Category Archives: Newsletter Archive

Ted Butler: Is the COT Report Still Valid?

18 September 2018 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price rose and fell a dollar or so between the 6 p.m. open in New York on Sunday evening until about 1:20 p.m. China Standard Time on their Monday afternoon.  It began to chop quietly higher at that point until shortly before 9 a.m. in New York.  The rally gained more momentum at that juncture — and that state of affairs lasted until the dollar stopped falling around 10:40 a.m. EDT.  It was sold quietly lower into the COMEX close from there — and then didn’t do much of anything after that.

The low and high ticks were recorded by the CME Group as $1,192.90 and $1,205.00 in the October contract — and $1,197.50 and $1,209.70 in December.

Gold was closed in New York on Monday at $1,201.10 spot, up $8.00 from Friday.  Net volume was pretty quiet at a bit under 199,000 contracts — and roll-over/switch volume was only 7,600 contracts on top of that.

For the most part, the price of silver traded in a similar fashion to gold, although once the afternoon London gold fix was in at 10 a.m. EDT, its subsequent rally looked like it had to be restrained.  That lasted until the dollar index stopped falling at 10:40 a.m. EDT and, like gold, was sold lower into the COMEX close from there.

The low and high ticks in this precious metal were reported as $14.065 and $14.285 in the December contract.

Silver was closed in New York yesterday at $14.17 spot, up 14 cents on the day.  Net volume was nothing out of the ordinary at about 54,700 contracts — and roll-over/switch volume was recorded as only 1,642 contracts.

Platinum was forced to trade in a similar price pattern as gold during the Monday trading session on Planet Earth yesterday, so I shan’t bother repeating myself.  ‘Da boyz’ closed platinum at $798 spot, up 6 bucks on the day, but it was up 14 dollars at its high, before it was hauled lower.

Palladium traded mostly flat until 10 a.m. CEST in Zurich — and its price was capped and sold lower starting very shortly after the Zurich close.  It finished the Monday session at $982 spot, up 7 dollars from Friday’s close.

The dollar index closed very late on Friday afternoon in New York at 94.95 — and began to edge very quietly lower as soon as trading began at 6:00 p.m. EDT on Sunday evening.  That lasted until a minute or two before 2 p.m. CST on their Monday afternoon.  It chopped quietly higher until precisely 8:00 a.m. BST…an hour and change latter — and it began to head lower from there.  The decline ended at 10:40 a.m. EDT in New York, although the 94.44 low tick was set a very few minutes before 1 p.m. EDT.  It inched quietly higher from there into the close — and finished the Monday session at 94.51…down 44 basis points from its close on Friday.

Here’s the 1-day intraday chart from midnight New York time on Monday onwards.

And here’s the 3-day chart so you can see the activity right from the 6:00 p.m. open in New York on Sunday evening.

And here’s the 6-month U.S. dollar index — and you already know my opinion of it.

The gold shares opened up a bit — and didn’t really start to rally until minutes before 10 a.m. EDT, which was probably when the afternoon gold fix in London was settled.  They rallied until about noon in New York — and then chopped sideways into the close from there.  The HUI closed up 2.27 percent.

The silver equities began to head higher right at the opening bell at 9:30 a.m. in New York on Monday morning — and their respective highs came a few minutes after the London close.  They edged a bit lower until a few minutes after 12 o’clock noon EDT — and chopped generally sideways for the remainder of the day.  Nick Laird’s Intraday Silver Sentiment Index closed higher by 2.66 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that zero gold and 107 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In silver, of the three short/issuers in total, the two that mattered were S.G. Americas and Advantage, with 85 and 20 contracts out of their respective client accounts.  There were seven long/stoppers in total — and the largest was JPMorgan with 33 contracts…24 for its own account, plus 9 for its client account.  Advantage was in second spot with 30 for its client account — and HSBC USA stopped 13 for its own account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in September fell by 1 contract, leaving 17 still around.  Friday’s Daily Delivery Report showed that 1 gold contract was actually posted for delivery today, so the change in open interest and the deliveries match for a change.  Silver o.i. in September fell by 66 contracts, leaving 247 still open, minus the 107 mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 76 silver contracts were actually posted for delivery today, so that means that 76-66=10 more silver contracts were added to the September delivery month.


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

The good folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings on inside both their gold and silver ETFs as of the close of business on Friday, September 14 — and this is what they had to report. For the fifth week in a row they showed increases in both ETFs, but this week it was only tiny amounts.  There was only 2,187 troy ounces of gold added, plus 9,484 troy ounces of silver.

There was a sales report from the U.S. Mint on Monday.  They sold 3,500 troy ounces of gold eagles — and a very respectable 925,000 silver eagles.

There was no gold reported received over at the COMEX-approved depositories on the U.S. east coast on Friday, but there was 22,923.663 troy ounces/713 kilobars [SGE kilobar weight] shipped from HSBC USA.  The link to that is here.

In silver, there was 871,511 troy ounces received, but only 67,388 troy ounces shipped out.  There was one truckload…600,468 troy ounces…dropped off at CNT — and 200,489 troy ounces was left at HSBC USA.  The remaining 70,553 troy ounces was picked up by the International Depository Services of Delaware.  In the ‘out’ category, there was 52,432 troy ounces shipped from Brink’s, Inc. — and 14,955 troy ounces left Delaware.  The link to all this is here.

It was pretty quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  Only 200 were received — and 223 were shipped out.  The link to that is here.


Here are the usual two charts that Nick passes around on the weekend.  They show the weekly changes in all the transparent depositories, mutual funds and ETFs for both gold and silver as of the close of business on Friday.  The decline in gold continues unabated — and for the first time in many weeks, there was a small decline in total silver held as well.  Click to enlarge for both.

I have a decent number of stories that I’ve accumulate over the weekend — and from Monday as well.


CRITICAL READS

A Decade after financial crisis JPMorgan predicts next one’s coming soon

With the 10th anniversary approaching of the catalyst for the last major global stock market crash – the Lehman Brothers’ collapse – strategists from JPMorgan are predicting the next financial crisis to strike in 2020.

Wall Street’s largest investment bank analyzed the causes of the crash and measures taken by governments and central banks across the world to stop the crisis in 2008, and found that the economy remains propped up by those extraordinary steps.

According to the bank’s analysis, the next crisis will probably be less painful, however, diminished financial market liquidity since the 2008 implosion is a “wildcard” that’s tough to game out.

The main attribute of the next crisis will be severe liquidity disruptions resulting from these market developments since the last crisis,” the reports says.

Changes to central bank policy are seen by JPMorgan analysts as a risk to stocks, which by one measure have been in the longest bull market in history since the bottom of the crisis.

The shift from active to passive asset management, and specifically the decline of active value investors, reduces the ability of the market to prevent and recover from large drawdowns,” said JPMorgan’s Joyce Chang and Jan Loeys.

This article was posted on the rt.com Internet site last Thursday — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.


The Next Financial Crisis Is Right on Schedule (2019) — Charles Hugh Smith

The system isn’t stable. It’s brittle and fragile. Eventually some non-linear dynamic manifests: a blight that’s resistant to the herbicide destroys the crop, an insect that’s resistant explodes out of nowhere and eats the crop, etc.

Pushing the system to an extreme only made it more vulnerable to an increasingly broad range of disruptors.

Systems made to appear stable by brute-force application of extremes will never be stable. Stability arises from all the features erased by brute-force application of extremes.

The previous two bubbles that topped/popped in 2000-01 and 2008-09 both exhibited non-linear dynamics that scared the bejabbers out of the central bank/state authorities accustomed to linear systems.

In a panic, former Fed chair Alan Greenspan pushed interest rates to historic lows to inflate another bubble, thus insuring the next bubble would manifest even greater non-linear devastation.

This interesting commentary by Charles is certainly worth reading.  It showed up on the dailyreckoning.com Internet site on Monday sometime — and another link to it is here.


Conjuring Up the Next Depression — Chris Hedges

During the financial crisis of 2008, the world’s central banks, including the Federal Reserve, injected trillions of dollars of fabricated money into the global financial system. This fabricated money has created a worldwide debt of $325 trillion, more than three times global GDP. The fabricated money was hoarded by banks and corporations, loaned by banks at predatory interest rates, used to service interest on unpayable debt or spent buying back stock, providing millions in compensation for elites. The fabricated money was not invested in the real economy. Products were not manufactured and sold. Workers were not reinstated into the middle class with sustainable incomes, benefits and pensions. Infrastructure projects were not undertaken. The fabricated money reinflated massive financial bubbles built on debt and papered over a fatally diseased financial system destined for collapse.

What will trigger the next crash? The $13.2 trillion in unsustainable U.S. household debt? The $1.5 trillion in unsustainable student debt? The billions Wall Street has invested in a fracking industry that has spent $280 billion more than it generated from its operations? Who knows. What is certain is that a global financial crash, one that will dwarf the meltdown of 2008, is inevitable. And this time, with interest rates near zero, the elites have no escape plan. The financial structure will disintegrate. The global economy will go into a death spiral. The rage of a betrayed and impoverished population will, I fear, further empower right-wing demagogues who promise vengeance on the global elites, moral renewal, a nativist revival heralding a return to a mythical golden age when immigrants, women and people of color knew their place, and a Christianized fascism.

The 2008 financial crisis, as the economist Nomi Prins points out, “converted central banks into a new class of power brokers.” They looted national treasuries and amassed trillions in wealth to become politically and economically omnipotent. In her book “Collusion: How Central Bankers Rigged the World,” she writes that central bankers and the world’s largest financial institutions fraudulently manipulate global markets and use fabricated, or as she writes, “fake money,” to inflate asset bubbles for short-term profit as they drive us toward “a dangerous financial precipice.”

Before the crisis, they were just asleep at the wheel, in particular, the Federal Reserve of the United States, which is supposed to be the main regulator of the major banks in the United States,” Prins said when we met in New York. “It did a horrible job of doing that, which is why we had the financial crisis. It became a deregulator instead of a regulator. In the wake of the financial crisis, the solution to fixing the crisis and saving the economy from a great depression or recession, whatever the terminology that was used at any given time, was to fabricate trillions and trillions of dollars out of an electronic ether.”

This commentary by Chris Hedges, a Pulitzer Prize-winning journalist — and a New York Times best-selling author, appeared on the truthdig.com Internet site last week — and it comes to us courtesy of Patricia Caulfield.  Another link to it is here.


Ten Years After The Financial Crisis, The Contagion Has Spread To Democracy Itself

Tim Geithner, Ben Bernanke and Hank Paulson dealt a catastrophic blow to public faith in American institutions.

By the time Lehman Brothers filed for the largest bankruptcy in American history on Sept. 15, 2008, the country had been navigating stormy global financial waters for more than a year. Bear Stearns had been rescued in a bailout-facilitated merger with JPMorgan Chase, and the government had nationalized housing giants Fannie Mae and Freddie Mac. For anyone paying attention to the financial system, the situation had been quite dire for a long time.

And yet throughout the mess, the Federal Reserve and the U.S. Treasury had been permitting the largest banks in the country to funnel as much cash as they wanted to their shareholders ― even as it became clear those same banks could not pay their debts. Lehman itself had increased its dividend and announced a $100 million stock buyback at the beginning of 2008. Insurance giant AIG paid its highest dividend in company history on Sept. 19, 2008 ― three days after the Federal Reserve handed the insurance giant $85 billion in emergency funds. According to Stanford University Business School Professor Anat Admati, the 19 biggest American banks passed out $80 billion in dividends between the summer of 2007 and the close of 2008. They drew $160 billion in bailout funds from the U.S. Treasury, and untold billions from the Fed’s $7.7 trillion in emergency lending.

When poor people engage in such activity, we call it looting. But for the princes of American capital and their lieutenants at the Fed and the Treasury, this was pure crisis management.

Today, Ben Bernanke, Hank Paulson and Timothy Geithner insist they did what they had to under conditions of extreme duress. Mistakes were made, the government’s former top financial overseers acknowledge in a recent piece for The New York Times, but they did ultimately “prevent the collapse of the financial system and avoid another Great Depression.”

Except they didn’t really rescue the banking system.  They transformed it into an unaccountable criminal syndicate. In the years since the crash, the biggest Wall Street banks have been caught laundering drug money, violating U.S. sanctions against Iran and Cuba, bribing foreign government officials, making illegal campaign contributions to a state regulator and manipulating the market for U.S. government debt. Citibank, JPMorgan, Royal Bank of Scotland, Barclays and UBS even pleaded guilty to felonies for manipulating currency markets.

Not a single human being has served a day in jail for any of it.

This very worthwhile commentary put in an appearance on the huffingtonpost.ca Internet site very late on Sunday night EDT — and I thank Bill Christmas for pointing it out.  Another link to this excellent article is here.


David Stockman Exposes the “$20 Trillion Elephant in the Room

That U.S. stocks returned to record highs last month – picking up steam even as the world teetered on the bring of another debt crisis – has prompted even the most tenacious bears to recalibrate their forecasts, an effort, we think, to appease investors and clients who are luxuriating in the seemingly unstoppable gains of what is now the longest bull market in US history.

But while the wash of record returns (on paper, at least) has helped assuage the nagging doubts of many a “rational” investor, others are clinging ever-tighter to a pragmatic – if uncomfortable – realism. And one of the most strident voices among this group has been David Stockman, formerly the director of the OMB under Ronald Reagan and now the author of Stockman’s Contra Corner.

This article/interview was posted on the Zero Hedge website at 3:15 p.m. EDT on Monday afternoon.  The embedded video clip runs for 16:44 minutes — and because of bad editing, the Stockman interview doesn’t start until 50 second into it.  Another link to it is here.


Leave Home — Jeff Thomas

As an increasing number of people realize that their home country is becoming a liability to them, the most common question I hear from them is, “What do I have to do to remain where I am and still be assured that I’ll be able to retain both my wealth and my freedom?
The simple (and tragic) answer to this question is that there is no such solution. The two objectives are mutually exclusive.

Throughout the ages, whenever an empire has begun its inevitable collapse, no country has ever woken up and reversed the process. In every case, the government rides the decline to the bottom. And, along the way, a series of policies is invariably undertaken to save those in government in the downward rush. These policies are always at the expense of the populace.

Invariably, as the decline worsens, governments drag out the same policies that all other failing empires have implemented before them: Devaluation of currency, default on debt, increased warfare, creation of a police state and, finally, the looting of all those citizens who have even a modicum of wealth.

The question is not whether we like our home country as it presently is, but whether we’re prepared to accept what it’s about to become.

This very worthwhile commentary by Jeff appeared on the internationalman.com Internet site on Monday morning sometime — and another link to it is here.


Putin & Erdogan agree Idlib buffer zone to avert new Syria crisis

Russia and Turkey have agreed a “demilitarized zone” between militants and government troops in Syria’s Idlib, President Vladimir Putin said after hours-long talks with Turkey’s Recep Tayyip Erdogan focused on solving the crisis.

We’ve focused on the situation in the province of Idlib, considering presence of large militant groups and their infrastructure there,” Putin said at a press conference after the talks.

We’ve agreed to create a demilitarized zone between the government troops and militants before October 15. The zone will be 15-20km wide, with full withdrawal of hardline militants from there, including the Jabhat Al-Nusra.”

As part of solving the deadlock, all heavy weaponry, including tanks and artillery, will be withdrawn from the zone before October 10, Putin said. The zone will be patrolled by Turkish and Russian military units.

Before the end of the year, roads between Aleppo and Hama, and Aleppo and Latakia must be reopened for transit traffic, he said.

The agreement has received “general support” from the Syrian government, according to Putin.

This news story appeared on the rt.com Internet site at 4:23 p.m. Moscow time on their Monday afternoon, which was 9:23 a.m. in Washington — EDT plus 7 hours.  I thank Larry Galearis for bringing it to our attention — and another link to it is here.  The BBC spin on this is headlined “Syria war: Russia and Turkey to create buffer zone in Idlib” — and I thank Patrik Ekdahl for that one.


The Major Attack on Syria Followed Putin-Erdogan Agreement For Demilitarized Zone In Idlib

The world once again was taken to the brink of World War 3 Monday night, and the situation is still extremely dangerous. A massive wide-ranging assault on multiple Syrian provinces, including the coastal cities of Latakia and Tartus, occurred Monday evening reportedly by Israel and possibly with the help of France or the US, though the Pentagon is denying any US assistance during the assault.

With Syrian and Russian air defenses responding during the over hour-long attack which targeted among other things an alleged chemical weapons research center, and in the confusion of missiles cross the sky, a Russian maritime patrol plane was shot down with 14 personnel on board. The Pentagon is claiming it was Syrian defense which “accidentally” downed the plane, while Russia is pointing out its radar observed a French frigate firing in the area just before the plane went down.

Regardless, this is an incredibly dangerous situation which puts world powers closer to major war. And crucially, the whole event came immediately after Russia and Turkey announced they’ve agreed to establish a “demilitarized zone” around Idlib.

The Russian Ministry of Defense (MoD) announced just hours before the reported Israeli attack was initiated that Russia and Turkey have agreed to establish a 15-20km demilitarized zone along Syrian government positions.

This means the widely reported Syrian-Russian offensive is off for the time being, according to the Russian MoD.

But this raises the following questions given the timing of Monday’s night’s escalation: with Putin negotiating for a ‘world power deescalation’ over Idlib after the U.S. threatened attack, was Monday’s attack part of an Israeli (and Western allies) strategy for keeping regime change in Damascus on the table? Why escalate now?

This at the very least appears a conscious effort to keep the fires burning in Syria, to prevent Putin from being in the driver’s seat, and to continue to provoke hostilities with the Tehran-Damascus axis, and to further keep alive the possibility of the eventual military ouster of Assad.

This news item was posted on the Zero Hedge Internet site at 9:55 p.m. EDT on Monday night — and another link to it is here.  A ZH story from an hour earlier on this is headlined “Pentagon Says Russian Plane Shot Down By Syrian Defense Responding To Israeli Attack“.


Trump Slaps Tariffs on $200BN in China Imports; Will Add Another $267BN if China Retaliates

With traders waiting with bated breath for hours, moments ago the White House announced that it has imposed tariffs on approximately $200 billion worth of imports from China, effective September 24.

The tariffs will start at 10% until the end of the year, but in an unexpected twist, are set to rise to 25% on January 1, 2019, in what is worse case scenario than what the market had been pricing in, namely a 10% rate indefinitely.

Trump also warns that if China takes any retaliatory action “against U.S. farmers or other industries“, the U.S. will immediately pursue “phase three“, and impose an additional $267 billion in tariffs on Chinese imports.

The statement notes that while the U.S. has given China “every opportunity to treat us more fairly“, so far China “has been unwilling to change its practices.”

Trump concludes by saying that it is his duty “to protect the interests of working men and women, farmers, ranchers, businesses, and our country itself. My Administration will not remain idle when those interests are under attack. China has had many opportunities to fully address our concerns. Once again, I urge China’s leaders to take swift action to end their country’s unfair trade practices.”

Separately, the USTR announced that it has removed about 300 product categories from the tariff list and has cut some subsets of products, but the total value remains “approximately $200 billion“, and – as we showed earlier – a substantial portion of the imports targeted this time are consumer goods, which means that the pain to the U.S. household bottom line is about to get real.

This news item showed up  on the Zero Hedge website at 6:51 p.m. EDT yesterday evening — and another link to it is here.  There was a companion Bloomberg article from Monday morning headlined “China to Cancel Talks If Trump Moves Ahead With Tariffs, Sources Say” — and I thank Patrik Ekdahl for that one.


Meanwhile in China, Implosion of Stock-Market Double-Bubble — Wolf Richter

U.S. tariffs and threats of more tariffs have not been particularly well received in China, which is already being rattled by corporate credit problems, quakes in the shadow banking system, a peculiar Enron-type phenomenon at provincial and municipal governments called “hidden debt,” and the implosion of nearly 5,000 P2P lenders that have sprung up since 2015. And so today, the Shanghai Composite Index dropped 1.1% to 2,651.79.

This is a big milestone:

  • Below the low of its last collapse on January 28, 2016 (2,655.66)
  • Down 25.5% from its recent peak on January 24, 2018, (3,559.47)
  • Down 49% from its bubble peak on June 12, 2015 (5,166)
  • Down 56% from its bubble peak on October 16, 2007 (6,092)
  • Below where it had been for the first time on December 29, 2006 (2,675), nearly 12 years ago. That’s quite an accomplishment.

This chart of the Shanghai Stock Exchange Composite Index shows the last bubble in Chinese stocks. Note the rise from the last low in January 2016. This rise has been endlessly touted in the U.S. as the next big opportunity to lure U.S. investors into the Chinese market, only to get crushed again.

But what makes Chinese stocks interesting is not the collapse of one bubble and then the collapse of the subsequent recovery, but the longer view that is now taking on Japanese proportions.

This worthwhile commentary by Wolf was posted on the wolfstreet.com Internet site on Monday sometime — and I thank Richard Saler for sharing it with us.  Another link to it is here.


Trump’s Reckless Hostility Unites China and Russia — Eric Margolis

Good work Mr. President! You have now managed to lay the groundwork for a grand Chinese-Russian alliance. The objective of intelligent diplomacy is to divide one’s foes, not to unite them.
This epic blunder comes at a time when the U.S. appears to be getting ready for overt military action in Syria against Russian and Syrian forces operating there. The excuse, as before, will be false-flag attacks with chlorine gas, a chemical widely used in the region for water purification. It appears that the fake attacks have already been filmed.

Meanwhile, some 303,000 Russian, Chinese and Mongolian soldiers are engaged in massive maneuvers in eastern Siberia and naval exercises in the Sea of Japan and Sea of Okhotsk. The latter, an isolated region of Arctic water, is the bastion of Russia’s Pacific Fleet of nuclear-armed missile submarines.

Interestingly, President Vladimir Putin, who has attended the war games with his Chinese counterpart, Xi Jinping, just offered to end the state of war between Russia and Japan that has continued since 1945. He also offered some sort of deal to resolve the very complex problem of the Russian-occupied Kuril Islands (Northern Territories to Japan) that has bedeviled Moscow–Tokyo relations since the war. The barren Kurils control the exits and entry to the Sea of Okhotsk where Russia’s nuclear missiles shelter.

On a grander scale, Beijing and Moscow were signaling their new ‘entente cordiale’ designed to counter-balance the reckless military ambitions of the Trump administration, which has been rumbling about a wider war in Syria and intervention in, of all places, Venezuela. The feeling in Russia and China is that the Trump White House is drunk with power and unable to understand the consequences of its military actions, a fact underlined by recent alarming exposés about it.

Russia and China appear – at least for now – to have overcome their historic mutual suspicion and animosity. In the over-heated imagination of many Russians, China often appears to be the modern incarnation of the Mongol hordes of the past that held ancient Rus in feudal thrall. Russians still call China ‘Kitai’, or Cathay.

This brief, but worthwhile commentary by Eric put in an appearance on the unz.com Internet site on Saturday sometime — and I thank Larry Galearis for passing it along.  Another link to it is here.


Moon, Kim to meet for third summit in North Korean capital

South Korean President Moon Jae-in and North Korean leader Kim Jong Un will meet for their third summit on Tuesday in Pyongyang.

Moon will fly to Pyongyang Tuesday morning for the three-day summit with a 52-member delegation, including leaders of political parties and business magnates, as well as major cultural, religious figures and members of civil society.

President Moon is expected to arrive at Pyongyang International Airport at 10 a.m. on Tuesday and be greeted in an official welcoming ceremony. The first summit will be held after a luncheon,” said Im Jong-seok, Moon’s chief presidential secretary at a briefing in Seoul Monday.

Moon will be the third South Korean president to visit the North Korean capital. Moon’s two predecessors — Presidents Kim Dae-jung and Roh Moo-hyun — met former North Korean leader Kim Jong Il, father of current leader Kim Jong Un, in 2000 and 2007, respectively.

Moon and Kim will hold talks on Tuesday and Wednesday to discuss ways to advance inter-Korean relations and ease military tensions on the Korean Peninsula.

This semi-longish UPI story was posted on their website at 6:06 a.m. EDT on Monday morning — and it comes courtesy of Roy Stephens.  Another link to it is here.


Barrick Gold Seeks Chinese Partners, May Slash Headcount: Globe

Barrick Gold Corp. may slash 400 jobs and involve Chinese partners in its troubled Tanzania operations, Executive Chairman John Thornton told The Globe and Mail newspaper.

The Toronto-based company has slashed middle management by half to about 700 and “we want to get it down to 300,” Thornton, who’s been in his role since 2014, told the Globe in an interview in London. The former Goldman Sachs Group Inc. executive wants a leaner, entrepreneurial partnership more like the early days under late founder Peter Munk, the Globe said.

Thornton said there’s “an almost 100 percent” chance Chinese partners will get involved in Barrick’s projects in Tanzania that are operated through its 64 percent stake in Acacia Mining Plc. Acacia has plummeted 84 percent since its high in 2016 amid disputes with the government, which imposed a ban on exports of mineral concentrates last year and slapped the miner with a $190 billion tax bill.

The Acacia mines have never paid income tax to the Tanzanian government, which wants a new deal, Thornton told the Globe. Chinese companies can bring capital, technical expertise and — above all — political connections in Africa and Latin America that North American miners can’t match, he told the Globe.

It’s one thing to be a Canadian company. It’s another to have China as your partner,” Thornton told the Globe. “If I know one thing, I know this is right: we have the thinnest talent in the most difficult areas and we can’t develop all these projects alone.

This brief gold-related Bloomberg story showed up on their Internet site at 12:07 p.m. Denver time on Saturday morning — and  I plucked it from a GATA dispatch.  Another link to it is here.


Ted Butler: Is The COT Report Still Valid?

There can be little question that there has been a literal explosion in awareness and public commentary focusing on the Commitments of Traders (COT) Report and the analysis of silver and gold (and other markets) in accordance with futures market positioning. No doubt the interest has been generated by the reliability of the COT market structure approach over the long term, but also by the recent extreme and unprecedented massive size of the short positions of the managed money traders in gold and, particularly, in silver. The managed money short position in COMEX silver futures is now nearly 50% larger than it was at the previous record peak in April.

Coincident with the explosion in COT commentary and the unprecedented managed money short positions, there have been a number of questions related to the current efficacy and accuracy of the report. Some have raised questions whether the report is still a valid barometer of past and prospective price change, as well as if the report accurately reflects actual positioning by traders or whether there is deliberate misreporting.  These are significant concerns worthy of analysis. After all, if the COT report is no longer valid or trader positions are being misreported, the growing commentary is especially misplaced.

Behind the question of whether the COT report is still valid seems to be the reality that positioning has reached extremes never witnessed in the face of prices yet to reverse. This raises the alarm to some that something has gone haywire and the premise behind market structure analysis no longer works. While understandable, nothing could be further from the truth. Yes, the managed money short positions in silver and gold have reached extremes never before witnessed, but the positioning extremes are completely in sync with price performance.

To be clear, I’m not claiming that the record extreme short positioning by the managed money traders has resulted in the lowest prices ever recorded for silver and gold, as that would clearly be untrue. What I am claiming is that the record short positioning by the managed money traders has resulted in an equally unprecedented pattern of price – there has never been a consecutive weekly decline in the price of silver extending to 14 weeks in history. In other words, the positioning matches the price pattern perfectly; which is exactly what it is supposed to do.  Just because no one (certainly including me) predicted we would have record and unprecedented managed money shorting starting on June 12 does it mean the COT report is no longer valid.  Many things are beyond prediction.

In fact, the nearly identical pattern of positioning and price change is the clearest proof to date of the validity of the market structure approach based upon the COT report.  Far from questioning whether the market structure approach is still valid, there should instead be heightened awareness that the unprecedented short selling by the managed money traders is the sole cause of the unprecedented string of consecutive weeks of lower prices.

This absolute must read commentary by Ted was posted on the silverseek.com Internet site at 12:27 p.m. Denver time on Monday afternoon — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the purple martin, the largest member of the swallow family — and a bird that does not make it this far north, as I can’t remember ever seeing one. They are known for their speed and agility in flight, and when approaching their housing, will dive from the sky at great speeds with their wings tucked.  Purple martins suffered a severe population crash in the 20th century widely linked to the release and spread of European starlings in North America. Starlings and house sparrows compete with martins for nest cavities. Where purple martins once gathered by the thousands, by the 1980s they had all but disappeared.  Click to enlarge.


The WRAP

It was yet another day where the dollar index was searching for its intrinsic value…starting exactly at the 8:00 a.m. BST London open — and the precious metals were responding as they should.  I doubt that it was much of a coincidence that a dollar ‘rally’ appeared out of the blue in New York yesterday morning.  It certainly allowed the powers-that-be to nip their respective rallies in the bud, plus sell them lower — and prevent them from, once again, breaking above any dangerous moving averages….the 50-day in gold and platinum — and the 200-day in palladium.  Silver’s 50-day moving average was obviously in no danger, but JPMorgan certainly wasn’t going to allow that precious metal to run away to the upside on its own.

Here are the 6-month charts in all four precious metals, plus copper and WTIC.  You should also note that the copper price is being carefully kept below its respective 50-day moving average as well.  The ‘click to enlarge‘ feature only helps with the first four.

And as I type this paragraph, the London open is less than ten minutes away — and I note that gold was sold lower starting a few minutes after the 6:00 p.m. EDT open in New York on Monday evening — and that corresponded to a small, but sharp up-tick in the dollar index. It was sold lower until around 11 a.m. China Standard Time on their Tuesday morning — and it rallied in fits and starts from there until the 2:15 p.m. afternoon gold fix in Shanghai. It has been sold lower since — and is currently down $2.10 the ounce as London opens. It was more or less the same price pattern in silver, except its low of the day [so far] came about 7:45 a.m. CST on their Tuesday morning — and it’s down 4 cents at the moment. For the most part, platinum followed silver, but it’s up 2 bucks. Ditto for palladium, at least until 2 p.m. CST — and then it shot up from there — and is higher by 4 dollars as Zurich opens. Both platinum and palladium have been sold down since the afternoon gold fix in Shanghai as well.

Net HFT gold volume is a bit over 50,000 contracts already, but there’s only 1,239 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is around 12,400 contracts — and there’s 1,060 contracts worth of roll-over/switch volume in that precious metal.

The dollar index opened flat at 6:00 p.m. in New York yesterday evening, but jumped a bit over 10 basis points higher a few minutes later. It was sold very unsteadily lower from there — and its current 94.35 low tick came right at the afternoon gold fix in Shanghai. It’s off that low by a bit — and down 6 basis points as London opens.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and I’ll take a stab at what the report might show in tomorrow’s column when I have all five dojis to look at in both gold and silver in the above 6-month charts.

And as I post today’s column on the website at 4:02 a.m. EDT, I see that all four precious metals were sold lower in the first hour of London/Zurich trading, but are all of their current London/Zurich low ticks by a bit.  Gold is down $3.70 an ounce at the moment — and silver is down 6 cents.  Palladium is back at unchanged — and platinum is now up 6 dollars.

Gross gold volume is pretty chunky at around 77,500 contracts — and net of what roll-over/switch volume there is, net HFT gold volume is around 73,500 contracts.  Net HFT silver volume is getting up there as well at a hair over 17,000 contracts — and there’s 1,294 contracts of roll-over/switch volume in this precious metal.

The dollar index has been creeping higher ever since its current low at the afternoon gold fix in Shanghai — and is now up 9 basis points.

Not surprisingly, it looks like ‘push’ became ‘shove’ in the Middle East in the wee hours of their Tuesday morning.  But it certainly isn’t being allowed to manifest itself in precious metal prices…so it appears that the big ‘event’ that will be allowed to set precious metal prices rocketing higher, is still to come.

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

Ed

Platinum Stopped Cold at Its 50-day Moving Average Again

15 September 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crawled quietly and steadily higher until shortly before 12 o’clock noon China Standard Time on their Friday morning.  From there it traded flat until the 2:15 p.m. CST afternoon gold fix in Shanghai.  From there it rallied a few dollars, with the high tick of the day coming a few minutes before 9 a.m. in London.  A dollar index ‘rally’ began at that juncture — and the gold price was sold unsteadily lower for the remainder of the Friday session, with most of the price damage occurring by 12:45 p.m. in New York.

The high and low ticks were recorded as $1,208.50 and $1,192.90 in the October contract — and $1,213.80 and $1,197.70 in December.

Gold was closed on Friday afternoon at $1,193.10 spot, down $7.80 from Thursday.  Net volume was fairly decent at a bit over 270,000 contracts — and roll-over/switch volume was about 12,200 contracts on top of that.

The silver price action yesterday was joined at the hip with the gold price — and you don’t need the play-by-play on this.  The high came minutes before 9 a.m. in London — and the low tick came just minutes before the trading day ended at 5:00 p.m. in New York.

The high and low ticks in this precious metal were reported by the CME Group as $14.315 and $14.07 in the December contract.

Silver was closed in New York yesterday at $14.03 spot, down 11 cents on the day.  Net volume was pretty decent at around 63,200 contracts — and roll-over/switch volume added up to 3,635 contracts in this precious metal.

The price action in platinum was mostly similar right up until 10 a.m. Zurich time/9 a.m. in London.  The sell-off at that juncture didn’t have much effect, except to cut platinum’s gain up to that point, in half — and also stopped it from blasting through its 50-day moving average for the second day in a row.  It continued to trade sideways from there — and it wasn’t until ‘da boyz’ went to work starting at the COMEX open, that the real spoofing and algo-spinning got started.  Like gold and silver, platinum was sold lower for the remainder of the Friday session — and was closed on its absolute low of the day at $792 spot, down 9 bucks from Thursday — and 18 dollars off its high tick.

The palladium price was up 4 dollars or so by shortly after 11 a.m. CST on their Friday morning — and it hung in there until the other three precious metals got sold lower as well…10 a.m. CEST/9 a.m. BST.  It was sold back to unchanged over the next hour, but then began to tick higher, with the high of the day coming at, or shortly before, the afternoon gold fix in London.  From that point, the price was dealt with rather severely…especially the waterfall decline that occurred at noon in New York, which was similar to the declines in platinum and silver that came at the same time.  After that, it chopped nervously sideways until trading ended at 5:00 p.m. EDT.  Palladium was closed at $975 spot, down 3 dollars on the day — and 10 bucks off its high tick.

The dollar index closed very late on Thursday afternoon in New York at 94.54 — and traded sideways once it began at 6:00 p.m. EDT a few minutes later.  That lasted until around 10 a.m. CST — and it began to crawl lower from there.  The pace of the decline quickened a bit once the 2:15 p.m. afternoon gold fix was done in Shanghai on their Friday afternoon — and it certainly appeared that the usual ‘gentle hands’ showed up on the scene a few minutes before 9 a.m. BST in London.  The 94.36 low tick was printed at that juncture.  The ensuing rally topped out around the 94.98 mark about 2:15 p.m. in New York — and it didn’t do much after that.  The actually high tick was reported at 94.998 — and that came a couple of minutes before 4 p.m. EDT.  The dollar index finished the Friday trading session at 94.95…up 41 basis points from its Thursday close.

It was another day where a manufactured dollar index rally saved it from oblivion, but gave cover for JPMorgan et al to do the dirty in the precious metals…plus copper and WTIC.

And here’s the 6-month U.S. dollar index chart which, as always, I post for entertainment purposes only.

The gold stocks opened flat — and then chopped sideways until a big up/down spike occurred between 11:40 a.m. and 12:05 p.m. in New York trading.  They continued to chop unsteadily sideways around the unchanged mark from there until about 3:25 p.m.  At that point, it certainly appeared as if the day traders were heading for the exits — and the HUI closed lower by 0.64 percent.

The trading action in the silver equities was mostly similar, but the price pattern was far more volatile, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.76 percent.

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

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

Here’s the weekly chart — and it’s only because of Wednesday’s big rally in everything precious metal-related that prevented these charts from finishing in the red yet again.  It’s obvious that the equities outperformed their underlying precious metals.  Click to enlarge.

The month-to-date chart is bad, but it isn’t as bad it first appears, as it wouldn’t take much of a rally to turn this charts ‘all green’ as well.  Click to enlarge.

Of course nothing good can be said about the year-to-date chart — and if you’re looking for the ultimate sign of JPMorgan’s manic efforts to cover its short positions and go long, this is the result.  However, as I pointed out in this space last week, despite sea of red, it should still be noted that the silver equities continue to outperform their golden brethren on a year-to-date basis.  This fact clearly demonstrates that silver — and its associated equities, are going to vastly outperform their golden cousins when the next big rally is allowed to get underway.  I know that’s cold comfort indeed at a time like this, but that’s the essence of the current situation.  Click to enlarge.

As I said last week [and the week before — and the week before that] in this space…they above charts are pretty ugly…with this last swing for the fences by JPMorgan being the worst I’ve ever seen in the eighteen years that I’ve been studying the precious metal market.

Everyone and their dog now knows that JPMorgan is not only out of all its short positions in the precious metals, it’s also long them as well…particularly silver and gold.  With the current “white hot” configuration in the COMEX futures market, it’s highly doubtful that JPMorgan will appear as short sellers of either first and/or last resort once the next serious moving average-breaking rally is allowed to begin.  They sure as hell don’t want to be short when prices blow sky high — and IF they do appear again, it will be at significantly higher prices and, as I also said last week, I really do mean significantly.


The CME Daily Delivery Report showed that 1 gold and 76 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, JPMorgan stopped the lone contract for its client account.  In silver, the three short/issuers were International F.C. Stone, Advantage — and ADM…with 38, 20 an 18 contracts from their respective client accounts.  There were six long/stoppers in total, the largest being JPMorgan with 19 for its own account, plus another 7 for its client account.  Advantage came in second with 21 contracts for its client account — and in third place was HSBC USA with 13 contracts for its own account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in September fell by 55 contracts, leaving just 18 left, minus the 1 contract mentioned just above.  Thursday’s Daily Delivery Report showed that 56 gold contracts were actually posted for delivery on Monday, so that means that 56-55=1 gold contract was added to the September delivery month.  Silver o.i. in September dropped by 108 contracts, leaving 313 still open, minus the 76 contracts mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 146 silver contracts were actually posted for delivery on Monday, so that means that 146-108=38 more silver contracts just got added to September.

Month-to-date, there have been 608 gold contracts issued and stopped — and that number in silver is 5,945.


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

There was another tiny sales report from the U.S. Mint yesterday.  They sold 1,000 troy ounces of gold eagles — and that was all.

Month-to-date the mint has sold 15,000 troy ounces of gold eagles — 6,500 one-ounce 24K gold buffaloes — and 1,037,500 silver eagles.  That silver eagle number hasn’t moved since the Mint ran out of stock back on Tuesday, September 4…the last day they reported any sales of that bullion coin.  You would think that in the eight business days since then, that they would have produced and sold more…but no.  And as I said sometime last week, I’ll be very interested in what the sales numbers are, once they do resume.

There was a bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  There was 28,067.823 troy ounces/873 kilobars [SGE kilobar weight] received over at HSBC USA.  The link to that activity is here.

There was some activity in silver as well.  Nothing was reported received — and 632,489 troy ounces in total were shipped out of three different depositories.  There was 411,934 troy ounces shipped out of CNT…200,489 from Canada’s Scotiabank — and 20,018 troy ounces from Brink’s, Inc.  The link to that is here.

It was pretty quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received 162 of them — and shipped out 283.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Roman Empire, Nero, 54-68,  Aureus (64-65)

Origin: Roman Empire     Material: Gold     Full Weight: 7.03 grams

[Due to runaway inflation caused by the Roman government issuing base-metal coinage but refusing to accept anything other than silver or gold for tax payments, the value of the gold aureus in relation to the denarius grew drastically. Inflation was also affected by the systematic debasement of the silver denarius, which by the mid-3rd century had practically no silver left in it. — Wikipedia]


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, showed slight, but immaterial increases in the commercial net short positions in both silver and gold.

Despite the new engineered price low in silver on Tuesday, the Commercial net short position in this precious metal increased by 2,239 contracts, or 11.2 million troy ounces of paper silver.

As Ted has already pointed out in previous weekly reviews, the short positions of the Big 8 traders is now so comprised by the large number of Managed Money traders now in that group, that their changes each week no longer matter, so I won’t bother with them.

Under the hood in the Disaggregated Report, the brain-dead/moving average-following Managed Money traders reduced their short position by 3,373 contracts — and the non-technical/value investing Managed Money traders reduced their long position by 2,525 contract — and it’s the difference between those two numbers…848 contracts…that represents their change for the reporting week.  The difference between that number — and the Commercial net short position…2,239 minus 848 equals 1,391 contract…was made up by the traders in the other two categories, as both increased their long positions, plus reduced their respective short positions as well.  Here’s the snip for silver from the Disaggregated COT Report, so you can see these changes for yourself.  Click to enlarge.

Ted mentioned the fact that the 30,000 long contracts that the non-technical/value investing Managed Money traders put on in April has now been reduced down to a 12,000 contract long position as of yesterday’s COT Report.  Ted highly suspects [and for very good reason] that this 18,000 contract forced reduction during this latest engineered price decline in silver since June, has been one of the principle reasons that JPMorgan has been able to cover a decent chunk of its remaining 20,000 contract short position over the last few months.

And, while on the subject of JPMorgan, Ted calculates that they most likely added about 1,000 contracts to their existing long position in the COMEX silver market — and that puts them around 3,000 contracts held long as of Tuesday’s cut-off.

The Commercial net long position in silver now sits at 12,374 contracts, or 61.9 million troy ounces of paper silver.

Here is the 3-year COT chart for silver — and the weekly changes are basically immaterial — and what I’ve described all week as just ‘care and maintenance’ courtesy of JPMorgan.  Click to enlarge.

Despite the increase in the Commercial net short position in silver, it’s really not much more of a rounding error in what is already a wildly bullish COMEX futures market configuration.


In gold, the commercial net short position rose by 6,512 contracts, or 651,200 troy ounce of paper gold.

Like for silver, the number of brain-dead/moving average-following Managed Money traders now in the Big traders category, renders their break-down into the Big 4 and Big ‘5 through 8’ category, pretty much meaningless as well.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bit more, as the brain-dead/moving average-following Managed Money traders reduced their short position by 8,561 contracts — and the non-technical/value oriented Managed Money traders reduced their long position by 1,058 contracts.  The difference between those two numbers…7,503 contracts…represents their change for the reporting week.  The difference between that number — and the change in the commercial net short position…7,503 minus 6,512 equals 991 contracts…was made up, as it always is, by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader category.  Here’s the relevant snip from the Disaggregated COT Report for gold.  Click to enlarge.

There is no commercial net short position in gold, nor is there a long position, either…as the difference between the commercial long position and short position is a piddling 13 contracts.  Those contracts are on the ‘long’ side of the ledger, but compared to the 169,200 contract long and short positions currently held by the commercial traders, it’s an obviously meaningless amount.

As I said about silver, I’ll say about the weekly changes in gold…it’s basically ‘care and maintenance’ — and absolutely nothing to worry about.  Of course we would like to have seen the commercial net short positions in gold reduced further, but unless JPMorgan takes the gold price to new lows for this move down, it ain’t going to happen.

Here’s the 3-year COT chart for gold.  The changes are pretty microscopic in the grand scheme of things.  Click to enlarge.

We’re deep into ‘blood out of a stone’ territory here — and the set-up for a moon shot in silver and gold remains undiminished.  And as Ted also pointed out on the phone yesterday, the COT Report, bullish or not, doesn’t help with the timing of the next price move, it only indicates the direction of the next major move.  Both will be determined solely by JPMorgan.

In other precious metals, the brain-dead/moving average-following Managed Money traders decreased their short position in palladium by about 1,000 contracts — and in platinum they decreased their short position by about 2,000 contracts.  The non-technical/value oriented Managed Money traders in platinum increased their long position by around 2,200 contracts.  In copper, the Managed Money traders were basically unchanged, but the traders in the commercial category in copper managed to reduce their short position by a further 3,800 contracts.


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

But like the COT Report itself, the chart above is basically irrelevant at this point, as well — and for the same reason.  Except for Scotiabank — and maybe one or two U.S. banks…not including JPMorgan…the positions of the Big 4 and Big 8 traders is mostly made up of the brain-dead/moving average-following Managed Money traders now.

For the current reporting week, the Big 4 traders are short 110 days of world silver production—and the ‘5 through 8’ large traders are short an additional 66 days of world silver production—for a total of 176 days, which is a bit under 6 months of world silver production, or about 410.8 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 179 days of world silver production.]

The Big 8 commercial traders are short 39.4 percent of the entire open interest in silver in the COMEX futures market, which is virtually unchanged from the 39.3 percent that they were short in last week’s COT Report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be something close to 45 percent.  In gold, it’s now 32.1 percent of the total COMEX open interest that the Big 8 are short, down a hair from the 32.7 percent they were short in last week’s report — and a bit over 35 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 34 days of world gold production, which is down 2 days from what they were short last week — and the ‘5 through 8’ are short another 18 days of world production, which is unchanged from what they were short the prior week, for a total of 52 days of world gold production held short by the Big 8 — which is down 2 days from what they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold about 65 percent of the total short position held by the Big 8…which is down 1 percentage point from last week’s COT Report.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 63, 60 and 75 percent respectively of the short positions held by the Big 8.  Silver is down one percentage point from the previous week’s COT Report, platinum is basically unchanged from a week ago, as is palladium.

The set up for Ted’s double cross scenario by JPMorgan of the other commercial/Managed Money traders in all four precious metals is still wildly bullish in the extreme.

And as I keep saying — and will keep on saying…all we’re waiting for now is CME CEO Terry Duffy’s “event” to set it off.  And after all their efforts, it’s virtually inconceivable that JPMorgan will return as short seller of last resort.  But if they do, it will be at prices that we can only dream about at the moment.

It’s another day where decent stories were few and far between and, unfortunately, Doug Noland was a no-show this week.


CRITICAL READS

America’s Economy Is on a “Suicide Mission” — Bill Bonner

The Dow now stands within 500 points of a new all-time high – which would signal a revival of the bull market that began in March 2009… or August 1982, depending on how far back you want to trace it.

Remember, few investors – unless they are lucky or very well-advised – make money trading in and out of small market moves… or by choosing stocks that turn out to be Apple or Amazon.

Instead, they get in at the right time… and stay in… allowing the “primary trend” to take them where they want to go. The primary trend has taken stocks on the Dow from under 1,000 in 1982 to 26,000 today.

And today, many investors expect that trend to continue. They think the economy is strong and that it should get better. After all, that’s what the president of the United States says; who would know better than he?

But Bloomberg’s Smart Money Flow Index tells us that the pros have been getting out for the last six months.

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


James Grant: This Year the U.S. Treasury Will Issue the Most Debt Relative to GDP Since World War Two

James Grant, of Grant’s Interest Rate Observer, recently spoke at length to Sprott Media about the U.S. national debt, interest rates, and precious metals. In particular, Mr. Grant warns about the mounting volume of federal debt being issued by the U.S. Treasury.

This year… the government will issue… the most government securities as a percentage of GDP since the end of World War II. So the supply of government securities in relation to national production is the highest since the mid 1940s. Although this country is under arms in some degree, but it’s not waging a world war, so this is a very different fiscal picture than what we have been used to.

This 19-minute long interview was conducted in a very noisy environment…lots of voices in the background — and you really have to strain to hear clearly what Jim has to say.  I gave up trying about half-way through.  It was embedded in a story on thesoundingline.com Internet site on Friday morning sometime — and the first person through the door with it was Brad Robertson.  Another link to it is here.


The [U.S.] dollar is central to the next crisis — Alasdair Macleod

It is now possible to pencil in how the next credit crisis is likely to develop. At its centre is an overvalued dollar over-owned by foreigners, puffed up on speculative flows driven by interest rate differentials. These must be urgently corrected by the European Central Bank and the Bank of Japan if the distortion is to be prevented from becoming much worse.

The problem is compounded because the next crisis is likely to be triggered by this normalisation. It can be expected to commence in the coming months, even by the year-end. When flows into the dollar subside and reverse, bond yields can be expected to rise sharply in all the major currencies. There will also be a number of other unhelpful factors, particularly rising commodity prices, the timing of the Trump stimulus and trade tariffs pushing up price inflation. Coupled with a declining dollar, price inflation and therefore interest rates are bound to rise significantly.

Then there is another problem: when it comes to rescuing the global financial system from the systemic fall-out, not only will the challenge be greater than at the time of the Lehman crisis, but legislative changes, such as confusing bail-in provisions, have made it more difficult to execute.
There is also evidence that during the last credit crisis in 2008, the Russians were tempted to interfere with the Fed’s rescue attempts, potentially crashing the whole U.S. financial system. At that time, they failed to get the support of the Chinese. Now that Russia has disposed of most of its dollar investments in return for gold, and following an escalation of geopolitical conflicts, a new financial crisis may be regarded as an opportunity by America’s enemies to emasculate America’s financial and geopolitical power.

The outlook for the dollar and all dollar-dependent assets is not good. The only protection will be the possession of physical gold and silver, beyond the reach of systemically-threatened banks.

This longish opinion piece/commentary by Alasdair, which I have only partially skimmed, showed up on the goldmoney.com Internet site on Friday sometime — and I found it embedded in a GATA dispatch.  Another link to it is here.


Don’t Miss the Signs of Another Slow-Motion Meltdown — Jim Rickards

According to researcher David Eagleman, “The more memory you have of an event, the longer you believe it took.” So yes, time does seem to slow down in a crisis, but it’s a cognitive illusion.

That slowing down effect is important to bear in mind as we encounter the 20th anniversary of the Russia-LTCM financial crisis of September 1998 and the 10th anniversary of the Lehman-AIG financial crisis of September 2008.

For investors, those events were the financial equivalent of falling off a tall building or being strapped in during a plane crash. If you lived through them, you’ll recall some hours that seemed like days and days that seemed like weeks.

Of course, investors recall where they were and what they did during the absolute height of the panics — Sept. 28, 1998 and Sept. 15, 2008.

Most investors may not be aware that these peak panic moments had actually been playing out for over 15 months in both cases. Investors who closely observed the early signs of trouble had ample time to get out of the way of the panic itself.

In fact, most investors were oblivious to the early warnings. That 15-month build-up was a real slow-motion event, not an illusion.

This very interesting commentary by Jim appeared in the public domain over at the dailyreckoning.com Internet site on Friday sometime — and another link to it is here.


Days After 9/11 Tulsi Gabbard Slams “Betrayal of American People” Over Syria

In a rare and unprecedented speech delivered on the House floor just two days after the nation memorialized 9/11, Democratic Hawai’ian Congresswoman Tulsi Gabbard on Thursday slammed Washington’s longtime support to anti-Assad jihadists in Syria, while also sounding the alarm over the current build-up of tensions between the U.S. and Russia over the Syria crisis.

She called on Congress to condemn what she called the Trump Administration’s protection of al-Qaeda in Idlib and slammed Washington’s policies in Syria as “a betrayal of the American people” — especially the victims and families that perished on 9/11.

Considering that Congresswoman Gabbard herself is an Iraq war veteran and current Army reserve officer who served in the aftermath of 9/11, it’s all the more power and rare that a sitting Congress member would make such forceful comments exposing the hypocrisy and contradictions of US policy.

She called out President Trump and Vice President Mike Pence by name on the House floor in her speech:

Two days ago, President Trump and Vice President Pence delivered solemn speeches about the attacks on 9/11, talking about how much they care about the victims of al-Qaeda’s attack on our country. But, they are now standing up to protect the 20,000 to 40,000 al-Qaeda and other jihadist forces in Syria, and threatening Russia, Syria, and Iran, with military force if they dare attack these terrorists.”

And in perhaps a completely unprecedented moment, the Congresswoman accused America’s Commander-in-Chief during her floor speech for acting as “the protective big brother of al-Qaeda and other jihadists“.

This very worthwhile story put in an appearance on the Zero Hedge Internet site at 6:45 p.m. EDT on Friday evening — and another link to it is here.


U.S. Marines Conduct Live-Fire Drills With Syrian ‘Rebels’ In Rare Display Aimed at Russia

On Thursday an anti-Assad group in Syria’s south confirmed to Reuters via its ‘rebel’ commander that it is conducting rare military exercises with American forces in order to “send a strong message to Russia and Iran that the Americans and the rebels intend to stay and confront any threats to their presence,” according to a new Reuters report.

The anti-Assad commander, Colonel Muhanad al Talaa, is part of the Pentagon-backed Maghawir al Thawra group now conducting eight days of “live-fire and ground assault” drills that involve “hundreds” of U.S. troops and allied Syrian insurgents cooperating together.

These exercises have a big importance and have beefed up the defenses of the area and raised the combat capabilities and morale and that of civilians in the area,” Talaa said in a statement from Tanf.

The U.S. appears to be responding to the major Russian naval and amphibious assault drills along Syria’s coast from last week. This also comes after Moscow warned its forces could attack in the area near U.S.-occupied At Tanf in pursuit of al-Qaeda linked jihadists that Russia says hides out under U.S. protected areas.

American forces have enforced a 55 km (35 mile)-radius “deconfliction zone” around its garrison in At Tanf, which has been declared “off-limits” to others.

Meanwhile both Russia and Syria have condemned the presence of the base and others as a clear violation of Syrian sovereignty, and have lodged multiple formal complaints the U.N. Security Council, which have been routinely rebuffed or ignored.

You couldn’t make this stuff up.  One wonders what the American response would be if Mexico tried that in Arizona, or Canada in up-state New York.  Can you spell hypocrisy, dear reader?  This Zero Hedge article was posted on their website at 7:41 a.m. EDT on Friday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.


Argentine Peso Closes at Record Low as IMF Withholds $3 Billion Bailout Tranche

The bad news for Argentina keeps coming.

Shortly after a late selloff pushed the Argentina Peso to a new all time low on a closing basis, Reuters reported that a $3 billion tranche from the IMF that was supposed to be disbursed to Argentina this month under the country’s bailout deal was  postponed while the government hammers out the terms of the standby agreement, the largest in IMF history.

The payment “has been halted until new terms are reached,” said the Reuters source.

With the peso crashing earlier in the year amid fears of a collapsing economy and capital flight, President Macri signed a $50 billion deal with the IMF in June, but he went back to the Fund to renegotiate terms in order to speed up cash disbursements under the agreement. The discussions between Buenos Aires and and the IMF have been ongoing, with the IMF reportedly warning Argentina not to use the funds from the agreement to support the peso.

It is unclear of Argentina has remained in compliance with the request: earlier on Friday the central bank auctioned $200 million in reserves in a bid to stabilize the peso.

Meanwhile, according to Bloomberg, Argentina faces a bleak future no matter what happens: the most likely outcome for the troubled economy is a deep recession followed by political upheaval.

This news item showed up on the Zero Hedge website at 3:25 p.m. on Friday afternoon ED — and another link to it is here.


Trump to Proceed With $200BN More in China Tariffs Despite Talks; Stocks, Yuan Tumble

So much for the optimism that followed the WSJ report that the Trump administration is willing to offer China an olive branch in trade talks in hopes of avoiding further escalation (and which pushed the S&P back over 2,900).

Moments ago Bloomberg reported that President Trump has instructed aides on Thursday to proceed with tariffs on about $200 billion more in Chinese products despite Steven Mnuchin’s attempt to restart talks with Beijing to resolve the trade war.

The announcement of the new round of tariffs – which had been anticipated by most as a late September event – had been delayed as the administration considers revisions based on concerns raised in public comments, Bloomberg sources said.

On Thursday Trump met with his top trade advisers to discuss the China tariffs, including Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer. And as we said on Wednesday, Mnuchin has been the leading voice in the recent overture to the Chinese to re-start trade talks.

As a reminder, before his Thursday meeting, Trump boasted on Twitter that he has the upper hand in the trade feud with Beijing and feels “no pressure” to resolve the dispute.

This longish chart-filled commentary appeared on the Zero Hedge website at 1:10 p.m. on Friday afternoon EDT — and another link to it is here.


Changed [U.S.] Rhetoric is Not a Guide to Changed [U.S.] Policy

Trump, for all his bizarre pronouncements, hot and cold rhetoric toward China, Russia, North Korea, Venezuela, Syria, Iran and others is in reality doing no more than continuing the hegemonic ambitions of post-World War II America. Should he fall under the proverbial bus tomorrow, there may be some changes in the rhetoric, but the policies will remain the same: no real competition allowed.

America is the “exceptional nation” only in the sense that it does not regard itself as bound by the ordinary rules, much less the professed ones. Rules are followed only when it is convenient to do so, and under no circumstances are permitted to hinder the goal of imperial dominance.

The Mandarins of Canberra need to grasp that essential reality. Australia’s economic security and the future lie in Asia as even the most casual analysis of the trade, education, tourism and investment figures over the past four decades attest. Clinging to the delusion of a faithful friend in Washington, who clearly does not have friends, but rather, as Kissinger said, only interests, is a major policy misjudgment.

When the interests of the United States and Australia clash, as is inevitable in the changing geopolitical landscape of the greater Eurasian region, the denouement for Australia will be all the more traumatic because of its inability to learn from the same dictum: have neither friends nor enemies, only interests.

This very worthwhile commentary from Australian-based Barrister at Law, James O’Neil was posted on the journal-neo.org Internet site back on September 6 — and it comes to us courtesy of Larry Galearis who sent it to me last Saturday.  I’ve been saving it for this Saturday — and another link to it is here.


Turkey Banks Tap $4.5 Billion Gold Reserves to Shore Up Finances

Commercial lenders in Turkey have pulled as much as $4.5 billion worth of gold reserves since mid-June in an effort to avert a liquidity crisis as the lira plunged.

Weekly holdings reported by the Central Bank of Turkey fell by almost a fifth since June 15 to 15.5 million ounces with the lion’s share — $3.3 billion — of the exodus sparked by the monetary authority’s Aug. 13 move to lower reserve requirements.

The commercial banks were probably switching to more liquid assets, given what has happened to the lira,” Jason Tuvey, a senior emerging markets economist at Capital Economics in London said by phone on Friday. “There’s been concern at the commercial banks over their external debt burden, which has been reflected in the rising bank bond yields.”

Turkish lenders are allowed to meet reserve requirements with bullion deposits, unlike in most other countries.

Turkey is one of the 20 largest sovereign owners of the precious metal and boasts the fifth-biggest consumer demand in the world, according to 2017 data from the World Gold Council. It refines scrap gold into jewelry sold all over the Middle East.

The central bank cut the reserve requirements for banks by 4 percentage points for foreign exchange liabilities over one, two and three years, and by 2.5 percentage points over other maturities. This equated to $3 billion worth of dollar-equivalent gold liquidity, it said in a statement.

This gold-related Bloomberg story found a home on the investing.com Internet site on Friday morning at 8:11 a.m. EDT — and it’s something I found on the Sharps Pixley website.  Another link to it is here.


China’s state-owned miner Shandong Gold plans US$768 million in Hong Kong initial public offering

Shandong Gold Mining, one of China’s largest miners of the precious metal, is seeking to raise as much as US$768 million in a Hong Kong initial public offering (IPO) to fund overseas expansion.

The company is offering 327.7 million H-shares at between HK$14.7 and HK$18.4 (US$1.87-2.34), according to its filing to the Hong Kong stock exchange.

The state-owned domestic holding company of Shandong Gold is also listed in Shanghai with a market capitalisation of 43.6 billion yuan (US$6.3 billion).

The firm controls and operates 12 domestic gold mines, and accounted for 6.6 per cent of China’s gold output in 2016,. The country the world’s largest producer of the yellow metal.

Officials said it plans use the funds to partially repay US$972 million worth of debt it took on to buy a half stake in the Veladero Mine, Argentina’s largest mine and the second-largest in South America, from Canadian miner Barrick Gold in June 2017.

This gold-related news item put in an appearance on the South China Morning Post on Friday morning at 7:03 a.m. China Standard Time — 7:03 p.m. EDT in New York on Thursday evening…EDT plus 12 hours.  I found this on the gata.org Internet site — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is Friday’s ‘finch like’ mystery bird — and it turned out to be the purple finch.  I posted two shots of the female in yesterday’s missive — and asked for help, as I’d never seen one before.  I’d seen the male of the species on several occasions, but from a distance.  Three readers came to my rescue.  The first was Mike Ullman, followed by Roy Stephens — and then Dave Stirling yesterday evening.  David passed the photo past his bird freak mother-in-law — and that was her answer as well.  Birds from northern Canada migrate to the southern United States; others are permanent residents.  Not this one, as she was obviously on her way south.  Male coloration varies in intensity with the seasons — and is derived from the berries and fruits in its diet. There are obviously slight colour variations in the female as well.  The first two photos are from the Internet.  Click to enlarge.

And here’s one of my photos of the female from yesterday’s column, so you can compare.  Click to enlarge as well.


The WRAP

Today’s pop ‘blast from the past’ is one I stumbled over when I was poking around on the youtube.com Internet site earlier this week.  I posted a tune from this rock group very recently, but not this particular one…so I latched onto it for today’s column.  This band hails from San Jose, California — and their heydays were the 1970s.  This was their first big hit in 1972 — and it’s still hugely popular today.  The link is here.

And as an afterthought just now, I thought I’d check to see if there was a bass cover to this tune — and there is.  Here’s my favourite guy…Canada’s own Constantine Isslamow…doing the honours — and I was astonished at both the intricacy and complexity of it.  What’s even more amazing is that musicians can play this sort of music without ever looking at their hands — and sing at the same time.  Wow!  I can barely sign my own name.  The link is here…enjoy!

Today’s classical ‘blast from the past’ is one that I just caught the tail end of on CBC FM the other day, so I thought I’d feature it today.  I seem to remember posting this about a year ago, but it doesn’t really matter.  It’s Brahms Piano Concerto No. 1 in D minor Op. 15 which finally reached completion in 1858 after he’d been working on it for four years.  He was 25 years young at its premiere — and he was soloist.  It had started off life as a sonata for two pianos four years earlier and, with time, was morphed into this.  Here’s the incomparable Maurizio Pollini doing the honours at the keyboard, along with the Staatskapelle Dresden.  Christian Thielemann conducts.  The link is here.


JPMorgan et al wasted little time on Friday putting some distance between the gold price and its current 50-day moving average.  Using the dollar index ‘rally’ that began minutes before 9 a.m. in London as cover, they showed no mercy in that precious metal, or in the other three…stopping platinum from blasting through its 50-day moving average for the second day in a row.  They’ve been doing the same in palladium for the last week or so already, except its the 200-day moving average for it. They hit copper for a few pennies yesterday as well, as it was close to threatening its 50-day moving average, too.

All of the above is certainly visible in the 6-month charts for the Big 6 commodities posted below.  The ‘click to enlarge‘ feature helps a bit with the first four.

So, where to from here — and how soon?

Whatever world ‘event’ that will be used as a trigger to set off this short covering rally for the ages in the precious metals — and all other commodities, has obviously not occurred yet.  But you can rest assured that the U.S. deep state et al are working diligently on that very thing.  Until then, JPMorgan will keep precious metal prices on ice — and in this ‘care and maintenance’ mode that I’ve been going on about for the last week or so.

Does that mean that we can see [temporarily] lower prices from here?  Sure, as JPMorgan is running this show with an obvious iron fist — and they can do whatever they want.

But these record high grotesque and obscene short positions that the brain-dead/moving average-following Managed Money traders have built up in the precious metals since June, has to be resolved — and if JPMorgan doesn’t show up as short seller of last resort, nothing can prevent a melt-up at some point once that key 50-day moving average is allowed to broken to the upside.

And that is the key.  This moving average break-out to the upside won’t be happening by chance.  It will happen only because JPMorgan allows it — and once they do, they’ll sit back and watch the results of their carefully constructed handiwork of the last six months or so.  They didn’t get off the short sides of the precious metals for no reason.  Whatever ‘event’ is coming, they have obviously been warned about it well in advance.

We’re all tired of this.  I know I am — and it’s safe to say that you are as well.  But end it will — and as I’ve said on too many occasions in the past, let’s hope that the world that emerges after this ‘event’, is still fit to live in.

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

Ed

Gold Halted Dead in Its Tracks at Its 50-Day Moving Average

14 September 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped very quietly sideways throughout all of Far East and most of London trading on their respective Thursdays.  Then, at 8:30 a.m. EDT, the price began to head sharply higher, but ran into ‘something’ within a minute or so.  The price was capped and turned lower the moment it touched its 50-day moving average at the 9:30 a.m. EDT open of the equity markets in New York — and it was sold equally sharply lower until minutes before the 11 a.m. EDT London close.  It continued to crawl a bit lower until it touched the $1,200 spot mark shortly after 2 p.m. in the thinly-traded after-hours market — and didn’t do much after that.

The high and low ticks are barely worth looking up — and the CME Group reported them as $1,212.40 and $1,200.00 in the October contract.  For December, those numbers are $1,218.00 and $1,205.00.

Gold was closed in New York on Thursday at $1,200.90 spot, down $5.20 from Wednesday.  Net volume was pretty healthy at a bit over 285,000 contracts — and roll-over/switch volume was around 19,900 contracts.

The silver price didn’t do much in Far East trading on their Thursday, but was sold down a bit in late morning trading in London, but was back to just below unchanged by the COMEX open.  Its 8:30 a.m. EDT rally ran into the same price resistance as gold — and silver’s high tick came at 9:45 a.m. in New York.  From there, it was forced to follow the same price path as gold for the remainder of the Thursday trading session — and it was closed right on its low tick of the day.

The high and low in this precious metal was reported as $14.39 and $14.19 in the December contract.

Silver was closed in New York yesterday at $14.14 spot, down 9.5 cents on the day.  Net volume was pretty heavy at a bit under 76,500 contracts — and roll-over/switch volume in this precious metal was around 6,400 contracts on top of that.

The price pattern in platinum was very similar to that for gold, except the price began to rally around 1 p.m. CEST in Zurich…7 a.m. in New York…and it was subsequently capped and driven lower starting a few minutes before 9 a.m. EDT, which was the moment that it touched its 50-day moving average as well.  ‘Da boyz’ had it almost back to unchanged by around 10:20 a.m. — and it wasn’t allowed to do much after that.  Platinum was closed at $801 spot, up 2 dollars from Wednesday.

Ditto for palladium, except it managed to recover a few dollars off its New York low — and then traded sideways once the COMEX closed.  It finished the Thursday session at $978 spot, up 6 dollars from Wednesday’s close.

The dollar index closed very late on Wednesday afternoon in New York at 94.83 — and once trading began at 6:00 p.m. EDT a few minutes later, it edged a few basis points lower until shortly after 12 o’clock China Standard Time on their Thursday afternoon.  It crawled quietly higher until a minute or so after 2 p.m. CST — and then chopped quietly sideways until a few minutes before 8:30 a.m. in New York.  A waterfall decline ensued based on a CPI/PPI report — and the 94.43 low tick was set at, or minutes before, the afternoon gold fix in London.  It ‘rallied’ a bit from there until around noon EDT — and then edged lower until shortly after the 1:30 p.m. COMEX close — and chopped quietly sideways until trading ended.  The dollar index finished the Thursday session in New York at 94.54…down 29 basis points from its close on Wednesday.

It was yet another day where the powers-that-be didn’t allow the decline in the U.S. dollar index to be reflected in precious metal prices.

And here’s the 6-month U.S. dollar index — and for reasons that are becoming more obvious with each passing day like yesterday, you already know how I fell about it.  It’s bulls hit.

The gold shares jumped up a percent and small change at the open, but were sold down into negative territory — and to their respective low ticks by the 11 a.m. EDT London close.  They bounced back to just about unchanged by 11:30 a.m….and then chopped quietly sideways for the remainder of the Thursday session.  The HUI closed lower by 0.46 percent.

It was almost the same price path for the silver equities, except their respective lows came shortly after 2 p.m. EDT — and they recovered a bit into the close from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.09 percent.  Click to enlarge if necessary.

 

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

The CME Daily Delivery Report showed that 56 gold and 146 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, of the three short/issuers in total, the only one that mattered was Morgan Stanley with 50 contracts out of its in-house/proprietary trading account.  Of the four long/stoppers, JPMorgan was the biggest, with 41 contracts for its client account.  In very distant second and third place came ADM and Advantage, with 7 and 6 contracts for their respective client accounts.  In silver, the largest of the three short/issuers was Goldman Sachs with 122 contracts out of its own account.  Of the six long/stoppers in total, JPMorgan was the biggest with 60 contracts…43 for itself — and 17 for its client account. Advantage came in second place with 36 contracts for its client account — and HSBC USA stopped 28 contracts for its own account.  The link to yesterday’s Issuers and Stoppers Report is here.

I know that Ted follows what Goldman Sachs does in silver very closely, as well.  They’ve already stopped 1,064 silver contracts for their own account in September so far — and these 122 contracts mentioned in the previous paragraph is the first time they’ve shown up a short/issuer this month.  It will be interesting to see how much more they issue as the September delivery month moves along.  Here’s a snip from the CME’s website showing their monthly activity in 2018 so far, plus December 2017.  Click to enlarge.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in September rose for the third day in a row, this time by 20 contracts, leaving total open interest at 73 contracts, minus the 56 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, so that means that 20 contracts [net] were added to the September delivery month.  Silver o.i. in September declined by 34 contracts, leaving 421 still open, minus the 146 silver contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 83 silver contracts were actually posted for delivery today, so that means that 83-34=49 more silver contracts just got added to September.


There was another withdrawal from GLD yesterday, as an authorized participant removed 85,181 troy ounces.  And there was yet more silver deposited in SLV, as an authorized participant…most likely JPMorgan…added 1,315,986 troy ounces.

Since its high back on 25 April, there has been 4,136,856 troy ounces of gold removed from GLD.  But since its June 15 low, there has been 20.9 million troy ounces of silver added to SLV.

The folks over at the shortsqueeze.com Internet site updated their short position data for both SLV and GLD for the two week period ending on August 31 — and this is what they had to report.  The short position in SLV increased from 6,672,600 shares/troy ounces, up to 7,320,000 shares/troy ounces, or an increase of 9.7 percent.  The short position in GLD increased as well…from 925,440 troy ounces, up to 1,138,670 troy ounces, which is an increase of 23.0 percent.

There was no sales report from the U.S. Mint for the second day in a row.

It was all zeros in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.

There was very little activity in silver.  Nothing was reported received — and only 60,892 troy ounces were shipped out.  That occurred over at Canada’s Scotiabank.  Also at Scotiabank there was 408,669 troy ounces transferred from the Eligible category — and into Registered.  Undoubtedly this is now out for delivery in September.  The link to this is here.

There wasn’t much happening over at the COMEX-approved gold kilobar depositories in Hong Kong on Wednesday.  They only received 30 of them — and shipped out 320.  This activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

Saxe-Zeitz, Maurice, 1656-1681, Thaler 1667

Origin: Roman German Empire     Material: Silver     Full Weight: 27.55 grams

It was a fairly quiet news day on Thursday — and I have very little for you.


CRITICAL READS

The Greatest Financial Crime of the 21st Century — Bill Bonner

[T]his week marks the tenth anniversary of the collapse of Lehman Brothers. The papers are full of remembrances and lies.

Ben Bernanke, for example, is still hailed as a hero. We wonder… Is it a mistake… or a fraud?
In a discussion last week, he admits to having made mistakes. From Bloomberg:

Former Federal Reserve Chairman Ben Bernanke acknowledged that policymakers made two critical errors fighting the financial crisis a decade ago: They failed to see it coming with such force, then underestimated how much economic damage it would cause later.

“Nobody saw how widespread and devastating the crisis itself would be,” he said in a short video discussing the results of a 90-page paper on the subject released on Thursday.

Nobody?

We – along with dozens of others – thought a crisis was inevitable. The Dow-to-Gold ratio was over 20. Debt had reached 325% of GDP. Houses were selling for crazy prices… with mortgages available even to welfare recipients and household pets.

We warned that surely some rough beast was slouching toward Wall Street. Then, using a technical term rarely employed by our fellow financial Cassandras, we predicted that the reckoning would be a “doozy.”

This longish, but worthwhile commentary by Bill showed up on the bonnerandpartners.com Internet site very early on Thursday morning EDT — and another link to it is here.


U.S. Government Spends a Record $433 Billion in One Month as Deficit Explodes

Two days ago we previewed the the U.S. budget deficit for the first 11 months of fiscal 2018, which according to CBO data, hit $895 billion, up $222 billion or 39% from the same period last year. Additionally, we noted that according to CBO calculations, the US would hit a $1 trillion deficit in calendar 2019, one year sooner than the previous forecast of 2020.

Today, the U.S. Treasury released the detailed budget deficit breakdown for the month of September and the first 11 months of the year, and the numbers are scary.

According to the latest Monthly Treasury Statement, in August, the US collected only $219BN in tax receipts – consisting of $106BN in individual income tax, $93BN in social security and payroll tax, a negative $3BN in corporate tax and $24BN in other taxes and duties- a drop of 3.2% from the $226BN collected last August…

… but more concerning was that in August, the 12 month trailing receipt total was barely higher compared to a year ago, up just 0.3% Y/Y after rising as much as 3.1% at the end of 2017, and on the verge of turning negative year over year.

The real highlight of the August budget report was that government outlays, or total spending, soared to $433.3 billion, not only 30% higher than a year ago, but the highest government monthly outlay of any month on record.

This resulted in a August budget deficit of $214 billion, which was not only one of the highest one-month deficits on record, but also the highest August deficit on record.

The August deficit brought the cumulative 2018F budget deficit to over $898BN during the first 11 month of the fiscal year, up a whopping 40% over the past year.

This longish, chart-filled commentary put in an appearance on the Zero Hedge website at 4:38 p.m. on Thursday afternoon EDT — and another link to it is here.


Wall Street Ignores Corporate Earnings Deception – Don’t Get Burned! — Dennis Miller

Diogenes would have a tough time finding an honest man announcing corporate earnings. In my article, Pepsi-Cola Hits The Spot?, I outlined how Pepsi trumpeted sales and profit increases, yet both actually declined.

Investors have a difficult challenge managing their life savings dealing with phony, deceptive data. Corporate America blares misleading headline numbers hoping to drive up their stock prices and bonuses. How does an average investor truly understand the real potential of investment opportunities?

Tony Daltorio has been writing about stocks for over 20 years. I’ve followed him since he started with Investor’s Alley, writing the Growth Stock Advisor. Although it’s only 3 years old, it’s returned some outstanding winners on companies most of us have never heard of like Sterling Construction (160%) and Neos Therapeutics (73%).

His recent educational e-mail, “Tariffs, the Market and Earnings” caught my attention. He emphasized, Be Careful of Earnings “Massages”. Uncovering the truth is getting tougher and the SEC is doing nothing to help:

This commentary by Dennis was posted on this Internet site on Thursday morning EDT — and another link to it is here.


U.S. to Impose “Very Severe” Sanctions on Russia Over Skripal Case

In the latest salvo meant to convince Mueller that Trump is not a pawn of the Kremlin, a State Dept official said on Thursday that the U.S. plans a second round of “very severe” sanctions on Russia over use of nerve agent. The stated reason: Russia has not allowed on-site chemical weapons inspections, nor has it provided reassurance that it won’t use nerve agents against its own people, says Manisha Singh, Asst. Sec. for bureau of economic and business affairs

We are looking at this November deadline” under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, Singh said, adding that “we plan to impose a very severe second round of sanctions.”

The sanctions will kick in some time in November, presumably just after the November midterms, if Moscow does not take steps in the wake of the poisoning of former Russian spy Sergei Skripal in the United Kingdom, Assistant Secretary of State Manisha Singh said on Thursday.

We have indicated to them that they can evade, they can make themselves not subject to these sanctions if they allow the onsite inspections, if they give us a verifiable assurance that they will not use these nerve agents against their own people again,” Singh said. “They have not done so so far, so to that extent, we are looking at this November deadline as absolutely, we plan to impose a very severe second round of sanctions under the CBW [Biological Weapons and Warfare Elimination Act].”

While U.S. sanctions on Russia are hardly new, what is surprising this time is that the new round will include not only defense procurement and aid, but also target the country’s increasingly unstable banking sector. Quote Sing: “It’s going to include banking sanctions, prohibition on procurement of defense articles, aid money — it’s a laundry list of items that will penalize the Russian government.

And Skripal case has already been proven to be an embarrassingly transparent “false flag” operation already…but still the U.S./U.K. deep state persists.  This new item was posted on the Zero Hedge website at 11:40 a.m. EDT…and it comes to us courtesy of Brad Robertson.  Another link to it is here.


Orban and Farage stand up to George Soros and his E.J. Parliament cronies

The E.U. Parliament has moved to trigger what is referred to as the ‘nuclear option’ Article 7 against Hungary.

During the parliament session in Strasbourg, France, 448 MEPs voted in favour of invoking Article 7 against Hungary, while 197 voted against the motion and 48 abstained.

According to RT, Article 7 of the 2007 Treaty of Lisbon, often dubbed ‘nuclear option’, is designed to be applied if there is “a clear risk of a serious breach” of the E.U. values by one of the member states.

Orban confronted a hostile E.U. Parliament, and gave a fiery speech, vowing to keep Hungary independent and free of E.U. neoliberal, globalist dogma, telling MEPs, “you condemn us because we are not a nation of migrants.”

UKIP’s Nigel Farage defended Orban, blasting Eurocrats for their condemnation of the Hungarian PM, who has put in place measures to restrict the influence of George Soros.

Nigel’s speech starts at the 2:25 minute mark — and it’s definitely worth your while…if you have the interest, that is.  This news item put in an appearance on theduran.com Internet site on Wednesday — and I thank Roy Stephens for pointing it out.  Another link to it is here.


It was yet another day where I found no precious metal stories that I thought worth posting.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is a mystery bird that not only haven’t I seen before, but I can’t identify, either.  With the shape and size of its bill, I would assume that it’s a member of the finch family, but I see nothing in my National Geographic bird book that even remotely resembles it.  It’s a bit larger than a sparrow — and it landed just below the same fork of the tree that I’ve photographed a cedar waxwing, the kingbird — and a downy woodpecker in the last month or so.  Any help in identifying this bird would be appreciated.  Click to enlarge for both.


The WRAP

There should be no real doubt in anyone’s mind that JPMorgan & Co. were right there to prevent gold from blasting above its 50-day moving average at the open of the equity markets in New York yesterday morning.

If you check the 6-month gold chart [December contract] posted below, you’ll note that the high tick there was recorded as $1,218.00 — and the 50-day moving average was computed at the close of Thursday trading as $1,218.26.  It can’t be cut any closer than that.

So, along with gold, the other precious metals had to get it in the neck too — and it should also be very carefully noted that ‘da boyz’ pulled the same stunt in platinum, as it was about to take out its 50-day moving average as well.

But palladium is already well above its 50-day moving average — and threatening to break above its 200-day moving average, but that act was stopped in its tracks.  The COMEX futures market for palladium is not only very tiny, but it’s also very illiquid as well, plus there’s a real supply/demand issue with this precious metal, so it’s march harder for JPMorgan et al to keep it corralled.  The STOP sign at the 200-day moving average was the best they could do under the circumstances.

Here are the 6-month charts for all four precious metals, plus copper and West Texas Intermediate — and it should also be noted that WTIC closed back below its 50-day moving average on Thursday.  The ‘click to enlarge‘ feature only helps with the first four graphs.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price began crawl quietly higher as soon as trading began at 6:00 p.m. EDT in New York on Thursday evening. That lasted until shortly before noon China Standard Time on their Friday morning — and the price has been trading sideways since. At the moment, it’s up $4.90 the ounce. The price pattern in silver has been identical — and it’s up 8 cents currently. Ditto for platinum and palladium — and there up 5 and 2 dollars respectively.

Net HFT gold volume is a bit over 38,000 contracts — and there’s only 390 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is about 7,300 contracts — and roll-over/switch volume in this precious metal is only 693 contracts.

The dollar index traded almost ruler flat once it began at 6:00 p.m. in New York yesterday evening, but began to inch lower around 10 a.m. CST on their Friday morning — and was down 5 basis points by shortly before noon in Shanghai — and traded quietly sideways until shortly after the 2:15 p.m. CST afternoon gold fix in Shanghai. It turned a bit lower at that point — and is down 10 basis points as London opens.

Today, around 3:30 p.m. EDT, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, September 11.  I’m not expecting much change in gold, but certainly a bit more improvement in silver based on the new intraday low that JPMorgan set during the Tuesday trading session.  There shouldn’t be any material changes in either platinum or palladium for the reporting week.  Ted noted the new low in silver on Thursday in his mid-week commentary on Wednesday, but concluded his COT comments with the following sentence…”I have no strong disposition as to what Friday’s report will indicate in gold or silver, other than we will still be in an extremely bullish market structure.”

Extremely bullish“, he says?  How about ‘Over the Moon’ bullish.

And as I post today’s column on the website at 4:02 a.m. EDT, I note that the gold price began to head higher shortly after trading began in London — and it’s up $7.00 at the moment. Silver is now up 10 cents — and platinum and palladium are up 9 and 3 dollars respectively.

Gross gold volume is around 54,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume in this precious metal is about 52,800 contracts. Net HFT silver volume is a bit over 10,200 contracts — and there’s 709 contracts worth of roll-over/switch volume in that precious metal.

The dollar index has been sinking quietly lower during the last hour — and is currently down 12 basis points.

We’re obviously still in ‘care and maintenance’ mode awaiting whatever the deep state has planned that will set off this short covering rally for the ages in the precious metals.  All we can do is [im]patiently wait for that day.  But it draws ever closer.

See you here tomorrow.

Ed

Some Positive Price Activity For a Change

13 September 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold quietly lower until around 1 p.m. China Standard Time on their Wednesday afternoon — and then didn’t do much until shortly after the London open.  It crawled very quietly and unsteadily higher into the 10:30 a.m. morning gold fix — and from there it was sold equally quietly lower to its low tick of the day, which came right at the COMEX open in New York.  It began to head higher from there — and tacked on a quick 8 bucks or so in ten minutes between the 11 a.m. EDT London close — and 11:30 a.m.  It continued to tick quietly higher after that until a minute or so before 2:30 p.m. in after-hours trading — and was sold a bit lower until shortly before 4 p.m.  It traded ruler flat from there into the 5:00 p.m. close.

The low and high ticks were reported as $1,192.40 and $1,208.30 in the October contract — and $1,197.60 and $1,213.90 in December.

Gold finished the Wednesday session in New York at $1,206.10 spot, up an even $8.00 from Tuesday’s close.  Net volume was pretty heavy at just under 284,000 contracts — and roll-over/switch volume was  a bit under 9,200 contracts.

The price path for silver, as it normally is, was the same as it was for gold, except the price spike after the London close was much more violent — and obviously had to be restrained.  It was sold down a bit until noon in New York — and although it pretty much mirrored the gold price action after that, it wasn’t allowed to trade above its 11:25 a.m. EDT high tick.

The low and high in this precious metal was recorded as $14.105 and $14.315 in the December contract.

Silver was closed on Wednesday at $14.235 spot, up 11.5 cents on the day and, like gold would have closed at heaven only knows what if a short seller of last resort hadn’t appeared at 11:25 a.m. EDT.  Net gold volume was very decent as well at 76,500 contracts — and there was 6,900 contracts worth or roll-over/switch volume on top of that.

The platinum price was also sold lower in morning trading in the Far East as well — and was down five dollars or so by 10 a.m. CST.  It chopped around that price until shortly before 1 p.m. CEST in Zurich — and from that juncture was sold down to its low tick of the day by shortly before 8 a.m. in New York an hour and change later.  It began to head unsteadily higher from there — and that rally ran out of gas/got capped the moment it hit the $800 spot mark shortly after 2 p.m. EDT in the thinly-traded after-hours market.  It didn’t do much of anything after that.  Platinum finished the day at $799 spot, up 9 bucks from Tuesday’s close.

Palladium was forced to trade within five or six dollars either side of unchanged throughout all of the Wednesday trading session.  Its low tick on Wednesday matched its low tick on Tuesday — and although it rallied about six buck or so into positive territory during the New York session, it was sold back to unchanged after the COMEX close.  Palladium finished the day at $972 spot…unchanged on the day.

The dollar index closed very late on Tuesday afternoon in New York at 95.11 — and once trading began a few minutes later at 6:00 p.m. EDT in New York on Tuesday evening, it began to quietly head higher.  That ‘rally’ became more erratic in afternoon trading in the Far East — and the 95.28 high tick of the day was set a very few minutes before the 8 a.m. London open.  It sagged a bit in morning trading over there, but was almost back its high shortly after 12 o’clock noon BST.  It was all down hill from there — and it certainly looked like the usual ‘gentle hands’ showed up as the index plunged.  The 94.73 low tick appeared to come a few minutes before 2 p.m.  It rallied about ten basis points or so from there until 3:40 p.m. — and then edged lower into the close.  The dollar index finished the day at 94.83…down 28 basis points from its close on Tuesday.

Here’s the 6-month U.S. dollar index — and it should be noted that it closed below its 50-day moving average.  That means nothing in such a managed market, but the pure T.A. types may certainly read something into it.

The gold stocks opened unchanged — and after a brief and very tiny dip into negative territory, began to head higher.  Their respective highs came a minute before 3 p.m. in New York trading — and they crawled quietly lower into the close from there.  The HUI closed up a very respectable 3.65 percent.

It was virtually the same price path for the silver equities, including the time of their respective high ticks — and a sharp bump up about twenty minutes before the 4:00 p.m. close ensured that they finished very close to their highs.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 4.77 percent.  Click to enlarge if necessary.

 

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

The CME Daily Delivery Report showed that zero gold and 83 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In silver, the two short/issuers were Scotia Capital/Scotiabank with 80 contracts for its in-house/proprietary trading account — and Advantage with 3 contracts from their client account.  There were six long/stopper in total — and the largest was JPMorgan with 39 contracts in total…28 for its own account, plus 11 for clients.  HSBC USA came in second with 19 contracts for its own account — and Advantage stopped 15 for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in September rose for the second day in a row, this time by 22 contracts, leaving 53 still around.  Tuesday’s Daily Delivery Report showed that 14 gold contracts were posted for delivery today, so that means that 14+22=36 more gold contracts were added to the September delivery month.  Silver o.i. in September declined by 7 contracts, leaving 455 still open, minus the 83 contracts mentioned in the previous paragraph.  Tuesday’s Daily Delivery report showed that 15 silver contracts were actually posted for delivery today, so that means that 15-7=8 more silver contracts were added to September.


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

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

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  Nothing was reported received, but 51,426 troy ounces in total were shipped out from four different depositories.  The largest withdrawal was from JPMorgan, as 28,066.950 troy ounces/873 kilobars [U.K./U.S. kilobar weight] was shipped out.  In second spot was the International Depository Services of Delaware, as they parted company with 10,416.600 troy ounces/324 kilobars [U.K./U.S. kilobar weight].  Lesser amounts, not in kilobar form, were shipped out of HSBC USA and Delaware.  All that activity is linked here.

There was also decent activity in silver.  Nothing was reported received, but 1,804,659 troy ounces were shipped out.  The largest amount by far was two truck loads…1,190,987 troy ounces…that departed JPMorgan.  There was also a small truck load…512,548 troy ounces withdrawn from HSBC USA — and in third spot was Delaware, as they parted company with 101,123 troy ounces.  There were also some transfers from the Registered category into Eligible — and vice versa…with the largest transaction being 303,900 troy ounces from Registered and back into the Eligible category at CNT.  The link to all this action, plus a bit more, is here.

There was some activity over at the COMEX-approved gold kilobar depository in Hong Kong on their Tuesday.  They didn’t receive any, but shipped out 2,804 of them.  This activity was at Brink’s, Inc., of course — and the link to that, in troy ounces, is here.

Saxe-Gotha-Altenburg, Ernest I, 1640-1675, Reichsthaler 1675

Origin: Roman German Empire     Mint: Gotha      Material: Silver     Weight: 28.82 grams

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


CRITICAL READS

It Feels Like 2007 All Over Again… — Bill Bonner

In 2007, the Fed – making its classic Mistake #2 – raised its key lending rate to over 5%, which was enough to bring on the hurricane.

In just a few months, all the delightful news headlines passed into history. The Dow was cut in half… the U.S. economy was in its worst recession since the 1930s… and the Fed was on to Mistake #3 (cutting rates in a panic).

Which, in turn, brings us back to gold.

The other thing the news reports of 2007 told us was that the ratio of the Dow to gold was around 20. That is, it took 20 ounces of gold to buy the Dow.

That was about the same ratio as 1929. And about the same as the major top in the late 1960s. By 1980, the ratio hit its all-time low of 1.

The ratio actually brushed 40 at the end of the 1990s – an all-time record. By 2007, it was at 20 again.

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


$300 Billion Cash Repatriated in Q1, Goldman Sachs Expects Eventual $1 Trillion in Buybacks

In response to the Trump tax cuts, corporations are repatriating record levels of cash.

The Tax Cuts and Jobs Act encouraged the repatriation of profits, which had been subject to additional U.S. levies after it was brought home.

In response to the Trump tax cuts, there was a Dramatic Rise in Corporate Cash Brought Home in 2018.

In the first quarter alone, multinational enterprises brought home about $300 billion of the $1 trillion held abroad, according to a recent Federal Reserve study. A good chunk of that repatriated money went to share repurchases — for the top 15 cash holders, some $55 billion was used on buybacks, more than double the $23 billion in the fourth quarter of 2017.

Corporations apparently have nothing better to do with the cash. Executive stock options, not shareholder interests, are in play.

This brief commentary by Mish Shedlock, along with a very interesting chart, was posted on the moneymaven.io Internet site on Tuesday sometime — and I thank Richard Saler for sending our way.  Another link to it is here.


Dr. Dave Janda interviews your humble scribe

This 25-minute audio interview was broadcast live on Ann Arbor, Michigan’s all-talk radio WAAM 1600 on Sunday afternoon EDT — and appeared on the Good Doctor’s website on Sunday evening.

I posted this interview in Wednesday’s column, but neglected to hyperlink the headline — and wasn’t informed of that until I received an e-mail from Malcolm Roberts very early yesterday morning.  I was sound asleep at the time — and I didn’t get around to fixing the link until about nine hours after it had been posted, so I’m posting this interview one more time.


One million Catalans rally for independence in Barcelona

Around one million Catalans rallied in Barcelona on Tuesday, banging drums and blowing whistles in a show of support for independence nearly a year after a failed attempt to break away from Spain.

Wearing coral-red T-shirts and waving the red, yellow and blue Catalan separatist flag, a sea of protesters gathered for the rally on Catalonia’s “national day” which commemorates Barcelona’s fall to troops loyal to Spain’s King Philip V in 1714.

The annual “Diada” holiday has since 2012 been used to stage a massive rally calling for secession for the wealthy northeastern region with its own distinct language.

But this year’s event had particular significance as a test of strength after a referendum last October 1, and the Catalan parliament’s unilateral declaration of independence on October 27, all came to naught.

Demonstrators climbed on each others shoulders to form human towers, a Catalan tradition, while others carried yellow and black signs that read “Free Catalan political prisoners now“, a reference to Catalan separatist leaders in jail awaiting trial over last year’s independence bid.

This news item showed up on the france24.com Internet site on Tuesday sometime — and it comes to us courtesy of Roy Stephens.  Another link to it is here.


Juncker vows to turn euro into reserve currency to rival dollar

Jean-Claude Juncker has vowed to turn the euro into a global reserve currency that could rival the dollar as part of the European Union’s drive to reduce its financial dependence on the United States.

In his last “State of the Union” speech to members of the European Parliament in Strasbourg today, the president of the European Commission said it was an “aberration” that the E.U. paid for more than 80 percent of its energy imports in U.S. dollars despite only 2 percent of imports coming from the U.S.

Most of the dollar-denominated imports are from Russia and the Gulf states.

We will have to change that. The euro must become the active instrument of a new sovereign Europe,” said Mr. Juncker, whose five-year tenure as commission president is due to end next year.

The rest of this story is posted behind the Financial Times subscription wall — and I found this in a GATA dispatch yesterday.  Another link to it is here.


Head of Russian bank warns customers they may not get dollars back

Russians with bank accounts in dollars may find they can only make withdrawals in other currencies if new sanctions proposed by U.S. lawmakers take effect.

I am sure that all the clients of all banks should receive their money back. That’s the principal approach,” VTB Group Chief Executive Officer Andrey Kostin said today. “How, in which currency, is a different story.”

The U.S. Senate is considering punishing the Kremlin for alleged election meddling, including a fresh raft of measures dubbed the “bill from hell.” This could bar Americans from buying new issues of Russian sovereign debt and ban Russia’s largest state banks, such as VTB, from using dollars.

Kostin’s comments are an indication to markets that policy makers and businesses are bracing for the worst, and could focus investors’ attention on the possible fallout from sanctions, according to Liza Ermolenko, an economist at Barclays Capital in London.

This Bloomberg article put in an appearance on their website at 5:15 a.m. Denver time on Wednesday morning — and was updated about two hours later.  I found it on the gata.org Internet site — and another link to it is here.


The U.S.’s Choice: WWIII…or Saving Face in Syria

Sometimes when I step back from the overwhelming flow of geopolitical insanity I’m reminded of the old adage that coming close only counts in horseshoes and hand grenades.

To which, I always add, “And nuclear war.”

I’ve been watching the build up to the operation to liberate Idlib in Syria which includes the endless neocon and Israeli moral preening warning Assad against using chemical weapons with a sense of detachment.  And I keep thinking to myself, “Do they really think we’re that stupid?

Three times the chemical weapons canard has been used to justify further aggression against Syria and three times a full-blown U.S. invasion has been averted. First by Vladimir Putin’s deft diplomacy and General Dunford’s refusal to implement a ‘no-fly zone’ in 2013 and then during the Trump years with ineffectual air strikes on Syrian airbases.

How much of that ineffectuality of those airstrikes were designed by Defense Secretary James Mattis to avoid a wider conflagration and how much was Russian EW/missile defense is anyone’s guess.

The truth most likely lies somewhere in the middle.

That is why everyone who is worrying about the U.S.’s blustering over Syria’s Idlib campaign needs to take a big step back and think the scenario through.

This very interesting commentary/opinion piece by Tom Luongo showed up on the strategic-culture.org Internet site on Tuesday sometime — and I pulled it from a Zero Hedge story that appeared on their website late yesterday evening.  Another link to it is here.


Is a Major Attack on Syria Feasible? A Look at Russia’s Key Force Multiplying Assets and their Ability to Deter Western Military Action — Parts 1 and 2

With the United States, Britain and France all reportedly making preparations to launch a major offensive against Syria, and threatening use of force on a scale far larger than that of the attack carried out in April 2018, Russia has notably responded by moving naval assets to the Mediterranean and deploying its warships in defensive positions to deter a potential second Western attack. While Russia has previously tolerated Western interventions against Damascus on a small scale, namely token missile strikes initiated with prior warning which were further blunted by Syria’s own air defences, a larger strike which could have a significant impact on the outcome of the war – at a time when Damascus’ forces and those of its allies prepare for a major ground offensive against the Jihadist held province of Idlib – could well cross a red line which would lead to Russian intervention on the side of its Middle Eastern ally. To be able to deter a Western attack however, Russia will need to demonstrate that it has a credible chance of protecting Syria against the combined firepower of its adversaries despite the far smaller size of its forces in the country – which pale in comparison to the massive Western military forces deployed throughout the Middle East and the U.S. and possibly French carrier strike groups which are likely to participate in an attack.

For Russia’s naval contingent in Syria to have a chance of deterring the Western fleets, it will need to rely on two critical assets – support from ground based aircraft and missile systems operating from Syrian territory itself, in some cases from as far as Russia’s own territory, and extensive use of asymmetric weapons systems which will leave Western assets such as warships, fighters and bombers vulnerable despite their numerical advantage. While Russia’s sole aircraft carrier is poorly suited as an asset for long range power projection, and is nevertheless currently undergoing a refitting and unavailable for front-line service, the country has an arguably far more valuable asset – Khmeimim airbase in Syria’s Latakia province. While modern Western carriers lack high performance air superiority fighters, the last of these having been retired by the United States Navy shortly after the Soviet Union’s collapse in favour of lighter unspecialised multirole aircraft, Russia’s Air Force contingent relies heavily on specialised heavy combat jets such as the Su-35, Su-30SM and Su-27SM air superiority fighters and Su-34 strike fighters. The first three of these enjoy considerable advantages in speed, operational altitude, engagement range, range and manoeuvrability over their counterparts in the U.S. Navy allowing them to protect Russian warships and Syrian assets from air attack even against enemy air contingents many times their size. The Su-34 meanwhile, as an advanced long range ship hunter armed with missiles such as the Mach 3 Kh-41, the Mach 3.5 sea skimming Kh-31A and the 300km range Kh-35U and P-800, can pose a major threat to hostile warships at considerable distances from Syrian coast – with missiles designed to evade the latest and most capable air defence networks fielded by the U.S. Navy.

I suspect that we’ll find out soon enough how much of this is true or not.  This longish, but very interesting commentary was posted on the militarywatchmagazine.com Internet site last Friday — and it’s worth reading if you have the interest.  I thank reader M.A. for sending it along — and another link to it is here.


I didn’t see any precious metal-related news stories that I thought worth posting.


The PHOTOS and the FUNNIES

Here are two more photos of red-necked grebes for you.  As the time to migrate approaches, these birds…plus the ducks and geese at the pond…spend a lot of time bathing — and preening their new flight feathers in preparation for the trip south.  The bathing/splashing ritual for the grebes is rather entertaining to watch — and here’s an adult showing the ‘young-un’ how it’s done.  Click to enlarge.


The WRAP

I was certainly happy to see gold and silver prices higher during the New York trading session yesterday.  But it should be fairly obvious that ‘da boyz’ weren’t letting prices run too high at that moment, as the spikes higher in morning trading were rather harshly dealt with, particularly in silver.

But what I was really happy to see was the reaction of the precious metal equities, as they finished strongly higher — and that’s always an encouraging sign.

Here are the 6-month charts for the Big 6 commodities once again — and it should be noted that both copper and WTIC closed higher as well.  Gold is now within ten dollars of its 50-day moving average — and it will be interesting to see what is allowed to happen from a price perspective, once it breaks above it by any appreciable amount.  The ‘click to enlarge‘ feature helps with the first four.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price has been trading a bit lower, but not really doing much in Far East trading on their Thursday. At the moment it’s down $1.80 an ounce. It’s been the same for silver — and it’s down 3 cents currently. Platinum and palladium are up a bit…the former by 2 dollars — and the latter by 1.

Net HFT gold volume is a bit over 39,000 contracts — and there’s only 558 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is 8,400 contracts — and there’s only 32 contracts worth of roll-over/switch volume on top of that.

The dollar index crawled quietly lower until shortly after 12 o’clock noon in Shanghai on their Thursday afternoon — and it headed equally quietly higher from there — and is up 6 basis points as London opens.

It remains to be seen if yesterday’s positive price action in New York will continue into the Thursday trading session or not.  There certainly has been no follow-through in Far East trading. The precious metals are still very much in the price grip of JPMorgan — and they can toy with this market as much as they wish until whatever ‘event’ I’m expecting, manifests itself.

And as I post today’s missive on the website at 4:03 a.m. EDT, I note that the precious metal prices popped a bit higher during the last thirty minutes or so in London and Zurich trading. Gold is down only 40 cents — and silver is now up a penny. But platinum is now up 5 bucks — and palladium by 2.

Gross gold volume is around 50,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is a hair under 49,000 contracts. Net HFT silver volume is now 12,100 contracts — and there’s only 46 contracts worth of roll-over/switch volume in that precious metal.

The dollar index continues to crawl higher — and is up 11 basis points at the moment.

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

Ed

JPMorgan Sets a New Intraday Low Price in Silver

12 September 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was down a couple of bucks by shortly before 11 a.m. China Standard Time on their Tuesday — and then didn’t do much until around 2:30 p.m. CST on their Tuesday afternoon.  It rallied a bit at that point, but ran into ‘something’ around 8:30 a.m. BST in London.  It was sold lower until around 1 p.m. BST/8 a.m. EDT — and then got hammered to its low tick of the day during the next forty minutes of trading.  It chopped higher in fits and starts from there, but the moment it showed signs of breaking above $1,200 spot, it was tapped lower — and the gold market closed for the day a few minutes after that.

The low and high ticks, which really aren’t worth looking up, were reported by the CME Group as $1,187.40 and $1,199.50 in the October contract — and $1,192.70 and $1,204.80 in December.

Gold finished the Tuesday trading session in New York at $1,198.10 spot, up $2.70 on the day.  Net volume was nothing too much out of the ordinary at a bit under 252,000 contracts — and roll-over/switch volume was a hair under 12,000 contracts on top of that.

It was the same general price path for silver, except the high tick of the day came shortly before 8:30 a.m. in London.  But when the hammer fell at the COMEX open, JPMorgan et al drove silver to a new intraday low for this engineered move down.  It rallied rather impressively off that low, but that was stopped cold at the 1:30 p.m. EDT COMEX close before it could get back to unchanged on the day.  It wasn’t allowed to do anything after that.

The high and low ticks in silver were recorded as $14.265 and $13.965 in the December contract.

Silver was closed at $14.12 spot, down 4 cents on the day.  Net volume was very decent at a bit under 75,000 contracts — and roll-over/switch volume in this precious metal was 6,650 contracts.

Platinum chopped mostly sideways until around 1:30 p.m. CST — and then began to tick higher.  That lasted until shortly after 10 a.m. CEST in Zurich — and then it was sold lower until shortly before 9 a.m. in New York.  It chopped unsteadily higher until shortly before 1 p.m. EDT, but a decent chunk of those gains were gone by the 1:30 p.m. COMEX close.  It picked up a couple of dollars after that — and finished the Tuesday session at $790 spot, up 5 bucks on the day.

It was mostly similar for palladium on Tuesday, at least until shortly before 10 a.m. in Zurich.  It was sold lower from there — and then appeared to go ‘no ask’ minutes before 11 a.m. over there.  The $965 spot low tick was printed at that point.  Its subsequent rally attempt from there — and again at the COMEX open, was driven back to its low tick of the day a couple of more times around 9 a.m. in New York.  Its ensuing rally from that point was capped around 12:30 p.m. EDT.  It was sold lower into the COMEX close from there — and then traded flat for the remainder of the Tuesday session.  Palladium was closed at $972 spot, down 3 dollars from Monday’s close.

The dollar index closed very late on Monday afternoon in New York at 95.14 — and began to creep higher as soon as trading began a few minutes later at 6:00 p.m. EDT.  The rally picked up more momentum starting minutes before 9 a.m. China Standard Time on their Tuesday morning — and it topped out around the 95.29 mark around 9:35 a.m. CST.  It began to head lower from there — and then sharply lower starting around 1:30 p.m. CST on their Tuesday afternoon.  The 94.88 low tick was set around 8:10 a.m. in London — and it should be obvious to all and sundry that the usual ‘gentle hands’ were there to save it at that point.  The ensuing rally topped out at the 95.35 mark [its high tick of the day] about 8:35 a.m. in New York — and it chopped quietly lower until minutes before 4 p.m. EDT.  During the next forty-five minutes of trading, the index made a noble effort to fall back below the 95.00 mark once again, but was turned higher in the nick of the time.  The dollar index finished the Tuesday session in New York at 95.11…down 3 basis points from Monday’s close.

Here’s the 6-month U.S. dollar index — and Tuesday’s trading action was just another day where, if left to its own devices, would have crashed and burned.

The gold shares gapped down 2 percent during the first ten minutes of trading in New York on Tuesday morning, but began to chop higher from there.  They were back at the unchanged mark by shortly before 1 p.m. EDT — and chopped unevenly sideways into the close from there.  The HUI finished higher by 0.07 percent…basically unchanged on the day.

The silver equities gapped down a bit more than 2 percent at the open.  But they rallied very unevenly from there until around 12:40 p.m. in New York trading and, also like the gold stocks, chopped sideways into the close from that point onwards.  Nick Lairds’ Intraday Silver Sentiment Index closed down another 0.58 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 14 gold and 15 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  In gold, the two short/issuers were Advantage and ADM with 9 and 5 contracts out of their respective client accounts.  There were four long/stoppers in total.  JPMorgan stopped 8 for its client account — and Advantage picked up 4 for its client account as well.  In silver, the two short/issuers were Advantage and R.J. O’Brien with 12 and 3 contracts out of their respective client accounts.  There were four long/stoppers in total, with the largest being JPMorgan.  They picked up 6 for their own account, plus 1 contract for their client account.  In number two spot was HSBC USA.  They stopped 4 contracts for their own in-house/proprietary trading account.  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 September rose by 3 contracts, leaving 31 still open, minus the 14 mentioned just above. Monday’s Daily Delivery Report showed that 11 gold contracts were actually posted for delivery today, so that means that 11+3=14 more gold contracts were added to the September delivery month.  Silver o.i. in September rose by 10 contracts, leaving 462 still around, minus the 15 contracts mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 24 silver contracts were actually posted for delivery today, so that means that 24+10=34 more silver contracts were added to September.


There was a tiny withdrawal from GLD yesterday, as an authorized participant took out 8,580 troy ounces.  Without doubt, this amount would represent a fee payment of some type.  There were no reported changes in SLV.

The folks over at Switzerland’s Zürcher Kantonalbank finally got around to updating their website with the changes in their gold and silver ETFs as of the close of business on Friday, September 7 — and this is what they had to report.  For the fourth straight week there have been increases in both ETFs.  This past week they added 5,109 troy ounces of gold, plus another 125,935 troy ounces of silver.

There was another small sales report from the U.S. Mint.  They sold 2,500 troy ounces of gold eagles — and that was all.

It was very quiet in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.  Nothing was reported received — and only 707.300 troy ounces/22 kilobars [U.K./U.S. kilobar weight] were shipped out.  That activity was at JPMorgan — and I won’t bother linking it.

There was a decent amount of activity in silver.  Nothing was reported received, but 1,204,80 troy ounces were shipped out.  One truck load…607,308 troy ounces…departed HSBC USA — and one truck load…597,499 troy ounces…left Canada’s Scotiabank.  There was also 1,152,972 troy ounces transferred from the Eligible category — and into Registered.  There was 797,020 at Scotiabank — and the remaining 355,966 troy ounces was at Brink’s, Inc.  These amounts would certainly be for September delivery.  The link to that activity is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They reported receiving 2,650 of them — and shipped out 112.  All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here’s a chart that Nick Laird passed around on Sunday.  It shows the withdrawals from the Shanghai Gold Exchange going back to the beginning of 2008.  It’s been updated with August’s data — and the withdrawal that month was 190.59 tonnes.  Click to enlarge.

I have an average number of stories for you today.


CRITICAL READS

How to Purge the Rot From American Finance — Bill Bonner

Last week, we wrote about the Whimper and the Bang. The Whimper – a credit deflation… with falling stock prices and a recession – is inevitable. Every credit-fueled boom eventually runs out of gas… and then turns into a bust.

As for Making America Great Again… you can forget about it until this debt bubble issue is resolved.

And you’re not going to do that by increasing the military budget, cutting taxes (unless you’re willing to cut spending, too), or getting into pointless trade wars with everyone from Canada to China.

All of the blather about “more than full employment”… 4% growth… and the tax cut “paying for itself”… is just a distraction. Look at the numbers more carefully – they are almost all misleading or irrelevant.

So are the endless feuds and fantasies coming out of Washington. Soon, it won’t matter who ratted out the president in The New York Times.

It won’t matter, either, whether the Russians tried to influence the 2016 presidential election. (Who didn’t?) Or, whether or not POTUS really is a moron.

These things won’t matter because people will have other things to worry about.

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


The Fed’s Lost Opportunity to Return to Normal — Jim Rickards

Current Fed policy will push the U.S. economy to the brink of recession, possibly by later this year. When that happens, the Fed will have to reverse course and ease monetary policy.

Meanwhile, the economic cheerleaders recite recent GDP figures and the stimulative effects of the Trump tax cuts.

There’s one problem with the happy talk about 3–4% growth. We’ve seen this movie before.
In 2009, almost every economic forecaster and commentator was talking about “green shoots.” In 2010, then-Secretary of the Treasury Tim Geithner forecast the “recovery summer.” In 2017, the global monetary elites were praising the arrival (at last) of “synchronized global growth.”

None of this wishful thinking panned out. The green shoots turned brown, the recovery summer never came and the synchronized global growth was over almost as soon as it began.

Strong quarters have been followed by much weaker quarters within six months on six separate occasions in the past nine years. There’s no reason to believe this time will be any different.

This commentary by Jim appeared on the dailyreckoning.com Internet site on Tuesday — and I thank Brad Robertson for bringing it to my attention — and now to yours.  Another link to it is here.


Giving Anarchy a Bad Name — Jeff Thomas

Today, the major corporations that profit from warfare not only donate heavily to the political campaigns of both political parties, thereby assuring that there will be a proliferation of unnecessary wars; they also control both the news programmes and the film industry, assuring that there will be no equivalent of M.A.S.H. for present-day Americans to watch.

There will also be no news broadcasts that expose the U.S. government creating and funding rebel organisations such as ISIS – that create chaos that the U.S. must then come in and “control.”

If the American people were to receive such news on their televisions, they would today be asking meaningful questions as they did in the 70’s, such as, “How is it possible for the U.S., the greatest military power on earth, to invade a country like Afghanistan, fighting against disorganized sheepherders for sixteen years, spending three trillion dollars doing it, and not gaining any ground whatever – in effect, being no further ahead than when they started?

And how can returning veterans of that war be treated by Government as being potential terrorists – classified as “threats to democracy” upon their return?

The American media of today does not present these questions to viewers and they shall not do so in the future.

This very worthwhile commentary by Jeff was posted on the internationalman.com Internet site on Tuesday — and another link to it is here.


Why Are We Siding With al-Qaeda? — Ron Paul

Last week, I urged the Secretary of State and National Security Advisor to stop protecting al-Qaeda in Syria by demanding that the Syrian government leave Idlib under al-Qaeda control. While it may seem hard to believe that the U.S. government is helping al-Qaeda in Syria, it’s not as strange as it may seem: our interventionist foreign policy increasingly requires Washington to partner up with “bad guys” in pursuit of its dangerous and aggressive foreign policy goals.

Does the Trump Administration actually support al-Qaeda and ISIS? Of course not. But the “experts” who run Trump’s foreign policy have determined that a de facto alliance with these two extremist groups is, for the time being, necessary to facilitate the more long-term goals in the Middle East. And what are those goals? Regime change for Iran.

Let’s have a look at the areas where the U.S. is turning a blind eye to al-Qaeda and ISIS.

First, Idlib. As I mentioned last week, President Trump’s own Special Envoy to fight ISIS said just last year that “Idlib Province is the largest Al Qaeda safe haven since 9/11.” So why do so many U.S. officials – including President Trump himself – keep warning the Syrian government not to re-take its own territory from al-Qaeda control? Wouldn’t they be doing us a favor by ridding the area of al-Qaeda? Well, if Idlib is re-taken by Assad, it all but ends the neocon (and Saudi and Israeli) dream of “regime change” for Syria and a black eye to Syria’s ally, Iran. [That’s a big 10-4 good buddy! – Ed]

Second, one of the last groups of ISIS fighters in Syria are around the Al-Tanf U.S. military base which has operated illegally in northeastern Syria for the past two years. Last week, according to press reports, the Russians warned the U.S. military in the region that it was about to launch an assault on ISIS fighters around the U.S. base. The U.S. responded by sending in 100 more U.S. Marines and conducting a live-fire exercise as a warning. President Trump recently reversed himself (again) and announced that the US would remain at Al-Tanf “indefinitely.” Why? It is considered a strategic point from which to attack Iran. The U.S. means to stay there even if it means turning a blind eye to ISIS in the neighborhood.

Ron’s commentary is full of a lot of “inconvenient truths”, dear reader — and is certainly worth reading.  It was posted on his website on Monday sometime — and I thank Sonia Marlowe-Marais for sharing it with us.  Another link to it is here.


Intel Veterans Urge President Trump to Step Back From the Brink on Syria

In a memo to President Trump, a group of former U.S. intelligence officers, including NSA specialists, warn that the potential for a U.S.-Russia confrontation has never been greater at a moment the White House has confirmed it’s in the planning stages of a strike on Syria, claiming “new intelligence” that Assad has already “ordered” a chemical weapons attack, according to the WSJ.

MEMORANDUM FOR: The President

FROM: Veteran Intelligence Professionals for Sanity (VIPS)

SUBJECT: Moscow Has Upped the Ante in Syria

Mr. President:

We are concerned that you may not have been adequately briefed on the upsurge of hostilities in northwestern Syria, where Syrian armed forces with Russian support have launched a full-out campaign to take back the al-Nusra/al-Qaeda/ISIS-infested province of Idlib.  The Syrians will almost certainly succeed, as they did in late 2016 in Aleppo.  As in Aleppo, it will mean unspeakable carnage, unless someone finally tells the insurgents theirs is a lost cause.

That someone is you. The Israelis, Saudis, and others who want unrest to endure are egging on the insurgents, assuring them that you, Mr. President, will use U.S. forces to protect the insurgents in Idlib, and perhaps also rain hell down on Damascus. We believe that your senior advisers are encouraging the insurgents to think in those terms, and that your most senior aides are taking credit for your recent policy shift from troop withdrawal from Syria to indefinite war.

This very worthwhile commentary showed up on the Zero Hedge website at 4:45 p.m. on Tuesday afternoon EDT — and another link to it is here.


How to Explain the Cause of the Syrian War in 2 Minutes

The last time time President Trump launched massive strikes on Syria in April of 2018, Jeffrey Sachs went on MSNBC‘s Morning Joe just two days before the attack to give the American public a perspective they had never heard aired on a major cable network.

Importantly, Sachs is not some random unknown blogger or obscure editorial writer, but a renowned Columbia University professor and career Harvard academic who has won numerous awards and serves as special economic adviser to the U.N.

During the panel Sachs appeared to shock his hosts with erudite analysis of how the seven-year long war in Syria has fundamentally been fueled by covert regime change from the West and its Gulf allies — a rare if not unheard of subject for the show.

In a mere two minutes Sachs cut through the soundbites even as — just like now — the Trump administration was advancing completely unverified claims of an Assad chemical attack on civilians in order to prep the public for military intervention.

There was wasn’t much the talking heads sitting across from the U.N. economist could say after that.

This absolute must watch 2:20 minute video clip from MSNBC — and is from April of this year, but it’s still the absolute truth of the matter.  This clip appeared on the Zero Hedge website at 11:45 p.m. EDT last night — and another link to it is here.


U.S. threatens to arrest ICC judges if they pursue Americans for Afghan war crimes

The United States threatened Monday to arrest and sanction judges and other officials of the International Criminal Court if it moves to charge any American who served in Afghanistan with war crimes.

White House National Security Advisor John Bolton called the Hague-based rights body “unaccountable” and “outright dangerous” to the United States, Israel and other allies, and said any probe of U.S. service members would be “an utterly unfounded, unjustifiable investigation.”
If the court comes after us, Israel or other U.S. allies, we will not sit quietly,” Bolton said.

He said the U.S. was prepared to slap financial sanctions and criminal charges on officials of the court if they proceed against any Americans.

We will ban its judges and prosecutors from entering the United States. We will sanction their funds in the US financial system, and we will prosecute them in the U.S. criminal system,” he said.

We will do the same for any company or state that assists an ICC investigation of Americans,” he said.

Wow!  The U.S. deep state has really has the gloves off now — and they don’t care who they trample as they attempt to take over the entire planet.  He sound like Hitler before the outset of WW2.  The rest of the nations of the world must be aghast at all this, plus all the other stunts that the U.S., the U.K. and ‘others’ are pulling these days.

This story was posted on the france24.com Internet site on Tuesday sometime — and I thank Roy Stephens for pointing it out.  Another link to it is here.


Dr. Dave Janda interviews your humble scribe

This 25-minute audio interview was broadcast live on Ann Arbor, Michigan’s all-talk radio WAAM 1600 on Sunday afternoon EDT — and appeared on the Good Doctor’s website on Sunday evening.


Memoirs of an Unemployed Man — Hugo Salinas Price

I have had an interesting life, in the course of my retirement from business; my retirement happened somewhat by chance, in the year 1988; one Friday evening I presided a meeting of a group directors of Elektra, a Mexican company the property of my father and myself. We had had some 500 of these meetings in past years; they took place every two weeks. My son Richard was present, having been with the company since 1980. (He had arrived in 1980 from Dallas, Texas, looking for a post at Elektra, after being fired from his job  – he had called his supervisor a fool, if not something worse. He was probably right in his judgment of his superior officer’s decisions, but of course saying what you think is not the best way to get along in business).

Well, having risen to leave from the meeting I mention, suddenly an impulse came upon me and I announced: “This is the last meeting that I shall preside. My son Richard will take over from here. Cancel all my Powers of Attorney and my signatures in bank accounts“. Thus, I fired myself.  Richard really deserved to run the family company, since he is far more able in business, than myself.

So that’s how I found myself unemployed at 56, a situation which I have thoroughly enjoyed the last 30 years, especially since Richard turned out to be a businessman of singular ability, whose efforts have made me a rather wealthy man. The shares of Elektra to my name, if their number is multiplied by their quoted value on the Mexican Stock Exchange, and divided by the current rate of exchange of the Peso against the Dollar, amount to about – well, I’d rather not say. Bad luck might ensue!

I advance the clock to 1995; a terrible financial collapse had hit Mexico with a heavy devaluation of the Mexican Peso against the Dollar.

During this crisis, I had conversations with some of my conservative friends, and the conversations turned to silver money; my friends suggested that I put my thoughts into print, and so I did. I published a tract which intended to show how a silver money could be adopted by Mexico. It was much too ambitious and impossible to consider as a serious proposal.

Consequently, I put out another tract, urging the use of silver as a means of saving for the Mexican people. There has been available, since 1982, a pure silver coin weighing one Troy ounce, with no stamped value upon it: the “Libertad” silver ounce. The Mexican people have been acquiring modest amounts of this coin, over the years. One defect that puts off many purchasers, is that the monetary value of this coin fluctuates, and at times make it seem a bad investment, especially for new investors – though over time, the value of the coin does show a constant rise.

This long, but very worthwhile commentary by Hugo put in an appearance on the plata.com.mx website on Tuesday — and I found it in a GATA dispatch last evening.  Another link to it is here.


China’s Gold Reserves:  Another Month, Another Zero — Lawrie Williams

This is beginning to sound like a broken vinyl record, but the Chinese Central Bank has reported yet another zero increase in its gold reserve in August – for the 22nd month in a row! The country’s total gold reserve – as reported to the IMF – officially remains at 1,842.6 tonnes although most China followers reckon the nation’s real gold reserve is considerably in excess of this figure but held in a way that the country does not feel the need to report the true amount until it is deemed expedient to do so. When it feels the time is right, the additional gold is then moved into the official Forex data.

Thus on an official basis, the value of the country’s gold holdings fell in August by US$1.096 billion given the lower gold price, and this amounted to only 2.3% of the country’s total forex holdings, which themselves fell by $8.23 billion in August to still a massive $3.11 trillion. A fall had been anticipated by the markets but perhaps by not quite as much.

Regarding the reporting of its gold reserves China has quite a track record of delaying increases for several years at a time.

The country reported zero increase in its gold reserve from late 2002 to April 2009 and then again from April 2009 until July 2015 and on each occasion then reported massive increases, presumably built up over the previous 6 years, but held in some unspecified accounts which the Chinese government felt no need to report – at least that’s what they said at the time. Then from July 2015, somewhat cynically, the country did report monthly gold reserve increase for the 15 months prior to the yuan’s final acceptance into the IMF’s special drawing right (SDR) basket of currencies as the third largest constituent after the U.S. dollar and the euro. The other two constituents are the Japanese yen and the U.K. pound sterling. And once this acceptance was confirmed, China abruptly ceased to report any monthly increases in its gold reserve. Make of that what you may! (The SDR was initially defined in 1969 as equivalent to 0.888671 grams of fine gold—which, at the time, was also equivalent to one U.S. dollar. After the collapse of the Bretton Woods system, the SDR was redefined as a basket of currencies which has changed over the years to the five constituent currencies noted above.)

Most analysts and commentators, including this one, firmly believe that China is continuing to build its gold reserves without reporting the increases. And furthermore what is reported may equally be a fiction and nowhere near the full size of the nation’s true gold reserve figure. It has a track record of only reporting increases in its reserve figure when it feels it opportune to do so.

This interesting commentary by Lawrie appeared on the Sharp Pixley website on Sunday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Today’ ‘critter’ is the cherry-faced meadowhawk, a very common dragonfly in these parts that show up in mid summer.  The first shot is of the female — and I took it a couple of minutes after those two caterpillar photos that I featured in yesterday’s column — and also taken on the same pathway.  The second shot is of the male — and I took that photo a couple of summers ago.  The ‘click to enlarge‘ feature only helps with the first shot.


The WRAP

It was another day of ‘care and maintenance’ in gold — and as I’ve already noted, it was prevented from rising above $1,200 spot in after-hours trading yesterday.  JPMorgan used the opportunity to blast silver to a new intraday low for this move down — and as I said in this space in Tuesday’s column…”I also noticed that the silver price hasn’t been allowed to get too far off its current low tick — and if JPMorgan wished it, they could certainly engineer the price to another new low for this move down.”  I’ll be careful not to mention that again.

Platinum has also been forced to trade sideways since its August low — and palladium has been capped and sold quietly lower just about every day since it threatened to take out its 200-day moving average early last week.

As Ted says, JPMorgan still has the precious metals in its iron grip — and until they decide, or are instructed to put their hands in their pockets, nothing will change.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and it should be noted that West Texas Intermediate blasted above — and closed above, its 50-day moving average yesterday.  The ‘click to enlarge‘ feature only helps with the first four.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price, once again, was sold quietly lower in Far East trading until shortly before 1 p.m. China Standard Time on their Wednesday afternoon. It edged slightly higher going into the 2:15 p.m. CST afternoon gold fix in Shanghai, but was turned lower after that. At the moment, gold is down $4.90 an ounce. It was the same price path for silver — and it’s down 4 cents currently. The trading pattern in platinum and palladium was very similar, with both down 4 dollars as Zurich opens.

Net HFT gold volume is coming up on 48,000 contracts — and there’s only 777 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is pretty quiet, relatively speaking…coming up on 7,400 contracts — and the roll-over/switch volume in this precious metal is 1,767 contracts.

The dollar index continued to crawl quietly higher once trading began in New York at 6:00 p.m. EDT in New York on Tuesday evening. Its current 95.23 high tick was set a few minutes after 1:30 p.m. CST. It fell 9 basis points going into the afternoon gold fix in Shanghai — and has been turned sharply higher since. The index is up 9 basis points as London opens.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday Commitment of Traders Report.  Using the above charts as a guide, it certainly doesn’t appear that there will be much change in gold, but after yesterday’s new intraday low in silver, I would expect further long-selling and shorting by the two different groups of Managed Money traders.  But as to how much in contract terms that will amount to, I’m not prepared to stick my neck out.  Ted is the real authority on all this, plus all other things silver and gold related — and he may or may not have something to say about it in his mid-week commentary later today.

And as I post today’s column on the website at 4:10 a.m. EDT, I see that all four precious metals have rallied a bit during the first hour of London and Zurich trading. Gold is now down only $2.00 — and silver is up 3 cents. Platinum is back at unchanged — and palladium is down only 2 bucks.

Gross gold volume has jumped up to 64,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is 62,000 contracts. Net HFT silver volume is now up to a bit over 12,000 contracts — and roll-over/switch volume is 1,786 contracts on top of that.

The dollar index made up to the 95.28 mark a few minutes before the London open — and was up 18 basis points at that juncture, but has taken a real header since — and is down 2 basis points as the first hour of trading in London and Zurich draws to a close.

The bullish set-ups in silver and gold are now so extreme that I’m numb to it all.  But when this price management scheme is brought to its inevitable end, you won’t…as Ted says…have to ask “Is this it?” or not, because it will be immediately evident in their respective prices.

See you here tomorrow.

Ed

Precious Metal Prices Still in ‘Care and Maintenance’ Mode

11 September 2018 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was down about four bucks by minutes before 2 p.m. China Standard Time on their Monday afternoon — and it chopped weakly higher from the until the 10:30 a.m. BST morning gold fix in London.  It was then sold down to its low tick of the day, which came, at or minutes before the COMEX open.  The subsequent rally was mostly capped by around 9:10 a.m. EDT — and it was sold quietly, but evenly lower until the 1:30 p.m. COMEX close.  It rallied about three dollars in short order after that, before trading quietly sideways until the market closed at 5:00 p.m. EDT.

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

Gold was closed in New York on Monday at $1,195.40 spot, down 80 cents on the day.  Net volume was pretty light at just under 197,000 contracts — and roll-over/switch volume was just over 10,700 contracts.

The silver price was also sold unevenly lower until a few minute before 2 p.m. CST — and then it began to head sharply higher.  It was capped around 9 a.m. in London — and the high tick of the day came at, or minutes after, the morning gold fix in London.  It was sold unsteadily lower from there into the COMEX close and, like gold, bounced up a bit shortly after that — and from there didn’t do a thing for the remainder of the Monday trading session.

The low and high ticks in this precious metal were reported as $14.11 and $14.285 in the December contract.

Silver was closed on Monday at $14.16 spot, down half a cent from Friday.  Net volume was nothing special at around 49,100 contracts — and roll-over/switch volume in this precious metal was 3,790 contracts.

The platinum price was down about three bucks by around 1:45 p.m. CST on their Monday afternoon — and then got punched down to its low tick of the day a minute or so before 2 p.m. over there.  Then, like silver and gold, it headed higher until the 10:30 a.m. morning gold fix in London — and then traded flat until the COMEX open.  The price really sailed at that point but, ran into very willing sellers around 9 a.m. in New York.  Thirty minutes later ‘da boyz’ had it heading lower — and the New York low was set about an hour after the COMEX close.  It didn’t do anything after that.  Platinum was closed yesterday at $785 spot, up 5 bucks on the day…but 13 dollars off its high tick…which would have been eye-wateringly higher if it had been allowed to trade freely.

The palladium price ticked unevenly lower until minutes before the Zurich open — and that proved to be its low of the day.  From that point it chopped unsteadily higher until shortly after the afternoon gold fix in London.  Then, like on Friday at that time, some kind soul came along and hit the price shortly before noon in New York.  That sell-off lasted until shortly after 3 p.m. EDT in the thinly-traded after-hours market.  It rallied a small handful of dollars immediately after that, before trading sideways for the remainder of the Monday session.  Palladium was closed on Monday at $975 spot, down a dollar from Friday — and 14 dollars off its high tick of the day.

The dollar index closed very late on Friday afternoon in New York at 95.34  — and began to crawl quietly lower once trading began at 6:00 p.m. EDT on Sunday evening.  That lasted until a few minutes before 9 a.m. China Standard Time on their Monday morning — and it began to head higher from there.  That tiny rally hit its zenith very shortly after 12 o’clock noon in Shanghai — and except for an hour long up/down move between 2:30 and 3:30 p.m. CST, continued lower until at, or minutes before, the 10:30 a.m. morning gold fix in London.  From that juncture it crept a bit higher until shortly before the COMEX open — and then down it went.  The usual ‘gentle hands’ appeared — and saved it from blasting below the 95.00 mark a minute or so after 9 a.m. in New York.  The 95.02 print at that point was its low of the day.  It inched higher from that juncture until around 3:30 p.m. EDT — and from there it inched equally quietly lower into the close.  The dollar index finished the Monday session at 95.14…down 20 basis points.

It was obvious once again that the dollar index would have crashed and burned if those ‘gentle hands’ hadn’t show up in New York yesterday morning.

Here’s the 1-day dollar index chart so you can see more detail…

And here’s the 3-day chart so you can see all of Monday’s action, right from the 6:00 p.m. open in New York on Sunday evening, which was Monday morning in the Far East already…7 a.m. in Tokyo…6 a.m. in Shanghai.

And here’s the 6-month U.S. dollar index — and as I keep saying, not much should be read into it.

The gold shares opened about unchanged — and chopped sideways until around 10:30 a.m. in New York trading.  That was it for the day, as they headed lower from there, as the HUI closed down 1.64 percent.

The silver equities traded in a similar fashion, except they hung in there for another two hours after the gold stocks began to head lower.  Nick Lairds’ Intraday Silver Sentiment/Silver 7 Index closed down 1.30 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 11 gold and 24 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, the sole short/issuer was Advantage — and there were four long/stoppers in total, with the largest being JPMorgan with 6 for its client account.  In silver, the sole short/issuer was Advantage as well.  There were five long/stoppers in total, with the largest being JPMorgan with 14 contracts in total…10 for their house account, plus another 4 for their client account.  In second spot was HSBC USA with 7 for its own account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in September fell by 17 contracts, leaving just 28 left, minus the 11 mentioned just above.  Friday’s Daily Delivery Report showed that 28 gold contracts were actually posted for delivery today so, for the second reporting day running, more gold is shown withdrawn than there is open interest.  I was hoping they would have that fixed on Monday, but obviously not.  Silver o.i. in September declined by 347 contracts, leaving 452 still around, minus the 24 contracts mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 347 silver contracts were actually posted for delivery today, so the deliveries and change in open interest match for a change, which is surprising on such a large number.


There were no reported changes in GLD yesterday, but for the second business day in a row, there was another deposit in SLV.  This time an authorized participant, most likely JPMorgan, added 940,054 troy ounces.

There was a tiny sales report from the U.S. Mint yesterday.  They sold 1,000 troy ounces of gold eagles — and that was it.

It was all zeros in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.

There was no silver reported received — and only 75,478 troy ounces were shipped out…60,404 from CNT — and the remaining 15,073 troy ounces came out of the International Depository Services of Delaware.  There was also a big transfer from the Eligible category and into Registered…1,576,009 troy ounces…and that occurred over at CNT as well — and is obviously delivery related.  The link to this is here.

There was decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They didn’t receive any, but shipped out 4,132 of them.  This activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are the usual two charts that Nick passes around on the weekend.  They show the amount of gold and silver in all know repositories, mutual funds and ETFs as of the close of trading on Friday, September 7.  Gold withdrawals and deposits netted out at unchanged on the week.  But more silver continues to be added to these funds and, except for Ted, not a peep out of the other so-called precious metal ‘analysts’ out there.  Click to enlarge for both.

I have a very decent number of stories for you today.


CRITICAL READS

The Global Financial System is Unraveling, and No, the U.S. is Not Immune — Charles Hugh Smith

The “recovery”/Bull Market is in its 10th year, and yet central banks are still tiptoeing around as if the tiniest misstep will cause the whole shebang to shatter: what are they so afraid of?

The cognitive dissonance/crazy-making is off the charts:

On the one hand, central banks are still pursuing unprecedented stimulus via historically low interest rates, liquidity and easing the creation of credit on a vast scale. Some central banks continue to buy assets such as stocks and bonds to directly prop up the “market.” (If assets don’t actually trade freely, is it even a market?)

On the other hand, we’re being told the global economy is in synchronized growth and this is the greatest economy ever.

Wait a minute: so the patient has been on life-support for 10 years and authorities are telling us the patient is now super-healthy? If the patient is so healthy, then why is he still on life support after 10 years of “recovery”?

If the global economy is truly healthy, then central banks should end all their stimulus programs and let the market discover the price of credit, risk and assets.

Charles had a similar article on his website last week, but the folks over at the dailyreckoning.com have edited it to give it more clarity — and it’s a must read, even if you’ve read it before.  It was posted on their Internet site on Sunday sometime — and another link to it is here.


James Grant Responds to the Bernanke-Paulson-Geithner Op-Ed

Over the weekend, Global Financial Crisis-era policymakers Ben Bernanke, Timothy Geithner and Henry Paulson brought the band back together to pen a New York Times opinion piece. After sharing their self-exonerating analysis of the events of 2007-2009 and subsequent response (which one of the three did the fact checking?), Bernanke et al. argue for greater regulatory powers, or as they put it, “adequate firefighting tools,” to resolve future financial crises.

Blanket guarantees of bank debt by the Federal Deposit Insurance Corporation, the Fed’s emergency lending capabilities and the Treasury department’s guarantee of money market funds are among the mechanisms cited by the authors as necessary for crisis prevention and mitigation.

The trio write:

“We need to make sure that future generations of financial firefighters have the emergency powers they need to prevent the next fire from becoming a conflagration. We must also resist calls to eliminate safeguards as the memory of the crisis fades.  For those working to keep our financial system resilient, the enemy is forgetting.”

Alternatively, the monetary mandarins could take a cue from Peter Fisher, former executive vice-president at the Federal Reserve Bank of New York and senior fellow at the Tuck School of Business. Speaking on policy normalization at the Grant’s spring conference on March 15, 2017, Fisher offered a commanding critique of the crisis-era response led by the authors of this weekend’s Times piece. Written 18 months ago, the below passage could serve as a direct rebuttal to the authors, particularly former Fed chair Bernanke:

“Curiously, the Fed has acknowledged no failures. All the experiments have been successful, every one: no failures, no negative side effects, no perverse consequences, only diminishing returns.

What has been most extraordinary about extraordinary monetary policy is the awkward denial of uncertainty in defense of extraordinary actions. Wanting so badly to manipulate our expectations, the central bankers did not want to leave us any room for doubt… The Fed and other central banks appear to have avoided being candid about the uncertainty in order to maintain their credibility. But this is backwards. They cannot regain their credibility unless they are candid about the uncertainty and how they confront it.

The full text from Fisher’s remarks is available here.  Ben Bernanke, Tim Geithner and Hank Paulson, please copy. Come to think of it, please read.

This short article was posted on the Zero Hedge website at 7:53 p.m. EDT on Monday evening — and there are several embedded links which you can only access by  going to the story itself.  That story is linked here as well.


Fed Should Buy Stocks in the Next Recession: Former IMF Chief Economist

Our economy’s journey to becoming Japan will take one giant step forward if former IMF chief economist Olivier Blanchard has his way. His “outside the box” solution for our next recession? The Fed should buy stocks, finance the federal deficit and buy goods. He detailed this thought provoking idea at the Boston Fed’s monetary policy conference that took place this past weekend.

This thinking comes as a result of a “general sense [that] the Fed has to re-think its approach to combating recessions,” according to a new MarketWatch article.

Why must it re-think its approach? Because the Fed itself has eliminated most of its tools used to fight recessions by keeping the United States in a lower interest rate environment for too long, instead of raising rates as the market roared. Now we have a stock market at all time highs and record debt levels yet again – but this time with a Federal Reserve that has far fewer options to combat the next recession than it ever has had in the past and with a neutral rate of interest that is lower than it has ever been in the past.

Fascinatingly enough, economists are only now starting to realize that this lack of firepower could be a detriment to the Federal Reserve in the future. Blanchard stated over the weekend that the Fed could probably handle a small recession, but a more major recession, like the one we experienced in 2008, should prompt the Fed to resort to “previously unheard of policies”.

This marketwatch.com story put in an appearance on their website at 10:38 a.m. Monday morning EDT — and I borrowed the above paragraphs of introduction from the Zero Hedge website, but the story was something I found in a GATA dispatch.  Another link to it is here.


Danske Scandal is Watershed Moment as Europe Wakes Up to Risks

Europe can’t allow itself another money laundering scandal like the one engulfing Denmark’s biggest bank, according to a growing list of regulators, legislators and even bankers now demanding better region-wide controls against such crime.

Rasmus Jarlov, the minister in charge of financial legislation in Denmark, says the example of Danske Bank A/S is one from which Europe needs to learn. The lender is now the target of criminal investigations in Denmark and Estonia amid allegations that as much as $9 billion, mostly from Russia, was laundered through its Estonian unit between 2007 and 2015.

Jarlov says it’s “absolutely” clear that there are “lessons that can be drawn from as significant a case as this one.” He also says he’s sure that there will be an exchange of information from the Danske case within the European Union, with the idea being to “ensure that we do all we can in Europe to prevent another” such case.

The minister, who has been looking into the allegations against Danske together with Estonian authorities, says it’s now clear the amounts of money in question are “enormous.” He also says that “a lot suggests that things have happened that are illegal,” as investigators sift through the evidence.

Europe has seemed unprepared for the stunning revelations of large-scale money laundering apparently committed under its watch. Danske is just the latest bank found to have had inadequate procedures in place to prevent laundering, with the list including Deutsche Bank AG and ING Groep NV.

This Bloomberg new item appeared on their website at 2:00 a.m. Denver time on Sunday morning — and was updated about twenty-five hours later.  I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.


Bolton Warns Next Chemical Attack by Assad Will Lead to Much Stronger Strike on Syria

Update: Trump’s national security advisor John Bolton indicated during a speech on Monday that the United States, Britain, and France have agreed that another use of chemical weapons by Syria would be taken “very seriously” and will require a much “stronger” and harsher response.

Bolton’s warning of a “third chemical attack” today comes on the heels of a Sunday Wall Street Journal story citing unnamed U.S. officials who claim to have intelligence showing Assad “approved the use of chlorine gas in an offensive against the country’s last major rebel stronghold.”

It appears the Trump White House is now signalling that an American attack on Syrian government forces and locations is all but inevitable.

But this time the stakes are higher as Russia has built up an unprecedented number of warships in the Mediterranean Sea along the Syrian coast in response to prior reports that the U.S., France, and Great Britain could be preparing an attack.

This rather alarming, but not surprising news story put in an appearance on the Zero Hedge website at 2:10 p.m. EDT on Monday afternoon — and I thank Brad Robertson for pointing it out.  Another link to it is here.  In a parallel story is this article by Pat Buchanan headlined “Is Trump Going Neocon in Syria?” — and I thank Philip Manuel for that one.


Staged Gas Attacks and U.S. Shortcomings: U.S. Senator Tells Sputnik About His Syria Trip

U.S. Senator Richard Black in an exclusive interview with Sputnik, revealed how the Syrian people see their president, what went wrong with the U.S. policy in the Mideast and also expressed his admiration for the state of human rights in the country, as “Syria has the greatest women’s rights and the greatest religious freedoms of any Arab country.”

Black, a Republican member of the Virginia State Senate, has recently returned from Syria, where he met with Syrian President Bashar Assad and discussed recent developments in the country.

Sputnik: You recently met with Syrian President Bashar al-Assad. What was your general opinion of the man and how accurately is he represented in Western media?

Richard Black: This is the second time that I’ve met with President Assad. We had a 45-minute schedule and we ended up talking for three hours. The last time he was optimistic, he was determined. This time there was almost a spring in his step. He was quite joyous and happy.

I think, like all Syrians, he realizes that unless the West gets involved in a very malign fashion, the War will end rather soon. I think all Syrians are ready for that, but he seemed very upbeat and very happy.

You asked about how he is portrayed in the media. People in Syria know that he is a very humble individual. There is almost a touch of shyness about him. Incredibly intelligent and very devoted to his people.

This very worthwhile interview showed up on the sputniknews.com Internet site at 10:40 a.m. Moscow time on their Monday afternoon, which was 3:40 a.m. in Washington — EDT plus 7 hours.  Another link to it is here.


What to do about 10,000 al-Qaeda-linked terrorists in Idlib?

Turkish President Recep Tayyip Erdogan failed last week to get his Russian and Iranian counterparts to support his desperate bid for a cease-fire in Idlib, the stronghold of the al-Qaeda-linked terrorist group Hayat Tahrir al-Sham, as well as other radical Salafi and armed gangs based in the northwestern Syrian province.

The U.N. estimates that there are nearly 3 million civilians in Idlib, about half of them displaced from other parts of Syria, and that 900,000 civilians will be affected by a government assault. U.N. Syria envoy Staffan de Mistura said Friday, “The Security Council cannot accept that the civilians of Idlib must face this type of fate. Efforts to combat terrorism do not supersede obligations under international law in the moral conscience of humanity. We must put the sanctity of human civilian life above everything else.”

If it’s a slaughter, the world is going to get very, very angry,” U.S. President Donald Trump said Wednesday. “And the United States is going to get very angry, too.”

Turkey, which already hosts some 3.5 million Syrian refugees, seeks to avoid another massive inflow of Syrians displaced by conflict, but has been unable to convince non-terrorist armed groups to withdraw and distance themselves from Hayat Tahrir al-Sham.

On paper, the leaders reiterated pledges to seek a negotiated solution to Syria’s seven-year conflict, to preserve the country’s territorial unity, to eliminate al-Qaeda-linked terrorists and to assure the safe return of millions of displaced Syrians,” reports Amberin Zaman. “But a regime attack on Idlib will likely move ahead despite Turkey’s appeals for more time to use carrot-and-stick diplomacy with the jihadis.”

That Hayat Tahrir al-Sham is digging in, rather than getting out, should come as no surprise. The U.N.-designated terrorist group formerly known as Jabhat al-Nusra, which controls about 60% of Idlib province, is unlikely to throw in the towel even while the international community seems to be throwing it a lifeline.

This commentary put in an appearance on the al-monitor.com Internet site on Sunday sometime — and it comes to us courtesy of Roy Stephens.  Another link to it is here.


Armageddon in Idlib

A showdown between the U.S. and Russia is coming over Syria. Our sources inside Syria tell us that Russia began building up capabilities to support the Syrian Arab Army’s retaking of Idlib Province as early as June 2018. Included with new T90 tanks and advanced missile-based artillery are new air defense capabilities as well, along with ECM or electronic counter measures capabilities.

Russia is arming the Syrian Arab Army to fight not just al Qaeda and ISIS, the primary occupiers of Idlib, but the U.S., Britain and France as well.

The real war is between Russia and the U.S. America has no real ability to defend Idlib other than through the use of advisors, generally private military contractors, and supplying high technology armaments directly to organizations officially deemed terrorist by the U.S. government.

The “dark horse” here, of course, is Turkey. Her military has jointly occupied much of Idlib with the nearly extinct Free Syrian Army, in its latest guise Turkish Army reservists in civilian dress.

This has been a problem with Turkey for some time, one that nearly destroyed Pakistan some years ago. I had a chance to go over this with Imran Khan one evening. We discussed the situation Pakistan faces, continual pressure from the U.S. to fight terrorism while America itself is the one actually fostering the terrorism.

This very worthwhile commentary showed up on the journal-neo.org Internet site last week — and I thank Larry Galearis for pointing it out.  Another link to it is here.


Trump to evict Palestinian mission in Washington

The Palestine Liberation Organization mission in Washington faces imminent closure by the Trump administration, a top Palestinian official said Monday.

We have been notified by a U.S. official of their decision to close the Palestinian Mission to the U.S.,” said chief negotiator Saeb Erekat.

This dangerous escalation shows that the U.S. is willing to disband the international system in order to protect Israeli crimes and attacks against the land and people of Palestine as well as against peace and security in the rest of our region,” he said in a statement.

The Wall Street Journal hours earlier published excerpts from the draft announcement to be made by Trump’s national security advisor John Bolton.

The Trump administration will not keep the office open when the Palestinians refuse to start direct and meaningful negotiations with Israel,” Bolton is expected to say Monday.

Bolton is also expected to threaten U.S. sanctions against the International Criminal Court if it moves forward with a probe of alleged Israeli war crimes.

This story, filed from Beirut, appeared on the Asia Times website at 7:17 p.m. Hong Kong time on their Monday evening, which was 7:17 a.m. EDT in Washington — EDT plus 12 hours.  I thank Tolling Jennings for sending it along — and another link to it is here.


Financial Times explains why it can’t report gold price rigging

It is time to admit that I once deliberately withheld important information from readers. It was 10 years ago, the financial crisis was at its worst, and I think I did the right thing. But a decade on from the 2008 crisis (our front pages from the period are at ft.com/financialcrisis), I need to discuss it.

The moment came on September 17, two days after Lehman declared bankruptcy. That Wednesday was — for me — the scariest day of the crisis, when world finance came closest to all-out collapse. But I did not write as much in the Financial Times.

Two critical news items had broken on Tuesday night. First, AIG received an $8.5 billion bailout. It needed it because it had to pay up for credit default swap transactions it had guaranteed. Without those guarantees, bonds sitting on banks’ balance sheets and assumed to be of no risk would instead be deemed worthless. That would instantly render many of the banks holding them technically insolvent. A failure of AIG, many believed, would mean an instantaneous collapse of the European banking system, which held much impaired U.S. credit.

Meanwhile, the Reserve Fund, the largest U.S. independent money market mutual fund, announced a loss on its holdings of Lehman bonds. As a result, its price would fall below $1 per share.

This was terrifying because money market funds, which hold short-term bonds, were treated as guaranteed. No money market fund had ever “broken the buck” (or fallen below a price of $1).

Such a story on the FT‘s front page might have been enough to push the system over the edge. Our readers went unwarned, and the system went without that final prod into panic.

Was this the right call? I think so. All our competitors also shunned any photos of Manhattan bank branches. The right to free speech does not give us right to shout fire in a crowded cinema; there was the risk of a fire, and we might have lit the spark by shouting about it.

This worthwhile story in the Financial Times of London, which actually bears the headline “In a Crisis, Sometimes You Don’t Tell the Whole Story“, was posted on their Internet site on Friday — and is posted in the clear on the gata.org Internet site.  Another link to it is here.


Iran gives permission to exchange offices to import gold, currency banknotes

Currency exchange offices have been given permission to import currency into the country and they can import currency in the form of bills,” central bank governor Abdonaser Hemmati said, according to IRNA on September 8.

Currency exchange offices will also be allowed to import gold, the head of the Iranian parliament’s economic committee, Mohammad Reza Pour-Ebrahimi, said Saturday, ISNA reported.

Imports of both gold and foreign currency by exchange offices were previously forbidden, Pour-Ebrahimi said.

In the past, this issue was forbidden and any kind of import would be considered contraband,” he said.

This brief news story showed up on the en.trend.az Internet site on Saturday sometime — and it’s something I found on the Sharps Pixley website.  Another link to it is here.


Will I Come Back Dead?‘  The Human Costs of South African Gold

After more than two decades of improving mine safety since the end of apartheid, South Africa’s progress has stalled with an increase in gold-mining deaths.

More than 50 people have died in the country’s mines in 2018, roughly the same number as this time last year. While annual death tolls are far lower than the 615 in recorded in 1993 — the last full year of apartheid — 2017 witnessed the first rise in 10 years.

Most of the gold mining fatalities are due to workers being crushed under falling rocks, caused by more frequent tremors as companies dig deeper for the precious metal, in some cases reaching depths of more than 4 kilometers (2.5 miles). The government is investigating Sibanye Gold Ltd.’s operations, where over half the gold mining deaths occurred this year.

When you wake up in the morning you think, will I come back dead or alive?” said Sivelly Mangola, a 40-year-old rock drill operator at Sibanye’s Driefontein mine who was once trapped for 30 minutes by a rockfall. “It’s traumatizing.”

Chris Powell’s headline to this story is far more accurate, it read…”When will Bloomberg do a story about the human costs of gold price suppression?“.  It was posted on their Internet site at 4:01 p.m. Denver time on Sunday afternoon — and was subsequently updated about twenty-seven hours later.  I found it embedded in a GATA dispatch yesterday — and another link to it is here.


Hundreds of Roman gold coins found in basement of old theater in Northern Italy

Archaeologists are studying a valuable trove of old Roman coins found on the site of a former theater in northern Italy.

The coins, at least 300 of them, date back to the late Roman imperial era and were found in a soapstone jar unearthed in the basement of the Cressoni Theater in Como, north of Milan.

We do not yet know in detail the historical and cultural significance of the find,” said Culture Minister Alberto Bonisoli in a press release. “But that area is proving to be a real treasure for our archeology. A discovery that fills me with pride.”

Whoever placed the jar in that place “buried it in such a way that in case of danger they could go and retrieve it,” said Maria Grazia Facchinetti, a numismatist — or expert in rare coins — at a Monday press conference.

They were stacked in rolls similar to those seen in the bank today,” she said, adding the coins have engravings about emperors Honorius, Valentinian III, Leon I, Antonio, and Libio Severo “so they don’t go beyond 474 AD.”

All of this makes us think that the owner is not a private subject, rather it could be a public bank or deposit,” Facchinetti added.

Archaeologists also uncovered a golden bar inside the jar.

This very interesting gold-related news item, along with some very worthwhile photos, was posted on the cnn.com Internet site on Sunday — and the first person through the door with story was David Larsen.  Another link to it is here.


Just gold everywhere’: Australia gold rush heats up after 2 nuggets worth $11mn found 4 days apart

Miners in Western Australia have made what many believe to be two of the biggest gold nugget discoveries in recorded history, just four days apart.

You might go your whole life and you’ll never see anything like it. It’s definitely a once-in-a-lifetime discovery,” senior geologist Zaf Thanos said, as quoted by ABC Australia.

As a geologist, like I said, you get excited by a pinhead speck. But to see something on this scale is just phenomenal. This sort of bonanza zone is incredibly unique.”

Miners uncovered the amazing specimens in the first week of September at the 45-year-old Beta Hunt, which is operated by Canadian company RNC Minerals, and located near the small town of Kambalda, 630 km east of Perth.

The largest gold nugget was discovered 500 meters below the surface in an area just three meters wide and three meters high. It weighed roughly 90 kg. Rather than wait for heavy machinery to do the lifting, the miner who discovered it, Henry Dole, and two colleagues brought the giant nugget, dubbed the “Mother Lode,” to the surface themselves using a normal trolley.

Everything was covered in dust, and as I watered the dirt down there was just gold everywhere, as far as you could see,” Dole told ABC Australia. “I’ve been an airleg miner for 16 years. Never in my life have I ever seen anything like this. There was chunks of gold in the face, on the ground, truly unique I reckon. I nearly fell over looking at it… we were picking it up for hours.”

RNC Minerals reported a total haul of quartz and gold nuggets in excess of 190 kg, “the largest of which is 95kg with an estimated gold content of 2,440 oz. and a second large specimen stone of 63kg with an estimated gold content of 1,620 oz.”

I received a lot of stories about this discovery yesterday.  The first one was this rt.com news item from George Whyte — and another link to it is here.  There are more photos in this dailymail.co.uk story headlined “‘There was just gold everywhere, as far as you could see’: Miners discover 90kg of the precious metal” — and it was on the gata.org Internet site.  Plus much different photos in this Financial Post story headlined “Toronto miner unearths boulder that contains 9,000 ounces of gold in Australia, worth about $15M” — and that comes courtesy of George Whyte as well.


The PHOTOS and the FUNNIES

Along with the spider photos that I posted in my column last week, another critter that shows up in the very late summer/early autumn around here is this caterpillar.  I saw this one on the trail around the pond as I was photographing that great blue heron sequence that was in my Saturday missive.  Since I only had the 400 mm lens with me, that’s what I was forced to use.  These two photos were taken from a bit under 4 meters/12 feet away — and needless to say, I had to crop them by a bit.  There’s not much depth of field at this range, either.  They’re something under 45 mm/2 inches long.  A search on the Internet says they’re the larva of a Tussock moth, but it doesn’t says which species.  Click to enlarge.

 

The WRAP

It was another day where it was obvious that precious metals wanted to blast higher, but ‘da boyz’ where there to not only cap all rallies, but sell them lower into the COMEX close as well.  They still have them in ‘care and maintenance’ mode until they’re ready to spring their ‘event‘…whether it be in Washington, or in Syria…or both.  We’ll find out soon enough I would think.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  There’s not much to see in the precious metals, but I note that WTIC was closed at a slight new low for this move down.  And I also noticed that the silver price hasn’t been allowed to get too far off its current low tick — and if JPMorgan wished it, they could certainly engineer the price to another new low for this move down.  The ‘click to enlarge’ feature only helps with the first four.

And as I type this paragraph, the London open is less than ten minutes away, I note that that gold price was sold lower until shortly before 11 a.m. China Standard Time on their Tuesday morning. It didn’t do much from there until shortly before 2 p.m. CST on their Tuesday afternoon. It then rallied sharply by a few dollars at that juncture — and is 30 cents the ounce at the moment. In most respects, the price action in silver was similar — and it’s up 3 cents. Platinum chopped mostly sideways in price until about 1:45 p.m. CST — and it edged higher at that point as well — and is up 5 dollars. Palladium mostly followed what happened in gold and silver during Far East trading — and it’s up 4 bucks as Zurich opens.

Net HFT gold volume is a bit under 41,000 contracts — and there’s only 885 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is a bit over 9,500 contracts — and there’s only 199 contracts worth of roll-over/switch volume in that precious metal.

The dollar index began to crawl quietly higher the moment that trading began at 6:00 p.m. EDT in New York on Monday evening. That rally got a bit more serious starting a few minutes before 9 a.m. CST on their Tuesday morning — and its current 95.29 high tick was set about forty minutes later. It’s been pretty much all down hill since then, as the dollar index is now down 15 basis points as London opens.

Today, at the close of COMEX trading is the cut-off for this Friday’s Commitment of Traders Report — and I may or may not hazard a guess as to what it might show when I post my column on Wednesday.

And as I put today’s efforts up on the website at 4:03 a.m. EDT, I see that all four precious metals are off their current high ticks…such as they are. At the moment ‘da boyz’ have gold back at unchanged — and silver is up 2 cents. Platinum is up by 5 dollars — and palladium by 2.

Gross gold volume is around 51,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is about 49,500 contracts. Net HFT silver volume is a bit over 13,200 contracts — and there’s still only 213 contracts worth of roll-over/switch volume on top of that…up 14 contracts from an hour ago.

The dollar index hit it current 94.88 low tick shortly after London opened — and is off it by a handful of basis points — and is currently down 20. That decline is obviously not being allowed to manifest itself in precious metal prices.

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

Ed

JPMorgan: Now Long Silver in the COMEX Futures Market

08 September 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped unsteadily sideways around the $1,200 spot mark through all of Far East and most of London trading on their respective Friday’s.  The price got smacked a bit at the 8:30 jobs report in New York, but began to head higher about 9:01 a.m. EDT.  That rally was allowed to last for about forty minutes before ‘da boyz’ showed up — and they set the low tick of the day about fifteen minutes before the COMEX close.  It crawled a few dollars higher over the next hour — and then didn’t do much until trading ended at 5:00 p.m. in New York.

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

Gold was closed in New York on Friday at $1,196.20 spot, down $3.30 on the day.  Net volume was  pretty heavy once again at around 260,500 contracts — and roll-over/switch volume was just about 11,700 contracts on top of that.

Silver’s price pattern was much more ‘volatile’ yesterday.  It was up a nickel or so in early morning trading in the Far East on their Friday morning, but then was kicked downstairs [like gold and platinum] shortly after 11 a.m. CST.  It chopped very unsteadily higher from there once trading began in London and, like gold, was sold lower on the 8:30 a.m. EDT jobs report.  Also like gold, it rallied sharply — and obviously had to be restrained, with the high tick of the day, such as it was, coming around 11:30 a.m. in New York.  It was sold down to below unchanged on the day by the COMEX close — and crawled a bit higher and back into the green by the time trading ended at 5:00 p.m. EDT.

The low and high ticks are barely worth looking up, but the criminal CME Group recorded them as $14.105 and $14.29 in the December contract.

Silver was closed yesterday at $14.165 spot, up 3.5 cents from Thursday.  Net volume was pretty heavy once again at a hair over 74,000 contracts — and there was close to 3,250 contracts worth of roll-over/switch volume on top of that, in this precious metal.

Platinum traded pretty flat in Far East trading on their Friday, with the exception of the bump down shortly after 11 a.m. CST — and at 2 p.m. over there, it began to rally weakly to its high of the day, which came around 10:45 a.m. CEST in Zurich trading.  It was all down hill from that point until 9 a.m. in New York — and after that, it was forced to follow a similar price path as both silver and gold.  Platinum was closed on Friday at $780 spot, down 11 dollars on the day.

Palladium traded flat in the Far East on Friday — and then there was a big down/up spike shortly before 10 a.m. in Zurich, which may or may not have been a data feed error.  It rallied very unsteadily from there — and looked to be running into a decent amount of price resistance on its way to its $986 spot high tick that came at the Zurich close.  It wasn’t allowed to get a penny above that price — and ‘da boyz’ hammered it lower starting shortly after 1 p.m. in New York trading — and came close to getting it back at unchanged on the day.  That would have been a considerable feat considering it was up $15 at its high.  It rallied a few dollars off that low almost immediately — and then didn’t do much for the remainder of the Friday session.  Palladium was closed at $976 spot, up 5 bucks from Thursday.

The dollar index closed very late on Thursday afternoon in New York at 95.03 — and proceeded to chop quietly sideways the moment that trading began at 6:00 p.m. EDT on Thursday evening.  It began to drift lower starting around noon China Standard Time on their Friday — and the 94.87 low tick was set sometime during morning trading in London.  It began to edge higher starting around 11:45 a.m. BST — and then blasted higher on the jobs report in New York.  ‘Gentle hands’ managed to get it up to its 95.46 high tick by the 1:30 p.m. EDT COMEX close — and it proceeded to drift a few basis points lower until it was sold down a bit more at the end of the trading day.  The dollar index finished the Friday session at 95.34 — up 31 basis points from Thursday.

And here’s the 6-month U.S. dollar index chart — and absolutely nothing should be read into it, as it’s just as managed as the rest of the financial markets these day.

The gold shares gapped down a bit over a percent at the open in New York on Friday morning — and rallied to their respective highs, which came a minute or so before the London close…11 a.m. EDT.  They sold off from there — and back into negative territory until about 1:20 p.m. in New York trading — and then crawled quietly but unsteadily higher from there until trading ended at 4:00 p.m. EDT.  The HUI closed up 0.64 percent.

The price path for the silver equities was a virtual carbon copy of what happened with the silver stocks — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 0.10 percent, which is certainly better than the alternative, albeit not by much.  Click to enlarge if necessary.

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

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

Here’s the weekly chart — and it’s another sea of red.  The declines in the metal during the reporting week/month-to-date are pretty tiny, but because ETFs and mutual funds were forced to sell shares into the market to pay for redemptions, the equities got their collective asses kicked.  Click to enlarge.

The month-to-date chart and weekly charts are the same for this week only, so I won’t bother posting it.

The year-to-date graph is even more butt-ass ugly than it was a week ago.  However, despite the wall-to-wall red, it should still be noted that the silver equities continue to outperform their golden brethren on a year-to-date basis.  This fact clearly demonstrates that silver — and its associated equities, are going to vastly outperform their golden cousins when the next big rally is allowed to get underway.  Click to enlarge.

And with yet another stunning COT Report in silver and gold yesterday, the above seas of red is what major price bottoms are made of.  And I as I said last week [and the week before — and the week before that] in this space…they’re ugly…with this last swing for the fences by JPMorgan being the worst I’ve very seen in the eighteen years that I’ve been watching the precious metal market.

Everyone and their dog now knows that JPMorgan is not only out of all its short positions in the precious metals, it’s also long them as well…particularly silver and gold.  With the current “white hot” configuration in the COMEX futures market, it’s highly doubtful that JPMorgan will appear as shorts sellers of either first and/or last resort once the next serious moving average-breaking rally is allowed to begin.  They sure as hell don’t want to be short when prices blow sky high — and IF they do appear again, it will be at significantly higher prices…and I really do mean significantly.


The CME Daily Delivery Report for Day 5 of September deliveries showed that 28 gold and 347 silver contract were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, Advantage issues all 28 contracts out of its client account.  Of the four long/stoppers in total, Morgan Stanley stopped 12 in total…9 for clients — and 3 for its own account.  Advantage picked up 8 for its client account — and ADM picked up 5 contracts for its client account as well.  In silver, there were four short/issuers in total — and the only two that mattered were International F.C. Stone and ABN Amro with 168 and 146 contracts out of their respective client accounts — and Advantage was a distant third with 31 contracts out of its client account. There were six long/stoppers in total, with JPMorgan being the largest…132 contracts for its own account, plus 51 for clients.  HBSC USA stopped 90…89 for its house account and the remaining contract for its client account.  Advantage came in third with 34 for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in September declined by 44 contracts, leaving 45 still open, minus the 28 mentioned just above.  Thursday’s Daily Delivery Report showed that 63 gold contracts were actually posted for delivery on Monday, so something doesn’t add up here, as 63 minus 45 is a negative number.  Maybe this will resolve itself in Monday’s Preliminary Report.  Silver o.i. in September dropped by 311 contracts, leaving 799 still around, minus the 347 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 295 silver contracts were actually posted for delivery on Monday, so that means that 311-295=16 silver contracts disappeared from the September delivery month.

For the first week of September deliveries, there have been 526 gold contracts issued and stopped so far — and that number in silver is already up to 5,601 contracts.


There was a withdrawal from GLD yesterday, as an authorized Participant took out 47,326 troy ounces.  But the big surprise of the day was the huge deposit made in SLV, as an a.p. added 3,008,256 troy ounces!

Since its low back on June 15 of this year, there has been 18.6 million troy ounces of silver added to SLV — and during the same time period there has been 2.68 million troy ounces of gold withdrawn from GLD.   Except for Ted Butler, not a soul is breathing a word about this immense dichotomy.  I would suspect that he’ll have something to say about this in his weekly review later today.

There was a sales report from the U.S. Mint yesterday.  They sold 4,000 troy ounces of gold eagles — and 6,500 one-ounce 24K gold buffaloes.

Month-to-date…one week…the mint has sold 10,500 troy ounces of gold eagles — 6,500 one-ounce 24K gold buffaloes — and 1,037,500 silver eagles.  This has been the best start to any month since January.  I’d guess that this would be the final call for purchasing precious metals at these ridiculously low prices.

The U.S. Mint also came out with a note yesterday saying that they were temporarily out of stock of the 24K one-ounce gold buffaloes as well — and it only took sales of 6,500 coins to do it.  They certainly don’t carry much inventory.  I thank reader Mark Barooshian for pointing that out.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Nothing was reported received — and only 1,286.000 troy ounces/40 kilobars [U.K./U.S. kilobar weight] were shipped out of Canada’s Scotiabank.  I won’t bother linking this amount.

It was busier in silver, as two smallish truck loads…1,106,297 troy ounces…were received at Brink’s, Inc. — and all the 89,213 troy ounces of ‘out’ activity was at CNT.  There was a bunch of paper transfers from the Eligible category — and into Registered — and vice versa.  There was 230,819 troy ounces transferred from Registered and back into Eligible at Brink’s, Inc. — and 815,346 troy ounces transferred from the Eligible category and into Registered at CNT.  The link to all this activity is here.

It was a very busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 10,540 of them, plus they shipped out another 6,292.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

Sicily, Syracuse, Agathokles, 317-310 BC, Dekadrachma

Origin: Ancient Greece     Material: Gold    Full Weight: 4.27 grams

Agathocles was described as “behaving as a criminal at every stage of his career”, according to Machiavelli — and he was also cited as an example “Of Those Who By Their Crimes Come to Be Princes”.

A lot of the so-called political leaders in the U.S. deep state easily fall into that category.  Plus ça change, plus c’est la même chose, dear reader.


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, September 4 was yet another stunner — and another one for the record book…and history books.

In silver, the Commercial net short position declined by another 13,196 contracts, or 66.0 million troy ounces of paper silver.

They arrived at that number by selling 6,117 long contracts, but they reduced their short position by a further 19,313 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

The internal changes of the Big 8 traders is no longer relevant — and has been that way for many weeks, as there are so many Managed Money Traders now in that category, that the numbers are meaningless…but here they are anyway if you’re keeping score.  Ted said that the Big 4 traders reduced their short position by approximately 800 contracts — and the ‘5 through 8’ large traders decreased their short position by about 300 contracts as well.  The really big heavy lifting was done Ted’s raptors, the 38-odd small Commercial traders other that the Big 8, as they increased their long position by a chunky 12,100 contracts, which is another new record I’m sure.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders almost to the contract.  The brain-dead/moving average-following Managed Money traders added another 8,347 short contracts and, collectively these 62 traders are now short 104,482 COMEX silver contracts, or 552 million troy ounces of paper silver!  Gasp!  The non-technical Managed Money traders sold 4,871 long contracts — and it’s the sum of those two numbers…8,347 plus 4,871 equals 13,218 contracts.  The difference between that number — and the Commercial net short position is only…13,218 minus 13,196 equals 22 contracts!  That was made up by the traders in the other two categories, as they basically traded long and short positions with each other during the reporting week.   Here’s a snip from the Disaggregated COT Report so you can see it for yourself.  Click to enlarge.

The Commercial traders are now net long the market by 14,613 contracts, or 73.1 million troy ounces.   According to Ted, not only has JPMorgan covered the rest of their short position in silver, but they are now net long the market by around 2,000 contracts as well.  My how the worm has turned!  So except for the 2,000 contracts that JPMorgan is long, almost all of the rest of the Commercial net long position in silver is held by Ted’s raptors, the small Commercial traders other than than Big 8.  How preposterous is that, you ask?  It’s far beyond that now — and the CFTC says and does nothing.

Here is the 3-year COT chart for silver, updated with the latest COT data — and it is a sight to behold.  Click to enlarge.

Words fail me at this point.  JPMorgan has pulled off the perfect double cross…leaving the short position entirely in the hands of not only the brain-dead/moving average-following Managed Money traders, but the other four U.S. banks that are still net short silver in the COMEX futures market — and my commentary on this subject in the latest Bank Participation Report further down, certainly falls into the required reading category.


In gold, the commercial net short position declined by another 14,787 contracts, or 1.48 million troy ounces of paper gold.  The commercial traders are now net long the gold market by a hair.

They arrived at that number by adding 3,151 long contracts, plus they covered an additional 11,636 short contracts — and it’s the sum of those two numbers that represents their change for the reporting week.

Like for silver, the positions of the Big 8 commercial traders are totally meaningless, as they are now completely contaminated by the presence of many Managed Money traders, but here are the numbers anyway.  Ted said the Big 4 traders didn’t do much of anything during the reporting week, as their change was less than 100 contracts, which isn’t even a rounding error.   The ‘5 through 8’ large traders decreased their short position by about 8,100 contracts — and Ted’s raptors, the 46-odd small commercial traders other than the Big 8, added approximately 6,700 long contracts.

Under the hood in the Disaggregated COT Report, less than half of the weekly change was made up by the Managed Money traders.  The brain-dead/moving average-following M.M. traders only added 2,630 short contracts — and the non-technical Managed Money traders reduced their long position by 4,320 contracts — and it’s the sum of those two numbers…6,950 contracts…that represents their change for the reporting week.  The difference was made up, as it always is, by the traders in the other two categories, as the ‘Other Reportables’ decreased their net long position by 3,484 contracts — and the ‘Nonreportable’/small traders reduced their net long position by 4,353 contracts.  And here’s the applicable snip from the Disaggregated COT Report for gold.  Click to enlarge as well.

As I mentioned briefly a few paragraphs ago, their is no longer a Commercial net short position in gold, as they are now net long by a tiny amount…6,525 contracts…or 652,500 troy ounces of paper gold.  Ted said a few weeks ago that JPMorgan had covered its short position in gold — and after the last couple of COT Reports, is probably long the COMEX futures market in gold by a good bit now.  That doesn’t include the 20 million troy ounces of physical gold that Ted says they own.

Here is the 3-year COT chart for gold — and it’s simply amazing to look at.  Click to enlarge.

A double cross in silver — and in gold as well.  These crooks at JPMorgan are masters at their craft — and you have to give them credit for that.  I just hope that the CFTC’s new enforcement director, Jamie McDonald, is getting his cut — and he should be getting a big one for covering for them, plus lying about it all with a straight face.

In palladium, the Managed Money traders continue to cover short positions like mad — and it’s this short-covering rally that’s driving up the palladium price.  They’ve covered over half of it in the last two reporting periods.  In platinum, the Managed Money traders of the brain-dead variety increased their short position by a bit — and the non-technical Managed Money traders increased their long position by a bit.  In copper, the Managed Money traders reduced their short position by about 5,000 contracts net.  But despite that fact, the traders in the commercial category in copper managed to add to their long positions, plus cover more shorts — and they are now net long the COMEX futures market in copper by 5,000 contracts.

So, are we done to the downside yet?  Only JPMorgan knows that.  And as Ted Butler said so succinctly at least a decade ago…and it’s been even more apropos during this current [and brutal] engineered price decline…”we won’t know when the bottom is in until we see it in the rear-view mirror.”  Amen to that!

Of course, nothing I spoke about in the COT Report above, the ‘Days to Cover’ commentary, or in the Bank Participation Report further down, would be known by anyone in the precious metals community…including me…if it wasn’t for him.  You’re getting the Reader’s Digest version from me — and second hand to boot.  As the old saying goes…”Oats that have already been through the horse are always cheaper than the ones straight out of the bin.”…or words to that effect.  If you want the Full Monty, I’d suggest that you consider a subscription to his service — and the link to his website is here.


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

For the current reporting week, the Big 4 traders are short 115 days of world silver production—and the ‘5 through 8’ large traders are short an additional 64 days of world silver production—for a total of 179 days, which is 6 months of world silver production, or about 417.8 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 181 days of world silver production.]

In the COT Report above, the Commercial net long position in silver was reported as 73.1 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders [almost all Managed Money traders now] is 417.8 million troy ounces.  The long position of the Managed Money traders is now up to 417.8 plus 73.1 equals 490.9 million troy ounces.

The Big 4 traders are short about 29 days of world silver production each.

The four traders in the ‘5 through 8’ category are short 64 days of world silver production in total…which is unchanged from last week’s COT Report.  They’re short, on average, 16 days of world silver production each.

As you’ve already heard, JPMorgan is no longer part of the Big 8…or short silver at all — and is now net long the COMEX futures market.  The remaining Big 8 traders…four U.S. banks, plus Canada’s Scotiabank, plus many others, mostly Managed Money traders…have been left holding the short bag.

The Big 8 commercial traders are short 39.3 percent of the entire open interest in silver in the COMEX futures market, which is up a bit from the 37.2 percent that they were short in last week’s COT Report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be something close to 45 percent.  In gold, it’s now 32.7 percent of the total COMEX open interest that the Big 8 are short, up a bit from the 33.9 percent they were short in last week’s report — and a bit over 35 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 36 days of world gold production, which is unchanged from what they were short last week — and the ‘5 through 8’ are short another 18 days of world production, which is down two days from what they were short the prior week, for a total of 54 days of world gold production held short by the Big 8 — which is down 2 days from what they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold about 67 percent of the total short position held by the Big 8…which is up three percentage points from last week’s COT Report.  Like in silver, there are at least three, if not more, Managed Money traders in the Big 8 category now — and that certainly skews the numbers to the high side by a number of days of world gold production.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 64, 60 and 73 percent respectively of the short positions held by the Big 8.  Silver is down one percentage point from the previous week’s COT Report, platinum is up 1 percentage point from a week ago, but palladium is up 8 percentage points from last week’s COT Report — and that’s because the Big 4 have been going short this ongoing rally in that precious metal.  Not by much, but it’s such a tiny market, it doesn’t take much to change the percentages by a lot, especially when the ‘5 through 8’ large traders are sitting pat.

The set up for Ted’s double cross scenario by JPMorgan of the other commercial/Managed Money traders in all four precious metals is more extreme now than he ever could have imagined in his wildest dreams, so it’s even more ‘locked and loaded’ now after three blockbuster COT Reports in a row for silver…and gold.

And as I keep saying — and will keep on saying…all we’re waiting for now is CME CEO Terry Duffy’s “event” to set it off.  And after all their efforts, it’s virtually inconceivable that JPMorgan will return as short seller of last resort.  But if they do, it will be at prices that we can only dream about at the moment.


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

In gold, 5 U.S. banks were net short 16,384 COMEX contracts in the September BPR…none of which belongs to JPMorgan.  In August’s Bank Participation Report [BPR], these same 5 U.S. banks were net short 22,961 contracts, so there’s been a noticeable decrease…6,577 contracts…during this reporting period.  Back in February’s BPR in gold, these same 5 U.S. banks were net short 114,008 contracts.  That’s a drop of 97,600 contracts, or 9.8 million troy ounces in seven months.  That was JPMorgan getting out of Dodge.

Also in gold, 28 non-U.S. banks are net short only 7,310 COMEX gold contracts, which is barely a rounding error per bank…261 contracts each.  In the August BPR, 28 non-U.S. banks were net short 24,895 COMEX contracts, so the month-over-month decline is a very chunky 17,585 contracts.  I suspect that there’s at least one large non-U.S. bank in this group [probably Scotiabank] that might holds all of that amount, plus more, all by itself…as the 7,310 contracts is a net number — and the remaining contracts…which are already an immaterial amount…divided up between the remaining 27 non-U.S. banks, would be even more immaterial.

The world’s banks, with the exception of the remaining four U.S. banks, plus most likely Scotiabank, are basically gone out of the gold market.  They, along with the Managed Money traders, have been left holding the bulk of the remaining short positions in gold…courtesy of JPMorgan.

As of this Bank Participation Report, 33 banks [both U.S. and foreign] are now net short only 5.0 percent of the entire open interest in gold in the COMEX futures market, which is down fifty percent from the 10.2 percent they were short in the August BPR.

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

In silver, 5 U.S. banks are net short 14,527 COMEX silver contracts in September’s BPR — and Ted figures that JPMorgan is now long the COMEX futures market by about 2,000 contracts, so the other four U.S. banks, whoever they might be, have been left holding the above short position all by themselves.  In August’s BPR, the net short position of these U.S. banks was 28,122 contracts, so the short position of the U.S. banks is down around 14,000 contracts from a month ago.  All of that decrease should be attributed to JPMorgan.  Since Ted stated in the August BPR that JPMorgan was short 20,000 COMEX contracts a month ago, they’ve improved their position month-over-month by 20,000 plus 2,000 equals 22,000 contracts.  So one or more of the remaining U.S. banks had to go short the 8,000 contract difference…22,000 minus 14,000 equals, approximately…8,000 contracts.  I know he’ll have lots more to say about this in his weekly commentary this afternoon.

Also in silver, 25 non-U.S. banks are net short 14,073 COMEX contracts…which is down a decent amount from the 21,569 contracts that these same non-U.S. banks were short in the August BPR.  I would suspect that Canada’s Scotiabank still holds a goodly chunk of the short position of the non-U.S. banks.  And since that’s probably the case, it certainly means that a number of the remaining 24 non-U.S. banks might actually be net long the COMEX futures market in silver.  But even if they aren’t, the remaining short positions divided up between these other 24 non-U.S. banks are immaterial — and have always been so.

As of September’s Bank Participation Report, 30 banks [both U.S. and foreign] are net short 13.4 percent of the entire open interest in the COMEX futures market in silver—which is down a very decent amount from the 21.1 percent that they were net short in the August BPR — with much, much, much more than the lion’s share of that now held by four U.S. banks, other than JPMorgan…plus Scotiabank.

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

In platinum, 4 U.S. banks are now net long 2,573 COMEX contracts in the September Bank Participation Report.  In the August BPR, these 4 U.S. banks were net short 622 COMEX platinum contracts, so there’s been another big change for the fourth month in a row.

It’s a good bet that JPMorgan has not only covered its short position in platinum, but it is now position entirely on the long side as well, just like they are in both gold and silver.

Also in platinum, 17 non-U.S. banks are net short 1,192 COMEX contracts, which is down 58.3 percent from the 2,861 contracts they were net short in the August BPR.

And to give you some idea how fast the banks have been exiting their short positions in platinum; in February’s BPR…20 U.S. and non-U.S. banks were net short 29,406 COMEX platinum contracts.  In September’s report, this one, 21 banks have a combined long position of 2,573 contracts.  That’s serious short covering, dear reader.

And as of September’s Bank Participation Report, 21 banks [both U.S. and foreign] are now net long 1.5 percent of platinum’s open interest in the COMEX futures market, which is a dramatic change from the 6.9 percent they were collectively net short in the August BPR.

Here’s the Bank Participation Report chart for platinum — and it’s obvious that they’re no longer a factor.  Click to enlarge.

In palladium, 4 U.S. banks were net short 3,429 COMEX contracts in the August BPR, which is up a tiny bit from the 3,146 contracts they held net short in the August BPR.

Also in palladium, 12 non-U.S. banks are net short 1,847 COMEX contracts—which is up a bit from the 1,666 COMEX contracts that these 12 non-U.S. banks were short in the August BPR.  When you divide up the short positions of these non-U.S. banks more or less equally, they’re also immaterial…especially when you compare them to the positions held by the 4 U.S. banks.  But having said that, the short positions in palladium held by the U.S. banks are pretty much immaterial as well.

However, it’s obvious from the increase that the banks having been adding to their short positions during this continuing rally in palladium, most likely to prevent it from running away to the upside, which is precisely what it would do if they weren’t there to hold the price back.

But, having said all that, as of this Bank Participation Report, 16 banks [U.S. and foreign] are net short 29.3 percent of the entire COMEX open interest in palladium.  In August’s BPR, the world’s banks were net short 20.9 percent of total open interest, so there’s been a noticeable increase in the concentrated short position of the banks in this precious metal.

It’s apparent that the banks can move palladium prices around even with small amounts of trading, as they are a large part of total open interest in a very tiny and illiquid market at the best of times.

The net short position of the world’s banks in palladium was 18,683 contracts in total back in January of this year.  Compare that with the 5,276 contracts [net] they are short in September’s Bank Participation Report.   But it will prove immensely difficult for them to cover these remaining short positions without blowing the price sky high.

Here’s the palladium BPR chart.  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007—and they became the predominant and controlling factor by the end of Q1 of 2013. That has changed completely over the last six months.  Click to enlarge.

Along with today’s Commitment of Traders Report, the above data in the September Bank Participation Report proves beyond all doubt that the world’s bullion banks…principally JPMorgan…have been covering their short positions in all four precious metals at a furious pace for the last seven months.  That process has accelerated in the last two months…especially during the last two weeks — and for all intents and purposes [expect for the remaining short position in silver already discussed above] there are no material short positions held by any of the U.S. or non-U.S. banks in any precious metal.

We’re somewhere far beyond Ted’s “locked and loaded” scenario, depending on what adjective one cares to use.  ‘Explosively bullish’ is the best I can do, but even that description doesn’t do the current set-up justice.

All we’re [still] waiting for is CME CEO Terry Duffy’s “event” that will set it off.

I have a very decent number of stories for you today.


CRITICAL READS

Doug Noland: Approaching the 10-year Anniversary

I’ve never viewed the 2008 fiasco as a “failure of the free markets.” It was instead an abject failure of policy making – of government policy and central bank doctrine and methods. At its roots, the crisis was the inevitable consequence of unsound money and Credit – finance that over time became increasingly unstable specifically because of government intervention and manipulation. “Activist” central banks were manipulating the price of finance and the quantity and allocation of Credit, along with increasingly heavy-handed interventions to backstop dysfunctional markets.

The crisis was a predictable failure in inflationism. Sure, it’s reasonable to blame the reckless behavior of Wall Street. But risk-taking, leveraging, speculation and chicanery were all incentivized by policy measures employed to inflate both asset prices and the general price level.

Instead of crisis focusing attention on the root causes of perilous financial and economic fragilities, it was a panicked backdrop conducive to only more egregious government and central bank intervention. Rather than exhaustive discussions of the roles played by “The Maestro’s” “asymmetric” market-friendly policy approach, Bernanke’s pledge of “helicopter money,” and central bank “puts” in inflating the Bubble, Dr. Bernanke was the superhero figure with the smarts, determination and academic creed to reflate the securities markets for the good of humanity. It was a grand illusion: Enlightened inflationism was viewed as the solution – and not the core problem that it was. And inflationists – including the FT‘s Martin Wolf – cheered on zero rates, Trillions of QE and the resulting inflation of the greatest Bubble in human history.

Doug’s weekly Credit Bubble Bulletin is always a must read for me — and I doubt this one is an exception.  I’ll get around to reading it after I crawl out of bed tomorrow.  Another link to it is here.


The Fed’s QE Unwind Hits $250 Billion — Wolf Richter

In August, the Federal Reserve was supposed to shed up to $24 billion in Treasury securities and up to $16 billion in Mortgage Backed Securities (MBS), for a total of $40 billion, according to its QE-unwind plan – or “balance sheet normalization.” The QE unwind, which started in October 2017, is still in ramp-up mode, where the amounts increase each quarter (somewhat symmetrical to the QE declines during the “Taper”). The acceleration to the current pace occurred in July. So how did it go in August?

The Fed released its weekly balance sheet Thursday afternoon. Over the period from August 2 through September 5, the balance of Treasury securities declined by $23.7 billion to $2,313 billion, the lowest since March 26, 2014. Since the beginning of the QE-Unwind, the Fed has shed $152 billion in Treasuries:

The Fed is also shedding is pile of MBS. Under QE, the Fed bought residential MBS that were issued and guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Holders of residential MBS receive principal payments as the underlying mortgages are paid down or are paid off. At maturity, the remaining principal is paid off.  To keep the balance of MBS from declining after QE had ended, the New York Fed’s Open Market Operations (OMO) kept buying MBS.

This 4-chart article was posted on the wolfstreet.com Internet site on Thursday.  Some kind reader sent it to me on that date, but I decided not to post it.  But when I received it from Richard Saler on Friday, I had a change of heart.  Another link to it is here.


America’s Oil Boom Is a Fraud — Bill Bonner

You’ll recall that it turned America from a big importer of oil to a major exporter… and revived much of the heartland with big fracking projects in woebegone regions of Texas and North Dakota.

The shale oil boom was even credited with having scuttled the oil market, which dropped from a high of around $130 a barrel in mid-2008 to under $30 in late 2016, thanks to so much new supply.
But guess what? The whole boom was fake. It didn’t add to wealth; it subtracted from it.

Accumulated losses over the last five years tote to more than $200 billion, with $36 billion lost in the Bakken shale fields in North Dakota alone.

Had credit been priced properly, it never would have happened. From The New York Times:

The 60 biggest exploration and production firms are not generating enough cash from their operations to cover their operating and capital expenses. In aggregate, from mid-2012 to mid-2017, they had negative free cash flow of $9 billion per quarter.

These companies have survived because, despite the skeptics, plenty of people on Wall Street are willing to keep feeding them capital and taking their fees. From 2001 to 2012, Chesapeake Energy, a pioneering fracking firm, sold $16.4 billion of stock and $15.5 billion of debt, and paid Wall Street more than $1.1 billion in fees, according to Thomson Reuters Deals Intelligence. That’s what was public. In less obvious ways, Chesapeake raised at least another $30 billion by selling assets and doing Enron-esque deals in which the company got what were, in effect, loans repaid with future sales of natural gas.

But Chesapeake bled cash. From 2002 to the end of 2012, Chesapeake never managed to report positive free cash flow, before asset sales.

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


Regime Change: American Style — Patrick Buchanan

Wednesday came leaks in The Washington Post from Bob Woodward’s new book, attributing to Chief of Staff John Kelly and Gen. James Mattis crude remarks on the president’s intelligence, character and maturity, and describing the Trump White House as a “crazytown” led by a fifth- or sixth-grader.

Kelly and Mattis both denied making the comments.

Thursday came an op-ed in The New York Times by an anonymous “senior official” claiming to be a member of the “resistance … working diligently from within to frustrate parts of his (Trump’s) agenda.

A pedestrian piece of prose containing nothing about Trump one cannot read or hear daily in the media, the op-ed caused a sensation, but only because Times editors decided to give the disloyal and seditious Trump aide who wrote it immunity and cover to betray his or her president.
The transaction served the political objectives of both parties.

While the Woodward book may debut at the top of The New York Times best-seller list, and “Anonymous,” once ferreted out and fired, will have his or her 15 minutes of fame, what this portends is not good.

For what is afoot here is something America specializes in — regime change. Only the regime our establishment and media mean to change is the government of the United States. What is afoot is the overthrow of America’s democratically elected head of state.

This very worthwhile commentary by Pat put in an appearance on the buchanan.org Internet site at 1:01 a.m. EDT on Friday morning — and it’s definitely worth reading.  I thank Phil Manuel for pointing it out — and another link to it is here.


Over Half Of America Suffering Drought As Lake Powell, Lake Mead Drop To “Dangerous” Low Levels

The worst drought in years in the western half of the United States has sparked hundreds of wildfires, has crippled thousands of farms, and has produced what could ultimately be the worst water crisis in modern American history.

As you will see below, Lake Powell and Lake Mead have both dropped to dangerously low levels, and officials are warning that we may soon be looking at a substantial shortfall which would require rationing.  Unfortunately, many in the eastern half of the country don’t even realize that this is happening.  The mighty Colorado River once seemed to be virtually invulnerable, but now it doesn’t even run all the way to the ocean any longer.  Demand for water is continually increasing as major cities in the Southwest continue to grow, and this is happening at a time when that entire region just keeps getting drier and drier.  To say that we are facing a “water crisis” would be a major understatement.

I have written quite a bit about the drought in the Southwest in recent months, and it just keeps getting worse.  According to Forbes, more than half the nation is now experiencing some level of drought…

Drought conditions across the United States have worsened throughout the summer, culminating in more than half the country experiencing abnormally dry or drought conditions by the end of August.

The latest update of the United States Drought Monitor shows that more than half of the country—nearly 56 percent—is abnormally dry or mired in a full-on drought. More than a third of the country is experiencing drought conditions, and almost eight percent is in an extreme or exceptional drought.

This very worthwhile commentary was posted on the Zero Hedge website on Wednesday morning — and I was saving it for my Saturday missive — and here it is.  Another link to it is here.


Iran, Russia, Turkey Leaders Urge “Negotiated Political Process” on Idlib as Putin and Erdogan Clash

Amidst extreme tensions ratcheting up over the past days as Russian and Syrian forces have initiated their final assault on al-Qaeda held Idlib, the presidents of Iran, Russia, and Turkey are meeting in what’s broadly described as a “high stakes summit” in Tehran on Friday.

Pressure is high after Thursday evening statements by a top State Department envoy on Syria, who told reporters, “There is lots of evidence that chemical weapons are being prepared.” The envoy, Jim Jeffrey, doubled down on prior promises that “Assad would be guilty” for any future chemical attack in Syria.

But it seems what appears to be a coordinated White House effort at calculated pressure to deter the Syria-Russia operation in Idlib is having an effect. An early statement from the summit carried in Iran state media says Iran, Russia, and Turkey have agreed that the Syria conflict can only end through “negotiated political process” and not through military means.

Turkey’s President Recep Tayyip Erdogan reportedly pushed for a cease-fire plan at the summit, warning that the massive Idlib battle would be “a bloodbath” and will be a serious national security threat to his country, and further warned of a “humanitarian catastrophe” unfolding.

However Russian President Vladimir Putin underscored Syrian sovereignty and Assad’s “right” to regian control over territory currently held by terrorists. This, in line with President Assad’s prior promises to “regain every inch” of Syrian national territory before the war.

Idlib isn’t just important for Syria’s future, it is of importance for our national security and for the future of the region,” Erdogan said during formal statements at the Friday summit. “Any attack on Idlib would result in a catastrophe. Any fight against terrorists requires methods based on time and patience,” he added, saying “we don’t want Idlib to turn into a bloodbath.” He concluded “We must find a reasonable way out for Idlib.”

This story is also from the Zero Hedge website.  It was posted there at 8:20 p.m. EDT on Friday evening — and another link to it is here.


Reply to Paul Craig Roberts’ crucial question — The Saker

In a recent article, Paul Craig Roberts directly asked me a very important question. Here is the relevant part of this article (but please make sure to read the full article to understand where Paul Craig Roberts is coming from and why he is raising this absolutely crucial issue):

Andrei Martyanov, whose book I recently reviewed on my website, recently defended Putin, as The Saker and I have done in the past, from claims that Putin is too passive in the face of assaults. https://russia-insider.com/en/russia-playing-long-game-no-room-instant-gratification-strategies-super-patriots/ri24561 As I have made the same points, I can only applaud Martyanov and The Saker. Where we might differ is in recognizing that endlessly accepting insults and provocations encourages their increase until the only alternative is surrender or war.

So, the questions for Andrei Martyanov, The Saker, and for Putin and the Russian government is: How long does turning your other cheek work? Do you turn your other cheek so long as to allow your opponent to neutralize your advantage in a confrontation? Do you turn your other cheek so long that you lose the support of the patriotic population for your failure to defend the country’s honor? Do you turn your other cheek so long that you are eventually forced into war or submission? Do you turn your other cheek so long that the result is nuclear war?

I think that Martyanov and The Saker agree that my question is a valid one.

First let me immediately state that I do find this question valid, crucial even, and that is a question which I have been struggling with for several years now and that still keeps me up at night. I think that this question ought to be raised more often, especially by those who care for peace and oppose imperialism in all its forms and I am grateful to Paul Craig Roberts for raising it.

This rather long — and somewhat involved commentary by the Saker showed up on his Internet site yesterday sometime — and the first person through the door with it was Larry Galearis.  Another link to it is here.


Trump Does 180 Shift on Syria: Regime Change Back on the Table

Will the war in Syria never end? Will the international proxy war and stand-off between Russia, the United States, Iran, and Israel simply continue to drift on, fueling Syria’s fires for yet more years to come?  It appears so according to an exclusive Washington Post report which says that President Trump has expressed a desire for complete 180 policy shift on Syria.

Only months ago the president expressed a desire “to get out” and pull the over 2,000 publicly acknowledged American military personnel from the country; but now, the new report finds, Trump has approved “an indefinite military and diplomatic effort in Syria“.

The radical departure from Trump’s prior outspokenness against militarily pursuing Syrian regime change, both on the campaign trail and during his first year in the White House, reportedly involves “a new strategy for an indefinitely extended military, diplomatic and economic effort there, according to senior State Department officials“.

This even though one of the Pentagon’s main justifications for being on Syrian soil in the first place — the destruction of ISIS — has already essentially happened as the terror group now holds no significant territory and has been driven completely underground.

But most worrisome about the Post report is that sources said to be close to White House policy planning on Syria suggest that Trump has made a commitment to pursuing regime change as a final goal.

No surprises with this article, as Trump just rubber stamps whatever the deep state sticks under his nose.  This item is also from the Zero Hedge website — and it’s courtesy of Brad Robertson.  Another link to it is here.


Basra Oil Facility Stormed By Protesters, 2 Hostages Taken In Growing Chaos

Update 2: The situation in the southern Iraq city of Basra is continuing to escalate after rioters burned down the city’s sprawling Iranian consulate, and amidst unconfirmed rumors that the local American consulate may be under threat, though said to be under heavy guard by Iraqi national forces.

During the night hours Friday protesters have reportedly stormed an oil facility and are holding two staff workers hostage. The incident is unfolding at the West Qurna 2 oilfield, which is run by the Russian multinational energy company Lukoil.

According to a breaking Reuters report:

Protesters entered a water treatment facility linked to the West Qurna 2 oilfield, managed by Lukoil, and held two Iraqi employees hostage on Friday, according to a Lukoil source and a source with Basra’s energy police.

The precise identities of the hostages or the particular group holding them is still unknown at this point. Lukoil is a Moscow-based corporation.

Iraqi authorities in Basra have declared a city-wide curfew as well as a state of emergency.

This news story appeared on the Zero Hedge website at 4:12 p.m. on Friday afternoon EDT — and another link to it is here.


Even Diapers Are Scarce“: Iran’s Rial Plummets to Record Low Amid Economic Carnage

An on the ground report by the Associated Press details the disastrous effects of the Iranian rial’s continuing slide as it hit a record low starting Wednesday: residents in Tehran are frantically lining up outside money changing offices, diapers and many basic staples have disappeared from store shelves, and hard currency only is being demanded even to book an airline ticket.

The rial has this week plummeted 140 percent since the United States withdrew from the Iran nuclear deal a mere four months ago in May.

Local and international reports indicate that on Wednesday the national currency began trading at over 150,000 rials to $1USD in the currency exchange shops of Tehran.

As the AP reports, “Those who went to work at the start of the Iranian week on Saturday saw their money shed a quarter of its value by the time they left the office on Wednesday.” There’s a sense of nervousness and panic in the air according to the report, with a rush to find black market money changers on the streets, even though state media has yet to acknowledge just how low the true value of the rial has fallen.

Meanwhile Iran’s top leadership continues to lash out at Washington for stripping common citizens of their daily needs. In a speech over the past weekend Iran’s supreme leader Ayatollah Ali Khamenei, condemned the U.S. sanctions as economic “sabotage” while making specific mention of diaper shortage.

As quoted by the AP, budget head Mohammad Bagher Nobakht lamented of what’s to come, describing a future of “long queues in front of the shops, like money exchange houses, that can create an ugly scene in the city alleys and streets.” But it appears Tehran is already deep in the midst of this, and such scenes will only get worse.

Of course this crisis is 100 percent “Made in America”.  This news item put in an appearance on the Zero Hedge website at 9:50 a.m. EDT on Friday morning — and another link to it is here.


Russia’s Huge Natural Gas Pipeline to China Nearly Complete

Gazprom’s Power of Siberia natural gas pipeline from Russia to China is 93 percent complete, the Russian gas giant said in an update on its major projects.

A total of 2,010 kilometers (1,249 miles) of pipes are laid for the Power of Siberia gas pipeline between Yakutia and the Russian-Chinese border, or on 93 percent of the route’s length, Gazprom said in a statement.

The natural gas pipeline is expected to start sending gas to China at the end of 2019 and its completion is among Gazprom’s top priorities.

The two-string submerged crossing of the Power of Siberia pipeline under the Amur River is 78 percent complete, and the Atamanskaya compressor station adjacent to the border is also under construction, the Russian company says.

Gazprom has a 30-year contract with CNPC for the supply of an annual 1.3 trillion cu ft of natural gas via the infrastructure.

This interesting news item, courtesy of the oilprice.com Internet site, was picked up by the folks at Zero Hedge yesterday — and it comes to us courtesy of Brad Robertson.  Another link to it is here.


Trump Threatens China With Another $267BN in Tariffs

The Friday moment everyone has been waiting for, namely whether or not Trump would greenlight the next $200BN in China tariffs now that the comment period is over. Moments ago we got the answer when Trump, speaking to reporters on board of Air Force 1, just said that he is ready to impose another $267BN in China tariffs in addition to the $200 billion proposed that his administration is putting the final touches on.

The implementation of tariffs on $200 billion of products from China “will take place very soon depending on what happens,” Trump told reporters on Air Force One on Friday. “I hate to do this, but behind that there is another $267 billion ready to go on short notice if I want.”

This would mean that Trump would be taxing a grand total of $517BN in Chinese exports ($50BN + $200BN +$267BN). Putting China’s exports to the U.S. in context, it was $505BN in 2018, suggesting Trump’s total proposal would more than cover all of Chinese trade with the U.S. It was also not clear what tariff rate Trump had in mind for either the new $267BN or existing $200BN in tariffs.

The news comes one day after the Dept of Commerce announced that the US trade deficit with China hit an all time high $36.9 billion in July.

Meanwhile, in terms of actionable developments, there were none, because for all those expecting Trump to launch the $200BN in 2nd round tariffs today, Trump suggested that nothing is imminent, saying that the tariff “will take place very soon depending on what happens“… but not today.

This is another Zero Hedge item.  This one showed up on their Internet site at 3:15 p.m. EDT yesterday afternoon — and another link to it is here.


Congressmen Introduce Bill to End Taxation of Gold and Silver

The battle to end taxation of constitutional money has reached the federal level as U.S. Representative Alex Mooney (R-WV) today introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion.

The Monetary Metals Tax Neutrality Act – backed by the Sound Money Defense League, Money Metals Exchange, and free-market activists – would clarify that the sale or exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation.

My view, which is backed up by language in the U.S. Constitution, is that gold and silver coins are money and…are legal tender,” Mooney said in a House Financial Services Committee hearing this week. “If they’re indeed U.S. money, it seems there should be no taxes on them at all. So, why are we taxing these coins as collectibles?

Acting unilaterally, the Internal Revenue Service has placed gold and silver in the same “collectibles” category as artwork, Beanie Babies, and baseball cards, a classification that subjects the monetary metals to a discriminatorily high long-term capital gains tax rate of 28%.

Sound money activists have long pointed out it is inappropriate to apply any federal income tax, regardless of the rate, against the only kind of money named in the U.S. Constitution. And the IRS has never defended how its position squares up with current law.

This interesting news item appeared on the moneymetals.com Internet site yesterday — and I found it in a GATA dispatch.  Another link to it is here.


Gold market intervention by BIS declines after $100 price plunge

Gold swaps and gold derivatives undertaken by the Bank for International Settlements appear to have declined by about 24 percent in August, according to the bank’s statements of account for that month and July:

https://www.bis.org/banking/balsheet/statofacc180831.pdf

https://www.bis.org/banking/balsheet/statofacc180731.pdf

The information provided in the BIS’ monthly statements is not sufficient to calculate a precise amount of gold-related derivatives, including swaps, but the bank’s total estimated exposure as of August 31 was about 370 tonnes of gold, down 115 tonnes from the approximately 485 tonnes as of July 31.

The bank’s gold swaps and derivatives had increased by 17 percent from June through July. During this period the gold price fell by about $100 per ounce.

The BIS provides little information on what it is doing in the gold market, why, and for whom and refuses to answer questions about its activity in the market.

Of course the big decline in gold prices is almost entirely due to the manic short covering during the engineered price decline in the COMEX futures market…led by JPMorgan. This gold related news item appeared on the gata.org Internet site on Thursday — and another link to it is here.


Sales of American Eagle palladium coin took five minutes to end

In less than five minutes, orders placed Sept. 6 for the Proof 2018-W American Eagle $25 palladium coin were sufficient to put the numismatic product into “Currently Unavailable” status.

The product is limited to a maximum release of 15,000 coins; the Mint sold 14,782 examples. Customers ordering the numismatic product were restricted to purchasing one coin per household. The Mint-determined price for each coin was $1,387.50.

A “Currently Unavailable” status does not automatically mean a sellout. The product notice on the Mint’s website states: “We are currently out of this item, but more may be available later. Provide your email using the ‘REMIND ME’ button and we will let you know when we are taking orders again.

Mint spokesman Michael White said the orders placed are being reconciled to ensure proper processing of orders. Some orders are likely to be canceled because of expired credit cards or because the person placing the order chooses to cancel the sale on their own, White said. Any coins that are available after the order reconciliation, provided the maximum is not reached, will be offered first to customers in the order in which orders were placed but not filled because of the ending of initial sales, White said.

Even before sales got underway, some dealers were offering bounties of up to $500 per coin to anyone successful in placing an order and willing to resell the coin to the dealer making the guaranteed profit offer.

Wow!  I’m impressed!  This news story put in an appearance on the coinworld.com Internet site yesterday sometime — and another link to it is here.


Russian Finance Ministry Considering Abolishing VAT on Gold

We receive appeals, including from banks, which say that customers are ready to pay significant sums, billions of rubles, to buy gold, while the client wants to be able to take a couple of bars when he needs it. If this measure allows we even return capital worth tens of billions [of rubles], it will be justified,” the deputy minister said at the Moscow Financial Forum.

The issue is still being discussed, and now there is an additional impulse to solve it, he said.

You can see that the state pays much attention to the repatriation of capital. It turned out that a number of citizens would like to repatriate their capital, but invest it not in the banking system but in gold bars. This is a personal right, but the VAT is now an obstacle for this,” Moiseyev said

Now, citizens buying gold in the bank are obliged to pay VAT, which is now 18 percent, and will be increased to 20 percent starting next year. At the same time, when selling ingots, the bank is not returning VAT. The question of canceling the tax has been discussed in the ministry since last year, but initially, the ministry wanted to solve the issue via a system much alike the trade-in in the car sales. It planned to exempt from VAT only gold bought for investment purposes, and not the one used by jewelers.

This would make a monstrous difference to gold bullion sales to the average Russian citizen.  They should have done this years ago.  Let’s hope it gets the OK…and soon.  This very worthwhile gold-related news item was posted on the sputniknews.com Internet site at 4:29 a.m. Moscow time on their Friday morning, which was 9:29 a.m. in Washington — EDT plus 7 hours.  I found this on the Sharps Pixley website — and another link to it is here.


Mongolia’s central bank purchases 12.2 tonnes of gold so far this year

The Bank of Mongolia said Thursday that it had purchased 12.2 tonnes of gold from legal entities and individuals in the first eight months of this year.

The figure is the same as the amount of gold purchases in the first eight months of 2017, the central bank said in a statement.

As of August, the bank’s average gold purchase price was 95,042.34 Mongolian tugrik (about 38 U.S. dollars) per gram.

The Bank of Mongolia has set a target to buy 22 tonnes of gold this year. If we reach this goal, the foreign exchange reserves will increase by at least 700 million U.S. dollars,” Byadran Lkhagvasuren, vice chairman of the Bank of Mongolia, told reporters, adding “September and October are peak season for gold mining. So, we believe the goal will be fulfilled.”

This gold-related story, filed from Ulan Bator/Ulaanbaatar, put in an appearance on the xinhuanet.com Internet site on Thursday sometime — and it’s another article I lifted from the Sharps Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES

My one day at the pond earlier this week yielded a lot of goodies — and this migrating great blue heron was another.  This looks like an adult male, not in his breeding plumage — and close up, he looks pretty ratty.  For the last shot of this 4-photo sequence, I was so close that I had to actually back up a bit to get him all in the frame of my big telephoto lens.  And it wasn’t until I got this photo sequence up on the computer screen at home did I realize that he had been standing on one leg the whole time.  Click/double click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ is one that I stumbled across back in November 2016 — and I’ve been a monstrous fan of this group ever since.  I was looking for a tune by the American rock band Chicago at the time, when I stumbled across a cover of it by a group from Moscow called Leonid and Friends.  This tune is timeless — and their cover of it was posted on the youtube.com Internet site two years ago next week — and I thought it time for a revisit.  The link is here.  Enjoy!

Today’s classical ‘blast from the past’ is tinged with fall, because at our latitude, we’re deep into it.  The leaves have been changing colour for a month already and nights are growing very cool — and we’ve already had our first touch of frost.  Here’s Antonio Vivaldi’s Concerto No. 3 in F major, Op. 8, RV 293 “L’autunno…Autumn.  Anne Sophie Mutter does honours as soloist.  I saw her perform Beethoven’s violin concerto in Hong Kong with the Boston Symphony about 30-odd years ago — and I still have the ticket stub somewhere.  She’s aged better than I.  The link is here.


To me, it was just another day of careful price management in the precious metals on Friday, with the first coming [for no reason at all] like a bolt of lightning out of a clear blue sky shortly after 11 a.m. in Shanghai, the next time at the release of the job numbers in New York — and then almost all of palladium’s decent gains were engineered away shortly after 12 o’clock noon EDT.  Nothing to see here folks, please move along.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and the only thing worth noting is that West Texas Intermediate crude oil was closed at a slight new low for this move down — and that would certainly be a sign for the brain-dead/moving average-following Managed Money traders to go further short.  The ‘click to enlarge‘ feature helps a bit with the first four.

But underlying the rather unremarkable price performance of the last few days, is now a COMEX market structure in these Big 6 commodities that I never thought possible — and the above charts give no hint of.  I’ve completely run out of adjectives and superlatives to describe the current situation — and ‘explosive’ doesn’t come close to doing it justice.  Perhaps Ted will be able to define it for us, as he’s a better wordsmith than I.


But out there in the real world, the number of possible black swans is starting to increase at an exponential rate.  Not so much due to natural forces in the equity or currency markets, but the ever-increasing shoving by the U.S. deep state…not only against Donald Trump, but also all parties involved in the Syrian conflict…principally Russia.

The final battle coming in the Syrian city of Idlib, could be one of several ‘events’ that may be the start of something far more serious.  The deep state wants a war/proxy war with Russia et al so badly, that you can almost taste it in the main stream media — and in Washington…regardless of the consequences.

The Russians and Syrians are far too smart and level-headed to ever give these warmongers an excuse…but that won’t stop them for one minute.  Because the deep state will make one up if they need to — and the opportunities for ‘false flag’ operations in this environment are pretty much limitless.  This telegraphed ‘gas attack’ is made to measure, but has already been declared as such by all parties, except for the deep state, of which Nicky Haley is a card-carry member.

I’ve said it before — and I’ll say it again here now…the sociopathic/psychopathic personality types that make up the deep state should not be underestimated.  They don’t give a damn about whatever collateral damage is caused, or who gets trampled underfoot on the way…friend or foe alike.

But whatever sets this whole area ablaze — and it’s coming just as sure as the sun will rise in the east tomorrow morning, I suspect will be the event that begins the short squeeze in the Big 6 commodities that will be one for the ages.  And I have some suspicion that this event will be precipitated for exactly that reason…amongst others, of course.

Once it’s all over, the world we know today won’t exist in its current form — and I must admit that I’m more than fearful for what may take its place.

So, like you, I’m all in favour of higher precious metal prices…very high precious metal prices as a matter of fact.  But as I’ve said before, I should be careful what I wish for…in some respects.

And with the 17th anniversary of 9/11 only a few days away as well, all eyes should be on the U.S. deep state — and whatever upcoming treachery they have planned.

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

Ed

Precious Metal Prices: On a Short Leash

07 September 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price rose and fell a few dollars during Far East trading on their Thursday — and was down a bit by 2 p.m. China Standard Time.  The price began to crawl higher from there — and back above $1,200 spot — and that lasted until the noon silver fix in London — and then it chopped quietly sideways.  Then minutes before the 11 a.m. EDT London close, the dollar index was blasted higher — and the gold price was blasted lower…back below $1,200 spot.  That event was all over in less than fifteen minutes.  From there the price traded mostly sideways, with a slightly positive bias after the COMEX close.

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

Gold was closed in New York on Thursday at $1,199.50 spot, up $3.20 on the day.  Net volume was pretty decent at a bit over 260,000 contracts — and roll-over/switch volume was 19,000 contracts.

With some minor variations, the price pattern in silver was about the same — and it was obvious, at least to me, that its price was being carefully micro-managed as well.

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

Silver was closed at $14.13 spot, down 3.5 cents on the day.  Net volume, like for gold, was surprisingly heavy at a bit over 70,600 contracts — and roll-over/switch volume in this precious metal was 2,545 contracts.

Like for gold and silver, platinum’s Far East low tick came at 2 p.m. CST as well.  It began to rally rather smartly starting about thirty minutes after Zurich open — and that lasted until about the 10:30 a.m. morning gold fix in London.  It was sold lower for about an hour, before rallying anew — and its high tick came at the afternoon gold fix.  It was down hill from there…helped along by that big up-tick in the dollars index…until about 11:30 a.m. in New York.  The price crawled higher from that point until 2 p.m. in the thinly-traded after-hours market — and it traded flat for the rest of the day.  Platinum finished the Thursday session at $791 spot, up 7 dollars from Wednesday’s close…but would have closed significantly higher if allowed.

The palladium price didn’t do much of anything in Far East trading on their Thursday, but began to edge higher starting a few minutes before 10 a.m. CEST in Zurich.  That was capped around the morning gold fix in London as well — and the price didn’t do much until shortly before 9 a.m. in New York.  It was sold unevenly lower from there into the COMEX close — and edged unevenly sideways until trading ended at 5:00 p.m. EDT.  Palladium was closed at $971 spot, up a buck from Wednesday and, like platinum, would have obviously closed higher if allowed, as well.

The dollar index closed very late on Wednesday afternoon in New York at 95.11 — and shortly after trading began at 6:00 p.m. EDT on Wednesday evening, quickly fell below the 95.00 mark.  From that juncture, it traded sideways until around 10:45 a.m. China Standard Time on their Thursday morning.  It began to edge higher from there until exactly 2 p.m. CST –  and then proceeded to chop quietly, but very unsteadily lower from there until a few minutes before 11 a.m. EDT…the London close.  The 94.93 low tick of the day was set at that point — and it then blasted up to the 95.18 mark during the next fifteen minutes.  From that point, it resumed its unsteady price decline — and the index closed at the 95.03 mark, down 8 basis points from Wednesday.

It’s obvious from the intraday dollar index chart below, that it was saved by the usual ‘gentle hands’ on five separate occasions yesterday.  The first time, shortly after trading began at 6 p.m. EDT in New York on Wednesday evening — and four times during the Thursday trading session in New York.

It’s also equally obvious that the sharp spike up in the dollar index minutes before the London close was used to full advantage by ‘da boyz’ in repricing gold, silver and platinum by a bit each.

And here’s the 6-month U.S. dollar index — and it’s purely fiction, as the dollar index would crash and burn if allowed — and yesterday’s price action in New York was proof positive of that.

The gold stocks were up almost 2 percent by the 10 a.m. EDT afternoon gold fix in London, but by 10:25 a.m. had given back almost all of those gains.  They then rallied sharply until the big price spike in the dollar index occurred starting a few minutes before the 11 a.m. EDT London close.  From that juncture the gold shares chopped quietly lower until their respective low ticks were set around 3:40 p.m.  They rallied a bit into the close from there.  The HUI finished down 0.62 percent.

It was the same general price path for the silver equities…at least in the early going.  They bottomed out around 1:10 p.m. in New York trading — and then chopped quietly higher until a minute or so after 3 p.m. EDT — and didn’t do much after that.  Nick Laird’s Intraday Silver Sentiment Index finished down 0.09 percent.  Call it unchanged.  Click to enlarge if necessary.

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

The CME Daily Delivery Report for Day 4 of September deliveries showed that 63 gold and 295 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, the only short/issuer that mattered was HSBC USA with 57 contracts out of its in-house/proprietary trading account.  The three long/stoppers were…Advantage with 32 for its client account…Morgan Stanley with 18 contracts, 15 for its own account, plus 3 for its clients — and 13 contracts for JPMorgan’s client account.  In silver, there were six short/issuers.  The two largest were International F.C. Stone and S.G. Americas, with 160 and 102 contracts out of their respective client accounts.  In very distant third spot was Citigroup with 21 contracts from its client account as well.  There were eight long/stoppers, the largest of which was JPMorgan with 154…111 for its own account, plus 43 for its clients.  In second spot was HSBC USA picking up 75 contracts…74 for its own account, plus 1 contract for clients.  Advantage and Goldman came in third and fourth with 25 and 21 contracts…Advantage for its client account — and Goldman Sachs for its own account.  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 fell by 3 contracts, leaving 89 still around, minus the 63 mentioned just above.  Wednesday’s Daily Delivery Report showed that 5 gold contracts were actually posted for delivery today, so that means that 5-3=2 more gold contracts just got added to September.  Silver o.i. in September dropped by 332 contracts, leaving, 1,110 still open, minus the 295 mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 291 silver contracts were actually posted for delivery today, so that means that 332-291=41 silver contracts vanished from the September delivery month.


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

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

When the mint finally get caught up on silver eagles production to match the orders they have on their books, it will be interesting to see how a big a number it is.  As I’ve said numerous times, this ain’t John Q. Public buying them…certainly not these quantities when investor sentiment is in the toilet.

There wasn’t much activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received — and only 8,646 troy ounces were shipped out.  That amount came from three separate depositories.  There was also a transfer of 14,031 troy ounces out of the Registered category — and back into Eligible.  That involved two different warehouse.  And because they amounts are not significant, I’m not going to itemize everything.  If you wish to see the break-downs for yourself, the link to it all is here.

In silver, there wasn’t much physical activity.  Nothing was reported received — and only 61,579 troy ounces were shipped out — and all of that amount was at CNT.  There were two rather significant transfers…the largest being 783,856 troy ounces from the Eligible category — and into Registered over at CNT as well.  There was 597,499 troy ounces transferred in the other direction over at Canada’s Scotiabank…from Registered back into Eligible.  The link to this is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 3,700 of them — and shipped out 179.  All of this action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here’s another chart that I dug up on Nick Laird’s website just now.  It shows the monthly gold withdrawals from the Shanghai Gold Exchange starting in January of 2008…so there’s 10+ years of data in the chart below.  According to this chart, there was 137.41 tonnes withdrawn in July, the latest month for which data is available.  But in a Sharps Pixley story in today’s Critical Reads section below, Lawrie Williams states that August gold withdrawals from the SGE totalled 190.59 tonnesClick to enlarge.

And not including the 190 tonnes withdrawn in August, there has been 16,234 tonnes of gold withdrawn from the Shanghai gold exchange over the last ten-plus years.  Where did all that gold come from?

I have a decent number of stories for you today.


CRITICAL READS

How to Punish the White House “Traitor” — Bill Bonner

Treason,” says Trump, demanding that The New York Times hand over the traitor on national security grounds.

Here at the Diary, we hope The New York Times reveals its source.

If not, we have a suggestion: decimation.

It worked for the Roman army. And military historian Antony Beevor claims the Soviets used it, too, to stiffen the resistance at Stalingrad.

The idea for the Romans was simple: When punishing entire cohorts (military units), they’d line up all the soldiers… and every tenth man would get the sword.

Here’s how the Trump team could use it now: Simply line up the entire White House staff – the head of the National Security Agency… the guards at the front gate… secretaries… top officials… everyone. If no one confesses to having told the truth to The New York Times, shoot every tenth person.

We don’t know if that would solve Mr. Trump’s morale issue, but it would be good for the morale of the rest of the nation.

This commentary by Bill showed up on the bonnerandpartners.com Internet site very early on Thursday morning EDT — and another link to it is here.


These “Gradual” Rate Hikes Start to Add Up: U.S. Treasury Yields up to Three Years Hit 10-Year Highs — Wolf Richter

The one-month treasury yield rose to 2.0% yesterday at the close and is at about the same level today, the highest since June 10, 2008. It is starting to price in a rate-hike at the Fed’s September 25-26 meeting. This rate hike, the Fed’s third this year, would bring its target to a range between 2.0% and 2.25%.

The three-month yield, currently at 2.14%, has reached the highest level since February 26, 2008. Back then, as the Financial Crisis was taking its toll, yields were going through enormous volatility, as the chart below shows. During that volatile period in mid-2008, the three-month yield spiked for a day to 2.07% on June 16, but never got back to the 2.14% in February that year:

It hasn’t been exactly a whirlwind rate-hike cycle with one-percentage-point rate hikes per meeting, à la Paul Volcker in the early 1980s, but in their “gradual” – as the Fed never tires to point out – easy-to-digest, no-surprises manner, the rate hikes are starting to add up. There is an entire generation working in the finance industry and on Wall Street who has never seen Treasury yields this high. They’re in for a learning experience.

This chart-filled commentary put in an appearance on the wolfstreet.com Internet site on Wednesday sometime — and it comes to us courtesy of Richard Saler.  Another link to it is here.


A Nice Little House With a White Picket Fence — Dennis Miller

I was a senior, Sally was a freshman. We would hold hands and walk to the small lake on the other side of her family’s farm. The bank was angled, and we would lean back and stare at the distant sky and cloud formations. Sally (Name is changed but the story is real) was my high school sweetheart who I still hold fondly in my heart.

I was about to graduate from high school and leave home. We discussed, “What’s life really all about?” It was the first time I remember peering over the horizon, actually wondering about adulthood. I emphatically declared I want “A nice little house with a white picket fence”.
That was 60 years ago. Ten days after graduation I headed off to the Marine Corps. There was no money for college, might as well fulfill my military obligation.

I’m forever grateful to Sally. Every day in boot camp, over that long, hot summer, I got her letter with a return address HOLLAND. (Hope our love lasts and never dies) Like most young romances, about six months later we went our separate ways.

I didn’t see Sally again until I was 60 years old at a high school reunion. She is still the same wonderful person, married to another classmate who is a cool guy. They raised a nice family and are happy. As we hugged I thanked her for her wonderful letters to a young man who had just left home. I’m happy for her, she is a good person who deserves a good life.

Now the 80-year-old milestone is in front of me. I’m probably a silly romantic daydreaming about my childhood memories – and then sharing my thoughts.

This interesting commentary by Dennis was posted on his Internet site yesterday sometime — and another link to it is here.


Choosing Your Immigrants — Jeff Thomas

In the 18th century, America was made up primarily of people who, of necessity, had had to work hard. Had they not taken full responsibility for their own welfare, there was no one else to do it for them and they would have starved. As this was the case, anyone who did arrive on American shores who was unwilling to work and wanted others to provide for him, could expect to find no sympathy and might well starve.

In the 19th century, the former colonies had become the United States. Expansion was underway and the young people of the 18th century became the entrepreneurs of the 19th century. In order to continue to get the menial tasks accomplished, millions of immigrants were needed. Those who were welcomed were those who were prepared to start at the bottom, often live in poor conditions, receive no entitlements and compete for even menial jobs. If they accepted these terms, they received the opportunity to immigrate and work.

Also, in the 19th century, the U.S. expanded to the West coast, covered the nation with railroads and created the industrial revolution – the greatest period of expansion in U.S. history.

In the 20th century, income tax was implemented, the Federal Reserve took over the dollar and the “New Deal” Introduced the concept of entitlement. It was a mixed century of wealth generated by the industrial revolution, fighting against the new concept of entitlement.

In the 21st century, immigrants in large numbers were again encouraged to come in. However, unlike in the 19th century, they were not encouraged on the basis of starting at the bottom, often living in poor conditions, receiving no entitlements and competing for even menial jobs.

Quite the contrary. They not only were guaranteed welfare, schooling and housing, they would not be required to work at all and, if they committed crimes, they were likely to be released without prosecution. They, in fact, were afforded privileges above that of American citizens.

This interesting — and very worthwhile commentary by Jeff appeared on the internationalman.com Internet site yesterday sometime — and another link to it is here.


Ruble Tumbles on Medvedev Comments, U.K. Allegations as Russian Yields Surge

The Russian ruble tumbled as much as 2%, sliding to 69.63, the lowest level against the dollar since March 2016 and its biggest drop since August 8 after Russia’s prime minister Dmitry Medvedev effectively admitted that U.S. sanctions are starting to bite, and said that he is hopeful that the Bank of Russia becomes “active” as rates are high.

It’s necessary to move from neutral to stimulating oversight of the credit sphere to create conditions for more confident economic growth,” Medvedev said at conference in Moscow, adding that “Interest rates remain quite high despite the successes in holding back inflation.” The prime minister also urged the central bank to take an “active position” to address the issue of elevated rates.

According to Rabobank’s Piotr Matys, “market participants are especially sensitive to any comments on monetary policy from prominent officials in current environment” adding that the USDRUB could approach 71.40 in coming weeks.

It seems that the market has interpreted comments from PM Medvedev as political interference in the monetary policy. Such remarks may undermine credibility of the central bank and Governor Nabiullina, who is well respected by investors for acting decisively during the ruble crisis only a few years ago.”

From the perspective of technical analysis comments from PM Medvedev may provide USD/RUB with sufficient momentum to break higher from the consolidation pattern that formed over the past few weeks. This bullish breakout would allow USD/RUB to extend gains towards the next important level at around 71.40 in the coming weeks

This story showed up on the Zero Hedge Internet site at 11:58 a.m. EDT on Thursday morning — and I thank Brad Robertson for sending it along.  Another link to it is here.


Iraq is Facing a Major Internal Crisis

Despite the fact that production and export figures presented by Iraqi sources are showing a significant improvement, optimism should be tempered.

Iraq continues to head towards a major showdown between the two main political rival blocks, led by Prime Minister Al Abadi and former PM Al Maliki. Both are currently in a race to lead the country, while being confronted by internal and external threats.

Iraqi oil production and export figures are showing very positive developments, even though internally, the country is teetering on the brink. The latest data from the Iraqi ministry of oil shows that it has boosted its southern crude oil exports to 3.583 million b/d in August, 40,000 bpd higher than in July. Since the OPEC meeting in Vienna, Baghdad has been pushing to increase its total production to a three-month average of 3.549 million b/d, an increase of 109,000 b/d from the first five months of 2018.

It is surprising to see that even with continuing unrest in the Basra region, exports from its southern terminals are up. Loadings from the Khor al-Amaya terminal have been suspended since the start of 2018. Iraq’s State Oil Marketing Organization (SOMO) reported that 2.727 million b/d of Basrah Light have been shipped from the terminals, along with 856,000 b/d of Basrah Heavy crude. At present another seven tankers have berthed, while four are waiting for their turn, with a total of around 7 million barrels.

Northern Iraqi oil figures are also promising, as exports from the semi-autonomous Kurdistan Regional Government to the Turkish Mediterranean port of Ceyhan have been growing. Kurdish sources indicate that the KRG is currently exporting 445,000 bpd to Ceyhan, which is a 40 percent increase in comparison to July. Government oil production in the north however is still blocked, as there is no agreement between Baghdad and the KRG. A potential 200,000 bpd is currently not being exported due to this issue.

The future could, however, be less bright than the above data suggests. The country is facing a total shutdown if the competing political blocks are not able to reach a deal in the parliament soon. Several days ago the Iraqi parliament met for the first time since the May elections. At present, current Prime Minister Haider al-Abadi is still trying to reach a majority coalition, but has, until now, been blocked by his rivals, led by former Prime Minister Nouri al-Maliki. After several heated discussions, no solution has been reached.

This very interesting background story put in an appearance on the oilprice.com Internet site at 5:00 p.m. Central Daylight Time on Wednesday afternoon — and I found it embedded in a Zero Hedge article from 3:26 p.m. EDT on Thursday afternoon.  Another link to it is here.  A companion story to this from ZH was posted on their Internet site at 8:18 p.m. on Thursday evening.  It’s headlined “U.S. Embassy In Baghdad’s Green Zone Under Attack“.


Balance Sheet of the Forever War — Pat Buchanan

It is time for this war in Afghanistan to end,” said Gen. John Nicholson in Kabul on his retirement Sunday after a fourth tour of duty and 31 months as commander of U.S. and NATO forces.

Labor Day brought news that another U.S. serviceman had been killed in an insider attack by an Afghan soldier.

Why do we continue to fight in Afghanistan?

We continue to fight simply because we are there,” said retired Gen. Karl Eikenberry who preceded Gen. Nicholson.

Absent political guidance and a diplomatic strategy,” Eikenberry told The New York Times, “military commanders have filled the vacuum by waging a war all agree cannot be won militarily.”

This longest war in U.S. history has become another no-win war.

This worthwhile commentary by Pat appeared on his Internet site on Tuesday sometime — and my thanks go out to Roy Stephens for sharing it with us.  Another link to it is here.


USD/JPY Tumbles After Trump Hints At Japan Trade War Next

USD/JPY dived after hours (following a day of weakness) after reports from The Wall Street Journal  that President Trump told a columnist that he will take his trade fights to Japan next.

Yen strengthened as safe haven carry flows reverted home on the Trump headlines…

WSJ‘s James Freeman wrote  about a phone call he received from the president, in which Trump “described his good relations with the Japanese leadership but then added:

“Of course that will end as soon as I tell them how much they have to pay.'”

Freeman said the phone call came after he appeared on Fox News Channel giving the president credit for the results of his tax and regulatory reforms. During the phone call, Freeman wrote, the president sounded “still very focused on eliminating trade deficits with America’s trading partners.”

This tiny 1-chart Zero Hedge news item was posted on their website at 4:25 p.m. EDT on Thursday afternoon — and another link to it is here.


Look out for Emerging-Market Contagion Effects — Nomi Prins

Even though summer technically lasts until Sept. 21, the reality is that after Labor Day, markets often snap into a hectic fall mode.

A recent Reuters article notes that, “President Donald Trump’s relentless “America First” trade push is hurting confidence in many countries, rising U.S. interest rates are putting strains on emerging economies and currency problems have hit crisis levels in Argentina and Turkey.”

When considering the markets over the last few weeks and seeing how the Turkish lira in particular has fallen 40% against the dollar since the start of the year, I started thinking back to my first job on Wall Street.

At the time, I was earning my degree in mathematics. And my senior thesis was on chaos theory.
Chaos theory aims to find “hidden order” in a seemingly chaotic environment. This hidden order is often reflected in symmetry and in repetitive events.

This very interesting commentary by Nomi appeared on the dailyreckoning.com Internet site on Wednesday sometime — and another link to it is here.


After 10 Years of “Recovery,” What Are Central Banks So Afraid Of? — Charles Hugh Smith

If the economy were truly recovering, wouldn’t central banks have tapered their stimulus and intervention long ago? Instead, central bank stimulus skyrocketed to new highs in 2015-2017 as global markets took a slight wobble. That little slide triggered a massive central bank response, as if the patient had just suffered a cardiac arrest.

As for China’s economy being so healthy–then why are Chinese authorities expanding credit in such manic desperation? Healthy economies growing organically don’t need authorities pumping trillions of yen, yuan, euros and dollars into credit and asset markets.

So what are central banks so afraid of? Why are they still tiptoeing around in fear after 10 years of unprecedented stimulus? The answer is as obvious as the emperor’s buck-naked body: central banks know the global economy is so brittle, so fragile and so dependent on cheap credit for its survival that the slightest contraction in credit will collapse the entire system.

If the world’s economies still need central bank life support to survive, they aren’t healthy–they’re barely clinging to life. The idea that central banks can wean a sick-unto-death global economy off life support is magical thinking, and central banks know it.

If the patient isn’t getting well after 10 years on life support, he isn’t going to get well.

This must read commentary by Charles was posted on the Zero Hedge website at 8:15 p.m. EDT yesterday evening — and another link to it is here.


Apocalypse, Or Not? — Alasdair MacLeod

Uncertainty and change are with us all the time. In a truly free market economy we embrace it because they are driven by our personal economic interests, and it is a continual process. But the desire for change is driven by us only in our role as consumers; as workers or businessmen facing competition for our existing labour and skills we tend to resist it. It is that side of us that a government taps into.

Modern governments, except where they are overtly mercantilist, don’t do change. Their support, indeed their reason for being, is based on anti-progressive lobbying from both establishment businesses and socialistic pressure groups. Government economists do not recognise progress, living in a stagnant world of historical statistics. Progressive change interferes with their certainties and is therefore never properly considered.

This is what the welfare states in the West have become, societies managed by anti-progressive governments, nominally responsible to their electorates, but in fact with a life of their own. The interests of governments have long since departed from those of consumers and increasingly conflict with their needs and wants. It is a process that has evolved to the current position over the last hundred years, when governments had understood their role should be strictly limited to identifiable national interests, when government employees deferred to the general public as their civil servants, and importantly, when the national currency was based on money chosen collectively by individuals.

It is therefore a much larger issue than just money. It is about the direction of political travel. For individuals it has become a prolonged road to serfdom, where power and personal freedom have been sequestered by the government from the consumer. The consumer has lost the right to keep his own income, and his preferences are now regarded by the state as subject to its control, to plan and dispose of as it sees fit.

This opinion piece/commentary should be read with an open mind.  There are some things I agree with — and some, not so much.  It was posted on the goldmoney.com Internet site yesterday sometime — and I found it embedded in a GATA dispatch.  Another link to it is here.


Chinese gold demand on the rise — Lawrie Williams

Contrary to media reports suggesting weak Chinese gold demand based primarily on a big fall in gold imports from Hong Kong, the latest gold withdrawal figures out of the Shanghai Gold Exchange paint a very different picture. August gold withdrawals came to just short of 191 tonnes compared with 161 tonnes for the same month a year earlier and 144 tonnes in August 2016. Year to date SGE gold withdrawals at 1,366 tonnes are around 6% up on the first 8 months of 2017 and over 10% up on the corresponding 2016 figure. If this advantage is maintained for the remainder of the year the full year figure could well be in excess of 2,150 tonnes – and bring the full year total close to the second best year for SGE gold withdrawals ever.

The media made great play of the fact that July gold exports from Hong Kong to Mainland China were substantially down on the previous month – China’s July net gold imports via Hong Kong plunge 45 pct m/m was the Reuters headline – and the article went on to make the very out-of-date comment that the Hong Kong figures serve as a proxy for total Chinese gold imports, which they have not done for some years now. Judging by known gold export figures from countries which report these it is doubtful whether even half mainland China’s gold imports are routed through Hong Kong nowadays. The greater part now comes in via Beijing and Shanghai and perhaps other ports of entry.

[And] with the low gold price also seen as boosting demand in India, the world’s second largest gold consumer which, according to GFMS, has just recorded particularly strong gold imports in August — apparently a 15-month high — gold is perhaps performing more strongly than its COMEX-manipulated price might suggest. Hang in there. There should be better times ahead.

This very worthwhile commentary by Lawrie put in an appearance on the Sharps Pixley website yesterday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Here are a couple of photos of red-necked grebes over at the pond.  I’ve posted many photos of these birds over the years, as they nest here every year in exactly the same spot.  The first shows one adult and two juveniles…the only two that survived from the four eggs they laid.  Two of the three are having cat naps.  The second shot is of an adult bird, complete with hapless minnow, looking for one of the above juveniles to feed it to.  I would have been a lot happier if they had been a little closer than they actually were, as these shots were taken at the outer limits of the resolving power of my telephoto lens.  The red reflection in the water is from a building in the distant background.  Click to enlarge for both.


The WRAP

Except for the new low in WTIC yesterday, there’s not much to look at it in any of the 6-month charts posted below.  But as I mentioned at the top of this column, I was rather taken aback by the high volume levels in both gold and silver, but particularly in silver.  The price action in both didn’t seem to justify those volumes, although it’s certainly possible that ‘da boyz’ had to show up to prevent precious metal prices from really blasting higher.  Like I said in yesterday’s column, it certainly appears that the powers-that-be have them on a short leash — and will keep them there until they’re ready to release them.

Here are the charts for the Big 6 commodities — and the ‘click to enlarge‘ feature only helps with the first four.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price crawled a few dollars higher until shortly after 11 a.m. China Standard Time on their Friday morning — and at that point it was tapped back to the $1,200 spot mark — and has been chopping quietly sideways since. At the moment, it’s up only 90 cents an ounce. Silver was up a nickel or so in early morning trading in the Far East but began to fade starting shortly before 10 a.m. CST. It then got smacked down more than a dime starting the same time as gold got tapped lower. It’s off it current low by a bit, but still down 3 cents an ounce. Platinum traded flat until it was sold lower as well, also starting shortly after 11 a.m. over there. It has been chopping unsteadily higher since — and is currently up a dollar. Palladium has been trading sideways throughout the entire Far East trading session — and is down a dollar as Zurich opens.

Gross gold volume is a bit over 56,000 contracts already — and net of current roll-over/switch volume, net HFT gold volume is around 51,700 contracts. Net HFT silver volume is also pretty heavy already at around 18,200 contracts — and there’s only 454 contracts worth of roll-over/switch volume in that precious metal.

The dollar index chopped quietly sideways slightly above the 95.00 mark until shortly before noon in Shanghai, but then began to fade unsteadily from there — and is currently down 9 basis points as London opens.

Today, at around 3:30 p.m. EDT, we get the weekly COT Report — and the companion Bank Participation Report.  Both will be sights to behold — and I will have all of it in my Saturday missive.

Also today, at 8:30 a.m. EDT, we get the latest jobs report and, as always, it will be interesting to see how precious metal prices react, or will be allowed to react.  So brace yourself.

I’m filing Friday’s column an hour earlier than usual, because I have to be up far earlier than I’d like to be this morning.

Enjoy your weekend — and I’ll see you here tomorrow.

Ed

U.S. Mint Temporarily Sold Out of 2018 Silver Eagles

06 September 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price traded flat until around 8:30 a.m. China Standard Time on their Wednesday morning– and then began to edge very unsteadily higher until around 8 a.m. in New York/1 p.m. in London.  At that point, it began to rally with a bit more authority, but was capped shortly before the equity markets opened in New York.  The price didn’t do much after that.

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

Gold finished the Wednesday session at $1,196.30 spot, up $5.20 from Tuesday’s close.  Net volume was pretty light at a hair over 200,000 contracts — and roll-over/switch volume amounted to about 9,800 contracts.

The silver price did nothing in Far East and most of London trading.  There was a rally of less than ten cents around 9 a.m. in New York, but that was quietly capped — and the silver price chopped very quietly sideways for the remainder of the Wednesday session.

The low and high ticks in this precious metal aren’t worth looking up, either.

Silver closed in New York on Wednesday at $14.165 spot, up 3 cents on the day.  Net volume was pretty decent at a hair over 65,000 contracts — and roll-over/switch volume in this precious metal was just about 3,200 contracts.

Platinum traded sideways until shortly after 1 p.m. CST on their Wednesday afternoon — and at that juncture, the price pressure began — and it was sold lower until the COMEX open.  The subsequent rally, which ran into a bit of ‘interference’ at or just after the London p.m. gold fix, ran out of gas/was capped at the Zurich close — and it didn’t do much of anything after that.  Platinum was closed in New York yesterday at $784 spot, up 7 bucks from Tuesday.

The platinum price traded a small handful of dollars either side of unchanged in Far East trading, but was sold lower shortly after the Zurich open.  It chopped quietly and unsteadily higher from there until at, or minutes before, the afternoon gold fix in London — and then was clocked for a bunch of dollars going into the Zurich close.  Like platinum, the price traded pretty flat from there until trading ended at 5:00 p.m. EDT in New York.  Palladium was closed at $970 spot, down 9 dollars on the day.

The dollar index closed very late on Tuesday afternoon in New York at 95.43 — and then fell down to the 95.28 mark by 10:30 a.m. China Standard Time on their Wednesday morning.  But thirty minutes later it was headed higher.  The 95.66 high tick was set sometime during the first hour of London trading — and it chopped unsteadily lower from there until exactly 9:00 a.m. in New York.  It fell like a stone by about 35 basis points during the next few minutes.  It gained a bit of that back by shortly after 11 a.m. EDT, but quietly chopped lower from there until trading ended.  The dollar index finished the day at 95.11…down 32 basis points points.

It should be carefully noted that the 35 basis waterfall decline in the dollar index at 9 a.m. in New York wasn’t allowed to have much impact on precious metal prices.  I’m sure that they would have been hammered lower if the dollar index rallied that much under similar circumstances.

And here’s the 6-month U.S. dollar index — and nothing should be read into it.

The gold shares opened about unchanged — and then headed lower until around 10:25 a.m. in New York trading.  Thirty minutes later they were back in positive territory by a hair…but by around 1:45 p.m. EDT, they were back at their earlier lows — and they only recovered a bit after that.  The HUI closed down 0.84 percent.

In most respects that mattered, the silver equities traded in a similar pattern as their golden brethren — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.64 percent.  Click to enlarge if necessary.

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

I would suspect that the precious metal share price action on Wednesday was a combination of forced selling by mutual funds and the like, combined with some serious bottom fishing.  If I’d waited until now to back up the truck, I would have been a big buyer yesterday as well, that’s for sure…but, alas…


The CME Daily Delivery Report for Day 3 of September deliveries showed that 5 gold and 291 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In gold, it was Advantage as the sole short/issuer — and they also stopped 3 of those contracts as well.  In silver, the largest short/issuer by far was ABN Amro with 238 contracts out of its client account.  Once again it was JPMorgan as the largest long/stopper, with 146 contracts in total…105 for its own account, plus another 41 for its clients.  In second spot was HSBC USA with 71 for its own account.  Tied for third were Citigroup and Goldman Sachs…21 for the former, for its client account — and the same number of course for Goldman, except they were for their in-house/proprietary trading account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in September declined by 9 contracts, leaving 92 still open, minus the 5 mentioned just above.  Tuesday’s Daily Delivery Report showed that 10 gold contracts were actually posted for delivery today, so that means that 10-9=1 more gold contract was just added to the September delivery month.  Silver o.i. in September dropped by 549 contracts, leaving 1,442 still open, minus the 291 contracts mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that 593 silver contracts were actually posted for delivery today, so that means that 593-549=44 more silver contracts were added to September.


There were no reported changes in GLD yesterday…but here was a small withdrawal from SLV, as an authorized participant removed 147,104 troy ounces.  I suspect that a withdrawal of that size would represent a fee payment of some kind.

There was a sales report from the U.S. Mint yesterday.  They sold a chunky 637,500 silver eagles, but no gold bullion coins of any description.

In the first two business of days of September, the mint has sold 1,037,500 silver eagles — and in conjunction with that fact, the Internet was all atwitter yesterday with a rumour/fact that the U.S. Mint is out of stock of silver eagles.  When Ted was informed of this situation by reader Rick Cordes, he had this to say…”Obviously, the Mint has scaled back production in response to the fall-off in sales (all JPM’s doing)“.  He would be right about that.

Then, late last night I got this e-mail from subscriber and rare-coin dealer Richard Nachbar

Hi Ed:

Just a heads up in case your usual eagle-eyed subscribers didn’t see this today.  The U.S. Mint stopped selling 2018 Silver Eagles [ASE] today…but only temporarily.  They sent an e-mail to their Authorized Purchasers [A.P.s] stating that recently increased demand had depleted their inventory.

Some A.P.s with existing 2018 ASE inventory then raised their wholesale asking prices for sealed case quantities from the usual Spot + $2.25 or so to Spot + $3.00 per coin (the Mint currently charges their A.P.s spot + $2.00).  That is a wholesale premium of about 21% over spot, basis $14.20, highest this year.

Back-dated ASE product in the secondary market – which has been plentiful for the last year or so due to investor dis-hoarding – has mostly been bought up also.

Richard

Hmmm…isn’t that interesting!

There was a bit of movement in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  Nothing was reported received, but 44,045 troy ounces were shipped out.  There was 27,907.068 troy ounces/868 kilobars [SGE kilobar weight] shipped out of HSBC USA — and 16,138 troy ounces shipped out of JPMorgan.  There was also a transfer of 8,846 troy ounces from the Eligible category — and back into the Registered category over at HSBC USA as well.  The link this activity is here.

There was some activity in silver.  There was 680,938 troy ounces received — and 20,062 shipped out.  One truck load…599,644 troy ounces…ended up at CNT — and the remaining 81,293 troy ounces found a home at Canada’s Scotiabank.  All of the ‘out’ activity was at HSBC USA.  There was also one truck load…596,583 troy ounces…transferred from the Eligible category — and into Registered — and that most likely has to do with September deliveries.  The link to all this is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, they reported receiving 1,200 of them — and shipped out 248.  This activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here’s an interesting chart that I pulled off Nick Lairds’ website just now.  It shows gold withdrawals from the Shanghai Gold Exchange vs. World Gold Mining Production for the last ten years.  Once you add India, Russia and Turkey’s gold imports on top of that, virtually all of the world’s yearly gold production has disappeared into those four countries over the last five years — and counting.  Of course this demand doesn’t include the ‘rest of the world’…which is not an insignificant number.

But despite all that, JPMorgan et al have managed to keep the gold price suppressed while this has been transpiring.  Click to enlarge.

It was a fairly quiet news day on Wednesday — and I have an average number of stories for you today.


CRITICAL READS

America Is Headed to “Crazytown” — Bill Bonner

The big story we’re following, by the way – which will dominate the money world for the next 10 to 20 years – is how the U.S. goes broke.

Our guess: first, with a whimper… and then a bang. Today, we look at the whimper.

The U.S. was already on the road to ruin long before the 2016 presidential election…

George W. Bush abandoned fiscal conservatism in favor of activism, war, and deficits. Barack Obama continued the program. And the Fed misled the entire world with phony price signals – putting the real cost of money at less than zero.

There was some hope that The Great Disrupter, Donald J. Trump – with his army of fed-up patriots – would drain the swamp and change the course of history. But the general quickly revealed that 1) he had no idea where the real battle was taking place… and 2) he wanted no part of it anyway.

Instead, with its tax cut, defense-spending hike, and dozens of petty distractions, the Trump administration squandered what might have been the last chance of squaring things up.

Even if the Trump team is thrown out of office in the next general election, the replacements are not likely to be any more eager to take on the Deep State than their predecessors.

Bill’s latest commentary appeared on the bonnerandpartners.com Internet site very early on Wednesday morning EDT — and another link to it is here.


Goldman Sachs Joins Citigroup in Flashing Warnings on S&P 500

When investor optimism over U.S. stocks is on the rise, so are Wall Street warnings.

Sentiment has climbed to levels that foreshadowed the year’s worst rout, prompting Citigroup to caution that another pullback may be in the offing. At Goldman Sachs, elevated valuations and a tightening labor market have driven the firm’s bull/bear market indicator to alarming highs.

It doesn’t mean the bull market will end soon. But after a 9 1/2-year rally where the S&P 500 rose 19 percent annually, investors should be prepared for lower returns in coming years, according to Goldman Sachs strategists led by Peter Oppenheimer. The firm’s bull/bear market indicator has shown a close relationship with the S&P 500’s forward returns since 1955, with peak readings coinciding with the start of the last two bear markets. Right now, it’s “flashing red”, said the strategists.

The warnings mark a turnaround from last month, when persistent stock gains prompted at least two strategists to raise their year-end forecasts for the S&P 500. The index fell 0.3 percent to 2,888.60 at 4 p.m. in New York.

This Bloomberg new story was posted on their Internet site at 6:09 a.m. Denver time on Wednesday morning — and was updated about eight hours later.  I found it today’s edition of the King Report — and another link to it is here.


U.S. Trade Deficit With E.U. and China Hits Record

The July trade deficit – a closed watched number in a time of trade wars – came in at $50.1BN, fractionally better than the $50.2BN expected, but 9.5% worse than last month’s revised print of $45.7BN. This was the biggest one month move since 2015.

The deficit deteriorated as a result of less exports (-1.0%) and more imports (+0.9%). Broken down, July exports were $211.1 billion, $2.1 billion less than June exports, while July imports were $261.2 billion, $2.2 billion more than June imports. The July increase in the goods and services deficit reflected an increase in the goods deficit of $4.2 billion to $73.1 billion and a decrease in the services surplus of $0.1 billion to $23.1 billion.

But what was most important is the geographic distribution of trade, and this is where Trump will be displeased because in July the trade deficit with both China ($36.8 billion)…and the E.U. ($17.6 billion), were the highest on record.

While the number will not have much of an impact on Q3 GDP, it could have a major impact on future trade because if Trump wanted one final “sign” to slap China with $200BN of tariffs on Friday, he just got it.

This 3-chart Zero Hedge item was posted on their Internet site at 8:45 a.m. EDT on Wednesday morning — and another link to it is here.  It’s the first contribution of the day from Brad Robertson.


Russia As a Cat: My Response to Paul Craig Roberts — Andrei Martyanov

Before I proceed in addressing some issues that Paul Craig Roberts raised in his article, partially addressed to me and Andrei Raevsky (aka Saker), I want to express my profound admiration for Dr. Roberts and his courageous civic position and his real, not for show, American patriotism. It is an honor and a privilege to be engaged in conversation with such an esteemed person, even when I disagree with him in some aspects of geopolitical reality when related to, the now official, Cold War 2.0 between the United States and Russia, and Russia’s posture in this conflict. Dr Roberts writes:

As I have made the same points, I can only applaud Martyanov and The Saker. Where we might differ is in recognizing that endlessly accepting insults and provocations encourages their increase until the only alternative is surrender or war. So, the questions for Andrei Martyanov, The Saker, and for Putin and the Russian government is: How long does turning your other cheek work? Do you turn your other cheek so long as to allow your opponent to neutralize your advantage in a confrontation? Do you turn your other cheek so long that you lose the support of the patriotic population for your failure to defend the country’s honor? Do you turn your other cheek so long that you are eventually forced into war or submission? Do you turn your other cheek so long that the result is nuclear war?

Here is where I and Paul Craig Roberts differ dramatically on the issue of Russia’s strategy. Yes, I agree with Dr. Roberts that, quoting William Fulbright, “words are deeds and style is substance insofar as they influence men’s mind and behavior”. But while insults and provocations are unpleasant and in some cases do influence mind and behavior of some, with modern day Russia it is different. I already laid out some basics of Russia’s strategy here at Unz Review, I will expand a bit more in answering Dr. Roberts’ undeniably valid question.

This very interesting commentary was posted on the unz.com Internet site yesterday — and the first reader through the door with it was Brad Robertson.  Another link to it is here.


Turkey’s woes could be just the start as record global debt bills come due

Ten years after the worst financial panic since the 1930s, growing debt burdens in key developing economies are fueling fears of a new crisis that could spread far beyond the disruption sweeping Turkey.

The loss of investor confidence in the Turkish lira, which has surrendered more than 40 percent of its value this year, is only a preview of debt problems that could engulf countries such as Brazil, South Africa, Russia and Indonesia, some economists say.

Turkey is not the last one,” said Sebnem Kalemli-Ozcan, an economics professor at the University of Maryland. “Turkey is the beginning.”

For now, few experts think that a broader crisis is imminent, though Argentina last week asked the International Monetary Fund to accelerate a planned $50 billion rescue as the peso crashed to a historic low. But the danger of a financial contagion that could hit Americans by crushing U.S. exports and sending the stock market plunging should be taken more seriously in light of a massive increase in global debt since the 2008 downturn, the economists said.

Total debt is a whopping $169 trillion, up from $97 trillion on the eve of the Great Recession, according to the McKinsey Global Institute.

This worthwhile news item showed up on The Washington Post‘s website on Tuesday — and it’s the first of two stories that I lifted from Wednesday’s edition of the King Report.  Another link to it is here.


Turkey Ripples Hit Korea as Record Money-Market Funds Pulled

Turkey’s economic troubles are reverberating in a market for short-term investors all the way across the Eurasian continent in South Korea.

Investors pulled 8.7 trillion won (US$7.8 billion) from mutual funds dealing in short-term debt and other cash-like instruments on Friday, the biggest single-day outflow ever from such products, according to the latest data from the Korea Financial Investment Association. While some of that may have been down to month-end withdrawals, such funds had been snapping up securities backed by deposits at Middle East banks in recent months.

Investors seem to have gotten nervous about the situation in Turkey,” said Kim Ki-myung, a credit analyst at Korea Investment & Securities Co. in Seoul.

The pullback by Korean investors underscores the broad impact of Turkey’s troubles on global markets. Korea’s money market funds have been trying to earn extra yield by betting on deposits at Middle Eastern banks, especially those from Qatar, but the lenders’ exposure to Turkey has started to cause concern among those investors.

This article was posted on the Bloomberg website at 11:35 p.m. Denver time on Tuesday night — and I found it in yesterday’s edition of the King Report.  Another link to it is here.


False-flag Failure: The U.S. Cuts to the Chase to Defend its Terrorists in Syria — Finian Cunningham

Last week the U.S. warned of military strikes on Syria “if” government forces use chemical weapons (CW). This week, Trump comes clean by dropping any mention of a CW pretext – simply warning Syria not to attack terrorists.

Trump tweeted his warning to Syria, as well as its allied Russian and Iranian forces, to not launch a military offensive to retake control of the northwest province of Idlib. The area is the last remaining stronghold of illegally armed militant groups in Syria. It’s potentially the endgame to the nearly eight-year war.

On Monday, Trump said: “President Bashar al-Assad of Syria must not recklessly attack Idlib Province. The Russians and Iranians would be making a grave humanitarian mistake to take part in this potential human tragedy.”

The U.S.’ top general, Joseph Dunford, the chairman of the Joint Chiefs of Staff, also reiterated seeming anxiety for humanitarian casualties, calling for a “tailored operation.”

So, alleged chemical weapons are no longer part of the U.S. rationale. It’s basically: don’t make any military move. The American president added that “hundreds of thousands of lives” could be lost if Syria and its allies move to rid the province of an estimated 10,000 militants among a civilian population of three million.

Trump’s apparent “humanitarian” concern seems alarmist, if not cynical. When did he articulate similar misgivings when U.S. air forces were pounding Raqqa to bits last year, causing thousands of civilian deaths?

This longish, but very worthwhile commentary by Finian appeared on the informationclearinghouse.com Internet site on Wednesday sometime — and I thank Brad Robertson for finding it for us.  Another link to it is here.


Recession Reignites Concerns South Africa’s Credit Rating Will Be Downgraded

South Africa’s unexpected slump into a second recession in almost a decade has boosted fears of another round of credit-rating downgrades that could see a sell-off in local-currency bonds.

The cost of insuring the country’s debt against default for five years using credit-default swaps spiked to the highest since November 2016 while yields on the government’s benchmark local-currency bonds due in December 2026 rose to a nine-month high. The rand weakened the most against the dollar among major and emerging-market currencies.

Rand-denominated bonds — which comprise about 90 percent of the country’s liabilities — have the lowest investment-grade rating with a stable outlook at Moody’s Investors Service. Today’s data could see the company follow S&P Global Ratings and Fitch Ratings Ltd. by reducing this to junk, traders including Michelle Wohlberg at FirstRand Bank Ltd. said.

The release “has reignited fears of a possible Moody’s downgrade on Oct. 12,” she said. “Low growth impacts on key revenue streams like tax collection, and given the already high strain on our [finances], this growth figure is concerning.”

This Bloomberg story put in an appearance on their website at 7:30 a.m. MDT on Wednesday morning — and it’s the third news item that comes to us courtesy of yesterday’s edition of the King Report.  Another link to it is here.


India’s Aug gold imports double, hit 15-month high as prices drop — GFMS

India’s gold imports more than doubled in August to hit their highest level in 15 months as lower prices prompted manufacturers to replenish inventory for a jewellery exhibition, provisional data from metals consultancy GFMS showed.

The 116.5 percent jump in gold purchases year-on-year to 100 tonnes last month by the world’s second biggest consumer could support global prices, which have so far slid 8.5 percent in 2018.
But rising gold imports could widen India’s trade deficit and further pressure its currency, the rupee, which hit a record low of 71.95 against the dollar on Wednesday.

In August, local gold prices fell to their lowest level in seven months, prompting jewellers to buy the bullion to fulfill jewellery show orders, said Cameron Alexander, a Perth, Australia-based analyst at GFMS.

For the first eight months of 2018, Indian gold imports fell 12.6 percent from a year earlier to 532.1 tonnes, data compiled by GFMS showed.

Indian gold demand is set to improve in the second half of the year after falling 6 percent in the January-June period, as government steps to boost farmers’ incomes are expected to boost rural buying power, the World Gold Council said last month.

This gold-related story, filed from Mumbai, appeared on the uk.reuters.com Internet site at 3:49 a.m. British Summer Time on their Wednesday morning — and it’s something I found on the Sharps Pixley website.  Another link to it is here.


Asia’s super rich advised to add more gold to their portfolios to protect assets amid storms pounding equity markets

Advisers to Asia’s super rich think their clients should put more of their money into gold, taking advantage of price declines to buy the yellow metal amid volatile global markets and U.S.-China trade tensions, a new report said.

A survey of these advisers found a preference for gold holdings amounting to 5 per cent to 10 per cent of total assets. That is up from an earlier recommendation of 3 per cent to 5 per cent, according the report, “Going for Gold”, which was released on Wednesday by U.S. financial services firm INTL FCStone.

Most advisers in the survey – 62 per cent – said their clients should or maybe should increase their weighting in gold, versus 38 per cent who said they should not. The survey was of 174 private banks, family offices, wealth management advisers and other market experts in Asia.

Not only does Asia, and especially Singapore, offer a remarkably complete and professional gold market infrastructure, but the current global economic, financial and geopolitical factors could be considered as highly supportive of the rationale to hold and grow the portions of gold in any [high net worth] portfolio,” said Martin Huxley, head of precious metals Asia at INTL FCStone.

This article put in an appearance on the South China Morning Post website at 6:01 p.m. CST on their Wednesday evening, which was 6:01 a.m. in New York — EDT plus 12 hours.  It’s the second story in a row that I found on the Sharps Pixley website — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ photos looks rather uninteresting, but it’s the first one I’ve ever seen with camera in hand.  It’s the eastern kingbird… a small passerine birds of the tyrant flycatcher family.  These birds wait on an exposed perch and then catch insects in flight…which is precisely what this one was doing as I was observing it.  They have long pointed wings and large broad bills. Their breeding habitat is open areas across North America.  Click/double-click to enlarge.


The WRAP

For the most part, it was a ‘nothing’ day in the precious metals…including copper.  But WTIC was closed below its 50-day moving average.  The other thing I noticed, which I’ve already mentioned, was that despite the lack of price activity, silver’s volume was pretty decent…most likely some spill-over from Tuesday’s engineered price decline.

Here are the 6-month charts for the Big 6 commodities — and except for West Texas Intermediate, there’s not a lot to see.  The ‘click to enlarge‘ feature only helps with the first four.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price rose and fell a couple of dollar in Far East trading on their Thursday morning…in tandem with a dollar drop and rally during that time period. At the moment, it’s up 40 cents an ounce. Silver’s ‘rally’ during the same time period was virtually non-existent — and it’s now down a penny. Ditto for platinum and palladium, with former down 2 dollars — and the latter back at unchanged.

Net HFT gold volume is around 44,500 contracts — and roll-over/switch volume is only 298 contracts on top of that. Net HFT silver volume is a hair under 10,000 contracts — and there’s only 557 contracts worth of roll-over/switch volume in that precious metal.

The dollar index took a bit of a nose dive shortly after trading began at 6:00 p.m. EDT in New York on Wednesday evening. It fell below the 95.00 mark briefly around 7 p.m. EDT — and traded flat until around 10:45 a.m. China Standard Time on their Thursday morning. It has been edging quietly higher since, but is off its 2:00 p.m. CST current high tick by a bit — and is up 6 basis points as London opens.

With precious metal prices and their associated equities piled in a bloody mess at Jamie Dimon’s feet, we await developments.  What event[s] will be allowed to light the fuse to this COMEX powder keg — and how soon?

Casting an eye on what’s going on in the world right now, I expect the process to begin with either events Washington, or the Middle East, or both.

So we wait some more.

And as I post today’s missive on the website at 4:02 a.m. EDT, I note that the gold price has been inching higher ever since 2 a.m. CST on their Thursday afternoon — and as the first hour of London trading draws to a close, the gold price is up $2.00 the ounce. It’s been the same for silver — and it’s now up 4 cents. Ditto for platinum and palladium, with the former up a dollar — and the latter by two.

Gross gold volume is just over 54,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is around 53,000 contracts. Net HFT silver volume is 12,500 contracts — and there’s 558 contract worth of roll-over/switch volume in that precious metal.

The dollar index traded flat during the hour preceding the London open — and then dropped a few basis points at that juncture — and is up 4 at the moment.

Tomorrow we get the latest and greatest Commitment of Traders Report, plus the companion Bank Participation Report — and both will be ones for the record books as well.

See you then.

Ed

Is JPMorgan Out of Its Short Position in Silver?

05 September 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price made three rally attempts between the 6 p.m. open in New York on Monday evening — and 2 p.m. China Standard Time on their Tuesday afternoon.  The first two were met with quiet selling pressure the moment that they made it back to the unchanged mark.  The third rally attempt got the ‘Full Monty’ — and ‘da boyz’ set the low tick of the day at, or shortly after the, the afternoon gold fix in London.  The price chopped quietly higher from there into the 1:30 p.m. EDT COMEX close — and then it was sold equally quietly and unevenly lower from there until trading ended at 5:00 p.m. EDT.

The high and low ticks are barely worth looking, but here they are anyway.  In October, the high and low ticks were recorded as $1,204.50 and $1,190.00 — and in the December contract, those numbers were $1,209.70 and $1,195.10.

Gold was closed in New York yesterday at $1,191.10 spot, down $9.80 from Monday’s close.  Net volume, minus Monday’s, was around 275,000 contracts — and roll-over/switch volume, also net of Monday’s volume, was about 10,800 contracts.

The silver price didn’t do much of anything from the 6:00 p.m. EDT open on Monday evening in New York, until JPMorgan dropped the hammer at 2 p.m. CST on their Tuesday afternoon.  They set the low tick of the day at, or shortly after, the afternoon gold fix in London and, like gold, it crawled unsteadily higher into the COMEX close from there — and then didn’t do much of anything after that.

The high and lows in this precious metal were reported by the CME Group as $14.59 and $14.035 in the December contract.

Silver was closed on Tuesday at $14.135 spot, down 32.5 cents from Monday — and 37 cents from last Friday’s close.  Not surprisingly, net volume…minus Monday’s…was very heavy at about 100,500 contracts — and [net] roll-over/switch volume was a bit under 4,900 contracts on top of that.

Platinum traded sideways to down a bit until shortly after 1 p.m. China Standard Time on their Tuesday afternoon.  It jumped up 3 bucks at that point, to $790 spot, but ‘da boyz’ were right there with their spoofing and their algo spinning, with the low tick being set shortly after 9 a.m. in New York.  It was allowed to chop quietly higher until around 1 p.m. EDT — and it traded unevenly sideways for the remainder of the Tuesday session.  Platinum finished the day at $777 spot, down an even 10 bucks from Monday’s close.  JPMorgan et al had it down 22 dollars at its low tick of the day.

The palladium price crawled quietly lower in Far East trading on their Tuesday — and was down 2 dollars by shortly before the Zurich open.  At that point, a trap door opened under its price as well — and the spike low tick was set minutes after 8:30 a.m. in New York, although the price trend was already higher starting an hour before that.  It continued to rally sharply, but under obvious interference, until the $987 spot high tick was set shortly before 1 p.m. EDT.  At that juncture it was up 9 dollars on the day.  But ‘da boyz’ wouldn’t let that stand — and a very few minutes later it was hauled lower — and closed at $979 spot, up only 2 bucks from Monday.

The dollar index closed very late on Monday afternoon in New York at 95.14 — and it began to ‘rally’ the moment that trading began very early on Monday evening in New York.  It made it up to the 95.27 mark by around 10:35 a.m. China Standard Time on their Tuesday morning, but it sank back to just about unchanged by 1:30 p.m. CST.  It was up, up and away from there — and all of the gains that mattered were in by shortly after 9 a.m. in London.  From that juncture the index traded mostly sideways until minutes before 9 a.m. in New York five hours later.  Then it began to head unsteadily higher — and the 95.74 high tick of the day came at precisely 10 a.m. EDT…which was the afternoon gold fix in London.  The index more or less hung in there until around 10:40 a.m. — and then began to head sharply lower.  That decline ended around 12:45 p.m. — and it didn’t do much from that point until trading ended late yesterday afternoon EDT.  The dollar index finished the Tuesday session at 95.43…up 29 basis points from Monday’s close.

Only platinum began to head lower as the dollar index began to head higher at 1:30 p.m. CST — and even then, there was a decent time lag between those two events.  Gold and silver didn’t follow until kicked downstairs starting at 2 p.m. CST, about half an hour later — and palladium didn’t get any help lower until a few minutes before the Zurich open…about eighty minutes later.

You’ll excuse me for thinking this once again, but that dollar index ‘rally’ looked just as engineered as the price declines in the precious metals that followed.   But it was a very decent fig leaf — and JPMorgan used it to their advantage.

And here’s the 6-month U.S. dollar index — and we’ll see if this current ‘rally’ continues or not.

The gold stocks gapped down about 3 percent or so at the open — and their respective lows came around 10:45 a.m. in New York trading.  They recovered a hair by the 11 a.m. EDT London close — and then traded almost ruler flat for the rest of the Monday session.  The HUI closed down 4.10 percent.

It was almost the same price path for the silver equities — and at their 10:45 a.m. EDT lows, they were down 6 percent.  But they began to edge quietly and steadily higher — and that continued right until trading ended at 4:00 p.m. in New York.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down another 4.32 percent.  Click to enlarge if necessary.

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

Without doubt there was fairly substantial institutional selling yesterday at the 9:30 a.m. open of the equity markets in New York.  But always remember that every stock dumped in a panic, or in a forced sale situation, was bought by ‘someone’ — and it’s an extremely safe bet that they now reside in the strongest of hands.


The CME Daily Delivery Report showed that 10 gold and 593 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday. In gold, Advantage issued all of them from their client account.  They also picked 3 contracts as a long/stopper.  JPMorgan stopped 2 for its client account — and Morgan Stanley stopped 5 for its in-house/proprietary trading account.  In silver, there were nine short/issuers in total, but the only two that mattered were JPMorgan and International F.C. Stone, as they issued 434 and 117 contracts out of their respective client accounts.  There were also nine long/stoppers in total as well.  The biggest by far was JPMorgan with 307 in total…221 for its own account, plus another 86 for its client account.  The number two and three long/stoppers were HSBC USA and Goldman Sachs.  They stopped 148 and 83 contracts for their respective in-house trading accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session also includes all of the volume data for Monday as well.  Gold open interest in September declined by 43 contracts, leaving 101 still open, minus the 10 mentioned just above.  Friday’s Daily Delivery Report showed that 49 gold contracts were actually posted for delivery today, so that means that 49-43=6 more gold contracts were added to the September delivery month.  Silver o.i. in September dropped by 551 contracts, leaving 1,991 still open, minus the 593 contracts mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that only 316 silver contracts were posted for delivery today, so that means that a chunky 551-316=235 silver contracts vanished from September.  That’s a lot!


There was another very large withdrawal from GLD on Monday, as an authorized participant removed 265,033 troy ounces.  There were no reported changes in SLV.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, August 31 — and this is what they had to report.  Their gold ETF added a very impressive 34,977 troy ounces — and their silver ETF increased by 161,332 troy ounces.

There was a decent sales report from the U.S. Mint to start the month of September.  They sold 6,500 troy ounces of gold eagles — and 400,000 silver eagles…but no gold buffaloes.  It’s an excellent bet that these sales were not to John Q. Public, as they are no longer around.

The only physical activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday, was 2,175 troy ounces that was left at Delaware.  But there was 89,023 troy ounces transferred from the Registered category — and back into Eligible.  Of that amount, there was 69,956 troy ounces at Brink’s, Inc. — and 28,066.950 troy ounces/873 kilobars [U.K./U.S. kilobar weight] at JPMorgan.  A link to that activity is here.

There was a bit more activity in silver, as a truck load…599,984 troy ounces…was received at CNT — and 110,904 troy ounces was shipped out of Canada’s Scotiabank.  The link to that is here.

There wasn’t much happening over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They didn’t receive any — and only 150 were shipped out.  That activity was at Brink’s, Inc. of course — and I won’t bother linking it.


Here are a four charts that Nick passed around yesterday.  These first two, which are both 10-year charts, show gold and silver bullion coin sales for the U.S. Mint, updated with August’s sales data.  The gold coin sales include gold buffalo sales as well as gold eagle sales.  Click to enlarge.

These next two charts are 6-year charts — and are for The Perth Mint…updated with gold and silver bullion coin sales for August as well.  Click to enlarge if necessary.

I only have four stories for you today.


CRITICAL READS

America’s Finances Seem Fishy — Bill Bonner

What the Argentines don’t know about financial fishiness isn’t worth knowing.

Last week, for example, the central bank of Argentina fixed its key rate at 60% – after its previous fix of 45% failed to fix the problem of the failing Argentine peso – leaving the pampas in the same fix they were in before.

The real problem is that they borrow too much money. Then, they’re far from being reliable payers. They default punctiliously – about once every 10 years. Then, they start again, usually with the help of the International Monetary Fund – which lends, of course, other people’s money… and doesn’t worry too much about getting it back.

(We will be going back to Argentina in a couple of weeks, where our dollars are worth about three times as much as they were a year ago. We’ll give you a fuller report then.)

In the meantime, part of the reason Argentina is so desperate is that it has a government deficit of 6% of GDP; by comparison, Italy has a deficit of only 2% of GDP.

But wait. What about the U.S.? Over the last 12 months, government debt rose by about $1.2 trillion.

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


India Joins China in Defying Trump, Will Allow Imports of Iranian Oil

Two weeks after China – the top importer of Iranian crude oil – defied the White House, disclosing that it would continue importing Iranian oil ignoring U.S. sanctions on Tehran, India, the second biggest buyer of Iranian oil exports, has given permission to its state refiners to import Iranian oil using a similar scheme as China in which Tehran would arrange tankers and insurance after firms including the country’s top shipper Shipping Corp of India halted voyages to Iran due to U.S. sanctions.

According to Reuters, New Delhi’s attempt to keep Iranian oil flowing mirrors a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co. China previously said that it would not stop buying Iranian oil despite U.S. efforts to bring the Iranian exports down to ‘zero.’ But Beijing is also said to have agreed not to increase its oil purchases from Iran.

The move will benefit Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and MRPL, which plan to lift Iranian cargoes during the rest of the fiscal year ending on March 31. India wants to continue buying oil from OPEC member Iran as Tehran is offering almost free shipping and an extended credit period.

With the Indian decision, it is possible that virtually all of Iran’s output could be captured by just China and India if Tehran’s other “pro-U.S.” clients decide to comply with the U.S. sanctions. Indian state refiners, which drove India’s July imports of Iranian oil to a record 768,000 barrels per day, had planned to nearly double oil imports from Iran in 2018/19.

This news story appeared on the Zero Hedge website at 2:45 p.m. EDT yesterday afternoon — and I thank Brad Robertson for sending it along.  Another link to it is here.


Perth Mint August Gold sales mark best since October 2017

The Perth Mint’s Gold products sales shot up by 30 percent month on month to 38,904 ounces during the month of August this year, while Silver products sales gained by 7 percent from July to 520,245 ounces, said the mint in a blog post.

Perth Mint’s Gold products sales during the month of August marked their highest since October 2017 mainly due to as lower prices attracted buying.

However, Perth Mint’s August Gold sales nearly doubled from last year, while silver sales climbed about 33 percent.

Silver prices declined 6.5 percent during the month of August, marking their third straight monthly decline.

The Perth Mint refines more than 90 percent of newly mined gold in Australia, the world’s No. 2 gold producer after China.

The above five paragraphs are all there is to this short news item filed from Perth, Australia.  It showed up on the scrapregister.com Internet site on Tuesday sometime — and another link to it is here.  I ‘borrowed’ it from the Sharps Pixley website.


Japan braces for gold smuggling rush in shadow of tax hike

As Japan prepares to raise the consumption tax for the first time in half a decade next year, the Ministry of Finance worries that gold smuggling will also get a boost.

When the tax was last increased in 2014, to 8 percent to 5 percent, smuggling of the precious metal jumped as criminal organizations quickly realized how to game the system for their own enrichment.

The scheme works like this: Procure gold in places like Hong Kong, which does not tax it. Have mules hide it in their luggage and blend in with tourists, traveling to Japan to sell to stores that buy gold from the public. The stores pay for both the gold itself and the consumption tax. The tax component becomes pure profit.

And with the consumption tax set to rise to 10% in October 2019, margins will grow even fatter.

Japan has an unflattering reputation as a “go-to place” for gold smugglers. In 2017, there were 1,347 cases discovered by law enforcement — 112 times the tally from 2013, the year before the last tax hike. Seized gold last year amounted to 6,236 kg, a 47-fold increase.

This very interesting and worthwhile gold-related article put in an appearance on the asia.nikkei.com Internet site at 3:16 p.m. Japan Standard Time on their Tuesday afternoon, which was 2:16 a.m. in New York…EDT plus 11 hours.  I found it in a GATA dispatch yesterday morning — and another link to it is here.


The PHOTOS and the FUNNIES

Back to the ‘Big Island’…Hawai’i…once again for this photo, plus two video clips.  This is another early-morning picture of the boat ramp at Isaac Hale Beach Park — and a ‘sand’ bar, comprised of black ‘sand’ and lava fragments carried by long-shore currents from the lava delta, continues to block it.  If this boat ramp ever reopens, which is highly unlikely, it certainly won’t be in its current form.  Click to enlarge.

The first video clip is a 34-second aerial shot of fissure 8 that was taken on Monday.  There’s a full description of what you’re seeing at the front of it, so I won’t add anything now — and the link to that is here.  The second video, shot on August 26 — and which runs for 2:15 minutes, is really spectacular.  It’s of the crater rim at Kīlauea volcano.  The volume change, from early May 2018 to present, is over 825 million cubic meters (1 billion cubic yards). The vertical collapse of the crater floor is more than 500 m (1,600 ft).  Full-screen viewing is a must — and the link to that is here.  The photo and videos are courtesy of the U.S. Geological Survey.


The WRAP

In what had all the hallmarks of an engineered dollar index rally to camouflage an equally engineered price decline in all four precious metals…plus copper…JPMorgan went to work to cover what was left of its remaining short position in silver.  They’ve been hard at it ever since the COMEX close back on Tuesday August 28.  It all appeared to end with this final wash-out yesterday.

As silver analyst Ted Butler has already stated in his weekly review on Saturday– and I mentioned in my Saturday missive as well, he estimated JPMorgan’s short position in silver “to be no more than 7,000 contracts to possibly 5,000 contracts or less. And if it was not holding such a small short position as of [last] Tuesday, it would appear to be since the cutoff.

It’s a fairly safe assumption to make that they’re most likely out of it by now, but Ted won’t know for sure until Friday.

Here are the 6-month charts for all of the ‘Big 6’ commodities — and you can see the handiwork of ‘da boyz’ in three of the four precious metals…plus copper.  But it’s the pounding in silver…from its high through its low tick during the reporting week…that really stands out.  The ‘click to enlarge‘ feature only helps with the first four graphs.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price traded sideways until around 9 a.m. China Standard Time on their Wednesday morning. At that juncture it began to edge higher, as the dollar index edged lower. That state of affairs lasted until around 10:30 a.m. CST — and with a rising dollar index, the gold price has been chopping quietly lower ever since. At the moment it’s up $1.20 cents the ounce. The silver price traded virtually ruler flat until around 1 p.m. CST on their Wednesday afternoon — and it’s been ticking quietly lower since — and is down 3 cents at the moment. Platinum is a bit lower in afternoon trading in the Far East…and is down 3 bucks. Palladium is up a dollar as Zurich opens.

Net HFT gold volume is coming up on 41,000 contracts — and there’s only 803 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is about 12,700 contracts — and roll-over/switch volume in this precious metal is 1,134 contracts.

The dollar index didn’t do much when trading began at 6:00 p.m. EDT in New York on their Tuesday evening, but as I said just above, began to head lower at 9 a.m. CST on their Wednesday morning. Its current 95.28 low tick came around 10:30 a.m. CST — and at 11 a.m., began to crawl higher. It took a bit of a jump a few minutes before 2 p.m. CST — and is currently up 8 basis points as London opens.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and companion Bank Participation Report.  As I just mentioned, Ted will be able to recalibrate JPMorgan’s short position in silver, or what’s left of it…if anything, once he has those reports in hand.

I mentioned in passing in yesterday’s missive that “Not that I’m rooting for it or anything, but if JPMorgan is in the process of eliminating the last of their silver short position, I’d be grateful if they had it completed before 1:30 p.m. EDT this afternoon“.  It certainly appears that I got my wish.

And as I post today’s column on the website at 4:02 a.m. EDT, I see that except for a minor up/down price spike, not much has changed with the gold price during the first hour of London trading. It’s up $1.50 at the moment. Ditto for silver — and it’s down 2 cents. But platinum and palladium have both been sold lower during the first hour of Zurich trading, with platinum now down 5 dollars currently — and palladium by 4.

Gross gold volume is a bit over 60,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is just under 59,000 contracts. Net HFT silver volume is a hair over 17,500 contracts — and there’s 1,206 contracts worth of roll-over/switch volume in that precious metal.

The dollar index continues to head higher — and is now up 19 basis points as the first hour of London/Zurich trading draws to a close.

So, are we done yet?  I don’t know.  Ted thought so weeks ago…as did I — and I wasn’t shy about saying so.  I even purchased more shares in three different silver mining companies that I already owned stock in.  However, with 20/20 hindsight, I did so too soon.

But I must admit the thought that JPMorgan might actually attempt to cover its remaining 20,000 COMEX contract short position in silver, was not something that seriously crossed my mind.  How wrong I was!  So, if you’re looking for a reason for all this unexpected financial and emotional pain over the last month, that would be the cause of it.

But that changes nothing.  The ‘white hot’ bullish scenario that existed a month ago is even more so now — and far better days lie ahead at some point.

See you here tomorrow.

Ed