Author Archives: edsteer

JPMorgan P.M. Traders Indicted in “Criminal Enterprise”

17 September 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price blasted higher on the Saudi Arabia bombing news the moment that trading began at 6:00 p.m. EDT in New York on Sunday evening.  Needless to say it ran into ferocious opposition almost instantly — and the price was capped and turned lower around 8:25 a.m. China Standard Time on their Monday morning.  That sell-off lasted until around 11 a.m. CST — and from there it chopped very quietly sideways until shortly before 2 p.m. in after-hours trading in New York.  A bit of selling pressure reappeared — and the gold price was carefully closed back below $1,500 spot by 5:00 p.m. EDT.

The high and low ticks were reported by the CME Group as $1,512.80 and $1,496.90 in the October contract — and $1,519,70 and $1,503.40 in December.

Gold was closed in New York on Monday afternoon at $1,497.90 spot, up an even $10 on the day.  Net volume was a bit over 332,000 contracts — and there was 18,000 contracts worth or roll-over/switch volume on top of that.

The price activity in silver was very similar, although it had a extra ticks higher…the first at noon in Shanghai — and the other at the 11 a.m. EDT London close.  But the gains in both those rallies had pretty much vanished by the end of the Monday trading session.

The high and low ticks in silver were recorded as $18.075 and $17.69 in the December contract.

Silver was closed on Tuesday at $17.825 spot in the December contract.  Net HFT silver volume was a bit under 106,500 contracts — and there was 3,000 contracts worth of roll-over/switch volume in this precious metal.

Platinum also jumped up a bit on the bombing news — and its price was capped and turned lower at 8 a.m. CST on their Monday morning.  It was sold back to almost unchanged by 11 a.m. in Shanghai — and then didn’t do much until shortly after 11 a.m. in Zurich.  It edged a bit higher from there, but ran into ‘something’ around 2 p.m. in Zurich/8 a.m. in New York — and its price was blasted lower until the 10 a.m. EDT afternoon gold fix in London.  It crept unevenly higher from that juncture into the 1:30 p.m. COMEX close — and didn’t do a thing after that.  Platinum was closed at $935 spot, down 11 bucks from Friday.

Palladium was down 9 dollars by 11 a.m. China Standard Time on their Monday morning, but began to edge higher from there, with the high tick of the day…around $1,606 spot…coming at 10 a.m. in Zurich.  It then wandered unevenly sideways until the same 2 p.m. CEST/8 a.m. EDT as platinum.  That special ‘someone’ showed up in palladium at that point as well — and the low tick was set shortly after the afternoon gold fix in London.  It recovered quickly off its low — and then really didn’t do much of anything for the remainder of the Monday session.  Palladium was closed at $1,584 spot, down 6 bucks from Friday.

The dollar index closed very late on Friday afternoon in New York at 98.26 — and opened down 14 basis points once trading commenced around 6:35 p.m. EDT on Sunday evening, which was 6:35 a.m. China Standard Time on their Monday morning..  It’s 98.03 low tick was set around 7:25 p.m. EDT/7:25 a.m. CST — and it’s a reasonable assumption to make that the usual ‘gentle hands’ appeared.  It rallied rather smoothly from there until a very few minutes before the 11 a.m. EDT London close — and its 98.71 high tick was set at that juncture.  It traded very quietly and unevenly sideways for the remainder of the day.  The dollar index finished the Monday session at  98.61…up 35 basis points from its close on Friday.

Of course, there was no correlation whatsoever between what precious metal price were doing — and what was going in in the currency market yesterday.

Here’s the DXY chart from BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…98.18…and the close on the DXY chart above, was 43 basis points on Monday.  Click to enlarge as well.

The gold stocks gapped up at the open — and then were sold back below unchanged briefly, as the gold price was hit for a few bucks shortly after the equity markets opened in New York yesterday morning.  That was short-lived, as the gold price turned on a dime — and the shares followed.  The gold price was capped and turned lower for the final time a few minutes after the London close — and the stocks followed the gold price until shortly after 1 p.m. EDT — and the proceeded to trade unevenly higher by a hair going into the 4:00 p.m. close of trading.  The HUI finished up 1.51 percent.

The silver equities followed the gold shares up until silver’s price was also capped and turned lower a few minutes after the London close — and from that juncture they traded unevenly sideways with a slight negative bias until the equity markets closed at 4:00 p.m. in New York.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index close higher by 2.71 percent.  Click to enlarge if necessary.

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

And, for a pleasant change, the three usual laggards…Buenaventura, Peñoles — and Hecla…weren’t laggards yesterday.  Hecla closed up 8.29%.


The CME Daily Delivery Report showed that 6 gold and 147 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, the two short/issuers were ADM and Advantage, with 4 and 2 contracts out of their respective client accounts.  The three long/stoppers were Advantage, Morgan Stanley and JPMorgan, with 3, 2 and 1 contracts — all for their respective client accounts.

In silver, the three short/issuers were ABN Amro, ADM and Advantage…with 109, 24 and 14 contracts — and all from their respective client accounts.  There were six long/stoppers in total.  The largest was Advantage, with 68 for its client account.  In second spot was JPMorgan, with 51 contracts in total…49 for clients, plus 2 for its own account.  In third spot was CME Group, picking up 14 contracts for its own account, which it immediately reissued as 5×14=70 one-thousand troy ounce mini silver contracts.  ADM picked up 41 of those — and Advantage stopped the other 29.

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 September rose by 4 contracts, leaving 29 still open, minus the 6 contracts mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that only 1 gold contact was actually posted for delivery today, so that means that 4+1=5 more gold contracts were added to September.  Silver o.i. in September declined by 74 contracts, leaving 374 still around, minus the 147 contracts mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 98 silver contracts were actually posted for delivery today, so that means that 98-74=24 more silver contracts were just added to the September delivery month.


There were no reported changes in GLD on Monday, but there was another hefty withdrawal from SLV, as an authorized participant removed another 2,899,591 troy ounces.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of trading on Friday, September 13 — and this is what they had to report.  They added 25,173 troy ounces of gold, plus 59,800 troy ounces of silver.

Other than what was reported in GLD, SLV and  Zürcher Kantonalbank reported above, there was very little activity in any of the other gold and silver ETFs on Monday.

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

There was a tiny bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  There was 2,636.382 troy ounces/82 kilobars [SGE kilobar weight] dropped off at Brink’s, Inc. — and in the ‘out’ category, there was 198 troy ounces that departed Delaware.  I won’t bother linking this.

There was a bit more activity in silver, as one truckload…624,535 troy ounces…was shipped into Brink’s, Inc. — and the only ‘out’ activity was 15,216 troy ounces that departed Delaware.  The link to that is here.

The only activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday was one lone kilobar…32.151 troy ounces…that was taken out of Brink’s, Inc.  I shan’t bother linking this activity, either.


Here are the usual two charts that Nick passes around on the weekend.  They show the amount of gold and silver in all known depositories, ETFs and mutual funds, as of the close of business on Friday, September 13.  During the ‘week that was’…there was a net 555,000 troy ounces of gold taken out — and in silver, that number was a whopping 6,939,000 troy ounces that was withdrawn on a net basis.  Click to enlarge for both.

I have a have a lot of stories/articles for you today.


CRITICAL READS

Retail Apocalypse: 2019 Store Closures Already Surpass 2018

As the economy cycles down through fall, there is new, alarming data by professional services firm BDO USA LLP, first reported by The Wall Street Journal, that indicates retail bankruptcies continue to rise as store closures have already outpaced all of 2018.

BDO warned that the recent acceleration of the retail apocalypse was primarily due to last year’s weak holiday shopping season.

The rate of bankruptcy filings and store closures this year have jumped to crisis levels, expected to continue into 2020.

David Berliner, who leads business restructuring at BDO, said the trend is rather alarming but could slow into late 2019. “I don’t think the pace of the bankruptcy filings will be as large as it was in the first half,” he added.

BDO found many retailers are dealing with massive debt loads, over expansion due to cheap money, private equity-ownership pressures, and changing consumer behavior. It was the weak consumer in the 2018 shopping season that led to the acceleration of store closures in 2019.

Retail sales in 1H19 were lackluster, due to smaller tax refunds for consumers, trade war uncertainties and tariffs, and inclement weather, which forced many retailers to offer significant discounts, according to BDO.

This longish chart-filled commentary showed up on the Zero Hedge website at 9:31 a.m. EDT on Monday morning — and it’s the first offering of the day from Brad Robertson.  Another link to it is here.


Something Just Snapped: Chaos Hits Repo Market as “Dollar Funding Storm” Makes Thunderous Landfall

Late last Friday, we warned that a “dollar funding storm” is set to make landfall in the U.S. amid a series of converging sources of pressure that we said would result in “secured funding markets breaking higher“, among which:

  • elevated UST supply,
  • bloated dealer balance sheets and year-end regulatory constraints, and
  • a banking system near reserve scarcity.

Ironically, it was the rising recession concerns in August – manifesting in the form of an inverted yield curve, cash hiding in repo, and a slow build in UST supply – that kept secured funding pressures at bay. However, as we explicitly noted last Friday, “clear signs of funding pressure could emerge starting next week with sizeable coupon settlements and the mid-September corporate tax date.”

Fast forward to today, i.e. “next week” when the dollar funding storm we warned about has just made thunderous landfall and the overnight general collateral repo rate, an indicator of secured market stress and by extension, dollar funding shortages, soared from Friday’s close of 2.25% to a high of 3.80%, a spike of over 150bps…Click to enlarge.

Commenting on today’s shocking move, BMO rates strategist Jon Hill said that “secured funding markets are clearly not functioning well,” adding that a jump like this, one which is not happening during the traditional quarter end window dressing period, is “bordering on chaos.”

Needless to say, such a move – without a clear catalyst – is a clear indication that plumbing in the overnight funding markets has just snapped, and is badly broken to be trading so far above the effective funds rate. As Bloomberg adds, the spike suggests the next few months could be volatile given the expected increase in Treasury supply, bloated dealer balance sheets, regulatory issues and a banking system where reserves are scarce.

Picking up where he left off in his Friday note, BofA head of rates strategy Mark Cabana said that while “one day is not a big deal, if funding pressures persist, it implies a loss of control of funding markets,” adding what we pointed out previously, namely that “If the market is struggling now, it raises questions about how well the market will handle the fourth-quarter funding squeeze.”

We’ll see how this turns out — and if Mr. Powell has anything to say about it in his remarks after the FOMC meeting tomorrow afternoon EDT.  This is another Zero Hedge news item.  It was posted on their Internet site at 2:15 p.m. EDT on Monday afternoon — and another link to it is here. Bill King, of King Report fame had this to say about it in his Tuesday blog…”A big negative on Monday was the surge in repo rate.  The overnight rate hit 7% during the final hour of trading.  It settled at 5% after the close.  Some pundits proffered the view that a day or two of a funding squeeze would not be a problem.  But if the need for funds continues, let alone accelerates, look out.


The Dollar and Democracy Are Frauds — Bill Bonner

You now understand as well as we do why the money system is doomed. Today’s dollar is fake, with no firm connection to the real world of time, resources, and output.

The “wealth” it produces is fake too. We saw that last week; in the 50 years after WWII, household net worth averaged about 350% of GDP. Then, suddenly it shot up to over 500%. Where did that extra money – about $30 trillion of extra household wealth – come from?

Among the many, it’s slim pickins. Real median household income was a little over $60,000 in the late ’90s; it’s still a little over $60,000. But among the few, it’s high cotton all year round. Joel Kotkin elaborates:

The top 1% in America captured just 4.9 percent of total U.S. income growth in 1945-1973, but since then the country’s richest classes has gobbled up an astonishing 58.7% of all new wealth in the U.S., and 41.8 percent of total income growth during 2009-2015 alone…

You already know what was really going on; the fix was in.

This rather brief commentary from Bill appeared on the bonnerandpartners.com Internet site early on Monday morning EDT — and another link to it is here.


The Sky is Falling — Jeff Thomas

Governments are in the flimflam business.

Pared down to the bare essentials, governments can be very useful in passing and enforcing a small number of very basic laws. These laws should be limited to policing those who would seek to aggress against others, or their property. Governments may also have a value in providing protection from invasion – organizing an army of able-bodied people to address this collective problem, if and when it occurs.

And that’s about it. Beyond that, the private sector can, and almost always does, do a better job at virtually everything else. Therefore, a government should be small, cost very little to run and do as little as possible.

But since a government already exists, why not have it do more? Why not assign to it some of those tasks that tend not to attract businessmen?

Well, the simple, but almost universally little-understood, reason is that governments do not actually produce anything. They are, in fact, a parasitical construct that consumes money but creates nothing of worth.

This worthwhile commentary from Jeff was posted on the internationalman.com Internet site on Monday morning EDT — and another link to it is here.


Russia prevents Israeli airstrikes in Syria

The controversy between Israel and Russia regarding airstrikes of Iranian targets in Syria and Iraq continues, despite the meeting Between Prime Minister Benjamin Netanyahu and Russian President . This was reported on Friday by Independent Arabia.

According to the report, Moscow has prevented three Israeli airstrikes on three Syrian outposts recently, and even threatened that any jets attempting such a thing would be shot down, either by Russian jets or by the S400 Anti-aircraft missiles.

The source cited in the report claims a similar situation has happened twice, and that during August, Moscow stopped an airstrike on a Syrian outpost in Qasioun, where a S300 missile battery is placed.

Moreover, it was claimed that another airstrike planned for a week later on a Syrian outpost in the Qunaitra area and a third airstrike on a sensitive area in Latakia. This development is what pushed Netanyahu to have his quick visit in Russia to try and convince Putin to ignore Israel’s attacks in Syria. According to the Russian source, Putin let Netanyahu know that his country will not allow any damage to be done to the Syrian regime’s army, or any of the weapons being given to it, because giving such a permission would be seen as giving Israel leniency – something that contradicts Russia’s goal of assisting the Syrian regime.

This story has multiple sources…The Jerusalem Post — and Independent Arabia…and this iteration put in an appearance on the informationclearinghouse.com Internet site on Saturday sometime — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Saudi Oil Output Cut in Half After Drones Strike Aramco Site

Saudi Arabia’s oil production was cut by half after a swarm of explosive drones struck at the heart of the kingdom’s energy industry and set the world’s biggest crude-processing plant ablaze — an attack blamed on Iran by the top U.S. diplomat.

Iran-backed Houthi rebels in Yemen, who’ve launched several drone attacks on Saudi targets in the past, claimed responsibility for the assault on the kingdom’s Abqaiq plant.

U.S. Secretary of State Michael Pompeo said in a tweet there’s no evidence the attacks came from Yemen and blamed Iran directly, but didn’t offer evidence for that conclusion either. President Donald Trump spoke with Saudi Crown Prince Mohammed Bin Salman by telephone but hasn’t commented directly. Dow Jones reported that Saudi and U.S. officials are investigating the possibility that cruise missiles were launched from Iraq, which is much closer than Yemen.

About 5.7 million barrels per day of output has been suspended, Saudi Aramco said in a statement. “Work is underway to restore production and a progress update will be provided in around 48 hours,” said Amin H. Nasser, Aramco’s president and chief executive officer.

That’s affected about half of Saudi Arabia’s oil production. Gas output was also disrupted, with 2 billion cubic feet in daily output, about half of normal production, stopped by the attack, SPA news agency said, citing the kingdom’s Energy Minister Abdulaziz bin Salman. Operations in Abqaiq and Khurais are halted for now.

Abqaiq is the heart of the system and they just had a heart attack,” said Roger Diwan, a veteran OPEC watcher at consultant IHS Markit.

This Bloomberg news story was posted on their website at 10:32 p.m. PDT on Friday night — and was last updated about twenty hours after that.  Swedish reader Patrik Ekdahl was the first reader through the door with this story — and another link to it is here.  A parallel Bloomberg story to this is headlined “Pompeo Blames Iran for Drone Attack on Saudi Oil Industry” — and that’s from Patrik as well.  Then there’s this story from the off-guardian.org Internet site headlined “Oiling for War: The Houthi Attack on Abqaiq” — and that comes courtesy of Roy Stephens.


‘Locked and Loaded’ for War on Iran? — Patrick Buchanan

In recent decades, the U.S. has sold the Saudis hundreds of billions of dollars of military equipment. Did our weapons sales carry a guarantee that we will also come and fight alongside the kingdom if it gets into a war with its neighbors?

Before Trump orders any strike on Iran, would he go to Congress for authorization for his act of war?

Sen. Lindsey Graham is already urging an attack on Iran’s oil refineries to “break the regime’s back,” while Sen. Rand Paul contends that “there’s no reason the superpower of the United States needs to be getting into bombing mainland Iran.”

Divided again: The War Party is giddy with excitement over the prospect of war with Iran, while the nation does not want another war.

How we avoid it, however, is becoming difficult to see.

John Bolton may be gone from the West Wing, but his soul is marching on.

This commentary from Pat put in an appearance on his Internet site on Monday sometime — and I thank Phil Manuel for sliding it into my in-box in the very week hours of Tuesday morning EDT.  Another link to it is here.


Gold and The Art of Financial War Revisited — Andy Schectman

GATA doesn’t get invited anymore to financial conferences in Toronto and Vancouver now that touting mining shares takes precedence over warning monetary metals investors about manipulation of the markets by governments and central banks. But at the Sprott Natural Resources Symposium in Vancouver six weeks ago the president of Miles Franklin Precious Metals, Andy Schectman, gave a wonderful presentation about the comprehensive deception being waged against the monetary metals by governments, central banks, and their investment bank allies.

This 23-minute video presentation was posted on the youtube.com Internet site on Saturday sometime — and it’s link here.  I found this embedded in the daily blog that I get from Miles Franklin Precious Metals every day — and I borrowed the previous paragraph from the GATA dispatch about it.


U.S. charges JPMorgan precious metals traders over alleged market manipulation

Two current and one former JPMorgan Chase & Co executives were charged over allegedly participating in market manipulation in the trade of precious metals including gold, silver, platinum and palladium between 2008 and 2016, the Department of Justice said on Monday.

The three men – global precious metals desk head Michael Nowak, precious metals trader Gregg Smith, and former trader Christopher Jordan, who left JPMorgan in 2009 – were charged with a racketeering conspiracy and other federal crimes, it said in a statement.

A spokesman for JPMorgan declined to comment. One of the largest gold traders in the world, the bank said in an August regulatory filing it was “responding to and cooperating with” investigations by various authorities, including the Department of Justice, relating to trading practices in the metals markets.

Reuters reported on Sept. 12 that Nowak and Smith had been placed on leave from the bank pending the ongoing investigation.

It’s truly regrettable that the DOJ decided to go forward with a prosecution of Mike Nowak, who has done nothing wrong. We look forward to representing him at trial and expect him to be fully exonerated,” Nowak’s attorneys, David Meister and Jocelyn Strauber of Skadden, Arps, Slate, Meagher & Flom LLP, said in an emailed statement.

The defendants “and their co-conspirators allegedly engaged in a complex scheme to trade precious metals in a way that negatively affected the natural balance of supply-and-demand,” Federal Bureau of Investigation (FBI) Assistant Director William Sweeney said in the statement.

Not only did their alleged behavior affect the markets for precious metals, but also correlated markets and the clients of the bank they represented,” said Sweeney, who works in the FBI’s New York Field Office.

Ted Butler found it rather outrageous that one of the lawyers defending JPMorgan’s Nowak is, in fact, a former CFTC Enforcement Division head — and was holding that position during the time period that these offenses occurred over at JPMorgan.  You couldn’t make this stuff up!  This Reuters story, filed from Washington, was posted on their website at 4:47 a.m. EDT on Monday morning — and was updated about eight hours later.  It comes to us courtesy of Doug Milne — and another link to it is here.


DoJ Accuses JPMorgan’s Precious Metals Trading Desk of Being a Criminal Enterprise

Who would have thought that JPMorgan’s precious metals trading desk is the functional equivalent of the mafia, and that its one-time leader, Blythe Masters, was the mafia’s don?

Well, almost everyone who didn’t mind being designated a conspiracy theorist for years. And now comes vindication, because this has just been confirmed by the DOJ, which accused the PM trading desks at JPMorgan of being deeply involved in what prosecutors described as a “massive, multiyear scheme to manipulate the market for precious metals futures contracts and defraud market participants.”

In an indictment unsealed on Monday morning, the DoJ charged Michael Nowak, a JPMorgan veteran and former head of its precious metals trading desk and Gregg Smith, another trader on JPM’s metals desk, in the probe. (Blythe Masters was somehow omitted).

Based on the fact that it was conduct that was widespread on the desk, it was engaged in in thousands of episodes over an eight-year period — that it is precisely the kind of conduct that the RICO statute is meant to punish,” Assistant Attorney General Brian Benczkowski told reporters.

Here are all the gory details, as this Zero Hedge story has the entire DoJ indictment document embedded in this article.  It might just has well have come straight from Ted Butler, as it contains every detail of what he’s spoken about regarding JPMorgan since they took over Bear Stearns in March of 2008.  It was posted on their website at 1:52 p.m. on Monday afternoon EDT — and it certainly falls into the must read category.  Another link to it is hereBloomberg carried the story as well — and it’s headlined “JPMorgan’s Metals Desk Was a Criminal Enterprise, U.S. Says” — and I thank Dan Moore for that one.


JPMorgan Inherited ‘Spoof’ Method From Bear Stearns, U.S. Says

When JPMorgan Chase & Co. took over Bear Stearns more than a decade ago, it got two traders with a new trick.

Their strategy: Use multiple fake orders to manipulate the prices of precious metals futures. The maneuver, adopted by the traders’ new colleagues at JPMorgan, became part of a spoofing and rigging campaign so expansive that federal authorities have now likened it to a criminal enterprise operating inside the U.S.’s biggest bank.

In a criminal indictment unsealed on Monday, U.S. prosecutors accused three JPMorgan traders of rigging futures trades in precious metals for nearly a decade, making millions of dollars for the bank at the expense of counterparties that included the bank’s own clients.

The charges were the latest turn in a years-long investigation that has previously yielded guilty pleas from traders at several banks, including two from JPMorgan. Prosecutors said more than a dozen JPMorgan employees ultimately helped make manipulative “spoof” trades for the bank, in part by using the strategy their new colleagues brought in May 2008.

That pair, Gregg Smith and Christiaan Trunz, showed their new JPMorgan colleagues “a new style of layering multiple deceptive orders at different prices in rapid succession,” prosecutors wrote. The strategy made their market spoofing more difficult to execute and detect, prosecutors wrote in the indictment of Smith and two others. Trunz pleaded guilty last month and is cooperating with authorities.

The strategy was adopted by Michael Nowak, who was JPMorgan’s global head of precious metals trading when he was put on leave last month.

Federal prosecutors charged Nowak, Smith and a third man, Christopher Jordan, of “conspiracy to conduct the affairs of an enterprise involved in interstate or foreign commerce through a pattern of racketeering activity” — counts more commonly known as RICO charges. That language, rarely used in big bank cases, suggests that JPMorgan may face deeper legal jeopardy that goes beyond the individuals who have already been prosecuted.

JPMorgan declined to comment.

As Chris Powell says at the beginning of this GATA dispatch…”A powerful vindication of silver market analyst and whistleblower Ted Butler, who long has said the racket began with JPMorganChase’s acquisition of Bear Stearns.”  This Bloomberg story appeared on their Internet site at 4:26 a.m. EDT on Monday morning — and was updated about ten hours later.  It’s definitely worth reading — and another link to it is here.


Sitting on a gold mine? Thieves steal £1mn toilet from U.K. palace

A £1 million golden toilet has been stolen from the birthplace of Winston Churchill. The dirty crime involved thieves ripping the 18-carat gold commode from its plumbing, causing flooding at the Oxfordshire palace.

Thames Valley Police arrested a 66-year-old man in connection with the theft after they received a report of a burglary at Blenheim Palace early Saturday morning.

Thieves broke into the historical site and stole a “high value toilet made out of gold that was on display at the palace,” Detective Inspector Jess Milne said.

Due to the toilet being plumbed in to the building, this has caused significant damage and flooding.”

The golden toilet was named ‘America’ and was part of a contemporary art exhibition at the palace. Created by Italian artist Maurizio Cattelan, it was plumbed into a wooden chamber opposite the room where former U.K. prime minister Churchill was born, and visitors were able to queue up to use it.

The toilet has not been recovered, and police have issued an appeal for anyone who may have information to come forward.

This rather laughable news item showed up on the rt.com Internet site at 2:10 p.m. Moscow time on their Saturday morning, which was 7:10 a.m. in New York — EDT plus 7 hours — and it was updated about forty-eight hours later.  The first person through the door with this gold-related news item was U.K. reader Tariq Khan — and another link to it is here.  There was a story on this from the telegraph.co.uk Internet site about this with the very cheeky headline… “£4.8m golden lavatory stolen from Blenheim Palace … police have nothing to go on” — and I found that in a GATA dispatch.


The PHOTOS and the FUNNIES

After taking the photos of the pontoon boats shooting the rapids on the Thompson River on June 23 in Saturday’s column…this first photo was about 7 kilometers/4 miles away looking out over the river, mainly WSW, with the coastal mountain range in the background.  That’s a CP train snaking its away along the canyon, with the CN rail bed on the opposite bank.  The Trans-Canada Highway heads south at the turn,  just visible near the centre of the photo — and then follows the Fraser RiverB.C. Highway 12 to Lillooet branches off to the right…northwest up the Fraser River canyon at Lytton,  a very few kilometers around that same corner.  The Thompson River flows into the Frazer River at Lytton.  Click to enlarge.  The second photo shows Lytton from Ferry Road, with the confluence of the Thompson and Frazer Rivers barely visible just to the left of center of the photo.  Only the difference in water colour makes it obvious. The last shot shows the Lytton ferry across the Fraser, that takes you to the settlements on the other side. We’ve been there — and done that, but it’s a story for another day.  Click to enlarge.


The WRAP

Not that there was any doubt in most people’s minds, but the fact that JPMorgan is the capo di tutti capi of the price management scheme in the precious metals in general — and silver in particular, was put up in lights by the U.S. Department of Justice on Monday.  The manipulation deniers can say whatever they want, but the facts of the case now speak for themselves.

And as Chris Powell stated in one his dispatches yesterday…” [It’s] a powerful vindication of silver market analyst and whistleblower Ted Butler, who long has said the racket began with JPMorgan Chase’s acquisition of Bear Stearns.”  And it also jibes quite nicely with what Jim Rickards has said in the public domain about JPMorgan over the years, calling them “the biggest criminal organization the world has ever known.”

And to top it all off, just about everything that’s in the indictment is what Ted has written about for the last ten or so years regarding the take-over of Bear Stearns by JPMorgan.

Of course it remains to be seen at what point in this ongoing and now public conspiracy, that JPMorgan will exit stage left as short seller of last resort — and sometimes first resort as well.  If or when they do, the remaining short sellers will be on the hook for potentially catastrophic losses.  And if I were a short seller of any size in the precious metals arena in the COMEX futures market, I would be looking to cover as quickly as I could…because the first person out the door will lose the least.

I suppose, as Ted Butler said on the phone yesterday, that doesn’t preclude ‘da boyz’/Big 8 traders from engineering another price decline.  But if they did, they would be doing it full view of the DoJ…who are obviously wise to the whole scheme from A to Z…but didn’t come out and say it exactly those words.  I’m sure Ted will have lots to say in his mid-week commentary for his paying subscribers on Wednesday.

Here are the 6-month charts for the four precious metals, also courtesy of stockcharts.com — and the only change worth noting, was the change in the silver price.  Copper gave back all of Friday’s gains — and the gap higher in WTIC is the highlight of the day.  Click to enlarge for all.

And as I type this paragraph, the London open is less than a minute away — and I note that the gold price chopped quietly sideways throughout most of the Far East trading session on their Tuesday, but was turned quietly lower shortly before 2 p.m. China Standard Time — and is down $3.70 the ounce. Silver’s price path was virtually identical — and it’s lower by 6 cents as London opens. Ditto for platinum — and it was sold lower at 2 p.m. CST — and is down 3 bucks. Palladium was up 11 dollars or so by shortly after 8 a.m. CST — and it has been sold very unevenly lower since. It’s off its current low by a hair — and is now down 2 dollars as Zurich opens.

Net HFT gold volume is coming up on 55,500 contracts — and there’s only a tiny 696 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is about 14,500 contracts — and there’s a tiny 229 contracts worth of roll-over/switch volume on top of that.

The dollar index hasn’t been doing much of anything since trading commenced around 7:45 p.m. EDT on Monday evening in New York, which was 7:45 a.m. China Standard Time on their Tuesday morning. But it ticked higher starting a few minutes before 2 p.m. CST — and is up 11 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.


Well, the FOMC meeting starts today — and with the oil refinery bombing in Saudi Arabia on the weekend, plus the rather dicey situation that exists in the repo market right now — and topped off by an ever-rising dollar index, I wouldn’t want to hazard a guess as to what Powell will have to say tomorrow afternoon at 2 p.m. EDT.

But whatever he has to say will most likely move the markets — and it just remains to be seen in which direction they move, or are allowed to move.


And as I post today’s efforts on the website at 4:02 a.m. EDT, I note that the price of gold and silver jumped a bit higher starting a few minutes before the London open, as the dollar index hit its current high tick — and headed a bit lower. And as London closes, gold is now down only 60 cents the ounce — and silver by 3 cents. Platinum and palladium barely missed a beat in their quiet downward price paths, with the former down 5 dollars — and the latter by 9 as the first hour of Zurich trading ends.

Gross gold volume is around 68,500 contracts — and minus the tiny amount of roll-over/switch volume, net HFT gold volume is a bit under 67,000 contracts. Net HFT silver volume is coming up on 16,000 contracts — and there’s still only 255 contracts worth of roll-over/switch volume on top of that.

The dollar index topped out about five minutes before the London/Zurich opens — and has headed lower since — and is only up 4 basis points as of 8:45 a.m. in London/9:45 a.m. in Zurich.

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

Ed

Gold Closed Lower…But Silver Unchanged on the Day

11 September 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The selling pressure in gold began shortly after trading commenced at 6:00 p.m. EDT in New York on Monday evening — and it was sold lower until around 9:35 a.m. CST on their Tuesday morning.  It didn’t do much from there until 2 a.m. CST on their Tuesday afternoon — and then began to head higher.  That lasted until 9:30 a.m. in London — and it was sold quietly lower into the COMEX open from there.  It rallied rather sharply from that juncture until 9:40 a.m. EDT, where it was stopped dead in its tracks the moment that it broke above the $1,500 spot mark.  It was unevenly down hill from there — and the low tick of the day was set about twenty minutes before trading ended at 5:00 p.m. EDT.

The high and low ticks were reported as $1,502.50 and $1,487.80 in the October contract — and $1,509.10 and $1,494.30 in December.

Gold was closed in New York on Tuesday at $1,485.30 spot, down $13.30 from Monday.  Net volume was enormous, as always seems to be the case these days, at 384,000 contracts — and there was just over 14,500 contracts worth of roll-over/switch volume on top of that.

The silver price followed an almost identical path as gold, except its rally at the COMEX open took it into positive territory by a bit — and it was up 13 cents or so by shortly before 10 a.m. in New York.  The price managed to stay in positive territory until around 3 p.m. EDT in after-hours trading…but was sold lower from there — and back into negative territory by a hair.

The high and lows in silver were recorded by the CME Group as $18.265 and $17.855 in the December contract.

Silver was closed at $17.99 spot, down 0.5 cents from Monday.  Net volume was monstrous once again at 110,000 contracts — and there was around 7,100 contracts worth of roll-over/switch volume in this precious metal.

Platinum was sold very unevenly lower starting about an hour after trading began at 6:00 p.m. in New York on Monday evening — and its low of the day was set shortly before 1:30 p.m. China Standard Time on their Tuesday afternoon.  It rallied from there into the Zurich open, but was capped at that point — and it traded mostly sideways in a fairly narrow price range until around 9:45 a.m. in New York when its high of the day was printed.  From that juncture it was sold quietly lower until shortly after 3 p.m. in the thinly-traded after-hours market — and it didn’t do much after that.  Platinum was closed at $928 spot, down 16 bucks from Monday.

The palladium price didn’t do much until 8 a.m. in Shanghai on their Tuesday morning — and it was sold down to its low at 10 a.m. CST.  After a bit of an up/down move it began to head sharply higher a few minutes before the Zurich open.  It then ran into ‘something’ minutes after the Zurich open — and it was sold down hard over the next hour and change, before beginning to tick higher once more. It had a bit of a bumpy ride in COMEX trading New York — and it bounced off the $1,543 spot mark on a number of occasions.  It was sold quietly lower from noon EDT until the 1:30 p.m. COMEX close — and it traded flat until the trading day ended at 5:00 p.m. EDT.  Palladium was closed at $1,538 spot, up 14 dollars on the day.

The dollar index closed very late on Monday afternoon in New York at 98.28 — and opened up five basis points once trading commenced around 7:45 p.m. EDT, which was 7:45 a.m. China Standard Time on their Tuesday morning.  It crept higher from that juncture until 9:10 a.m. CST — and then proceeded to chop somewhat unevenly sideways everywhere on Planet Earth for the remainder of the Tuesday session.  The dollar index finished the day at 98.33…up the same 5 basis points that it started the day at.

Once again, the price action in the precious metals had zero to do with what was happening in the currency market.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the good folks over at the stockcharts.com Internet site.  The delta between its close…98.31…and the close on the DXY chart above, was 2 basis points on Tuesday.   Click to enlarge as well.

The gold shares gapped down over a percent at the open, but quickly rallied to their highs of the day at 10:20 a.m. in New York trading.  From that point, it was quietly and unevenly down hill until trading ended at 4:00 p.m. EDT.  The HUI finished the day down only 0.68 percent, which I considered to be a positive development.  Click to enlarge.

The silver equities also gapped down at the open — and began to rally from there until around 12:20 p.m.  They managed to hang in there until 2 p.m. before finally succumbing — and were sold very quietly lower into the 4:00 p.m. close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 2.17 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 as well.

And as I just pointed out regarding the gold shares, the overall share price action in both silver and gold was very encouraging.


The CME Daily Delivery Report showed that 22 gold and 156 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.

In gold, the three short/issuers were International F.C. Stone, Advantage and ADM, with 9, 7 and 6 contracts out of their respective client accounts.  The two long/stoppers were JPMorgan and Advantage, with 18 and 4 contracts.  JPMorgan picked up 11 contracts for its client account, plus another 7 for its own account.  Advantage stopped 4 for its client account.

In silver, there were five short/issuers in total — and the only two that mattered were Advantage and ABN Amro, with 85 and 62 contracts out of their respective client accounts.  There were seven long/stoppers in total — and the two largest were Advantage and ABN Amro as well, picking up 49 and 41 contracts for their respective client accounts.  In second spot was Australia’s Macquarie Futures, stopping 27 for its own account.  In fourth place was JPMorgan, picking up 25 contracts in total…16 for clients — and 9 for its own account.

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

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in September fell by 50 contracts, leaving 46 still open, minus the 22 mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 51 gold contracts were actually posted for delivery today, so that means that 51-50=1 more gold contract got added to September.  Silver o.i. in September declined by 320 contracts, leaving 598 still around, minus the 156 mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 458 silver contracts were actually posted for delivery today, so that means that 458-320=138 more silver contracts just got added to the September delivery month.


There were no reported changes in GLD on Tuesday, which I found somewhat surprising.  But there was another withdrawal from SLV, as an authorized participant removed 1,777,268 troy ounces.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on in their gold and silver ETFs as of the close of business on Friday, September 6 — and this is what they had to report:  They added a smallish 1,797 troy ounces of gold, but removed 340,701 troy ounces of silver.

There was a small sales report from the U.S. Mint yesterday.  They sold 500 troy ounces of gold eagles — and 233,000 silver eagles.

There was a tiny amount of gold movement over at the COMEX-approved depositories on Monday.  Nothing was reported received — and only 2,123 troy ounces were shipped out.  Of that amount, there was 2,025.450 troy ounces/63 kilobars [U.K./U.S. kilobar weight] shipped out of Canada’s Scotiabank — and the remaining 97 troy ounces…one good delivery bar…departed Brink’s, Inc.  I won’t bother linking this amount.

There was pretty big activity in silver, as 1,199,488 troy ounces was reported received — and 344,994 troy ounces were shipped out.  All of the ‘in’ activity…two truckloads…was dropped off at CNT.  The ‘out’ activity was split up between three different depositories.  The two largest were HSBC USA, which shipped out 293,215 troy ounces — and Canada’s Scotiabank, which parted with 48,968 troy ounces.  There were a couple of paper transfers from the Eligible to the Registered category…599,828 troy ounces at CNT — and another 147,718 troy ounces at the International Depository Services of Delaware.  This is undoubtedly in preparation for delivery in September.  The link to all this is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They reported receiving 347 of them — and shipped out 1,195.  All of this occurred at Brink’s, Inc, as per usual — and the link to that, in troy ounces, is here.


Below is a chart that Nick Laird passed around on Monday, that I just didn’t have space for in my Tuesday column…so here it is now.  It shows the withdrawals from the Shanghai Gold Exchange, updated with August’s dataDuring that month they took out 107.73 tonnes…which isn’t a lot.  Gold demand in China is obviously shrinking — and has been that way almost since the beginning of the year.  Lawrie Williams has something to say about it in ‘The Wrap‘ section below.  Click to enlarge.

I have very little in the way of stories/articles for you today.


CRITICAL READS

Trump Fires John Bolton in Final Break After Months of Internal Policy Division

President Trump has fired national security adviser John Bolton, the lifelong proponent of American hard power, after months of division between the men over the direction of foreign and national security policy.

Bolton responded with his own post on Twitter asserting that he had initiated the idea that he would step down, but that Trump decided to wait until the following day.

Bolton was Trump’s third national security adviser and continued the pattern of departures by advisers who proved a bad fit for a White House led by the rare president with no prior experience with the military, national security or elected office.

Deputy White House press secretary Hogan Gidley told reporters that Bolton’s deputy, Charles Kupperman, now will serve as an acting national security adviser. As a protégé of Bolton, Kupperman is unlikely to last very long in the job; Trump said he would name a new adviser next week.

The position does not require Senate confirmation so Trump can pick whoever he likes, but it was unclear on Tuesday who the White House considers to be among the potential candidates.

This news item appeared on the npr.org Internet site at 12:03 p.m. EDT on Tuesday morning — and I thank Roy Stephens for sending it along.  Another link to it is here.  The Zero Hedge spin on this his headlined “Trump Fires John Bolton After “Disagreeing Strongly With His Suggestions” — and I thank Brad Robertson for that one.  Tom Luongo also had something to say about this in an article headlined “Trump Thumping Bolton is a Good Start


Jamie Dimon on the End of Trading: “The Battle is More in the Tech World Than in Having Brilliant Traders

The world of trading, as generations of traders knew it, is over, and it took a timestamp from Jamie Dimon to make it official: “The battle is more in the tech world at this point than in having brilliant traders.”

And so, in a world in which being a better trader – i.e. outsmarting everyone else – no longer matters as the market is now hopelessly broken by central banks, and instead just speed and the ability to front-run order-flow is relevant, it is no surprise that JPMorgan was reserved in its Q3 revenue outlook, which while set to rise 10% in Q3 – only due to a base effect – will continue the recent trend of disappointing trading revenue.

We’re not jumping for joy,” JPM CEO Jamie Dimon said Tuesday during an investor conference in New York, quoted by Bloomberg. The 10% gain is only possible because Q3 2018 was very weak; on a sequential basis, the Q3 2019 revenue will be a decline of about 10% versus the already disappointing second quarter, Dimon said.

Other banks are set to be even worse: Citi’s trading revenue is set to drop this quarter amid the brief bout of volatility that gripped markets in August, CFO Mark Mason said Monday; Bank of America’s fixed-income trading revenue will likely be down “a little bit,” while equities trading has done well, COO Tom Montag said.

Over the past decade, Wall Street trading desks have transformed into deserted ghost towns, struggling to keep up with their electronic peers amid an unprecedented shift to cheaper, more efficient passive investing; at the same time struggles among hedge funds and moves to cheaper electronic trading have made banks’ securities units less profitable. According to Bloomberg, the five biggest U.S. banks saw a collective $5 billion drop in trading revenue in the first half of the year after an 8% slide in the second quarter and a 14% decline in the first three months of the year.

This is just the start: according to Dimon, margins will continue to drop across the financial sector as more trades move to electronic platforms, and as “trading” as we once knew it, is no more.

This rather sombre, but not surprising article was posted on the Zero Hedge website at 4:45 p.m. on Tuesday afternoon EDT.  The above six paragraphs are all there is to it — and another link to the hard copy is hereGregory Mannarino‘s post market-close rant on Tuesday is linked here.


Book Review of James Rickards “Aftermath

Aftermath” is the latest addition to three previous publications by Rickards, Currency Wars (2011), The Death of Money (2014), The Road to Ruin (2016). Together, with the present offering (Aftermath, 2019), the author uses the analogy of the Four Horsemen of the Apocalypse to illustrate the themes of his four books. The latest book is thematic in its approach to the events which have taken place in the world in general and the United States in particular during this period.

Rickards had previously worked for the CIA (possibly still does – who knows?) but now seems to be a free-wheeling business executive, writer and strategic analyst. He tends to circulate outside of the usual middle-ranking semi-elite circles preferring to consort with the less observable, higher-ranking coteries of the inner-party. Moreover, he has nothing but disdain for the run-of-the-mill talking heads to be found (in abundance) in the media and academia – the outer-party.

His observations of this social stratum are unapologetic and caustic:

History is the first casualty of media micro-second attention span. An army of pseudo-savants saturate the airways to explain that tariffs are bad, trade wars hurt growth and mercantilism … are a throwback to the 17th century. These sentiments come from mainstream liberals and conservatives and tag-along journalists trained in the orthodoxy of so-called free-trade and the false if comforting belief that trade deficits are the flip-side of capital surpluses. So, what is the problem? … The problem is that perpetual trade deficits have put the United States on a path to a crisis of the US$.”

As is apparent, his contempt is palpable.

It should be said that much of his writing and theorising is at times occasioned by a high level of sophistication, alas sadly lacking in most of his contemporaries. But for all his refinement and eloquence, that doesn’t stop him being, from Off Guardian’s perspective (and mine), on the other side – the side of the Anglo-Zionist empire.

This book review by Frank Lee put in an appearance on the off-guardian.com Internet site on Saturday sometime — and it comes to us courtesy of Roy Stephens.  It’s worth reading if you have the interest — and another link to it is here.


Serbs Ignore E.U. Warning Over Plan to Join Russia-Led Trade Union

Serbia’s plan to join a Russian-led economic union is drawing ire from the European Union, which the Balkan nation says it wants to be part of.

The E.U.’s executive commission has made clear that Serbia will have to cancel any bilateral trade agreements with other countries if and when it joins the E.U., and leaders said they’d rather see Belgrade aligning its policies more with the bloc’s. Serbian officials have ignored the criticism and will sign a deal to join the Eurasian Economic Union on Oct. 25.

The plan is “not a hindrance to European integration,” Serbian Trade Minister Rasim Ljajic said by email last week. The European Commission’s warning isn’t going to “affect Serbia’s decision to enter into this agreement in Moscow,” he said.

The E.U. has no say over which groups Serbia joins while it’s not a member, but some of its representatives indicated they would like to see greater commitment to membership, especially after an E.U. progress report earlier this year showed that Serbia was only partially aligning its foreign and security policies with the E.U.’s.

Serb leaders have said that E.U. membership is a priority, a goal they hope to achieve around the middle of next decade. At the same time, Serbia has historic and religious ties with Russia, which is helping it prevent the further recognition of Kosovo in international bodies. Additionally, Russia has donated fighter jets and tanks to Serbia and Serb leaders, including President Aleksandar Vucic, are frequent visitors to Moscow.

You can’t be marching in several directions at the same time,” Slovak Foreign Minister Miroslav Lajcak, who spent years working in the Balkans, said last month in Helsinki. “If you’re serious about your European orientation then obviously you make political decisions that bring you closer to it. This is not one of them.”

The E.U. bulls hit never stops.  This Bloomberg news item appeared on their website at 8:00 p.m. PDT on Tuesday evening — and I thank Swedish reader Patrik Ekdahl for sharing it with us.  Another link to it is here.


Chinese Auto Sales Crash For the 14th Time in 15 Months, Falling 9.9%

Chinese auto sales continue to plunge deeper into recession, with the country’s China Passenger Car Association releasing preliminary data for August that in no way indicates that the trend could be slowing.

Instead, it has been a “historically prolonged slump” for the world’s largest car market, according to Bloomberg.

The CPCA reported on Monday that sales of sedans, SUVs, minivans and multipurpose vehicles in August fell 9.9% to 1.59 million units.  Click to enlarge.

It has been the industry’s largest downturn in three decades and automakers are still facing headwinds as trade tensions with the U.S. continue. China has tried to roll out several stimulus measures to help the industry, including loosening car purchase restrictions, but they have done little to encourage consumption thus far.

Preliminary data from MarkLines on Japanese automakers selling in China shows Nissan and Honda posting 2.0% and 5.9% gains, respectively, while Toyota sales fell 3.8% and Mazda sales suffered the largest blow, down 20.7%. We will revisit this data toward the middle of the month, when it is updated to include additional manufacturers from around the globe.

And while China continues its struggles, other large markets, like India, are also tumbling. India posted a 41% sales drop for automobiles in August, the largest such drop on record. U.S. automakers eeked out a slight rebound in sales, but were helped along by the Labor Day weekend partially falling in August.

This Zero Hedge story was posted on their Internet site at 11:25 p.m. on Tuesday night EDT — and another link to it is here.


China gold demand way down year to date — Lawrie Williams

It has been reported that China has been restricting gold imports from April through to July and this seems to have been confirmed by a sharp fall in gold withdrawals from the Shanghai Gold Exchange (SGE) from April through to August.  In the year to August withdrawals of gold from the exchange are running over 15% below those of the comparable months in 2018 when full year withdrawals totalled 2,054 tonnes and over 10% below the first eight months of 2017 when the full year total was also a little over 2,000 tonnes.  Indeed the August figure of 107.73 tonnes was over 40% lower than for the same month last year.  As we noted here back in June 2019 looks like being the first year since 2014 when the total of gold withdrawals out of the SGE has fallen below 2,000 tonnes for the full year.  The latest figures suggest that this year’s gold withdrawals total may well come in at less than 1,800 tonnes.

It certainly looks as though the U.S.-instigated trade war is beginning to bite with the Chinese consumer.  We have always measured Chinese gold demand by the reported gold withdrawal figures from the SGE.  This is a consistent measure reported monthly, so does provide comparative figures direct from source rather than estimates of consumption from the major precious metals consultancies, which seem to hugely underestimate known gold flows (published gold import figures from major sources) into the Middle Kingdom plus the nation’s own production.

The latest monthly gold withdrawal figures for the past three years…would seem to confirm that Chinese gold demand this year will be substantially less than in the recent past.  Indeed reports out of China have indicated the gold imports restrictions have cut deliveries of gold into China this year by perhaps close on 400 tonnes, which would serve to confirm our past analysis that SGE withdrawals bear a close correlation with Chinese gold demand as calculated from known imports from countries which report these figures, China’s own gold production plus allowances for scrap conversion and for unknown direct imports.

This gold-related news item by Lawrie showed up on the Sharps Pixley website early on Tuesday morning BST — and another link to it is here.  Lawrie had another story about China and gold — and it’s headlined “China says it only adds 5.9 tonnes of gold to reserves in August“.


A shipwreck worth billions off the coast of Cartagena

It was on 8 June 1708 that Spanish galleon San José erupted into flames off the coast of Cartagena, Colombia. The ship had been at battle with the British since late afternoon, and by night, the 62-cannon galleon had disappeared into the Caribbean Sea. With it, sunk nearly 600 people and up to $20bn worth of gold, silver and jewels.

For centuries, the San José galleon lay lost on the ocean floor. But the mystery surrounding the ship began to unravel in 2015, when the Colombian government announced it had officially been found.

Four years later, the galleon is still 600m deep in Colombian waters. Now, it’s at the centre of a custody dispute among parties all staking claim to the San José’s riches.

The Colombian government hasn’t revealed the exact location of the famed galleon, which is often called the “holy grail” of shipwrecks. But the San José is said to be located close to the Rosario Islands, a tropical archipelago and national park 40km from Cartagena. Throngs of small motorboats zoom over the waters as they transport beach-going tourists to the islands each day. While being carried across the sea, it’s difficult not to imagine the San José and its treasure, somewhere out there below.

The San José galleon left Panama’s port city of Portobelo in late May 1708. It was laden with gold, silver and precious stones extracted from what was then Spanish-controlled Peru, which have been estimated to be worth between $10bn and $20bn today. The riches were destined for King Philip V of Spain, who relied on resources from his colonies to finance the War of the Spanish Succession.

The galleon’s captain, Jose Fernandez de Santillan, knew that the British, who were involved in the war, might have ships waiting to attack in Cartagena; the city was only meant to be a quick stop to repair the San José before its longer journey to Havana, Cuba, and then on to Spain. But the captain pushed forward anyway. And by the evening of 8 June, a battle for the San José’s treasure had begun.

This fascinating story, which put in an appearance in the Travel section of the bbc.com Internet site on Monday, comes to us courtesy of Swedish reader Patrik Ekdahl — and another link to it is here.


The PHOTOS and the FUNNIES

From the Talking Rock Golf Course to the famous Adams River was about a five-minute drive on June 17.  The first three shots are of viewing areas over the river where you can watch the salmon spawn.  The sockeye salmon is the most famous because of its colour change when it enters the fresh water of the Fraser River in Vancouver.  But several other species also make the run at the same time, but not in as large a numbers as the sockeye.  The third photo is one I borrowed from the Internet.  The 2019 salmon run is already underway — and they should be showing up in Merritt in the Nicola and Coldwater rivers in the next week or so — and in Salmon Arm a week later.  2019 is not a “dominant” year…as that was last year.  The next one will be in 2022.  The ones in the intervening years are not as impressive.  Click to enlarge.


The WRAP

Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There was never a democracy yet that did not commit suicide.” – John Adams


It was another day of price management in gold…starting off in morning trading in the Far East — and continuing after the 10 a.m. EDT afternoon gold fix in London.  And although the price path for silver was about the same as it was for gold, ‘da boyz’ didn’t do much more than close it unchanged on the day, after it was up in COMEX trading.   Platinum got hammered again, but that should come as no surprise, as the commercial traders are ringing the cash register on the Managed Money traders after letting them run up a huge long position by the end of trading last Wednesday.  That engineered price decline will certainly be apparent in Friday’s COT Report.  Ditto for palladium.

Copper was closed at unchanged — and right on its 50-day moving average for the fourth consecutive day.  WTIC had a minor set-back yesterday.

Here are the 6-month charts, courtesy of stockcharts.com, for the Big 6 commodities — and I’ll point out once again that all the price activity that occurred in gold, silver and platinum after the COMEX close on Tuesday, doesn’t show up on their respective dojis.  All three were sold lower after that time.  Click to enlarge.

And as I type this paragraph, the London open is less than a minute away — and I see that gold and silver prices stair-stepped their way higher in price until at, or just before, the 2:15 p.m. CST afternoon gold fix in Shanghai. Both ran into ‘something’ at that juncture — and both have been turned lower since. Gold is up only $6.70 currently — and silver by 14 cents. The same can be said for platinum — and it’s up 10 bucks. And almost the same can be said of palladium — and it’s up 10 dollars as well, as Zurich opens.

Net HFT gold volume is coming up on 54,500 contracts — and there’s a tiny 922 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is 15,500 contracts — and there’s only 480 contracts worth of roll-over/switch volume on top of that.

The dollar index opened up 1 basis point once trading commenced at 7:45 p.m. EDT in New York on Tuesday evening, which was 7:45 a.m. China Standard Time on their Wednesday morning. It had smallish up/down move between then and around 12:30 p.m. CST — and it has been edging a bit higher since, but is off its current high tick [such as it is] by a hair. And as of 7:45 a.m. BST in London/8:45 a.m. in Zurich, the dollar index is up 4 basis points.


Well, with gold closing at a new low for this move down — and silver closing up only a dime by the 1:30 p.m. EDT COMEX close yesterday, it’s pretty much a given that the Commitment of Traders Report we see on Friday will be one for the record books.

I know that Ted is more than interested in what happened on Thursday and Friday of last week on record volumes in both gold and silver…particularly silver, as the price/volume activity was so far out in left field, it’s almost assured that this report will show unprecedented changes.  Fortunately, all that data will be in it, as I was somewhat apprehensive that if there were big rallies in both metals on Monday and Tuesday, it would mask some of that price/volume activity from last week.  As it turned out, that was a needless worry.


And as I post today’s missive on the website at 4:02 a.m. EDT, I note that all four precious metals were sold lower starting around 8:30 a.m. BST/9:30 a.m CEST. Gold is now only up $4.40 the ounce currently…silver is up only 7 cents — and platinum and palladium by 7 and 6 dollars respectively.

Gross gold volume is around 67,000 contracts — and minus the tiny amount of roll-over/switch volume, net HFT gold volume is 65,000 contracts. Net HFT silver volume is 18,500 contracts — and there’s still only 505 contracts worth of roll-over/switch volume in this precious metal.

Not surprisingly, the dollar index is up a bit more as well — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, the index is now up 9 basis points.


Today is the 18th anniversary of 9/11.  Let’s hope it passes without incident.

See you here tomorrow.

Ed

Ted Butler: Stranger Than Fiction

28 June 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price certainly didn’t do much on Thursday.  It was sold quietly lower in Far East trading until the London open — and then it inched higher until the COMEX open, where it was tapped lower — and traded briefly below $1,400 spot for a minute or so.  From that point it edged quietly higher until trading ended at 5:00 p.m. EDT in New York.

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

Gold finished the day at $1,409.20 spot, up 60 cents from Wednesday’s close.  Net volume was very heavy once again at just over 318,500 contracts —  and there was 18,500 contracts worth of roll-over/switch volume in this precious metal.

The silver price was forced to follow an almost identical price to gold in Far East and London trading, although there were some variations during the COMEX trading session in New York.  It was certainly obvious, at least to me, that silver was kept from closing above unchanged on the day.

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

Silver was closed at $15.225 spot, down 1.5 cents from Wednesday.  Net volume was pretty heavy at a bit under 77,500 contracts — and there was just under 22,000 contracts worth of roll-over/switch volume out of July and into future months.

Platinum was down four bucks by shortly after 10 a.m. China Standard Time on their Thursday morning — and then didn’t do much until about 12:30 p.m. CEST in Zurich.  It ticked higher from that juncture — and was up a dollar by the COMEX open. It was sold lower from there — and the low tick was set at noon in New York.  It jumped up 5 dollars by 1 p.m. EDT — and didn’t do much of anything after that.  Platinum was closed at $812 spot, down 2 dollars on the day.

Palladium was up 8 bucks by 11 a.m. CST on their Thursday morning, but was down 3 dollars by the Zurich open.  From that point it chopped unevenly sideways a handful of dollars either side of the $1,500 spot mark until around 1 p.m. in Zurich trading.  Then away it went to the upside, with the high of the day coming at the COMEX close — and it ended up closing on its high of the day in the thinly-traded after-hours market.  Palladium finished the Thursday session at $1,532 spot, up 32 dollars from Wednesday.

The dollar index closed very late on Wednesday afternoon in New York at 96.21 — and opened down 4 basis points once trading commenced at 7:45 p.m. EDT on Wednesday evening, which was 7:45 a.m. China Standard Time on their Thursday morning.  From that juncture it didn’t do much until 9:10 a.m. CST, when it began to head higher.  All the gains that mattered were in by 12:30 p.m. CST — and the index chopped quietly sideways until a few minutes before London opened — and it began to head lower from there.  The 96.14 low tick of the day was printed around 11:55 a.m. in London.  It edged unevenly higher until 9:55 a.m. in New York, but fell back to around the unchanged mark very shortly thereafter — and from that point, it chopped very quietly sideways until trading ended at 5:30 p.m. EDT.  The dollar index finished the Thursday session at  96.19…down 2 basis points from Wednesday’s close.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site — and the delta between its close…95.74…and the close on the DXY chart above, was 45 basis points on Thursday.  Click to enlarge as well.

The gold stocks gapped down a bit at the open — and then hit their respective low ticks a minute or two before 11 a.m. in New York trading.  They chopped quietly higher from there, but couldn’t quite squeeze a positive close, as the day traders showed up in the last ten minutes with their sell orders.  The HUI closed down 0.32 percent.

The silver equities sold off in a similar manner at the New York open, but were down almost two percent at their lows, which also came a minute or so before 11 a.m. EDT.  They also chopped higher from there, but ran into a bout of selling around 11:30 a.m…which lasted for about forty-five minutes — and a positive close became “a bridge too far” at that point — and the day traders did the rest ten minutes before trading ended at 4:00 p.m.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.66 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report for Day 1 of July deliveries showed that 371 gold and 2,620 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

In gold, of the five in total, the largest short/issuer by far was JPMorgan, with 272 contracts — and in distant second place was Advantage with 40 — and ADM in third spot with 31.  All contracts involved their respective client accounts.  There were eight long/stoppers in total.  Marex Spectron was the largest with 101 contracts for its client account — and in second place was ABN Amro with 99 contracts for its client account.  Coming in third was JPMorgan, stopping 88 contracts for its in-house/proprietary trading account.

In silver, there were seven short/issuers in total — and the largest by far was JPMorgan, with 1,400 contracts out of its so-called ‘Client Account’.  In second, third and fourth place were International F.C. Stone with 480…ABN Amro with 360 — and ADM with 134 contracts…all from their respective client accounts as well.  There were thirteen long/stoppers in total — and head-and-shoulders above the rest was HSBC USA picking up 1,341 contracts for its own account.  JPMorgan stopped 439 contracts…Morgan Stanley 429…ABN Amro 145 — and Citigroup stopped 131 contracts.  All these were for their respective client accounts.

The link to yesterday’s Issuers and Stoppers Report is here — and it’s worth a look, if you have the interest.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in July fell by 151 contracts, leaving 425 still around, minus the 371 contracts mentioned a few paragraphs ago.  Silver o.i. in July cratered by another 9,628 contracts, leaving just 3,873 left, minus the 2,620 mentioned a few paragraphs ago.

All of the remaining 119 gold contracts scheduled for June delivery, will be delivered today.


For the third day in a row there was a withdrawal from GLD.  This time an authorized participant took out 66,046 troy ounces.  And, for the first time in seven days, there was a deposit into SLV, as authorized participant added a very decent 2,574,902 troy ounces.  Ted figures that this ETF is owed considerably more physical silver than that.

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

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

It was another reasonably busy day in silver, as two truckloads…1,198,140 troy ounces…were reported received — and all of that ended up at CNT.  There was 542,228 troy ounces shipped out.  Of that amount, there was 540,228 troy ounces shipped out of HSBC USA — and the remaining 2,000 troy ounces departed Delaware.  The link to that activity is here.

There was a bit of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 700 of them, but didn’t ship out any.  All of these gold kilobars ended up at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


Here are three more charts that Nick Laird passed around the other day.  They show European gold imports and exports, updated with April’s data. This first chart shows that they imported 96.3 tonnes — and exported 110.9 tonnes. Click to enlarge.

These next two charts show the countries and tonnages that were received by each country in the Euro Zone — and the second shows what countries exported gold — and the tonnage associated with eachClick to enlarge for both.

I only have a tiny handful of stories for you today.


CRITICAL READS

Albert Edwards: This Was the Final Recessionary Shoe, and it Has Now Fallen

Exactly three months ago, in late March, the 3 month-10 year spread inverted for the first time since 2007…an event which sparked near-panic in the market as historically curve inversion has preceded the last 7 recessions.

However, while the inversion was certainly a memorable event, the question on everyone’s lips is how do risk assets perform once the curve flattens and/or inverts. According to back-tests from Goldman, since the mid-1980s, significant stock draw-downs (i.e. market crashes) began only when term slope started steepening after being inverted.

In other words, as we noted then, “Curve Inversion Is Bad, But It’s The Steepening After That Kills.”

Fast forward to today, when in his latest bearish missive, SocGen’s permabear Albert Edwards picks up where we left off, and in a note titled “the final recession shoe has now fallen“, he notes that while inversion of the U.S. yield curve is seen as a reliable precursor to U.S. recessions, “it has a long and variable lead time“, and instead “a far more immediate and present danger of recession occurs when after inversion, a rapid steepening occurs.”

Sound familiar?

In any case, as we first commented in early 2019, Edwards notes that this subsequent steepening “usually informs investors the cycle is over and it is time to flee for the hills.”

Well, for those who haven’t figured out the punchline yet, rapid curve steepening is now occurring, and as Edwards gleefully concludes, this “suggests recession may indeed either be imminent or else it has already arrived.”

This worthwhile commentary was posted on the Zero Hedge website at 12:45 p.m. on Thursday afternoon EDT — and I thank Brad Robertson for this one.  Another link to it is here.  A parallel ZH story is headlined “Goldman Warns Risk of Market Crash is Highest Since the Financial Crisis, Nearing 60%” — and that’s from Brad as well. Then this ZH piece from last night…”Paul Singer Warns a 40% Market Crash is Coming


Inflation Has Distorted The U.S. Markets — Bill Bonner

Yesterday [Wednesday] once again, the Dow rose in the morning on news that a deal with China was 90% done – and fell later, as investors realized that they couldn’t believe anything that came out of Washington.

Meanwhile, the president of the United States of America says he’d rather have a European – an Italian, no less – as head of the Federal Reserve.

Powell? Draghi? In America as in Europe, Italian as in English, the phenomenon is the same. We say “inflation,” you say “inflazione.” What’s the difference?

But this is not your grandfather’s inflazione. This is inflation of asset prices, not consumer prices. And Mario Draghi is as good at it as Jay Powell is.

Every day seems to bring some new absurdity, each one more dizzying than the one before. We’re almost laughed out.

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


Doug Noland: History Rhymes

But extending the “Terminal Phase” has ensured a historic parabolic surge in systemic risk. Consumer (chiefly mortgage) borrowings have increased 17.2% over the past year (40% in two years!). Thousands of uneconomic businesses continue to pile on debt. Unprecedented over- and mal-investment runs unabated. Millions more apartments are constructed. The bloated Chinese banking system continues to inflate with loans of rapidly deteriorating quality.

Global risk markets have been conditioned for faith both in Beijing’s endless capacity to sustain the boom and global central bankers’ determination to sustain system liquidity and economic expansion. So long as Chinese Credit keeps flowing at double-digit rates, inflating perceived wealth ensures Chinese spending and finance continue to buoy vulnerable emerging market booms and the global economy more generally. Global risk markets remain more than content.

At this stage, however, global bonds have adopted an altogether different focus: China’s financial and economic structures are untenable. Sustaining rapid Credit growth is increasingly fraught with peril. With market players now questioning Beijing’s implicit guarantee for smaller and mid-sized banks and financial institutions, financial conditions are in the process of tightening at the financial system’s “periphery.” And tightened Credit conditions have begun to reverberate in the real economy.

And what about the possible impact of a positive G20 and momentum toward a U.S./China trade deal? Stocks, no surprise, are readily excitable. For global safe haven bonds, however, it’s of little consequence. How can this be? Because even a trade deal would at this point have minimal impact on what has become deep and rapidly worsening structural impairment. Trade deal or not, Chinese exports to the U.S. will decline, right along with capital investment. Even with a deal, the Chinese financial system faces the consequences of years of rapid expansion as economic prospects deteriorate. Sure, 6% growth as far as the eye can see. That implies a further surge in consumer debt and even more dangerous mortgage finance and apartment Bubbles. Unparalleled overcapacity and maladjustment.

I would closely follow unfolding developments in Chinese Credit – funding issues for small and mid-sized banks; ructions in the money markets; trust issues with repo collateral, inter-banking lending, and counterparties; vulnerabilities in local government financing vehicles (LGFV); heightened concerns for speculative leverage; and the overarching issue of the implicit Beijing guarantee of essentially the entire Chinese financial system. The overarching issue is one of prospective losses of monumental dimensions. These losses will have to be shared in the marketplace. As much as global markets bank on Beijing bankrolling China’s entire financial apparatus, the Chinese government will not welcome the prospect of bankrupting itself.

This week’s edition of Doug Noland’s weekly commentary is certainly a must read — an it appeared on his website very early on Saturday morning EDT — and another link to it is here.


Doug Casey on False Flags and Pretexts For the Next War

I’d go so far as to say that most wars are started with false flags in one way or another, where the real bad guy is disguised.

The people who run nation states are never of the highest moral character. In fact, when it comes to political leaders, the scum rise to the top. These people are necessarily Machiavellian and capable of anything; they have to be in order to claw their way to the top of the political snake pit. Even if a person is basically decent when he gets into politics, he’ll inevitably be corrupted by his environment—and the fact he’s expected to exert power and use force to preserve the interests of the State. You can expect mainly duplicity and sanctimony from them.

International Man: There have been many instances of false flag events that have changed the course of history—by leading to wars, military interventions, and political upheavals. What do you think are some of the most notable historical examples, like the Gulf of Tonkin for instance?

Doug Casey: That’s an excellent one. The Gulf of Tonkin was entirely fabricated by the Johnson administration, which was looking for an excuse to invade Vietnam.

This worthwhile commentary from Doug was posted on the internationalman.com Internet site on Thursday sometime — and another link to it is here.


Perth Mint Gold Bullion Sales in May Drop to 25-Month Low

Sales of Australian bullion products slowed in May, for a second month in a row, figures from The Perth Mint of Australia show.

The Mint’s silver sales registered at a three-month low while its gold sales logged in at the lowest level in 25 months.

Perth Mint sales of gold coins and gold bars reached 10,790 ounces last month, registering declines of 46% from April and 27.1% from May of last year. The monthly tally was the weakest since April 2017 when the Mint sold 10,490 ounces.

Year-to-date gold sales at 114,251 ounces are 7.5% lower than 123,491 ounces sold in the first five months of 2018.

May sales of the Mint’s silver coins and silver bars at 681,582 ounces dropped 24.8% from April but grew 22.3% from May 2018.

For the year so far, silver sales at 3,935,784 ounces register 2.9% lower than the 4,052,011 ounces sold during the same period last year.

This precious metal-related news item showed up on the coinnews.net website on Thursday sometime — and I plucked it from the Sharps Pixley website.  Another link to it is here.


Ted Butler: Stranger Than Fiction

Yesterday, the Department of Justice and the Commodity Futures Trading Commission announced yet another settlement, both criminal and civil, for “spoofing” and market manipulation in COMEX precious metals, this time against Merrill Lynch, a unit of Bank of America. The infractions occurred hundreds of times starting at least in 2008 and continuing through 2014. While Merrill Lynch and Bank America settled criminal charges via a deferred prosecution agreement and a $25 million fine, separate criminal charges are pending against a number of former individual traders.

Considering that a straight criminal charge and/or conviction could easily have resulted in, effectively, putting Merrill Lynch out of business (many cities, states and government entities are forbidden from doing business with convicted felons), Merrill and BAC got off easy. For the umpteenth time, price manipulation is the most serious market crime possible and Merrill just dodged a bullet that could have been fatal.

Not so lucky, of course, were the many victims of Merrill Lynch’s criminal activities who are unlikely to collect a penny for the long-running gold and silver price manipulation. Apparently, this is what comes of high-level corporate crime in the U.S. – a wrist slap of a fine, a dubious trophy on some prosecutor’s mantle and an avoidance of the real issues.

What makes this all stranger than fiction is that the settlement covers nearly the exact time period that the CFTC (with DOJ involvement according to the late Bart Chilton) was involved in a formal five year investigation into a COMEX silver investigation which ended in 2013 with no findings of wrongdoing. Neither the CFTC nor the Justice Department could find anything wrong with silver (or gold) back then, but now each can recite chapter and verse about all the wrongdoing that took place at that time. What are the odds that the CFTC could have been inundated with more allegations of a silver manipulation than any other complaint in its history and for it to conclude repeatedly those allegations had no substance, only to come back years later saying plenty was wrong? Thanks for nothing.

This commentary from Ted put in an appearance on the silverseek.com Internet site at 8:53 a.m. MDT on Thursday morning — and it’s definitely worth reading.  Another link to it is here.


The PHOTOS and the FUNNIES

Continuing on our back-road trip from Merritt to Princeton on May 5, we came across this valley, complete with a creek — and the right-of-way for the long-defunct Kettle Valley Railway.  You can see it running across the center of the first photo.  The timber bridge over the road in the gap, was taken down years ago, but people still drive that route anyway — and it’s only for the bravest of souls.  The second photo is from the rail-bed itself…looking north.  And while on top, I came across this one tiny violet…smaller than a dime, sticking out amongst the pebbles.  A quick addition of an extension tube made short work of this macro shot.  Depth-of-field…in millimeters — and fractions thereof…is at a premium at these close quarters.  Click to enlarge.


The WRAP

It was really a ‘nothing’ day from a precious metal price standpoint…with the obvious and glaring exception of palladium.  Everything else appeared to on ‘care and maintenance’…so there’s not much to see, or to say.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  Click to enlarge.

And as I type this paragraph, the London open is less than a minute away — and I see that the the gold price began to head sharply higher staring about an hour after trading began at 6:00 p.m. EDT in New York on Thursday evening.  The price was capped and driven lower by ‘da boyz’ starting shortly before 10 a.m. China Standard Time on their Friday morning.  It was kicked downstairs some more going into the London open — and gold is now up only $2.10 the ounce.  Silver was up about 9 cents by minutes before 10 a.m. CST, but once JPMorgan et al were through with it, it’s now down a penny on the day.  It was about the same for platinum and palladium in the early going, but neither was hit as hard in afternoon trading in the Far East — and the former is up 3 bucks currently — and the latter by 11 as Zurich opens.

Net HFT gold volume is way up there at a bit over 100,000 contracts — and there’s 3,214 contracts worth of roll-over/switch volume on top of that.  Net HFT silver volume is around 14,000 contracts — and roll-over/switch volume is only 445 contracts.  Most of this net volume is in the new front month for silver, which is September.

The dollar index opened unchanged once trading commenced at 7:45 p.m. EDT in New York on Thursday evening, which was 7:45 a.m. CST on their Friday morning.  It dipped to its current low tick…such as it was…at 8:30 a.m. CST — and then crept quietly higher until 1:40 p.m. in Shanghai.  At that juncture it was sold sharply lower at that point, which was the same moment that gold and silver prices were hit in the Far East.  And as of 7:45 a.m. BST in London, the index is down 4 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 — and I’m already bracing myself.

In his mid-week commentary on Wednesday, silver analyst Ted Butler had this to say about it: “As far as what to expect in Friday’s COT report, I’m going to stick with my previous guesses of 50,000 net contracts in gold — and 15,000 net contracts in silver for managed money buying and commercial selling, although higher numbers in gold wouldn’t surprise me. My main concern is what JPMorgan may have done.”

I had a subscriber ask for a copy of the companies that I hold shares in yesterday, so I passed it along.  Then it suddenly occurred to me that I hadn’t posted it in this column for a while, so here it is again.


And as I post today’s column on the website at 4:02 a.m. EDT, I note that the gold price has crept a bit higher during the first hour of London trading — and is up $3.30 an ounce. Silver is now up a penny. Platinum is up 2 dollars, but ‘da boyz’ smoked palladium…from up 11 dollars at the Zurich open…it’s now down 12 bucks as the first hour of Zurich trading ends.

Gross gold volume is around 127,500 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is a bit over 119,000 contracts. Net HFT silver volume is about 16,300 contracts — and there’s only 684 contracts worth of roll-over/switch volume on top of that.

The dollar index continues to head lower — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, the index is now down 12 basis points.

That’s it for today — and I hope you have a good weekend.  For all my Canadian subscribers, I hope you have a safe and happy ‘Canada Day’ long weekend.

I’ll see you here tomorrow.

Ed

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