracts.

The dollar is still in that big 20 basis point trading range that it’s been in throughout all of Far East trading on their Thursday, but it’s in ‘rally’ mode at the moment — and is now up 13 basis points.

With ‘da boyz’ obviously on the rampage in the COMEX futures market in the Big 6 commodities, absolutely nothing will surprise me when I check the charts after I roll out of bed later this morning.

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

Ed

A Bloodbath in Silver: Courtesy of JPMorgan et al

03 February 2018 — Saturday

YESTERDAY in SILVER, GOLD, PLATINUM and PALLADIUM


The gold price didn’t do much in Far East trading on their Friday — and was up less than a dollar by the London open.  But by the 10:30 a.m. GMT morning gold fix, it was down about three bucks and change — and then didn’t do a thing until the job numbers came out.   ‘Da boyz’ were lying in wait — and the low tick of the day came around 10:35 a.m. EST.  It rallied a decent amount from there until  12:30 p.m. — and then traded flat until the dollar index was rescued at the 1:30 p.m. EST COMEX close.  The gold price drifted lower from there, almost getting back to its low tick of the day by shortly after 3 p.m. in after-hours trading — and it ticked a bit higher into the close from there.

The high and low ticks were reported as $1,353.30 and $1,330.10 in the April contract.

Gold was closed in New York yesterday at $1,331.90 spot, down $16.40 on the day.  Not surprisingly, net volume was over the moon at 404,000 contracts.

The silver price traded in a very similar price pattern as gold on Friday — and with the same inflection points.  JPMorgan was laying in wait at 8:30 a.m. EST — and the carnage was awesome to behold.  At its low, they had silver down 70 cents in after-hours trading…a hair over 4 percent.  Both the 50 and 200-day moving averages fell in the process.

The high and low ticks in this precious metal were recorded by the CME Group as $17.225 and $16.52 in the March contract.

Silver finished the Friday session in New York at $16.575 spot, down 62.5 cents from Thursday — and was also closed below both its 50 and 200-day moving averages in the process.  Net volume was an eye-watering 113,500 contracts.  The Managed Money traders were pitching long contracts and going short in droves — and JPMorgan et al…courtesy of their own engineered price smash…were standing there buying up everything that the Managed Money traders were selling.  How criminal can you get.

Platinum was also sold a bit lower when trading began in New York at 6:00 p.m. EST on Thursday evening.  It was down 10 bucks minutes before noon in Zurich, but rallied back above the $1,000 spot mark by the COMEX open.  The $983 low tick was set shortly before the Zurich close — and it was forced to follow a price path similar to gold and silver for the remainder of the New York session.  Platinum finished the Friday session at $990 spot, down 16 bucks from Thursday.

Palladium didn’t do much until shortly after 3 p.m. China Standard Time on their Friday afternoon — and at that juncture it jumped up a bit — and then crawled higher until a few minutes before the COMEX open in New York.  It was sold down to a dollar below unchanged by shortly before the Zurich close…just like for platinum — and it then rallied quietly and unsteadily higher for the rest of the day.  Palladium closed at $1,039 spot, up 8 dollars.

The dollar index closed very late on Thursday afternoon in New York at 88.65 — and began to chop very quietly higher once trading began a few minutes later at 6:00 p.m. EST.  It hit a 90-minute air pocket between 3 p.m. CST — and around 8:45 a.m. in London — and then didn’t do much until the job numbers came out.  The index launched higher at that point, but that ‘rally’ flamed out at the 89.43 mark just minutes after 10:30 a.m.  It chopped lower from there — and got rescued by the usual ‘gentle hands’ at the 1:30 p.m. COMEX close as it broke below the 89.00 mark.  That feeble ‘rally’ that was generated at that point didn’t amount to much — and the dollar index was closed on Friday at 89.22 — and up 57 basis points from Thursday.

It’s obvious that without the intervention of those ‘gentle hands’…the dollar index would have crashed and burned — and there would have been no fig leaf for the powers-that-be to do the dirty in the precious metals yesterday.

On Thursday, the dollar index fell 52 basis points — and gold closed higher by $3.30 the ounce.  On Friday, the dollar index rallied 57 basis points, basically regaining all of Thursday’s losses in the process — and gold got hit for $16.40.  With silver down 4 percent yesterday, I thought gold got off easy.

The point I’m making is that ‘da boyz’ are selling into the precious metal rallies on dollar index weakness — and adding fuel to the fire to the downside when the dollar index rises.

And here’s the 2-year U.S. dollar index chart.

The gold stocks gapped down a bunch at the open — and hit their morning lows around 10:40 a.m. when the gold price began to rally off its low tick of the day.  That rally in the equities ended the same time as the rally in gold did…12:30 p.m. EST.  It was down hill all the way from there — and the HUI got clubbed to the tune of 4.39 percent.

The price path for the silver equities was very similar — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by ‘only’ 2.99 percent.  When you consider the fact that silver was down 4 percent on the day, these declines in their associated equities don’t look nearly as bad…although on days like today, that’s cold comfort.  Click to enlarge, if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index — and it’s just as sad looking.  Click to enlarge.

Here are the usual charts from Nick that show what’s been happening for the week, month-to-date — 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 butt-ass ugly.  There’s just no other words for it.  Click to enlarge.

And year-to-date — as there are only two days gone in the new month, so the month-to-date chart is rather meaningless.  But it doesn’t look too hot, either.  Click to enlarge as well.

No matter how obvious the price management scheme in the precious metals is, you can take it to the bank that the executives of these mining companies that we own shares in will say and do nothing.  And neither will the World Gold Council, The Silver Institute…or the CME Group or the CFTC.  As stockholders, we have been completely abandoned by all parties that are supposed to be looking out after our best interests.  Instead of that, they’ve willfully fed us to the wolves.


The CME Daily Delivery Report for Day 3 in February shows that 431 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Of the five short/issuers in total, the only two worth mentioning are HSBC USA and Goldman Sachs, as they issued 366 and 61 contracts out of their respective in-house/proprietary trading accounts.  And of the six/long stoppers, JPMorgan stopped nearly everything…392 for its own account, plus 24 for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

Of the 1,302 gold contracts issued and stopped this month, JPMorgan has stopped 1,051 of them…875 for its own account, plus another 176 for its client account.  JPMorgan has also issued 508 contracts out of its client account, with JPMorgan stopping a goodly chunky of those for its own in-house/proprietary trading account as well.

The CME Preliminary Report for the Friday trading session showed that gold open interest in February fell by 675 contracts, leaving 2,233 left, minus the 431 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that only 196 gold contracts were actually posted for delivery on Monday, so that means that 675-196=479 more gold contracts vanished from February at the mutual consents of both the short/issuers and long/stoppers involved.  Silver o.i. in February declined by 2 contracts, leaving just one left.  Thursday’s Daily Delivery Report showed that zero gold contracts were actually posted for delivery on Monday, so it’s obvious that 2 silver contracts vanished from the February delivery month for the same reason that I gave for gold.  At the rate that deliveries/open interest in both precious metals is progressing, the February delivery month has quickly turned into a non-event.

It’s a given that Ted Butler will have something to say about all this in his mid-week review this afternoon.


There were no reported changes in GLD yesterday, but there was a smallish withdrawal from SLV, as an authorized participant removed 133,948 troy ounces.  A withdrawal of this size usually represents a fee payment of some kind.

Ted mentioned on the phone yesterday that close to 18 million share of SLV changed hands yesterday.  One has to wonder just how many of those shares now belong to JPMorgan — and how soon the ‘redemption of shares for physical metal’ will begin…not that it has ever stopped, mind you.

The U.S. Mint had a tiny sales report yesterday.  They sold 1,000 troy ounces of gold eagles — and 1,000 one-ounce 24K gold buffaloes.  Those numbers are the month-to-date totals for February as well.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Only 7,523.100 troy ounces/234 kilobars [U.K./U.S. kilobar weight] were received over at Scotiabank — and nothing was shipped out.  I shan’t bother linking this amount.

It was busier in silver, as 591,161 troy ounces were received — and 352,369 troy ounces shipped out.  All of the ‘in’ activity was at JPMorgan — and all the ‘out’ activity was from CNT.  The link to that is here.

That truckload into JPMorgan’s vault on Thursday put their COMEX silver stash at a new record high of 126.3 million troy ounces, which is a bit over 51 percent of all the silver held on the COMEX.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 3,500 of them, plus they shipped out another 398.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, showed a moderate increase in the commercial net short position in silver — and a somewhat surprising decline in gold.

In silver, the Commercial net short position increased by 5,794 contracts, or 29.0 million troy ounces of paper silver.

They arrived at that number by reducing their long position by 3,808 contracts — and they also added 1,986 contracts to their short position.  The sum of those two numbers is the change for the reporting week.

Ted said that the Big 4 traders actually reduced their short position by approximately 300 contracts — and the ‘5 through 8’ large traders decreased their short position by around 700 contracts as well.  All the heavy lifting was by Ted’s raptors, the 42 small commercial traders other than the Big 8, as they reduced their long position by about 6,800 contracts.

Under the hood in the Disaggregated COT Report it was a rather mixed bag, as the Managed Money traders only accounted for about half of the weekly change in the Commercial net short position.  They reduced their long position by 3,732 contracts — and they reduced their short position by 6,562 contracts as well — and the difference between those two numbers…2,830 contracts…was their change for the reporting week.  As always, the difference between that number and the Commercial net short position…5,794 minus 2,830 equals 2,964 contracts…was picked up by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader categories.  In this week’s report, the lion’s share of that difference came from the ‘Nonreportable’/small trader category.

Based on the tiny drop in the short position of the Big 4 traders, Ted didn’t change the short position of JPMorgan this week…leaving it at 31,000 contracts.  The Commercial net short position in silver as of the Tuesday cut-off was 236.4 million troy ounces of paper silver.

Here’s the 3-year COT chart for silver.  Click to enlarge.

Of course, after the JPMorgan-led bloodbath in the COMEX silver market yesterday, the above COT data is “yesterday’s news” in every respect — and I would suspect that silver is now configured bullishly.


In gold, the commercial net short position actually dropped by 9,476 contracts, or 947,600 troy ounces of paper gold.

They arrived at that number by selling 6,768 long contracts, but they also reduced their short position by 16,244 contracts — and the difference between those numbers was the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by about 6,100 contracts…however, the ‘5 through 8 large traders increased their short position by around 1,100 contracts.  Ted’s raptors, the 45 small commercial traders other than the Big 8, added approximately 4,500 contracts to their long position.

Under the hood in the Disaggregated COT Report there was very little in the way of change with the Managed Money traders during the reporting week.  They reduced their long position by 5,406 contracts, but they also reduced their short position by 3,432 contracts — and the difference between those two numbers…is only 1,974 contracts.  The difference between that number and the commercial net short position…9,476 minus 1,974 equals 7,502 contracts…was made up by the traders in the other to categories, as both sold long positions and increased their respective short positions as well.

The commercial net short position in paper gold now sits at 22.51 million troy ounces.

And here’s the 3-year COT Report for gold.  Click to enlarge.

Of course ‘all of the above’ is, like in silver, very much “yesterday’s news” as well.

With JPMorgan et al taking out both the 50 and 200-day moving averages in silver with real authority yesterday, it’s a reasonable assumption to make that we may be close to, or at, a bottom for the silver price.  But the same can’t be said of gold, as it has had a bearish market structure on the COMEX for quite a number of weeks.  So although there certainly was huge improvement in the commercial net short position since the Tuesday cut-off, with most of that coming yesterday, one should fervently hope that the 50 and 200-day moving averages in gold aren’t on ‘da boyz’ ‘to do’ list.  I don’t think they are, but Ted pointed out that possibility on the phone yesterday — and it can’t be ignored.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s 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.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 are short 126 days of world silver production—and the ‘5 through 8’ large traders are short an additional 64 days of world silver productionfor a total of 190 days, which is over 6 months of world silver production, or about 461.7 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 192 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 236.4 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 461.7 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 461.7 minus 236.4 = 225.3 million troy ounces.  The reason for the difference in those numbers is that Ted’s raptors, the 42-odd small commercial traders other than the Big 8, are long that amount.

As I also stated in the above COT Report analysis, Ted pegs JPMorgan’s short position at about 31,000 contracts, or around 155 million troy ounces, unchanged from what they were short in last week’s COT Report.  155 million ounces works out to around 64 days of world silver production that JPMorgan is short.  That’s compared to the 190 days that the Big 8 are short in total.  JPM holds about 34 percent of the entire short position held by the Big 8 traders.

Up until two weeks ago, when I was preparing my presentation for the Vancouver Resource Investment Conference, I had estimated the short position in silver held by Scotiabank/ScotiaMocatta at approximately 32 days of world silver production minimum.  That turned out to be high by quite a bit.  Now that I’ve recalibrated their short position, it’s now down to about 23 days, or maybe a bit less.  So it’s more than obvious that Scotiabank has been actively reducing their short position in the COMEX futures for the last year.  I’m sure they’ve covered a certain portion of it during the normal course of business, but it’s equally obvious that JPMorgan has taken up some of the slack, as have some of the other traders in the Big 8 category.

JPMorgan has been forced by circumstance to pick up Scotiabank’s trading/price management duties in silver and gold.  So JPMorgan is by far the No. 1 silver short on Planet Earth — and likely to remain that way indefinitely.  Of course they have 675+ million troy ounces of physical silver [and counting!] stashed away to cover that, so they are in no danger.  That can’t be said of the remaining Big 7, unless JPMorgan plans to bail out some, or all of them.  And if that’s the case…at what price?  I get the feeling, as I said last week, that it wouldn’t come cheap.

The two largest silver shorts on Planet Earth—JP Morgan and one other, which may or may not be Scotiabank, are short about 87 days of world silver production between the two of them—and that  87 days represents about 69 percent of the length of the red bar in silver in the ‘Days to Cover’ chart…a bit more than two thirds of it.  The other two traders in the Big 4 category are short, on average, about 19.5 days of world silver production apiece, down 0.5 days from last week’s report.

The four traders in the ‘5 through 8’ category are short, on average…16 days of world silver production each, which is down 0.25 days from what they were short in last week’s COT Report.

This is just more proof of the fact, if any was needed, that it’s only what JPMorgan does in the COMEX silver market that matters, as it’s only their position that ever changes by any material amount.  Although not much happened during the past reporting week

The Big 8 commercial traders are short 46.6 percent of the entire open interest in silver in the COMEX futures market, which is virtually unchanged from last week’s COT Report — and that number would be almost 50 percent once the market-neutral spread trades are subtracted out.  In gold, it’s now 48.5 percent of the total COMEX open interest that the Big 8 are short, up a bit from last week’s report — and something over 50 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 68 days of world gold production, which is down 2 days from what they were short last week — and the ‘5 through 8’ are short another 29 days of world production, which is up 1 day from what they were short the prior week, for a total of 97 days of world gold production held short by the Big 8 — which is down one day from the 98 days they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold 70 percent of the total short position held by the Big 8…which is up 1 percentage point from last week’s COT Report.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are 66, 71 and 77 percent respectively of the short positions held by the Big 8.  Silver is unchanged from the previous week’s COT Report — and platinum is down 1 percentage point from last week — and palladium is down 2 percentage points from what it was in last week’s COT Report.

I have an average number of stories for you today…but there’s no Cohen/Batchelor interview this week.


CRITICAL READS

U.S. Adds 200,000 Jobs; Wages Rise by Most Since Recession

U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy’s steady move toward full employment extended into 2018.

Non-farm payrolls rose 200,000 — compared with the median estimate of economists for a 180,000 increase — after an upwardly revised 160,000 advance, Labor Department figures showed Friday. The jobless rate held at 4.1 percent, matching the lowest since 2000, while average hourly earnings rose a more-than-expected 2.9 percent from a year earlier, the most since June 2009.

Treasury yields and the dollar gained, while stock futures remained lower, as the data reinforced the Fed’s outlook for three interest-rate hikes this year under incoming Chairman Jerome Powell, including one that investors expect in March. The figures may also add to the likelihood of a fourth rate increase in 2018.

The report puts the nation closer to maximum employment — one of the goals of the Federal Reserve — and sets a solid tone for hiring this year following continued gains in payrolls in 2017. That could be starting to generate a long-awaited, sustained pickup in wages and boost demand in this expansion, which may also get a lift this year from tax-cut legislation signed by President Donald Trump in December.

The gain in wages will add to concerns that inflationary pressures are building in the economy,” said Michael Feroli, chief U.S. Economist at JPMorgan Chase & Co., who correctly projected the payrolls gain. “It solidifies expectations that the Fed will hike in March. The question is, what will they signal for hikes after that?

There were lot of caveats buried in the job numbers yesterday, so it’s not as rosy as this Bloomberg story makes it out to be.  This article was posted on their Internet site at 6:30 a.m. Denver time on Friday morning — and updated about an hour later.  I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.


Dollar Spikes Most in Over a Year, But…

Strong ‘headline’ earnings growth (despite all the caveats) has sparked a hawkish tilt to trading sending bond yields higher and spiking the dollar index by the most since Jan 2017.

There’s just one thing though…

The 0.9% spike in the dollar index is the most since January 18th 2017 and sounds impressive, but for a trader, it appears the spike is for fading as it hits the Trump Rescue highs and rolls over…

So the strongest wage growth in years merely enabled machines to run some stops before the trend lower continues?

This very brief 2-chart Zero Hedge item appeared on their website at 11:28 a.m. EST on Friday morning — and I thank Brad Robertson for sending it our way.  The second chart is worth a look — and another link to it is here.


Is the U.S. waging a ‘cold war’ to weaken the dollar?

The dollar is at its weakest level in years against other major currencies.

Experts say the drop is being driven, at least in part, by the U.S. government. And some suggest it’s a deliberate campaign aimed at boosting the American economy at the expense of major trading partners like Europe and Japan.

The Trump administration is engaged in “a cold currency war — and it’s winning,” Joachim Fels, an economist at investment firm Pimco, said this week.

Rather than an open conflict, which would involve direct intervention in currency markets, the hostilities come in the form of words and “covert” actions, he wrote in a blog post.

Fels points to the Trump administration’s moves to slash taxes and boost spending, which he says are coming at “the wrong time“. The measures will pile on more government debt, making investors less eager to own dollar assets, like U.S. Treasury bonds.

Policies like that “are sending an implicit but very clear signal to markets: A weaker dollar is the goal,” Fels wrote. “Markets have understood the signal.”

Yep, that pretty much sums it up.  This news item put in an appearance on the money.cnn.com Internet site at 6:47 a.m. EST on Friday morning — and I found it embedded in a GATA dispatch.  Another link to it is here.


Bond Panic Spreads/World of Hurt — Bill Bonner

The feds giveth; the feds taketh away…and the feds maketh a mess of things.

They have engineered a grotesquely exaggerated credit cycle – holding short-term interest rates below the rate of inflation for far too long.

They’ve been giving out free money, in other words.

Now they have an economy burdened by far too much debt… just as the credit cycle turns.

A few basis points doesn’t seem like much. But when you have to borrow, every extra basis point (one one-hundredth of a percentage point) hurts. And when you have $67 trillion in debt, a few basis points can be a disaster.

To be more precise, a one-basis point increase in carrying costs would add $6.7 billion to the nation’s annual interest rate charge.

This excellent commentary by Bill was posted on the bonnerandpartners.com Internet site yesterdays sometime — and another link to it is here.


Doug Noland: The Grand Crowded Trade of Financial Speculation

It’s worth noting that the U.S. dollar caught a bid in Friday’s “Risk Off” market dynamic. Just when the speculator Crowd was comfortably positioned for dollar weakness (in currencies, commodities and elsewhere), the trade abruptly reverses. It’s my view that heightened currency market volatility and uncertainty had begun to impact the general risk-taking and liquidity backdrop. And this week we see the VIX surge to 17.31, the high since the election.

The cost of market risk protection just jumped meaningfully. Past spikes in market volatility were rather brief affairs – mere opportunities to sell volatility (derivatives/options) for fun and hefty profit. I believe markets have now entered a period of heightened volatility. To go along with currency market volatility, there’s now significant bond market and policy uncertainty. The premise that Treasuries – and, only to a somewhat lesser extent, corporate Credit – will rally reliably on equity market weakness is now suspect. Indeed, faith that central bankers are right there to backstop the risk markets at the first indication of trouble may even be in some doubt with bond yields rising on inflation concerns. When push comes to shove, central bankers will foremost champion bond markets.

Unless risk markets can quickly regain upside momentum, I expect “Risk Off” dynamics to gather force. “Risk On” melt-up dynamics were surely fueled by myriad sources of speculative leverage, including derivative strategies (i.e. in-the-money call options). As confirmed this week, euphoric speculative blow-offs are prone to abrupt reversals. Derivative players that were aggressively buying S&P futures to dynamically hedge derivative exposure one day can turn aggressive sellers just a session or two later. And in the event of an unanticipated bout of self-reinforcing de-risking/de-leveraging, it might not take long for the most abundant market liquidity backdrop imaginable to morph into an inhospitable liquidity quandary.

This week’s Credit Bubble Bulletin was posted on Doug’s website in the wee hours of Saturday morning EST — and it’s always a must read for me.  Another link to it is here.


Welcome to the Trade War — Jim Rickards

Ready or not, a trade war between the U.S. and China is underway.

On Monday, Jan. 22, President Trump announced steep 30% U.S. tariffs on imports of solar panels and washing machines.

What was significant about these tariffs is that they are being applied worldwide. The tariffs are not aimed at China alone, but China is by far the largest source of solar panels shipped to the U.S., and China and South Korea are the largest sources of washing machines.

So while Trump can claim that these tariffs are not specifically targeted at China, that is exactly what they are.

This war has the potential to sink stock markets, shrink world trade and unravel the “synchronized growth” story that global elites have been pushing for the past year.

This worthwhile commentary by Jim was posted on the dailyreckoning.com Internet site yesterday — and another link to it is here.  Jim had a second article posted on that website as well on Friday — and it’s headlined “Trump, Davos and Free Trade


U.S. sanctions, baffled Russians, hot air and history — The Saker

So, finally, the suspense is over.  Kind of.  The U.S. Treasury has finally released the list of Russian entities and individuals which could (conditional!) be sanctioned by the U.S. Treasury in compliance with the H.R.3364 – Countering America’s Adversaries Through Sanctions Act.

Two things are noteworthy: first, this list completely ignores one of the most important realities of Russian politics: that the real, dangerous, opposition to Putin is not from the people (who support him at anywhere between 60% to 80%+) or from the Russian media (which, while often critical, does not represent a real threat to him) or even the Duma (whose opposition parties are critical of the Kremlin, but who are very careful about criticizing Putin himself lest they lose support from the people) .  For years now I have been explaining that the real opposition to Putin is a) inside the ruling elites, including the Presidential Administration and the Government and b) big money: banks, oligarchs, etc.  I call this (informal) opposition the “Atlantic Integrationists” because what these pro-western globalists want is for the AngloZionist Empire to accept Russia as an equal partner and to have Russia fully integrate the US-controlled international financial and security structures: WTO, NATO, EU, G7/8, etc.  Very roughly speaking you could think of them as the “Medvedev people” (but you could also say that the Ministers in charge of the Russian economy all fall into this category, as do almost all the heads of Russian banks).

Now that the U.S. Treasury has released this “list of marked individuals” (and their families, relatives or associated corporate entities) for potential, unspecified, future sanction, who do you think will freak out most, the Eurasian Sovereignists or the Atlantic Integrationists?  Then look a step further and forget about the U.S. for a second: Russia is trying hard to work with the Europeans in many join projects.  What do you think the creation of such a list will have on joint ventures between E.U. and Russian businessmen?  I predict two things:
It will place a great deal of pressure on E.U. corporations not to do business with the Russians and, therefore, it will further place the E.U. and the U.S. on a collision course.

It will hurt the Atlantic Integrationists where it hurts them the most: in their financial interests.

Frankly, if I was paid to think long and hard about how to come up with the dumbest and most self-defeating foreign policy decision for the USA, I could never do better than what the Trump Administration and Congress have just done.  This is, by the way, something which all Russian analysts agree with.  What they don’t agree with are the reasons for that seemingly completely and terminally stupid move.

This long — and rather involved commentary is a must read…if you have the interest, that is. And even if you don’t read the whole thing, the commentary under the last three sub-headings, 1] Possible Russian reactions, 2] Conclusion one: the Empire’s main export is hot air, and…most important…3] Conclusion two: learning optimism and caution from history; should be on your must read list.  This commentary by the Saker showed up on his Internet site yesterday sometime — and I thank Larry Galearis for pointing it out.  Another link to this is here.


Russia says U.S. ‘hunting’ for Russians to arrest around the world

Russia has issued a travel warning recommending its citizens think twice before traveling abroad, saying the United States was hunting for Russians to arrest around the world.

The Foreign Ministry statement warns Russian citizens that when abroad they face a serious threat of arrest by other countries at Washington’s request, after which they could be extradited to the United States.

Despite our calls to improve cooperation between the relevant U.S. and Russian authorities … U.S. special services have effectively continued ”hunting“ for Russians around the world,” the travel warning said.

Considering these circumstances, we strongly insist that Russian citizens carefully weigh up all the risks when planning trips abroad,” the Foreign Ministry said.

It said more than 10 Russians had been detained in foreign countries with U.S. involvement since the start of 2017.

This brief Reuters story, filed from Moscow, showed up on their Internet site at 11:19 p.m. EST on Thursday night — and was updated about eight hours later.  It’s from Zero Hedge via Brad Robertson — and another link to this short news item is here.


Gas Wars: Germany approves North Stream 2 pipeline with Russia

In the latest of a slowly advancing series of events, Germany has decided to disregard and work around the American economic sanctions directed at the Russian Federation, and to find a way to bring in the new Nord Stream 2 pipeline from Russia to Germany.

Finland, Sweden and Denmark have yet to approve the new pipeline project, but with Germany as a major economic power on board it is increasingly likely that they will follow suit.

The Nord Stream 2 pipeline is expected to double the present pipeline’s volume of natural gas to Europe, from 55 billion cubic meters to about 110 billion cubic meters.  The pipeline terminates in Greifswald, Germany, where it connects to various trans-European pipelines for distribution across that continent.

With this pipeline in place, Russia further secures both its place as an energy exporter with Europe, but it also solidifies business and commercial relations with Europe as a whole. As the economic sanctions against the Russian Federation slowly resolve, the nation stands to be seen as much more vital to the region than it ever has been.

This story was posted on the russiafeed.com Internet site just before midnight Moscow time on their Thursday night — and it comes to us courtesy of Roy Stephens.  Another link to it is here.


Henry Kissinger says a “pre-emptive attack” against North Korea is a “strong” possibility

Former Secretary of State Henry Kissinger has said that he agrees with the aggressive statements President Trump has made towards North Korea.

Kissinger also warned Congress last week against potential military intervention near Russian and Chinese borders without the world’s support.

The former Secretary of State said that the Trump Administration “will hit that fork in the road, and the temptation to deal with it with a pre-emptive attack” against North Korea “is strong, and the argument is rational.

The current North Korean trajectory, Kissinger continued, could lead to nuclear proliferation throughout Asia, as he believes South Korea will not accept being the only Korea without nuclear capability. Japan will follow suit, he said.

Then we’re living in a new world, in which technically competent countries with adequate command structures are possessing nuclear weapons in an area where there are considerable national disagreements,” Kissinger said. “That is a new world that will require new thinking by us.

This news item appeared on theduran.com Internet site at 2:23 p.m. EST on Friday afternoon — and it has obviously been edited since it was first posted, because Roy Stephens sent it to me about five hours before that.  Another link to it is here.  The Zero Hedge spin on all this is linked here.


Hope Diamond Eat Your Heart Out! Two Huge, Rare Gemstones Discovered in Russia

The discovery was made at a mine in Yakutia, the northeastern Russian region where close to 95% of Russia’s diamonds and over a quarter of all diamonds mined in the world are found.

The two large, jewelry-quality diamonds, with a mass of 97.92 and 85.62 carats, respectively, are very rare, according to officials from Alrosa, the Russian diamond mining group whose miners made the incredible find.

The transparent, yellow-tinged gems, both coming in the shape of an octahedron, were found at the Yubileynaya mine, one of the largest in the world, last month. The mine has long been known for being the source of some of Alrosa’s largest gemstones.

Alrosa is one of the largest diamond producers in the world, accounting for about 29% of global production, with mining operations in Yakutia and Arkhangelsk Region. In 2017, the company reported a 6% increase in its diamond output to 39.6 million carats.

This very brief news item/click bait, with a neat photo of one of these stones, was posted on the sputniknews.com Internet site at 3:45 p.m. Moscow time on their Friday afternoon, which was 7:45 a.m. in New York — EST plus 8 hours.  I thank reader M.A. for sending it our way — and another link to it is here.


All trapped gold miners in South Africa rescued unhurt

The National Union of Mineworkers confirmed on Friday morning that all 955 Sibanye Gold mine workers who were trapped underground have been resurfaced.

The mine workers were rescued at around 06:30 this morning,” the union’s national spokesperson Livhuwani Mammburu confirmed to News24.

They are currently getting medical check-ups. No injuries were sustained – they are just exhausted.”

There were some people with dehydration and few cases of high blood pressure and 16 of our older employees needed drips – but everything was successful.”

We are providing counselling for them and their families where it’s necessary,” Wellsted told News24.

This news item showed up on the news24.com Internet site at 9:23 a.m. SAST on their Friday morning, which was 2:23 a.m. in New York — EST plus 7 hours.  I found it on the gata.org Internet site — and another link to it is here.


Swiss gold exports in 2017 lower but still 80% plus flowing east — Lawrie Williams

The continued accumulation of physical gold in Asia and the Middle East goes on regardless as shown by gold exports from Switzerland – the leading national conduit for gold bullion.  Switzerland has achieved this position through its refineries specialising in taking gold in unmarketable forms and importing dore bullion from mines and refining, or re-refining it into the sizes and purities in demand in the eastern market place.  This is combined with the great reputation of Switzerland in the gold marketplace and as a conduit for such activities.

Although Swiss gold exports in 2017 were the lowest in 11 years they were still substantial at over 1,600 tonnes. That is equivalent to half the world’s annual new mined gold output, and with China the world’s largest gold miner already, and a known non-exporter, the Asian and Middle Eastern regions will have accumulated at least 65% of global gold output adding up the imports from Switzerland plus Chinese domestic production alone.  But other countries also export gold directly to Asian and Middle Eastern refineries and we would guesstimate that perhaps 80% of all the gold bullion moving around the world may be ending up in these regions – a huge proportion of what remains the world’s No.1 monetary asset (in our opinion at least).  With bitcoin continuing to crash – it has lost almost 60% of its value from its peak in December and could well crash much further as scared investors offload on the way down – gold may be again coming into its own as a key investment asset class in the minds of investors seeking to preserve their wealth.

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


The PHOTOS and the FUNNIES

The first award-winning photo is entitled “Willow Grouse” by Finnish photographer Markus Varesvuo.  This must have been shot using a remote control, as no willow grouse/ptarmigan would ever let you get this close in the wild.  This is what it looks like in its summer plumage.  Its pure white in winter.  This is a bird that inhabits the high latitudes and arctic regions of Planet Earth.  I saw lots of them in my younger days when that area of Canada was my home.  The second photo is by the same photographer — and I’d dearly love to know how he got this shot, because he’d have to be looking virtually straight down on it when he took it.  It’s entitled “Gannet Underwater“.  Click to enlarge.


The WRAP

Today’s iconic pop ‘blast from the past’ needs no introduction — and the only hard part to believe is that it’s 40 years young/old this year!  The link is here.

Today’s classical ‘blast from the past’ is somewhat more ancient, of course, dating from 1844.  It’s Felix Mendelssohn’s Violin Concerto in E minor, Op. 64…his last large orchestral work. It forms an important part of the violin repertoire and is one of the most popular and most frequently performed violin concertos in history — and for very good reasons.  I’ve featured this work before, but it’s been a while.

Here’s the incredibly gifted Hilary Hahn with the Frankfurt Radio Symphony Orchestra — and under that baton of Paavo Järvi.  It doesn’t get any better than this — and the link is here.


It was obvious that the powers-that-be were not going to allow the precious metals to become a safe harbour yesterday, especially when they were busy engineering price declines in both silver and gold so they could cover as many of their short positions as possible.  So these manufactured waterfall price declines in these two precious metals did double-duty yesterday.

Although silver certainly appears washed out to the downside, at least for the most part, the same can’t be said for gold — and I’m not at all sure how far along the “wash, rinse, spin — and repeat” cycle we’re going to have to travel with that precious metal.  I’d hate to think that they have the 50 and 200-day moving averages for gold in their sights but, as Ted pointed out, you can’t overlook that possibility.  What that would mean for silver is not good either — and a revisit of mid-December’s low can’t be dismissed.  But that’s wild-ass speculation on my part at the moment.

Of course JPMorgan’s short positions in the COMEX futures market has now been trumped by the physical silver and gold that Ted Butler says they hold.  And, without doubt, that along with covering their short positions in the COMEX futures market, they were big buyers of both GLD and SLV shares yesterday as well — and it’s an absolute guarantee that they’ll be redeeming every last share for physical metal at some point.  The question then becomes, just how much physical gold and silver are they going to accumulate before allowing prices to rise?  A good question with no answer at the moment.

As I say every Saturday without fail — and it’s just as apropos this week…”JPMorgan et al continue to have precious metal prices in their iron grip — and until that changes, nothing changes.

Here are the 6-month charts for all four precious metals, plus copper once again.  And because the low tick of the day in silver was set by ‘da boyz’ after the COMEX close, that data point doesn’t appear on Friday’s doji.  The ‘click to enlarge‘ feature helps a bit with the first four.

They say that they don’t ring a bell at the top of the market, but if you didn’t hear it yesterday, you could certainly see the signs that it was.  The powers-that-be were at battle stations in every market that mattered right from 8:30 a.m. EST onward — and I expect they’ll be around when the markets open at 6:00 p.m. on Sunday evening in New York.

This day of reckoning, if this is indeed the start, has been a long time in coming…and has been prolonged as long as it has by easy Central Bank credit.  I will not wax philosophical on this, as others such as Bill Bonner, David Stockman — and Jim Rickards have already done so — and far more eloquently than I…with more to come as the great unwind begins.

If you read the last paragraph of the article by the Saker in today’s Critical Reads section, what you see below is an excerpt from that.  As I’ve been saying for the last month or so, the U.S. deep state has painted itself into a corner in just about every theatre of operation that they have been engaged in, both domestically — and abroad.  They are running out of options — and their list of friends is getting thin.  I was very relieved and reassured by what he had to say, as it confirmed my thoughts as well, except he’s just so much better with words than I.

If we look at world history we can always see the same phenomenon taking place: when things go well, the elites are united, but as soon as things go south, the elites turn on each other.  The reason for this is quite simple: elites are never as united as they pretend to be.  In reality Empires, and any big country, really, are run by a coalition of elites who all benefit from the established order.  They can hate each other, sometimes even kill each other (SA vs SS, Trotskyists vs Stalinists, etc.), but they will work together just like crime families do in the mob.  But when a real, profound, crisis becomes undeniably apparent, these ruling elites typically turn on each other and when that happens, nobody is really in charge until, eventually, the entire system comes tumbling down or a new main ruler/group emerges.  Right now the Anglo/Zionists elites are locked into a huge struggle which is likely to last for the foreseeable future.”

Finally, we should never confuse the inability to get anything done with the inability to make things worse: the latter does not flow from the former.  Nazi Germany was basically defeated in Stalingrad (Feb 1943) but that did not prevent it from murdering millions more people for another two and a half years before two Soviet soldiers placed the Soviet flag on top of the Reichstag.  We are still far away from such a “Reichstag flag” moment, but we sure are witnessing the Anglo/Zionist “Stalingrad” taking place before our eyes.”

A dangerous and cornered beast, just chock-full of socio/psychopathic personality types I like to mention every weekend, is one to be watched carefully — and with some fear and trepidation.  They will not go down to defeat gladly, or willingly.  I’ll put absolutely nothing past them — and Henry Kissinger’s straw-in-the-wind of a military strike against North Korea might just be the start.  Or maybe something in the Ukraine or Middle East…or “all of the above”.

Somewhere in all of this will come the “event” that was spoken of back on July 12 when CME Group CEO Terry Duffy was interviewed by Neil Cavuto.  Here’s a cut-and-paste from my July 13, 2017 column…

Well, the Duffy/Cavuto interview certainly looked a bit stage-managed to me.  The leading questions were too pat — and the answers came too smoothly.  The gold chart, as Dave Janda pointed out in the story above, appeared right on cue.  Nothing was left to chance.  The other thing that I found intriguing was the fact that he said “people will wake up some morning and find precious metal prices substantially higher“…or words to that effect.  What that translates into from where I sit, is that the blast off will begin while North America is asleep.  All we await is the whatever “event” he spoke of, to occur.  As I’ve told Ted for years now, the precious metals price explosion will not take place in a news vacuum.

But when this “event” does finally occur, it will bring an end to the precious metal price management scheme in general — and silver in particular.  The only side-show left will be to place your bets on high silver prices go, or are allowed to go.  I’m not sure if this will be a partially controlled event or not…but if left to free-market forces alone, the 3-digit silver price we end up with will be jaw-dropping — and silver will really become the “new gold”.

The pertinent part of the Duffy/Cavuto interview begins at the 4:55 minute mark — and the link is here.

As bad as things appear at this point in time, it’s always darkest just before dawn — and this too shall pass.

I’m done for the day — and the week — and I’ll be watching the Sunday evening open in New York with great interest.

See you on Tuesday.

Ed

Ted Butler: The Biggest Scandal

01 October 2016 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The last trading day of the week, month and quarter was a rather tumultuous affair in the precious metal and currency markets yesterday.

The gold price rallied in fits and start during the Far East trading session on their Friday — and that continued into early trading in London.  The high tick over there came at, or just after, the London morning gold fix — and the price turned lower starting around 12:30 p.m. BST — and by 8:30 a.m. in New York, an hour later, it was only up a couple of bucks from Thursday’s close.  It rallied sharply at that point, but by shortly after 9 a.m. EDT the price was capped — and at that juncture ‘da boyz’, their spoofing and their algorithms put on a show, with the low tick of the day [and a new low for this move down] set a minute or so after the 1:30 p.m. COMEX close.  It chopped mostly higher from there into the 5 p.m. close of after-hours trading.

The high and low ticks were reported as $1,331.50 and $1,316.00 in the December contract.

Gold was closed in New York yesterday at $1,315.90 spot, down an even 4 dollars from Thursday.  Net volume was very high at a hair over 190,000 contracts.161001gold

And here’s the 5-minute gold tick chart courtesy of Brad Robertson.  There was a bit of volume in late Far East/early London trading, but the real volume started on the engineered price decline that began shortly after the noon silver fix in London, which is 05:00 Denver time on the chart below.  Needless to say, the heaviest volume occurred during the COMEX trading session in New York, particularly during the big price moves…both up and down — and really didn’t fall off to what I call ‘background levels’ until very late on Friday afternoon.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ is a must here.161001-5-minute-gold

The silver price didn’t do a thing until 9 a.m. in London — and then it rallied a decent amount until exactly 8:30 a.m. in New York, just like gold.  After that, the price pattern was very similar to what occurred in gold, except the price spike was far more pronounced — and back above its 50-day moving average.  But by the COMEX close, JPMorgan et al had the price back to where it was when the initial rally began at 9 a.m. in London.  The silver price rallied a handful of pennies from there, but that was it.

The low and high ticks in this precious metal were recorded by the CME Group as $19.12 and $19.77 spot, which was an intraday move of 65 cents, or over 3 percent.

Silver was closed on Friday at $19.145 spot, up 5.5 cents on the day.  Net volume was very heavy at just over 66,000 contracts.161001silver

Like on the 5-minute tick gold chart above, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ is a must here as well.161001-5-minute-silver

Platinum didn’t do a lot in Far East trading — and what gains there were, were mostly gone by shortly before 10 a.m. Zurich time on their Friday morning.  After that, platinum followed the same pattern as gold, although the price spikes in early COMEX trading weren’t anywhere near as pronounced.  And, like silver, almost all of Friday’s earlier gains vanished by the COMEX close.  It was sold a bit lower in the thinly-traded after-hours market, finishing the Friday session at $1,025 spot, up one whole dollar.  At its high tick yesterday, it was up $17 the ounce.161001platinum

Palladium was up 4 bucks or so by the time its 8:30 a.m. EDT rally began — and those gains, plus its New York gains, were all gone by the COMEX close as well.  It rallied a few dollars after that, however — and finished higher by 7 dollars an ounce.  Palladium was up 11 bucks at its high tick.161001palladium

The dollar index closed very late on Thursday afternoon in New York at 95.47 — and chopped unsteadily sideways until it took off the to the upside around 2:25 p.m. China Standard Time on their Friday afternoon.  It topped out at precisely 8:00 a.m. in New York.  The high tick at that point was 95.96.  Then down it went.  The 95.34 low tick came shortly before noon EDT.  It rallied about 20 basis points during the next hour, but then crawled lower for the remainder of the day.  The dollar index closed in New York on Friday afternoon at 95.44 — down 3 whole basis points from Thursday.

Although the precious metals initially reacted as they should have on the dollar swoon, the gains were all taken away by the powers-that-be — and then some in gold.161001intraday-gif

And here’s the 3-year U.S. dollar index — and one wonders what it would show if all the world’s currencies were allowed to trade freely.  I don’t know for sure myself, but it wouldn’t look like this.161001-3-year-usd

The gold stocks gapped up about 2 percent at the open, but once it became obvious that JPMorgan et al weren’t taking any prisoners during the COMEX trading session in New York, they were in the red shortly after the London p.m. gold fix was in.  They drifted lower from there — and traded pretty flat after the 1:30 p.m. EDT COMEX close.  The HUI finished the Friday session down 1.15 percent.161001hui

Not surprisingly, the silver stocks opened up a bit more that 2 percent, but followed their golden brethren like a shadow after that.  The low tick of the day came shortly after 2 p.m. EDT — and they rallied a hair from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.22 percent.  Click to enlarge if necessary.161001silver-7

I thought I’d post the long-term Silver 7 chart so you can see how things are progressing once you stand back and look at the overall.161001lt-silver-7  Click to enlarge.

And here are three charts from Nick that tell all.  The first one shows the changes in gold, silver, platinum and palladium for the past week, in both percent and dollar and cents terms, as of Friday’s closes in New York — along with the changes in the HUI and Silver Sentiment/Silver 7 Index.  The Click to Enlarge feature really helps on all three charts.161001weekly

And the chart below shows the month-to-date changes as of Friday’s close.161001month-to-date

And below are the year-to-date changes as of the close of trading yesterday.161001year-to-date

The CME Daily Delivery Report showed that 3,005 gold, plus 11 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, there were ten short/issuers — and the three largest were S.G. Americas with 1,760 contracts out of their client account, plus Canada’s Scotiabank and HSBC USA with 630 and 532 contracts out of their respective in-house trading accounts.  There were 14 long/stoppers involved.  The largest was Goldman Sachs once again with 689 for its client account, plus 668 for its own account.  Next came Macquarie Futures with 1,313 for their own in-house trading account.  JPMorgan was an ‘also ran’ once again, picking up 225 contracts for its own account.  In silver, Scotiabank issued all 11 contracts — and Macquarie Futures picked up 10 of those for its own account.  The link to yesterday’s Issuers and Stoppers Report is here — and is worth a look if you have the interest.

The CME Preliminary Report for the Friday trading session showed that gold open interest in October dropped by a chunky 2,944 contracts, leaving 4,449 left, minus the 3,005 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 2,470 gold contracts were actually posted for delivery on Monday, so that means that a very large 2,944-2,470= 474 short/issuers in gold were let off the delivery hook by the firms holding the long side of their contracts.  October silver o.i. fell by 235 contracts, leaving 202 still left, minus the 11 contracts mentioned above.  Thursday’s Daily Delivery Report showed that 301 silver contracts were posted for delivery on Monday, so that means that another 301-235=66 silver contracts were added to the October delivery month yesterday.

After two days of no activity, there was another withdrawal from GLD on Friday.  This time an authorized participant took out 38,156 troy ounces.  And as of 6:33 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I checked back at 1:40 a.m. EDT this morning, I noted that there was small withdrawal from SLV, as 595,560 troy ounces were removed — and that’s a bit on the chunky side to be a fee payment of some kind, but the final word on that will certainly be Ted’s.

There was another sales report from the U.S. Mint to end the month and the quarter.  They sold 7,500 troy ounces of gold eagles — 2,500 one-ounce 24K gold buffaloes — but no silver eagles.

For the month of September, the mint sold 94,000 troy ounces of gold eagles — 17,500 one-ounce 24K gold buffaloes — and 1,675,000 silver eagles.  Gold coin sales were very decent, but without JPMorgan there to buy every silver eagle the mint could produce, over and above what John Q. Public was buying, silver eagles sales remain in the dumpster.  The sales numbers in silver eagles over the last few months probably reflects true consumer demand over that last five years.  I’m sure Ted will have something to say about this in his weekly commentary this afternoon.

There was some gold movement over at the COMEX-approved depositories on Thursday.  There was 33,391 troy ounces received at Canada’s Scotiabank — and the only ‘out’ movement was 3 kilobars from the Manfra, Tordella & Brookes, Inc. depository.  The link to that activity is here.

Once again there was a very decent amount of in/out action in silver, as 594,448 troy ounces were received — and 420,010 troy ounces were shipped out the door for parts unknown.  All of the ‘in’ activity was at Brink’s, Inc. — and 359,976 troy ounces of the ‘out’ activity was at CNT.  The rest came of of Scotiabank.  The link to that action is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 1,494 of them, plus they shipped out 2,108.  All of the action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The deterioration in this week’s Commitment of Traders Report puts us back at, or very close to, a record high Commercial net short position in both gold and silver — and it was far worse in gold, particularly in the Managed Money category, but first things first.

In silver, the Commercial net short position increased by 3,873 contracts, or 19.4 million troy ounces of paper silver.  They arrived at that number by purchasing 2,252 long contracts, but they also added 6,125 short contracts as well.  The net of those two numbers is the change/increase for the reporting week.  The Commercial net short position is now back above 500 million troy ounces, at 504.1 million troy ounces of paper silver.

Ted said that the Big 4 commercial traders, which includes JPMorgan and Scotiabank of course, increased their short positions by about 1,000 contracts.  The ‘5 through 8’ large traders reduced their short position by around 400 contracts — and the balance was covered by Ted’s ‘raptors’ — the commercial traders other than the Big 8 — as they sold 3,300 contracts of their long position in silver.

Ted puts JPMorgan’s short position at 33,000 contracts, up 1,000 contracts from last week’s COT Report.

Under the hood in the Disaggregated COT Report it was far worse, as the Managed Money traders increased their long position by 3,745 contracts — and they also reduced their short position by 1,826 contracts, for a net change of 5,571 contracts, which is about 1,700 contracts more than the Commercial net short position.  Of course it was the traders in the other two categories of Disaggregated report that made up the difference — the ‘Other Reportable’ category — and the Nonreportable/small trader category.

Here’s the 9-year chart for the silver COT Report — and it’s butt-ass ugly.  We’re not back at record highs, but at these extremes, it really doesn’t matter if we are or not.161001cot-silver

In gold, the numbers were even more horrific.  The Commercial net short position in that precious metal increased by 23,979 contracts, or 2.40 million troy ounces of paper gold.  They arrived at that number by purchasing 2,842 long contracts, plus they added 26,821 short contracts that came to them courtesy of the Managed Money traders who went long in droves.  The difference between those two numbers equals the change in the Commercial net short position for the week, which is now up to 31.46 million troy ounces.

It was another “all for one, and one for all” with the Commercial traders during the reporting week.  Ted said that the Big 4 traders increased their short position by about 12,800 contracts, the ‘5 through 8’ traders added a further 1,700 contracts to their short positions — and Ted’s raptors, the Commercial traders other than the Big 8, increased their short position by around 9,500 contracts.

And as bad as the numbers were in the Legacy COT report above, under the hood in the Disaggregated COT Report, it was as ugly as sin.  The Managed Money traders increased their long positions by an eye-watering 36,032 contracts, plus they reduced their short positions by 5,998 contracts — and the sum of those two numbers…42,030 contracts…was the change for the reporting week.  Wow!  The difference between the Managed Money number and the commercial net short position was around 18,000 contracts — and that’s what the other two groups of trader in the Disaggregated COT Report went short during the reporting week, because the numbers always have to net out to zero.

Here’s the 9-year COT chart for gold– and although we’re not back at a record high commercial net short position yet, we’re certainly within spitting distance of it.161001cot-gold



One can only imagine how high gold and silver prices would have risen if they had been allowed to trade freely during the reporting week.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s 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.161001days-to-cover

As I say in every Saturday column without fail—the short positions of the Big 4 and 8 traders in silver continues to redefine the meaning of the words ‘obscene’ and ‘grotesque’.  For the current reporting week, the Big 4 are short 154 days [5 months] of world silver production—and the ‘5 through 8’ traders are short an additional 66 days of world silver production—for a total of 220 days, which is just over 7 months of world silver production, or 534.6 million troy ounces of paper silver held short by the Big 8.

And it should be pointed out here that in the COT Report above, the Commercial net short position in silver is 504.1 million troy ounces.  So the Big 8 hold a short position larger than the net position—and by about 30.5 million troy ounces.

And if that isn’t bad enough, the Big 8 are short 53.0 percent of the entire open interest in silver on the COMEX futures market — which is only off last week’s record high by a hair.  How insane is that?  And if you subtract out the market-neutral spread trades, it’s a reasonable assumption the Big 8 are short more than 55 percent of the total open interest in silver.  In gold it’s up to 48.1 percent of the total open interest that the Big 8 are short.

And as an aside, the two largest silver shorts on Planet Earth—JPMorgan and Canada’s Scotiabank—are short about 104 days of world silver production between the two of them—and that 104 days represents around 68 percent [two thirds] of the length of the red bar in silver in the above chart.  The other two traders in the Big 4 category are short, on average, about 25 days of world silver production apiece.

And based on Ted’s estimate of JPMorgan’s short position of 33,000 contracts, JPMorgan is short around 68 days of world silver production all by itself.  Because of that, the approximate short position in silver held by Scotiabank works out to around 36 days of world silver production.

In gold, the Big 4 are now short 76 days of world gold production — and the ‘5 through 8’ another 24 days of world production, for a total of 100 days. That number makes the math easy, as the Big 4 in gold hold 76 percent of the total short position held by the Big 8 — and that must be a record.  How’s that for a concentrated short position within a concentrated short position???

And just as an aside the “concentrated short positions within a concentrated short position” in silver, platinum and palladium… are 70, 70 and 66 percent respectively of the short positions held by the Big 8.

And the CME Group, the CFTC and the mining industry just sit their like dorks and do nothing.

I don’t have all that many stories for you today — and I hope you have enough time in what’s left of your weekend to read the ones that interest you.


CRITICAL READS

A Furious Rick Santelli Rages at Janet’s Jawboning: “Please, Don’t Help Anymore

http://www.zerohedge.com/news/2016-09-30/furious-rick-santelli-rages-janets-jawboning-please-dont-help-anymore

CNBC‘s Rick Santelli turned it up to ’11’ today as The Fed’s Janet Yellen joined the world’s central planners in suggesting intervention directly in the stock markets would ‘help’ the average Joe.

Santelli exclaims “don’t help anymore!!” How has any of their ‘help’ helped in the last 7 years?

“Central banks buying in the [stock] market… you really think that’s a good idea?” Raging about picking winners, buying Deutsche Bank, and keeping stocks “steady” around elections, the veteran pit trader exploded, “is that the world we really want to live in?”

The Fed’s buying stocks “will completely and utterly and in every possible way destroy and value in the marketplace…”

3 minutes of brutal reality slapped into the face of a ridiculous rumor-driven day…

This CNBC video clip showed up on the Zero Hedge website at 9:45 p.m. on Friday evening — and it’s certainly worth your while.  I found it all by myself — and another link to it is here.


Illinois Suspends “Billions of Dollars” of Investment Activity With Wells Fargo

Just when you thought you could relax into the weekend knowing that the U.S. (and world) banking system was ‘fixed’ again thanks to a rumor from French press, Wells Fargo take another hit. Following California’s decision to sever all banking ties with the bank, Illinois State Treasurer Michael Frerichs has confirmed his state’s plans to suspend billions of dollars of investment activity with Wells Fargo.

As Bloomberg reports,

  • News conference will be held on Monday at 10:00 a.m. at the James R. Thompson Center in Chicago to share details about the moratorium
  • Treasurer’s office comments in a statement

We estimate the score now to be Wells Fargo 0 – 4 Elizabeth Warren (claw backs, soldier car repo fines, California sanctions, and now Illinois, suspending banking)

This tiny Zero Hedge piece showed up on their website at 4:53 p.m. on Friday afternoon EDT — and another link to it is here.


David Stockman on “Wall Street Week”: Get Out of Harms’ Way Now—–The Casino is Heading For a Crash

Fox Business Former Reagan Budget Director David Stockman on the Federal Reserve and what is needed to boost the U.S. economy.

This 6:31 minute video clip appeared on David’s website yesterday sometime — and it comes courtesy of Roy Stephens.


David Stockman Interview: 30 Years of Misrule by the Wall Street/ Washington Elites

This 22:04 minute audio interview conducted by Jay Taylor is definitely worth your time if you have it.

Roy Stephens sent it to me on Thursday, the same day it appeared on David’s website.  But for length reasons, I thought I’d save it for my Saturday column.


Iceland’s Pirates head for power on wave of public anger

A party that hangs a skull-and-crossbones flag at its HQ, and promises to clean up corruption, grant asylum to Edward Snowden and accept the bitcoin virtual currency, could be on course to form the next Icelandic government.

The Pirate Party has found a formula that has eluded many anti-establishment groups across Europe. It has tempered polarising policies like looser copyright enforcement rules and drug decriminalisation with pledges of economic stability that have won confidence among voters.

This has allowed it to ride a wave of public anger at perceived corruption among the political elite – the biggest election issue in a country where a 2008 banking collapse hit thousands of savers and government figures have been mired in an offshore tax furore following the Panama Papers leaks.

If the Pirates emerge as the biggest party in an Oct. 29 parliamentary election – as opinion polls suggest – they will deliver another defeat to Europe’s mainstream politicians.

This longish Reuters news item, filed from Reykjavik, showed up on their Internet site at 4:39 p.m. BST on Thursday afternoon London time — and I thank Patrik Ekdahl for pointing it out.  For content reasons, it had to wait for today’s column — and another link to it is here.


U.K. farm subsidies: Payment to billionaire prince sparks anger

Taxpayers are paying more than £400,000 a year to subsidise a farm where a billionaire Saudi prince breeds racehorses.

The Newmarket farm of Khalid Abdullah al Saud – owner of the legendary horse Frankel – is among the top 100 recipients of E.U. farm grants in the U.K.

Farm subsidies swallow a huge chunk of the E.U.’s budget. They were started after World War Two to stimulate production, but led to food mountains that had to be dumped.

A compromised reform process – the so-called “greening” of the Common Agricultural Policy – resulted in farmers mostly being paid depending on how much land they own.

The U.K.’s top beneficiaries include estates owned partly or wholly by the Queen (£557,706.52); Lord Iveagh (£915,709.97); the Duke of Westminster (£427,433.96), the Duke of Northumberland (£475,030.70 ) the Mormons (£785,058.94) – and many wealthy business people.

I thought I knew all about farm subsidies in the U.K. and E.U., but I must admit that even I was taken aback by this article.  I received it in time for Friday’s column, but thought best to wait for today because of the subject material.  Patrik Ekdahl sent us this story as well — and his comment “Subsidies, a personally pet peeve…” hardly begins to do justice to the situation described in this story.  It was posted on the bbc.com Internet site on Thursday sometime — and another link to it is here.


Stocks Climb as Treasuries Fall on Deutsche Bank’s Speculation

Risk appetite returned to global markets on speculation Deutsche Bank AG will pay less than half of a penalty sought by the U.S., sparking a rally in stocks and sending Treasuries tumbling.

Equities extended their longest monthly advance since June 2014 and the Dow Jones Industrial Average climbed more than 160 points as a financial companies surged. The euro erased losses, while Treasuries fell with gold amid lower demand for haven assets. Oil posted its first September increase since 2010 as OPEC agreed to an output cut earlier this week.

Relief swept over global markets as Agence France-Presse reported that Deutsche Bank is near a $5.4 billion deal with the U.S. Department of Justice to settle a probe related to bad mortgages. Traders have kept a close watch on the lender as it struggles with tougher capital standards and soaring legal bills. While its shares have lost about 50 percent in value this year, systemic concerns have a way to go to reach levels sparked by the collapse of Lehman Brothers Holdings Inc. in 2008 after steps to shore up the financial system.

There’s a little bit of recognition of the reality that Deutsche Bank is not Lehman,” said John Stoltzfus, chief market strategist at Oppenheimer & Co. in New York. “The banks, as result of all the regulatory changes since the world crisis, are in better shape to withstand this.

The key word in the headline is “speculation” — because that’s what it is at the moment.  This Bloomberg story was originally datelined at 5:09 p.m. MDT on Thursday afternoon.  At that time it was headlined “Most Asian Index futures drop amid bank rout, oil, copper swing“.  It received a complete rewrite at 2:41 p.m. MDT on Friday afternoon — and sports the headline you see now.  I found this story on Doug Noland’s website — and another link to it is here.


Doug Noland: A Take on Deutsche Bank

Learning from the crisis, Deutsche Bank’s balance sheet is these days heavy on liquid assets. There are as well various emergency liquidity facilities available from the ECB and Bundesbank. Deutsche Bank is better prepared, policymakers are better prepared and the world is better prepared. From the bullish perspective, it’s almost unthinkable that global policymakers would sit back and watch the collapse of the “world’s most systemically risky bank.”

The sanguine bullish view is supported by Deutsche Bank (senior debt) Credit default swaps. Despite Friday’s morning’s 20 bps surge, CDS closed at 240 bps, still below trading highs from February. While elevated, these are not levels indicative of a looming Lehman-style collapse. Moreover, there’s the U.S. equities VIX index. Closing the week at 13.29, a level suggesting nothing but blue skies ahead. Moreover, the S&P ended Q3 only about 1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} below record highs.

The bears, well, they’re convinced the bulls are nuts. More important than whimsical CDS pricing, the naysayers point to an incipient exodus of Deutsche Bank clients. Global markets were shaken Thursday by a Bloomberg article discussing how some key hedge funds were abandoning ship. Not yet faded from memory, Lehman Brothers proved a prime brokerage and counter-party exposure nightmare. Those who panicked first panicked best.

It’s perfectly rational for hedge funds in particular to shift assets, collateral and derivative business away from the slow-motion train wreck, Deutsche Bank. The bears see an approaching point of no return: a crisis of confidence and “run” on Deutsche that will necessitate a bailout and restructuring.

Doug’s Credit Bubble Bulletin was posted on his website around 2 a.m. EDT this morning — and it easily falls into the must read category.  Another link to it is here.


Armageddon at Aleppo: John Batchelor Interviews Stephen F. Cohen

The repercussions of the failed Syrian ceasefire may be driving the newest offensive by Russian and Syrian forces to take Aleppo. The government side seems to have given up on ceasefire along with its faith in the motives of Washington, the E.U. and U.N. The result has been an unprecedented attack on the city by air and ground forces resulting in many civilian casualties. Cohen is quite blunt in stating that this is a serious setback for the NCW (New Cold War)  and that Russian and American relations have taken a very bad hit; that Americans cannot be trusted is now officially Russia’s policy (as stated at the U.N.), and that the factions war between moderates and the war party in Washington is now in the open. This has removed most of the diplomatic options. Cohen goes on to state that Putin now only sees the military solution for ending the war as the best troops of ISIS are in Aleppo and therefore an escalation is the logical thing to do to destroy terrorists there before they can escape. There is one aspect, however, that was not discussed that was also revealed in the bombing of Syrian Army forces to end the ceasefire and Putin may be worried that Washington may decide to actively begin attacking Assad forces.  Also note, (and with apologies to Marshall McLuhan) that given the MSM in the U.S. and elsewhere is controlled for the most part by the war party in Washington one might assume that the war party faction is actually in control of Washington.

Finally the pundits bring up the little discussed role of invading Turkey in the war. Batchelor makes the point that the U.S is agreeing to discontinue support of the Kurds (even as they were effective fighters against ISIS), Cohen agrees and adds that it is also Putin’s failure to have trusted either Erdohan or Obama in Syria. And finally (!) Batchelor brings up the speculation that Turkey and Syrian forces might tangle – a personal worry of mine as Turkey would represent Washington one step removed AND NATO. Cohen does not discount this but he reminds that Russia’s first goal in Syria is to destroy ISIS. However, this is not a goal shared by Washington at all – and a fact that is surely known in the Kremlin.

Batchelor then goes on to suggest that on all fronts of the NCW the failure of the coalition in Syria has grave repercussions, and that an escalation is underway. Cohen responds with a discussion about how Ukraine and Syria are very similar. The solution in both seems to be whether Washington agrees to any solution, and the war party is always ready to undo any gains toward common sense and the political/diplomatic solution.  In Ukraine’s case Washington is aided in maintaining that war by the instability in the Kiev and Poroshenko’s fear of a Right Sector coup in Kiev. In Syria it is out and out mutiny and sabotage by the Defense Department, and in the end all pundits are left guessing about what outcomes on both fronts President Obama prefers.

The last segment is about the U.S. presidential debates, and I will leave that to listeners to pursue alone. However, there is a commentary about the American show 60 Minutes and its topic of a nuclear war that should be heard. As usual all these discussions are but a paraphrase of the broader analysis heard in the podcast and listeners are exposed to far more insights when they tune in at the provided link.

This 40-minute audio interview is certainly a must listen for anyone, even if you’re not a serious student of the New Great Game, as it wouldn’t take much for things to spiral totally out of control in Syria — and elsewhere.  It was posted on the audioboom.com Internet site on Tuesday but, for obvious reasons, had to wait for today’s column.  I offer profuse thanks to Larry Galearis for the link, plus his always incredible executive summary that you see above.  Another link to this interview is here.


Russia’s Sergei Lavrov: BBC interview in full

In an exclusive interview with the BBC, Russian Foreign Minister Sergei Lavrov says his country believes the United States may be tacitly supporting jihadist rebels in Syria.

He said the U.S. had broken a promise to help separate the the powerful Jabhat Fateh al-Sham (formerly known as al-Nusra Front) and other extremist groups from more moderate rebels.

He was speaking to Stephen Sackur on BBC World News TV on the first anniversary of the beginning of the Russian air campaign in Syria.

This 23:15 minute video interview was posted on the bbc.com Internet site yesterday sometime — and I must admit that I haven’t had time to listen to it yet, so I can’t comment on it.  I thank reader M.A. for bringing it to our attention — and another link to it is here.


The war against Syria: both sides go to “plan B”

In view of the total failure the U.S. policy to regime-change Syria and overthrow Assad, the time has now come for the United States to make a fundamental choice: to negotiate or double down. Apparently, Kerry and others initially tried to negotiate, but the Pentagon decided otherwise, treacherously broke the terms of the agreement and (illegally) bombed the Syrian forces. At which point, Kerry, Power and the rest of them felt like they had no choice but to “join” the Pentagon and double down. Now the U.S. “warns” Russia that if the Aleppo offensive continues, the U.S. will not resume negotiations. This is a rather bizarre threat considering that the U.S. is clearly unable to stick to any agreement and that the Russians have already concluded that the USA is “not-agreement-capable”. The Russia reaction was predictable: Lavrov’s admitted that he could not even take his American colleagues seriously.

Okay, so both sides are fed-up with each other. What comes next?

The U.S. will send more weapons to Daesh, including MANPADs, TOWs and Javelins. The effect of that will be marginal. Russian fixed-wing aircraft fly at over 5’000m where they are out of reach from MANPADs. They are currently the main provider of firepower support for the Syrians. Russian combat helicopters, while probably not immune to MANPADs, are still very resistant to such attacks due to three factors, survivability, weapons range and tactics: Mi-28s and Ka-52 have missiles with a maximum range of 10km and the way they are typically engaged is in a kind of ‘rotation’ where one helicopters flies to acquire the target, fires, immediately turns back and is replaced by the next one. In this matter they all protect each other while presenting a very difficult target to hit. Russian transport helicopters would, however, be at a much higher risk of being shot down by a US MANPAD. So, yes, if the US floods the Syrian theater with MANPADS, Syrian aircraft and Russian transport helicopters will be put at risk, but that will not be enough to significantly affect Russian or Syrian operations.

This longish commentary by The Saker appeared on his Internet site yesterday — and as of this writing has had 10,000 views already.  I thank Larry Galearis for his second contribution of the day — and another link to it is here.


Here’s the Smoking Gun That China Has a Huge Housing Bubble

Speculative buyers have eschewed Chinese stocks in favor of property, prompting even the chief economist at the central bank of the world’s second largest economy to declare that housing was in a “bubble.”

But when strategists at UBS AG recently compiled a list of bubblicious housing markets, there weren’t any selections from mainland China due to the lack of reliable data on the subject, underscoring the continued difficulty in declaring Chinese real estate to be in overheated territory.

But Deutsche Bank AG Chief China Economist Zhiwei Zhang thinks he’s pinpointed “a clear sign of a bubble” in the market — one that will end in a major correction in two years’ time.

After analyzing how much developers were willing to spend to win land auctions in 10 major Chinese cities in which values are already up 23 percent year-over-year, the economist found that the business case for these bids evaporates unless property prices continue to increase.

This Bloomberg article appeared on their Internet site at 7:22 a.m. Denver time on Thursday morning — and it’s another contribution from Patrik Ekdahl — and another link to it is here.


Clean Disruption – Why Energy and Transportation will be Obsolete by 2030 – Oslo, March 2016

Tony Seba’s Clean Disruption Keynote presentation at the Swedbank Nordic Energy Summit in Oslo, Norway, March 17th, 2016.

The keynote, based on the book ‘Clean Disruption of Energy and Transportation’ assert that four technology categories will disrupt energy and transportation by:

1- Batteries / Energy Storage
2- Electric Vehicles
3- Self-Driving Vehicles
4- Solar Energy

This very interesting and worthwhile video presentation was posted on the youtube.com Internet site back on April 2, 2016 — and Ted Butler featured it in his mid-week review ten days ago.  It runs for 53:53 minutes, but do yourself a favour, blow the froth off a cold one and watch it.  The further the presentation goes, the more incredible it gets.  The connection to silver is unspoken, but it’s in your face when he’s talking about solar power. Another link to it is here.


Ted Butler: The biggest scandal

My objection to managed money futures traders (and their commercial counterparties) dictating prices to the world’s actual commodity producers and consumers is that it completely upends the functioning of the law of supply and demand, which happens to be the cornerstone of any free market system. Prices are supposed to rise as real demand presses against real supply and vice versa to the downside, providing accurate price signals for increasing or decreasing real production and consumption. If prices are set by futures market speculators based upon chart or technical considerations that will send false signals to the world’s producers and consumers. The real law of supply and demand has been replaced by a paper market version divorced from factors in the real world.

At heart, I’m a commodities guy with a futures market background and I am most interested in silver, not sugar. But the same circumstances that exist and led me to discover the silver price manipulation have spread to other commodities on which futures trading occurs. I’ve singled out sugar futures trading because the facts are so similar. I’m not complaining about the price level of sugar (or silver for that matter), I’m complaining about how prices are set. Just like the tail shouldn’t wag the dog, futures market speculators shouldn’t dictate prices to real world producers and consumers. It should be the other way around.

Most at fault here are the regulators and the exchanges. Just like upper management at Wells Fargo, the commodity regulators and exchanges are supposed to be the adults making sure everything is on the up and up. But just as Wells Fargo management failed miserably, the CFTC and the CME Group have failed miserably in regulating silver, gold, copper and crude oil. To the failure list we can now add ICE and sugar trading. It took years and outside influence (local newspaper stories) to crack open the Wells Fargo scandal, but when it was opened, it was hard to believe it could have continued for as long as it did. This commodity pricing scandal has been going on for far longer than the indiscretions at Wells Fargo, but may be close to being cracked open.

This absolute must read commentary by Ted was posted in the clear on the silverseek.com Internet site at 9:41 a.m. Denver time on Friday morning — and another link to it is here.


Secret Alpine Gold Vaults Are the New Swiss Bank Accounts

Deep in the Swiss Alps, next to an old airstrip suitable for landing Gulfstream and Falcon jets, is a vast bunker that holds what may be one of the world’s largest stashes of gold. The entrance, protected by a guard in a bulletproof vest, is a small metal door set into a granite mountain face at the end of a narrow country lane. Behind two farther doors sits a 3.5-ton metal portal that opens only after a code is entered and an iris scan and a facial-recognition screen are performed. A maze of tunnels once used by Swiss armed forces lies within.

The owner of this gold vault wants to remain anonymous for fear of compromising security, and he worries that even disclosing the name of his company might lead thieves his way. He’s quick to dismiss questions about how carefully he vets clients but says many who come to him looking for a safe haven for their assets don’t pass his sniff test. “For every client we take, we turn one or two away,” he says. “We don’t want problems.”

Demand for gold storage has risen since the 2008 financial crisis. Many of the wealthy see owning gold as a hedge against the insecurity of banks and a reasonable investment at a time when markets are volatile and bank accounts and low-risk bonds pay almost no yield. It may also be a way to avoid the increasing scrutiny of tax authorities. In high-profile cases, U.S., French, and German prosecutors have gone after citizens of those countries with undeclared Swiss bank accounts.

Swiss storage operations such as these don’t have the same obligation that Swiss banks do to report suspicious transactions to federal regulators. Americans aren’t required under the U.S. Foreign Account Tax Compliance Act to declare gold stored outside financial institutions.

This very interesting Bloomberg article put in an appearance on their website at 1:00 a.m. MDT on Friday morning — and it’s the final contribution of the day from Patrik Ekdahl — and I thank him on your behalf.  Another link to this story is here.


India’s gold demand likely to fall to 750-800 tonnes in 2016 on high price

India’s gold demand is likely to fall to around 750-800 tonnes in 2016, as against 860 tonnes last year, mainly due to sharp rise in prices and jewellers’ strike following new regulations, World Gold Council has said.

In the first half of this year, gold demand fell to 248 tonnes. We think that demand will be better in the second half on the back of good monsoon,” WGC India MD Somasundaram PR told PTI on the sidelines of an Assocham event.

In August, WGC had reported that the country’s gold demand fell by 30 per cent to 247.4 tonnes during the first six months of 2016 from 351.5 tonnes in the year-ago period.Asked about the reasons for fall in demand, Somasundaram said: “Prices have risen sharply this year. Jewellers strike because of imposition of excise duty and pan card complexities are some other factors for the likely decline in demand“.

This gold-related news item appeared on the firstpost.com Internet site at 6:35 p.m. IST on their Thursday evening — and I plucked this story off the Sharp Pixley website late last night Denver time.  Another link to it is here.


The PHOTOS and the FUNNIES

The roses are still in bloom around here, but like all plant life at this latitude, are waiting for the first frost of the season, which is really late this year.  I spotted these two flies resting on a rose petal in the cool morning air — and despite my close approach, they never moved.  The ‘click/double click to enlarge‘ feature helps with both shots. 161001-2016-09-29-2

161001-2016-09-29-3161001cartoon-12161001cartoon-13


The WRAP

Today’s pop ‘blast from the past’ comes from a U.S. rock band that was by no means a one-hit wonder.  But, having said that, their most wildly popular tune, which was picked off their 1976 album Leftoverture, has sort of eclipsed everything that came before, or after.  I have to include it as of the Top 10 rock numbers of all time.  I’ve posted it before, but it’s been a while.  The link is here.

Today’s classical ‘blast from the past’ dates from around 1761-65.  It’s Haydn’s Cello Concerto No. 1 in C Major.  The work was presumed lost until 1961, when musicologist Oldřich Pulkert discovered a copy of the score at the Prague National Museum. Though some doubts have been raised about the authenticity of the work, most experts believe that Haydn did compose this concerto.

Like Mozart’s Requiem, who composed it no longer matters, as audiences the world over love both works anyway.  Here’s the incomparable Mstislav Rostropovich, considered by many as the greatest cellist that the 20th century ever produced, doing the honours with The Academy.  The link is here.


It was a pretty wild trading day during the COMEX session on Friday — and it should have been obvious to anyone with two synapse to rub together that JPMorgan et al were there with the hammer to drive the rallies in all four precious metals into the dirt.

This was particularly the case with silver, as it rallied well above its 50-day moving average before getting driven back to unchanged.  To a lesser extent, the same thing happened in gold, but the 50-day moving average was not involved.

All the price action yesterday certainly included the Managed Money traders on the long side — and the commercial traders on the other.  Once their respective prices ran up, or were allowed to run up, ‘da boyz’ and their HFT buddies rang the cash register for fun, profit and price management purposes once they’d spun their algos.  It was, as Ted Butler said, the powers-that-be running their ‘scam within a scam‘ on a very short-term basis — “day trading the 50-day moving averages” as he so aptly put it.

I’m sure he’ll have further comment on this, plus some dollar amounts to attach to these paper moves yesterday when his weekly review comes out later this afternoon.

Since this is my Saturday column, I’m including the 6-month charts for the Big 6+1 commodities that JPMorgan et al have an interest in.  That also includes the grains — and sugar — but I can’t post the charts for everything.161001-6-month-gold

161001-6-month-silver161001-6-month-platinum161001-6-month-palladium161001-6-month-copper161001-6-month-ng161001-6-month-wtic

Besides the fact that world is in a hell of mess on all fronts — economically, politically and financially, there isn’t much new to report.  The rumours that Deutsche Bank has settled with the U.S. Department of Justice is beside the point, as the bank is basically done for anyway, as the bank run on it has started already — and will only get worse as time passes.  It’s too big to fail — and too big to bail.  All we can do is stand back and watch what happens going forward.  If you didn’t read Doug Noland’s take on it in the Critical Reads section, now is a good time to make amends.

But it’s the situation in Syria that poses the gravest danger at the moment — and if the sociopaths and psychopaths at The Pentagon get their way, the consequences are unimaginable.

The inclusion of the yuan in the basket of currencies that determines the value of the IMF’s Special Drawing Rights — the world new currency — passed into the history books without a murmur yesterday — and with the IMF’s meeting in Washington next Friday, it only remains to be see how soon they start running the electronic SDR printing presses — and in what amounts.

My opinion, for what that’s worth, is that the process will begin soon — and in prodigious quantities as well.  We’ll see.

But, for the moment — and with Friday’s price action in the precious metals being a case in point, it doesn’t appear that JPMorgan et al are about to remove their iron grip from their respective prices.  However, with the amount of gold and silver being delivered on the COMEX this year — and earlier, it’s obvious [at least to me] that much higher prices are in our future.  But as to when, I’m as clueless as anyone else.

But still hanging over the precious metals are these grotesque and obscene short positions — and until that is resolved with a down-side engineered price declines of Biblical proportions in all four, or until some out-of-left-field black swan event blows their respective prices sky high and ‘da boyz’ get over run…things will remain, generally, as they are right now.

I know that’s no consolation, but that’s all I can see for the moment.

And on that cherry note, I’m done for the day — and the week.

Enjoy what’s left of your weekend — and I’ll see you here on Tuesday.

Ed

JPMorgan et al Smash the Precious Metals Using the Job Numbers as Cover

06 August 2016 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much in Far East or early London trading on their Friday, as the world waited for the job numbers report at 8:30 a.m. EDT yesterday morning.  And when they were announced, JPMorgan et al were ready.  Most of the damage was done by 10:45 a.m. EDT, but shortly before the COMEX close, quiet selling pressure appeared once again — and gold was closed almost on its low of the day.

The high and low ticks were reported by the CME Group as $1,371.00 and $1,340.40  in the December contract.

Gold was closed in New York yesterday at $1,335.40 spot, down $25.00 on the day.  Net volume was just over 195,000 contracts — and that includes October and December.160806gold

Here’s the 5-minute gold chart courtesy of Brad Robertson as usual.  The volume spike in the first five minutes after the job numbers was something north of 20,000 contracts — and it didn’t really die off to what could be called background levels until after the 1:30 p.m. EDT COMEX close, which is 11:30 a.m. Denver time on the chart below.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon the following day in Hong Kong and Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ is a must here.160806 5-minute gold

It was more or less the same price pattern in silver, so I shall spare you the gory details.  The spike low of the day came shortly after 2:30 p.m. in the thinly-traded after-hours market.

The high and low ticks in this precious metal were recorded as $20.47 and $19.715 in the September contract.

Silver finished the Friday session at $19.655 spot, down 65.5 cents from Thursday’s close.  Net volume was way up there at 62,407 contracts — and there was decent roll-overs out of September.160806silver

Platinum made it up to $1,164 spot in the first hour that Zurich was open for business on their Friday morning, but ‘da boyz’ didn’t spare this precious metal on the job numbers, either — and the $1,135 low tick came right at the Zurich close.  It rallied ten bucks by the COMEX close, but sold off a few dollars in the after-hours market.  Platinum finished trading in New York yesterday at $1,144 spot, down 12 bucks on the day.160806platinum

The trading pattern in palladium was similar to what it was in platinum — and the powers-that-be closed that metal down 9 bucks — and back below $700 at $694 spot.160806palladium

The dollar index closed very late on Thursday afternoon in New York at 95.79 — and continued to crawl lower from its 5:00 p.m. EDT peak.  The 95.55 low tick came at 12:30 p.m. BST in London — and from there it ‘rallied’ 5 basis points into the jobs report.  The 8:30 a.m. ramp job came to an end at the London p.m. gold fix — and the high tick at that juncture was 96.52.  It began to head south with some conviction at that point, but ‘gentle hands’ appeared about fifteen minutes before the COMEX close — and it inched higher for the rest of the Friday session.  The dollar index closed on Friday at 96.26 spot, up 47 basis points from Thursday.160806intraday.gif

Here’s the 6-month U.S. dollar index and, as I said in yesterday’s column, you can read into it whatever you wish, as it’s just as managed as everything else out there is these days.  As GATA’s Chris Powell said back in 2008 — “There are no markets anymore, only interventions.160806 6-month USD

The gold stocks crashed about 4 percent at the open, but did recover a it by the 10 a.m. EDT gold fix in London.  After that, they didn’t do much, as the HUI closed down 3.43 percent.160806HUI

The silver equities also got hit for about 4 percent at the open, but from there they rallied until just before the 1:30 p.m. COMEX close.  After that they faded a bit as the trading day came to a close.  But despite the fact that silver got clocked for 65 cents the ounce, Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down only 2.18 percent.  It certainly appeared that someone was ‘buying the dip’ yesterday.  Click to enlarge if necessary.160806Silver 7

And here are two charts from Nick that tell all.  The first one shows the changes in gold, silver, platinum and palladium for the past week, which is also the month-to-date chart as well, since August 1 was on Monday.  It shows the changes in both percent and dollar and cents terms, as of Friday’s closes in New York — along with the changes in the HUI and Silver Sentiment/Silver 7 Index.  The Click to Enlarge feature really helps on these charts.160806Weekly

And here’s the year-to-date changes as of the close of trading yesterday.160806Year-to-date

The Daily Delivery Report showed that 395 gold and 1 lonely silver contract were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, the only two short/issuers worth mentioning were International F.C. Stone and ABN Amro with 268 and 125 contracts out of their respective client accounts.  JPMorgan was, once again, the largest long/stopper with 245 contracts for its client[s] plus another 10 for its own account.  Once again Macquarie Futures were there in second place to pick up 77 contracts for its own account.  The rest of the issuers and stoppers are in yesterdays Issuers and Stoppers Report — and that’s linked here.

So far this month, Macquarie Futures has picked up 2,473 gold contracts for its own account — and their accumulation has only started in the last month.  JPMorgan so far in August has stopped 2,969 contracts for its client account, plus another 447 contracts for itself.

The CME Preliminary Report for the Friday trading session showed that gold open interest in August fell by 404 contracts, leaving 2,738 still open, minus the 395 contracts mentioned two paragraphs ago.  Yesterday’s Daily Delivery Report showed that 1,019 gold contracts were issued for delivery on Monday, so that means that 1,019-404=615 gold contracts got added to the August delivery month.  Silver o.i. in August dropped by 56 contracts, leaving 240 still around, minus the 1 lonely silver contract mentioned earlier.  Thursday’s Daily Delivery Report showed that 63 silver contracts were posted for delivery on Monday, so that means that 63-56=7 silver contracts were added to the August delivery month.

Looking at September and October in gold.  Gold o.i. in September fell by 1,662 contracts, leaving 6,276 contracts still open — and October o.i. in gold rose by 316 contracts, bringing the contracts in October still open up to the 48,432 contract mark.

Despite the big drop in the gold price yesterday, a very large 229,077 troy ounces was deposited in GLD.  That deposit takes GLD back almost to its 2016 high which occurred during the first week of July.  Of course, after Friday’s activity — and maybe Monday’s as well — we could see an equally huge withdrawal.  There were no changes in SLV.

There was no sales report from the U.S. Mint on Friday — and month-to-date the mint has sold a laughable 5,500 troy ounces of gold eagles, plus 75,000 silver eagles.  The retail bullion market in the U.S. must be in a world of hurt.

There was a whole bunch more gold deposited at the COMEX-approved warehouses on Thursday.  They received 170,172.450 troy ounces in three different warehouses — and every bar received in all three was in kilobar form.  The gold received at Brink’s, Inc. and Delaware was the U.S./British standard 32.150 troy ounce weight, while the gold received at HSBC USA — 2,500 kilobars — was the Shanghai Gold Exchange weight of 32.151 troy ounces per kilobar.  There was 4,822.500 troy ounces/150 kilobars shipped out of Canada’s Scotiabank.  The link to all of this kilobar activity, in troy ounces, is here.

It was hugely busy in silver as well, as 801,093 troy ounces were reported received — and very healthy 1,749,110 troy ounces were shipped out.  Virtually all of the in/out activity was at CNT and JPMorgan.  The link to all that action is here — and it’s worth a look if you have the interest.

For a change it was rather quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They only received 615 — and shipped out only 378.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, showed the expected deteriorations in the Commercial net short positions in both silver and gold.  However, they weren’t nearly as bad as I expected they would be.

In silver, the Commercial net short position increased by 1,998 contracts, or 9.99 million troy ounces of paper silver.  They achieved this by adding 1,008 contracts to their short positions, plus they also added 3,006 contracts to their short position as well, with the difference between those two numbers being the weekly change.  The Commercial net short position is at another new record high of 545.6 million troy ounces of paper silver.

Ted said that the Big 4 traders added about 2,000 contracts to their already outrageous short position — and he ‘5 through 8’ did precisely the same thing.  The small commercial traders, Ted’s raptors, reduced their short position by around 2,000 contracts.  With the new Bank Participation Report in hand, Ted now pegs JPMorgan’s short position at around 35,000 contracts.  Ted says that JPM hasn’t had a silver short position this big since back in 2008/09 when they took over the short positions of Bear Stearns.

Under the hood in the Disaggregated COT Report, it was quite a different story, as the Managed Money traders, instead of adding to their already record long positions, plus reducing their short positions, actually ran for the hills — selling 2,710 long contracts for enormous profits, plus they added 3,281 contracts on the short side.  Ted’s comment to me was that it was non-technical funds in this category that were responsible for these rather counterintuitive changes.  But, having said that, it’s also safe to assume that the brain-dead Managed Money traders that are technically oriented, did add to their long positions, plus reduce their short positions during the reporting week, so it’s reasonable to assume that these non-technical funds sold far more long contracts — and added more short contracts than this report shows.  Even though Ted and I talked about all this for a while, I’ll be more than interested in his final interpretation of these changes.  Of course with these surprise changes, the ‘Other Reportables’ traders, plus the ‘Nonreportable’/small trader categories in the Disaggregated Report went in the other direction to make up the difference.  Ted also mentioned the fact that there may have been a reporting error as well, but the numbers are what they are.

Here’s the 9-year chart for the silver COT Report — and it’s still ugly in the extreme. Click to enlarge.160806COT - silver

In gold, the Commercial net short position increased by 15,004 contracts, or 1.50 million troy ounce of paper gold.  They arrived at this number by reducing their long position by 3,509 contracts, plus they added 11,495 contracts to their short positions.  The sum of those two numbers is the change for the reporting week.  the Commercial net short position in gold is back up to 32.40 million troy ounces.

Ted said that the Big 4 added around 12,500 contracts to their short positions — and the raptors, the commercial traders other than the Big 8, added another 4,000 or so contracts to their short positions as well.  The ‘5 through 8’ traders reduced their short position by about 1,500 contracts.

Under the hood in the Disaggregated Report, things were a lot more straight forward than they were in silver, although the Managed Money traders accounted for not quite half of the 15,004 contract change in the Commercial net short positions.  During the week they added 9,765 long contracts, plus the added 2,457 short contracts — and the difference between those two number is 9,765-2,457=7,308 contracts.  Almost every other long contract necessary to balance things out came from the ‘Other Reportables’ category, as the ‘Nonreportabe’/small trader category was basically unchanged.

Here’s the 9-year COT chart for gold — and although not at a record high, is still at nose-bleed levels no matter how you care to interpret it.  Click to enlarge.160806COT - gold


 

Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s 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 8 traders in each physically traded commodity on the COMEX.  Click to enlarge.160806Days to Cover

This week’s chart is hugely different from last week.  When I asked Nick why the days-to-cover for the Big 8 traders in silver dropped from 238 days in last week’s chart, to 215 days in this week’s chart, even though the short position in silver was at another new record high: he responded by saying — “It’s because I just updated them all with the latest years production numbers.

I must admit that until I have a firm handle on this, which won’t be until next week, I’ll offer the chart with no comment except to say that the short positions in all four precious metals are outrageous, with silver [as always] being the most egregious of the lot.

The other thing that can be pointed out is the short position of the Big 4 in gold vs. the short position of the ‘5 through 8’ traders — the red bars vs. the green bars in the chart above.  Since one of the largest, if not the largest, trader in the ‘5 through 8’ got bailed out — and the short positions of the non-U.S. bullion banks plunged because of that — see the Bank Participation Report in gold below — the short position of Big 4 now represent 72.5 percent of the short position of the Big 8 traders in gold.  In silver, that number is 69.3 percent.  Talk about concentration — and I know that Ted will have lots to say about it later today in his weekly review.

The Big 8 traders in gold are short 49.1 percent [almost half] of the entire open interest in the COMEX futures market in gold, plus they’re short 46.5 percent of the entire COMEX futures market in silver—and these positions are held against thousands of other traders in these two precious metals who are long the COMEX futures market.   Ted pointed out that if you subtract out the market-neutral spread trades in both these precious metals, the Big 8 are actually short more than 50 percent of the total COMEX open interest in both metals.

How much more outrageous can this get?  And neither the CFTC nor the miners say, or do, anything.


The July Bank Participation Report [BPR] data is extracted directly from the above Commitment of Traders Report.  It shows the COMEX 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.  For this one day a month we get to see what the world’s banks are up to in the COMEX futures market, especially in the precious metals—and they’re usually up to quite a bit.

In gold, 5 U.S. banks are net short 96,818 COMEX contracts in the August BPR.  In July’s Bank Participation Report [BPR], that number was 93,370 contracts, so they’ve increased their collective short positions by a rather smallish 3,448 contracts during the reporting period.  Three of the five banks would include JPMorgan, Citigroup—and HSBC USA.  As for who the fourth and fifth banks might be—I haven’t a clue, but I doubt very much of their positions, long or short, would be material.

Also in gold, 28 non-U.S. banks are net short 74,981 COMEX gold contracts.  In the July BPR 25 non-U.S. banks were net short 98,464 COMEX contracts, so the month-over-month change is monstrous, as they’ve decreased their collective short positions by 23,483 contracts, or 23.8 percent.  Ted’s comment was that the trader in the ‘5 though 8’ category in gold that got bailed out in last week’s COT Report, was a foreign bank.  But which bank it was may never be known.  However it might be Canada’s Scotiabank, as they’re the only foreign bank that I know of with a short position approaching that size.

I’ll be very curious to see what Ted has to say about all this in his weekly review this afternoon.

As of this Bank Participation Report, the world’s banks are net short 29.5 percent of the entire open interest in gold in the COMEX futures market, which is not a big change from the 29.3 percent they were short in the July BPR.

Here’s Nick’s chart of the Bank Participation Report for gold going back to 2000.  Charts #4 and #5 are the key ones here.  Note the blow-out in the short positions of the non-U.S. banks [the blue bars in chart #4] when Scotiabank’s COMEX gold positions [both long and short] were outed in October of 2012.  That’s why I suspect that it was Scotiabank that got rescued last week. CLICK to ENLARGE is a must here!160806BPR - gold

In silver, 4 U.S. banks are net short 37,134 COMEX silver contracts—and it was Ted’s back-of-the-envelope calculation from yesterday that JPMorgan holds around 35,000 contracts of that net short position on its own.  The net short position of these five U.S. banks was 32,329 contracts in the July BPR, so there’s been a 4,805 contract increase in the net short positions of the U.S. banks since then. Based on the August BPR numbers in silver, it’s a mathematical certainty that the other 4 U.S. banks are about market neutral in the COMEX futures market in silver — and if they are net short, it’s only by a few thousand contracts at most.  As Ted says, JPMorgan is the ‘Big Kahuna’ in silver as far as the U.S. banking system is concerned — and these numbers prove it in spades.

Also in silver, 15 non-U.S. banks are net short 37,794 COMEX contracts—and that’s down a hair from the 38,020 contracts that 19 non-U.S. banks held short in the July BPR.  I’m still prepared to bet big money that Canada’s Scotiabank is the proud owner of a goodly chunk of this short position—about the same as JPMorgan holds.  That most likely means that a few of the remaining 14 non-U.S. banks might actually be net long the COMEX silver market.

As of this Bank Participation Report, the world’s banks are net short 33.4 percent of the entire open interest in the COMEX futures market in silver—which is virtually unchanged from the 33.2 percent that they were net short in the July BPR — with the lion’s share of that is held by JPMorgan and Canada’s Scotiabank.

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!160806BPR - silver

In platinum, 5 U.S. banks are net short 14,054 COMEX contracts in the August Bank Participation Report.  In the July BPR, these same banks were short 9,892 COMEX platinum contracts, so they’ve increased their net short position by 42 percent in one month.

I’d guess that JPMorgan holds the lion’s share of that 14,054 contract net short position.

Also in platinum, 16 non-U.S. banks are net short 12,169 COMEX contracts, which is virtually unchanged from the 12,570 contracts they held short in July.

If there is a large player in platinum among the non-U.S. banks, I wouldn’t know which one it is.  However I’m sure there’s at least one big one in this group.  The reason I say that is because before mid-2009 when the U.S. banks showed up, the non-U.S. banks were always net long the platinum market by a bit—see the chart below—and now they’re net short.  The remaining 15 non-U.S. banks divided into whatever contracts are left, isn’t a lot, unless they’re all operating in collusion—which I doubt.  But from the numbers it’s easy to see that the platinum price management scheme is an American show as well, with one big non-U.S. bank involved.  Scotiabank perhaps?

And as of this Bank Participation Report, the world’s banks are net short 33.0 percent of the entire open interest in platinum in the COMEX futures market, which is down a bit from the 35.2 percent they were collectively net short in the June BPR.  CLICK to ENLARGE is a must here as well.160806BPR - platinum

In palladium, 4 U.S. banks were net short 4,283 COMEX contracts in the July BPR, which is up quite a bit from the 2,532 contracts they held net short in the July BPR.  Even if JPMorgan held all these contracts themselves, and they might, it’s a pretty small amount, but it’s still a month-over-month increase of 69 percent.

Also in palladium, 15 non-U.S. banks are net short 4,480 palladium contracts—which is a pretty big increase from the 2,534 COMEX contracts that these same banks were short in the July BPR.  But if you divide up the short positions of the non-U.S. banks more or less equally, they are immaterial, just like they are in platinum.

As of this Bank Participation Report, the world’s banks are net short 29.9 percent of the entire COMEX open interest in palladium.  In July’s BPR they were only net short 23.2 percent.

Here’s the palladium BPR chart.  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007—and they became the predominant and controlling factor by the end of Q1 of 2013.  But their footprint is pretty small now, but has been increasing for the last two months as palladium has rallied.  However, I would still be prepared to bet big money that, like platinum, JPMorgan holds the vast majority of the U.S. banks’ remaining short position in this precious metal.160806BPR - palladium

As I say every month at this time, the three U.S. banks—JPMorgan, Citigroup, HSBC USA—along with Canada’s Scotiabank— are the tallest hogs at the precious metal price management trough. However, this month may be different, because as I said further up, it looks like it was Scotiabank that got bailed out of its gold short position.

But JPMorgan and Canada’s Scotiabank still remain the two largest silver short holders on Planet Earth in the COMEX futures market.  And it appears that JPMorgan is back in the position of being King Silver Short, but Scotiabank is a very close second.


Here’s a chart the Nick Laird passed around several hour after I’d filed Friday’s column, so here it is now.  It was his answer to a story in Forbes headlined “So Why Do Indian Households Invest So Much In Gold?” — and that story is linked here, plus I have another story about it in the Critical Reads section as well.

Anyhow, Nick went on to say in his covering e-mail that “The real reason why Indians invest in gold is that they would lose too much value by investing in assets valued in Indian Rupees. It’s a simple case of physical vs. fiat and how to preserve one’s wealth.”  Give that man a cigar!

Here’s the gold price in Indian Rupees going all the way back to 1976 — and the reason why they buy so much gold is self-evident.  Click to enlarge.160806India Gold

And Nick’s next chart is the withdrawals from the Shanghai gold exchange, updated with July’s data — and they reported that the withdrawals for that month totalled 117.6 tonnes.  The ‘click to enlarge‘ feature works well here too.160806SGE

Despite my best efforts to hack and slash in the editing room, I still have a decent number of stories for you today — and I hope you can find the time in what’s left of your weekend to read the ones that interest you.


CRITICAL READS

July Jobs Report: Trying to Find Meaning in the Meaningless — Jeffrey Snider

The BLS released yet another perfect payroll report for July. It hit on all the major themes, putting further distance to the shocking May number. All the right people have been reassured by all the right parts.

U.S. employment rose at a solid clip in July and wages rebounded after a surprise stall in the prior month, signs of an improving economy that opened the door wider to a Federal Reserve interest rate increase in September…

We view this report as easily clearing the hurdle needed to keep the Fed on track for a September rate hike. The bar for not moving now is much higher,” said Rob Martin, an economist at Barclays in New York.

Unfortunately for anyone who still thinks the Establishment Survey contains useful information, the quotes above were written in August 2015, not August 2016, about the July 2015, not July 2016, jobs figures. That happy sentiment last year at this time was derived from the initial estimate of +215k, less than the current July’s +255k. After revisions showed that, at least according to the BLS view of the trend-cycle world, the labor market last summer was supposedly much stronger than first thought, the Establishment Survey now registers an impressive +277k for July 2015.

And it mattered not one bit.

This commentary by Jeffrey showed up on David Stockman’s website yesterday — and I thank Roy Stephens for today’s first news item.  Another link to it is here.


Earnings beats are concealing bad results

Investors shouldn’t be fooled by this season’s “better-than-expected” earnings—they are still pretty bad.

With nearly 90{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the S&P 500 companies having reported second-quarter results through Friday morning (437 out of 505), aggregate earnings-per-share for the group are on course to decline 3.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} from a year ago, according to FactSet.

Many Wall Street strategists are pleased, because that is a lot better than expectations of a 5.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} decline on June 30, just before earnings reporting season kicked off. So are investors, as the S&P and NASDAQ Composite Index   closed in record territory Friday, and the Dow Jones Industrial Average closed less than 0.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} away.

But that is like saying you should be happy with the “D” you got, because it would really be a “B” if the teacher changed the scale to grade on a curve.

This commentary appeared on the marketwatch.com Internet site at 4:13 p.m. on Friday afternoon EDT — and it comes courtesy of Scott Linn.  Another link to this story is here.


This Bond Sale May Solve Wall Street’s $566 Billion Problem

Bonds sold on Thursday could determine whether Wall Street banks stay in the $566 billion business of packaging commercial mortgages into securities.

The nearly $871 million issue, from Wells Fargo & Co., Bank of America Corp., and Morgan Stanley, is the first to comply with new rules designed to make commercial mortgage-backed securities safer for investors.

To meet new regulations, the banks are keeping some of the offering. Bankers across the industry are unsure of a crucial piece of information about the assets that they hang onto: Will regulators view them like bond investments or mortgage loans? If regulators treat them like bonds, more underwriters are likely to exit the business, which generates $2 billion of annual revenue for them, according to research firm Coalition Development.

Any exit would be another blow for Wall Street bond businesses, which have already experienced 30 percent drops in revenue in the last three years after getting hammered by litigation, regulation, and shrinking customer volume. The decline of their commercial mortgage bond units could also make it harder for property owners to borrow. Banks already have $1.9 trillion of the real estate loans on their books, and regulators are pressuring them to reduce risk from the assets.

This Bloomberg article was posted on their Internet site at 5:00 p.m. Denver time on Wednesday — and I thank West Virginia reader Elliot Simon for finding it for us.  Another link to this story is here.


A Global Derivatives Expert Shines the Light on Systematic Risk

As promised in last week’s edition of The Passing Parade, below you’ll find my notes from a wide-ranging and very interesting conversation I had with a friend of mine who recently retired from a position as a very senior risk manager for one of the world’s largest banks.

Unlike most people in his elevated position, my friend—we’ll call him John—is about as down to earth as can be. He lives simply, drives an old truck, and exudes none of the arrogance found in many of his peers.

In fact, if you were to meet him you’d never guess that, until recently, he operated at the very pinnacle of the world of high finance, overseeing tens of billions of dollars of stock, bond, and option transactions on a daily basis.

Given the positions he has held, I strongly suspect he is one of the few people in the world who understands the quadrillion-dollar spider web of derivatives contracts stretching around the globe.

Wow!  This long and somewhat involved interview between David Galland and ‘John’ is definitely a must read.  It appeared on the garretgalland.com Internet site yesterday sometime — and it’s the second offering of the day from Roy Stephens.   Another link to this very long, but worthwhile interview is here.


Decline of Empire: Parallels Between the U.S. and Rome, Part III — Doug Casey

Wars made Rome. Wars expanded the country’s borders and brought it wealth, but they also sowed the seeds of its destruction, especially the three big wars against Carthage, 264-146 BCE.

Rome began as a republic of yeoman farmers, each with his own plot of land. You had to be a landowner to join the Roman army; it was a great honor, and it wouldn’t take the riffraff. When the Republic was threatened—and wars were constant and uninterrupted from the beginning—a legionary might be gone for five, ten, or more years. His wife and children back on the farm might have to borrow money to keep things going and then perhaps default, so soldiers’ farms would go back to bush or get taken over by creditors. And, if he survived the wars, an ex-legionary might be hard to keep down on the farm after years of looting, plundering, and enslaving the enemy. On top of that, tidal waves of slaves became available to work freshly confiscated properties. So, like America, Rome became more urban and less agrarian. Like America, there were fewer family farmers but more industrial-scale latifundia.

War turned the whole Mediterranean into a Roman lake. With the Punic wars, Spain and North Africa became provinces. Pompey the Great (106-48 BCE) conquered the Near East. Julius Caesar (100-44 BCE) conquered Gaul 20 years later. Then Augustus took Egypt.

The interesting thing is that in the early days, war was actually quite profitable. You conquered a place and stole all the gold, cattle, and other movable property and enslaved the people. That was a lot of wealth you could bring home—and then you could milk the area for many years with taxes. But the wars helped destroy Rome’s social fabric by wiping out the country’s agrarian, republican roots and by corrupting everyone with a constant influx of cheap slave labor and free imported food. War created longer, faraway borders that then needed to be defended. And in the end, hostile contact with barbarians” actually wound up drawing them in as invaders.

This commentary by Doug is another one that’s certainly worth reading, but it ends in an infomercial as well.  It was posted on the internationalman.com Internet site yesterday sometime — and another link to it is here.


Those Hacked DNC Emails: It Was NSA, Not Putin — Judge Andrew P. Napolitano

On the eve of the Democratic National Convention, WikiLeaks — the courageous international organization dedicated to governmental transparency — exposed hundreds of internal emails circulated among senior staff of the Democratic National Committee during the past 18 months.

At a time when Democratic Party officials were publicly professing neutrality during the party’s presidential primaries, the DNC’s internal emails showed a pattern of distinct bias toward the candidacy of former Secretary of State Hillary Clinton and a marked prejudice toward the candidacy of Sen. Bernie Sanders. Some of the emails were raw in their tone, and some could fairly be characterized as failing to respect Sanders’ Jewish heritage.

The revelation caused a public uproar during the weekend preceding the opening of the Democratic convention in Philadelphia last week, and it caused the DNC to ask its own chairwoman, Rep. Debbie Wasserman Schultz, to resign. When she declined to do so, President Barack Obama personally intervened and implored her to leave. She submitted to the president’s wishes, gave up her public role as chair of the convention and eventually resigned as chair of the DNC late last week.

In order to take everyone’s eyes off this intrusive and uncomfortable bouncing ball, the leadership of the DNC, in conjunction with officials of the Clinton campaign, blamed the release of the DNC emails on hackers employed by Russian intelligence agents. Many in the media picked up this juicy story and repeated it all last week.

But the Russians had nothing to do with it.

This interesting commentary showed up on David Stockmans’ website on Thursday — and it’s a repost from the Lew Rockwell website.  It’s the third offering of the day from Roy Stephens.  Another link to this article is here.


We are all Keynesians now, so let’s get fiscal — Ambrose Evans-Pritchard

The Bank of England has done everything possible under the constraints of monetary orthodoxy to cushion the Brexit shock. It is now up to the British government to save the economy, and the sooner the better.

Monetary policy is close to the limits. The Bank’s pre-emptive £170bn stimulus package is brave – and unquestionably the right thing to do in these dramatic circumstances – but it is not an economic bazooka and much of the boost will leak into asset price inflation.

Governor Mark Carney said the package should be enough to eke out a “little growth” and avert a recession in the second half of the year.

Catastrophist talk of an instant downward spiral following a No vote in the referendum – mostly emanating from George Osborne’s coterie – was always premised on the willfully-false assumption that the Bank of England would sit idly by and let it happen. Today’s actions have at least demolished that canard. As Mr Carney said, the imperative now is to make Brexit a “success”.

This AE-P commentary put in an appearance on the telegraph.co.uk Internet site at 7:12 p.m. BST on their Thursday evening, which was 2:12 p.m. in New York — EDT plus 5 hours — and it’s the fourth and final contribution from Roy Stephens.  Another link to this article is here.


Saving the system — Alasdair Macleod

Monetary policy, we are told, is all about staving off recession and stimulating economic growth.

However, not only is monetary debasement in any form counterproductive and destroys the personal wealth of the masses, but the economists who devised today’s monetarism have completely lost their way.

This article addresses the confusion surrounding this subject, and concludes the real reason for today’s global monetary policies is an ultimately futile attempt to prevent a systemic and economic crisis.

This longish commentary by Alasdair was posted on the goldmoney.com Internet site on Thursday sometime — and I found it embedded in a GATA release.  Another link to this article is here.


Doug Noland: Updating Government Finance Quasi-Capitalism

The policy response to the 2008/2009 crisis was nothing short of phenomenal. A Trillion of QE from the Fed, zero rates and massive bailouts. Still, the Fed at the time claimed to be committed to returning to the previous policy regime as soon as practical. The Fed devoted significant resources toward mapping out a return to normalcy, going so far as releasing in 2011 a detailed “exit strategy” for normalizing rates and returning its balance sheet to pre-crisis levels.

But with the European crisis at the brink of turning global back in 2012, it had become clear by that point that thoughts of returning to so-called “normalcy” were illusionary. It may have been the ECB’s Draghi talking “whatever it takes,” but he was speaking for global central bankers everywhere. QE was no longer just a crisis measure. It would effortlessly provide unlimited ammo for which to inflate securities markets and spur risk-taking and economic activity. If zero rates were not providing the expected market response, no reason not to go negative. If buying sovereign bonds wasn’t getting the job done, move on to corporates and equities.

Such a deviant policy backdrop coupled with an already deeply distorted and speculative market backdrop ensured descent into a truly freakish financial landscape. Most obvious, markets have come to largely disregard risk. Serious cracks in China and Europe have been largely ignored by global markets. The increasingly alarming geopolitical backdrop is completely disregarded. Brexit was regarded – for about a trading session. Global economic vulnerability is on full display, though massive QE and negative-yielding developed country sovereign debt ensures a “money” deluge into the corporate debt marketplace. Concern for risk has hurt performance. Recurring bouts of concern puts one’s career at risk – whether one is a portfolio manager, financial advisor, trader, independent investor, analyst or strategist.

I am most nervous because I see no dialing back Government Finance Quasi-Capitalism. Government intervention – in the U.S., Europe, Japan, China and EM – has been so egregious and overpowering that retreat has become unthinkable. Policymakers would have to admit to historic misjudgment – and then be willing to accept the consequences of reversing course. Global markets and economies are now fully dependent upon aggressive fiscal and monetary stimulus. Bubbles are in the process of “going to unimaginable extremes – and then doubling!” Bursting Bubbles will evoke finger-pointing and villainization. That’s when the geopolitical backdrop turns frightening.

Doug’s weekly Credit Bubble Bulletin is always a must read for me.  This week’s edition was posted on his Internet site around midnight Denver time last night.  Another link to his commentary is here.


Trump Jaw-Jaws NATO, WW3, Crimea, Ukraine, ISIS — John Batchelor Interviews Stephen F. Cohen

This week we see our pundits finally reacting to the DNC (and Clinton) allegations that Donald Trump and Putin are somehow comrades – the concept that Trump is a Putin apologist or worse…. Cohen, on the other hand, finds this interesting that in light of all the very recent Putin bashing Trump is still talking in terms of a kind of détente. Given that the whole of the now obviously compromised nature of anti-Russian, anti Putin stance, a presidential candidate is taking such a radical position has to be bizarre in American politics! Even as it is, Trump’s statements are somewhat clumsily expressed. Clinton, on the other hand, is clearly the warmonger and stays firmly hostile against Russia. We are increasingly hearing that voting for Clinton is a vote for war – at least from those that pay attention to the details behind these events.

Trump’s understanding of the strategic nature of NATO is also astute, as are his funding questions regarding budgetary fairness with US allies. But on whether Russia should be treated as a hostile power Trump has clearly come out in favour of moderation. (What is striking in Cohen’s commentary is that prior to the current Ukrainian Civil War there was zero interest for Russia in amalgamating Crimea into Russia from Ukraine!)  Cohen and Batchelor are starting to explain Donald Trumps ideas of how to deal with foreign even “unaligned countries” like Russia and China and they have nothing to do with the Wolfowitz Doctrine or hegemony, and that puts him at odds with both parties and the neocon factions present therein. There follows an interesting discussion on American history of interference in Russian politics and Ukraine as a measure of contrast with what Trump intends as president.

Finally the discussion leads to Syria where events are beginning to take an historic turn for Russia, Syria and ISIS. While the move to détente with Washington weakens – due to Sec. Defence, Ash Carter’s strong statements of opposition – Russian and Syrian forces are preparing for the final assault on Aleppo. To this end they are creating safe corridors for civilians out of the city and even a surrender route for ISIS troops. A major assault is in the works and, if successful, will see Assad get his country back. However, for Obama’s hopes for a “mini-détente” for his legacy as president, the train may have already left the station.

This 40-minute audio interview was posted on the audioboom.com Internet site on Tuesday — and I thank Ken Hurt for sending the link.  But the big THANKS always goes out to Larry Galearis for providing the above executive summary.  Another link to this interview is here.


A Gloomy Egypt Sees Its International Influence Wither Away

In a televised speech, Abdel Fattah el-Sisi, a general turned president, warned Egyptians that they lived in a broken country surrounded by enemies who would never leave them alone.

Take a good look at your country,” he said during the speech in May. “This is the semblance of a state, and not a real state.

Egypt needed law and order and strong institutions if it was to reverse its downward spiral and become “a state that respects itself and is respected by the world,” he said.

While rare in its bluntness, Mr. Sisi’s assessment is widely shared by Egyptians.

After five years of political and economic turmoil, a sense of gloom hangs over the country. Traditionally a leader of the Arab world, politically and culturally, and home to a quarter of its population, Egypt has become inward-looking and politically marginalized in a way not seen for generations.

The country is a basket case — end of story.  This essay, filed from Cairo, appeared on The New York Times back on Tuesday, but for content reasons had to wait for my Saturday column.  It comes courtesy of Patricia Caulfield — and another link to it is here.


Airbus A380 Customer Qantas Doesn’t Want the Last Eight on Order

Qantas Airways Ltd. said it doesn’t want the remaining eight A380s it still has on order because the dozen it operates now are sufficient to meet demand, further dimming future sales prospects for the largest passenger plane that’s struggled to find buyers.

Our intention is that we’re not taking those aircraft,” Qantas Chief Executive Officer Alan Joyce said Friday at an airline conference in Brisbane, Australia.

Qantas was one of the original operators of the A380 and looked to become one of the biggest buyers of the double-decker built by Airbus Group SE. Joyce has pushed back delivery of the remaining planes for about two years now, joining customers including Virgin Atlantic Ltd. that haven’t outright canceled orders but are unlikely ever to have them fulfilled. That leaves Emirates of Dubai as the one committed buyer of the aircraft.

Airbus announced a drastic cut in production last month of the flagship super-jumbo, saying it would build about 12 of the planes annually compared with close to 30 in recent years. The number of aircraft Joyce said he needs is in line with most other operators of the model, including Deutsche Lufthansa AG and British Airways. Emirates’ orders account for close to 50 percent of the model’s backlog.

This brief, but very interesting Bloomberg story, was posted on their website at 4:49 a.m. MDT yesterday morning — and it’s courtesy of Brad Robertson via Zero Hedge.  Another link to this news item is here.


Why Do Indians Spend So Much on Gold? RBI to Study

The Reserve Bank of India has set up a committee to study Indian household financing patterns and why Indians spend large sums on gold.

The panel will look at various facets of household finance in India and to benchmark India’s position vis-a-vis both peer and advanced countries, the RBI said in a statement on Thursday.

The panel, headed by Tarun Ramadorai, professor of financial economics at the University of Oxford, will have representation from financial sector regulators SEBI, IRDAI, and PFRDA apart from the RBI.

It will consider “whether, how, and why the financial allocations of Indian households deviate from desirable financial allocation and behaviour (for example, the large household allocation to gold).

This story showed up on The Times of India website on Thursday sometime.  I found it on the gata.org Internet site, complete with Chris Powell’s headline which read “Maybe Indians buy so much gold because their currency is so crappy“.  Another link to this gold-related news item is here.


Chinese gold demand hugely down on a year ago — Lawrie Williams

The Shanghai Gold Exchange (SGE) has just announced its latest monthly gold withdrawals figure for July, which came to 117.6 tonnes, making withdrawals for the year to end July 1,090.7 tonnes, suggesting a full year total of perhaps north of 1,800 tonnes.  Given the PBoC equates SGE withdrawals to its calculation of Chinese gold demand, despite this being hugely in excess of consumption as calculated by the main precious metals research consultancies – in part due to their rigid categorisation as to what should actually be included in their figures -the latest SGE figure might be seen as pretty respectable given they would seem to represent somewhere between 50 and 60{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of global new mined gold output.  That is until one compares the latest figures with last year’s SGE gold withdrawals at the same time!

To put it in perspective, last year in July the SGE reported gold withdrawals out of the exchange for that month at a massive 285.5 tonnes, comfortably more than double this year’s statistic.  The year to end July figure in 2015 was 1,463.9 tonnes – which means Chinese gold demand, as expressed by the SGE reports, is running 25{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} below the levels of a year ago.  Admittedly 2015 was a huge new record year for SGE gold withdrawals – almost 2,600 tonnes for the full year – and the July withdrawals figure was also a record for a single month.  Even so, the latest July figure is the lowest since February this year when the SGE was closed for a week for the Chinese New Year holiday and does suggest that the weak Chinese demand noted by many observers is still in full swing.

This commentary by Lawrie appeared on the sharpspixley.com Internet site yesterday — and it’s certainly worth reading.  Another link to this article is here.


The PHOTOS and the FUNNIES

I took these photos very late in the afternoon on Thursday — and for that reason, the colours are far more vivid than they would be if I’d taken them very early in the afternoon, which is when I normally go out.  The first is a female red-necked grebe in non-breeding colours looking for a young ‘un to give that freshly-caught fish to.  She was a little further away that I wanted, so the image quality is not what I would like.  The second photo is of a pair of Cherry-Faced Meadowhawks ‘doing it’ in the grass.  They were ‘doing it’ in the air too, but until they landed there was no way that I was going to get the shot.  I took it from about 5 meters away, and it’s heavily cropped as well, so the image quality is not what I would like either.  The ‘click to enlarge‘ feature really helps here.160806 2016 08 01 1

160806 2016 08 01 4160806Cartoon 8160806Cartoon 4


The WRAP

Today’s pop blast from the past is a classic from back in 1970 and, arguably, the opening guitar riff is one of the greatest in the history of rock.  Let’s see…2016-1970=46 years ago!  How did we get to be so old?  The link is here.  Enjoy!

Today’s classical ‘blast from the past’ is Antonín Dvořák’s Cello concerto in B minor, Op. 104 which he composed in 1894/95.  I’ve heard it live several times — once with the great cellist Mstislav Rostropovich and also with Yo Yo Ma.  I was listening to it on my home stereo system yesterday — and thought I’d present it as today’s classical selection.  Here is Mstislav himself, who is considered to be the greatest cellist of the 20th century, with the London Symphony — and the link is here.


Not surprisingly, JPMorgan et al used the cover of the job numbers, to beat the living daylights out of all four precious metals, plus copper yesterday.   But it was mostly silver and gold they were after. They also ramped the dollar index pretty good as well.  But the dollar effect faded after the London p.m. gold fix — and had to be ‘rescued’ in afternoon trading in New York.

Since this is my Saturday column, here are the 6-month charts for the Big 6+1 commodities.160806 6-month gold

160806 6-month silver160806 6-month platinum160806 6-month palladium160806 6-month copper160806 6-month NG160806 6-month WTIC

I would suspect, but don’t know for sure, that this is the start of the long-awaited engineered price decline — and how long it lasts, or how deep it goes, is unknown at the moment.  If they’re serious about this, I’m sure they’ll lay another beating on the precious metals at the open on Sunday evening in New York, so I’ll be watching for that when the time comes.

The headline to Alasdair Macleod’s commentary further up is “Saving the System” — and that’s what all these wild financial machinations are about — and have been for almost a generation now.  But after the 2007-2009 melt-down, the situation has become ever more desperate.

And because of that, I think it very apropos at this juncture to dredge up Peter Warburton’s April 2001 essay “The Debasement of World Currency:  It is inflation, but not as we know it” which is linked here.

I’ve lost count of the number of times I’ve linked this piece — and the number of times I’ve quoted from his essay what I consider to the three most important paragraphs ever written about the precious metals price management scheme in particular — and the war against all commodities in general — and here they are:

Central banks are engaged in a desperate battle on two fronts

What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the US dollar, but of all fiat currencies. Equally, they seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.

It is important to recognize that the central banks have found the battle on the second front much easier to fight than the first. Last November I estimated the size of the gross stock of global debt instruments at $90 trillion for mid-2000. How much capital would it take to control the combined gold, oil, and commodity markets? Probably, no more than $200 billion, using derivatives. Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world’s large investment banks have over-traded their capital [bases] so flagrantly that if the central banks were to lose the fight on the first front, then the stock of the investment banks would be worthless. Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices.

Central banks, and particularly the U.S. Federal Reserve, are deploying their heavy artillery in the battle against a systemic collapse. This has been their primary concern for at least seven years. Their immediate objectives are to prevent the private sector bond market from closing its doors to new or refinancing borrowers and to forestall a technical break in the Dow Jones Industrials. Keeping the bond markets open is absolutely vital at a time when corporate profitability is on the ropes. Keeping the equity index on an even keel is essential to protect the wealth of the household sector and to maintain the expectation of future gains. For as long as these objectives can be achieved, the value of the US dollar can also be stabilized in relation to other currencies, despite the extraordinary imbalances in external trade.

If this doesn’t describe what’s going on right now, I don’t know what does.  However, I’m sure that even Warburton has been taken aback by how long and how far this fight has gone on without the whole system imploding.

But sooner or later it will — and probably sooner, rather than later.

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

Ed