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

14 March 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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


CRITICAL READS

Consumer Prices Accelerate As Apparel, Car Insurance Costs Jump

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

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

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

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

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

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


Trump replaces Secretary of State Rex Tillerson with CIA chief

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

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

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

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

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

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


Stephen Hawking dies aged 76

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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


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

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

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

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

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

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

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

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


Hungary’s Central Bank to Repatriate Its Gold From London

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

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

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

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

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


The PHOTOS and the FUNNIES

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


The WRAP

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


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

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

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

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

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

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

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

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

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

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

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

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

I’ll see you here tomorrow.

Ed

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

10 February 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

Here’s the weekly chart — and it’s even uglier this week than it was last week.  There’s just no other words for it.  Click to enlarge.

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

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

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

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


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

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


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

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

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

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

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

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

And why was that, you ask?

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

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

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

So would Ted.

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

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

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


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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

In platinum, 5 U.S. banks are net short 20,817 COMEX contracts in the February Bank Participation Report.  In the January BPR, ‘3 or less’ U.S. banks were net short 13,341 COMEX platinum contracts, so there’s been a huge increase in the short position of the U.S. banks in question during the last reporting month.

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

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

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

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

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

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

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

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

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

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


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

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

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

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


CRITICAL READS

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

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

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

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

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

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


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

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


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

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

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

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

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

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

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

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


Subprime and Short Vol — Doug Noland

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

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

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

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

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

There will be a very steep price to pay.

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


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

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

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

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

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

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


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

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

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

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

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

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

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

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


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

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

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

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

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

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


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

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

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

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

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


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

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

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

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

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

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


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

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

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

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

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

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

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


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

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

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

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

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

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


The PHOTOS and the FUNNIES

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


The WRAP

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

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


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

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

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

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

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

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

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

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

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

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

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

See you on Tuesday.

Ed

All Four Precious Metals Get Closed at New Lows on Wednesday

08 February 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


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

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

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

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

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

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

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

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

The salami slicing continues in all four precious metals.

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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


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

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

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


CRITICAL READS

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

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

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

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

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

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


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

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

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

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

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

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


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

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

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

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

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

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

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


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

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

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

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

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

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

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

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


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

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

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

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

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


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

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

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

* Sentiment Changes: Once Complacent Investors Now Jumpy and Nervous

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

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


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

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

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

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

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

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


Deutsche Bank Shares Plunge to Crisis Level

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

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

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

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

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

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


Ukrainian factory Azovmash losses thousands of workers to Russia

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

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

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

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

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

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


Nine straight years of record annual gold mine production

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

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

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

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

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


The PHOTOS and the FUNNIES

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


The WRAP

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

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

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


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

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

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

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

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

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

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

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

So we wait some more.

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

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

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

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

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

Ed

A Bloodbath in Silver: Courtesy of JPMorgan et al

03 February 2018 — Saturday

YESTERDAY in SILVER, GOLD, PLATINUM and PALLADIUM


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here’s the weekly chart — and it’s butt-ass ugly.  There’s just no other words for it.  Click to enlarge.

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

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


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

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

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

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


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

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

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

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

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

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

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


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

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

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

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

Under the hood in the Disaggregated COT Report it was a rather mixed bag, as the Managed Money traders only accounted for about half of the weekly change in the Commercial net short position.  They reduced their long position by 3,732 contracts — and they reduced their short position by 6,562 contracts as well — and the difference between those two numbers…2,830 contracts…was their change for the reporting week.  As always, the difference between that number and the Commercial net short position…5,794 minus 2,830 equals 2,964 contracts…was picked up by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader categories.  In this week’s report, the lion’s share of that difference came from the ‘Nonreportable’/small trader category.

Based on the tiny drop in the short position of the Big 4 traders, Ted didn’t change the short position of JPMorgan this week…leaving it at 31,000 contracts.  The Commercial net short position in silver as of the Tuesday cut-off was 236.4 million troy ounces of paper silver.

Here’s the 3-year COT chart for silver.  Click to enlarge.

Of course, after the JPMorgan-led bloodbath in the COMEX silver market yesterday, the above COT data is “yesterday’s news” in every respect — and I would suspect that silver is now configured bullishly.


In gold, the commercial net short position actually dropped by 9,476 contracts, or 947,600 troy ounces of paper gold.

They arrived at that number by selling 6,768 long contracts, but they also reduced their short position by 16,244 contracts — and the difference between those numbers was the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by about 6,100 contracts…however, the ‘5 through 8 large traders increased their short position by around 1,100 contracts.  Ted’s raptors, the 45 small commercial traders other than the Big 8, added approximately 4,500 contracts to their long position.

Under the hood in the Disaggregated COT Report there was very little in the way of change with the Managed Money traders during the reporting week.  They reduced their long position by 5,406 contracts, but they also reduced their short position by 3,432 contracts — and the difference between those two numbers…is only 1,974 contracts.  The difference between that number and the commercial net short position…9,476 minus 1,974 equals 7,502 contracts…was made up by the traders in the other to categories, as both sold long positions and increased their respective short positions as well.

The commercial net short position in paper gold now sits at 22.51 million troy ounces.

And here’s the 3-year COT Report for gold.  Click to enlarge.

Of course ‘all of the above’ is, like in silver, very much “yesterday’s news” as well.

With JPMorgan et al taking out both the 50 and 200-day moving averages in silver with real authority yesterday, it’s a reasonable assumption to make that we may be close to, or at, a bottom for the silver price.  But the same can’t be said of gold, as it has had a bearish market structure on the COMEX for quite a number of weeks.  So although there certainly was huge improvement in the commercial net short position since the Tuesday cut-off, with most of that coming yesterday, one should fervently hope that the 50 and 200-day moving averages in gold aren’t on ‘da boyz’ ‘to do’ list.  I don’t think they are, but Ted pointed out that possibility on the phone yesterday — and it can’t be ignored.


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

For the current reporting week, the Big 4 are short 126 days of world silver production—and the ‘5 through 8’ large traders are short an additional 64 days of world silver productionfor a total of 190 days, which is over 6 months of world silver production, or about 461.7 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 192 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 236.4 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 461.7 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 461.7 minus 236.4 = 225.3 million troy ounces.  The reason for the difference in those numbers is that Ted’s raptors, the 42-odd small commercial traders other than the Big 8, are long that amount.

As I also stated in the above COT Report analysis, Ted pegs JPMorgan’s short position at about 31,000 contracts, or around 155 million troy ounces, unchanged from what they were short in last week’s COT Report.  155 million ounces works out to around 64 days of world silver production that JPMorgan is short.  That’s compared to the 190 days that the Big 8 are short in total.  JPM holds about 34 percent of the entire short position held by the Big 8 traders.

Up until two weeks ago, when I was preparing my presentation for the Vancouver Resource Investment Conference, I had estimated the short position in silver held by Scotiabank/ScotiaMocatta at approximately 32 days of world silver production minimum.  That turned out to be high by quite a bit.  Now that I’ve recalibrated their short position, it’s now down to about 23 days, or maybe a bit less.  So it’s more than obvious that Scotiabank has been actively reducing their short position in the COMEX futures for the last year.  I’m sure they’ve covered a certain portion of it during the normal course of business, but it’s equally obvious that JPMorgan has taken up some of the slack, as have some of the other traders in the Big 8 category.

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

The two largest silver shorts on Planet Earth—JP Morgan and one other, which may or may not be Scotiabank, are short about 87 days of world silver production between the two of them—and that  87 days represents about 69 percent of the length of the red bar in silver in the ‘Days to Cover’ chart…a bit more than two thirds of it.  The other two traders in the Big 4 category are short, on average, about 19.5 days of world silver production apiece, down 0.5 days from last week’s report.

The four traders in the ‘5 through 8’ category are short, on average…16 days of world silver production each, which is down 0.25 days from what they were short in last week’s COT Report.

This is just more proof of the fact, if any was needed, that it’s only what JPMorgan does in the COMEX silver market that matters, as it’s only their position that ever changes by any material amount.  Although not much happened during the past reporting week

The Big 8 commercial traders are short 46.6 percent of the entire open interest in silver in the COMEX futures market, which is virtually unchanged from last week’s COT Report — and that number would be almost 50 percent once the market-neutral spread trades are subtracted out.  In gold, it’s now 48.5 percent of the total COMEX open interest that the Big 8 are short, up a bit from last week’s report — and something over 50 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 68 days of world gold production, which is down 2 days from what they were short last week — and the ‘5 through 8’ are short another 29 days of world production, which is up 1 day from what they were short the prior week, for a total of 97 days of world gold production held short by the Big 8 — which is down one day from the 98 days they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold 70 percent of the total short position held by the Big 8…which is up 1 percentage point from last week’s COT Report.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are 66, 71 and 77 percent respectively of the short positions held by the Big 8.  Silver is unchanged from the previous week’s COT Report — and platinum is down 1 percentage point from last week — and palladium is down 2 percentage points from what it was in last week’s COT Report.

I have an average number of stories for you today…but there’s no Cohen/Batchelor interview this week.


CRITICAL READS

U.S. Adds 200,000 Jobs; Wages Rise by Most Since Recession

U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy’s steady move toward full employment extended into 2018.

Non-farm payrolls rose 200,000 — compared with the median estimate of economists for a 180,000 increase — after an upwardly revised 160,000 advance, Labor Department figures showed Friday. The jobless rate held at 4.1 percent, matching the lowest since 2000, while average hourly earnings rose a more-than-expected 2.9 percent from a year earlier, the most since June 2009.

Treasury yields and the dollar gained, while stock futures remained lower, as the data reinforced the Fed’s outlook for three interest-rate hikes this year under incoming Chairman Jerome Powell, including one that investors expect in March. The figures may also add to the likelihood of a fourth rate increase in 2018.

The report puts the nation closer to maximum employment — one of the goals of the Federal Reserve — and sets a solid tone for hiring this year following continued gains in payrolls in 2017. That could be starting to generate a long-awaited, sustained pickup in wages and boost demand in this expansion, which may also get a lift this year from tax-cut legislation signed by President Donald Trump in December.

The gain in wages will add to concerns that inflationary pressures are building in the economy,” said Michael Feroli, chief U.S. Economist at JPMorgan Chase & Co., who correctly projected the payrolls gain. “It solidifies expectations that the Fed will hike in March. The question is, what will they signal for hikes after that?

There were lot of caveats buried in the job numbers yesterday, so it’s not as rosy as this Bloomberg story makes it out to be.  This article was posted on their Internet site at 6:30 a.m. Denver time on Friday morning — and updated about an hour later.  I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.


Dollar Spikes Most in Over a Year, But…

Strong ‘headline’ earnings growth (despite all the caveats) has sparked a hawkish tilt to trading sending bond yields higher and spiking the dollar index by the most since Jan 2017.

There’s just one thing though…

The 0.9% spike in the dollar index is the most since January 18th 2017 and sounds impressive, but for a trader, it appears the spike is for fading as it hits the Trump Rescue highs and rolls over…

So the strongest wage growth in years merely enabled machines to run some stops before the trend lower continues?

This very brief 2-chart Zero Hedge item appeared on their website at 11:28 a.m. EST on Friday morning — and I thank Brad Robertson for sending it our way.  The second chart is worth a look — and another link to it is here.


Is the U.S. waging a ‘cold war’ to weaken the dollar?

The dollar is at its weakest level in years against other major currencies.

Experts say the drop is being driven, at least in part, by the U.S. government. And some suggest it’s a deliberate campaign aimed at boosting the American economy at the expense of major trading partners like Europe and Japan.

The Trump administration is engaged in “a cold currency war — and it’s winning,” Joachim Fels, an economist at investment firm Pimco, said this week.

Rather than an open conflict, which would involve direct intervention in currency markets, the hostilities come in the form of words and “covert” actions, he wrote in a blog post.

Fels points to the Trump administration’s moves to slash taxes and boost spending, which he says are coming at “the wrong time“. The measures will pile on more government debt, making investors less eager to own dollar assets, like U.S. Treasury bonds.

Policies like that “are sending an implicit but very clear signal to markets: A weaker dollar is the goal,” Fels wrote. “Markets have understood the signal.”

Yep, that pretty much sums it up.  This news item put in an appearance on the money.cnn.com Internet site at 6:47 a.m. EST on Friday morning — and I found it embedded in a GATA dispatch.  Another link to it is here.


Bond Panic Spreads/World of Hurt — Bill Bonner

The feds giveth; the feds taketh away…and the feds maketh a mess of things.

They have engineered a grotesquely exaggerated credit cycle – holding short-term interest rates below the rate of inflation for far too long.

They’ve been giving out free money, in other words.

Now they have an economy burdened by far too much debt… just as the credit cycle turns.

A few basis points doesn’t seem like much. But when you have to borrow, every extra basis point (one one-hundredth of a percentage point) hurts. And when you have $67 trillion in debt, a few basis points can be a disaster.

To be more precise, a one-basis point increase in carrying costs would add $6.7 billion to the nation’s annual interest rate charge.

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


Doug Noland: The Grand Crowded Trade of Financial Speculation

It’s worth noting that the U.S. dollar caught a bid in Friday’s “Risk Off” market dynamic. Just when the speculator Crowd was comfortably positioned for dollar weakness (in currencies, commodities and elsewhere), the trade abruptly reverses. It’s my view that heightened currency market volatility and uncertainty had begun to impact the general risk-taking and liquidity backdrop. And this week we see the VIX surge to 17.31, the high since the election.

The cost of market risk protection just jumped meaningfully. Past spikes in market volatility were rather brief affairs – mere opportunities to sell volatility (derivatives/options) for fun and hefty profit. I believe markets have now entered a period of heightened volatility. To go along with currency market volatility, there’s now significant bond market and policy uncertainty. The premise that Treasuries – and, only to a somewhat lesser extent, corporate Credit – will rally reliably on equity market weakness is now suspect. Indeed, faith that central bankers are right there to backstop the risk markets at the first indication of trouble may even be in some doubt with bond yields rising on inflation concerns. When push comes to shove, central bankers will foremost champion bond markets.

Unless risk markets can quickly regain upside momentum, I expect “Risk Off” dynamics to gather force. “Risk On” melt-up dynamics were surely fueled by myriad sources of speculative leverage, including derivative strategies (i.e. in-the-money call options). As confirmed this week, euphoric speculative blow-offs are prone to abrupt reversals. Derivative players that were aggressively buying S&P futures to dynamically hedge derivative exposure one day can turn aggressive sellers just a session or two later. And in the event of an unanticipated bout of self-reinforcing de-risking/de-leveraging, it might not take long for the most abundant market liquidity backdrop imaginable to morph into an inhospitable liquidity quandary.

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


Welcome to the Trade War — Jim Rickards

Ready or not, a trade war between the U.S. and China is underway.

On Monday, Jan. 22, President Trump announced steep 30% U.S. tariffs on imports of solar panels and washing machines.

What was significant about these tariffs is that they are being applied worldwide. The tariffs are not aimed at China alone, but China is by far the largest source of solar panels shipped to the U.S., and China and South Korea are the largest sources of washing machines.

So while Trump can claim that these tariffs are not specifically targeted at China, that is exactly what they are.

This war has the potential to sink stock markets, shrink world trade and unravel the “synchronized growth” story that global elites have been pushing for the past year.

This worthwhile commentary by Jim was posted on the dailyreckoning.com Internet site yesterday — and another link to it is here.  Jim had a second article posted on that website as well on Friday — and it’s headlined “Trump, Davos and Free Trade


U.S. sanctions, baffled Russians, hot air and history — The Saker

So, finally, the suspense is over.  Kind of.  The U.S. Treasury has finally released the list of Russian entities and individuals which could (conditional!) be sanctioned by the U.S. Treasury in compliance with the H.R.3364 – Countering America’s Adversaries Through Sanctions Act.

Two things are noteworthy: first, this list completely ignores one of the most important realities of Russian politics: that the real, dangerous, opposition to Putin is not from the people (who support him at anywhere between 60% to 80%+) or from the Russian media (which, while often critical, does not represent a real threat to him) or even the Duma (whose opposition parties are critical of the Kremlin, but who are very careful about criticizing Putin himself lest they lose support from the people) .  For years now I have been explaining that the real opposition to Putin is a) inside the ruling elites, including the Presidential Administration and the Government and b) big money: banks, oligarchs, etc.  I call this (informal) opposition the “Atlantic Integrationists” because what these pro-western globalists want is for the AngloZionist Empire to accept Russia as an equal partner and to have Russia fully integrate the US-controlled international financial and security structures: WTO, NATO, EU, G7/8, etc.  Very roughly speaking you could think of them as the “Medvedev people” (but you could also say that the Ministers in charge of the Russian economy all fall into this category, as do almost all the heads of Russian banks).

Now that the U.S. Treasury has released this “list of marked individuals” (and their families, relatives or associated corporate entities) for potential, unspecified, future sanction, who do you think will freak out most, the Eurasian Sovereignists or the Atlantic Integrationists?  Then look a step further and forget about the U.S. for a second: Russia is trying hard to work with the Europeans in many join projects.  What do you think the creation of such a list will have on joint ventures between E.U. and Russian businessmen?  I predict two things:
It will place a great deal of pressure on E.U. corporations not to do business with the Russians and, therefore, it will further place the E.U. and the U.S. on a collision course.

It will hurt the Atlantic Integrationists where it hurts them the most: in their financial interests.

Frankly, if I was paid to think long and hard about how to come up with the dumbest and most self-defeating foreign policy decision for the USA, I could never do better than what the Trump Administration and Congress have just done.  This is, by the way, something which all Russian analysts agree with.  What they don’t agree with are the reasons for that seemingly completely and terminally stupid move.

This long — and rather involved commentary is a must read…if you have the interest, that is. And even if you don’t read the whole thing, the commentary under the last three sub-headings, 1] Possible Russian reactions, 2] Conclusion one: the Empire’s main export is hot air, and…most important…3] Conclusion two: learning optimism and caution from history; should be on your must read list.  This commentary by the Saker showed up on his Internet site yesterday sometime — and I thank Larry Galearis for pointing it out.  Another link to this is here.


Russia says U.S. ‘hunting’ for Russians to arrest around the world

Russia has issued a travel warning recommending its citizens think twice before traveling abroad, saying the United States was hunting for Russians to arrest around the world.

The Foreign Ministry statement warns Russian citizens that when abroad they face a serious threat of arrest by other countries at Washington’s request, after which they could be extradited to the United States.

Despite our calls to improve cooperation between the relevant U.S. and Russian authorities … U.S. special services have effectively continued ”hunting“ for Russians around the world,” the travel warning said.

Considering these circumstances, we strongly insist that Russian citizens carefully weigh up all the risks when planning trips abroad,” the Foreign Ministry said.

It said more than 10 Russians had been detained in foreign countries with U.S. involvement since the start of 2017.

This brief Reuters story, filed from Moscow, showed up on their Internet site at 11:19 p.m. EST on Thursday night — and was updated about eight hours later.  It’s from Zero Hedge via Brad Robertson — and another link to this short news item is here.


Gas Wars: Germany approves North Stream 2 pipeline with Russia

In the latest of a slowly advancing series of events, Germany has decided to disregard and work around the American economic sanctions directed at the Russian Federation, and to find a way to bring in the new Nord Stream 2 pipeline from Russia to Germany.

Finland, Sweden and Denmark have yet to approve the new pipeline project, but with Germany as a major economic power on board it is increasingly likely that they will follow suit.

The Nord Stream 2 pipeline is expected to double the present pipeline’s volume of natural gas to Europe, from 55 billion cubic meters to about 110 billion cubic meters.  The pipeline terminates in Greifswald, Germany, where it connects to various trans-European pipelines for distribution across that continent.

With this pipeline in place, Russia further secures both its place as an energy exporter with Europe, but it also solidifies business and commercial relations with Europe as a whole. As the economic sanctions against the Russian Federation slowly resolve, the nation stands to be seen as much more vital to the region than it ever has been.

This story was posted on the russiafeed.com Internet site just before midnight Moscow time on their Thursday night — and it comes to us courtesy of Roy Stephens.  Another link to it is here.


Henry Kissinger says a “pre-emptive attack” against North Korea is a “strong” possibility

Former Secretary of State Henry Kissinger has said that he agrees with the aggressive statements President Trump has made towards North Korea.

Kissinger also warned Congress last week against potential military intervention near Russian and Chinese borders without the world’s support.

The former Secretary of State said that the Trump Administration “will hit that fork in the road, and the temptation to deal with it with a pre-emptive attack” against North Korea “is strong, and the argument is rational.

The current North Korean trajectory, Kissinger continued, could lead to nuclear proliferation throughout Asia, as he believes South Korea will not accept being the only Korea without nuclear capability. Japan will follow suit, he said.

Then we’re living in a new world, in which technically competent countries with adequate command structures are possessing nuclear weapons in an area where there are considerable national disagreements,” Kissinger said. “That is a new world that will require new thinking by us.

This news item appeared on theduran.com Internet site at 2:23 p.m. EST on Friday afternoon — and it has obviously been edited since it was first posted, because Roy Stephens sent it to me about five hours before that.  Another link to it is here.  The Zero Hedge spin on all this is linked here.


Hope Diamond Eat Your Heart Out! Two Huge, Rare Gemstones Discovered in Russia

The discovery was made at a mine in Yakutia, the northeastern Russian region where close to 95% of Russia’s diamonds and over a quarter of all diamonds mined in the world are found.

The two large, jewelry-quality diamonds, with a mass of 97.92 and 85.62 carats, respectively, are very rare, according to officials from Alrosa, the Russian diamond mining group whose miners made the incredible find.

The transparent, yellow-tinged gems, both coming in the shape of an octahedron, were found at the Yubileynaya mine, one of the largest in the world, last month. The mine has long been known for being the source of some of Alrosa’s largest gemstones.

Alrosa is one of the largest diamond producers in the world, accounting for about 29% of global production, with mining operations in Yakutia and Arkhangelsk Region. In 2017, the company reported a 6% increase in its diamond output to 39.6 million carats.

This very brief news item/click bait, with a neat photo of one of these stones, was posted on the sputniknews.com Internet site at 3:45 p.m. Moscow time on their Friday afternoon, which was 7:45 a.m. in New York — EST plus 8 hours.  I thank reader M.A. for sending it our way — and another link to it is here.


All trapped gold miners in South Africa rescued unhurt

The National Union of Mineworkers confirmed on Friday morning that all 955 Sibanye Gold mine workers who were trapped underground have been resurfaced.

The mine workers were rescued at around 06:30 this morning,” the union’s national spokesperson Livhuwani Mammburu confirmed to News24.

They are currently getting medical check-ups. No injuries were sustained – they are just exhausted.”

There were some people with dehydration and few cases of high blood pressure and 16 of our older employees needed drips – but everything was successful.”

We are providing counselling for them and their families where it’s necessary,” Wellsted told News24.

This news item showed up on the news24.com Internet site at 9:23 a.m. SAST on their Friday morning, which was 2:23 a.m. in New York — EST plus 7 hours.  I found it on the gata.org Internet site — and another link to it is here.


Swiss gold exports in 2017 lower but still 80% plus flowing east — Lawrie Williams

The continued accumulation of physical gold in Asia and the Middle East goes on regardless as shown by gold exports from Switzerland – the leading national conduit for gold bullion.  Switzerland has achieved this position through its refineries specialising in taking gold in unmarketable forms and importing dore bullion from mines and refining, or re-refining it into the sizes and purities in demand in the eastern market place.  This is combined with the great reputation of Switzerland in the gold marketplace and as a conduit for such activities.

Although Swiss gold exports in 2017 were the lowest in 11 years they were still substantial at over 1,600 tonnes. That is equivalent to half the world’s annual new mined gold output, and with China the world’s largest gold miner already, and a known non-exporter, the Asian and Middle Eastern regions will have accumulated at least 65% of global gold output adding up the imports from Switzerland plus Chinese domestic production alone.  But other countries also export gold directly to Asian and Middle Eastern refineries and we would guesstimate that perhaps 80% of all the gold bullion moving around the world may be ending up in these regions – a huge proportion of what remains the world’s No.1 monetary asset (in our opinion at least).  With bitcoin continuing to crash – it has lost almost 60% of its value from its peak in December and could well crash much further as scared investors offload on the way down – gold may be again coming into its own as a key investment asset class in the minds of investors seeking to preserve their wealth.

This very worthwhile commentary by Lawrie put in an appearance on the Sharps Pixley website yesterday — and another link to it is here.


The PHOTOS and the FUNNIES

The first award-winning photo is entitled “Willow Grouse” by Finnish photographer Markus Varesvuo.  This must have been shot using a remote control, as no willow grouse/ptarmigan would ever let you get this close in the wild.  This is what it looks like in its summer plumage.  Its pure white in winter.  This is a bird that inhabits the high latitudes and arctic regions of Planet Earth.  I saw lots of them in my younger days when that area of Canada was my home.  The second photo is by the same photographer — and I’d dearly love to know how he got this shot, because he’d have to be looking virtually straight down on it when he took it.  It’s entitled “Gannet Underwater“.  Click to enlarge.


The WRAP

Today’s iconic pop ‘blast from the past’ needs no introduction — and the only hard part to believe is that it’s 40 years young/old this year!  The link is here.

Today’s classical ‘blast from the past’ is somewhat more ancient, of course, dating from 1844.  It’s Felix Mendelssohn’s Violin Concerto in E minor, Op. 64…his last large orchestral work. It forms an important part of the violin repertoire and is one of the most popular and most frequently performed violin concertos in history — and for very good reasons.  I’ve featured this work before, but it’s been a while.

Here’s the incredibly gifted Hilary Hahn with the Frankfurt Radio Symphony Orchestra — and under that baton of Paavo Järvi.  It doesn’t get any better than this — and the link is here.


It was obvious that the powers-that-be were not going to allow the precious metals to become a safe harbour yesterday, especially when they were busy engineering price declines in both silver and gold so they could cover as many of their short positions as possible.  So these manufactured waterfall price declines in these two precious metals did double-duty yesterday.

Although silver certainly appears washed out to the downside, at least for the most part, the same can’t be said for gold — and I’m not at all sure how far along the “wash, rinse, spin — and repeat” cycle we’re going to have to travel with that precious metal.  I’d hate to think that they have the 50 and 200-day moving averages for gold in their sights but, as Ted pointed out, you can’t overlook that possibility.  What that would mean for silver is not good either — and a revisit of mid-December’s low can’t be dismissed.  But that’s wild-ass speculation on my part at the moment.

Of course JPMorgan’s short positions in the COMEX futures market has now been trumped by the physical silver and gold that Ted Butler says they hold.  And, without doubt, that along with covering their short positions in the COMEX futures market, they were big buyers of both GLD and SLV shares yesterday as well — and it’s an absolute guarantee that they’ll be redeeming every last share for physical metal at some point.  The question then becomes, just how much physical gold and silver are they going to accumulate before allowing prices to rise?  A good question with no answer at the moment.

As I say every Saturday without fail — and it’s just as apropos this week…”JPMorgan et al continue to have precious metal prices in their iron grip — and until that changes, nothing changes.

Here are the 6-month charts for all four precious metals, plus copper once again.  And because the low tick of the day in silver was set by ‘da boyz’ after the COMEX close, that data point doesn’t appear on Friday’s doji.  The ‘click to enlarge‘ feature helps a bit with the first four.

They say that they don’t ring a bell at the top of the market, but if you didn’t hear it yesterday, you could certainly see the signs that it was.  The powers-that-be were at battle stations in every market that mattered right from 8:30 a.m. EST onward — and I expect they’ll be around when the markets open at 6:00 p.m. on Sunday evening in New York.

This day of reckoning, if this is indeed the start, has been a long time in coming…and has been prolonged as long as it has by easy Central Bank credit.  I will not wax philosophical on this, as others such as Bill Bonner, David Stockman — and Jim Rickards have already done so — and far more eloquently than I…with more to come as the great unwind begins.

If you read the last paragraph of the article by the Saker in today’s Critical Reads section, what you see below is an excerpt from that.  As I’ve been saying for the last month or so, the U.S. deep state has painted itself into a corner in just about every theatre of operation that they have been engaged in, both domestically — and abroad.  They are running out of options — and their list of friends is getting thin.  I was very relieved and reassured by what he had to say, as it confirmed my thoughts as well, except he’s just so much better with words than I.

If we look at world history we can always see the same phenomenon taking place: when things go well, the elites are united, but as soon as things go south, the elites turn on each other.  The reason for this is quite simple: elites are never as united as they pretend to be.  In reality Empires, and any big country, really, are run by a coalition of elites who all benefit from the established order.  They can hate each other, sometimes even kill each other (SA vs SS, Trotskyists vs Stalinists, etc.), but they will work together just like crime families do in the mob.  But when a real, profound, crisis becomes undeniably apparent, these ruling elites typically turn on each other and when that happens, nobody is really in charge until, eventually, the entire system comes tumbling down or a new main ruler/group emerges.  Right now the Anglo/Zionists elites are locked into a huge struggle which is likely to last for the foreseeable future.”

Finally, we should never confuse the inability to get anything done with the inability to make things worse: the latter does not flow from the former.  Nazi Germany was basically defeated in Stalingrad (Feb 1943) but that did not prevent it from murdering millions more people for another two and a half years before two Soviet soldiers placed the Soviet flag on top of the Reichstag.  We are still far away from such a “Reichstag flag” moment, but we sure are witnessing the Anglo/Zionist “Stalingrad” taking place before our eyes.”

A dangerous and cornered beast, just chock-full of socio/psychopathic personality types I like to mention every weekend, is one to be watched carefully — and with some fear and trepidation.  They will not go down to defeat gladly, or willingly.  I’ll put absolutely nothing past them — and Henry Kissinger’s straw-in-the-wind of a military strike against North Korea might just be the start.  Or maybe something in the Ukraine or Middle East…or “all of the above”.

Somewhere in all of this will come the “event” that was spoken of back on July 12 when CME Group CEO Terry Duffy was interviewed by Neil Cavuto.  Here’s a cut-and-paste from my July 13, 2017 column…

Well, the Duffy/Cavuto interview certainly looked a bit stage-managed to me.  The leading questions were too pat — and the answers came too smoothly.  The gold chart, as Dave Janda pointed out in the story above, appeared right on cue.  Nothing was left to chance.  The other thing that I found intriguing was the fact that he said “people will wake up some morning and find precious metal prices substantially higher“…or words to that effect.  What that translates into from where I sit, is that the blast off will begin while North America is asleep.  All we await is the whatever “event” he spoke of, to occur.  As I’ve told Ted for years now, the precious metals price explosion will not take place in a news vacuum.

But when this “event” does finally occur, it will bring an end to the precious metal price management scheme in general — and silver in particular.  The only side-show left will be to place your bets on high silver prices go, or are allowed to go.  I’m not sure if this will be a partially controlled event or not…but if left to free-market forces alone, the 3-digit silver price we end up with will be jaw-dropping — and silver will really become the “new gold”.

The pertinent part of the Duffy/Cavuto interview begins at the 4:55 minute mark — and the link is here.

As bad as things appear at this point in time, it’s always darkest just before dawn — and this too shall pass.

I’m done for the day — and the week — and I’ll be watching the Sunday evening open in New York with great interest.

See you on Tuesday.

Ed

The Death Warrant For King Dollar?

27 January 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was up 8 dollars by the London open on continued dollar weakness.  But the dollar decline and the gold price rally both ended a few minutes after 8 a.m. GMT — and the gold price and dollar index began to head in the other direction.  The gold price was back to just about unchanged by 9 a.m. EST in New York as the dollar index topped out around the 89.23 mark.  From that point the gold price rallied weakly until a few minutes after 2 p.m. in the thinly-traded after-hours market — and it was sold a bit into the 5 p.m. close of trading from there.

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

Gold was closed in New York on Friday afternoon at $1,349.30 spot, up only $2.00 from Thursday.  It was another monster volume day…gross volume was 491,038 contracts — but minus all the roll-over/switch volume, which was around 152,000 contracts, net HFT gold volume was only about 186,000 contracts.

The price path for silver was, tick for tick, almost the same as gold, with the low on Thursday evening in New York shortly after the open — and the high tick, minutes after trading began at London, when the dollar index decline got reversed.

The low and high ticks in silver were recorded by the CME Group as $17.235 and $17.53 in the March contract.

Silver was closed at $17.38 spot, up 12.5 cents from Thursday’s close.  Net volume, like in gold, was much reduced from what it has been all week, at only about 75,200 contracts, with only 4,000 contracts worth or roll-over/switch volume on top of that.

The platinum price more or less chopped sideways until shortly after 1 p.m. China Standard Time on their Friday afternoon.  It began to ‘rally’ from there — and that lasted until shortly before 1 p.m. CET in Zurich.  The price began to chop quietly lower from there — and it was closed on its low tick of the day…$1,006 spot — and down 6 dollars from Thursday.

Palladium didn’t do anything until shortly after 3 p.m. CST on their Friday — and it gradually ticked higher and was up about 4 bucks by noon in Zurich.  That lasted for a bit over an hour before the selling pressure appeared — and the spike low below $1,070 spot came shortly before 12:30 p.m. in New York.  It rallied a bunch of dollars from there until minutes after 2 p.m. in the thinly-traded after-hours market — and then traded flat into the close.  Palladium finished the Friday session at $1,083 spot, down 4 bucks on the day.

The dollar index closed very late on Thursday afternoon in New York at 89.46 — and ticked a few basis points higher once trading began at 6 p.m. in New York a few minutes later on Thursday evening.  It was sold lower to just below the 89.20 mark by minutes before 10 a.m. CST in Shanghai on their Friday morning — and then traded pretty flat until shortly after 1 p.m. CST.  Then down it went in a fairly big hurry, blasting through the 89.00 mark like a hot knife through soft butter, with the 88.70 low tick coming a minute or so after the 8 a.m. London open.  ‘Gentle hands’ began to work their magic at that juncture — and the DXY topped out around the 89.32 mark minutes after 9 a.m. in New York.  It chopped lower from there until a minute or so after 2 p.m. — and back below the 89.00 mark once again.  That was no way to end the week, so it was ramped back above the 89.00 mark in short order — and mercifully the markets closed before it could fall back below that number.  The dollar index finished the day and the week at 89.04…down 42 basis points from its Thursday close.

Make no mistake about it, dear reader, but the U.S. dollar is toast — and the remaining currencies are only better by default.  With the powers-that-be in the U.S tossing it around like a rag doll in the public press — and getting saved, but only temporarily, by the ‘The Donald’ on Thursday afternoon, it’s now a currency to run away from as fast as one can.  And if one thinks of the U.S. bond/treasury market in those terms, it boggles the mind. I’ll have more about this in The Wrap.

And here’s the 5-year U.S. dollar index — and as I said last Saturday at this time, there’s not a thing between its current ‘value’ — and the 80.00 mark, except thin air.  But after the Mnuchin/Draghi/Trump bun fight in the currency markets over the last three days…80.00 might just be ‘jacks for openers’.

The gold stocks gapped up a mere one percent and change at the open — and then spent the rest of the Friday session giving back half of even those meagre gains.  The HUI closed higher by only 0.60 percent.

The silver equities gapped up a bit higher at the open, but by 11:30 a.m. they began to head lower and thankfully finished up on the day, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 0.45 percent.  Click to enlarge if necessary.

 

And here’s the 1-year Silver Sentiment/Silver 7 Index chart.  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 a mixed bag, with the silver equities down on the week, even though silver closed higher for the week by a very decent amount.  Click to enlarge.

And since only three weeks are gone from the New Year so far, the year-to-date chart will serve double duty as the month-to-date chart as well.  Click to enlarge.

Of course the shares continue to underperform the metals themselves, particularly in silver this past week, but I expect that to change as time goes along.  Don’t forget that JPMorgan et al continue to have precious metal prices in their iron grip — and until that changes, nothing changes.


With January open interest down to a tiny handful of contracts in both gold and silver, the CME Daily Delivery Report showed that only 1 silver contract was posted for delivery within the COMEX-approved depositories on Tuesday.  The CME Group stopped that contract and immediately reissued it as 5 contracts in the 1,000 ounce mini-silver contract for delivery in January.

The CME Preliminary Report for the Friday trading session showed that gold open interest in January declined by 2 contracts, leaving 2 left.  Thursday’s Daily Delivery Report showed that 1 gold contract was posted for delivery on Monday.  Silver o.i. in January declined by 1 contract, leaving 2 still open, minus the 1 contract mentioned in the previous paragraph.

For all intents and purposes, the January delivery month is done in both gold and silver — and I won’t bother with the Daily Delivery or Preliminary Reports until First Day Notice on Wednesday, which will be in my Thursday column.


There was a withdrawal from GLD yesterday, as an a.p. took out 37,955 troy ounces.  Based on the current price action, it’s reasonable to assume that this was another one of Ted’s ‘conversion of GLD shares for physical metal’.  There were no reported changes in SLV.

The folks over at the shortsqueeze.com Internet site update their website with the short positions in both SLV and GLD as of the close of trading on Monday, January 15 — and this is what they had to report.  The short position in SLV dropped from 12,322,000 shares/troy ounces, down to 10,975,500 shares/troy ounces, which works out to a decline of 10.9 percent.  But things were far different in GLD, as the short position increased from 871,560 troy ounces up to a whopping 1,719,630 troy ounces, a jump of 97.3 percent…virtually double what it was at the end of December.  Ted and I spoke about this big increase on the phone yesterday, but both of us had other fish to fry, so I didn’t spend too much time on it.  I have my suspicions, but I’ll keep them to myself until I see what Ted has to say about it.

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

Month-to-date the mint has sold 57,000 troy ounces of gold eagles — 23,500 one-ounce 24K gold buffaloes — and 3,095,000 silver eagles.  These aren’t anywhere close to being record sales numbers for January.

There was no in or out gold movement at the COMEX-approved gold depositories on the U.S. east coast on Thursday.  The only activity was a paper transfer of 2,339 troy ounces from Eligible and into Registered at Delaware.  I won’t bother linking this.

It was much different in silver, of course, as 1,186,241 troy ounces were received — and another 2,338,047 troy ounces were shipped out.  One truck load…599,110 troy ounces…was left at JPMorgan’s vault — and another truck load…587,131 troy ounces…was dropped off at Canada’s Scotiabank.  In the ‘out’ category, two truck loads…1,193,538 troy ounces…departed CNT — and 302,956 troy ounces left Brink’s, Inc. — and the remaining 841,551 troy ounces was shipped out of HSBC USA.  The link to all this action is here.

I would suspect, but do not know for sure, that all this in/out silver activity has to do with deliveries from what was issued and stopped in December.  All I know is that it’s been one hell of a frantic in/out week — and it’s a given that Ted will have lots to say about this in his weekly missive this afternoon.

And before leaving silver, JPMorgan’s COMEX silver inventory now stands at 124.6 million troy ounces — and with that deposit on Thursday, it pushes them over the 50 percent mark, as they now hold over 50 percent of all the physical silver in the COMEX warehouses system.  Here’s the applicable chart.

It was another huge day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received a chunky 12,551 kilobars — and shipped out 9,657.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, showed a huge improvement in the Commercial net short position in silver — and only a minor deterioration in gold.  But even this ‘good news’ in gold was ‘bad news’ in a way, which I’ll get into once I’m done with silver.

In silver, the Commercial net short position dropped by a very decent 8,646 contracts, or 43.2 million troy ounces of paper silver.

They arrived at that number by adding 3,730 long contracts, plus they reduced their short position by 4,916 contracts — and the sum of those two numbers represents the change for the reporting week.

Ted said that the Big 4 traders, read JPMorgan, reduced their short position by around 1,500 contracts, but the ‘5 through 8’ large traders actually increased their short position by about 600 contracts.  The big change was in Ted’s raptors, the 41-odd small Commercial traders other than the Big 8, as they increased their long position by approximately 7,700 contracts.

Under the hood in the Disaggregated COT Report, it was an entirely Managed Money affair plus a bit more, as they decreased their long position by 6,192 contracts, plus they added 3,645 contracts to their short position.  The sum of those two numbers…9,837 contracts…was their change for the reporting week.  The difference between that number — and the Commercial net short position…9,837 minus 8,646 equals 1,191 contracts…was made up, as it always is, by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader categories.

As is usually the case, Ted assigned the entire 1,500 contract decline of the Big 4 traders to JPMorgan — and he estimates their current short position at around 31,000 contracts.  The Commercial net short position in silver is now sitting at 207.5 million troy ounces.

Here is the 3-year COT chart for silver — and it’s nice to see that decline, although I suspect that there’s been some deterioration since the cut-off.  However, I wouldn’t be prepared to bet any money on that.  Click to enlarge.

In gold, the commercial net short position only increased by 2,045 contracts, or 204,500 troy ounces of paper gold.

They arrived at that number by adding 3,256 contracts to their long positions — and they increased their short position by 5,301 contracts.  The difference between those two numbers is the change for the reporting week.

But it was the activity of the Big 8 traders that was cause for concern.  The Big 4 increased their short position by 6,400 contracts — and the ‘5 through 8’ large traders increased their short position by 2,300 contracts as well.  Ted’s raptors, the 46-odd small commercial traders other than the Big 8, added 6,700 long contracts.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders by at least a country mile, as they increased their long position by 8,630 contracts, plus they added a smallish 626 short contracts.  The difference between those two numbers…8,004 contracts…was their change for the reporting week.  Of course the difference between that number — and the commercial net short position…8,004 minus 2,045 equals 5,959 contracts…was, like in silver and every other commodity, made up by the traders in the other two categories, the ‘Other Reportables’ and the ‘Nonreportable’/small traders.  This week, the lion’s share of that difference was taken up by the ‘Other Reportables’…as they reduced their long position by a considerable amount, plus added a small amount of new shorts.

The commercial net short position in gold is now at 23.46 million troy ounces — and I would suspect that it has risen a bit more since the Tuesday cut-off.

Here’s the 3-year COT chart for gold.  Click to enlarge.

It remains to be seen just how far on the long side that the Managed Money traders are willing to go — and how quickly prices are allowed to rise from here depends entirely on how aggressively that JPMorgan et al stand there as sellers of last resort.  At the moment these rallies are orderly, but if the Big 8 traders ever decide to put their hands in their pockets, both silver and gold will explode to the upside — and I say that with the same certainty that I know that the sun will set in the west tonight.

JPMorgan is insulated from any price rallies by the fact that they have 675 million troy ounces of physical silver backing a 155 million troy ounce short position in the COMEX futures market.  Ted has also determined that JPMorgan holds 20+ million troy ounces of physical gold, against an approximate futures market short position of around 7.5 million troy ounces.  ‘Da boyz’ over at JPM could walk away from the futures market any time they wish — and let the other Big 7 shorts burn in hell.  Some day they just might do that.  But as to which day, nobody knows.

I look forward to what Ted has to say in his weekly review this afternoon, as he’s the real authority on all this.


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

For the current reporting week, the Big 4 are short 127 days of world silver production—and the ‘5 through 8’ large traders are short an additional 65 days of world silver production—for a total of 192 days, which is over 6 months of world silver production, or about 466.5 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 194 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 207.5 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 466.5 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 471.4 minus 207.5 = 263.9 million troy ounces.  The reason for the difference in those numbers is that Ted’s raptors, the 41-odd small commercial traders other than the Big 8, are long that amount.  And why they haven’t been selling these positions more aggressively during this 4-week long silver rally still remains a mystery, but by holding off as long as they have, they have been making just oodles more money.  They also added to their long position during this reporting week as well.

As I also stated in the above COT Report analysis, Ted pegs JPMorgan’s short position at about 31,000 contracts, or around 155 million troy ounces, basically unchanged from what they were short in last week’s COT Report.  155 million ounces works out to around 64 days of world silver production that JPMorgan is short.  That’s compared to the 192 days that the Big 8 are short in total.  JPM holds about 33 percent of the entire short position held by the Big 8 traders.

Until last Sunday, when I was preparing my presentation at the Vancouver Investment Conference, I had estimated the short position in silver held by Scotiabank/ScotiaMocatta at approximately 32 days of world silver production minimum.  That turned out to be high by quite a bit.  Now that I’ve recalibrated their short position, it’s now down to about 23 days.  So it’s obvious that Scotiabank has been actively reducing their short position in the COMEX futures for the last year.  I’m sure they’ve covered a certain portion of it during the normal course of business, but it’s obvious that JPMorgan has taken up some of the slack, as have some of the other traders in the Big 8 category.

Here are the two charts from my presentation, which I also posted earlier this week, that caused me to change my mind about Scotiabank.  The first is from January 2017 — and the second from last weekend…January 19, 2018.  Note the huge changes in the positions of JPM and Scotia, plus the increases in the short position of the ‘5 through 8’ traders since January 2017.  Their collective short positions have risen about a third during that period.  Click to enlarge for both charts.

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

The two largest silver shorts on Planet Earth—JP Morgan and one other, which may or may not be Scotiabank, are short about 87 days of world silver production between the two of them—and that  87 days represents about 68 percent of the length of the red bar in silver in the ‘Days to Cover’ chart…a bit more than two thirds of it.  The other two traders in the Big 4 category are short, on average, about 20 days of world silver production apiece.

The four traders in the ‘5 through 8’ category are short, on average…16.25 days of world silver production each, which is up 0.25 days from what they were short in last week’s COT Report.

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

The Big 8 commercial traders are short 46.7 percent of the entire open interest in silver in the COMEX futures market, which is down a bit from last week’s COT Report — and that number would be almost 50 percent once the market-neutral spread trades are subtracted out.  In gold, it’s now 47.4 percent of the total COMEX open interest that the Big 8 are short, up a bit from last week’s report — and a hair over 50 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 70 days of world gold production, which is up 2 days from what they were short last week — and the ‘5 through 8’ are short another 28 days of world production, which is up 1 day from what they were short the prior week, for a total of 98 days of world gold production held short by the Big 8 — which is up 3 days from the 95 days they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold about 71 percent of the total short position held by the Big 8…which is unchanged from last week’s COT Report.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are 66, 72 and 79 percent respectively of the short positions held by the Big 8.  Silver is up 1 percentage point from the previous week’s COT Report — and platinum and palladium are also up 1 percent from what they were in last week’s COT Report.

These concentration numbers show that the Big 4 traders still have an iron grip on precious metal prices — and as I keep going on endlessly about…until this situation changes…nothing else will change either…including their respective prices.

I have a very decent number of stories for you today, including the Cohen/Batchelor interview, which comes in four parts this week.


CRITICAL READS

Core Durable Goods Orders Tumble Most In a Year

While headline durable goods orders showed a 2.9% MoM surge, but away from aircraft orders and war-spending, capital goods orders dropped 0.3% MoM in December – the most in 12 months.

But this surge was all thanks to aircraft and war-spending:

*  Bookings for commercial aircraft climbed 15.9% MoM
*  Orders for Aircraft Engine and Engine Parts rose 24.4% MoM
*  Defense capital goods orders increased 19.5% MoM
*  Defense aircraft and parts soared 55.3% MoM

So, at the core, orders tumbled most in a year…in other words, we’re gonna need more war to get that GDP up over 3.0%…

This brief 3-chart news item showed up on the Zero Hedge website at 8:39 a.m. EST on Friday morning — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Flying Blind, Part 3: Why Now is Not the Time and Place for Nosebleed P/E Multiples — David Stockman

As we indicated in Part 2, the very idea that you would pay 26X EPS for the S&P 500 at the tail end of a 103 month long recovery cycle is truly ludicrous. That is, there is a time to anticipate a strong profits rebound during the early years of a recovery, thereby meriting a robust P/E multiple.

But there is also the obvious point that expansions eventually become long in the tooth and end in recession. Even by the lights of the central bank money printers, the business cycle has not yet been outlawed.

After all, that’s why the Eccles Building is now motoring head-down and straight into an epochal pivot which it is pleased to call interest rate “normalization” and balance sheet shrinkage (QT). In plain English, however, that is just central banker-speak for bond dumping on an unprecedented and epic scale. And it is being done out of deathly fear that the next recession will make its appointed rounds with the Fed out of dry powder and impotent.

Folks, these people aren’t totally stupid. They have amassed extraordinary power and plenary dominance over the nation’s $19 trillion capitalist economy only by assiduously cultivating the mother of all Big Lies.  Namely, the myth that private capitalism is dangerously unstable and possessed of an economic death wish for periodic cyclical collapses, which can be forestalled only by the deft interventions of the central bank.

That’s self-serving malarkey, of course. Every recession of the modern Keynesian era has been caused by the Federal Reserve, and most especially the calamity of 2008-2009. And the “recovery” from that one, as well as those stretching back to the 1950s, was owing to the inherent regenerative powers of the free market, not the interest rate and credit supply machinations of the Fed.

This long chart-filled commentary by David appeared on the Zero Hedge website at 11:02 a.m. EST on Friday morning — and I thank Richard Saler for sending it our way.  Another link to it is here.


Doug Noland: America First and the Decapitation of King Dollar

Historians may look back at Team Trump’s jaunt to chilly Davos as a pivotal juncture in global finance. Was it naivety, gall or a combination – or just typical of today’s overabundance of complacency? The U.S. Treasury Secretary – facing enormous fiscal deficits, rising rates, $16.5 TN of federal debt, a nervous bond market and suspicious foreign officials – openly advocating a weaker dollar.

There are certainly plenty of dollars in the world available to sell or hedge. What is the likelihood of dollar selling turning disorderly? One might look at several years of incredible ECB and BOJ “whatever it takes” liquidity creation and rate suppression (and interest-rate differentials you could drive a truck through) and ponder Friday’s closing prices of 1.24 for the euro and 108.58 for the dollar/yen. Those are two flashing warning signs of dollar vulnerability.

In all the euphoria, markets can be excused for presuming dollar weakness ensures a further delay in global rate normalization. Yet things turn quite interesting the day unruly currency markets begin indicating disorderly trading. The almighty central bankers might have little to offer. What if they intervene to no avail? This could prove the juncture when markets begin questioning the Indomitable Central Banks in Control thesis. The price of market “insurance” would begin to creep (or, not unlikely, spike) higher, and the availability of cheap risk protection would wane (possibly abruptly). In such a development, I would expect the more sophisticated market operators to begin (aggressively) pulling back on risk and leverage. Such a dynamic, especially after such a spectacular melt-up, would mark an important inflection point for market liquidity.

Doug’s weekly Credit Bubble Bulletin showed up on his Internet site in the wee hours of Saturday morning EST — and another link to it is here.


Davos Dumbbells — Bill Bonner

In the Financial Times is a photo of a smiling Christine Lagarde.

The former French finance minister… former partner at multinational law firm Baker McKenzie… former student at the Holton-Arms School for girls in Bethesda, Maryland… and permanent member of the international Deep State Establishment… is now head of the IMF.

Writing in the newspaper, preparatory to her visit to the Swiss citadel of globalism, elitism, and good-intentions-gone-bad, Ms. Lagarde seemed to be picking up on our theme from yesterday’s Diary:

Despite the improved economic outlook, there are still far too many people left out. There is still too much inequality and still a great deal of uncertainty about the future.”

How she knows what is “too much” or “too many” was not disclosed. But in the public space, there’s no check on B.S.

This longish, but very worthwhile commentary by Bill was posted on the bonnerandpartners.com Internet site on Friday sometime — and another link to it is here.


U.S. CFTC to fine UBS, Deutsche Bank, HSBC for spoofing, manipulation: sources

The U.S. derivatives regulator is set to announce it has fined European lenders UBS, HSBC and Deutsche Bank millions of dollars each for so-called “spoofing” and manipulation in the U.S. futures market, three people with direct knowledge of the matter told Reuters.

The enforcement action by the Commodity Futures Trading Commission (CFTC) is the result of a multi-agency investigation that also involves the Department of Justice (DoJ) and the Federal Bureau of Investigation (FBI) – the first of its kind for the CFTC, the people said.

The fines for UBS and Deutsche Bank will be upward of ten million, while the fine for HSBC will be slightly less than that, the people said, without providing exact figures.

Spokesmen for HSBC, Deutsche Bank and UBS declined to comment.

The settlement is the most high-profile brought so far by the CFTC’s head of enforcement James McDonald who was appointed to the role in March 2017.

And what about JPMorgan et al –and the four precious metals, Mr. McDonald?????  This Reuters article, filed from Washington, put in an appearance on their Internet site at 4:40 p.m. on Friday afternoon EST — and I plucked it from a GATA dispatch.  Another link to it is here.


Moody’s upgrades outlook on Russia’s sovereign rating to positive from stable

Moody’s rating agency has changed the outlook on Russia’s Ba1 long-term issuer and senior unsecured debt ratings to positive from stable. Concurrently, Moody’s affirmed Russia’s long-term ratings at ‘Ba1’, the agency said in a press release.

Growing evidence of institutional strength” and “increased evidence of economic and fiscal resiliency” were the key factors of the change in the outlook, the agency said.

Russia’s macroeconomic framework coped well with the oil price shock and with the impact of sanctions imposed to date, and enhancements have been made to the government’s rule-based fiscal framework,” the press release said.

In Moody’s view, the rating “appropriately balances Russia’s fiscal strength, somewhat improved economic prospects and effective policy-making against the combination of longer-term economic challenges and continued nearer-term exposure to external events.”

In a related decision, Moody’s raised Russia’s country ceilings for foreign currency debt to ‘Baa3/P-3’ from ‘Ba1/ NP’ “to reflect diminished concerns that the government might impose capital controls or otherwise ration foreign exchange reserves.”

As I’ve said quite a number of times, Russia is the most solvent and well managed country on Planet Earth.  This TASS news item was picked up by the folks over at the russiafeed.com Internet site on Friday sometime — and it comes courtesy of Roy Stephens.  Another link to it is here.


Putin’s message at annual Leningrad siege WW2 memorial: never again

He who does not learn from history is doomed to repeat it; Russians understand this fact better than any when they call to mind the storms of the WW2 and the bloody Seige of Leningrad. Russia can not afford to forget, more than 20 million Russians perished in the ‘Great Patriotic War’, which is more than the population of several modern countries including Romania, The Netherlands, Greece, and many more. Take a moment and imagine an entire country obliterated, that is how great the death toll was for Russia.

But those millions of Russians, Ukrainians, Belarusians, Poles, other Slavs, and Soviet Citizens were not obliterated from existence. Their eternal memory and resolve gave the living strength, and with it, they endured as they always have, and they captured Berlin, ending the largest holocaust in human history.

By far one of the bloodiest battles in human history was the Siege of Leningrad (also called Petrograd and Saint Petersburg today). Casualties were around one million people…one million, for one city. The real number is possibly much higher, as many people were missing.

When the Russian President speaks the words you are about to hear, bare one thing in mind, remember it and never forget it…His brother was among the dead. President Putin’s own brother died of disease as a child during the terrible siege.

Here is what the President said to veterans and celebrants at the anniversary as reports TASS news:

This article was posted on the russiafeed.com Internet site around 8 a.m. Moscow time on their Friday morning.  It’s the second offering in a row from Roy Stephens — and another link to it is here.


Tales of the New Cold War: The 2018 Containment Theory (1 of 4) — John Batchelor interviews Stephen F. Cohen

Part 1: Batchelor opens this week with an introductory bombshell fresh from the American Council on Foreign Relations. Their published report reconfirms all of the Russiagate allegations and goes on to state that Russia is preparing for full spectrum interference of numerous American institutions including elections in the future.   The professor quickly points out that the CFR is composed of the elites of the elites of American foreign affaires experts, council to presidents (Cohen states he has membership – now to be short-lived), and is unabashedly anti Russia, as it states its conclusions that are based on the usual culprits in the MSM. It not only accepts the reality of the New Cold War, but without lament, but accepts the Trumps Putin/Trump collusion. However, to counter this amazing document is one issued from the House of Representatives by three committee chairmen representing Judiciary, Oversight and House Intelligence working together from DOJ documents about what the Obama Administration has done during the Trump election. It concluded that there is firm doubt about the validity of Russiagate.  The link to Part 1 is here as well.

Part 2: The CFR core message, according to Cohen, is a legitimization of this cold war that the U.S. should be “escalating and promoting” and not open to détente. The report itself (if accepted as policy) may be, according to Batchelor, a document with which to go to war. And unsurprisingly Cohen finds the timing, in light of the rapid debunking on all sides of Russiagate, as strange. Again the notes accompanying these podcasts do expand on this commentary and are a recommended read as well.  The link to Part 2 is here.

Part 3:  Batchelor’s opening words to Part 3 introduces the idea that the CFR appears to be advocating the US to move to a full war footing with Russia, and a total propaganda smear campaign against individual countries friendly to Russia and individuals in Russia –  a “you’re either with us or against us” situation. More worrisome for Batchelor is the advocacy of military spending including the modernization of the US nuclear arsenal – and the dismissal for the dangers of doing this – and that there will be no treaties to limit development of nuclear delivery systems. Cohen agrees and states that the CFR is prestigious enough to strongly influence policy direction and with much support from other political entities, including apparently a change of the Trump White House to a more hard line against Russia, that this is more than worrisome. Cohen concludes that those that support the CFR position are actually stating that Russia and China are the greater threats, and that international terrorism is not a concern. (More about this in my commentary.) Cohen considers that the purpose of this document, as odious and inept as it is, is to legitimatize a new cold war and to manage it as orthodoxy without discussion or criticism or moderation – in other words to exclude any official détente between Russia and Washington. It even calls for censorship, an assault on the American Constitution.   The link to Part 3 is here.

Part 4:  The last and shortest sections of this podcast Batchelor hazards the comment that the document is “resting on thin air” given that Russiagate is debunked. Cohen (he calls himself the optimist in this) states that the solution may lie with Putin and Europe. Will Europe go along? Will NATO countries? He does not count on Congress or the Senate – that are both anti-Russiagate AND anti-Russia. The US citizen has other priorities. That brings us back to Trump – who may be the only domestic solution.  The link to Part 4 is here.

“They” just won’t give up! Last week I suggested that government had already discounted any importance given to the U.S. citizens, that their opinion in the Russiagate debate counted for nothing. Although I agree with most of what Batchelor and Cohen say here, I also think that the CFR document from such an important policy institution shows that the CFR has been subverted by Deep State/Military Industrial Complex interests and the real meaning is a kind of declaration that not only is the political position of the citizen not relevant to foreign policy, to the massive procedural irregularities, and to political crimes but neither is that of the Senate, Congress and even the president . Resistance and discussion of any aspect of Russiagate and policy positions involving the validity of the New Cold War should be officially censored according to the orthodoxy of Russiagate in this document. This may also see the dismissal of all criminal acts behind Russiagate, including those of Hillary. I wonder that our pundits have not concluded the same thing. The single minded insistence of conformity to what has been debunked reveals that the Deep State requires total conformity of its views. There is no partnership with Putin’s Russia possible, given that the direction of M.E. terrorism is a direct product of Washington foreign policy. The only question remaining is whether the neocon/war party elements can force this Russiagate madness on government against all the facts emerging in the front lines of Washington? If they can, the United States government becomes a de facto military dictatorship regardless of constitutionality. After all, legitimacy is a trait that has been long abandoned in Washington and this has only become very obvious since just before the Trump election and during the agonizing subversion of Russiagate. The devolution of the Washington government is an on going process that is about to target the congress and the senate.

This extensive executive summary, plus concluding comments, comes to us courtesy of Larry Galearis — and he really outdid himself this week, with four parts in total.  I thank him on your behalf.  All of this was posted on the audioboom.com Internet site on Tuesday — and the links to each part is as indicated.


Kurds call on Syrian regime to intervene in Afrin battle

Kurdish militias fighting against Turkey in the Syrian enclave of Afrin have called on the government of Bashar al-Assad to intervene and protect the area’s borders.

The latest development, nearly a week into Turkey’s military offensive, could undermine Kurdish aspirations for self-governance and, if heeded, could set the stage for a direct military confrontation between Ankara and Damascus.

It could also create an open alliance between the U.S.-backed Kurdish forces and a government that Washington had sought to unseat for years.

While we insist that we will continue to defend Afrin against rabid external attacks and will confront the Turkish attempts at occupying Afrin, we invite the Syrian state to carry out its sovereign duties towards Afrin and to protect its borders with Turkey from attack,” the autonomous authority governing Afrin said in a statement on Thursday.

Ankara launched a military offensive into Afrin spearheaded by its Syrian rebel allies on Saturday in order to oust the People’s Protection Units (YPG) from the Kurdish enclave, which borders Turkey.

This news story was posted on theguardian.com Internet site at 10:55 p.m. GMT on Thursday evening, which was 5:55 p.m. EST in Washington.  I thank Roy Stephens for sending it our way — and another link to it is here.  There was a piece about this by Alex Mercouris on theduran.com Internet site early on Friday morning.  It’s headlined “First sign of end to Afrin crisis as Kurds call on Assad for help” — and that comes to us via Larry Galearis.


Uncle Sam Dumps the Kurds (Yet Again) — The Saker

The drama which is unfolding in northern Syria is truly an almost ideal case to fully assess how weak and totally dysfunctional the Anglo/Zionist Empire has really become. Let’s begin with a quick reminder.

The U.S.-Israeli goals in Syria were really very simple. As I have already mentioned in a past article, the initial Anglo/Zionist plan was to overthrow Assad and replace him with the Takfiri crazies (Daesh, al-Qaeda, al-Nusra, ISIS – call them whatever you want).  Doing this would achieve the following goals…[list]…

With the joint Russian-Iranian military intervention, this plan completely collapsed. For a while, the USA tried to break up Syria under various scenarios, but the way the Russian Aerospace forces hammered all the “good terrorists” eventually convinced the Anglo/Zionists that this would not work.

The single biggest problem for the Empire is that while it has plenty of firepower in the region (and worldwide), it cannot deploy any “boots on the ground”. Being the Empire’s boots on the ground was, in fact, the role the AngloZionists had assigned to the Takfiri crazies (aka Daesh/IS/ISIS/al-Qaeda/al-Nusra/etc/), but that plan failed. The only U.S. allies left in the region are Israel and Saudi Arabia. The problem with them is that, just like the USA themselves, these countries do not have ground forces capable of actually deploying inside Syria and taking on not only the Syrian military, but the much more capable Iranian and Hezbollah forces. Murdering civilians is really the only thing the Israelis and Saudis are expert in, at least on the ground (in the skies the Israeli Air Force is a very good one). Enter the Kurds.

The Anglo/Zionist wanted to use the Kurds just like NATO had used the KLA in Kosovo: as a ground force which could be supported by U.S./NATO and maybe even Israeli air power. Unlike the Israelis and Saudis, the Kurds are a relatively competent ground force (albeit not one able to take on, say, Turkey or Iran).

This longish commentary by the Saker showed up on the unz.com Internet site on Friday sometime — and I thank Larry Galearis for bringing it to our attention.  Another link to it is here.


How the seizure of a U.S. spy ship by North Korea nearly sparked nuclear war

This is it, they’re taking us out here to kill us,” Stu Russell thought as he trudged through the snow in the middle of the night into a dark forest.

Russell was one of 83 Americans held captive inside North Korea, following the seizure of the USS Pueblo spy ship in international waters, on January 23, 1968.

For weeks they were kept in a sparse, freezing-cold building they nicknamed “the Barn.” It had no running water and was infested with rats and bed bugs. Inside, the men were denied sleep, forced into stress positions, whipped and beaten. Their officers, particularly Lloyd Bucher, the ship’s commander, came in for vicious punishments, as their interrogators demanded they sign “confessions” stating they were illegally spying in North Korean territorial waters when they were captured.

Like today, 1968 was a period of heightened tensions on the Korean Peninsula. The war that led to the division of the country had only stopped 15 years earlier and bloody skirmishes were still common.

This very interesting and worthwhile detailed walk down memory lane, which I certainly remember hearing about on the radio way back then, was posted on the msn.com Internet site last Saturday — and for content reasons, had to wait for today’s column.  I thank Garry Robinson for sending it along — and another link to it is here.


Some Reflections on History and Economics — Hugo Salinas Price

Unfortunately, the governments of the whole world and their guides, the professors of the erroneous doctrines of the inductive school of economics, studiously avoid any reference to truly scientific economics as presented by the Austrian Schools. And they do so, because they are under the surviving influence of the ideas of the French Revolution, that postulated a reformed world where there would be no suffering. Today, if an economics professor publicly accepts that a world without suffering is an impossible proposition, he is in great danger of losing his job.
The predictable consequence of a whole world under the management of a false economics based on induction – i.e. experimentation – is an inevitable total disaster for the world.

The thinkers of the world are hoping that Christian Russia and Confucian China, the two great powers of Eurasia, will return to gold as money, by virtue of their military power, and sweep away, as Napoleon did before them, the present existence of “Assignat-like” fiat moneys in the world.

Such a transformation, in full concordance with the doctrines of the Austrian Schools of Economics, would immediately re-vitalize the world’s economy, due to its inevitable consequences: 1. The immediate stimulation of hope for a better future, in all nations. 2. The immediate activation of all able-bodied individuals to work as hard as possible, in order to obtain the precious money of gold and silver. 3. The re-emergence of the principle which has ruled human life in all ages past: “He who does not work, shall not eat” to motivate all those who waste their lives in idleness.

That’s a big 10-4 good buddy!  This very worthwhile commentary by Hugo appeared on the plata.com.mx Internet site on Tuesday — and I thank Hellmuth Vedder for bringing it to my attention — and now to yours.  Another link to this commentary is here.


Days Are Numbered for Price Manipulation — Ed Steer

This 7:30 minute video interview with your humble scribe was hosted by Charlotte McLeod — and was conducted on Monday at the Vancouver Investment Resource Conference.  It was posted on the youtube.com Internet site yesterday.


Divers find stash of rare gold coins at site of 1800s wreck off North Carolina coast

A stash of gold coins found Monday is the latest piece of evidence that a shipwreck 40-plus miles off the North Carolina coast is that of the steamship Pulaski, which took half its wealthy passengers to the bottom of the Atlantic in 1838.

Divers found 14 gold coins and 24 silver coins in a spot “no bigger than a cigar box.” All predate the ship’s sinking and include one British coin that experts say could be worth $100,000. Other gold coins in the collection are valued in the $10,000 to $12,000 range, officials said.

James Sinclair, a marine archaeologist involved in project, says finding gold coins proves the team is in the right spot.

This evidence supports reports that valuables, including gold and silver, were aboard the Pulaski when she sank,” Sinclair said in a statement.

The disappearance of Pulaski remains one of the nation’s most dramatic and deadly maritime disasters, partly because half on board died, but also because its passengers included some of the most prominent families in the southeast. Among those lost was New York Congressman William B. Rochester and six members of the Lamar family, then among the richest families in the southeast. The luxury steamship that went to the bottom of the Atlantic in 1838 with half its affluent passengers may have been found 40 miles off the coast of North Carolina.

This very interesting news item put in an appearance on the charlotteobserver.com Internet site at 4:20 p.m. EST on Friday afternoon — and was updated about three hours later.  I found it on the gata.org Internet site — and another link to it is here.


The PHOTOS and the FUNNIES

Here are two more award-winning bird photos from 2017.  The first is headlined “Camouflage” by Daniel Stenberg from Sweden.  The second is entitled “Bravery” as a pied crow takes on a white-backed vulture.  This photograph is by Hungarian wildlife photographer Bence Máté.  The ‘click to enlarge‘ feature helps with both shots.


The WRAP

Today’s pop ‘blast from the past’ is from the very early 1980s — and is all Canadian once again.  It’s one of the biggest rock and roll hits by any band that this country has ever produced in any generation.  I’ve posted it before, but it’s been a while.  The link is here.

Today’s classical ‘blast from the past’ dates from 1845.  It’s Robert Schumann‘s Piano Concerto in A minor, Op. 54.  It was premiered in Leipzig on January 1, 1846 with his wife Clara at the keyboard.  Here’s another gifted female pianist doing the honours for us today.  It’s the very yummy Georgian-born Khatia Buniatishvili, accompanied by the Frankfurt Radio Symphony, under the baton of Paavo Järvi.  The link is here.


Once again I was more than underwhelmed by the price action in silver and gold yesterday, especially considering the fact that the U.S. dollar index continues to proceed almost unimpeded towards its true intrinsic value.  It will be interesting to see if the powers-that-be will allow free-market forces to determine what that is — and although they’re allowing precious metal prices to rise, they’ve got them on a very short leash.  That’s certainly being reflected in the corresponding equities, as they continue to underperform.

I certainly don’t expect the above situation to continue indefinitely, but it is what it is for the moment — and there’s nothing that can be done about it.  Once the bloom is off the world’s bond and equity markets, I expect things will change for the better in a hurry for both silver and gold.

Of course there’s still JPMorgan to contend with, but this price management scheme is now very long in the tooth — and everyone that matters is on to them.  The latest indication came from The Central Bank of the Russian Federation…with their own version of “Fort Knox” now stacked high with pallets of 1,000 troy ounce good delivery silver bars.

Like I said in that interview with Charlotte McLeod posted in the Critical Reads section, I’d rather be years early, than one day late when this all comes to an end.

Here are the 6-month charts for all four precious metals, plus copper once again.  And how far these rallies can run without getting really, really, really overbought, remains to be seen.  The ‘click to enlarge‘ feature helps a bit with the first four.

As Doug Noland said in the title to his weekly Credit Bubble Bulletin...America First — and the Decapitation of King Dollar…this event has thrown a spanner into the works of the international financial system.  Where we go from here is completely uncharted territory.

I doubt very much of the powers-that-be will be able to put this genie back in the bottle, at least not in my lifetime.  Anyone with dollar holdings, which includes every central bank, government and big business, is certainly looking over their collective shoulders now — and it wouldn’t surprise me in the slightest if there wasn’t some sort of rush for the exits — and soon.

And with King Dollar now on a death watch, the other fiat currencies that comprise the world’s financial system, whether they’re part of the dollar index or not, can no longer be considered safe havens.  The only alternative is precious metals — and when that rush begins, it will certainly spell ‘game over’ for the short holders in the COMEX futures market…except for JPMorgan, of course.

As I approach my seventieth birthday, never once in my lifetime did I ever entertain the idea that I would be living in the world we’re in today…one that has now totally gone off the rails.

Although I’m happy to be ‘all in’ with my precious metal holdings — and certainly hope that they will save me from whatever circumstance that comes shambling forth from this day onward, it’s cold comfort knowing that the safety catch has now been taken off the world’s financial system.

But other than what I’ve done to personally prepare, there’s not much I, or anyone else can do, except watch events unfold — and hope that what I/we have done, proves to be enough.

How did it come to this?

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

Ed

Trump Speaks, the DXY Rallies — Gold and Silver Get Hammered

26 January 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


NOTE If you are getting the daily e-mail version of my column, but there are no charts or photos embedded, please click on and bookmark my new website URL, which is linked here.

That should fix the problem. — Ed


It was a wild day in the currency markets yesterday — and except for what Trump had to say at 2 p.m. EST, thirty minutes after the COMEX close — none of it was allowed to have much effect on precious metal prices.

The gold price traded down a few dollar until around 9:30 a.m. CST on their Thursday morning — and began to head quietly higher, with the high tick of the day coming just a few minutes before 3 p.m. China Standard Time on their Thursday afternoon.  The price was sold quietly lower from there — and that sell-off lasted until around 8:40 a.m. GMT in London.  At that point, the gold price was down a few dollars.  But by minutes after 9 a.m. in New York, it was back in the plus column by the same amount, only to get sold lower into the afternoon gold fix in London.  Once that was put to bed, the gold price began to rally quietly — and that state of affairs lasted until a few minutes before the COMEX close.  Once the close was done, gold was sold down four or five dollars over the next thirty minutes or so until Trump spoke about a ‘strong dollar‘ — and that, as they say, was that.  The low tick was in about 2:45 p.m. — and its subsequent rally off that low wasn’t allowed to get far.  The price chopped sideways from there into the close.

The high and low ticks in gold were reported as $1,365.40 and $1,341.00 in the February contract.

Gold finished the Thursday session at $1,347.30 spot, down $10.40 on the day.  Gross volume was gargantuan once again — and the biggest one-day volume number I’ve ever seen, at 686,134 contracts — and net volume was a knee-wobbling 372,500 contracts.  And, not surprisingly, roll-over/switch volume was very heavy as well at just under 157,000 contracts.  What a day!

The silver price followed a similar path to gold…virtually tick for tick…although the price activity was far more muted, as was the sell-off when Trump spoke a minute or so after 2 p.m.  After that event, everything was the same as it was for gold once again.

The high and low ticks in this precious metal were recorded by the CME Group as $17.705 and $17.125 in the March contract.

Silver was closed in New York yesterday at $17.255 spot, down 28 cents from Wednesday.  It was another record volume day in silver as gross volume checked in at 138,138 contracts…net volume at 121,500 contracts — but not a lot of roll-over/switch volume…just under 8,300 contracts worth.

Platinum followed the silver and gold price pattern yesterday as well, but there was very little price movement at their common inflection points.  And also like gold and silver, platinum was also up on the day until Trump opened his mouth, but ended up getting closed at $1,012 spot, down two dollars from Wednesday.

Up until about 2:30 p.m. China Standard Time on their Thursday afternoon, the palladium price sort of matched what was going on in the other three precious metals.  But once the sell-off began at that point, it continued generally lower until the low tick was placed at, or minutes before, the afternoon gold fix in London.  It rallied a bit from there until shortly before the Zurich close — and then chopped sideways until Trump pontificated on the U.S. dollar at 2 p.m. EST…then down it went as well.  Palladium finished the Thursday session in New York at $1,087 spot, down 17 bucks on the day — and back below $1,100 spot.

The dollar index closed very late on Wednesday afternoon in New York at 90.21 — and after rallying a handful of basis points during the first two hours after trading began a few minutes later at 6:00 p.m. EST Wednesday evening, it began to head sharply lower.  That sell-off ended at the 88.80 mark just minutes before 2:30 p.m. CST on their Thursday afternoon.  By minutes before 9 a.m. GMT in London it was up to 89.22.  By minutes before 11 a.m. it was back at 89.00…but bounced off that mark — and chopped very quietly higher until Draghi spoke at 8:25 a.m. EST in New York.  It fell like a rock from there to its 88.44 low tick, which occurred at precisely 9:00 a.m. EST.  It should be obvious to anyone with even a room temperature I.Q. that the usual ‘gentle hands’ appeared at that time to prevent the dollar index from crashing once again.

The most amazing part of that precipitous decline was that there was nary a hint of it in the prices of any of the precious metals…nada!

From that juncture, the DXY bounced around sideways until ‘The Donald’ spoke at 2 p.m.  — and the index blasted skyward in short order — and ‘da boyz’ began to lean on precious metal prices at the same moment.  The 89.55 high ticks came shortly before 3 p.m. EST — and although it rolled over hard from there, it was rescued once again about thirty minutes later.  It ‘rallied’ quietly into the close from there.  The dollar index finished the day at 89.46 — and up 25 basis points from its Wednesday close.

This is certainly no way for the world’s ‘reserve’ currency to behave.

And here’s the 6-month U.S. dollar index which, as always, is posted for its entertainment value only — and that’s particularly true after yesterday’s action.

The gold shares opened about unchanged — and then slid to their morning lows at the London p.m. gold fix, which was obviously 10 a.m. EST.  They rallied quietly back into positive territory, but began to roll over starting at the 1:30 p.m. COMEX close, as the gold price was rolled over.  Of course the real downside activity started when Trump spoke about a strong U.S. dollar.  The gold stocks hit their respective lows shortly before 3 p.m. — and closed off them by a hair, as the gold price recovered a bit after that.  The HUI closed down 2.32 percent.

The price pattern in the silver equities was almost identical to what happened in the gold stocks, but they barely made it back into positive territory by minutes before the COMEX close — and it was pretty much a bloodbath once ‘The Donald’ waxed philosophical about a “strong U.S. dollar” minutes after 2 p.m. EST.  Nick Laird’s Intraday Silver Sentiment/Silver 7 index closed down a chunky 3.73 percent.  Click to enlarge…if you dare!

I said in my Thursday column [about Wednesday’s silver price action] that the 2.03 percent increase in the Silver 7 Index that day on a 50 cent rally in the silver price was…”really underwhelming“.  On Thursday, silver was hit for 28 cents — and the carnage in the stocks was out of all proportion to that decline.  There’s a lot of day-trading going on in the precious metal stocks right now — and there was obviously some panic liquidation on Thursday.

Here’s the 1-year Silver Sentiment/Silver 7 Index — and all of this week’s gains, plus a tiny bit more, disappeared yesterday.  Click to enlarge.

The CME Daily Delivery Report showed that 1 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Monday.  There were no issuers or stoppers of consequence.  After Monday, there are only two delivery days left in January — and there’s not much open interest left in either gold or silver, anyway.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in January dropped by 2 contracts, leaving 4 still open, minus the 1 contract mentioned just above. Wednesday’s Daily Delivery Report showed that 3 gold contracts were actually posted for delivery today, so that means that 3-2=1 more gold contract was added to the January delivery month. Silver o.i. in January remained unchanged at 3 contracts, minus the 1 mentioned in the previous paragraph. Wednesday’s Daily Delivery Report showed that 1 silver contract was actually posted for delivery today, so that means that 1 more silver contract got added to January.


There were no reported changes in GLD yesterday.  But, for the first time since December 12, there was a deposit in SLV, as an authorized participant, most likely JPMorgan, added 848,727 troy ounces of silver.

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

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  There was 321.500 troy ounces/10 kilobars [U.K./U.S. kilobar weight] received at Canada’s Scotiabank — and the only other activity was a transfer of 22,041 troy ounces from the Eligible category — and into Registered over at HSBC USA.  I won’t bother linking this.

The only action in silver was two truck loads…1,199,756 troy ounces… that was deposited over at CNT.  Nothing was shipped out.  The link to that activity is here.

It was another pretty busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 6,529 of them, but shipped out only 1,210.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


I spent some time talking about The Central Bank of the Russian Federation‘s new-found interest in silver bullion as a monetary metal while I was in Vancouver.  Here’s the link to the story in question about this that I carried in my column from two weeks ago — and the photos of “Russia’s Fort Knox” are more than impressive, especially the ones that show their massive silver bullion holdings.  By my count, there is around 7.7 million troy ounces — and that’s at a minimum, because that’s just what I can see in these pictures. Each stack holds 100,000 troy ounces. Here are the three pertinent photos from that story — and you can count them yourself if you wish.  Here are the three pertinent ones from that story.  The click to enlarge feature only helps a bit with the first photo — and not the other two.

I sent an e-mail off to Russia’s Central Bank about twenty-four hours ago asking some questions about these photos, plus a few other things that were on my mind — and I’ll let you know if I hear anything.

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


CRITICAL READS

Draghi Hits Back at Mnuchin in Global Currency War of Words

European Central Bank President Mario Draghi attacked the U.S. Treasury Secretary’s comments on the dollar, saying he isn’t playing by the rules.

Speaking in Frankfurt on Thursday, Draghi said recent euro-dollar moves are partly down to Steven Mnuchin’s intervention at the World Economic Forum in Davos, at which he said a weaker greenback is good for U.S. trade.

The remarks breach a pledge by IMF members, Draghi said….

The exchange rate has moved in part because of endogenous reasons, namely the improvement in the economy, in part due to exogenous reasons that have to do with communication. But not by the ECB, but by someone else. This someone else’s communication doesn’t comply with the agreed terms of references.

The euro strengthened after Draghi’s comments, touching $1.2537, the strongest level since December 2014. It was up 0.8 percent at $1.2504 as of 4:55 p.m. Frankfurt time.

It was quite bold for Draghi to mention it,” said Viraj Patel, a currency strategist at ING Groep NV in London. “It’s going to be quite contentious going forward. I think it was a little message to the U.S. to say, let’s not get too carried away with trying to drive markets away from fundamentals.

This Bloomberg news item appeared on their Internet site at 7:37 a.m. Denver time on Thursday morning — and was updated about two hours later.  I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.  The Zero Hedge spin on this, courtesy of Brad Robertson, is headlined “In Stunning Development, Draghi Slams U.S. Dollar Jawboning


Dollar Surges After Trump Says “Mnuchin Was Misinterpreted, Dollar Will Get Stronger

After Stephen Mnuchin failed to arrest the dollar’s free-fall this morning, it appears to have been left to President Trump to ‘fix’ it. In a brief clip from a longer CNBC interview, Trump explained “ultimately he wants to see a strong dollar” and the dollar spiked…

Trump said “Mnuchin’s comment was taken out of context” and added that “our country is becoming so economically strong again and strong in other ways, too… and the dollar will get stronger and stronger and ultimately I want to see a strong dollar

And the reaction was instant buying of the dollar…

We do note that actually this is exactly what Mnuchin said this morning… that in the long-run we want a strong dollar… and offers no content for the short-term plunge.

This brief news item showed up on the Zero Hedge website at 2:09 p.m. on Thursday afternoon EST — and I thank Brad Robertson for sharing it with us.  Another link to it is here.


You Can’t Outrun a Wasp! — Dennis Miller

My grandfather, William Paul Smith was an ordinary dairy farmer with a degree in common sense. One of his favorite sayings was, “It’s the same thing, only different.” 70 years ago, he warned me not to throw rocks at a wasps’ nest. As I cried and put ice on the sting, he explained what happened always happens – and I got stung! I thought I was different – and could outrun a wasp – and had to learn the lesson the hard way.

His sage wisdom does not just apply to children. Why is it that many lessons are constant, yet even as adults, we choose to ignore warnings and learn the hard way?

The four most expensive words in the English language are this time it’s different” – Sir John Templeton

Good friend Chuck Butler, writes for Dow Theory Letters, a terrific publication. Chuck recently asked, “Will This Time Be Different?

His headline reminded me of my grandfather. Warnings are appearing regularly – are they being ignored?

This commentary by Dennis put in an appearance on his Internet site on Thursday morning — and another link to it is here.


When it comes to Davos, it’s inequality, stupid — Pepe Escobar

For billions of people, the Groucho Marx rule applies when talking about Davos. This is the exclusive club, which meets in the luxury Swiss resort each year to discuss the global business environment.

Groucho, of course, has been immortalized along with the rest of the Marx Brothers in the zany Hollywood movies of the 1930s, such as A Night a the Opera, A Day at the Races and Animal Crackers.

In one quick-fire response, he joked: “I sent the club a wire stating, ‘Please accept my resignation. I don’t want to belong to any club that will accept me as a member’.

Well, to start off with those billions of people would not get past the bouncers, because the self-defined World Economic Forum is about exclusion. Yet even if, by divine design, they were handed free passes, what would be the point?

This commentary by Pepe was posted on thesaker.is Internet site on Wednesday sometime — and I thank Roy Stephens for bringing it to our attention.  Another link to it is here.


Storm clouds gather over Ukraine — Alexander Mercouris

In a recent article for The Duran I wrote of how the economic situation in Ukraine appeared once more to be deteriorating, with economic statistics apparently being distorted to conceal the extent of the rise in inflation, making the claimed figure of 2% GDP growth in 2017 unlikely.

In a further sign of a deteriorating economic situation, recent reports from Ukraine speak of rolling electric power blackouts in some regions, suggesting growing energy shortages as the price of oil hikes.

In a symptom of how bad the situation has become, the Ukrainian government has quietly dropped its sanctions prohibiting coal imports from Russia, indicating that Ukraine is being forced to turn to Russia for imports of coal in light of the gathering energy crisis.

In this situation, as Paul Goncharoff has recently pointed out, the decision of the Stockholm Arbitration Tribunal to force Ukraine to resume gas purchases from Gazprom actually helps Ukraine,  since the gas Gazprom is able to supply Ukraine is actually cheaper than the gas Ukraine has up to now for political reasons been buying in Europe.

A further sign that economic pressures are causing a certain return to economic rationality in Ukraine is shown by a recent report from Interfax that Ukraine wants negotiations with Moscow to secure the transit of Russian gas to Europe across Ukraine.

This very worthwhile commentary by Alex appeared on theduran.com Internet site at 7:56 p.m. EST on Thursday evening — and it has obviously been updated, because Larry Galearis sent it tome about four hours before that time.  Another link to it is here.


Mike Kosares: Why gold can beat hyperinflation

USA Gold’s Mike Kosares, answering a question from the Netherlands, explains why gold prices are likely to outpace other prices during hyperinflation.

Kosares’ commentary is headlined “R.K. Asks for Some Specifics on Gold as a Hedge Against Hyperinflation” and it was posted on the usagold.com Internet site yesterday.  I borrowed the headline, plus the entire preamble, from a GATA dispatch yesterday.  Another link to it is here.


Nick Barisheff: Gold price manipulation isn’t mere conspiracy theory anymore

In an address this month to the Empire Club of Canada in Toronto, perhaps the country’s most esteemed public forum, Bullion Management Group founder, president, and chief executive officer Nick Barisheff said gold market manipulation is no longer mere conspiracy theory “promoted by gold bugs and organizations like GATA” but is becoming “self-evident.”

Barisheff described the suppression of the gold price through derivatives trading in which virtually no metal ever changes hands.

He quoted the deputy chairman of Russia’s central bank, Sergey Shvetsov, as saying, “The major gold-producing nations are tired of an international gold price that is determined in a synthetic trading environment having little to do with the physical gold market.

Barisheff added that he expects Asia to overthrow that system.

This very worthwhile gold-related news item was posted on the gata.org Internet site yesterday — and another link to it is here.


The PHOTOS and the FUNNIES

I was out for a drive past the old watering hole early yesterday afternoon — and it is, of course, snow-covered and frozen solid to great depth at this time of year.  Needless to say, there were no waterfowl to be seen…but just out of camera range was a small flock of about a dozen grey partridge, a member of the pheasant family, wandering through alfalfa stubble.  I hadn’t seen any of these critters for years — and it made the trip worthwhile.  Click to enlarge.


The WRAP

It was amazing to watch grown men duke it out in a verbal ‘currency wars’ food fight yesterday.  If that international pissing match between the most powerful of the financial elite on both sides of the Atlantic didn’t want to make you run screaming from fiat currencies, I don’t know what would.

But the big surprise for me yesterday was the 70 basis point decline in the U.S. dollar index in the 35-minute time period between 8:25 and 9:00 a.m. EST in New York.  Gold and silver prices barely moved in either direction.  Then when Trump opened his pie hole at 2 p.m…the DXY screamed higher by about 80 basis points — and “the seas boiled — and the sky fell” in the precious metals, taking their associated equities with them.

I’d be careful about reading too much into yesterday’s price action, because one trading day does not make for a trend.  But I am somewhat gobsmacked at the volumes we’ve been seeing in both gold and silver most of this week, particularly during the last couple of days.  I know that options and futures are expiring next week, but these volume numbers are almost without precedence regardless of that fact.

Here are the 6-month charts for all four precious metals, plus copper once again.  Without exception, the lows in all four precious metals [plus copper, I would think as well] came after the COMEX close — and don’t show up Thursday’s dojis.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price began to edge higher about an hour after trading began in New York on Thursday evening. It rallied until the decline in the dollar index took a bit of a rest — and then chopped sideways until just before 2 p.m. China Standard Time on their Friday afternoon — and it began to edge higher anew. At the moment, gold is up $7.80 an ounce. Silver took the same price path — and it’s up 21 cents currently. It was much the same for both platinum and palladium, with the former up 5 dollars — and the latter by 4 as the Zurich open looms.

Net HFT gold volume is only around the 46,000 contract mark, but there’s heavy roll-over/switch volume to the tune of about 31,000 contracts — and the net HFT volume in silver is a very chunky 20,500 contracts, with fumes and vapours in the roll-over/switch category.

The dollar index rallied for a tiny bit once trading began at 6:00 p.m. EST on Thursday evening in New York, but then sharply reversed until halting minutes before 10 a.m. CST. It didn’t do a lot from that juncture until shortly after 2 p.m. CST — and then began to head sharply lower once again. It’s down 66 basis points as London opens.

Today, at 3:30 p.m. EST, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, January 23. Just eye-balling the five days of the reporting week, there shouldn’t be much change in gold — and there’s a chance that there might be a slight improvement in the commercial net short position in silver for the reporting week. And as Ted correctly pointed out in his mid-week commentary to his paying subscribers yesterday afternoon…”But as has been the case over the past month or so, I get the feeling that the nuances in the silver report will be of interest.” I couldn’t agree more — and that may turn out to be the case in gold as well.

Whatever the numbers are, I’ll have them for you in Saturday’s missive.

And as I post today’s column on the website at 4:02 a.m. EST, I see that gold continued to rally a bit after London opened, but with the dollar index currently off its low tick, the gold price was turned a bit lower at the same time — and it’s up $7.30 an ounce as the first hour of trading in London draws to a close. It was the same in silver — and it’s up 20 cents. Platinum and palladium are up 6 and 5 bucks respectively.

Gross gold volume is monstrous at about 128,000 contracts — and net of huge roll-over/switch volume…around 37,000 contracts worth, net HFT gold volume is something over 54,500 contracts. Net HFT silver volume is now up to about 23,700 contracts, with still very little in the way of roll-over/switch volume.

The dollar index continued to slide to its current 88.73 low tick — and that came about five minutes or so after the London open — and as I said before, it’s off that low by a bit — and down ‘only’ 56 basis points. And it certainly appears to have all the hallmarks of an ‘engineered’ dollar rally.

With today being Friday — and with options and futures expiry on Monday, Tuesday and Wednesday of next week, absolutely nothing will surprise me when I check the charts later this morning.

Enjoy your weekend — and I’ll see you here tomorrow.

Ed

More Silver For JPMorgan in January COMEX Deliveries

29 December 2017 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


[NOTE:  I have the usual spacing/colour issues on the website version of my column today, but it’s not quite as bad as yesterday.  I’ll be back to normal with my weekend column, as I’ll be back on my computer at home then. — Ed]


The gold price began to head quietly higher starting an hour or so after trading began at 6:00 p.m. EST in New York on Wednesday evening.  That tiny rally lasted until shortly after trading began in London — and then was equally quietly sold lower until five minutes before the COMEX open.  It began to rally with a bit more enthusiasm at that juncture, but ran into a willing seller about fifteen minutes before the afternoon gold fix in London.  From there, it crept higher for the rest of the Thursday session, finishing on what appeared to be its high of the day.

The low and high ticks certainly aren’t worth looking up.
Gold finished the Thursday session in New York at $1,294.70 — and up another $7.90 from Wednesday’s close.  Net volume was very reasonable at something under 197,000 contracts — and there was a noticeable amount of switch volume out of February and into future months.
Silver followed a very similar price path as gold, so it doesn’t require any further embellishment from me — and the low and high ticks aren’t worth looking up in this precious metal, either.
The silver price closed yesterday at $16.84 spot, up another 18 cents.  Net volume was 59,000 contracts, with considerably less switch/roll-over volume than reported for gold.
Platinum was up six dollars by shortly before 2 p.m. China Standard Time on their Thursday afternoon — and didn’t do a lot for the remainder of the Thursday session.  It finished that day at $926 spot, up 6 bucks from Wednesday’s close.
The palladium price was up a few dollars by around 9:30 a.m. CET in Zurich trading, but then began to head a bit lower, with the low tick of the day…such as it was…coming shortly before 9 a.m. in New York.  It rallied from that point until the Zurich close — and ran into a willing seller shortly after that.  From there it traded mostly sideways into the 5:00 p.m. EST close of trading.  Palladium finished the Thursday session at $1,058 spot, up 4 dollars on the day.
The dollar index closed very late on Wednesday afternoon in New York at the 93.00 mark — and began to head lower the moment that trading began at 6:00 p.m. EST that evening.  That continued until shortly after the London open, when a weak counter-trend rally developed.  That lasted less than three hours — and the index continued its downward path.  The 92.57 low tick was set sometime between 1 and 2 p.m. EST in New York — and it chopped quietly higher into the close from there.  The dollar index finished the day at 92.68 — and down 32 basis points from its close on Wednesday.
And here’s the 6-month U.S. dollar index graph…
The gold stocks turned in another very poor performance again yesterday.  Although they gapped up a bit at the open, they were immediately sold down hard into the afternoon gold fix in London.  From that point they rallied nicely, with all the gains that mattered coming by around 12:45 p.m. in New York trading.  They hung in there pretty good until 2 p.m…when they were sold lower until 3 p.m. — and from that point they chopped quietly sideways into the close.  The HUI finished higher by a tiny 0.18 percent.
The silver equities followed a very similar price pattern — and barely managed to close in the green, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up only 0.07 percent…which is barely unchanged on the day.  Click to enlarge if necessary.
The shares continue to vastly underperform the precious metals — and as I said in yesterday’s missive, if it isn’t tax-loss selling, then the only other thing it can be is year-end book-squaring by various and sundry precious metals mutual funds and their ilk.  But for individual investors such as you and I, this if no consolation whatsoever.
Here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart.  Click to enlarge.
The CME Daily Delivery Report for First Day Notice for delivery in January showed that 137 gold and 321 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday, January 2.  In gold, there were five short/issuers in total — and the only real stand-out was 26 contracts that were issued from JPMorgan’s client account.  The only long/stopper that mattered was JPMorgan with 130 contracts for its own account.  In silver, there were six short/issuers in total — and the largest by far was HSBC USA with 247 from its in-house/proprietary trading account — and in very distant second place was JPMorgan with 26 contracts out of its client account.  Top dog as long/stopper was JPMorgan once again with 138 contracts…69 for its own account, plus another 69 for its client account.  In second and third place was HSBC USA and Goldman Sachs, with 97 and 61 contracts for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Thursday trading session showed that gold open interest inJanuary fell by 119 contracts, leaving 417 left, minus the 137 mentioned just above. Silver o.i. in January declined by 27 contracts, leaving 539 still open, minus the 321 contracts mentioned in the previous paragraph.
I would suspect that the January delivery month will be finished in very short order — and the fact that a lot of “the usual suspects” are taking delivery for their client accounts means that the insiders are still loading the silver boat for their own personal gain when the silver price is allowed to hit the heights.
There were no reported changes in GLD yesterday, but there was another big withdrawal from SLV, as an authorized participant removed 1,320,729 troy ounces.  It’s a fairly safe bet that this was one of Ted’s patented exchanges of SLV shares for physical metal — and that JPMorgan owns it all now.  With silver prices on the rise recently, there can be no other possible explanation for this withdrawal, or the one for 801,876 troy ounces on Wednesday.
The folks over at the shortsqueeze.com Internet site updated their short report for both SLV and GLD as of the close of business on November 30.  The short position in SLV actually increased during the November 15 to 30th reporting period…from 12,918,800 shares/troy ounces, up to 13,168,600 shares/troy ounces…which works to a rise of 1.93 percent.  And for whatever reason, the website blocked me from getting access to the short interest change in GLD — but I should have that in my next column, which will be posted very late on Saturday night, or Sunday morning.
And much to my surprise, the U.S. Mint had a tiny sales report. They sold 2,000 troy ounces of gold eagles — and that was all.
There was no reported in/out activity in gold over at the COMEX-approved gold depositories on the U.S. east coast on Wednesday.
One truck load of silver…600,483 troy ounces…was reported received — and that all ended up at JPMorgan. That deposit, as does every deposit going forward, brings a new record high for their COMEX silver holdings, which now sits at 118.8 million troy ounces. There was also a transfer of 639,854 troy ounces from the Registered category — and back into Eligible.  That happened over at CNT.  The link to all this activity is here.
And it was all zeros, both in and out, over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.

Another day where the stories, cartoons and photos are the bare minimum required.


CRITICAL READS

Will Millenials Ever Be Able To Retire? — Dennis Miller

My oldest granddaughter (early 30’s) recently asked me that question. She and her husband have two children, a new home and are still paying off their college loans.

I can still remember when we lived from paycheck to paycheck, questioning why there was so much month left at the end of the money….

My response, “Sure, but when, and at what lifestyle, depends on many things; including decisions you make today.”

It’s easy for young people to look at retirement as something they need to address “tomorrow”; saving is put off – too many bills to pay. “Tomorrow” does come – the day of retirement reckoning is here before you know it.

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


Italy’s President Dissolves Parliament, Triggering Elections

Italian President Sergio Mattarella dissolved parliament on Thursday, setting the country on the path to a national election on March 4 that could lead to a hung parliament and a period of political turbulence.

The head of state signed a decree ending the legislative sessions in both houses of parliament, according to an e-mailed statement from Mattarella’s office. At a cabinet meeting later, the government of Prime Minister Paolo Gentiloni set the election date, according to an official who could not be named because he was not authorized to comment publicly on the issue.

At a traditional end-of-year news conference earlier on Thursday, Gentiloni played down the risk of political turbulence ahead.

We mustn’t dramatize the issue of political instability, which is certainly an issue but rather than being worried about it, we should tackle it knowing that we’re pretty much vaccinated against it,” Gentiloni said. Frequent change of government “is not a recent phenomenon and it hasn’t stopped our country growing,” he added.

Italy is the ‘I’ of the PIGS group — and like their totally insolvent banking system, the nation as a whole is bankrupt as well.  Only the fact that the ECB continues to buy up all their bonds, keeps the financial and fiscal wolves off the country’s doorstep.  This Bloomberg news item showed up on their website at 10:27 a.m. Denver time on Thursday morning — and was updated about an hour later.  I thank Swedish reader Patrik Ekdahl for pointing it out — and another link to it is here.


$1.5 million Perth Mint gold seized in U.S. fraud case

More than $1.5 million in Perth Mint gold has been handed to U.S. authorities after its owner, a Texan man, was jailed for 40 years for a fraud that netted millions of dollars.

Matthew Norman Simpson, 34, was chief executive of an internet provider in Dallas until an FBI raid in 2009 named him as an alleged conspirator in a “massive cybercrime conspiracy”.

The complicated plot involved creating shell companies and using phony identities to defraud a number of communications companies, including giants AT&T and Verizon, out of goods and services totalling more than $20 million.

They even paid homeless people in cash and alcohol for the use of their identities to act as the officers, directors or managers of the shell companies.

In 2012, after being found guilty, Simpson was sentenced to 40 years jail, was ordered to pay more than $17 million in restitution, and had millions of dollars in assets seized after a jury found they were the ill-gotten gains of the fraud.

Included in those assets were three certificates of ownership of Perth Mint gold, valued at more than $1.5 million.

This interesting news item appeared early on Wednesday afternoon on December 27 ‘down under’ time — and was posted on The West Australian website.  It’s something I found on the Sharps Pixley website — and another link to it is here.


The PHOTOS and the FUNNIES

 

The WRAP

Gold and silver prices continue to crawl higher every day — and now even platinum is above its 50-day moving average.  There was certainly more Managed Money long buying and short covering again yesterday, but they haven’t shown up en masse as of yet — and that included yesterday’s price/volume activity.  As silver analyst Ted Butler pointed out in his quote in yesterday’s column…”So while I got extremely bullish as prices fell into the Dec 12 price lows, the lack of aggressive buying by the managed money traders on the upswing is even more bullish. Let me not beat around the bush – the managed money trades are in a highly unique circumstance of having their lungs ripped out to the upside, should the commercials so decide to let prices fly higher. Certainly, this adds to my suspicions that the last trip lower in price was more arranged and deliberate than any prior engineered move. In short, I don’t know how the commercials could have set up things better than they have.”
At this stage of the game, it would be Ted’s raptors [the small commercial traders other than the Big 8] doing most of the heavy lifting, selling copious quantities of their long position in both precious metals…for huge profits, I might add.  The ‘5 through 8’ large traders, along the with the Big 4 in general — and the Big 1 in particular…JPMorgan…won’t show up in the rally until its latter stages…if JPMorgan shows up at all, that is.
Here are the 6-month charts for all four precious metals, plus copper once again.  Copper is now well into overbought territory — and I watch these rallies unfold with increasing interest.  The ‘click to enlarge‘ feature helps a bit with the first four charts.
Today at 3:30 p.m. EST, according to what Ted said in his mid-week commentary, we should get the latest and greatest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday.  It should come as no great shock to anyone that there will have been an increase in the commercial net short positions in both silver and gold…with the usual points of interest being the volumes involved — and the internal break-down of the players involved as well…as per Ted’s quote above.
And as London opens — and as I post today’s column on the website, I note that the gold price hasn’t done much during Far East trading on their Friday — and is currently up 10 cents.  Silver was down 2 cents all day long in Far East trading, but has dipped a bit lower in the last hour — and is down 5 cents the ounce.  Neither platinum and palladium have been doing much, with former sitting at unchanged — and the latter up a dollar as Zurich opens.
Net HFT gold volume is coming up on 31,000 contracts — and that number in silver is a bit over 7,600 contracts.
The dollar index continues its slow slide — and is down 9 basis points.

Today is the last trading day of the week, month, 4th quarter — and year.  I must admit that I have no idea what will happen from a price perspective during the New York trading session today.  

My usual Saturday column won’t show up on my website until late Saturday night/early Sunday morning EST, as I’ll be on the road almost all day Friday — and won’t have the hours to spend getting it out at its usual time, which is in the wee hours of Saturday morning.
See you then.
Ed

Ted Butler: Life Under Manipulation

25 November 2017 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


It was another quiet trading for gold.  The low of the day, such as it was, came at 11:30 a.m. in London — and it began to edge unevenly higher from there.  It made it back to unchanged on the day at, or shortly before, the afternoon gold fix in London — and was sold quietly lower — and back to its 50-day moving average — until London closed at 11 a.m. EST.  The gold price didn’t do a thing after that — and the after-hours market closed early…just before 2 p.m.

The low and highs definitely aren’t worth looking up.

Gold finished the Friday session in New York at $1,287.90 spot, down $2.70 from Thursday’s close.  Net volume on Friday was pretty light at something under 137,000 contracts

Silver traded a handful of pennies above unchanged all through Far East trading — and was still up a penny or so at the 10:30 a.m. GMT morning gold fix in London.  Once that was put to bed, the silver price was sold sharply lower — and back below $17 spot briefly.  By the noon GMT silver fix, it was back at $17 spot — and it chopped a few more pennies higher until the equity markets opened at 9:30 a.m. EST in New York.  It shot higher from there — and back above unchanged on the day, but ran into JPMorgan et al within minutes.  Once the afternoon gold fix was done, the silver price was sold back to $17 spot — and a bit below.  But it popped back above that mark by a penny or two just before the COMEX close.

The high and low ticks in this precious metal aren’t worth looking up either.

Silver was close in New York yesterday at $17.01 spot — and down 6 cents from Thursday  — and back below its 50-day moving average by a few pennies.  Net volume was exceedingly light at a bit under 29,000 contracts.

The platinum price was up 6 bucks by shortly after 11 a.m. China Standard Time on their Friday morning.  From that point it was sold unevenly lower to its $932 low tick of the day, which came shortly after 11 a.m. in Zurich.  It was bounced off that price a few times until about 8:30 a.m. in New York.  At that juncture it began to head higher.  An attempt was made to cap it just before 10 a.m. EST at the afternoon gold fix, but it powered higher through that — and the $942 spot high tick came a noon in New York.  It didn’t do a thing after that, finishing the day at $941 spot — and up 8 dollars from Thursday’s close.

The palladium price traded ruler flat in morning trading in the Far East on their Friday, but was sold back to the $1,000 spot mark by the Zurich open.  It traded at that price until a few minutes before 2 p.m. CET — and then the selling pressure appeared.  The $987 low tick was set at 1 p.m. in New York — and it recovered a couple of bucks before the markets closed for the day.  Palladium finished the Friday session at $989 spot — and down 14 bucks from Thursday.  This foray above the $1,000 spot mark certainly wasn’t allowed to last long.

The dollar index closed very late on Thursday afternoon in New York at 93.12 — and made a couple of minor attempts to rally once trading began at 6:00 p.m. EST in New York on Thursday evening.  It made it up to the 93.25 mark, its high tick of the day, minutes before 3:30 p.m. CST on their Friday afternoon.  Then the long slide began, with the 92.67 low tick coming about twenty minutes after the London close…about 11:20 a.m. in New York.  It rallied weakly until a few minutes before 1 p.m. EST — and didn’t do much of anything after that.  The dollar index finished the day at 92.76 — down 36 basis points from Thursday’s close.

And here’s the 6-month U.S. dollar index chart — and Friday’s doji contains Thursday’s trading data as well.

The dollar index is down about 240 basis points since around November 7 — and the gold price isn’t even up ten bucks.  That’s how carefully precious metal prices, particularly gold and silver, are being managed.

As I’ve said on a number of occasions in the last six months, this appears to be a controlled devaluation of the U.S. dollar that began back at the start of January.  The dollar index is down a monstrous 1,100+ basis points since January 1 — and the gold price has only been allowed to rise by 12 percent — and silver by less than 7 percent.

The gold shares gapped up a bit at the open, only to be met by a wave of selling.  There was a respite between 10:30 and 11 a.m. in New York trading, before the sell-off recommenced.  The markets closed at 1:00 p.m. EST — and at that point the HUI was down 0.70 percent.

The silver equities traded in a mostly similar manner, except Nick Laird’s Intraday Silver Sentiment/Silver 7 Index dropped by 0.96 percent.  Click to enlarge if necessary.

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

Here are the usual three 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.  ‘Click to enlarge‘ for all three.

Here’s the 1-week chart — and the precious metal equities managed small gains on the week, despite the fact that both silver and gold were down over that time period.

Here’s the month-to-date chart — and the silver equities still have a ways to go to get back in positive territory.

And here’s the year-to-date chart — and my comments on this one are the same as what I offered on the month-to-date chart.

The share price action, along with the precious metals themselves, are still in the iron grip of JPMorgan et al — and that won’t change until they’re through doing what they’re doing, or they get over run.  The terrible share price action in the silver equities hasn’t been helped by the poor earnings coming out of the major silver producers — and that has certainly been a drag on the Silver Sentiment/Silver 7 Index.  Of course that won’t change until we have higher prices…a real ‘Catch 22’ situation if I ever saw one.


The CME Daily Delivery Report showed that zero gold and 1 silver contract was posted for delivery within the COMEX-approved depositories on Tuesday.  Morgan Stanley issued — and ADM stopped.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session, which includes Thursday’s as well, showed that gold open interest in November declined by 11 contracts, leaving just one left.  Wednesday’s Daily Delivery Report showed that 11 gold contracts were actually posted for delivery on Monday, so those numbers work out fine — and we await delivery of that last gold contract.  Silver o.i. in November increased by 1 contract, leaving 1 left to deliver, minus the 1 mentioned in the previous paragraph — and that’s out for delivery on Tuesday.  For the most part, November deliveries are done.

Gold and silver open interest in December are still very chunky, but as I said a day or two ago, the vast majority of that will be gone by December’s first notice day — and those numbers will show up on the CME’s website around 10 p.m. EST on Wednesday evening.  A clearer picture of December deliveries won’t be know with any real certainty until Thursday.


There was no reported change in GLD on Friday, but there was another withdrawal from SLV, as an authorized participant took out 943,834 troy ounces.  Regardless of the circumstance of its removal from this ETF, it’s a reasonable assumption the JPMorgan owns it now.

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

Month-to-date the mint has sold 8,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 295,000 silver eagles.  There is no retail bullion market worthy of the name at the moment.

The Royal Canadian Mint final got around to posting their Q3/2017 report on their website yesterday — and with this report, it’s becoming more and more obvious that they’re couching their retail bullion sales in fewer words — and in more generalities.  All I could find was one paragraph, plus a chart on what’s happening vis-à-vis gold and silver maple leaf sales — and this time those words were nowhere to be found.  But from my previous conversations with the mint on this issue, it’s an excellent bet that most of the sales are silver and gold maple leafs and, not surprisingly, they’re down substantially once again.

Here’s a snip from the Page 8 of their third quarter report — and if you want to read the rest of the 40-page document, the link is here.  The ‘click to enlarge‘ feature helps a bit with snip below.

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  There was 56,146 troy ounces received over at HSBC USA — and there was 6,012.050 troy ounces/187 kilobars shipped out of Canada’s Scotiabank.  The link to that activity is here.

In silver, there was one truck load…598,157 troy ounces…received at Brink’s, Inc. — and one good delivery bar…987.000 troy ounces…was shipped out of Delaware.  The link to that is here.

It was a fairly busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  There were 5,431 received — and 1,152 shipped out.  As per usual, all of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


In case it had skipped your mind, there was no Commitment of Traders Report yesterday because of Thanksgiving in the U.S.  The report will appear on the CFTC’s website at 3:30 p.m. EST on Monday — and I’ll have all the details for you in my Tuesday column.


Here are two charts that Nick Laird slid into my in-box just as I was about to post today’s column — and since I don’t have any COT/Days to Cover charts in today’s column, I thought I’d slide them in here.  They show the weekly transparent gold holdings of all known depositories, mutual funds and ETFs as of the close of business on Friday.  The gold holdings continue to creep higher — and silver inventories are flat.  Click to enlarge for both charts.

I have an average number of stories today, including one repeat — and that’s the Cohen/Batchelor interview, this time with the usual executive summary from Larry Galearis.  There was no commentary from Doug Noland this weekend.


CRITICAL READS

A Bedtime Story — Bill Bonner

We are explaining our money system to our grandson, James, now 14 months old…

His mother tries to get him to go to bed at 9 p.m. But the little boy’s internal clock is still on Baltimore time; it tells him it is much too early to go to sleep.

Grandpa takes over, drawing out the monetary system like a general spreading a map on a field table. “Here is the enemy,” he says gravely. “They have us completely surrounded. We’re doomed.”

James grumbles. He squirms. He has a sunny, optimistic temperament. But we think our explanations are sinking in.

He seems to understand…that money is not wealth; it just measures and represents wealth, like the claim ticket on a car in a parking garage — and that our post-1971 money system is based on fake money that represents no wealth and measures badly.

This amusing, but deadly serious commentary by Bill appeared on the bonnerandpartners.com Internet site yesterday — and another link to it is here.


British Banks Brace for Grades in Toughest Stress Tests Yet

U.K. banks are bracing themselves for their grades in the toughest round of stress tests yet, with the fate of their dividends and strategies at stake as the Bank of England models how the seven largest British lenders will cope in another crisis.

On Tuesday the central bank will reveal how they fared in a scenario that includes sharp declines in global and domestic growth, the pound losing a quarter of its value, and deep consumer loan losses driven by surging interest rates and unemployment. While analysts forecast all will overcome the basic hurdle rate — which differs between banks — the results will reveal how much spare capital they can return to investors.

This year’s examination “combines a more severe stress scenario and higher capital hurdles,” making it the strictest so far, Goldman Sachs Group Inc. analysts led by Martin Leitgeb said in a Nov. 22 note. The focus will be on Barclays Plc, Lloyds Banking Group Plc and Standard Chartered Plc because they are all trying to increase or restart dividend payments, they said.

Responding to the aftershocks of the financial crisis, four years ago the BOE started annual health checks of the banking system, theorizing what the results could be from increasingly severe economic and geopolitical shocks. Royal Bank of Scotland Group Plc, still owned by taxpayers after a bailout in 2008, failed last year’s test and was forced to bolster capital. Barclays and Standard Chartered had some capital inadequacies, but neither was required to submit a new plan as they were deemed to be on the right track.

This story showed up on the Bloomberg website at 10:00 p.m. Denver time on Thursday evening — and was updated about 4 hours later.  I thank Swedish reader Patrik Ekdahl for sharing it with us — and another link to it is here.


Tales of the New Cold War:  Five things more perilous to the U.S. than Russia — John Batchelor interviews Stephen F. Cohen

Part 1:  John Batchelor opens the discussion with the President Trump, President Putin phone call  and its significance. Obviously a follow up to his statements after his earlier meeting in Vietnam, it signals earnestness for the leaders to have a diplomatic relationship and it is an important event. The Kremlin reports the subjects included Syrian peace talks, the U.N. peace process position, solving the refugee situation in Europe and Syria. But both pundits acknowledge that the domestic politics in Washington have stifled the attention this story deserved. The reason for this is the U.S. MSM which continues to echo the U.S. position that Russia is the major existential threat to the country, and Cohen delves into the dialectical history of the process since the end of the Soviet Union. How did the U.S. get from Clinton’s Yeltsin relationship, seen as partnership, to the existential threat today? Cohen maintains Russia does not even reach number five of his top threats to American national security. The list is: 1. Russiagate, 2. demonizing Putin, 3. terrorists with radioactive material, 4. nuclear arms club, 5. climate change and income inequality. Batchelor wanted this discussion also to include the devolution of diplomacy and discussion over this period. (Note that my bare bones approach to this complicated discussion is meant to encourage careful listening by readers.)  Number one, Russiagate is Cohen’s first choice as the most serious threat. The reason for this is that a president’s first duty as a president is diplomacy. If disallowed for any reason, the risk is grave. There follows next a discussion from Batchelor and details of how Russiagate has limited this diplomacy and the censorship and hysterical spin has kept Americans uninformed, confused or alienated.

Part 2:  Cohen’s second contender for the major national security concern resides in the personification of someone to hate for the public. Cohen states that citizen nationals need a “bad guy” to focus on. Putin, as a high profile world leader, had to fill that role, and Cohen maintains he was given that personal involvement in Russiagate for this reason. This is easily done in a censored press, and with a people kept ignorant for generations. Terrorism using nuclear materials is number three on Cohen’s list. So called “dirty bombs” are a nightmare of worry for both governments, and Russia’s security expertise is being wasted through damage by Russiagate.  The fourth concern on the list involves the proliferation of nuclear weapons. The fifth involves cooperation with climate change and addressing the politics of poverty that contribute to unstable countries and extremism in national populations. Russia and China are already doing much to change the economic conditions with its New Silk Road program and the U.S. is losing prestige in opposing it.  Cohen also comments on why Russia and China should not be seen as enemies according to a recent Rasmussen Poll. According to the poll 52% of Americans do not consider Russia an enemy and wish a cooperative relationship. There is also a large percentage of undecided listed as well, and Cohen makes the point that Russiagate for American citizens has not been a success.

The Hillary Clinton component to Russiagate has provided a strong element of inertia to the campaign. My speculation is that the Russiagate accusations remain in the news as a theme that has gone the bridge too far politically. There are two separate issues related to Hillary, her broad based criminality and ironically her own criminal manipulations in the election that have fuelled this chaos and may be fuelling it still. The facts are coming out, and yet are being shouted down with the dogma of Russiagate by the press. How does Washington deal with the revelation that their electoral system has become this corrupt, and it can put a Hillary Clinton in the White House? The attack on Trump, equally squalid, is but another neon sign that Americans have lost the control of their own government. The result seems to be a media and a government that has become ideological on a war footing at the expense of its own credibility. If Hillary is ever charged with a fraction of the crimes that have helped stage this chaos, the political damage may be too much to contemplate for those that have invested in the present system. Perhaps it would not be remiss to include an increasingly hostile American public to its own central government as a sixth national security concern.

I thank Larry Galearis for his very excellent executive summary — and Ken Hurt for providing the links earlier this week.  The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.


Syria war, Sochi peace — Pepe Escobar

The main take away of the trilateral, two hour-long Russia-Iran-Turkey summit in Sochi on the future of Syria was expressed by Russian President Vladimir Putin:

The presidents of Iran and Turkey supported the initiative to convene an All-Syrian Congress for national dialogue in Syria. We agreed to hold this important event at the proper level and ensure the participation of representatives of different sectors of Syrian society.”

Diplomatic sources confirmed to Asia Times much of the discussions in Sochi involved Putin laying out to Iran President Hassan Rouhani and Turkey President Recep Erdogan how a new configuration may play out in a constantly evolving chessboard.

Behind diplomatic niceties, tensions fester. And that’s how the current Astana peace negotiations between Russia-Iran-Turkey interconnect with the recent APEC summit in Danang.

In Danang, Putin and Trump may not have held a crucial bilateral. But Sergey Lavrov and Rex Tillerson did issue a joint statement on Syria – without, crucially, mentioning Astana; instead, the emphasis was on the slow-moving U.N. Geneva process (a new round of talks is scheduled for next week).

An extremely divisive issue – not exactly admitted by both parties – is the presence of foreign forces in Syria. From Washington’s perspective, Russian, Iranian and Turkish forces must all leave.

But then there’s the Pentagon, which is in Syria without a U.N. resolution (Russia and Iran were invited by Damascus).

This very worthwhile commentary by Pepe was posted on the Asia Times website at 5:50 a.m. HKT on their Friday morning, which was 4:50 p.m. on Thursday afternoon in Washington — EDT plus 13 hours.  It comes to us courtesy of U.K. reader Tariq Khan — and another link to it is here.


Russia slams U.S. “occupation” of Syria after reports suggest the U.S. will not leave Syria

Russian Foreign Ministry Spokesman Maria Zakharova has slammed a report from the Washington Post which claims the U.S. is planning to stay in Syria for “years” in an attempt to occupy and destabilise the country using the ethno-nationalist ambitions of their Kurdish proxies as a flimsy ‘justification’. This is something which was categorically rejected by the members of the Astana Group which includes Russia, Iran and Turkey.

Today Zakharova stated in response to the report,

They are there not only without permission from Damascus, but also in direct violation of the wishes of the Syrian government. In fact, what they are doing could be described as occupation”.

She further stated,

U.S. Defense Secretary openly said on November 13 that the American troops will not leave Syria until progress is made with a political resolution. The conditions of which, we presume, the U.S. wants to dictate arbitrarily.

    We have noted on numerous occasions that such statements cast a serious doubt about what the true goals of the U.S.-led coalition are in Syria”.

This very interesting, but not entirely surprising news item was written by columnist Adam Garrie — and posted on theduran.com Internet site at 10:03 p.m. EST on Thursday evening — and I thank Larry Galearis for pointing it out — and another link to this worthwhile article is here.


Sudan’s president visits Russia, tells Putin: “We need protection from the U.S.

Sudan has reached an agreement with the Russian Defense Ministry on assistance in upgrading its armed forces, President Omar al-Bashir said at a meeting with Russian President Vladimir Putin on Thursday in Sochi.

Sudan finds the situation in the Red Sea worrisome, al-Bashir said, adding that “U.S. interference in these affairs is also a problem,” TASS reports.

The Sudanese president said that U.S. intervention was “to blame for Sudan’s split” into two states.

As a result we need protection from aggressive actions by the U.S. We believe that what is happening in Syria now is an effect of U.S. interference.”

This RT news story was picked up by the russiafeed.com Internet site on Friday sometime — and I thank Roy Stephens for bringing it to our attention.  Another link to it is here.


The U.S./Saudi Starvation Blockade — Patrick Buchanan

Our aim is to “starve the whole population — men, women, and children, old and young, wounded and sound — into submission,” said First Lord of the Admiralty Winston Churchill.

He was speaking of Germany at the outset of the Great War of 1914-1918. Americans denounced as inhumane this starvation blockade that would eventually take the lives of a million German civilians.

Yet when we went to war in 1917, a U.S. admiral told British Prime Minister Lloyd George, “You will find that it will take us only two months to become as great criminals as you are.”

After the Armistice of Nov. 11, 1918, however, the starvation blockade was not lifted until Germany capitulated to all Allied demands in the Treaty of Versailles.

As late as March 1919, four months after the Germans laid down their arms, Churchill arose in Parliament to exult, “We are enforcing the blockade with rigor, and Germany is very near starvation.

So grave were conditions in Germany that Gen. Sir Herbert Plumer protested to Lloyd George in Paris that morale among his troops on the Rhine was sinking from seeing “hordes of skinny and bloated children pawing over the offal from British cantonments.”

This absolute must read commentary by Patrick showed up on his Internet site on Thursday night 11:44 p.m. EST — and I found it over at Zero Hedge.  Another link to it is here.


Rand Faces Test on Looming Risk of South Africa Junk Rating

Already bruised by political and budget troubles, the rand faces its next crucial test in less than 24 hours: reviews by two ratings companies.

S&P Global Ratings and Moody’s Investors Service are reviewing the country’s credit ratings Friday, and nine of 16 economists surveyed by Bloomberg expect the former to deliver a cut to the nation’s domestic debt. Four see a similar action by Moody’s. A demotion to sub-investment grade by both agencies will result in South Africa’s exclusion from Citigroup Inc.’s World Government Bond Index, hurting demand for the nation’s currency and bonds.

The rand slumped almost 6 percent versus the dollar since the end of June, the worst emerging-market performance after the Turkish lira, as October’s medium-term budget estimated a larger government deficit as well as slower economic growth. A double debt downgrade, combined with unresolved political uncertainties, could see the currency plunge more than 18 percent to 17 per dollar by year-end, according to Nedbank Group Ltd.

The rand slumped almost 6 percent versus the dollar since the end of June, the worst emerging-market performance after the Turkish lira, as October’s medium-term budget estimated a larger government deficit as well as slower economic growth. A double debt downgrade, combined with unresolved political uncertainties, could see the currency plunge more than 18 percent to 17 per dollar by year-end, according to Nedbank Group Ltd.

This is another Bloomberg story from Swedish reader Patrik Ekdahl.  This one put in an appearance on their website at 8:00 p.m. MST on Thursday evening — and was updated about seven and a half hours later.  Another link to it is here.


China’s bond squeeze could spread offshore

It is time to start worrying about Chinese bonds. Tightening regulation has provoked a sharp selloff in the $9 trillion fixed-income market, with collateral damage to share. If stress is sustained, it could infect China’s giant pile of foreign-currency debt.

Anxiety has been increasing all year, as President Xi Jinping takes a tougher line on financial risk. Regulators have suppressed techniques abused by speculators, such as short-term borrowings using bond-repurchase agreements and so-called negotiable certificates of deposit. This crackdown, combined with expectations of higher rates, had pushed up benchmark yields without much panic until this week.

What tweaked local punters were central bank guidelines targeting excesses in the $15 trillion asset management industry. The benchmark 10-year treasury yield topped 4 percent on Thursday, its highest since 2014.

Overseas investors have watched Chinese markets closely since 2015, when a stock crash was felt around the world. Bonds are far more important. Stressed companies and financial institutions have come to rely heavily on short-term debt issues to repay bank loans and maturing wealth management products. The sector remains patchily regulated and distorted by implicit guarantees.

No surprises here, as stories about troubles in China’s bond market have been showing up with more frequency these days.  This Reuters new item was posted on their Internet site at 9:21 p.m. EST on Thursday evening — and I thank Richard Saler for finding it for us.  Another link to it is here.


Gold CEO Lashes Out Against His Industry

A gold industry obsessed with containing costs and minimizing risks will find itself at the edge of a cliff by 2020 as supply tightens, according to one of the most profitable producers.

Despite prices recovering from 2015 lows, the industry has been slow to reinvest in exploration or sustaining capital, Randgold Resources Ltd. Chief Executive Officer Mark Bristow said. Half of the gold coming out of the ground isn’t profitable to mine based on the true extraction costs, he said.

The one thing this industry does very well is mine gold at a loss,” Bristow told analysts at a breakfast meeting in Toronto on Friday.

The weakening outlook is being masked by a focus on all-in-sustaining costs rather than cash costs, he said. While companies can lower AISC and boost earnings by reducing spending to sustain operations or tightening exploration budgets, the tactic erodes asset quality in the long run, the CEO said.

Similarly, severe damage has been done by high-grading, which shortens the life of a mine by focusing on the best quality ore. Since 2007, grades have dropped from an average of 2.5 grams a tonne to about 1 gram, Bristow said.

But not a word is spoken of the short position of the Big 4 and Big 8 traders in the COMEX futures market, dear reader.  This must read gold-related Bloomberg story appeared on their Internet site at 12:51 p.m. on Friday afternoon Denver time — and I found it embedded in a GATA dispatch.  Another link to it is here.


New tax on Dubai gold

Dubai calls itself City of Gold. Traders there buy and sell $75bn (£56bn) worth of the precious metal every year. Part of the reason for its success is that gold is untaxed, and therefore cheap.

But from the start of next year, the government is imposing a value added tax on gold sales. Jeremy Howell has more.

This 2:09 minute video clip was posted on the bbc.com Internet site on Friday sometime — and this brief news item is something I found over at Sharps Pixley last evening.


Ted Butler: Life under manipulation

Silver market analyst Ted Butler marvels again at the huge position in COMEX silver futures and the concentration of the short position.

Total open interest data indicates that there is a 1-billion-ounce open commitment in Comex silver short and long positions, more than annual world production or consumption. No other commodity has a larger real-world equivalent total open interest this high.

“The long and short position in Comex silver is so much larger than that of any other futures-traded commodity that it necessarily exerts a force on price more profound than in any other commodity. Because the positioning in Comex silver futures is larger than what’s going on in the real world, the paper market dictates price to the world of silver production and consumption.

The entire Comex net short silver position (more than 500 million ounces) is held by just eight traders, most of which are U.S. and foreign banks. This is the one glaring feature in silver that, to this point, has largely escaped notice, even by those that regularly follow and comment about the silver market. This is the entire ball game in silver.

The above three paragraphs was the Ted Butler quote in my Friday column.  Now it’s in the public domain over at the silverseek.com Internet site.  It’s a must read commentary that I found on the gata.org Internet site yesterday morning Denver time.  Another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the Asian black bear, also known as the moon bear, and white-chested bear.  It’s a medium-sized bear species native to Asia and largely adapted to arboreal life. It lives in the Himalayas, in the northern parts of the Indian subcontinent, Korea, northeastern China, the Russian Far East, the Honshū and Shikoku islands of Japan, and Taiwan. It is classified as vulnerable by the International Union for Conservation of Nature (IUCN), mostly because of deforestation and hunting for its body parts.


The WRAP

Today’s pop ‘blast from the past’ is, at ‘heart’, all Canadian…at least for us they are — and it’s a timeless and universal hit song of the ages.  Of course the Americans have claimed them as their own, because they were born there.  But up here in Canada…Ann and Nancy Wilson still belong to us, if only in spirit.  The link to their biggest hit ever is here — and the second biggest, a Led Zeppelin cover, is here.

Today’s classical ‘blast from the past’ was going to be Tchaikovsky’s Sixth Symphony, but after listening to snippets of it, I realized that it was way to deep and dark for this column, so I decided on something far more uplifting that I found in the right side-bar.  I’ve featured it once before, but it never ages — and without fail, it draws a sell-out crowd every time it’s performed.  It Maurice Ravel’s Boléro — and it was a smash hit right out of the gate when it was premiered in Paris on 22 November 1928.

Boléro became Ravel’s most famous composition, much to the surprise of the composer, who had predicted that most orchestras would refuse to play it.  Here’s the London Symphony, with the incomparable Valery Gergiev, conducting it with a toothpick!  The link is here.


Despite the fact that it was a holiday-shortened trading day — and volumes were very light, it was more than obvious that ‘da boyz’ were ever vigilant, as they were certainly micro-managing silver and gold prices on Friday.  It was particularly obvious in the 5-minute tick charts from Brad Robertson, which I didn’t include because yesterday’s price movements were so small.  But their footprints were unmistakable.  They also made sure that palladium wasn’t allowed to close above $1,000 spot.

And as I pointed out in my discussion on the dollar index changes, the powers-that-be certainly aren’t allowing the rapidly declining dollar index to be reflected in precious metal prices.  Not only has it been obvious all year long, but even more so when you consider the fact that the dollar index was down over 100 basis points on Thursday and Friday combined — and JPMorgan et al had the audacity to close gold and silver lower as well.  That would never happen in a free market.

Here are the 6-month charts for all four precious metals, plus copper once again — and as for the 6-month U.S. dollar index further up in today’s missive, the Friday dojis include Thursday’s price move as well.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

As Ted pointed out on the phone yesterday, it’s now been two months with no resolution to the sky-high short positions in the precious metals held by the Big 4 and 8 traders in the COMEX futures market.  Just a cursory glance at silver and gold’s respective charts above, shows that to be true.  They are, as Ted has also stated, now stuck with these short positions — and it only remains to be seen if they are able to engineer one last desperate price decline, or will they finally be forced to cover in a rising market.  There are no other ways out for them, except for JPMorgan, which has a big enough physical holding in silver to bail itself out of any short-side covering issue that presents itself.

Another week has also gone by where nothing has changed in the world’s financial and equity markets, either.  The rumblings under the surface are becoming more widespread, but the world’s various Plunge Protection Teams and central banks show up in the nick of time before anything develops a serious down-side momentum — and the ‘recoveries’ are near instantaneous now.  One or two these events spaced out within a week or two, seems to be something that they can handle.  The worrisome part is that they are becoming not only more frequent, but much larger in scale…most with the knock-on potential to turn from only a local issue, into a rapidly unfolding international debacle with a few simple mouse clicks.  The budding bond crisis in China is the latest standard bearer for all this.  I would suspect that multiple crisis of these magnitudes occurring all at once would be beyond their ability to cope one they got anywhere near out of hand.

So far, the powers-that-be have been able to keep the word’s investment dollars mostly away from precious metals — and all things of value, as per Peter Warburton’s classic essay “The debasement of world currency: It’s inflation but not as we know it“.  But some day that dog won’t hunt no more.  But as to which day that will be, heaven only knows.  However, the signs that the economic system that we’ve known all our lives is about to come to an abrupt end, are everywhere you care to look now.

That’s all for today — and the week — and I’ll see you on Tuesday with all the COT data.

Ed

COMEX Open Interest in Silver: One Billion Ounces

24 November 2017 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


With the only precious metal market that matters closed for their Thanksgiving holiday yesterday, the gold price didn’t do much on Thursday.  It was down about 3 bucks by shortly before 10 a.m. in London — and then got a bump upwards around the morning gold fix.  After that it traded flat for the rest of the day, before closing at 1 p.m. EST.

Gold finished the Thursday session at $1,290.60 spot, down 90 cents.  It should come as no surprised that net volume for the holiday-shortened trading session was very light at something under 99,500 contracts — and roll-over/switch volume out of December and into future months, was fairly decent.

Silver was sold down 8 cents by shortly after 9 a.m. China Standard Time on their Thursday morning — and then traded sideways until it had its little price jump centered around the morning gold fix in London as well.  It was back to unchanged by minutes after 11 a.m. GMT, but that wasn’t allowed to last.

Silver finished the Thursday session at $17.07 spot — and down 6 cents on the day.  Net volume was only 16,000 contracts, but roll-over/switch volume out of December was very heavy.

Platinum was also sold down a bit when trading began at 6:00 p.m. EST on Wednesday evening.  Its low came shortly before 11 a.m. CST — and although it rallied a few dollars off that low, it couldn’t, or wasn’t allowed to rally back above unchanged on the day.  Platinum was closed at $933 spot, down 4 dollars from Wednesday.

Palladium didn’t do much of anything from a price perspective on Thursday…at least until minutes after Zurich closed, that is.  Then the price became far more animated — and it shot above — and finally closed above, $1,000 spot…finishing the day at $1,003 spot…up 6 bucks.  A strange time to go long, or cover a short position.

The dollar index closed very late on Wednesday afternoon in New York at 93.25 — and began to edge quietly lower once trading began at 6:00 p.m. EST.  The 93.08 low tick was set minutes after 11:30 a.m. in London — and didn’t do a whole lot after that.  The index finished the Thursday session at 93.12 — and down 13 basis points on the day.  Nothing to see here.

And with the U.S. closed for the day, there’s no updated 6-month U.S. dollar index from the folks over at stockcharts.com…or any other data that would normally come from the U.S…HUI, Silver 7, Daily Delivery Report, GLD/SLV, U.S. Mint or warehouse stocks.

Here’s a photo I stole from a sputniknews.com story that I posted in my column earlier this week.  With the headlines and other frills stripped off of it, gold bars are most impressive when all stacked up like that.  Click to enlarge.

The only real reason for today’s column is to empty my in-box of stories, which have a tendency to pile up.  I don’t have all that many, but if added to Friday’s list, it would make my Saturday column a bit much to handle…for you and for me.


CRITICAL READS

Doug Casey on the New Fed Chair

A few words are in order about the likely new Chairman of the Federal Reserve, Jerome Powell.

I don’t know the man personally. Not that it would make any difference; denizens of the swamp within the Beltway usually present well, and a brief meeting rarely allows you to penetrate someone’s social veneer. But I’m pretty confident that if we dined together it would be tense and unpleasant. We’d have no common ground, after the obligatory two minutes on the weather and the state of the roads.

He’s a lawyer, has been a Fed Governor for five years, and appears to be a “steady as she goes” so-called moderate Republican. He’s a lifelong Deep State player. But let’s not waste time psychoanalyzing this bureaucrat; he’s just a cog in the machine. And the machine, at this stage, has a life of its own.

Many of my friends in the alternative press deplore Trump’s appointment of yet another conventional money printer. They were hoping for a “hawk,” who would start liquidating the Fed’s $4.5 trillion balance sheet, and raising interest rates. And they’re right. That $4.5 trillion of super money has driven stock, bond, and real estate prices to insane levels. And today’s artificially low interest rates are discouraging saving, and encouraging people to live above their means.

In an ideal world there would be some radical changes. The best thing for the U.S. in the (famous) long run is to go “cold turkey.” To abolish the Federal Reserve, fire its thousands of employees with their worthless PhDs. Return to 100% reserve banking with a strict separation of demand and time deposits. Depoliticize money by using gold, not Federal Reserve Notes. And default on the national debt, which is rewarding crony capitalists, and will turn future generations of Americans into serfs. And massively deregulate. And abolish the income tax, while cutting spending 90%. Etc. Etc.

The chances of that happening are exactly zero. So let’s talk, instead, about what is going to happen.

The rest of this Doug Casey rant is definitely worth reading as well.  It appeared on the caseyresearch.com Internet site yesterday — and the first person through the door with it was Brad Robertson.  Another link to this worthwhile read is here.


The Mother of All Irrational Exuberance — David Stockman

You could almost understand the irrational exuberance of 1999-2000. That’s because everything was seemingly coming up roses, meaning that cap rates arguably had rational room to rise.

But eventually the mania lost all touch with reality; it succumbed to an upwelling of madness that at length made even Alan Greenspan look like a complete fool, as we document below.

So doing, the great tech bubble and crash of 2000 marked a crucial turning point in modern financial history: It reflected the fact that the normal mechanisms of honest price discovery in the stock market had been disabled by heavy-handed central bankers and that the natural balancing and disciplining mechanisms of two-way markets had been destroyed.

Accordingly, the stock market had become a ward of the central bank and a casino-like gambling house, which could no longer self-correct. Now it would relentlessly rise on pure speculative momentum—- until it reached an asymptotic top, and would then collapse in a fiery crash on its own weight.

So with the market raging in self-fueling momentum at the 2600 mark on the S&P 500, we reflect back to the great dotcom crash for vivid reminders of what happens next. That earlier meltdown is especially pertinent because in many ways today’s stock market mania is far less justified than the one back then.

This commentary by David appeared on his Internet site on Tuesday — and it’s definitely worth reading.  It’s another contribution from Brad Robertson — and another link to it is here.


Fed Fears New Record High Credit Bubble – Danielle DiMartino Booth

Former Federal Reserve insider Danielle DiMartino Booth says the record high stock and bond prices make the Fed nervous because it’s fearful of popping this record high credit bubble. DiMartino Booth says, “The Fed’s biggest fear is they know darn well this much credit has built up in the background, and the ramifications of the unwind for what has happened since the great financial crisis is even greater than what happened in 2008 and 2009.  It’s global and pretty viral.  So, the Fed has good reason to be fearful of what’s going to happen when the baby boomer generation and the pension funds in this country take a third body blow since 2000, and that’s why they are so very, very intimidated by the financial markets and so fearful of a correction.”

Why will the Fed not allow even a small correction in the markets? DiMartino Booth says, “Look back to last year when Deutsche Bank took the markets to DEFCON 1.  Maybe you were paying attention and maybe you weren’t, but it certainly got the German government’s attention.  They said the checkbook is open, and we will do whatever we need to do because we can’t quantify what will happen when a major bank gets into a distressed situation.  I think what central banks worldwide fear is that there has been such a magnificent re-blowing of the credit bubble since 2007 and 2008 that they can’t tell you where the contagion is going to be.  So, they have this great fear of a 2% or 3% or 10 % (correction) and do not know what the daisy chain is going to look like and where the contagion is going to land.  It could be the Chinese bond market.  It could be Italian insolvent banks or it might be Deutsche Bank, or whether it might be small or midsize U.S. commercial lenders.  They can’t tell you where the systemic risk lies, and that’s where their fear is.  This credit bubble is of their making.

In short, the Fed does not know what is going to happen, and according to DiMartino Booth, nobody does. DiMartino Booth contends, “I don’t think any of us know what the implications are for a $50 trillion debt build since the great financial crisis (of 2008).  It is impossible to say.  We have never dealt with anything of this magnitude.”

This very worthwhile 23:30 minute video interview with host Greg Hunter was posted on the usawatchdog.com Internet site on Wednesday — and it comes to us courtesy of Brad Robertson as well.  Another link to it is here.


Canadian households lead the world in terms of debt: OECD

Canada leads the world in terms of household debt levels, and it’s a major risk to the country’s economy, the OECD says in a new report.

In a chapter of a report set to come out next month that has been released in advance, the Organization for Economic Co-operation and Development says that while virtually all countries saw their debt loads increase in the years leading up to the credit crisis of 2007, most have seen their indebtedness decrease over time.

But that’s not the case for Canada and some Scandinavian countries, where household debt levels, as the OECD puts it, “has continued to rise from high levels.”

Canada now leads the world in terms of household debt, when expressed as a percentage of the size of the economy.

This CBC news item was posted on their website on Thursday morning EST — and was picked up by the msn.com Internet site.  It’s yet another news item courtesy of Brad R. — and another link to it is here.


Sochi talks roundup: Russia, Iran, Turkey reach important breakthroughs on Syria

Speaking to the press after his meeting with his Iranian and Turkish counterparts in Sochi on Wednesday, President Putin said the peace talks in Astana and the establishment of de-escalation zones in Syria have made possible a fundamentally “new stage” in the Syrian settlement, and helped secure a “breakthrough” opportunity to crush the terrorists.

In the course of their meeting, presidents Vladimir Putin, Hassan Rouhani and Recep Tayyip Erdogan discussed the progress that has been made in the Syrian settlement process, and the steps necessary to ensure the complete and long-term normalization of the political and security situation in the country.

A joint statement released by the three heads of state after their talks declared that the countries’ collaborative efforts in the 11 months since the establishment of the ceasefire regime in late December 2016 have helped to secure a “breakthrough” in “bringing closer the elimination of [Daesh], the Nusra Front and all other terrorist organizations as designated by the United Nations Security Council.” The countries vowed to continue their cooperation until the terrorists are completely defeated.

Furthermore, the leaders promised to continue their coordinated efforts in reaching a political settlement “to ensure that the progress in the reduction of violence is irreversible.” This includes political support for reconciliation talks between the government and the opposition, assistance to Syrians in restoring the country’s unity, free and fair elections and a work on a constitution that would enjoy the support of the Syrian people. Crucially, the three leaders also reaffirmed their commitment to Syria’s sovereignty and territorial integrity.

This story was posted on the sputniknews.com Internet site at 10:12 p.m. Moscow time on their Wednesday evening, which was 2:12 p.m. in Washington — EST plus 8 hours — and I thank Roy Stephens for bringing it to our attention.  Another link to it is here.


The Urge to Surge: U.S. Military in Middle East Grows 33 Percent in Four Months

The U.S. military footprint in the Middle East has swelled some 33 percent in just the past four months, according to a new Pentagon report.

Since the beginning of July, the 40,517 troops and U.S. Department of Defense (DoD) civilian population prosecuting war and other security missions in the Middle East has grown to 54,180, a rise of 33 percent, according to DoD personnel and workforce report data.

The numbers do not include a sharp increase in U.S. troops — from some 11,000 to 15,000 according to military.com — deployed to hot spots in Afghanistan, where Washington has been at war for over 16 years.

The publicized troop increases in one of the most unstable parts of the world are thought to herald further escalations, as observed by the largest U.S. troop deployment to the region in five years.

Pentagon numbers detailed in the November 17 quarterly report show that every country in the region that hosts a U.S. military presence has seen a significant recent increase in DoD civilians and U.S. troops.

This news item put in an appearance on the sputniknews.com Internet site at 10:13 p.m. Moscow time on their Thursday evening, which was 2:13 p.m. in Washington — EDT plus 8 hours.  I thank Larry Galearis for finding it for us — and another link to it is here.


These Are the Five Biggest Tests Facing China’s Next Central Bank Chief

When Zhou Xiaochuan finally hands over the baton at the People’s Bank of China after a decade and a half in charge, his successor will inherit a series of headaches crowned by a debt pile racing toward 300 percent of output.

The next governor will be tasked with not just reining in that leverage without tripping up economic growth, but keeping an eye on accelerating inflation too, all as the institution’s role in a complex regulatory structure evolves. As if that wasn’t enough, they’ll also be tasked with maintaining a stable currency as it opens up to market forces and boosting communication to keep global investors in the loop.

The PBOC is in more of bind than ever with its monetary policy,” said Zhao Yang, chief China economist at Nomura Holdings Inc. in Hong Kong. “While it was fine to just look at inflation and economic growth targets in the past, the central bank now has to strike a balance among more targets, some of them conflicting.

China’s appointment of a new PBOC governor may be imminent, after Zhou last month signaled his retirement. Zhou is already helping set the agenda for his successor, having warned in October about the risk of a collapse in asset prices after the popping of a credit bubble. Here are five of the most pressing tasks that will be on the new chief’s docket from day one…

This Bloomberg story, courtesy of Brad Robertson, is one I plucked from a Zero Hedge article yesterday evening.  It was posted on their Internet site at 1:00 p.m. Denver time on Wednesday afternoon — and updated about eleven hours later.  Another link to it is here.


China Deleveraging Hits Corporate Bonds As Cascade Effect Begins

Following the market lock down during October’s Party Congress, many commentators were disturbed by the continued rise in Chinese government bond yields as we returned to “business as usual”, with the 10-year rising to 4%. At the beginning of this month, we discussed the sell-off and noted a useful insight from The Wall Street Journal

An important anomaly to note about the bond rout: as government bonds sold off, yields on less-liquid, unsecured Chinese corporate bonds barely moved.

    That is atypical in an environment of rising rates – usually, bond investors shed their less-liquid holdings and hold on to assets that are more easily tradeable, like government debt.

The question was…why had corporate bond yields barely moved? The answer, according to the WSJ, was that China’s deleveraging policy led to redemptions in the shadow banking sector, e.g. in the notorious $4 trillion Wealth Management Products (WMP) sector. Faced with redemptions, shadow banks had to sell something…quickly…and highly liquid government bonds were the “easiest option”. Furthermore…and this is potentially significant…the WSJ noted…

Meanwhile, the non-banks have held on to their higher-yielding corporate bonds, which at least have the benefit of helping them to maintain high returns.

Not any more.

We agreed with the WSJ’s explanation at the time, but noted that the government bond sell-off was actually a sign of the unravelling of the WMP Ponzi scheme. The Chinese authorities are wise to the Ponzi which is why they announced the overhaul of shadow banking and WMPs last Friday. However, the new regulations don’t kick in until mid-2019, a sign to us that when they looked “under the bonnet”, they didn’t like what they saw.

We doubt that China can achieve an orderly restructuring of its shadow banking sector, never mind its much larger credit bubble. A sign that we have taken another step towards China’s “Minsky moment” is that the bond sell-off has spread to the corporate bond market. The chart shows how spreads versus sovereign bonds have blown out during the last few weeks.

This long, but very worthwhile news item was posted on the Zero Hedge website at 7:15 p.m. on Thursday evening EST — and another link to it is here.


The Party Is Over for Australia’s $5.6 Trillion Housing Frenzy

The party is finally winding down for Australia’s housing market. How severe the hangover is will determine the economy’s fate for years to come.

After five years of surging prices, the market value of the nation’s homes has ballooned to A$7.3 trillion ($5.6 trillion) — or more than four times gross domestic product. Not even the U.S. and U.K. markets achieved such heights at their peaks a decade ago before prices spiraled lower and dragged their economies with them.

Australia’s obsession with property is firmly entrenched in the nation’s economy and psyche, fueled by record-low interest rates, generous tax breaks, banks hooked on mortgage lending, and prime-time TV shows where home renovators are lauded like sporting heroes. For many, homes morphed into cash machines to finance loans for boats, cars and investment properties. The upshot: Australian households are now twice as indebted as China’s.

This longish, but very interesting Bloomberg news story showed up on their Internet site at 6:00 a.m. MST on Thursday morning — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.


Whose Private-Sector Debt Will Implode Next: U.S., Canada, China, Eurozone, Japan? — Wolf Richter

The Financial Crisis in the U.S. was a consequence of too much debt and too much risk, among numerous other factors, and the whole house of cards came down. Now, after eight years of experimental monetary policies and huge amounts of deficit spending by governments around the globe, public debt has ballooned. Gross national debt in the U.S. just hit $20.5 trillion, or 105% of GDP. But that can’t hold a candle to Japan’s national debt, now at 250% of GDP.

And private-sector debt, which includes household and business debts — how has it fared in the era of easy money?

In the U.S., total debt to the private non-financial sector has ballooned to $28.5 trillion. That’s up 14% from the $25 trillion at the crazy peak of the Financial Crisis and up 63% from 2004.

In relationship to the economy, private sector debt soared from 147% of GDP in 2004 to 170% of GDP in the first quarter of 2008. Then it all fell apart. Some of this debt blew up and was written off. For a little while consumers and businesses deleveraged just a tiny little bit, before starting to add to their debts once again.

This worthwhile commentary by Wolf put in an appearance on the wolfstreet.com Internet site on Wednesday sometime — and I thank Judy Sturgis for pointing it out.  Another link to it is here.


Russia’s Plaurum sees PGMs more reliable than bitcoin — Lawrie Williams

There has been almost a mania over bitcoin and its crypto-currency copies recently as the price of the original has accelerated up to $8,000 which the writer sees as a bubble situation just waiting to burst.  It is a currency built almost entirely on sentiment and if sentiment changes we could see it return to from whence it came.  It, in the writer’s view, has no material substance behind it.  What comes from zero could just as easily return there – it is something of a legal Ponzi scheme only having value as long as investors carry on pouring money into it.

Thus it is good to read analysis from others who, to an extent at least, take a similar view.  Rick Rule has recently made the point that in his view bitcoin is a distraction.  It may appeal to the speculator, but he chooses gold for the long term.  And now analysts as Russia’s Plaurum Group have put out a statement that they see precious metals as more reliable and stable than bitcoin.

In terms of PGM demand though, Plaurum sees continuing strength in the automobile markets, at least in the short to medium term, and the supply shortages which have been benefiting palladium and rhodium prices in particular are likely to persist and drive prices even higher.  Meanwhile a change in sentiment for the very volatile bitcoin could bring it crashing down.  It’s not so much that bitcoin couldn’t see further gains.  It may do so, but is far more vulnerable to a substantial fall than the PGMs where a real shortfall exists.

This commentary by Lawrie appeared on the Sharps Pixley website yesterday — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the pheasant-tailed jacana, which is a bird I ran across when I was researching the Indian roller that graced my Thursday column.  They are identifiable by their wide feet and claws which enable them to walk on floating vegetation in shallow lakes, their preferred habitat. The females are more colourful than the males — and are polyandrous.  It breeds in India, southeast Asia, and Indonesia. It is sedentary in much of its range.  Here are four shots…three of the female — and one of the male.  ‘Click to enlarge’.


The WRAP

Cautious, careful people, always casting about to preserve their reputation and social standing, never can bring about a reform. Those who are really in earnest, must be willing to be anything or nothing in the world’s estimation — and publicly and privately, in season and out, avow their sympathy with despised and persecuted ideas and their advocates — and bear the consequences.Susan B. Anthony [1820-1906]


With the markets in the U.S. closed yesterday, there’s certainly not much to talk about regarding the precious metals price activity on Thursday.

But I was re-reading Ted Butler’s mid-week commentary to his paying subscribers just before I started on today’s missive — and it jogged my memory about something — and to make my point, I’m going to steal two more paragraphs from Ted, because he’s just so good at getting right to the heart of the matter…


“Total open interest data indicate that there is a one billion ounce open commitment in COMEX silver short and long positions, more than annual world production or consumption. No other commodity has a larger real world equivalent total open interest as high as silver.”

“Crude oil futures, for instance, have 10 times the number of total open paper contracts than COMEX silver, making silver’s total open interest appear unremarkable, or even small. But when you convert the open interest in each to real world equivalents, the comparison gets turned on its head. By real-world equivalents, COMEX silver open interest is 100 times larger than exists in crude oil in terms of open interest…relative to annual world production. The real world equivalent long and short position in COMEX silver is so much larger than that of any other futures-traded commodity that it necessarily exerts a force on price more profound than in any other commodity.”Silver analyst Ted Butler: 22 November 2017


You get a real sense of these numbers in the weekly “Days to Cover” chart that I post every week in conjunction with the Commitment of Traders Report.  I don’t call it “The most important chart in my Saturday column” for no reason, dear reader.

Although it doesn’t show open interest numbers for any of the physically traded commodities on the COMEX, the difference between what the Big 4 and Big 8 traders are short in crude oil vs. silver is eye-watering…4 and 6 days respectively for world production for crude oil — and 145 and 208 days for silver.  Click to enlarge.

The above chart is for last week’s COT Report, but it really doesn’t matter, as the chart barely changes, with crude oil always and forever on the far left — and silver [plus the other three precious metals] always and forever on the far right of this chart.  This circumstance has existed virtually without a break for at least a couple of generations.

Riddle me this.  What would the price of crude oil and silver be, if the respective short positions of the Big 4 and Big 8 traders in these two commodities were reversed?  Here’s another question.  How long would the CFTC — and the powers-that-be/deep state — allow that particular scenario to exist if it were to happen?


And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price has been wandering around a dollar or so either side of unchanged during Far East trading on their Friday — and at the moment it’s down 40 cents the ounce.  Silver spent almost the entire Far East session in positive territory by a few pennies — and it’s currently up 2 cents.  Platinum jumped up 6 bucks in early morning trading in Shanghai, but has been sold off a bunch since then — and is only up 2 dollars.  Palladium traded unchanged until shortly before 3 p.m. China Standard Time, but has been sold lower as well — and is down 3 bucks as Zurich opens.

HFT gold volume, net of Thursday’s volume, is pretty light at just over 36,000 contracts — and roll-over/switch volume out of December is very decent.  HFT silver volume, net of Thursday’s volume, is only about 5,200 contracts, which is very light, but roll-over/switch volume is very heavy in that precious metal.

The dollar index has been chopping very quietly, but unsteadily higher ever since trading began at 6:00 p.m. EST on Thursday evening in New York — and it’s up 13 basis points as London opens.

As I mentioned in yesterday’s column, all the large traders that aren’t standing for delivery in December, have to roll or sell their futures contracts on or before the close of COMEX trading on Tuesday — and the rest have to do the same by the close of COMEX trading on Wednesday, so gross volumes are going to be very heavy on a daily basis between now and then.

But with today being Black Friday in the U.S., it’s a given that the markets will most likely close early — and if they don’t, trading volumes will certainly fall off substantially in the afternoon as what few traders there are at the office, will most certainly head home early.

And as I post today’s column on the website at 4:02 a.m. EST, I note that precious metal prices have done practically nothing during the first hour of London/Zurich trading. Gold is down 10 cents at the moment. Silver isn’t doing much — and is still up 2 cents. Platinum is still up 2 bucks — and palladium is down the same amount as it was an hour ago…3 dollars.

Gross gold volume, which includes Thursday’s volume as well, is about 221,000 contracts — and with everything netted out, including Thursday’s volume…net HFT gold volume is around 45,000 contracts. Net HFT silver volume is 6,600 contracts.

The dollar index hit its current 93.25 high about forty minutes before the London open — and has been heading lower since — and is now back at unchanged.

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

Have a good weekend…long, or otherwise.

Ed

Gold and Silver Rally as the Dollar Index Craters

23 November 2017 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price wandered around a dollar or so either side of unchanged until around 1 p.m. China Standard Time on their Wednesday afternoon — and then rallied about five bucks until 9 a.m. in London.  From there it didn’t do much of anything until just after 12:30 p.m. GMT — and at that juncture began to head higher with some authority.  The high tick of the day came at 2:40 p.m. EST in after-hours trading.  It was sold lower by a few dollars for the next thirty minutes or so — and then traded flat for the remainder of the day.

The low and high ticks were reported as $1,278.60 and $1,294.60 in the December contract.

Gold finished the Wednesday trading session in New York at $1,291.50 spot, up $11.50 from Tuesday’s close — and back above its 50-day moving average.  Gross volume was 482,836 contracts.  Net volume was pretty heavy once again, at something under 259,000 contracts — and roll-over/switch volume out of December and into future months was pretty chunky as well.

Here’s the 5-minute tick chart for gold, courtesy of Brad Robertson as usual — and as you can tell, volumes were pretty elevated everywhere yesterday, but particularly during the COMEX trading session where it really matters.  It’s obvious from these volume numbers that yesterday’s price rallies were met by the usual short and long sellers of last resort.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York – and 1 p.m. China Standard Time [CST] the following day in Shanghai — and don’t forget to add two hours for EDT. The ‘click to enlarge‘ feature is a must.

The silver price also chopped quietly sideways until minutes after 1 p.m. CST on their Wednesday afternoon.  It rallied to the $17 spot mark by 3 p.m. CST — and was held there until shortly after 9 a.m. GMT in London.  It was sold down a bit into the noon silver fix — and began to head higher the moment that the COMEX trading session opened in New York at 8:20 a.m. EST.  That rally was squashed by the time the afternoon gold fix in London was done for the day — and it chopped and flopped around, mostly sideways, after that.

The low and high tick in this precious metal was recorded by the CME Group as $16.925 and $17.15 in the December contract.

Silver was closed on Wednesday at $17.13 spot, up 19 cents on the day — and back above its 50-day moving average as well.  Gross volume was sky high at 117,995 contracts, but once all December switch/roll-over volume was netted out, volume cratered to just under 48,000 contracts, which is on the lighter side…relatively speaking, that is.

And here’s the 5-minute tick chart for silver, thanks to Brad R. — and as you can tell at a glance, volumes weren’t nearly as heavy for this precious metal as they were for gold.

Like for gold, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1 p.m. China Standard Time [CST] the following day in Shanghai — and don’t forget to add two hours for EDT. The ‘click to enlarge‘ feature is a must as well.

Platinum was sold lower in morning trading in the Far East on their Wednesday.  Its low tick came at, or shortly after 11 a.m. CST.  It began to edge higher from there…in fits and starts…until the high tick was printed between 2 and 3 p.m. EST in after-hours trading in New York.  Then, like both silver and gold, it was sold lower until 4 p.m. — and from that point, traded flat into the close.  Platinum finished the Wednesday session at $937 spot — and up 5 bucks on the day.

Palladium didn’t do much of anything until minutes after 1 p.m. CST on their Wednesday afternoon — and like silver and gold, began to head higher.  A couple of attempts were made to rally the price up to, or over $1,000 spot during morning trading in Zurich, but both were turned aside.  It was sold lower from there until Zurich closed — and then it rallied anew, but was capped before it could make any more serious runs at the $1,000 spot mark.  From 11:15 a.m. EST, it was forced to chop sideways into the 5 p.m. close.  Palladium finished the Wednesday session at $997 spot, up 5 dollars from Tuesday.

The dollar index closed very late on Tuesday afternoon in New York at 94.06 — and began to head lower immediately.  It was down to around the 93.75 mark by precisely 9:00 a.m. GMT in London — and it rallied a bit from there until around 12:30 p.m. GMT.  From that point, the decline resumed in earnest, complete with a quick tick lower on the 2 p.m. Fed minutes.  The 93.21 low tick appeared to occur right at 4:30 p.m. in New York — and it rallied a small handful of basis points from there into the close.  The dollar index finished the day at 93.25 — and down 81 basis points from Tuesday.

And as has been the case all year, the precipitous decline in the dollar index was not being allowed to manifest itself to its maximum possible extent in the prices of the precious metals — and yesterday’s trading action was just another case in point…of which there are legion.

And here’s the 6-month U.S. dollar index…provided for its usual ‘entertainment value’ of course.

The gold shares gapped up a percent and change at the open — and then crawled quietly, but unenthusiastically higher until around 2:35 p.m. EST when the high tick for gold was set.  The stocks faded a hair into the close from there — and the HUI closed up only 1.42 percent.

The action of the silver equities was even less impressive.  They gapped up a percent at the open as well — and then gave back well over half those gains by minutes after 1 p.m. in New York trading.  They rallied a bit from there until the silver price was tapped lower a minute or so after 2:30 p.m. EST — and they chopped sideways into the close from that juncture.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index finished the Wednesday session up only 0.82 percent.  I was underwhelmed.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 11 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  ABN Amro was the largest of the three short/issuers, with 10 contracts out of its client account.  There were six long/stoppers in total, with the largest being Canada’s Scotiabank, with 4 contracts 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 November rose by 3 contracts, leaving 12 still open, minus the 11 mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery on Friday.  Silver o.i. in November decreased by 1 contract, leaving zero left — and since Tuesday’s Daily Delivery Report showed that 1 silver contract was posted for delivery on Friday…silver deliveries are now officially done for November.

With the November delivery month virtually done in gold, there won’t be much except dribs and drabs for deliveries for the remainder of the month.  And I just stated above, silver is already done.  First Day Notice for December deliveries is, according to Ted, one of the largest delivery months of the year — and that data from the CME Group is still a week away.  It could turn into quite an event.


Once again there were no reported changes in either GLD or SLV — and it was another day of no sales for the U.S. Mint as well.

It was also another day where there was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.

It was a different story entirely in silver, as 1,539,727 troy ounces were received — and 510,465 troy ounces were shipped out the door for parts unknown.  In the ‘in’ category, there was 334,653 troy ounces received at CNT — and one truck load…599,921 troy ounces…dropped off at HSBC USA.  The other truck load…605,153 troy ounces got left at Malca-Amit USA.  That’s their first receipt of silver since they opened their silver depository in New York several years ago.  In the ‘out’ category, there was 350,731 troy ounces that departed Canada’s Scotiabank — and another 159,734 troy ounces was shipped out of CNT.  Over at the Delaware depository, there was 127,890 troy ounces adjusted out of existence.  The link to all this action is here.

Over at the COMEX-approved gold kilobar depository in Hong Kong on their Tuesday, they reported receiving 405 of them — and shipped out 3,855.  As usual, all this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are three charts that Nick passed around on Tuesday, that I just didn’t have room for in Wednesday’s column.  The first one below shows Switzerland’s gold import and exports updated with October’s data.  During that month they imported 98.56 tonnes — and shipped out 139.92 tonnes.  Click to enlarge.

The next two charts shows the imports and exports broken down by country of origin in the first chart — and the destination of all gold exports in the second.  Lawrie Williams has commentary about this in the Critical Reads section just below — and if you don’t want to scroll down for it, it’s linked here as well.  Click to enlarge for both charts.

With Wednesday being the countdown for the big Thanksgiving holiday weekend in the U.S., there’s not a lot in the way of stories for you today, as yesterday was a huge travel day.  I do have the Cohen/Batchelor interview…sans the usual executive summary by Larry Galearis.  That will be forthcoming in my Saturday’s missive.


CRITICAL READS

Gold Jumps, Dollar Dumps After Dovish Fed Minutes

The dollar index had been falling in early trading – extending its free fall from the Nov 1st Fed statement – but legged down on the dovish minutes to the lowest in 5 weeks. Gold is extending its gains, above key technical levels and while the curve is steady, long-end bond yields are sliding modestly.

Today is the worst day for the dollar index since Sept 7th…And Gold has erased its plunge from Monday…Early weakness in bonds has been entirely reversed…

For now the machines have not figured out how to kick stocks higher…

This brief 4-chart Zero Hedge news item put in an appearance on their Internet site at 2:23 p.m. on Wednesday afternoon EST — and it comes to us courtesy of Brad Robertson.  Another link to it is here.


Core Capital Goods Orders Plunge Most in 13 Months

After rebounding from its July jolt, Durable Goods New Orders dramatically missed expectations in October (dropping 1.2% vs. expectations of a 0.3% rise). Perhaps even more concerning is the drop in Core Capital Goods Orders (-0.5% MoM vs expectations of a 0.5% rise) – the biggest drop in 13 months.

The June/July swing (Boeing orders) and storm bounce has gone and October’s preliminary print suggests a slowdown.

Aircraft orders tumbled:

  • Non-defense aircraft orders:  -18.6%
  • Defense aircraft orders:  -11.3%

Removing the impact of aircraft orders and defense spending, we have a problem in the real economy…

This is another brief 4-chart Zero Hedge article from yesterday morning.  It was posted on their website at 8:42 a.m. EST — and it’s also from Brad R.  Another link to it is here.


Hariri’s “Unresignation” as Seen in a Bizarre Photo With the Iranian Ambassador

During Wednesday’s independence day celebrations in Lebanon, Prime Minister Saad Hariri was bizarrely photographed in what appeared to be in a warm and enthusiastic handshake with Iran’s ambassador to Lebanon, Mohammad Fathali, while greeting dignitaries less than 24 hours after his plane touched down in Beirut following his bizarre two week detention in Saudi Arabia.

The photograph is receiving a lot of attention and circulation on Arab social media as ironically during his initial televised resignation speech from Riyadh he cited Iranian meddling and rising influence, even going so far as to suggest he could be assassinated in a nefarious Iranian plot. Yet now he appears surprisingly overjoyed standing in front of the Iranian ambassador.

But surely, based on the below photograph, the Saudi script is not unfolding exactly as planned. Not only did Hariri announce earlier on Wednesday that he will remain Lebanon’s prime minister, but he looks absolutely relieved to be back, and nothing close to being a man who actually fears possible assassination (as he previously declared in Saudi Arabia, likely under coercion).

Hariri addressed thousands of supporters during an independence day gathering and pledged to stay in Lebanon, while also declaring “Lebanon first“.

As we reported earlier, his initial shocking resignation, which President Michel Aoun had refused to formally accept, came amidst Saudi Crown Prince Mohammad bin Salman’s (MBS) aggressive crackdown within the royal family and against high officials, which resulted in the deaths of at least two princes, and the arrests of at least a dozen others.

In televised comments soon after arrival in Beirut, Hariri said that he “presented my resignation to President Aoun today and he urged me to wait” for more dialogue. “I showed responsiveness to this hope.” Hariri also denied reports that Riyadh forced him to step down. He says the claims that Saudi Arabia was keeping him against his will are merely “rumors.”

The situation in the Middle East is rapidly descending into farce, with MbS becoming the chief clown.  You couldn’t make this stuff up.  This story is also from Zero Hedge.  It showed up there at 5:24 p.m. EST on Wednesday evening — and another link to it is here.


The people have spoken,” says Zimbabwe’s new leader

Zimbabwe’s new leader Emmerson Mnangagwa told a cheering crowd in Harare on Wednesday that the country was entering a new stage of democracy following Robert Mugabe’s removal as president after nearly four decades in power.

Mnangagwa returned to the country earlier in the day, having fled for his safety when the 93-year-old former leader sacked him as vice president two weeks ago to smooth a path to the succession for his much younger wife Grace.

The people have spoken. The voice of the people is the voice of God,” Mnangagwa told thousands of supporters gathered outside the ruling ZANU-PF party’s offices in the capital.

“Today we are witnessing the beginning of a new and unfolding democracy.

Zimbabwe was once one of Africa’s most promising economies but suffered decades of decline as Mugabe pursued policies that included the violent seizure of white-owned commercial farms and money-printing that led to hyperinflation.

Call me skeptical, dear reader, but I’ll be very surprised if much changes once he’s sworn in.  This Reuters article, filed from Harare, was posted on their website at 10:46 p.m. EST on the Tuesday evening — and was updated around 2:30 p.m. EST yesterday afternoon.  It’s from Zero Hedge via Brad Robertson — and another link to it is here.


Tales of the New Cold War:  Five things more perilous to the U.S. than Russia — John Batchelor interviews Stephen F. Cohen

This week’s 2-part 40-minute audio interview was posted on the audioboom.com Internet site on Tuesday evening.

I don’t have the executive summary from Larry Galearis as of yet, but because it’s such a quiet news day, I thought that I’d include it in today’s column.  But if you don’t have time for them just now, they will return on Saturday.

The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.


NATO blunder ignites Turkish calls to leave alliance

A major blunder in NATO has brought bitter political rivals in Turkey into a rare demonstration of unity. Parties across the political spectrum are announcing their distrust of the international alliance.

President Recep Tayyip Erdogan spoke of the “major scandal,” as it is being referred to in Turkey, during an address to officials from his Justice and Development Party (AKP) in Ankara Nov. 17.

Erdogan said he had been informed by Chief of the General Staff Hulusi Akar and E.U. Affairs Minister Omer Celik that Mustafa Kemal Ataturk, the founder of the Turkish Republic, and Erdogan had been depicted as NATO’s enemies during a recent NATO military exercise in Norway.

He was referring to a military exercise held Nov. 8-17 in Stavanger, Norway, that, according to NATO, was “a Command Post/Computer Assisted Exercise without troops on the ground.

Once Erdogan heard of the insult, he ordered the withdrawal of the 40 Turkish officers who were to participate in the military exercise. Speaking to the AKP, he said, “You cannot have such an alliance or such an ally.”

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


The irresistible rise of MBS…and his possible downfall — Pepe Escobar/Uwe Parpart

In a two-part analysis of the recent and ongoing revolutionary developments in Saudi Arabia instigated and executed by Crown Prince Mohammad bin Salman (MBS), Asia Times editor Uwe Parpart and roving correspondent Pepe Escobar recount the details and background of the recent MBS power grab and attempt to ascertain whether it will last. In a matter of days, MBS may ascend to the throne, leaving to his father, King Salman, the ceremonial role of Custodian of the Two Holy Mosques. The November 4/5 MBS power play was a prelude. What does it portend? Who masterminded it and drove it? Who will benefit? What does it mean for the world’s most volatile region? Below, part 1.

When the black limousines arrived in the dead of night on Saturday November 4, and into Sunday November 5, few of the Saudi princes, ministers, ex-ministers, military leaders, media moguls and top businessmen who had been asked to attend the posh Ritz Carlton hotel in Riyadh’s diplomatic district thought it wise to decline the invitation.
Conveyed by Saudi police, the invitations were issued by Crown Prince Mohammad bin Salman (MBS), chairman of a brand new Supreme Committee to investigate public corruption that was created by a series of royal decrees just hours before the arrests.

The Committee’s powers include:

“Investigation, issuance of arrest warrants, travel bans, disclosure and freezing of accounts and portfolios, tracking of funds and assets and preventing their remittance or transfer by persons and entities, whoever they might be.”

Further, “The Committee … may take whatever measures deemed necessary to deal with those involved in public corruption cases and take what it considers to be the right of persons, entities, funds, fixed and movable assets, at home and abroad, return funds to the state treasury and register property and assets in the name of state property.”

Part One of this commentary by Asia Times editor Uwe Parpart and roving correspondent Pepe Escobar, appeared on their Internet site at 1:38 p.m. Tuesday evening Hong Kong time, which was 12:38 a.m. on Tuesday morning in New York.  It’s worth your while if you have the interest.  I thank U.K. reader Tariq Khan for bringing it to our attention — and another link to it is here.


How Turkey, Iran, Russia and India are playing the New Silk Roads — Pepe Escobar

Vladimir Putin, Recep Tayyip Erdogan and Hassan Rouhani will hold a summit this Wednesday in Sochi to discuss Syria. Russia, Turkey and Iran are the three power players at the Astana negotiations – where multiple cease-fires, as hard to implement as they are, at least evolve, slowly but surely, towards the ultimate target – a political settlement.

A stable Syria is crucial to all parties involved in Eurasia integration. As the Asia Times reported, China has made it clear that a pacified Syria will eventually become a hub of the New Silk Roads, known as the Belt and Road Initiative (BRI) – building on the previous business bonanza of legions of small traders commuting between Yiwu and the Levant.

Away from intractable war and peace issues, it’s even more enlightening to observe how Turkey, Iran and Russia are playing their overlapping versions of Eurasia economic integration and/or BRI-related business.

Much has to do with the energy/transportation connectivity between railway networks – and, further on the down the road, high-speed rail – and what I have described, since the early 2000s, as Pipelineistan.

This rather involved commentary by Pepe would be less so if I knew the countries and cities in the Middle East/Central Asia as well as I knew those in North and South America.  It appeared on the Asia Times website at 5:19 a.m. Hong Kong Time on Tuesday morning, which was 4:19 p.m. EST on Monday afternoon in New York.  I thank Tariq Khan for this article as well — and another link to it is here.


The Cardinal Sin of International Finance — Nick Giambruno

As Doug Casey has correctly noted, the prime directive of any organism—whether it’s an amoeba or a person or a corporation or a government—is to survive.

That’s why the U.S. government protects the petrodollar so zealously. It needs the system to survive.

World leaders who have challenged the petrodollar recently have ended up dead…

Take Saddam Hussein and Muammar Gaddafi, for example. Each led a large oil-producing country—Iraq and Libya, respectively. And both tried to sell their oil for something other than U.S. dollars, before U.S. military interventions led to their deaths.

In October 2000, Saddam had started to sell Iraqi oil for euros only. Iraq said it would no longer accept dollars for oil because it did not want to deal “in the currency of the enemy.

A little over two years later, the U.S. invaded. Immediately after Baghdad fell to U.S. forces, all Iraqi oil sales were switched back to dollars.

That pretty much sums it up.  This absolute must read commentary by International Man senior editor Nick Giambruno put in an appearance on that website yesterday I believe — and it’s the final offering of the day from Brad Robertson.  Another link to it is here.


Gold mining firms set aside $360 million for South Africa silicosis law suit

Six gold mining firms, including Anglo American, have made a 5 billion rand ($361 million) provision to settle a class action law suit with thousands of miners who contracted fatal lung diseases while working in South African mines, an industry document said on Wednesday.

Earlier on Wednesday, lawyers acting for miners who contracted silicosis and TB said settlement talks with implicated gold companies for an out-of-court deal could be reached by December.

This tiny 2-paragraph Reuters news item, filed from Cape Town, appeared on their website at 8:37 a.m. EST on Wednesday morning — and was updated about two hour later.  I found it embedded in a GATA dispatch.


Big Surge in Swiss gold exports to India and China — Lawrie Williams

There has been much talk in the media of late of very slack gold demand from the world’s two leading importers of the metal. India and China.  But the latest export figures for the yellow metal out of Switzerland for October would seem to counter this as both have seen a strong recovery from the admittedly weak September figures.

In the latest figures released by the Swiss customs administration, India came out top of the list for October gold exports, taking 38 tonnes, closely followed by mainland China with 34.6 tonnes.  Hong Kong came in in third place with 19.5 tonnes, once again demonstrating that the former British Crown Colony is no longer the principal conduit for Chinese gold imports.  However if one adds the Hong Kong imports to those of mainland China the latest Swiss figures do show that gold exports to Greater China from the world’s largest re-refiner and exporter of gold were an impressive 54.1 tonnes.  These figures compare with the previous month’s of 17.2 tonnes to China, 11.6 tonnes to India and 11.1 tonnes to Hong Kong.  By the looks of things gold demand in China and India is alive and well as the mid-year anomalies fall out of the system.

Substantial flows of gold [are] from Switzerland to the Middle and Far East – 83.3% of the Swiss exports are to this region.  What is of particular significance in this percentage is that in Asia and the Middle East the gold tends to land in firmer hands and doesn’t tend to find its way back on to the markets on gold price fluctuations as it may do in the West.  This is perhaps the principal reason that the long term future for the gold price is, in our view, extremely positive.  When the tide turns for gold investment in the West, as it almost certainly will, there will be a shortage of physical metal and this will drive the price up beyond the capability of paper gold trades to suppress it.  There does seem to be a certain momentum building in the gold price, but those who would suppress it have been dumping large amounts of notional gold on the futures market.  This cannot go on indefinitely and sooner or later the physical price will have to take off upwards, but as to when this tipping point will occur still remains hugely uncertain.

The above three paragraphs are all there is to this 1-chart/3-paragraph gold-related news story that showed up on the Sharp Pixley Internet site on Wednesday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter is the Indian roller…a strange name for a bird species of such exquisite beauty.  They are found widely across tropical Asia from Iraq eastward across the Indian Subcontinent to Indochina and are best known for the aerobatic displays of the male during the breeding season.


The WRAP

The real world equivalent long and short positions in COMEX silver is so much larger than that of any other futures-traded commodity, that it necessarily exerts a force on price more profound than in any other commodity. The big dog always leads the pack and because the positioning in COMEX silver futures is larger than what’s going on in the real world of silver production and consumption, the paper market dictates price to the world of real metal; instead of the other way around. This shouldn’t be and, in fact, is contrary to U.S. commodity law, but the CFTC refuses to deal with what is nothing less than a clear market distortion; the very essence of price manipulation.

But you can’t stop there. Since there is a long for every short in every futures contract, I suppose that someone could claim the equally large COMEX paper long position is manipulating silver prices higher than they should be. This does hold some merit at first blush, until you recognize the fact that silver is priced lower than it ever has been relative to just about every other commodity. There has to be a reason why silver is priced so cheaply, not only in absolute terms, but in impossible to argue with relative terms.

The reason has to do with the composition and nature of the short side of COMEX silver futures. Simply put, the entire true COMEX net short silver position is held by just 8 traders, most of which are U.S. and foreign banks. This is the one glaring feature in silver that, to this point, has escaped notice, even by those that regularly follow and comment on the silver market. In my opinion, this is the central issue in silver – the one thing that has most determined and will determine price. This is the entire ball game in silver. Silver analyst Ted Butler: 22 November 2017  [Emphasis mine – Ed]


Although it was another day where precious metal prices rallied across the board, it’s equally as obvious that the rallies, particularly in gold and silver, were met by “all the usual suspects” as sellers of last resort.  However, I’m sure that some of Ted’s raptors, who are long both gold and silver in the COMEX futures market, were selling their long positions for huge profits as well.  If they hadn’t, those two precious metals would have closed appreciably higher yesterday.

The precious metal equities are in Rodney Dangerfield territory…they “just can’t get no respect” — and that’s been going on all this week.  Of course that will change at some point, but as to exactly when, still remains to be seen.

As I pointed out at the top of today’s missive, both gold and silver closed back above their respective 50-day moving average once again — and we’ll find out soon enough if JPMorgan et al will allow these rallies to develop further.

Here are the 6-month charts for all four precious metals, plus copper, once again — and the penetrations I just spoke of, are obvious.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price was sold quietly lower — and was down a couple of buck by around 9:20 a.m. China Standard Time on their Thursday morning. It’s been chopping mostly sideways since — and is down $2.50 at the moment. Silver was sold down about 8 cents by 9:20 a.m. CST as well — and is currently down 6 cents. Ditto for platinum — and it’s down 4 dollars. Palladium chopped around a dollar or so either side of unchanged during Far East trading — and at the moment it’s down 3 bucks as the Zurich open looms.

Net HFT gold volume is nothing special at around 35,000 contracts — and roll-over/switch volume out of December is fairly decent. Net HFT silver volume is very light at 4,500 contracts — and roll-over/switch volume in that precious metal is pretty chunky already.

The dollar index has been chopping very quietly lower since trading began at 6:00 p.m. EST in New York on their Wednesday evening — and it’s down 3 basis points as London opens.

Including today, which is a holiday in the U.S. there are five business days left before First Notice for gold and silver deliveries for December are posted on the CME’s website.  All the large traders…those with more than 150 contract…that aren’t standing for delivery, have to roll or sell those positions before the end of COMEX trading on Tuesday — and all the rest of the traders that aren’t standing for delivery, have to be out of the December contract by the close of COMEX trading on Wednesday.  Gross trading volumes in both these precious metals are going to pretty enormous for the next few days [They already are. – Ed] as the remaining traders still holding December contracts, exit their positions.

Gold open interest in yesterday’s Preliminary Report showed that 165,772 gold contracts, plus 56,236 silver contracts, were still open at the close of trading yesterday…Wednesday — and it only remains to be seen how much of that is left by the time First Notice Day rolls around next Wednesday evening.  Based on past history, I would suspect that around 95 percent, or a bit more, of those amounts will be gone by the COMEX close a week from today.

And as I post today’s efforts on the website at 4:02 a.m. EST, I note that precious metals prices certainly haven’t been doing much during the first hour of London/Zurich trading. Gold is down $2.40 an ounce, silver is down 5 cents — and platinum and palladium are lower by 3 dollars and 2 dollars respectively.

Gross gold volume isn’t overly heavy at around 57,000 contracts — and net of roll-over/switch volume out of December, net HFT volume is about 41,000 contracts, which is pretty light. Net HFT silver volume is 5,800 contracts, which is exceedingly light.

The dollar index continues to inch lower — and is down 10 basis points.

With New York closed, I expect that trading activity will be pretty tepid for the remainder of the Thursday session.  New York will be open at least part of Friday, but I suspect that volumes will be light.

Is there a chance for some holiday price fireworks over the next couple of days?  I suppose, if some extraneous news event, like a break-out of hostilities in the Far East for example, might make a difference.  But since 95 percent of price activity is a paper trading game on the COMEX/GLOBEX between the commercial traders on one side — and the Managed Money traders on the other, I doubt if much will happen.  I say all this with the usual caveat that “I’d love to be proven spectacularly wrong about that.

Once again I wish all my American subscribers a safe and happy Thanksgiving long weekend — and I’ll see you here tomorrow.

Ed