Another Salami-Slicing Session

13 November 2018 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM

The gold price traded quietly sideways starting at the 6:00 p.m. EST open in New York on Sunday evening — and that state of affairs lasted until 1 p.m. China Standard Time on their Monday afternoon.  Except for an hour or so long ‘rally’ beginning at the London open, it was sold quietly lower until trading ended at 5:00 p.m. EST in New York on their Monday afternoon.

The high and low ticks aren’t worth looking up, but here they are anyway…$1,212.00 and $1,200.60 in the December contract.

Gold was closed in New York on Monday at $1,199.90 spot, down $9.50 from Friday.  Net volume was extremely quiet at a bit under 160,00 contracts — and there was a bit over 37,500 contracts worth of roll-over/switch volume out of December — and into future months.

The silver price wandered around a few pennies either side of unchanged in Far East and morning trading in London on their respective Mondays — and the price was turned quietly lower about forty-five minutes after the noon GMT silver fix.  That quiet sell-off lasted until the London afternoon gold fix…10 a.m. EST — and it traded flat from there until a few minutes after 3 p.m. in the thinly-traded after-hours market.  It was sold down to its low tick of the day an hour or so later…$13.99 spot…but made it back above the $14 spot mark by a penny before trading ended at  5:00 p.m. EST.

The high and low ticks in this precious metal were reported by the CME Group as $14.18 and $13.955 in the December contract.

Silver was closed yesterday at $13.99 spot, down 16 cents from Friday.  Net volume in this precious metal was very quiet as well at a bit over 53,000 contracts — and there was a hair under 16,500 contracts worth of roll-over/switch volume in this precious metal.

Platinum was up 4 bucks by minutes before 11 a.m. China Standard Time on their Monday morning, but was back to a few dollars below unchanged by 9:30 a.m. CET in Zurich.  It was back around unchanged a few hours later — and the selling pressure in this precious metal showed up around 10:30 a.m. in New York…thirty minutes before the Zurich close.  It was sold lower pretty hard at that juncture — and it finished the Monday session right on its $838 spot low tick of the day — and down 13 dollars from Friday’s close.

The palladium price was up a small handful of dollar in mid-morning trading in the Far East, but was back at unchanged by the Zurich open.  It was sold down hard at that point — and then didn’t do much of anything until the COMEX open.  It shot higher from there, but ran into ‘something’ almost right away — and from there it was sold unsteadily lower until the low tick of the day was set shortly after 4 p.m. EST in the thinly-traded after-hours market.  It didn’t do much after that.  Palladium was closed at $1,082 spot — and down 20 bucks from Friday’s close.

The dollar index closed very late on Friday afternoon in New York at the 96.90 mark — and jumped up 15 basis points the moment that trading began at 6:00 p.m EDT in New York on Sunday evening.  It crawled quietly back below the the 97.00 mark over the next four and half hours — and began to head higher about 11:45 a.m. CST on their Monday morning.  From that juncture it was up, up and away until about twenty minutes after the London open.  It chopped quietly lower from that point until a few minutes before 9 a.m. in New York — and it began to ‘rally’ anew, with the 97.69 high tick coming just before 5 p.m. EST.  It backed off a few basis points from there until trading ended.

The dollar index finished the Monday session in New York at 97.64…up 74 basis points from Friday’s close — and it was yet another day where what happened to gold and silver prices had almost no bearing on what was going on in the currency market.

And here’s the 3-day dollar index chart, so you can see the entire Monday trading session starting at 6:00 p.m. EST in New York on Sunday evening, which was 8 a.m. in Tokyo…7 a.m. in Shanghai.

And here’s the 6-month U.S. dollar index chart — and you can read into it whatever you wish.

The gold shares gapped down a bit at the open — and then stair-stepped their way lower until around 11:30 a.m. in New York trading.  They trended a bit higher over the next hour — and then traded flat until shortly before 2 p.m. EST.  They faded a bit from there, closing almost on their low ticks of the day.  The HUI finished down 2.20 percent.

In most respects, the silver equities traded in a similar fashion to the gold stocks, but Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down a hefty 3.44 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in November fell by 9 contracts, leaving 7 still open.  Friday’s Daily Delivery Report showed that 10 gold contracts were actually posted for delivery today, so that means that 10-9=1 more gold contract was added to the November delivery month.  Silver o.i. in November fell by 10 contracts, leaving just 3 left.  Tuesday’s Daily Delivery Report showed that 10 silver contracts were actually posted for delivery today, so the change in open interest and deliveries match.


There was a really big deposit into GLD yesterday, as an authorized participant added 217,541 troy ounces of gold.  I would suspect that this was used to cover an existing short position.  There was a withdrawal from SLV yesterday, as an a.p. removed 939,244 troy ounces.  I would suspect that JPMorgan owns it now.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on in the gold and silver ETFs as of the close of trading on Friday, November 9 — and this is what they had to report.  Their gold ETF declined by a smallish 3,858 troy ounces — and their silver ETF dropped by 54,174 troy ounces.

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

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

For a change, it was a lot quieter in silver, as only 262,667 troy ounces were received — and all of that was dropped off at JPMorgan’s vault.  There was only 45,373 troy ounces shipped out.  Of that amount, there was 25,251 troy ounces that left Delaware — and the remaining 20,121 troy ounces departed HSBC USA.  There was also a paper transfer of 601,969 troy ounces from the Eligible category and into Registered at Brink’s, Inc. — and I would think that this would be related to deliveries in November.  The link to this activity is here.

JPMorgan’s COMEX silver stash is now up to 152.33 million troy ounces which, of course, is another new record high.

It was pretty quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They only received 5 of them — and shipped out 117.  This activity, such as it was, occurred at Brink’s, Inc. — and I won’t bother linking this.


The Panagyurishte treasure was unearthed by accident in 1949, during clay digging near the town of Panagyurishte in Bulgaria. It has been dated to the fourth century B.C. The find consists of nine solid gold vessels, decorated with different zoomorphic and anthropomorphic figures, including seven rhyta, a rare amphora-rhyton and a phiale.

The treasure is unique not only for its weight in gold – a total of 6.1 kg, but also for the originality of its shapes and ornamentation, as well as for its exquisite craftsmanship.  Click to enlarge.

I have a decent number of stories for you today.


CRITICAL READS

The Poppies Fell for Two Hours… — Bill Bonner

Irish economist David McWilliams had invited us to participate in the “Kilkenomics Festival.” We have written so much about “Trump’s Trade War,” David must have thought we knew something about it. So he asked us to join a panel discussion.

We’re talking about two different things here,” we clarified, for the sake of the audience.

There’s a trade war, which is largely fake. And there’s the threat of a real war, which a trade war might cause.”

We explained our point of view. Mr. Trump has the most to lose from a trade war with China. His reputation for creating a strong economy… his reputation for forceful and successful deal-making… the fortunes of his major backers, as well as his own personal fortune – all depend on cutting a deal with the Chinese.

He could bring China to its knees, we explained, by blocking Chinese imports to the U.S. But he would enjoy his triumph for only about 10 seconds – the time it would take to notice that the U.S. stock market was crashing.

The U.S. president may be a blowhard and a dumbbell about a lot of things, but not about which side his bread is buttered on. He will want to come back from his meeting with China’s Mr. Xi at the G20 summit in Argentina at the end of this month with a victory announcement… not with a double obituary – one for “his” economy and the other for his career.

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


We Are Heading for Another Tragedy Like World War I — Eric Margolis

I’ve walked most of the Western Front of the Great War, visited its battlefields and haunted forts, and seen the seas of crosses marking its innumerable cemeteries.

As a former soldier and war correspondent, I’ve always considered WWI as he stupidest, most tragic and catastrophic of all modern wars.

The continuation of this conflict, World War II, killed more people and brought more destruction on civilians in firebombed cities but, at least for me, World War I holds a special horror and poignancy. This war was not only an endless nightmare for the soldiers in their pestilential trenches, it also violently ended the previous 100 years of glorious European civilization, one of mankind’s most noble achievements.

I’ve explored the killing fields of Verdun many times and feel a visceral connection to this ghastly place where up to 1,000,000 soldiers died. I have even spent the night there, listening to the sirens that wailed without relent, and watching searchlights that pierced the night, looking for the ghosts of the French and German soldiers who died here.

Verdun’s soil was so poisoned by explosives and lethal gas that to this day it produces only withered, stunted scrub and sick trees. Beneath the surface lie the shattered remains of men and a deadly harvest of unexploded shells that still kill scores of intruders each year. The spooky Ossuaire Chapel contains the bone fragments of 130,000 men, blown to bits by the millions of high explosive shells that deluged Verdun.

The town of the same name is utterly bleak, melancholy and cursed. Young French and German officers are brought here to see firsthand the horrors of war and the crime of stupid generalship.

My Grandfather survived this war, albeit barely — and I’ve heard the stories.  This worthwhile commentary from Eric showed up on the unz.com Internet site on Saturday sometime — and it comes courtesy of Larry Galearis.  Another link to it is here.


The American Dream — Jeff Thomas

Many people in Europe and North America are shaking their heads at the rapidly-growing support in their countries for a transition into collectivism. At present, this advance is developing especially rapidly in the U.S.

Since the election of Donald Trump, large numbers of liberal Americans are beside themselves with despair and are responding with vehement collectivist rhetoric.

But, why should this be so? There have been many U.S. presidents who were more conservative in their views than Mister Trump and, in fact, the Deep State, which unquestionably has more control over the future of the U.S. than any president, is clearly moving forward with a collectivist agenda.
Yet, we’re witnessing an anomaly that’s not only unprecedented in U.S. history; its ramifications and the rhetoric that drive it are often irrational beyond the pale.

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


German Bundestag MP, Petr Bystron, calls for an end to sanctions against Russia

Dear Mr. Bystron, recently we have met at the International Conference on the Development of Parliamentarism in Moscow recently. In front of representatives of Parliaments from all around the world, international experts and journalists you held a well-received speech, calling for an end to sanctions against Russia. Why?

I demanded an end to sanctions because they have not achieved anything except harming German business. There’s no point to maintaining these useless sanctions any longer.

The Russian-German relations are very complex. On the political agenda, they are burdened with the sanctions which the E.U. countries imposed to Russia, but on the other hand, Germany and Russia cooperate on a strategic project such as North Stream 2. How do you see the prospect of developing further relations between your country and Russia, and also how the United States relations towards the possibility of greater convergence between Germany and Russia?

Of course German companies are still trying to do business with Russia. The sanctions mainly hurt the meat and fruit exporters, as well as the machine tool industry. Exports dropped as much as 60% in the early days of sanctions in these sectors. Naturally, German businesses want to maintain their traditionally good contacts to Russia. North Stream 2 is just one example of this. But it’s no secret there is a lot of pressure from the United States to stop this project. There was a bipartisan initiative in the U.S. Senate in March supported by 39 Senators, urging the government to do everything it can it stop the pipeline. President Trump has come out against North Stream 2 as well.

This interview was posted on theduran.com Internet site on Sunday sometime — and I thank Roy Stephens for pointing it out.  Another link to it is here.


Russia’s grain exports surge more than 54% this year

Exports of Russia’s wheat and meslin flour expanded by 54.3 percent from January through September of 2018 against the same period a year ago, according to the latest statistics from the Federal Customs Service.

In terms of money, the grain exports reportedly amounted to $6 billion, marking a 62 percent growth. In September alone, the value of grain exports increased by 1.4 percent compared to the same period a year ago and totaled $898.1 million.

The data also showed that imports of grains to Russia dropped 11.1 percent in the first nine months of the year, totaling $245 million. Imports of barley declined by an enormous 94 percent to two million dollars, while purchases of corn by Russian producers fell to $127.6 million, marking a 7.6 percent drop.

On Thursday, Russian agricultural ministry raised the forecast of wheat exports for the current marketing year to 35 million metric tons. In late October, the ministry also increased projections for grain crop to 109 million metric tons from 105 million metric tons, citing improved conditions in Siberia. However, Russian producers managed to harvest 112.7 million tons of grain as of October 25.

Russia has captured more than half of the world’s wheat market in recent years, becoming the world’s biggest exporter of grain, thanks to bumper harvests and attractive pricing. In 2016, Russia became the world leader in wheat exports. Since the early 2000s, its share of the world wheat market has quadrupled.

The above five paragraphs are all there is to this interesting news item that put in an appearance on the rt.com Internet site last Friday afternoon Moscow time — and I thank Larry Galearis for sharing it with us.  Another link to the hard copy is here.


Khashoggi’s Last Words Revealed as Turkish Media Plans to Publish Audio Death Tape

A day after President Tayyip Erdogan dropped the latest bombshell related to the Saudi murder of Jamal Khashoggi, saying Turkey had handed over an audio recording of the journalist’s brutal slaying inside the Istanbul consulate to the U.S., Saudi Arabia, Germany, France and Britain, the contents of Khashoggi’s last words have emerged.

Editor for the the Turkish newspaper Daily Sabah, Nazif Karaman, shared some details from the audio tape with Al Jazeera. Karaman said Khashoggi’s last words were:

I’m suffocating… Take this bag off my head, I’m claustrophobic” – according what he confirmed is the authentic audio recording from inside the Istanbul consulate.

Meanwhile at the conclusion of the centennial anniversary of WWI ceremony in Paris President Erdogan’s office confirmed he and President Trump discussed the Jamal Khashoggi killing on the sidelines of the weekend events.

This Zero Hedge article found a home on theduran.com Internet site on Monday sometime — and I thank Roy Stephens for sending it our way.  Another link to it is here.  There was a parallel story to this in The New York Times yesterday — and it’s headlined “Tell Your Boss’: Recording Is Seen to Link Saudi Crown Prince More Strongly to Khashoggi Killing” — and I thank Roy for that one as well.


BRICS – A Future in Limbo? — Peter Koenig

Today it’s clear that fascist-turned Brazil is out – so we are at RICS. There is not much to argue about. The world’s fifth largest economy, Brazil, has failed and betrayed the concept of the BRICS and the world at large. Whether you consider South Africa as a valid member of the BRICS is also questionable. Much of SA’s social injustice has actually become worse since the end of apartheid. Ending apartheid was a mere political and legal exercise.

Distribution of power and money in SA have not really changed. To the contrary – it worsened. 80% of all land is still in the hands of white farmers. This is what President Cyril Ramaphosa wants to change drastically, by confiscating white farmers land without compensation and re-distribute it to black farmers, who have no formation of how to run these farms. This is not only utterly unjust and will create internal conflicts, the last thing SA needs, but it is also very inefficient, as farming and agricultural production will decline most likely drastically and SA, a potential exporter of farm goods, will become a net importer, a serious hit on South African’s economy.

The principle of redistributing land to the black African society is a solid one. But not by force and not by confiscation without compensation, nor without an elaborate training program for African farmers – to lead to a peaceful transfer – all of which does takes time and cannot happen over-night.

On a recent trip to SA, I spoke to several black people, including especially women from townships, i.e. SOWETO, who said they were better off under apartheid.

It is not a scientific statistic, but the fact that some black people dare say that the system that atrociously discriminated, exploited and raped them, was better than today’s system, is significant. It is a sad testimony to a generation of SA’s democracy.

So, now we are, we could say, down to RIC – Russia, India and China.

This very interesting and worthwhile commentary appeared on the journal-neo.org Internet site on Saturday sometime — and it’s the final offering of the day from Larry Galearis.  Another link to it is here.


For The First Time Ever, Bank Of Japan Total Assets Surpass Japan’s GDP

For the first time in history, a central bank has managed to print enough money to buy enough assets to surpass the nation’s annual GDP.

Under the watchful eye of Kuroda, and the overseeing (but independent) hand of Abe, The Bank of Japan’s balance sheet grew to 553.6 trillion yen as on November 10th – that is larger than Japan’s annualized nominal seasonally-adjusted GDP of 552.8 trillion yen (as of the end of June).

Some context for just how crazy this is, here is The Fed vs US GDP…

And putting it all together…

What happens next?

Simply unbelievable.  This story was posted on the Zero Hedge website at 8:57 p.m. EST on Monday evening — and another link to it is here…but everything you need to see is already posted above.


Banque de France wants Paris to compete with London for gold trade — Ambrose Evans Pritchard

Paris has vaulting ambitions to capture a share of the world gold trade from London, reviving its historic role as a top-tier power in the international bullion market.

The Banque de France has teamed up with JP Morgan to offer a full range of swaps, leases, and gold deposits for global central banks and sovereign wealth funds. Global reserve managers will be able to pledge bullion as collateral for deposits or for raising foreign currency on the Paris market.

Sylvie Goulard, the Banque de France‘s deputy governor, called it the spearhead of a sweeping shake-up of the French gold industry and left no doubt that one aim is to challenge the hegemonic position of the City of London in bullion dealing.

While these gold investment services have until now only been offered from London, it recently became possible for the Banque de France to offer them also from Paris. As a result, Paris could gradually re-emerge as a key marketplace for gold,” she wrote in The Alchemist, the in-house journal for the London Bullion Market Association.

While the French plans predate the Brexit referendum, they have taken on fresh salience as President Emmanuel Macron openly strives to peel away some of the Square Mile’s banking, wealth management, euro clearing, and insurance business.

Mme. Goulard said the BdF will act as a “principal” for the first time so that foreign central banks can generate a return from gold transactions without taking on counterparty risk, a crucial service in the ultra-cautious world of reserve managers.

This longish but worthwhile commentary from Ambrose appeared on The Telegraph‘s website on Sunday.  ‘Richard in La La Land’ cut and paste the story — and sent it to me — and I in turn sent it to Chris Powell.  The whole thing is posted in the clear in this GATA dispatch — and another link to it is here.  There was a Reuters story about this headlined “Bank of France partners with JPMorgan to boost gold bullion services: sources” — and I found that news item on the Sharps Pixley website late last night EST.


Sanctions push Iran’s Gold Bar and Coin demand to 5-1/2-year high in Q3

Recent positive momentum continued in Iran during the third quarter of this year. Iran’s Gold Bar and Coin demand hit 21.1 tonnes, the highest since Q2 2013, and accounted for three-quarters of the Middle East market, according to World Gold Council.

Renewed sanctions and the plummeting rial – with expectations for it to fall further – underpinned this flight to gold. VAT-free bars and coins were preferred over jewellery, which is subject to 9% tax.

The Middle East bar and coin market has continued its recent up trend, rising 144% year-on-year and 28% quarter-on-quarter. Gold Bar and Coin demand reached 27.8t, its highest level since Q2 2013, a period when demand spiked in response to a sharp fall in the gold price.

Bar and coin demand in Turkey reacted differently to the mix of financial insecurity and currency weakness.

As the Turkish lira gold price rose in August to a record high of TL273/g, investors liquidated some of their bar and coin holdings to book profits. Net new buying fell to 4.6t, a 69% drop on the same period last year.

The above five paragraphs are all there is to this gold-related news item, filed from Tehran, that was posted on the scrapregister.com Internet site yesterday sometime.  I found this on the Sharps Pixley website as well.  Another link to the hard copy is here.


The U.S. Dollar vs. Gold: The Final Showdown — Brent Johnson, CEO of Santiago Capital

This 20:32 minute video presentation from the Cambridge House Silver and Gold Summit, in San Francisco last month, put in an appearance on the youtube.com Internet site last Thursday.  What Brent fails to mention, like all other main-stream ostriches with their heads buried in the sand, is that the only reason that the precious metals haven’t taken off years ago, is for the simple reason that JPMorgan has its foot on their respective prices.  What the dollar index is doing is totally irrelevant at this stage of the game.  I thank Richard Saler for sending it our way.


The PHOTOS and the FUNNIES

This is another award-winning photo awarded by the Natural History Museum in London this year.  It’s from the ‘Animals in their Environment’ category — and entitled ‘Tigerland’ by French photographer Emmanueal Rondeau.

Accompanied by rangers, Emmanuel had climbed 700 metres to set up eight cameras, selecting areas with previous tiger sightings and evidence of recent use such as tracks, scratches and faeces. ‘The forests were nothing like I had ever seen,’ he says. ‘Every species was something new.’ Twenty-three days later, this Bengal tiger gazed directly into one of his cameras.

In the Kingdom of Bhutan, tigers are making a comeback. There are now thought to be 103 tigers living in the wild there – almost a third more than the last count in 1998. As Bhutan has developed, the country has created a network of wildlife corridors from one national park to the next to allow wildlife to roam relatively undisturbed.  Click to enlarge.


The WRAP

It was another salami-slicing day in the precious metals on Monday — and with the dollar index up big on the day, I was somewhat surprised that the price damage wasn’t worse than it was — and that volumes in both silver and gold were extremely light.

Without doubt, the Managed Money traders were dumping long positions for big losses — and piling onto the short side, as Monday’s Preliminary Report indicated that this sequence of events appeared to be occurring.

Copper also closed below its 50-day moving average for the second consecutive day — and the Managed Money traders continue to pour onto the short side in WTIC as well.  As Ted says, it’s the very act of them doing that, that drives prices lower.   And as Ted also pointed out in his weekly review on Saturday…”Remember, on big down days, the commercials are always buyers and the managed money traders are always sellers.  Always.”  [Emphasis mine – Ed]

These traders continue to get their respective clocks cleaned when prices are managed higher…or lower — and you’d think that at least some of them would have figured out by now that their current investing model is not working — and that they’re being screwed over.  But, alas, that’s not the case.

And with the November 15 redemption deadline approaching for all these hedge funds, they’re world is about to go from horrid…to putrid.

Here are the 6-month charts for the Big 6 commodities.  Only platinum and palladium are above their respective 50-day moving averages now.  The ‘click to enlarge‘ feature only helps with the four precious metal charts.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price rallied about four dollars or so by around 10 a.m. China Standard Time on their Tuesday morning — and the then didn’t do much of anything until shortly before 2 p.m. CST. It has been chopping quietly lower since — and is currently up $2.70 the ounce. It has been the same general price pattern for silver — and it’s up 8 cents at the moment. The platinum price chopped quietly higher until noon CST — and hasn’t done much since. It’s up 8 bucks. Platinum rallied until about that time as well, but in a very uneven fashion — and it has been trading sideways in the same manner since — and is now up 9 dollars as Zurich opens.

Net HFT gold volume is coming up on 42,500 contracts, which is nothing special — and there’s 1,360 contracts worth of roll-over/switch volume in that precious metal. Net HFT silver volume is around 13,300 contracts already — and there’s 731 contracts worth of roll-over/switch volume on top of that.

The dollar index began to fade a bit as soon as trading began at 6:00 p.m. EST in New York on Monday evening. That lasted until a few minutes after 12 o’clock noon CST — and it has been chopping quietly generally sideways since, but with a slight positive bias — and is down 7 basis points as of thirty minutes before the London open.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and using the past four reporting days as prologue, the report should make for happy reading.  But we’ve still got today to get through first, so I’ll wait until Wednesday’s missive before I stick my neck out.

And as I post today’s column on the website at 4:03 a.m. EST, I see that the gold price has crept a bit lower — and is only up $1.30 the ounce as the first hour of London trading draws to a close. Silver had a tiny price spike shortly before 9 a.m. over there, but it was quickly batted lower — and is back to up only 6 cents. Platinum and palladium have been edging a few dollars higher during the first hour of Zurich trading, with the former up 7 bucks — and the latter now up 9 dollars, but palladium was up 13 at one point.

Gross gold volume is now up to a bit over 58,000 contracts — and net of roll-over/switch volume, net HFT gold volume is about 54,000 contracts. Net HFT silver volume is now up to just under 17,000 contracts — and there’s 811 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has been trading generally sideways during the last hour — and is currently down 15 basis points as of 8:30 a.m. GMT.

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

Ed

Gold: Back Below Its 50-Day Moving Average

10 November 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold quietly lower until around noon China Standard Time on their Friday.  It crawled quietly higher from there until a few minutes after the London open — and then it crawled equally quietly lower until the COMEX open.  Then the spoofing and algo spinning began — and the low tick of the day came around 12:15 p.m. in New York.  It crept a few dollars higher from there until around 2:30 p.m. in the thinly-traded after-hours market — and didn’t do much after that.

The high and low ticks were reported by the CME Group as $1,224.60 and $1,207.20 in the December contract.

Gold was closed in New York on Friday at $1,209.40 spot, down $14.10 on the day — and back below its 50-day moving average.  Surprisingly enough, net gold volume wasn’t as heavy as I was expecting…a fact I pointed out to Ted on the phone yesterday…at a hair under 266,000 contracts, but roll-over/switch volume out of December and into future months was very decent at around 58,000 contracts.

The silver price inched quietly lower until around noon CST on their Friday as well — and then didn’t do much until 2 p.m. CST — and slid quietly from that point into the COMEX open.  JPMorgan did the rest — and set silver’s low tick came at 10:45 a.m. in New York.  It was bounced off that low tick a couple of times, before crawling higher staring around 12:15 p.m. EST.  That lasted until about 3 p.m. in after-hours trading — and it didn’t do much from there into the 5:00 p.m. close of trading.

The high and low ticks were recorded as $14.425 and $14.08 in the December contract.

Silver was closed yesterday afternoon at $14.15 spot, down 27 cents from Thursday — and a goodly distance below its 50-day moving average.  Net volume was extremely heavy at a bit over 96,000 contracts — and there was a hair under 21,800  contracts worth of roll-over/switch volume in this precious metal.

Platinum was down 6 dollars by noon in Shanghai on their Friday, but made it back to the unchanged mark by shortly after the Zurich open.  It then got the JPMorgan treatment starting at the COMEX open as well — and its low tick was set shortly after the Zurich close.  It was bounced off that low multiple times from that juncture — and was closed a dollar off its low at $851 spot, down 10 bucks on the day.

Except for the odd bump higher — and the odd soft spot, palladium was handled in a similar fashion as platinum.  Its low tick came shortly before noon in New York — and it managed to rally back to the $1,100 spot mark by the COMEX close.  Palladium finished the Friday session at $1,102 spot, down 11 dollars from Thursday.

The dollar index closed very late on Thursday afternoon in New York at 96.65 — and began to creep higher as soon as trading began at 6:00 p.m. EST in New York on Thursday evening.  That lasted until 10:25 a.m. GMT in London, which probably coincided with the morning gold fix over there.  From that point it chopped quietly lower until London closed at 11:00 a.m. EDT — and then jumped up to its 97.01 high tick which came exactly one hour later at precisely noon in New York.  It gave back some of that ‘rally’s’ gains during the next forty-five minutes — and traded quietly sideways for the remainder of the Friday session.  The dollar index finished the day at 96.90…up 25 basis points from Thursday’s close.

And here’s the 5-year dollar index, just to give you a bigger picture look at the world’s ‘reserve’ currency.  The delta between its close on Friday…96.73…and the close on the intraday chart above, was 17 basis points on Friday.

The gold stocks gapped down a bit at the 9:30 open in New York on Friday morning — and then continued to sag until their respective low ticks were set at 10:30 a.m. EST.  They began to chop unevenly higher from there — and the HUI closed down only 1.60 percent.

It was the same general price path for the silver equities, but they managed to rally a bit more off their lows than the gold shares — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down only 1.26 percent.  Click to enlarge if necessary.

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

Despite the JPMorgan engineered price declines during the COMEX trading session on Friday, there was some obvious deep-pocket bottom-fishing going on the in precious metal shares yesterday.


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 was another down week, taking back all of November’s gains in the process — and a bit more in some cases.  You can thank JPMorgan for the way the above graph looks this week.  Click to enlarge.

The month-to-date chart includes the five days of this past week, plus only two days from the prior week — and except for platinum and palladium prices, everything else on this chart shows about unchanged for the month of November.  Click to enlarge.

The year-to-date chart continues to be [mostly] a sea of red — and about unchanged from what it looked like at the end of October.  But it’s still clear from this chart that the silver equities are ‘outperforming’ their golden brethren, however that’s not saying much, is it?  Click to enlarge.

As I said in this space last week…it’s still JPMorgan’s world in the precious metals market– and they’ll do whatever they want, or until they’re told to step aside.


The CME Daily Delivery Report showed that 10 gold and 10 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, the sole short/issuer was Advantage.  Morgan Stanley stopped 9 — and JPMorgan picked up the remaining contract.  All issuer and stopper transactions involved their respective client accounts.  In silver, Advantage was the sole short/issuer as well — and Morgan Stanley the sole long/stopper…with 9 for its in-house/proprietary trading account — and the remaining contract for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday session showed that gold open interest in November rose by 10 contracts, leaving 16 still around, minus the 10 contracts mentioned just above.  I would suspect those are the same ten contracts that are out for delivery on Tuesday.  Thursday’s Daily Delivery Report showed that 1 gold contract was posted for delivery on Monday, so that means that 1+10=11 more contracts were added to the November delivery month.  Silver o.i. in November dropped by 18 contracts, leaving 13 still open, minus the 10 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 28 silver contracts were posted for delivery on Monday, so that means that 28-18=10 more silver contracts just got added to November and, like for gold, those are the ones out for delivery on Tuesday.

So far in November there have been 204 gold contracts issued and stopped, but in silver that number is 1,401…which is an enormous number for a so-called non-delivery month.


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

The folks over at the shortsqueeze.com Internet site updated their short position in both GLD and SLV as of the close of trading on Wednesday, October 31 — and this is what they had to report.  The short position in SLV rose from 8,321,800 shares/troy ounces, up to 9,920,500 shares/troy ounce, which was an increase of 19.2 percent over the two-week reporting period.  The short position in GLD fell from 1,529,190 troy ounces, down to 1,320,750 troy ounces, which works out to a decline of 13.6 percent over the same two-week reporting period.

There was not sales report from the U.S. Mint yesterday.

Month-to-date the mint has had only one sales report — and that was the middle of this past week, when they reported selling 6,000 troy ounces of gold eagles — 2,000 one-ounce 24K gold buffaloes — and 405,000 silver eagles.

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

Of course, silver continues to amaze, as 601,969 troy ounces was received — and another 1,344,612 troy ounces was shipped out.  In the ‘in’ category, the one truckload that was received, ended up at Brink’s, Inc.  In the ‘out’ category, one very large truckload…627,825 troy ounces…departed CNT — and another 692,098 troy ounces left Scotiabank’s vault.  The remaining 24,688 troy ounces was shipped out of Delaware.  The link to all this activity is here.

Ted mentioned the fact that this week was the second busiest week for in/out activity in silver in COMEX history, as just under 14 million troy ounces was either received or shipped out.  I expect that he’ll have a goodly amount to say about this state of affairs in his column this afternoon.

It was another fairly active day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 6,021 of them, but only shipped out 40.  All this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The photo below is one of the items found in the Treasure of GuarrazarIt was an archeological find composed of twenty-six votive crowns and gold crosses that had originally been offered to the Roman Catholic Church by the Kings of the Visigoths in the seventh century in Hispania, as a gesture of the orthodoxy of their faith and their submission to the ecclesiastical hierarchy.[2] The most valuable of all is the votive crown of king Reccesuinth with its blue sapphires from Sri Lanka and pendilia. Though the treasure is now divided and much has disappeared, it represents the best surviving group of Early Medieval Christian votive offerings.

The treasure, which represents the high point of Visigothic goldsmith’s work, was dug between 1858 and 1861 in an orchard called Guarrazar, in Guadamur, very close to Toledo, Spain. The treasure was divided, with some objects going to the Musée de Cluny in Paris and the rest to the armouries of the Palacio Real in Madrid (today in the National Archaeological Museum of Spain). In 1921 and 1936, some items of the Treasure of Guarrazar were stolen and have disappeared Click to enlarge.


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, was about as bad as I expected in silver, but nothing special in gold.

In silver, the Commercial net short position increased by another 9,531 contracts, or 47.7 million troy ounces of paper silver.  The reason this number is so ugly is because silver blew through — and closed above its 50-day moving average during the reporting week.

They arrived at that number by decreasing their long position by 3,620 contracts — and they also added 5,911 short contracts — and it’s the sum of those two numbers that represents the change for the reporting week.

I would suspect that JPMorgan’s short position in now large enough that they would now be included in the large ‘5 through 8’ traders category — and Citigroup’s short position in silver may be on the verge of being large enough as well.  The only other Bank in the Big 8 category would be Scotiabank — and they’re still in the Big 4 traders category I would think.  The remaining traders in the Big 8 category would most likely be of the Managed Money variety.  That would be especially true after the COMEX close yesterday.

But under the hood in the Disaggregated COT, there was a bit of a surprise waiting, as the Managed Money traders made up less than half [45%] of the change in the Commercial net short position.  They sold 2,891 long contracts, plus they reduced their short position by 7,219 contracts — and it’s the difference between those two numbers…4,328 contracts…that represents their change for the reporting week.  The difference between that number — and the Commercial net short position…9,531 minus 4,329 equals 5,201 contracts, was made up as it always is, by the traders in the other two categories.  Both categories…the ‘Other Reportables’ and the ‘Nonreportable’/small trader category covered short positions like mad during the reporting week.  This was particularly true of the ‘Nonreportable’/small trader category.

Here’s the usual snip from the Disaggregated COT Report for silver, so you can see these changes for yourself.  Click to enlarge.

The Commercial net short position in silver is now up to 19,291 contracts, or 96.5 million troy ounces of paper silver.

With the new Bank Participation Report in hand, Ted pegs JPMorgan’s short position at around 15,000 contracts.  In last week’s COT Report Ted calculated that they were short a bit over 10,000 contracts — and they added about 3,500 more contracts during this past reporting week, so Ted’s guesstimates all month long have been pretty much on the money.

Here’s the 3-year COT chart, courtesy of Nick Laird — and this week’s fairly chunky deterioration should be noted.  Click to enlarge.

Of course, as I mentioned in both Thursday’s and Friday’s columns, the current COT Report we have in front of us now is very much ‘yesterday’s news’ already — and that comment certainly applies even more after Friday’s COMEX close.


In gold, the commercial net short position increased as well, but only by 6,931 contracts, or 693,100 troy ounces of paper gold.  No critical moving averages were penetrated during the reporting week.

They arrived at this number by adding 8,040 long contracts, plus they increased their short position by 14,971 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Despite the increases in the Commercial net short position in gold recently, the position changes of the Big 4 and Big ‘5 through 8’ traders are still mostly immaterial because of the contamination of that data by the large number of Managed Money traders that still inhabit this group.  Although JPMorgan’s short position is now large enough that they would now be in the Big ‘5 through 8’ category, because Ted said they added a fairly healthy number of short contracts during the reporting week.  And if they are now in that category, they’re certainly the only U.S. bank or trading house that’s there.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bit more, as they increased their long position by 2,083 contracts — and they also reduced their short position by 5,994 contracts — and it’s the sum of those two numbers…8,077 contracts…that represents their change for the reporting week.

The difference between that number — and the commercial net short position…6,931 minus 8,077 equals 1,146 contracts…and that was made up entirely by the traders in the other two categories, although each group went about it differently.  Here’s a snip from the Disaggregated COT Report for gold, so you can see this for yourself.  Click to enlarge.

The commercial net short position in gold is now up to 3.81 million troy ounces.  An increase, yes…but on an historic basis, it’s still a very bullish number.

Here’s the 3-year COT chart for gold — an as I’ve already mentioned, the change wasn’t overly material.

Of course, like for silver, ‘all of the above’ is totally out the window, especially after Friday’s engineered price decline and close back below gold’s 50-day moving average.

The surprise for Ted with this week’s COT — and companion Bank Participation Report, was that JPMorgan appeared to be the only short seller active…not only during this reporting week, but all of October as well…if I heard him correctly.  He’ll have lots to say about this in his weekly review later today.

In the other metals, the Managed Money traders increased their net long position in palladium by a scant 835 contracts.  But it’s such a tiny market [27,859 contracts of total open interest] that it doesn’t take much to move it.  In platinum, the Managed Money traders really piled in on the long side in a big way, increasing their net long position by a hair under 10,000 contracts.  The total open interest in this precious metal is only 74,364 contracts.  They did the same in copper as well, increasing their net long position by a chunky 12,385 contracts.  Total open interest in copper sits at 247,313 contracts.

So with this week’s COT Report results already irrelevant, we’re back at very-to-wildly bullish set-ups in both silver and gold once again.

But it can be generally said that we’re still on ‘care on maintenance’ in the precious metals — and basically marking time…waiting for ‘whatever’ to happen.


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

But, like the COT Report itself, the chart above is basically irrelevant at this point as well — and for the same reason. Except for Scotiabank — and one or two U.S. banks…JPMorgan for sure — and possibly Citigroup by a whisker, if at all…the positions of the Big 4 and Big 8 traders are still mostly made up of the brain-dead/moving average-following Managed Money traders now.

For the current reporting week, the Big 4 traders are short 110 days of world silver production, up 6 days from what they were short in last week’s report — and the ‘5 through 8’ large traders are short an additional 48 days of world silver production, which is down 5 days from last week’s report—for a total of 158 days held short, which is a bit over five months of world silver production, or about 368.8 million troy ounces of paper silver held short by the Big 8. [In last week’s COT Report the Big 8 were short 157 days of world silver production.]

The Big 8 commercial traders are short 34.6 percent of the entire open interest in silver in the COMEX futures market, which is down a hair from the 35.1 percent that they were short in last week’s COT Report. And once whatever market-neutral spread trades are subtracted out, that percentage would be something around 40 percent. In gold, it’s 31.5 percent of the total COMEX open interest that the Big 8 are short, down from the 32.8 percent they were short in last week’s report — and a bit over 35 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 39 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 15 days of world production, which is down 2 days from what they were short the prior week, for a total of 54 days of world gold production held short by the Big 8 — which is unchanged from what they were short in last week’s report. Based on these numbers, the Big 4 in gold hold about 72 percent of the total short position held by the Big 8…which is up about 3 percentage point from last week’s COT Report.

And, once again, don’t forget that like in silver…a lot of the traders in the Big 4 and Big 8 categories in gold are still Managed Money traders — and not the commercial variety.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 70, 72 and 74 percent respectively of the short positions held by the Big 8. Silver is up 4 percentage points from the previous week’s COT Report, platinum is up 2 percentage point from a week ago. Palladium is down 1 percentage point from last week’s COT Report.


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

In gold, 5 U.S. banks were net short 52,203 COMEX contracts in the November BPR.  In October’s Bank Participation Report [BPR], these same 5 U.S. banks were net short 22,119 contracts, so there was a big increase…30,084 contracts…during this reporting period.  I believe that Ted mentioned that virtually all of this increase came courtesy of JPMorgan.

Also in gold, 27 non-U.S. banks are net short a very smallish 8,340 COMEX gold contracts, which isn’t much per bank…308 contracts each.  In the October BPR, 27 non-U.S. banks were net short only 1,960 COMEX contracts, so the month-over-month increase is 6,380 contracts, which is not a material amount.  However, I suspect that there’s at least one large non-U.S. bank in this group [probably Scotiabank] that holds all of that amount short, plus much more, all by itself…as the 8,340 contracts is a net number.  What that means is that a goodly number of these foreign banks are now net long the COMEX futures market in gold.

The world’s banks…with the exception of JPMorgan — and maybe Citigroup, plus most likely Scotiabank…are basically gone out of the gold market.

As of this Bank Participation Report, 32 banks [both U.S. and foreign] are now net short 12.2 percent of the entire open interest in gold in the COMEX futures market, which is up a bit from the 5.2 percent they were short in the October BPR.

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

In silver, 5 U.S. banks are net short 27,093 COMEX silver contracts in November’s BPR.  Of that amount, JPMorgan holds about 15,000 contracts, according to Ted.  In October’s BPR, the net short position of these U.S. banks was 16,529 contracts, so the short position of the U.S. banks is up by around 10,500 contracts from a month ago.  All of that increase is attributable to JPMorgan as well, as per Ted.

Also in silver, 21 non-U.S. banks are net short 19,563 COMEX contracts…which is down a bit from the 20,167 contracts that these same non-U.S. banks were short in the September BPR.  I would suspect that Canada’s Scotiabank still holds a goodly chunk of the short position of the non-U.S. banks.  And since that’s probably the case, it certainly means that a number of the remaining 20 non-U.S. banks might actually be net long the COMEX futures market in silver as well.  But even if they aren’t, the remaining short positions divided up between these other 20 non-U.S. banks are immaterial — and have always been so.

As of November’s Bank Participation Report, 26 banks [both U.S. and foreign] are net short 21.8 percent of the entire open interest in the COMEX futures market in silver—which is down a tad from the 24.4 percent that they were net short in the October BPR — with much, much more than the lion’s share of that now held by two U.S. banks…JPMorgan plus Citigroup…and Scotiabank.

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

In platinum, 5 U.S. banks are net short 10,564 COMEX contracts in the November Bank Participation Report.  In the October BPR, 5 U.S. banks were net short 4,770 COMEX platinum contracts, so there’s been a big deterioration during the reporting month…5,794 contracts…since the October BPR.

Also in platinum, 17 non-U.S. banks are net short 6,910 COMEX contracts, which is up from the 3,604 contracts they were net short in the October BPR.  But compared to the short positions of the 5 U.S. banks, the short positions of the non-U.S. banks are mostly immaterial.

And as of November’s Bank Participation Report, 22 banks [both U.S. and foreign] are now net net short 23.5 percent of platinum’s total open interest in the COMEX futures market, which is a dramatic increase from the 11.5 percent they were net short in October’s BPR.

Here’s the Bank Participation Report chart for platinum — and the deterioration in the last two months is rather alarming.  Click to enlarge.

In palladium, 4 U.S. banks were net short 6,885 COMEX contracts in the November BPR, which is up a bit from the 6,018 contracts they held net short in the October BPR.

Also in palladium, 14 non-U.S. banks are net short 1,895 COMEX contracts—which is down a bit from the 2,192 COMEX contracts that these same 14 non-U.S. banks were short in the October BPR.  When you divide up the short positions of these non-U.S. banks more or less equally, they’re immaterial, just like they are in platinum…especially when you compare them to the positions held by the 4 U.S. banks.

As of this Bank Participation Report, 18 banks [U.S. and foreign] are net short 31.5 percent of the entire COMEX open interest in palladium.  In October’s BPR, the world’s banks were net short 34.8 percent of total open interest, so there’s been a smallish decrease in the concentrated short position of the banks in this precious metal.

It’s apparent that the banks can move palladium prices around even with small amounts of trading, as they are a large part of total open interest in a very tiny and illiquid market at the best of times — and also trade “all for one, and one for all”….especially the U.S. banks…JPMorgan in particular.  For that reason alone, they’re still the dominant factor in the price of palladium.

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.  Click to enlarge.

Despite the deterioration in silver and gold in the November Bank Participation Report — and in the COT Report, the set-up still remains very bullish in both gold and silver — and is even more so since the Tuesday cut-off.  But we’re still basically in ‘care and maintenance’ mode as far as I can tell, especially when one considers how carefully that silver and gold prices are being managed vis-à-vis their respective 50-day moving averages.

I don’t have all that much in the way of stories again today.


CRITICAL READS

Doug Noland: Back to Fundamentals

The odds of de-risking/deleveraging dynamics attaining destabilizing momentum are mounting. Many hedge funds now have losses for the year, which forces managers to take down both risk and leverage in anticipation of year-end outflows. I believe deleveraging is now having a growing impact on marketplace liquidity around the world – and across asset classes. Yields are rising and spreads are widening throughout global fixed-income. Unstable equities markets around the globe are indicating a fragile liquidity backdrop. And this week’s $2.68 (4.3%) drop in WTI has all the appearances of a major leveraged speculating community panic liquidation (portending challenges for the – to this point – resilient junk bond market).

As another extraordinary market week came to its conclusion, the bulls “Back to Fundamentals” mantra from Wednesday was being hijacked by the bear camp. From my analytical perspective, the outcome of the midterms wasn’t going to materially alter the Bursting Global Bubble Thesis. Global financial conditions continue to tighten. Very serious issues related to China’s faltering Bubble remain unresolved. Italy’s political, financial and economic problems won’t be disentangled anytime soon. And the midterms weren’t going to solve the more pressing issues in the U.S., certainly including inflated asset and speculative Bubbles and a Federal Reserve determined to stay on the policy normalization course.

For me, Back to Fundamentals means a return of “Periphery to Core Crisis Dynamics” – rising yields, widening Credit spreads, de-risking/deleveraging, faltering global liquidity and, to be sure, China.

Doug’s weekly Credit Bubble Bulletin is always worth reading — and this weekend’s edition appeared on his website in the very wee hours of Saturday morning EST.  Another link to it is here.


Hedge Funds Brace For A November 15 Bloodbath

A few weeks ago, we reported that even when the market was hitting all time highs ahead of the historic October bloodbath, hedge fund investors were growing increasingly nervous, and rushed to redeem $15 billion from the space in September, the largest single monthly outflow in years, bringing year-to-date net flows to flat after being stubbornly in the green for much of the year despite what has been another deplorable year for hedge funds.

This was not the first time either: over the last three years, investors had removed over $100 billion from the industry, but performance gains had offset these losses… at least until last month.

And then October came which was not only a “bloodbath across almost every strategy“, but was the worst month for hedge funds in 7 years.

Which is why just one week ago,  we warned that what may be the most underappreciated delayed risk to the market is a surge in redemption requests as LPs and investors got their monthly performance reports, showing the worst month in years, and in knee-jerk response faxing in their request to have most or all of their money pulled out now before the rout accelerated.

Today, Bloomberg picks up on this risk, with reporter Saijel Kishan writing that following the second worst month of the decade for the hedge fund industry, many are bracing for an industry D-Day: Nov. 15.

That, as Kishan explains, is the deadline for investors to put managers on notice to get some – or all – of their money at year end.

These Managed Money traders have been killed in all markets…including the precious metal markets, along with WTIC.  The day of reckoning for these funds will be brutal.   This worthwhile news item put in an appearance on the Zero Hedge website at 4:22 p.m. EST on Friday afternoon — and I thank Brad Robertson for sharing it with us.  Another link to it is here.


This Will Be Trump’s Real Legacy — Bill Bonner

Using time as the ultimate measure of wealth, today, the top 10% are so wealthy that they can command about four times as much of the laborers’ time as they could in the 1970s.

Voters didn’t necessarily see it that way… But they felt that something wasn’t right. And they voted for Mr. Trump to do something about it. “Make America Great Again,” they pleaded.

Alas, the president did not understand the challenge and missed his opportunity to do anything about it. America could only be made great again by returning to the conservative principles that made it great in the first place – limited government, limited deficits, limited wars, and limited bureaucracy.

Instead, the president increased the deficit and diverted attention with public feuds, border walls, and trade wars.

And now, with the Democrats in control of the House… and Mr. Trump in control of the Republicans… the opportunity is gone. There will be no real reform of any sort.

Which, of course, is just what the insiders were hoping for.

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


Italy Signals It Won’t Budge on Budget Plans in Clash With E.U.

Italy signaled it would not bow to pressure from the European Union to water down its budget for next year, with Deputy Prime Minister Luigi Di Maio dismissing the prospect of sanctions as unlikely.

Speaking to the Foreign Press Association in Rome, Di Maio of the anti-establishment Five Star Movement said he was open to dialogue but made no hint of concessions. The populist government is preparing to reply to the European Commission by next Tuesday’s deadline.

We have made commitments and we will stick to these commitments to be a credible country,” said Di Maio, adding that a citizen’s income for the poor and a lower retirement age would not be delayed. After skepticism from Brussels, he said the government is confident about a 2.4 percent deficit target for next year because of a pickup in economic growth and cuts to wasteful spending.

Separately, Finance Minister Giovanni Tria told a parliamentary hearing that the government isn’t planning to change the deficit target, and will reaffirm to the E.U. the key points of its budget plan. He said the E.U. projection of a 2.9 percent deficit next year is not justified.

The government is locked in a clash with the commission on its budget plans, accusing Brussels of botched analysis over economic forecasts. At the same time a push to deliver on at least part of election promises is sparking near-constant wrangling between Di Maio and fellow-Deputy Premier Matteo Salvini of the anti-migrant League.

This Bloomberg story appeared on their website at 3:33 a.m. Pacific Standard Time on Friday morning…6:33 a.m. in New York — and was updated about an hour later.  I thank Swedish reader Patrik Ekdahl for sending it along — and another link to it is here.


France Takes the Lead In Protecting Iran Oil Trade From U.S. Sanctions

France aims to lead the European Union (E.U.) efforts in defying U.S. sanctions on Iran, by supporting the creation of a payment mechanism to keep trade with Iran and making the euro more powerful, France’s Economy Minister Bruno Le Maire said in an interview with the Financial Times.

Europe refuses to allow the U.S. to be the trade policeman of the world,” Le Maire told FT, adding that the E.U. needs to “affirm its sovereignty” in the rift between the E.U. and the United States over the sanctions on Iran.

The E.U. has been trying to create a special purpose vehicle (SPV) that would allow the bloc to continue buying Iranian oil and keep trade in other products with Iran after the U.S. sanctions on Tehran return.

The idea behind the SPV is to have it act as a clearing house into which buyers of Iranian oil would pay, allowing the E.U. to trade oil with Iran without having to directly pay the Islamic Republic.

As the U.S. sanctions on Iran snapped back on Monday, the SPV hasn’t been operational and reports have had it that the undertaking is very complicated and politically sensitive. The bloc is also said to be struggling with the set-up, because no E.U. member is willing to host it for fear of angering the United States, the Financial Times reported recently, citing E.U. diplomats.

This story appeared on the oilprice.com Internet site on Wednesday — and I plucked it from a Zero Hedge article that Brad Robertson sent along.  Another link to it is here.


U.S. Declares War on ‘Troika of Tyranny’ Pushing Them Closer to Russia

The U.S. is going to extend its “combat operations” — the sanctions war aimed at reshaping the world — to Latin America. Tough new penalties are planned against the “troika of tyranny,” consisting of Venezuela, Cuba, and Nicaragua “in the very near future.” This announcement was made by National Security Adviser (NSA) John Bolton on Nov.1 — a few days before the U.S. mid-term elections — in an attempt to draw more support from Hispanic voters, especially in Florida. An executive order on sanctions against Venezuela has already been signed by President Trump, but that’s just the beginning.

It was rather symbolic that on the same day the NSA delivered his bellicose speech, the U.N. General Assembly (UNGA) voted overwhelmingly in support of a resolution calling for an end to the U.S. economic embargo against Cuba. The document did not include amendments proposed by the U.S. that would put pressure on Havana to improve its human-rights record.

This is a prelude to a massive escalation in U.S. foreign policy, which will include the formation of alliances, in addition to the active confrontation of those who dare to pursue policies believed to be anti-U.S. “Under this administration, we will no longer appease dictators and despots near our shores,” Bolton stated, adding, “The troika of tyranny in this hemisphere — Cuba, Venezuela and Nicaragua – has finally met its match.” Sounds like a declaration of war. Brazil, Colombia, Argentina, Chile, and Peru are probably some of the nations the U.S. is eyeing for a potential alliance.

Bolton’s “troika” includes only countries ruled by governments that are openly “red” or Communist.  The list of nations unfriendly to the U.S. is much longer and includes Bolivia, Ecuador, Dominica, Grenada, Uruguay, and some other states ruled by leftist governments. Andrés Obrador, the president-elect of Mexico, takes office on Dec. 1. The Mexican leader represents the country’s left wing and looks like a tough nut to crack. Outright pressure may not be helpful in this particular case.

This rather disturbing, but not surprising article was posted on the strategic-culture.org Internet site on Wednesday — and it comes to us courtesy of Larry Galearis.  Another link to it is here.


Unprecedented “Desperation” Lending Directive Sends Chinese Stocks Reeling

On November 8, China shocked markets with its latest targeted stimulus in the form of an “unprecedented” lending directive ordering large banks to issue loans to private companies to at least one-third of new corporate lending, said Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission. The announcement sparked a new round of investor concerns about what is being unsaid about China’s opaque, private enterprises, raising prospects of a fresh spike in bad assets.

Guo’s comments were the latest attempt by authorities to try to improve funding access for China’s non-state companies, which have been struggling to get bank loans in the aftermath of China’s crackdown on shadow lending. More importantly, it was the first time financial regulators had given targets on private lending, confirmation that earlier efforts hadn’t sparked the necessary credit activity.

More importantly, this is the first time China set formal goals for private lending, a step it refrained from even during the financial crisis of 2008 according to Bloomberg. The stimulus package it implemented at the time swelled bad debt levels, which now threaten to swallow any new money poured into private companies. Non-state firms defaulted on 67.4 billion yuan ($9.7 billion) of local bonds this year, 4.2 times that of 2017, while the overall Chinese market is headed for a year of record defaults in 2018.

This news item showed up on the Zero Hedge website at 8:27 a.m. EDT on Friday morning — and it’s the final offering of the day from Brad Robertson.  Another link to it is here.


South African Gold Output Plunges 19 Percent…Most Since 2015 in September

Output retreated 19 percent from a year earlier, Pretoria-based Statistics South Africa said in a statement Thursday. Overall mining output fell 1.8 percent, while production of platinum-group metals increased 7.2 percent, it said.

Producers in South Africa, which operate some of the world’s deepest and most labor intensive mines, have been forced to reduce output and cut thousands of jobs as they struggle to contain operating costs. The continent’s most-industrialized economy fell into its first recession in almost a decade in the second quarter.

Sixty-nine workers have died in South African mines so far this year, with the nation’s gold mines accounting for more than half of the fatalities, Mineral Resources Minister Gwede Mantashe said last month.

This tiny Bloomberg story put in an appearance on their Internet site at 1:43 p.m. Pacific Standard Time on Thursday morning — and another link to it is here.


Chinese gold demand may be slipping, but only just — Lawrie Williams

The latest figures for Shanghai Gold Exchange (SGE) monthly gold withdrawals are in (for October) and they show a marginal downturn from those for the same month a year earlier.  But then October can be an anomalous month given the week long Golden Week holiday at the beginning of the month during which time the SGE is closed for business so perhaps not too much should be read into the latest data.

Withdrawals for the year to date are still marginally up on a year earlier, so we will have to wait for November’s figures (usually a strong month) to see if there is any specific trend downwards yet.  A Table showing the monthly gold withdrawals data year to date, with comparative figures for the prior two years, is shown below…

At the moment China is still on track for another2,000 tonne plus gold withdrawals year, but if full year demand slips a little we shouldn’t be too surprised.  Gold imports from Switzerland and Hong Kong – the two principal published sources for China’s direct gold imports, both appear to be slipping a little and the U.S.-imposed tariffs will be having some adverse impacts on China’s domestic economy which may be leading to a reduction  in disposable income among the gold-buying public..  The country’s own gold production is reported to be slipping too as tighter environmental controls are being implemented leading to reduced production, and even closures, at some of the country’s own gold mines.

This brief, but worthwhile 1-chart gold-related article from Lawrie was posted on the Sharps Pixley website on Thursday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s award-winning photo, bestowed by the Natural History Museum in London, comes to us courtesy of Australian photographer David Gallan — and it’s entitled “Home of the Quoll”.

It took David three years to locate this quoll – and another six months to take this photograph. He set up a camera trap where a fallen log bridged a stream, foregoing flash to minimise disturbance, then placed a scent bait to pause any passing quolls. His perseverance paid off when this hunting female scampered into view.

These shy creatures are ferocious predators. Almost a metre long from nose to tail, quolls can slice meat off the reptiles, birds and mammals they hunt with their strong teeth and muscles. Like all quoll species, the spotted-tailed quoll is threatened by habitat loss due to industrial logging and competition with introduced speciesClick to enlarge.


The WRAP

Today’s pop ‘blast from the past’ is one that I stumbled across when I was looking for something else.  It dates from 1972.  It’s from English pop musician Daniel Boone —  a.k.a Peter Lee Stirling.  He was a ‘one-hit wonder’ back in 1972 — and this tune peaked at #15 on The Billboard Hot 100 in the U.S. that year.  I remember spinning this ’45 on CHAR Radio in Alert, N.W.T. way back then —  I can’t recall having heard it since.  The link is here…but the video that goes with it is pretty cheesy.

Today’s classical ‘blast from the past’ is a composition by Pyotr Ilyich Tchaikovsky from 1875–76. Despite its initial failure, Swan Lake is now one of the most popular of all ballets.  I’m not about to post all the music…just the waltz, which you’ve most likely heard in one iteration or another in your life.  I’ve posted it before, but it’s been a very long time.  It runs for 7:20 minutes — and the link is here.


One would think that the “hot” PPI [Producer Price Index] number yesterday morning, which signals higher inflation ahead, would have sent the gold price soaring.  Under free market conditions, it certainly would have.  But with JPMorgan running rampant in the COMEX futures market, they engineered the gold price back below its 50-day moving average instead.  Even the sharp decline in South African gold production year-over-year would have made a difference as well at one point in time, but in managed markets, supply and demand mean nothing.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and the declines in all six commodities should be noted.  Copper is back below its 50-day moving average by a hair — and WTIC continues to get beaten into the dirt.  The ‘click to enlarge‘ feature only helps with the four precious metal charts.

Next week we have the November FOMC meeting — and even though a rate hike isn’t expected, what is expected is that the Fed will telegraph once again that they intend to raise rates at the December meeting.  Trump won’t be amused once again.

For that reason, I expect that there will be continued price pressure on the precious metals, at least until the white smoke goes up the proverbial chimney over at the Fed at 2:00 p.m. EST on Wednesday afternoon.  After that, who knows.

I’m sure that Jamie Dimon isn’t shaking in his boots over the DoJ conviction of one of their former precious metal traders, or not, but it’s a given that he knew the investigation was happening — and that a conviction was coming. It certainly hands-down proves that the culture at the bank, at least in this area, is rotten to the core — and provides complete vindication for Ted Butler.

But as he pointed out in his article in the public domain on Thursday, he won’t feel totally vindicated until the real crime is uncovered…”the ongoing fraud of prices being set by paper positioning on the COMEX and elsewhere between the nitwit managed money traders and the corrupt commercials, led by JPMorgan. It is nothing short of infuriating that the regulators – and I include the Department of Justice here – can’t or won’t see that spoofing, as bad as it is, is only an enabling tool to a much larger crime.”

And if he finds that infuriating, there’s also this.  Every precious metal mining company in the world knows exactly what’s going on — and haven’t done a thing about it since it first became public knowledge when Ted started writing about this issue on the Internet twenty years ago.  Even their so-called associations…the WGC and The Silver Institute…that purport to represent them, run screaming whenever the subject is broached.  You have to wonder what they talk about at their meetings in order to avoid the 800 lb. JPMorgan/CME Group gorilla sitting in the middle of the room…which only gets bigger and smellier with each passing week now.

It’s obvious the their fiduciary responsibility to the real owners of the company…us stockholders, is not top of mind for them, or their respective legal councils.

But as I’ve stated before, even with the unhappy COT Report on Friday…which is already very much “yesterday’s news”…the set-up in the COMEX futures market is still in the wildly bullish camp…both in silver and in gold.  And it has become even more so since Tuesday’s cut-off.

We are, as I’ve also said on too many occasions to recount, on ‘care and maintenance’ as far as gold and silver prices are concerned — and have been since the middle of August.  But what the trigger will be for JPMorgan to get their foot off their respective prices, remains to be seen.

No price management scheme lasts forever — and this one won’t, either.  But, like you, it can’t end soon enough to suit me.

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

Ed

Ted Butler: A Crack In the Dike

09 November 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold quietly lower once trading began at 6 p.m. in New York on Wednesday evening.  That ended around 12:30 p.m. China Standard Time on their Thursday afternoon — and from there it chopped generally sideways, except for the almost obligatory sell-off at the COMEX open.  It rallied a few dollars from there, before resuming trading sideways — and that continued for the remainder of the Thursday session.

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

Gold finished the Thursday session at $1,223.50 spot, down $2.60 from Wednesday’s close.  Net volume was pretty light once again at 188,500 contracts — but roll-over/switch volume was pretty heavy at just under 42,500 contracts on top of that.

Except for a brief rally in early afternoon trading in the Far East on their Thursday afternoon, it was pretty much all down hill for the silver price until 10 a.m. in London.  It rallied back towards the unchanged mark but, like for gold, ran into ‘something’ a few minutes after the COMEX open.  It was then allowed to rally until around 10:20 a.m. in New York — and from that point it chopped unsteadily lower until trading ended at 5:00 p.m. EDT.

The high and low ticks in this precious metal were reported by the CME Group as $14.575 and $14.365 in the December contract.

Silver was closed in New York on Thursday at $14.42 spot, down 12 cents on the day.  This was a new intraday and closing low for this move down — and it was closed back below its 50-day moving average as well.  Net volume was pretty decent at just under 69,500 contracts — and there was a fairly hefty 18,500 contracts worth of roll-over/switch volume in this precious metal.

The platinum price chopped sideways to a bit lower in Far East and Zurich trading on their respective Thursdays, but was back within a dollar of unchanged by the COMEX open.  After getting the gold and silver treatment at that juncture, it rallied back to about unchanged by minutes before the afternoon gold fix in London.  From that point it traded sideways until around 11:45 a.m. EST — and then some serious selling pressure appeared.  It was down 11 bucks by 3 p.m. in the thinly-traded after-hours market, but then tacked on a couple of dollars going into the 5:00 p.m. close.  Platinum finished the Thursday session at $861 spot, down 10 bucks from Wednesday.

The palladium price didn’t do much of anything in Far East trading on their Thursday — and was down a couple of dollars by minutes after 3 p.m. CST on their Thursday afternoon.  Selling pressure appeared at that point — and it was down 10 dollars shortly after the Zurich open.  It traded sideways into the COMEX open from there — and then got smacked just the same as the other three precious metal.  But at 9 a.m. in New York, it began to head higher with a vengeance — and was up a dollar or two by the Zurich close.  It edged quietly lower from that juncture until 2 p.m. in the thinly-traded after-hours market — and it got smacked 10 dollars lower from there.  That sell-off lasted until a few minutes after 3 p.m. EST — and it gained almost half of that back by the time the trading day ended at 5:00 p.m.  Palladium was closed on Thursday at $1,113 spot, down 8 dollars on the day.

The dollar index closed very late on Wednesday afternoon in New York at 96.16 — and began to crawl quietly higher once trading began at 6:00 p.m. EST a few minutes later.  That lasted until 1 p.m. China Standard Time on their Thursday afternoon — and from the point, the index began to bounce around a bit.  That state of affairs lasted until about 10:25 a.m. in New York — and at that point, a ‘rally’ began.  It topped out at the 96.74 mark shortly before 3 p.m. EST — and at 3 p.m. on the dot, it headed quietly lower into the close from there.  The dollar index finished the Thursday session at 96.65…up 49 basis points on the day.

And here’s the 6-month U.S. dollar index — and the delta between its close…96.55…and the close on the intraday chart above, was 10 basis points.

The gold shares gapped down a bit at the open, but from there began to chop generally higher — and their respective high ticks came a few minutes after 2 p.m. in New York trading.  An hour later, they were back in the red, but manged to struggle back into positive territory by the 4:00 p.m. EST close…finishing exactly unchanged on the day.

The silver equities gapped down a percent and change at the open, but then began to head higher and, like their golden brethren, hit their respective high ticks just minutes after 2 p.m. in New York.  An hour later, they were back to just about unchanged, but they ticked higher by a bit in the final hour of trading, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 0.79 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 1 gold and 28 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.   In gold — and for the second day in a row, Advantage issued the lone contract — and stopped it as well.  In silver, the two short/issuers were Advantage and JPMorgan…all from their respective client accounts.  There were three long/stoppers in total, with the largest being Morgan Stanley once again, with 11 contracts for its own account, plus another 4 for its client account.  Advantage came in second with 10 — and ADM picked up the other 3 contracts…all for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in November remained unchanged at 6 contracts, minus the 1 contract mentioned just above.  Wednesday’s Daily Delivery Report showed that 1 gold contract was posted for delivery today, so that means that 1 more gold contract was added to the November delivery month.  Silver o.i. in November dropped by 247 contracts, leaving 31 still around, minus the 28 mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 275 silver contracts were actually posted for delivery today, so that means that 275-247=28 more silver contracts just got added to November.

So far in November there have been 194 gold contracts issued and stopped, but in silver that number is 1,391…which is enormous for a so-called non-delivery month.


There were no reported changes in GLD yesterday, but there was a smallish withdrawal from SLV, as an authorized participant took out 281,782 troy ounces.

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

It was another zero in/zero out day in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.

It was yet another unbelievable day in silver, as 3,232,543 troy ounces was reported received, but only 191,723 troy ounces was shipped out.  In the ‘in’ category, there were four truckloads…2,412,73 troy ounces…received over at CNT — and the remaining 819,813 troy ounces found a home over at Canada’s Scotiabank.  All the ‘out’ movement…191,732 troy ounces…departed CNT.  The link to all this action is here.

It was pretty busy over at the COMEX-approved kilobar depositories in Hong Kong on their Wednesday.  They only received 55 of them, but shipped out 4,086.  All this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

And it should be noted that of the 9,012 kilobars that Brink’s, Inc. took in on Tuesday, all had been shipped out, plus a bit more, over the last two days…5,001 on Tuesday, plus the 4,086 on Wednesday…mentioned above.


The Terreaux Hoard (French – Trésor des Terreaux) is a hoard of coins discovered during excavations prior to the construction of an underground car park in Place des Terreaux in Lyon. France in 1993. It was made up of 459 silver coins and 84 gold coins in an earthenware pot. Judging by the coins’ date, it was buried c.1360 during the Hundred Years War. The coins include five écus of Philip VI of Valois, two moutons d’or of John the Good, a Venetian ducat and a number of florins. It is on display at the Museum of Fine Arts of Lyon.  Click to enlarge.

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


CRITICAL READS

Why Government Can’t Make America Great — Bill Bonner

Yesterday was a big day for the U.S. stock market. October was forgiven. And forgotten.
All is well, because the president and the new Democrat majority in the House are going to work together…

…to rip off the American people. Here’s CNBC:

The Dow closed up 545 points, led by gains in UnitedHealth and Apple. The S&P 500 gained 2.1 percent as the health care, tech, and consumer discretionary sectors each rallied more than 2.8 percent. The NASDAQ Composite rose 2.6 percent.

“Hopefully we can all work together next year to continue delivering for the American people, including on economic growth, infrastructure, trade, lowering the cost of prescription drugs,” Trump said in a news conference. “The Democrats will come to us with a plan for infrastructure, a plan for healthcare, a plan for whatever they’re looking at and we’ll negotiate.”

Yes, Dear Reader, it is a wicked world. Some people are always ready to use force or fraud to get what they want. Hundreds of them were elected on Tuesday.

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


Do Investors Need Stop Losses? — Dennis Miller

Everyone wants to buy at the low point and exit at the top. If you do, you are lucky!

During the tech boom my broker and I both bought a high-flying stock. We watched it double twice. It hit $100; we were sitting on nice gains.

Suddenly it dropped to $80. We talked about getting out – but decided to hang on. We were rewarded; it went back to $100. It did it again – then it hit $75.

It continued down. Each discussion ended with, “It can’t go any lower!” We kicked ourselves, feeling stupid, wishing we sold earlier. We finally capitulated, losing much of our profit. Yes, it can go lower – it bottomed around $4.

Much of today’s market is automated computer trading. Money managers tout their sophisticated tools reassuring investors they have programs to protect against catastrophic losses. They reassure investors about being safely diversified in their “family of funds”.

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


Big investors sue 16 banks in U.S. over currency market rigging

A group of large institutional investors including BlackRock Inc and Allianz SE’s Pacific Investment Management Co has sued 16 major banks, accusing them of rigging prices in the roughly $5.1 trillion-a-day foreign exchange market.

The lawsuit was filed on Wednesday in the U.S. District Court in Manhattan by plaintiffs that decided to “opt out” of similar nationwide litigation that has resulted in $2.31 billion (£1.76 billion) of settlements with 15 of the banks.

Those settlements followed worldwide regulatory probes that have led to more than $10 billion of fines for several banks, and the convictions or indictments of some traders.

The banks being sued are: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, Japan’s MUFG Bank, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, Standard Chartered and UBS.

This Reuters story, filed from New York, showed up on their Internet site at 3:46 p.m. EST on Wednesday — and I thank Jim Gullo for sending it our way.  Another link to it is here.


Blankfein Was “Mystery” Goldman Exec Present During 1MDB Meeting Noted By DoJ

What was perhaps even more curious about the DOJ complaint, was the reference of a “senior Goldman official” who was instrumental and involved in Goldman’s establishing of close ties with both 1MDB and the Razak government, ties which would eventually allow Goldman to issue $6 billion in three issue in bonds underwritten by Goldman which netted $600 million in fees for the bank.

And, as we added over the weekend, all of this is happening at a terrible time for Goldman, which recently underwent a leadership transition, with longtime former CEO Lloyd Blankfein handing the reins to John Solomon, who is best known for moonlighting as a DJ.

And as the breadth of the scandal – and the likelihood that the bank’s most senior employees may have looked the other way (though, to be sure, Blankfein has repeatedly denied having any knowledge of Goldman’s role) – becomes increasingly apparent, the timing of Blankfein’s exit is looking more and more suspect.

And now we now know why, because it now appears that our veiled reference that Blankfein may have been the unnamed senior Goldman official, was in fact accurate.

In a new report, Bloomberg writes that years before Goldman Sachs arranged bond deals now at the heart of globe-spanning corruption probes, “the firm’s then-CEO Lloyd Blankfein personally helped forge ties with Malaysia and its new sovereign wealth fund.”

But much more importantly, Blankfein was the unidentified “mystery” high-ranking Goldman Sachs executive referenced in U.S. court documents who attended a 2009 meeting with the former Malaysian prime minister, Bloomberg’s sources said. And what’s worse, the meeting was arranged with the help of men who are now tied to the subsequent plundering of the 1MDB fund, according to U.S. court documents unsealed last week.

This very interesting news item was posted on the Zero Hedge website at 12:40 p.m. EST on Thursday afternoon — and it comes to us courtesy of Brad Robertson.  Another link to it is here.  A parallel Zero Hedge story on this issue is headlined “Ex-Goldman Banker Fights Extradition to U.S. Over 1MDB Criminal Charges” — and that comes courtesy of Brad as well.


In Huge Shift, UAE to Reopen Embassy in Damascus as Gulf Rapprochement With Assad Likely

Regional Middle East media have been circulating early reports that the United Arab Emirates is preparing to re-open its embassy in Damascus after six years of closure, which is to kick-start a new regional shift. This comes as Gulf Cooperation Council (GCC) countries are reportedly strongly considering the restoration of diplomatic ties with the Assad government after all GCC states had closed their Syrian embassies in 2012.

The significance of this is huge, coming after seven years of war driven by an official policy of Syrian regime change by these very GCC governments, foremost among them Saudi Arabia, the UAE, and Qatar. Restoration of ties also means countries like the UAE could be major sources of financing reconstruction projects at a key moment when the United States is attempting to block all aid that could benefit the Syrian government.

According to Al Masdar News, Abu Dhabi has “ordered full maintenance works to its Syrian embassy to be ready for opening within the next two weeks.”

Such a speedy turn around signals the UAE is ready to acknowledge Assad as the legitimate leader of Syria after emerging victorious as the international proxy war continues to wind down, and likely with other Gulf states to follow.

This interesting Zero Hedge news item showed up on their website at 1:00 a.m. on Thursday morning EST — and it’s also from Brad Robertson.  Another link to it is here.


Operation ‘Enduring Defeat’? DoD Admits U.S. May Need to “Stay in Iraq For Decades”

Despite reports that the Islamic State terrorist group has lost 99 percent of its territory and shifted to insurgent tactics in Iraq and Syria, a recent report said an enduring defeat of the organization could take “years, if not decades.

This, according to Department of Defense information provided to investigators with the DoD Inspector General, is in large part due to what is still needed to make Iraqi security forces “self-reliant.”

“Systemic weaknesses remain, many of which are the same deficiencies that enabled the rise of ISIS in 2014,” according to the quarterly IG report on Operation Inherent Resolve, the counter-ISIS operation that spans Iraq and Syria.

Though top military officials recognized the gaps in capabilities among the Iraqi forces and that a “resurgence” of ISIS in the region is likely without sustained support and attention, congressional support for the fight against ISIS has decreased in the new fiscal year and an estimated $230 million in U.S. stabilization funds earmarked for Syria has been shifted to other countries.

The quarterly report on OIR [Operation Inherent Resolve] noted that while security in cities such as the capital Baghdad has improved to such a degree that security forces have removed about 300 police and security checkpoints and 1,000 barriers that divided and walled off the city.

This interesting, but not surprising commentary put in an appearance on the Zero Hedge website at 10:17 a.m. EST on Thursday morning — and is yet another contribution from Brad Robertson.  Another link to it is here.


U.S. Warns All Ports to Block Iranian Ships

The U.S. State Department has issued a series of warnings today demanding that all ports in the world avoid even nominal contact with Iranian commercial ships, warning that even limited contact could lead to U.S. sanctions.

Among the demands were that all ports and maritime insurance companies “steer clear” of Iranian ships, saying the U.S. would sanction anyone knowingly providing service to them. The threats were even broader for Iranian oil tankers.

With respect to the tankers, even though the U.S. offered waivers on oil purchases to eight nations, the State Department says no country must be able to allow any Iranian oil tankers to even enter their territorial waters, saying this would result in penalties and “catastrophic economic damage.”

U.S. officials are trying to force the world to stop buying Iranian oil, but say they are also doing so while trying to avoid a major price hike. Since none of Iran’s major oil buyers is willing to stop buying, the U.S. has so far proven unable to stop them.

The above four paragraphs is all there is to this brief article that appeared on the antiwar.com Internet site on Wednesday — and I thank Larry Galearis for pointing it out.  Another link to the hard copy is here.


Abe Meets Xi then Modi: A New Asia ‘Cooperation Sphere’?

One of the more important consequences of the Trump Administration trade war against both China as well as Japan is the recent diplomatic and economic meeting between Japan’s Prime Minister Shinzo Abe and China’s President Xi Jinping in Beijing. Not only was it the first such meeting by a Japanese PM in seven years since the chill in relations over a group of disputed islands in the East China Sea. It also suggested a new political and economic strategy might be emerging across Asia’s largest economic sphere. Hours after leaving Beijing Abe hosted Indian PM Narenda Modi in Tokyo. Does this all foreshadow a new flank in an emerging multi-polar world or merely shrewd politics by Abe?

Showing he saw the meeting in Beijing as more than a photo-op, Abe brought a business delegation of some 1,000 top Japanese businessmen. China Prime Minister Li Keqiang announced that deals worth $18 billion had been signed during the talks. As well the two agreed to resume $29 billion worth of mutual currency swaps in event of future currency crises. Both leaders agreed to create a hotline to communicate in event of possible future tensions. Abe also invited Xi to come to Japan in 2019, a major step.

Less discussed in public media was the fact that Japan has agreed to include the China Renminbi in Japan’s foreign exchange reserves, a significant boost to the credibility of China’s currency. China for its part will allow the Bank of Japan to invest directly in Chinese government bonds.

What was not mentioned in the press accounts either in China or Japan was an historic offer of the Japanese Emperor conveyed through Abe to Xi. According to informed sources in Japan, Abe conveyed the wish of Japan’s Emperor Akihito to visit China before he abdicates next April to formally apologize to the Chinese people for the Japanese invasion of China during the 1930s. At the same time the Emperor extended an invitation to China’s Xi to come to Japan. According to the report, Xi accepted the invitation regardless the Emperor’s decision on his visit to China. Such a move by Japan’s Emperor would be seen by Beijing and the Chinese as more than symbolic.

No kidding!!!  A profuse and magnanimous apology coming from the Emperor of Japan — and given on Chinese soil would be a diplomatic event of earthshaking importance.  Let’s see what happens.  This commentary by William F. Engdahl is definitely worth reading…if you have the interest, that is.  It was posted on the journal-neo.org Internet site on Monday — and it’s the second offering in a row from Larry Galearis.  Another link to it is here.


Ted Butler: A crack in the dike

Tuesday’s announcement by the Department of Justice of a guilty plea by a former trader of JPMorgan for systemic “spoofing” and price manipulation of gold, silver, platinum and palladium traded on the COMEX and NYMEX futures exchanges (owned by the CME Group) sure seemed like a very big deal to me for a number of reasons. The infractions occurred from 2009 to 2015 and the trader admitted to engaging in a conspiracy to commit market manipulation on hundreds of occasions, with the knowledge and consent of his immediate supervisors. Please take the time to read this DoJ announcement…linked here…as it is remarkably plainspoken.

First, let me get some personal feelings out of the way. I’ve received a number of comments to the effect of how this vindicates my long held belief that JPMorgan is the silver (and gold) crook of crooks. The truth is that I don’t consider it vindication (yet), but I will confess to a feeling of relief upon reading the complaint, as I believe it greatly reduces the chances of JPMorgan suing me for openly calling them the crooks that they are. To be sure, my fear of being sued was never really a personal fear, but how it might affect my wife and family. Correctly or incorrectly, I feel a great burden has been lifted.

That aside, the announcement by the DOJ was remarkable in many ways, not the least of which is that this is a criminal case which involves jail time and not a civil case which only involves monetary fines. Also, the announcement makes clear that this is very much an ongoing investigation and it’s hard to see how there won’t be further fall out for JPMorgan, since it’s obvious the guilty trader was doing what others were doing at the bank. It’s also hard for me to see how a trader involved in systemic criminal market activity in coordination with other traders at the bank doesn’t equate to systemic criminal activity by the bank itself. Notable, of course, is that of all the blizzard of spoofing and short term price manipulation cases brought recently in silver and gold, this is the first to zero in on traders at JPMorgan.

This must read commentary by Ted was part of his mid-week column to his paying subscribers on Wednesday — and I’m happy to see that he decided to post it in the public domain…which is where it belongs.  It appeared on the silverseek.com Internet site at 9:31 MST [Mountain Standard Time] on Thursday morning — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is another in a series of award-winning photographs handed out by the Natural History Museum in London this year.  This photo, by Argentinian biologist and photographer Darío Podestá, is entitled “Argentine Quickstep”.

Surveying the scene, Darío was captivated by ‘the fragility of the chick’ as it used its oversized legs to scurry after its parents. After an uncomfortable crawl through a salt field in the rain and mud, Darío trained his lens on the speckled fluff of the chick, framing it against the dramatic background of salt and sky.

Two-banded plover chicks will leave their nests almost immediately after they hatch, relying on their stilt-like legs to keep pace with their parents and to evade potential predators. Their long legs also keep their soft down away from the wet ground. After four or five weeks, they will grow large enough to fly away from the care of their mother and father.  I’ve tossed in photos of the adult birds as well.  Click to enlarge.


The WRAP

JPMorgan et al set a new intraday low in gold, plus a slight new low close for this move down on Thursday.  But in silver, they closed it back below its 50-day moving average, as the Managed Money traders are getting whip-sawed in and out of their positions once again by the commercial traders — and losing more buckets of money in the process.

Copper was also sold below its 50-day moving average on Thursday by a few pennies as well — and closed right on it.  WTIC  got horse-whipped for the umpteenth day in a row — and is now off its October 3rd high tick by 21 percent or so.  That translates into more big losses for the Managed Money traders on the long side…and with those of them now loaded to the gills with short positions, they’ll get their faces ripped off when the commercial traders allow crude oil to rally.

It’s such a scam — and going on in full view of the CFTC.

Below are the 6-month charts for all four precious metals, plus copper and WTIC — and the charts pretty much speak for themselves.  The ‘click to enlarge‘ feature only helps with the first four.

And as I type this paragraph, the London open is less than ten minutes away — and I see that once again the gold price was sold quietly lower the moment that trading began at 6:00 p.m. EST in New York on Thursday evening. The current low tick was set shortly after 12 o’clock noon in Shanghai — and it’s edged a tiny bit higher since — and is currently down $4.20 an ounce. It was the same general price path for silver — and it’s down 7 cents. Both are at new lows for this move down. Platinum was down 5 bucks by noon China Standard Time — and it hasn’t done much since — and is still down 4 dollars. The palladium price has been wondering sideways-to-down-a-bit in Far East trading on their Friday — but it’s now back at unchanged as Zurich opens.

Net HFT gold volume is around 39,500 contracts — and there’s a fairly hefty 12,500 contracts worth or roll-over/switch volume in this precious metal already. Net HFT silver volume is right on 15,000 contracts — and there’s only 286 contracts worth of roll-over/switch volume on top of that.

The dollar index has been crawling unevenly higher ever since trading began in New York on Thursday evening. Its current 96.87 high tick was set a very few minutes after 3 p.m. CST — and as of thirty minutes before the London open, it’s up 17 basis points.

Today, around 3:30 p.m. EST, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday…along with the companion Bank Participation Report.  For this one day a month we get to see what the U.S. and non-U.S. banks have been up to in the precious metals for the last month — and they’re normally up to quite a bit, especially the U.S. banks, with JPMorgan being the primary culprit.

I was of the opinion in Thursday’s column that we’re likely to see further — and decent increases in the short positions of the commercial traders in today’s COT Report.  Ted was of a similar mind, but not as downright negative as I am…so I’m cheering for him to be right — and so should you.

But whatever the numbers are, they are already “yesterday’s news” by a bit, based on the price ‘action’ in silver and gold since the COMEX cut-off on Tuesday.

And as I post today’s missive on the website at 4:02 a.m. EDT, I note that the gold price is a bit higher as the first hour of London trading draws to a close — and it’s down only $3.00 at the moment.  Silver is down 8 cents.  Platinum is a bit higher…only down 2 bucks.  Palladium was unchanged at the Zurich open, but it’s now down 4 dollars.

Gross gold volume is around 74,500 contracts — but net of current roll-over/switch volume, net HFT gold volume is just under 49,000 contracts.  Net HFT silver volume is way up there at just under 19,000 contracts — and there’s still only 569 contracts worth of roll-over/switch volume in this precious metal.

The dollar hit its current 96.89 high tick exactly at the 8:00 a.m. open in London, but has backed off that high by a bit — and is currently up 20 basis points as of 8:30 a.m. GMT.

That’s it for yet another day.  I hope you have a great weekend, but don’t forget to take a minute on Sunday to remember those who made the ultimate sacrifice.

See you here tomorrow.

Ed

The COMEX Silver Churn Continues Unabated

08 November 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Despite the fact that the dollar index cratered at the 6:00 p.m. EDT open on Tuesday evening, there was no reaction at all from the precious metal — and the smallish rally that did develop, got capped about 8:45 a.m. China Standard Time on their Wednesday morning.  It was sold two dollars below unchanged during the next couple of hours — and then proceeded to rally unevenly higher from there until the high tick of the day was set shortly before noon in London.  It was all down hill from that juncture until 4 p.m. in the thinly-traded after-hours market — and it crept a bit higher into the close from there.

The gold price traded within about a ten dollar price range everywhere on Planet Earth yesterday — and the low and high ticks really aren’t worth looking up.

Gold was closed in New York on Wednesday at $1,226.10 spot, down 40 cents on the day.  Net volume was nothing special at around 224,500 contracts, but a very decent chunk of that amount was transacted before noon in London to keep that rally under control.  Roll-over/switch volume in this precious metal was pretty impressive at a hair under 29,000 contracts.

Silver’s price path was virtually identical to gold’s, with the only significant difference being that the high tick of the day was set at 10 a.m. GMT in London yesterday morning, much earlier than the high for gold.

The low and high ticks in this precious metal were reported by the CME Group as $14.475 and $14.73 in the December contract.

Silver was closed in New York on Tuesday at $14.54 spot, up 4.5 cents on the day.  Net volume was  up a bit from Monday and Tuesday’s volume, at just under 63,500 contracts — and roll-over/switch volume was pretty heavy at a hair under 16,500 contracts.

The platinum price rallied unsteadily higher until shortly before 11 a.m. in Zurich — and then chopped generally sideways until shortly after the COMEX open.  It was then sold equally unsteadily lower until until trading ended at 5:00 p.m. EST.  Platinum finished the Tuesday session at $871 spot, up 4 dollars from Tuesday’s close.

The palladium price didn’t do much of anything until shortly after the Zurich open.  It rallied a bit from there for an hour or so, before trading flat into the COMEX open.  It began to fly from that point — and the high tick was set around 9:30 a.m. in New York.  From there it chopped quietly sideways until shortly before 1 p.m. EST.  The price was dropped 5 bucks at that juncture — and from that point it didn’t do much for the remainder of the Wednesday session.  Palladium closed at $1,121 spot, up 17 dollars on the day…gaining back almost all of Tuesday’s loses in the process.

The dollar index closed very late on Tuesday afternoon in New York at the 96.27 — and then fell like a stone the moment trading began at 6:00 p.m. EST a few minutes later — and its 95.90 low tick was set minutes later when the usual ‘gentle hands’ appeared — and drove it higher by 50+ basis points in less than an hour.  It began to head sharply lower once again starting around 10:20 a.m. CST on their Wednesday morning — and it revisited its low tick of the day at precisely noon CST.  For the second time in five hours, those ‘gentle hands’ appeared.  From that point it began to rally quietly higher — and that state of affairs lasted until 3 p.m. China Standard Time.  From that juncture in began to head lower — and the 96.68 low tick was set at the morning gold fix in London…10:30 a.m. GMT.  It began to crawl quietly but unevenly higher — and it certainly appeared that there was some sort of algorithm running in the background to keep it on such an neat and even path for the rest of the Wednesday session.  The dollar index finished the day at 96.16…down 11 basis points from Tuesday’s close.

And here’s the 6-month U.S. dollar index chart — and the delta between its close…96.12…and the close on the intraday chart above, was only 4 basis points.

The gold stocks opened about unchanged before dipping into negative territory by a bit.  At 10 a.m. EST they began to rally to their highs of the day…such as they were…and then proceeded to chop quietly lower and back into negative territory, finishing just off their lows of the day.  The HUI closed down 1.33 percent.

The silver equities opened a hair above unchanged — and were in negative territory for the rest of the day…following the gold share price path like the proverbial shadow.  And despite the fact that silver finished up a bit on the day, Nick Laird’s Silver Sentiment/Silver 7 Index closed down 2.83 percent.  Click to enlarge if necessary.

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

And as poorly as the precious metal equities performed on Wednesday, it should be remembered that there was a buyer for every share that was sold yesterday — and whoever the buyers were, they were certainly happy to pick them up at these bargain-basement prices.


The CME Daily Delivery Report showed that 1 gold and 275 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In gold, Advantage issued and stopped the lone contract.  In silver, of the three short/issuers in total, the only two that mattered were International F.C. Stone and ABN Amro with 169 and 101 contracts out of their respective client accounts.  There were six long/stoppers in total.  The biggest was Morgan Stanley with 95 contracts…69 for its own account, plus another 26 for its client account.  In number two spot was HSBC USA with 74 for its own in-house/proprietary trading account — and in third place was JPMorgan with 69 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in November declined by 3 contracts, leaving 5 left, minus the 1 mentioned just above.  Tuesday’s Daily Delivery Report showed that 2 gold contracts were actually posted for delivery today, so that means that 3-2=1 more gold contract vanished from the November delivery month.  Silver o.i. in November rose by 1 contract, leaving 278 still open, minus the 275 mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that only 2 silver contracts were actually posted for delivery today, so that means that 2+1=3 more silver contracts were added to November.


There was another withdrawal from GLD yesterday, as an authorized participant took out 47,295 troy ounces.  There were no reported changes in SLV.

There was a sales report from the U.S. mint yesterday, the first one for November.  They sold 6,000 troy ounces of gold eagles — 2,000 one-ounce 24K gold buffaloes — and 405,000 silver eagles.

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

As always, it was a completely different story in silver, as 1,691,842 troy ounces were received — and another 646,197 troy ounces was shipped out.  In the ‘in’ category, one truckload…604,655 troy ounces…was received at Brink’s, Inc. — and another truckload…599,444 troy ounces…was deposited at Canada’s Scotiabank.  There was also a smallish truckload…487,742 troy ounces…dropped off at JPMorgan.  In the ‘out’ category, there was 595,877 troy ounces…one truckload…shipped out of Malca-Amit USA — and the remaining 50,319 troy ounces departed CNT.  The link to all that activity is here.

The addition of that small truckload to JPMorgan’s silver depository on Tuesday brings their total COMEX silver stash up to 152.07 troy ounces…yet another record.

It was an extremely busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 9,012 of them — and shipped out another 5,001.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The silver jug below was made in Italy — and dates from the mid-first century A.D.  It’s one item from the Berthouville treasure.  The Berthouville hoard was discovered when a ploughshare struck a Roman tile in March of 1830. Once dislodged, the tile uncovered the hastily buried temple treasure a mere 20 cm beneath the modern surface.   The 93-piece treasure consisted of silver and other metalwork, of varying type, quality and dates in the 1st to late 2nd centuries of the Common Era.  Click to enlarge.

Except for the mid-term election stories, there wasn’t much else going on — and I only have an average number of articles for you today.


CRITICAL READS

Voting: America’s Favorite Hollow Ritual — Bill Bonner

Yesterday, the voters spoke.

The media – eager to attract eyeballs for their paid advertisers – spun the story as if it were the most important thing to happen since Adam ate the apple.

But what really changed?

The House – now in Democrat hands – will begin a new set of annoying hearings, designed to distract the voters from the larceny going on behind the scenes and the disaster it foretells.

There, away from the headlines, Democrats and Republicans, lefties and Trumpistas, will divvy up the ill-gotten goods from the election.

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


The United States is Going Broke — Jim Rickards

Those who focus on the U.S. national debt (and I’m one of them) keep wondering how long this debt levitation act can go on.

The U.S. debt-to-GDP ratio is at the highest level in history (106%), with the exception of the immediate aftermath of the Second World War. At least in 1945, the U.S. had won the war and our economy dominated world output and production. Today, we have the debt without the global dominance.

The U.S. has always been willing to increase debt to fight and win a war, but the debt was promptly scaled down and contained once the war was over. Today, there is no war comparable to the great wars of American history, and yet the debt keeps growing.

In a new Weekly Standard article, the celebrated James Grant of Grant’s Interest Rate Observer reviews not only the current debt and deficit situation but provides an overview of the U.S. national debt since George Washington and Alexander Hamilton.

Grant makes the point that the debt has been increased and decreased on a regular basis but never until today was there a view that the deficit didn’t matter and could be increased indefinitely.

This commentary by Jim showed up on the dailyreckoning.com Internet site on Wednesday sometime — and another link to it is here.


Mortgage Applications Plummet to 18-Year Lows as Rates Hit 2010 Highs

With purchase applications tumbling alongside the collapse in refinancings, the headline mortgage application data slumped to its lowest level since September 2000 last week.

This should not be a total surprise as Wells Fargo’s latest results shows the pipeline is collapsing – a forward-looking indicator on the state of the broader housing market and how it is impacted by rising rates, that was even more dire, slumping from $67BN in Q2 to $57BN in Q3, down 22% Y/Y and the the lowest since the financial crisis.

But in the month since those results, mortgage rates have gone higher still… (this is now the biggest 2Y rise in mortgage rates since 2000)…sparking further weakness in the housing market…

And absent Xmas weeks in 2000 and 2014, this is the weakest level of mortgage applications since September 2000.

This Zero Hedge article was posted on their website at 9:25 a.m. on Wednesday morning EDT — and I thank Brad Robertson for this one.  Another link to it is here.


Mike Maloney: One Hell of a Crisis Looms

Mike Maloney, monetary historian and founder of GoldSilver.com, has just released two new chapters of his excellent Hidden Secrets of Money video series.

In producing the series, Maloney has reviewed several thousand years of monetary history and has observed that government intervention and mismanagement — such as is now rampant across the world — has always resulted in the diminishment and eventual failure of currency systems.

As for the world’s current fiat currency regimes, Mike sees a reckoning approaching. One that will be preceded by massive losses rippling across nearly all asset classes, destroying the phantom wealth created during the latest central bank-induced Everything Bubble, and grinding the global economy to a halt…

This audio interview, with host Chris Martenson, was posted on the Zero Hedge website at 8:05 p.m. on Wednesday evening EDT — and it runs for 56:14 minutes.  And as I should point out, the two new Hidden Secrets of Money videos that are referred to here, have already appeared in my column — and if you didn’t watch them back then, it’s not too late to make amends.  Another link to the audio interview is here.


SWIFT Caves to U.S. Pressure, Defies E.U. By Cutting Off Iranian Banks

Shortly after Trump reimposed nuclear sanctions on Tehran on November 5, the international financial messaging system SWIFT announced the suspension of several Iranian banks from its service. “In keeping with our mission of supporting the resilience and integrity of the global financial system as a global and neutral service provider, SWIFT is suspending certain Iranian banks’ access to the messaging system,” SWIFT said.

The Belgium-based financial messaging service added: “This step, while regrettable, has been taken in the interest of the stability and integrity of the wider global financial system.”

SWIFT’s decision has further undermined E.U. efforts to maintain trade with Iran and save an international deal with Tehran to curtail its nuclear program, after President Donald Trump pulled the U.S. out in May. Being cut off from SWIFT makes it difficult for Iran to get paid for exports and to pay for imports, mostly of oil.

As a further note, the E.U. was one of the few entities not to receive a sanctions waiver from the U.S. earlier this week.

The European Commission was understandably displeased, and on Wednesday said it found the SWIFT decision “regrettable

As we reported over the weekend, last Friday Treasury Secretary Steven Mnuchin warned SWIFT it could be penalized if it doesn’t cut off financial services to entities and individuals doing business with Iran. However, by complying with Washington, SWIFT now faces the threat of punitive action from Brussels.

This story appeared on the Zero Hedge Internet site at 11:05 a.m. EST on Wednesday morning — and it’s the second offering of the day from Brad Robertson.  Another link to it is here.


U.S. Embassy in Moscow to Send Its Staffers to Afghan Talks in Russia — State Department

The Embassy of the United States in Moscow will dispatch a representative to monitor the peace talks between the Afghan government and the Taliban in the Russian capital on November 9, State Department Deputy Spokesperson Robert Palladino told reporters in a press briefing on Wednesday.

When asked whether Washington would send officials to attend the international talks, Palladino said, “The United States Embassy in Moscow will send a representative to the working level to observe the discussions.”

The spokesman added the U.S. government believes all countries should back direct dialogue between the government of Afghanistan and the Taliban to achieve the end to the conflict. He added that Washington remains ready to act on expediting the peace process in the region.

This brief news item was posted on the sputniknews.com Internet site at 12:50 a.m.. Moscow time on their Thursday morning, which was 4:50 p.m. in Washington — EST plus 8 hours.  I thank Larry Galearis for pointing it out — and another link to it is here.


Japanese Machine Orders Crash Most on Record as BoJ Member Admits “Can’t Solve Structural Problems”

Just two days ago we exposed the abject failure of Abenomics as even allowing for distortions from the natural disasters which hit Japan, the machinery orders data will only embolden the BOJ to stay the course.

September Japanese Core Machine Orders crashed 18.3% MoM (more than double the 9% drop expected and considerably worse than the impact of the tsunami). That is the greatest monthly collapse in orders ever and led to machine orders collapsing 7% YoY (when expectations were for a 7.7% rise YoY)…

Worse still, historically, core machine orders are an early indicator of future capital spending, and exclude volatile orders for ships and orders from electrical power companies’

It comes on the back of the negative print for real cash earnings and the slide in household spending earlier this week. And all this before the sales-tax hike planned for next year.

The utterly dismal data adds to signs that gross domestic product may have contracted slightly in the third quarter…

This news item, which certainly comes as no surprise to me, showed up on the Zero Hedge website at 7:20 p.m. EST on Wednesday evening — and another link to it is here.


Dumping the dollar: Iran and South Korea agree cross-currency trade

South Korea and Iran have agreed to switch to national currencies in trade exchanges as the sides aim to strengthen relations despite the US sanctions on Tehran.

The agreement is of great importance to both countries, Yonhap News Agency reported, explaining that the deal indicated Korea’s concerns about relations with Iran.

The countries also agreed to make payments and settle their financial and banking accounts using the South Korean national currency, the won. That will allow South Korean and Iranian companies to continue their extensive exchanges in various fields.

The volume of bilateral trade surpassed the $12-billion benchmark last year, according to Iran’s ambassador to Seoul Saeid Badamchi Shabestari, who told Press TV that the Iranian and Korean economies complement one another.

This story put in an appearance on the rt.com Internet site at 2:39 p.m. Moscow time on their Wednesday afternoon, which was 6:39 a.m. in Washington — EST plus 8 hours.  This is the second offering of the day from Larry Galearis — and another link to it is here.


Maduro scrambles to bring Venezuela’s gold back from the UK…[but is denied temporarily]

President Maduro of Venezuela is trying to repatriate at least 14 tonnes of gold held at the Bank of England, fearing that access could be frozen under U.S. sanctions against his regime.

The Bank has refused to release the gold bars, worth about £420 million, according to sources. British officials are understood to have insisted that standard measures to prevent money-laundering be taken — including clarification of the Venezuelan government’s intentions for the gold.

There are concerns that Mr. Maduro may seize the gold, which is owned by the state, and sell it for personal gain.

This very interesting news item was posted on thetimes.co.uk Internet site at 12:01 a.m. GMT on their Wednesday morning — and the above three paragraphs are all of this story that’s posted in the clear.  The rest is hidden behind their subscription wall.  I extracted this piece from an article posted on the silverdoctors.com Internet site that Brad Robertson sent my way — and another link to the hard copy is here.  A more comprehensive take on this story was posted on the sputniknews.com Internet site yesterday — and it’s headlined “Bank of England Refusing Venezuelan Request to Return $550 Mln in Gold – Report” — and I found it on the Sharps Pixley website.


Ray Dalio: Put 5-10% in Gold

Guru Ray Dalio, who has had tremendous success with his hedge fund Bridgewater Associates, appeared on an India-based TV station for a lengthy interview on Oct. 29.

Dalio doesn’t seem to like very many assets. He does not like equities. He does not like bonds. He does not like the U.S. dollar. He does not like the euro.

He suggests putting 5-10% of a portfolio in gold and weighting towards the higher range later in the cycle. He does not know where we are exactly, but we are pretty late in the cycle.

Dalio does not like any of the major asset classes except for gold. However, he later added that achieving a balanced portfolio is the most important thing. This is what Bridgewater accomplishes in its All-Weather portfolio.

Along with the story, there’s the 49-minute long video interview with Ray as well.  This article appeared on the gurufocus.com Internet site on Tuesday sometime — and it’s another story that I plucked from the Sharps Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES

Here is another award-winning photograph that was deemed so by the Natural History Museum in London this year.  It’s by Russian photographer Sergey Gorshkov.  It’s entitled ‘A Bear on the Edge

For Sergey, this photograph of a solitary polar bear walking steadily along a glacier is ‘a symbol of Franz Josef Land’. It speaks of the vulnerability of an iconic animal that depends entirely on this frozen wilderness. His powerful composition gives no hint of the biting wind and icy sea spray he had to endure while taking it.

The Russian Arctic National Park has recently been expanded to include the 191 uninhabited islands of Franz Josef Land. With a lack of data for this remote region, both polar bear numbers and rates of sea ice decline are unknown.  Click to enlarge.


The WRAP

It was certainly apparent that the powers-that-be where everywhere they had to be once trading commenced at 6:00 p.m. EST in New York on Tuesday evening — and nowhere was it more obvious than in their activities in the currencies and the precious metals.  Volumes in gold and silver were pretty heavy right up until they were turned lower in mid-morning trading in London.   By day’s end, there was nothing left to see.

For the second day in a row, silver touched its 50-day moving average, but did not penetrate it to the downside.  Platinum is now banging on its 200-day moving average door — and WTIC got sold down to a new intraday and closing low for the second trading session in a row.  It’s now even more oversold then it was on Tuesday.

You can see all this for yourself in the 6-month charts for the Big 6 commodities below.  The ‘click to enlarge‘ feature only helps with the four precious metal graphs.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price edged lower until around 1 p.m. China Standard Time on their Thursday afternoon.  It crawled a bit higher from there, before getting tapped down in price to its current low tick of the day.  It’s off that by a bit now, but still down $1.70 the ounce.  Silver’s price path has been guided in a very similar manner — and it’s down 4 cents currently.  On a smaller scale — and in somewhat more erratic fashion, the price path for platinum has been the same, but after its little afternoon sell-off in Far East trading, it’s up a buck.  Not so for palladium, as it’s been quietly ticking lower in price throughout all Far East trading — and it’s down 5 dollars at the moment.

Net HFT gold volume is a bit over 45,000 contracts — and there’s 2,022 contracts worth or roll-over/switch volume on top of that.  Net HFT silver volume is around 14,200 contracts — and there’s only 652 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has been creeping ever-so-quietly higher since trading began at 6:00 p.m. EDT in New York yesterday evening.  That lasted until 1 p.m. CST — and it’s a bit lower now — and back at unchanged on the day as the London/Zurich opens loom…but it appears to have been stuck at that value for quite some time now, so the ino.com Internet site may be having data-feed issues.

Silver analyst Ted Butler had some interesting comments about the DoJ case against that ex-JPMorgan trader — and here’s first paragraph from his mid-week commentary for his paying subscribers on Wednesday…

Yesterday’s announcement by the Department of Justice of a guilty plea by a former trader of JPMorgan for systemic “spoofing” and price manipulation of gold, silver, platinum and palladium traded on the COMEX and NYMEX futures exchanges (owned by the CME Group) sure seemed like a very big deal to me for a number of reasons. The infractions occurred from 2009 to 2015 and the trader admitted to engaging in a conspiracy to commit market manipulation on hundreds of occasions, with the knowledge and consent of his immediate supervisors. Please take the time to read this, as it is remarkably plainspoken.”  The link to the DoJ announcement is here.

I urged him to post all his thoughts on this case in the public domain, as they’re worth spreading far and wide.

And as I post today’s column on the website at 4:02 a.m. EST, I see that the gold price got sold lower by a bit more in the first hour of London trading — and is currently down $4.00 the ounce.  Silver’s price was managed lower in a similar fashion — and it’s now down 11 cents.  Platinum is now down a buck — and palladium is now 10 dollars lower.

Gross gold volume is around 63,500 contracts — and minus current roll-over/switch volume, net HFT gold volume is about 55,000 contracts.  Net HFT silver volume is now up to a bit under 18,000 contracts — and there’s 897 contracts worth of roll-over/switch volume on top of that.

And after a brief spike up at exactly 3:00 p.m. China Standard Time on their Thursday afternoon, the decent in the dollar index quietly continues — and as of 8:10 a.m. GMT in London, it’s down 2 basis points — and the ino.com feed is stuck at that time.

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

Ed

Another Barn-Burner Day in COMEX Silver Movement

07 November 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold quietly lower until 1 p.m. China Standard Time on their Tuesday afternoon.  It began to chop higher from there, but the price was capped at the noon silver fix in London — and when the COMEX opened at 8:20 a.m. EST yesterday morning, JPMorgan et al didn’t waste any time doing the dirty.  The low tick of the day was set a few minutes after the 1:30 p.m. EST COMEX close — and although it began to rally sharply at that point, the gold price wasn’t allowed to get too far.   From 2 p.m. onwards, it didn’t do much.

The high and low ticks were recorded by the CME Group as $1,237.80 and $1,224.90 in the December contract…an intraday move of a bit over one percent.

Gold was closed on Tuesday in New York at $1,226.50 spot, down $4.10 on the day.  Net volume was very quiet for the second day in a row at a bit over 173,000 contracts — and there was a hair under 16,000 contracts worth of roll-over/switch volume in this precious metal.

The silver price was down a penny by shortly after 1 p.m. CST on their Tuesday afternoon — and it rallied a nickel from that point until around 2:30 p.m. over there.  It chopped quietly sideways with a slight positive bias until the COMEX open — and you know the rest, as ‘da boyz’ dealt with silver in an almost identical fashion to gold after that.

The high and low ticks in this precious metal were reported as $14.715 and $14.48 in the December contract.  At its low tick, silver touched its 50-day moving average, but rebounded a few pennies to close just above it.

Silver was closed yesterday at $14.495 spot, down 11.5 cents from Monday.  Net volume was about the same as it was on Monday…around 60,500 contracts — and there was 7,609 contracts worth of roll-over/switch volume on top of that.

Platinum traded sideways until the same 1 p.m. CST time as the previous two precious metals — and its rally lasted until around 12:30 p.m. in Zurich.  It dipped a bit from there — and then retested its prior higher shortly after the COMEX open.  Then it was taken lower in price as well.  Like silver and gold, its low tick was set a minute or two after the 1:30 p.m. COMEX close — and it rallied a small handful of dollars into the 5:00 p.m. EST close.  Platinum finished the Tuesday trading session at $867 spot, up 3 bucks from Monday.

Palladium was down 5 dollars by around 11 a.m. CST — and it began to edge higher shortly after 1 p.m. as well.  It made it back to the unchanged mark by a few minutes before 3 p.m. CST — and traded mostly sideways to down a bit by the COMEX open.  It began to tick lower from there, but the bids got pulled and the spoofing started — and the palladium price crashed a further 27 dollars in less than an hour, starting at 9 a.m. EST.  It chopped unevenly higher from there…and back above $1,100 spot…until around 2:30 p.m. in the thinly-traded after-hours market — and then didn’t do much after that.  Palladium was closed on Tuesday at $1,104 spot, down 18 dollars on the day.

There was nothing free market about that, of course…but the CFTC and the people who mine this stuff will say — and do…nothing.  One wonders if their collective hands shake a little when they reach for their respective paycheques?

The dollar index closed very late on Monday afternoon in New York at 96.33 — and began to edge unevenly higher right from the 6:00 p.m. EST open a few minutes later.  That ‘rally’ lasted until 1 p.m. China Standard Time on their Tuesday afternoon.  It began to chop lower from that juncture, but was turned a higher a minute or so after 9 a.m. in London — and its 96.45 high tick appeared to come shortly after 10 a.m. over there.  The index didn’t do much until a few minutes after 11:30 a.m. GMT — and then down it went, with the 96.15 low tick of the day set around 8:40 a.m. in New York.  It chopped very unsteadily higher from there into the COMEX close — and then traded equally unsteadily lower until trading ended.  The dollar index finished the Tuesday session at 96.27…down 6 basis points from Monday’s close.

It was yet another day where what was happening in the currencies had little bearing on what was going on in the precious metal market…especially once trading began on the COMEX in New York.

Here’s the 6-month U.S. dollar index chart — and the delta between its close…96.12…and the close on the intraday chart above was 15 basis points yesterday.

The gold stocks opened unchanged, but less than fifteen minutes later they were headed lower — and that lasted until around 1 p.m. in New York trading.  They then crept unsteadily higher into the 4:00 p.m. EST close.  The HUI finished down 1.45 percent.

It was almost the same price path for the silver equities, except their respective low ticks came a few minutes after 3 p.m. EST — and they barely made it off that mark by the close.  Nick Laird’s Intraday Silver Sentiment Index closed down 2.09 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 2 gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  I won’t bother breaking these down, but if you wish to look for yourself, the link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in November declined by 7 contracts, leaving 6 still open, minus the 2 contracts mentioned just above.  Monday’s Daily Delivery Report showed that 5 gold contracts were actually posted for delivery today, so that means that 7-5=2 gold contracts vanished from the November Delivery month.  Silver o.i. in November dropped by 148 contracts, leaving 277 still around, minus the 2 contracts mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 150 contracts were actually posted for delivery today, so that means that 150-148=2 more silver contracts just got added to November.


There was a small withdrawal from GLD yesterday, as an authorized participant removed 18,918 troy ounces of gold.  There were no reported changes in SLV.

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

There was a tiny bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.  There was 6,430.000 troy ounces/200 kilobars [U.K./U.S. kilobar weight] deposited at Canada’s Scotiabank — and nothing was shipped out.  I won’t bother linking this.

It was another monster day in silver, as 1,199,216 troy ounces were reported received — and 1,691,576 troy ounces was shipped out the door.  In the ‘in’ category, there was one truckload…600,255 troy ounces…received at CNT — and the other truckload…598,961 troy ounces…was dropped off at JPMorgan.  In the ‘out’ category, there was 1,089,719 troy ounces that departed CNT, plus one truckload…600,863 troy ounces…that left Scotiabank.  The remaining 993 troy ounces…one good delivery bar…was shipped out of Delaware.  There was also a paper transfer of 617,163 troy ounces from the Eligible category — and into Registered — and it’s a fairly safe assumption to make that this will be for November deliveries.  The link to all this action is here.

Of course, with yesterday’s truckload deposit, JPMorgan’s silver stash is at a new record high…151.58 million troy ounces.

There was some decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They received 5,250 of them — and shipped out 530 .  All this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Here are two charts that Nick Laird passed around on the weekend, but I haven’t bother posting them until now, as I gave you these sales numbers in last Friday’s column — and there’s not really all that much to see.  They show gold and silver bullion coin sales from the U.S. Mint, updated with October’s data.  The gold eagle sales include gold buffalo sales as well.  Click to enlarge.

I don’t have all that much for you in the way of stories today.


CRITICAL READS

The Worst Part About Election Day: Somebody Wins — Bill Bonner

It hardly matters who you vote for anyway. Technology, evolving myths, and power relationships shape ideas. People always seem to think what they must think when they must think it.

And the Deep State makes policy decisions, no matter what the people think.

Bush, Obama, Trump – can you think of one thing any of them did to seriously challenge the Deep State? Did they cut the budget? Did they bring the troops home?

No? We didn’t think so.

And now, another election… and another big distraction. No matter who wins, the agenda remains the same: more money, power, and status for the insiders; less for you. That will continue until the whole thing blows sky high.

Our guess is that the final blow-up is still a long way off. Because now, with the latest tech innovations, the elite have a new weapon: digital control.

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


What This Election Is About — Paul Craig Roberts

I never cease to be amazed at the insouciance of Americans. Readers send me e-mails asking why I ever supported Trump when he was the Establishment’s candidate. If Trump was the Establishment’s candidate, why has the Establishment spent two years trying to destroy him?

The failure to put two and two together is extraordinary. Trump declared war on the Establishment throughout the presidential campaign and in his inaugural address.

As I wrote at the time, Trump vastly over-estimates the power of the president. He expected the Establishment, like his employees, to jump to his will, and he did not know Washington or who to appoint to support his goals. He has been totally defeated in his intention to normalize relations with Russia. Instead, we are faced with both Russia and China preparing for war.

In other words, the same outcome that Hillary would have achieved.

Trump has been so harassed by the Establishment that he is having trouble thinking straight. He was elected by “the deplorables” as the first non-Establishment candidate since when? You have to go back in history to find one. Perhaps Andrew Jackson. Jimmy Carter and Ronald Reagan were not the choice of the Democratic and Republican establishments, and the ruling establishments moved quickly to constrain both presidencies. The Democratic Establishment framed and removed both Carter’s budget director and chief of staff, depriving Carter of the kind of commitment he needed for his agenda. The Bush people that the Republican Establishment insisted be put in positions of power in the Reagan administration succeeded in blunting his reformist economic program and his determination to end the cold war. I fought both battles for Reagan, and I still have the bruises.

This worthwhile commentary by Paul put in an appearance on his Internet site on Monday sometime — and Roy Stephens sent it to me on Tuesday morning.  Another link to it is here.


Dr. Dave Janda interviews your humble scribe

The good doctor and I had a 24 minute chat on all-talk radio WAAM 1600 out of Ann Arbor, Michigan on Sunday.  We discussed the state of the U.S. and world economies — and precious metals, of course.


Iran’s ‘Ghost Ships’ Evade Oil Sanctions By Turning Off Trackers

In anticipation of the U.S. sanctions against Iranian oil exports, which were reimposed by the Trump Administration on Monday (along with additional sanctions on everything from Iranian shipping to banking and insurance), oil tankers bearing the Iranian flag have embraced a stealthy approach to keeping the oil flowing: They’re ‘ghosting’ international trackers by turning off their transponders, rendering the ships impossible to track by anything aside from visual cues.

Iran, which is already suffering from a drop in exports to 1.8 million barrels per day, down from 2.8 million barrels at the peak, is doing everything it can to keep the crude (along with 300,000 barrels of condensate) flowing. Though Iran received a temporary reprieve from the Trump Administration’s sanctions waivers granted to eight of its biggest customers, those waivers are temporary, and they were also granted with the understanding that the applicants would gradually reduce their reliance on Iranian oil.

That means the kingdom is going to need to do everything it can to help any and all customers avoid detection, and possible U.S. sanctions (which could include barring a given country’s largest banks from accessing dollars and the global dollar-based financial system). Already, the ghosting method is proving surprisingly effective: In an interview with Sputnik, the founders of one of the most popular oil-tanker tracking services, tankertracker.com, have been “utterly exhausted” trying to track Iranian ships.

Iran has also employed another strategy from the pre-Iran deal era. The Republica is keeping six ships with a total capacity of 11 million barrels anchored offshore, allowing the “floating storage tankers” to make speedy deliveries to try and mitigate buyers’ anxieties as, once they leave port, the ships will be essentially impossible to track.

This brief news story was posted on the Zero Hedge website at 1:00 a.m. EST on Wednesday morning — and another link to it is here.


E.U. Gold demand advances 10 percent during Q3: WGC

European Gold demand was 51.1 tonnes during the third quarter of this year, up 10% year-on-year, according to the World Gold Council.

Germany, which accounts for more than half of the region’s bar and coin investment – was up 10% to 28.4 tonnes. In late September the euro-denominated gold price fell to a two-and-a-half year low of €32,638/kg.

Unlike the European-ETF market, concerns around Italian debt and its potential to spark a broader financial crisis, prompted safe-haven buying among retail investors.

Having been in the doldrums for several quarters, the U.S. bar and coin market showed signs of life.

Demand reached double-digits – 10.5t, up 74% y-o-y. Growth was largely fuelled by bargain hunting in June, when the gold price dropped from more than US$1,300/oz to close on US$1,250/oz.

The above five paragraphs are all there is to this brief story, filed from New York, that appeared on the scrapregister.com Internet site…most likely on Tuesday, but there’s no dateline.  It’s the first of three stories in a row that I plucked from the Sharps Pixley website yesterday.  Another link to the hard copy is here.


India sees jump in bullion sales, as investors return to gold

Despite overall gold sales remaining subdued in the last two months, bullion sales in the Indian market have seen about 15 percent jump during this period, signalling an early trend of investors coming back to the yellow metal for a safe and steady return in the coming months, according to traders and market analysts.

The total gold sales in October 2018 is estimated to be about 70 tonnes in volume and about Rs 22,000 crore (approx $3 billion) in value, according to the quick estimates by Indian Bullion and Jewellers Association (IBJA). The sales in September 2018 were slightly less than the October figures.

The spurt in bullion demand in the recent months coincides with the on-going turmoil in the Indian equity market, which has seen a fall of over 4,000 points in the flagship BSE S&P index Sensex in the last 3-4 months – impacted by rising crude oil prices, weakening rupee and uncertainty over the prevailing political situation.

This article put in an appearance on the arabianbusiness.com Internet site at 10:06 a.m. Gulf time on their Tuesday morning — and it’s the second story that I picked up from the Sharps Pixley website.  Another link to it is here.


Jewelry sales propel China gold use in first nine months

China’s gold consumption continued to grow in the first three quarters of this year due to strong domestic demand.

The use of gold went up by 5.08 percent from a year ago to 849.7 tonnes in the January-September period, the China Gold Association said today, Xinhua reports.

Gold jewelry sales posted stable growth and contributed nearly two thirds of the total domestic gold consumption, while sales of industrial gold products and others registered the most rapid expansion, at 24.68 percent.

Gold coins, only accounting for around 2 percent of the total domestic gold consumption, grew by 6.47 percent.

This gold-related news item appeared on thestandard.com.hk Internet site at 5:09 p.m. Hong Kong Time on their Tuesday morning, which was 4:09 a.m. in New York — EST plus 13 hours.  I found it on the Sharps Pixley website — and another link to it is here.


Ex-JPMorgan trader pleads guilty to rigging monetary metals, implicates supervisors at bank

An ex-J.P. Morgan Chase trader has admitted to manipulating the U.S. markets of an array of precious metals for about seven years — and he has implicated his supervisors at the bank.

John Edmonds, 36, pleaded guilty to one count of commodities fraud and one count each of conspiracy to commit wire fraud, price manipulation, and spoofing, according to a release today from the U.S. Department of Justice.

Edmonds spent 13 years at New York-based J.P. Morgan until leaving last year, according to his LinkedIn account.

As part of his plea, Edmonds said that from 2009 through 2015 he conspired with other J.P. Morgan traders to manipulate the prices of gold, silver, platinum, and palladium futures contracts on exchanges run by the CME Group. He and others routinely placed orders that were quickly canceled before the trades were executed, a price-distorting practice known as spoofing.

For years John Edmonds engaged in a sophisticated scheme to manipulate the market for precious metals futures contracts for his own gain by placing orders that were never intended to be executed,” Assistant Attorney General Brian Benczkowski said in the release.

But will it make any difference, dear reader!!!  This news item, which was embedded in a GATA dispatch, appeared on the cnbc.com Internet site sometime yesterday morning.  There’s also a link from the Department of Justice about this charge as well — and it’s certainly worth a look, too.  Although I’m posting the link from the gata.org Internet site, the first person through the door with this story yesterday was reader T.A. — for which I thank him.  This is definitely worth reading — and another link to it is here.  The Zero Hedge spin on this his headlined “JPMorgan Gold-Spoofer Admits “Manipulating Precious Metals Markets” For Years” — and the first reader through the door with this story yesterday was Brad Robertson.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the glasswing butterfly — and it’s pretty much self-evident as to how it came by its name. The butterfly is mainly found in Central and northern regions of South America with sightings as far north as Texas and as far south as Chile.   I photographed one of these in Trinidad back in he early 1970s.  Click to enlarge.


The WRAP

With the dollar index not doing much of anything yesterday, it was obvious that precious metal prices, particularly gold and silver, were about to head uncomfortably higher — and after both were capped at the noon silver fix in London, the New York bullion banks not only took everything away during the COMEX trading session on Tuesday, they closed both of them, plus platinum, at new lows since last Thursday’s big rallies.

And as I pointed out further up, silver touched its 50-day moving average at its low tick on Tuesday.  But ‘da boyz’ obviously had the long knives out for palladium, as they’re trying to break this precious metal to the downside — and it just won’t cooperate.

The other two casualties on Tuesday were copper and WTIC, with the former being closed a penny or so back below its 50-day moving average — and the latter getting hammered down to a new intraday and closing low for this move down.  The Managed Money traders lost big money on this move down in WTIC — and will lose even more when the commercial traders turn the price higher — and it’s very oversold at the moment.

Here are the 6-month charts for the Big 6 commodities — and you can easily see the handiwork of JPMorgan et al.  The ‘click to enlarge‘ feature only helps with the four precious metal charts.

And as I type this paragraph, the London open is less than ten minutes away — and I note that even though the dollar index dropped like a rock at the 6:00 p.m. EST open in New York yesterday evening, it had no impact whatsoever on any of the precious metals.  Gold rallied a bit, but was obviously capped shortly before 9 a.m. China Standard Time on their Wednesday morning — and was sold down to its current low tick of the day about two hours later.  It has been chopping unsteadily higher since — and is currently up $3.50 the ounce.  Not surprisingly, silver was forced to follow a virtually identical price path — and its current rally attempt, which began at 3 p.m. CST, shows it up 7 cents at the moment.  Palladium has been chopping quietly and unsteadily higher since yesterday evening in New York — and it’s up 5 dollars.  The palladium price has done virtually nothing during Far East trading on their Wednesday — and is sitting at unchanged as Zurich opens.

Net HFT volume is way up there, so it’s obvious that ‘da boyz’ were out and about on Tuesday evening — and are still around as I type this.  It sits at a bit over 79,000 contracts — and there’s only 866 contracts worth of roll-over/switch volume on top of that.  Net HFT silver volume is heavy as well, at just under 15,000 contracts — and there’s only 635 contracts worth of roll-over/switch volume in that precious metal.

As I stated above, the dollar index fell like a rock the moment that trading began at 6:00 p.m. EDT in New York on Tuesday evening — and was down 30+ basis points in a minute or so.  The usual ‘gentle hands’ appeared and saved it at the 95.90 mark — and it got ramped higher — and up 50+ basis points by around 9:20 a.m. CST in Far East trading on their Wednesday morning.  It revisited its 95.90 low tick at precisely noon CST.  From there it shot back up to the 96.15 mark by around 2:45 p.m. in Shanghai — and it has drifted a bit lower since then — and is down 26 basis points about thirty minutes before the London open.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and the companion Bank Participation Report.  I expect that there will in an increase in the commercial net short positions in all four precious metals when the COT Report comes out…particularly silver, as it blew through — and then closed above its 50-day moving average during the reporting week.  There’s been some improvement since that rally, but not enough to make a material difference.

Ted will certainly have something to say about this in his mid-week commentary later today, as he’s the world authority on all things silver and gold related.  I may ‘borrow’ a few sentences on this subject for my Friday column.

And as I post today’s missive on the website at 4:02 a.m. EST, I see that the gold price continues to edge quietly higher — and is now up $4.00 the ounce as the first hour of London trading draws to a close, but is off its current high tick of the day by more than a dollar. Silver is getting frisky, as it’s now up 13 cents — and one has to wonder how long JPMorgan will allow this situation to last. Platinum has crept higher by another dollar — and is now up 6 bucks. The palladium price has finally picked itself up off the floor — and is up by 5 dollars as the first hour of Zurich trading ends.

Gross gold volume is coming up on 95,000 contracts — and net of roll-over/switch volume, net HFT gold volume is just over 92,000 contracts. Net HFT silver volume is very heavy at something over 19,000 contracts — and there’s still only 660 contracts worth of roll-over/switch volume on top of that. These rallies in silver and gold are not going unopposed.

The dollar index continues to inch lower — and it’s down 35 basis points as of 8:30 a.m. GMT in London.

With the mid-terms in the U.S. now in the history books, it remains to be seen what ‘da boyz’ allow in the way of precious metal prices going forward, as they certainly weren’t letting them to get out of hand yesterday evening as the election results were pouring in.

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

Ed

More Big In/Out Silver Activity At the COMEX on Friday

06 November 2018 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much of anything except chop quietly sideways in Far East trading on their Monday.  It was the same in London until shortly before 1 p.m. GMT — and then it was knocked a few dollars lower.  The low tick of the day, such as it was, came at precisely 8:30 a.m. in New York.  Its rally from there, such as it was, was stopped dead in its tracks at, or minutes after, the afternoon gold fix in London, which was the moment it broke back above unchanged on the day.  It was sold a bit lower from there — and didn’t do a lot for the remainder of the Monday session.

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

Gold was closed in New York yesterday at $1,230.60 spot, down $1.60 from Friday.  Net volume was extremely light at a bit under 143,000 contracts — and roll-over/switch volume was a tad over 15,000 contracts on top of that.

Silver’s price path was directed in a similar fashion to gold’s except it was sold down a bit harder, relatively speaking, starting just before 1 p.m. GMT/8 a.m. EST — and it wasn’t allowed to recover by the same amount as the gold price was in New York trading.  Its low was set at the same 8:30 a.m. time as gold — and except for a small up/down move either side of the afternoon gold fix, wasn’t allowed to do much for the remainder of the Monday session.

The high and low ticks in this precious metal were recorded as $14.775 and $14.595 in the December contract.

Silver was closed at $14.61 spot, down 10.5 cents on the day.  Net volume was somewhat elevated…at least compared to gold…at 60,700 contracts — and roll-over/switch volume in this precious metal amounted to 6,199 contracts.

The platinum price reached its $972 high tick of the day minutes after 3 p.m. China Standard Time on their Monday afternoon — and from there it was sold erratically lower — and was forced to trade in much similar price fashion as both silver and gold staring around 1:30 p.m. in Zurich…7:30 a.m. in New York.  It was sold down from there.  Its New York high came very shortly after the Zurich close — and it was sold lower once again — and that selling pressure lasted into the after-hours trading session.  Its low tick of the day was set around 4 p.m. EST — and it popped a few dollars higher into the 5 p.m. close from there.  Platinum was closed on Monday at $864 spot, down 3 dollars on the day.

The palladium price didn’t do much until very shortly before noon China Standard Time on their Monday morning.  It popped up about ten dollars in price over the next hour — and then chopped mostly sideways until 8:30 a.m. EST in New York…which was the same time as both silver and gold got smacked.  It began to head quietly higher from there — and that state of affairs lasted until a few minutes before the COMEX close.  It traded sideways from there until trading ended at 5:00 p.m. EST.  Palladium finished the Monday session at $1,122 spot, up 17 bucks on the day.

The dollar index closed very late on Friday afternoon in New York at the 96.50 mark…and fell about 10 basis points the moment that trading began at 6:00 p.m. EST in New York on Sunday evening.  It rallied unevenly higher from there — and the 96.68 high tick was set about ten minutes before 1 p.m. in London…8 a.m. in New York.  It stair-stepped lower in price from that point — and the 96.25 low tick was set around 2 p.m. EST.  It ‘rallied’ quietly but erratically from there — and finished the day at 96.33…down 17 basis points from Friday’s close.

It was another day where the goings-on in the currency markets were totally divorced from what was happening with precious metal prices.

Here’s the intraday chart from midnight in New York on Sunday, to the close of trading on Monday afternoon.

And here’s the 3-day dollar index chart, so you can see the action right from the New York open on Sunday evening.

And here’s the 6-month U.S. dollar index chart — and the delta between its close…96.08…and the close on the intraday chart above, was 25 basis points.

The gold shares rallied two percent in the first fifteen minutes of trading, once it began at 9:30 a.m. in New York.  But it wasn’t long after that, that they were back in negative territory — and their respective lows were set around 12:20 p.m. EST.  They crawled quietly higher from there — and managed to pop into positive territory shortly before 3 p.m. — and didn’t do much after that.  The HUI closed higher by 0.33 percent.

The price path for the silver equities was very similar to gold’s, but because silver was sold down more on a percentage basis during the COMEX trading session, the silver stocks were down more than 2 percent at their 12:20 p.m. EDT low ticks.  But they recovered back to unchanged by a minute or so before 3 p.m. EDT, but slid a bit during the last hour of trading.  Nick Laird’s Intraday Silver Sentiment Index closed lower by 0.16 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 5 gold and 150 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, Advantage and ADM issued 3 and 2 contracts respectively — and stopped those same contracts as well.  All this activity involved their respective client accounts.  In silver, of the three short/issuers in total, the only two that mattered were International F.C. Stone and ADM, with 121 and 27 contracts out of their respective client accounts.  There were six long/stoppers — and the three largest were Morgan Stanley with 52 contracts in total…40 for its own account, plus 12 for its client account.  Next came HSBC USA stopping 42 for its own proprietary trading account — and in third spot was JPMorgan with 38 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in November declined by 11 contracts, leaving 13 still open, minus the 5 mentioned just above.  Friday’s Daily Delivery Report showed that 17 gold contracts were actually posted for delivery today, so that means that 17-11=6 more gold contracts got added to November deliveries.  Silver o.i. in November rose by 26 contracts, leaving 425 still around, minus the 150 mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 3 silver contracts were posted for delivery today, so that means that 3+26=29 more silver contracts just got added to November.


There were withdrawals from both GLD and SLV on Monday.  In GLD, there was 56,754 troy ounces taken out — and in SLV, it was 1,315,073 troy ounces. I’m would think that Ted would suspect that the withdrawal from SLV was a conversion of shares into physical metal by JPMorgan — and maybe the gold as well.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, November 2 — and this is what they had to report. A tiny 847 troy ounces of gold was taken out of their gold ETF — and a smallish 15,111 troy ounces was added to their silver ETF.

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

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  There was 54,554 troy ounces shipped out of HSBC USA — and that’s all the action there was.  The link to this is here.

The activity in silver continues to astound, as 1,809,726 troy ounces were received — and another 1,457,208 troy ounces were shipped out.  In the ‘in’ category, there were two truck loads…1,213,082 troy ounces…received at CNT — and one truckload…596,644 troy ounces…was dropped off at Canada’s Scotiabank.  In the ‘out’ category, there were two truckloads…1,233,008 troy ounces…shipped from CNT — and 222,199 troy ounces from Malca-Amit USA, plus the remaining 2,000 troy ounces departed Delaware.  The link to all this activity is here.

There wasn’t much happening over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, as 215 were reported received — and only 71 shipped out.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are the usual weekly charts from Nick showing the changes for both gold and silver in all transparent depositories, ETFs and mutual funds, as of the close of business on Friday, November 2.  They show that 569,000 troy ounces of gold was added on a net basis, but 2,292,000 troy ounces of silver was taken out on a net basis during the last reporting week and, like the previous week, this negative number for silver is the result of JPMorgan withdrawing physical metal from SLV by the conversion of SLV shares.  Click to enlarge for both.

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


CRITICAL READS

David Stockman: Epic downturn is here, brace for 40% market plunge

David Stockman warns a 40 percent stock market plunge is closing in on Wall Street.

Stockman, who served as President Reagan’s Office of Management and Budget director, has long warned of a deep downturn that would shake Wall Street’s most bullish investors. He believes the early rumblings of that epic downturn are finally here.

It comes as the S&P 500 Index tries to rebound from its worst month since 2011.

No one has outlawed recessions. We’re within a year or two of one,” he said Thursday on CNBC‘s “Futures Now.” He added that: “fair value of the S&P going into the next recession is well below 2000, 1500 — way below where we are today.”

This is far from the first time he’s issued a dire warning. But this time, he suggests the latest leg down is an early tremor of the pain that lies ahead.

This brief 1 minute and 50 second video/audio interview put in an appearance on the cnbc.com Internet site at 5:00 p.m. EDT on Sunday afternoon — and was updated on Monday sometime.  I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.


Trump Administration Spares Corporate Wrongdoers Billions in Penalties

In the final months of the Obama administration, Walmart was under pressure from federal officials to pay nearly $1 billion and accept a guilty plea to resolve a foreign bribery investigation.

Barclays faced demands that it pay nearly $7 billion to settle civil claims that it had sold toxic mortgage investments that helped fuel the 2008 financial crisis, and the Royal Bank of Scotland was ensnared in a criminal investigation over its role in the crisis.

The three corporate giants complained that the Obama administration was being unreasonable and stood their ground, according to people briefed on the investigations. After President Trump took office, they looked to his administration for a more sympathetic ear — and got one.

Federal prosecutors and the Securities and Exchange Commission have yet to charge Walmart, and the Justice Department reached a much lower settlement agreement with Barclays in March, for $2 billion. R.B.S. paid a civil penalty, but escaped criminal charges altogether.

Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration’s aggressive deregulatory agenda throughout the federal government.

This very long essay put in an appearance on The New York Times website on Saturday — and although there’s probably a lot of truth to it, I’m always suspicious of the NYT, as it’s owned by the deep state — and mid-term elections are today in the U.S.  So keep that in mind if you decided to tackle this piece.  I thank Roy Stephens for sending it our way on Sunday — and another link to it is here.


It’s Not the End of the World — Jeff Thomas

Periodically, I’ll encounter someone who has read one of my essays and has decided not to pursue them further, stating, “You’re one of those ‘End of the world’ guys. I can’t be bothered reading the writings of someone who thinks we’re all doomed. I have a more positive outlook than that.”

In actual fact, I agree entirely with his latter two comments. I can’t be bothered reading the thoughts of a writer who says we’re all doomed, either. I, too, have a more positive outlook than that.

My one discrepancy with such comments is that I don’t by any means think that the present state of events will lead to the end of the world, as he assumes.

But then, neither am I naïve enough to think that if I just hope for the best, the powers that be will cease to be parasitical and predatory out of sympathy for me. They will not.

For any serious student of history, one of the great realisations that occurs at some point is that governments are inherently controlling by nature. The more control they have, the more they desire and the more they pursue. After all, governments actually produce nothing. They exist solely upon what they can extract from the people they rule over. Therefore, their personal success is not measured by how well they serve their people, it’s measured by how much they can extract from the people.

And so, it’s a given that all governments will pursue ever-greater levels of power over their minions up to and including the point of total dominance.

This interesting commentary from Jeff showed up on the internationalman.com Internet site on Monday sometime — and another link to it is here.


Americans Will Welcome the Tech-Fueled Police State — Bill Bonner

Fast Company reports:

Internet freedom is in decline across much of the globe as various governments crack down on dissent and so-called fake news, according to an annual report from Freedom House, a nonprofit that receives much of its funding from the U.S. government.

China is not only continuing to restrict online speech within its own borders, but also providing seminars and tours to delegations from other countries, where it promotes its restrictive techniques and tools. “While it is not always clear what transpires during such seminars, a training for Vietnamese officials in April 2017 was followed in 2018 by the introduction of a cybersecurity law that closely mimics China’s own law,” according to the report.

PARIS – A new, modern form of slavery is coming.

We are calm. We are patient.

We await developments with Zen-like resignation. Que sera, sera. Let it be. Amor fati… and all that.

We will soon be turned into a slave by algorithms and Big Data. But so what? Maybe we’ll like it.

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


For the first time since the Cuban crisis, nuclear war threat is real – Shophie Shevardnadze interviews Stephen F. Cohen

The U.S. has announced its withdrawal from the historic nuclear arms treaty with Russia. How serious of a setback is this for the two countries’ relations – and global security? We talked to Stephen Cohen, contributing editor of The Nation magazine, professor emeritus at Princeton University, and author of the book ‘War with Russia?

Sophie Shevardnadze: Stephen Cohen, contributing editor of The Nation magazine, professor emeritus at Princeton University, welcome to the show. It’s great to have you with us as usual. It’s been a while. But things changed. We’ve got a lot to talk about. Last time Trump and Putin met in Helsinki there were such big hopes that something would come out of it, that relations would improve. But not much really came out of the summit – and Donald Trump got a lot of flak at home for meeting the Russian leader. It’s hard to expect a major breakthrough this time around in Paris, what do you think?

Stephen Cohen: Well, there’s a big struggle, everybody knows about it, going on in Washington over Trump’s policy towards Russia. It would seem, and this has been the case you and I talked back then when he was a candidate, he said he wanted to co-operate with Russia. We used to call that détente. And that’s been pretty much his policy, overall policy since he became President. But he’s also done contradictory things. And the question is: are these contradictory things result of his own inability to be a consistent leader, or are people in Washington preventing him from doing what he wants to do with Russia? That’s the big question at the moment.

This 27:42 minute video interview, complete with a full transcript, was posted on the rt.com Internet site at 7:35 a.m. Moscow time on their Monday morning, which was 11:35 p.m. in Washington on Sunday evening — EDT plus 8 hours.  It was updated about thirty minutes later.  My thanks go out to George Whyte for sending it our way — and it’s definitely worth your while if you have the interest.  Another link to it is here.


Pompeo warns of ‘severe, swift punishment’ & ‘painful business’ with Iran as sanctions reinstated

The U.S. has reimposed sanctions on Iran, targeting the Islamic Republic’s energy, banking and shipping sectors. State Secretary Mike Pompeo warned of “swift punishment” for other countries doing business with Iran.

Monday’s sanctions are a reintroduction of penalties lifted under the 2015 Joint Comprehensive Plan of Action (JCPOA). The multilateral deal promised Iran sanctions relief in exchange for a pause on its nuclear weapons program. President Trump withdrew from the deal in May, and has since reimposed economic sanctions in several rounds.

The sanctions target 50 Iranian banks, 200 individuals, and vessels in Iran’s shipping and energy sectors, as well as one airline and 65 of its aircraft. Furthermore, Pompeo promised to mete out “swift punishment” to countries who defy the US’ anti-Iran sanctions.

I promise you,” Pompeo said, “that doing business with Iran in defiance of our sanctions will ultimately be a much more painful business decision than pulling out of Iran.”

This news item was posted on the rt.com Internet site at 1:39 p.m. Moscow time on their Monday afternoon, which was 3:39 a.m. in Washington — EST plus 8 hours.  It was updated about an hour later.  I thank Patrik Ekdahl for sending it our way — and another link to it is here.  An rt.com companion piece to this item, courtesy of Patrik as well, is headlined “Iran will break U.S. sanctions and continue to sell its oil – President Rouhani


The U.S. Backs Saudi Arabia…the Mideast’s Most Reactionary Nation — Eric Margolis

Saudi Arabia has been shaken to its core by the gruesome murder of journalist Jamal Khashoggi.

Turkish intelligence has leaked that the Saudi journalist, who wrote op-ed pieces for The Washington Post newspaper, was strangled in the Saudi consulate in Istanbul, then cut up into pieces for disposal, or dissolved in acid. His remains have not yet been found.

Khashoggi’s brazen murder has caused a crisis in U.S.-Saudi relations, an angry confrontation with Turkey, and serious questions about the Saudi war in wretched Yemen, which so far had caused 60,000 deaths and left this remote land facing starvation.

Trump and his allies initially supported the Saudi-Emirati war against Yemen, having fallen for the false claim that great Satan Iran was backing the Yemeni Houthi forces. Britain and Israel strongly supported the Saudi war.

In reality, Saudi Arabia’s headstrong Crown Prince Mohammed, got his nation embroiled in a no-win war against tough Yemeni tribes who refused to accept a Saudi-imposed figurehead ruler. The United Arab Emirates, a Saudi ally, also got involved to expand its little country-big ambitions around the Red Sea littoral.

But the Saudis lacked a real army to wage war in Yemen. They feared an army might mount a coup against the royal family as happened in Egypt, Iraq and Libya. In the past, the Saudis had rented crack Pakistani troops to protect their palaces and oil. But Pakistan refused Saudi requests to send troops to subdue Yemen.

This brief, but very interesting and worthwhile commentary by Eric, appeared on the unz.com Internet site on Saturday — and I thank Larry Galearis for pointing it out.  Another link to it is here.


The Untouchable U.S.-Saudi Relation Is a Core Element of U.S. Imperialism

If Saudi Arabia were really convinced of the innocence of MBS in the Khashoggi affair, it could use this situation to its advantage by reducing the role of Washington in its foreign policy. Turning to the east and increasing partnerships with China and Russia would have beneficial effects on the whole region, as well as reducing the importance of the United States in the world. Saudi Arabia is governed by a large family riven with divisions and feuds spanning decades. MBS has no interest in his kingdom and is occupied with his survival alone. He is aware that Netanyahu and Trump are his best bet for continuing to reign. Trump is equally aware of the importance of MBS in his communication strategy in the US, with a view to the midterm and the 2020 elections. MBS is for Trump the golden goose that finances the MAGA project, thanks apparently to Trump’s mesmerizing negotiation skills with the Saudis. Of course this is far from the truth, but what matters is the spin that Trump gives to this alliance.

Israel is the primary ally of MBS, given that the crown prince is the first Saudi monarch openly willing to establish diplomatic relations with the Jewish State and bring relations between the two countries out into the open. The upper level of the US government, the so-called deep state, tried for a few weeks to use MBS against Trump. But this strategy came to an end after the Israelis, together with some elements of the US deep state, saw the risk of downsizing the global relationship between Saudi Arabia and the US. MBS will hardly be pushed aside, and within the Kingdom his position seems firmer than many expected, as seen at the Davos in the Desert conference. Breaking up with MBS would have had unimaginable repercussions for the US’s hegemonic position, and this is something Washington can ill afford at the moment.

The use of jihadism and petrodollars as political and financial weapon against Washington’s adversaries is reason enough to quickly forget Jamal Khashoggi and go back to ignoring the various abuses committed by Saudi Arabia. In this phase of the transition from a unipolar to a multipolar world, the US cannot afford to renounce some of the most potent weapons in its arsenal to wield against its geopolitical foes.

This somewhat longish, but very interesting commentary by Federico Pieraccini…an independent freelance writer specialized in international affairs, conflicts, politics and strategies…who I’ve never heard of before, showed up on the strategic-culture.orgInternet site on Sunday sometime — and I thank Roy Stephens for bringing it to our attention.  Another link to it is here.


After 17 years of war, top U.S. commander in Afghanistan admits Taliban cannot be defeated

The Afghanistan war cannot be won militarily and peace will only be achieved through a political resolution with the Taliban, the newly-appointed American general in charge of U.S. and NATO operations has conceded.

In his first interview since taking command of NATO’s Resolute Support mission in September, Gen. Austin Scott Miller provided NBC News with a surprisingly candid assessment of the seemingly never-ending conflict, which began with the U.S. invasion of Afghanistan in October, 2001.

This is not going to be won militarily. This is going to a political solution,” Miller said.He mused that the Taliban is also tired of fighting and may be interested in starting to “work through the political piece” of the 17-year-old war.

But it’s not clear if the Taliban is open to negotiations. Last month, a top Taliban commander told RT, in a rare interview, that the group’s leaders had no desire to negotiate with the Americans.

This story appeared on the rt.com Internet site last Friday sometime — and I thank Richard Connolly for sharing it with us.  Another link to it is here.


Xi’s Swipes at Trump Show China Standing Its Ground in Trade War

If Chinese President Xi Jinping is getting ready to make big concessions to the U.S., his much anticipated speech at a Shanghai trade fair didn’t show it.

Xi hit back against President Donald Trump’s “America First” policies Monday with some of his most pointed language yet, denouncing “law of the jungle” and “beggar-thy-neighbor” trade practices. At the same time, he didn’t outline any new proposals that would suggest he was prepared to meet Trump’s demands, such as halting forced technology transfers or rolling back support for state-owned enterprises. Stocks declined across Asia.

All countries should strive to improve their business environment and solve their own problems,” Xi told the inaugural China International Import Expo, which featured more than 3,600 companies from 172 countries, regions and organizations. “They shouldn’t always whitewash themselves and blame others, or act like a flashlight that only exposes others, but not themselves.”

Xi stopped short of naming Trump or the U.S. in the speech, his most high-profile economic address since April. Instead, he stepped up warnings that protectionism would harm global growth while pledging to boost domestic consumption, strengthen intellectual property protection and advance trade talks with Europe, Japan and South Korea.

This Bloomberg news story was posted on their website at 6:50 p.m. Pacific Standard Time on Sunday evening — and was updated about 14 hours later.  I found this item in this morning’s edition of the King Report — and another link to it is here.


Republic Metals Corporation (Gold & Silver Refiner/Private Mint) Files For Bankruptcy

One of the largest gold and silver refineries in the world, Republic Metals Corporation, filed for Chapter 11 Bankruptcy in Federal Court on Friday. Here are the details…

Represented by Donlin Recano, we learn that Chapter 11 was filed in United States Bankruptcy Court, Southern District of New York on Friday, November 2, 2018…

That’s all there is to this story, but the link to the court filing is embedded in this item from the silverdoctors.com Internet site.  It appeared there on Monday sometime — and I thank Brad Robertson for sending it our way.  A story about this was on the Sharps Pixley website yesterday as well, but the link to it wasn’t active, so I couldn’t include it here.


Venezuela seeks to repatriate $550 million of gold from Britain, sources tell Reuters

Venezuela is seeking to repatriate about $550 million in gold bars from the Bank of England because of fears it could be caught up in international sanctions on the country, two sources with direct knowledge of the effort told Reuters.

Venezuela’s hard currency holdings have dwindled as existing U.S. financial sanctions have effectively blocked President Nicolas Maduro’s government from borrowing on international markets.

The Trump administration on Thursday issued a new round of sanctions banning U.S. citizens from having dealings with anyone involved in “corrupt or deceptive” gold sales from Venezuela, as part of efforts to boost pressure on Maduro.

Maduro’s government is seeking to bring 14 tonnes of gold held in the Bank of England back to Venezuela, according to two public officials with direct knowledge of the operation, who asked not to be identified.

This Reuters story, filed from Caracas, appeared on their Internet site at 6:09 a.m. EST on Monday morning — and I found it embedded in a GATA dispatch.  Another link to it is here.


Touting transparency in gold, ex-central banker is contradicted by IMF, BIS, and her own successor

Writing in the October edition of The Alchemist, the magazine of the London Bullion Market Association, former French central bank official Isabelle Strauss-Kahn acknowledges that central bank officials notice and are sensitive to complaints that they are manipulating the gold market. She also claims that central bank operations in the gold market have become more transparent, as if she doesn’t know how secretive those operations remain, even at her own former employer.

Strauss-Kahn, who joined the Banque de France in 1995 and was its director of market operations from 2003 to 2008, writes: “In 1995 I was invited to speak at a conference in New York organized by an investment bank. The price of gold was around $380 per ounce at the time and the market was quite bearish. My speech was not controversial and presented the stance of the Banque de France as a big and conservative holder of gold, but it triggered passionate reactions and debates within the audience.”

I could feel the anxiety and opposing views of producers and investment banks, which were all scrutinizing central banks’ behavior. Some were even accusing the authorities of manipulating the market.

The Banque de France,” Gautier replied, “does not make public the management of its foreign exchange reserves. Furthermore, we very seldom give interviews.”

Even so the bank’s former director of operations is permitted to write articles celebrating central banking’s supposed transparency in the gold market.  Thus Strauss-Kahn’s article is largely propaganda and disinformation.

While the London Bullion Market Association’s magazine is named The Alchemist, its alchemy is of a different sort, the sort of alchemy undertaken by modern central banking itself: not to turn lead into gold, as the alchemists of old sought to do, but to turn gold into mere paper.

Strauss-Kahn’s article is headlined “Removing the Cloak from Central Bank Gold Operations“.  The link to the pdf file that contains the story is at the bottom of this GATA dispatch from yesterday — and once it downloads, if you have to scroll down a bit before you’ll find it.  Another link to this GATA dispatch is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the Clark’s nutcracker…a bird I’ve featured before, but it’s been many years.  It is ashy-grey all over except for the black-and-white wings and central tail feathers (the outer ones are white). The bill, legs and feet are also black. This bird derives its name from the explorer William Clark. It can be seen in western North America from British Columbia and western Alberta in the north, to Baja California and central New Mexico in the south.  Click to enlarge.


The WRAP

I wouldn’t read much of anything into the price action in either silver or gold yesterday — and I still consider it to be of the ‘care and maintenance’ variety — and they certainly aren’t being allowed to trade freely.  Of course with gold volume the lightest I can remember, it was pretty easy for anyone with an agenda to guide its price in any direction they wanted, I was somewhat surprised by the volume in silver, but with silver closing lower for the second day in a row after its ‘rally’ on Thursday, it’s certainly possible that the Managed Money traders were more active than usual in response to that.

Here are the 6-month charts for all four precious metals.  Palladium is on the rise again — and I note that WTIC set another new intraday and closing low yesterday.  The ‘click to enlarge‘ feature only helps 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 crept quietly lower until around 1 p.m. China Standard Time on their Tuesday — and then began to edge unsteadily higher — and is up 10 cents currently.  The silver price was down a penny by a few minutes after 1 p.m. CST and, like gold, rallied a bit from there — and is up 4 cents the ounce at the moment.  Platinum didn’t do much until minutes after 1 p.m. CST in Far East trading — and it headed higher from there as well — and is up 4 bucks.  The palladium price was down 5 dollars by noon in Shanghai, but was back to unchanged by shortly before 3 p.m. over there.  It was sold down from that juncture — and is down 3 dollars as Zurich opens.

Net HFT gold volume is very quiet…creeping up on 25,000 contracts — and there’s only 131 contracts worth of roll-over/switch volume on top of that.  Net HFT silver volume is about 8,900 contracts — and there’s only 105 contracts worth of roll-over/switch volume in this precious metal. 

The dollar index began to crawl higher once trading began at 6:00 p.m. EST in New York on Monday evening — and was up about 12 basis points by 1 p.m. CST on their Tuesday afternoon.  It had given all of that back, plus a bit more by around 3:15 p.m. CST, but is a bit higher since — and is currently up only 3 basis points as of 7:30 a.m. GMT in London.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and companion Bank Participation Report.  With only 4 price dojis to look at currently from the above charts, I would think it’s a very safe bet that there will be increases in the commercial net short positions in all four precious metals…all of that in response to the big rallies on Thursday.  But with one more day left to go, I’ll reserve final judgement for my Wednesday missive.

And as I post today’s column on the website at 4:04 a.m. EDT, I see that gold is up a $2.70 an ounce as the first hour of London trading draws to a close.  Silver hasn’t been allowed to do too much — and is up 5 cents.  Platinum is still up 5 dollars, but palladium is now down 4 as the first hour of Zurich trading comes to an end.

Gross gold volume is now up to around 38,000 contracts — and net of roll-over/switch volume, HFT gold volume is just under 35,000 contracts.  Net HFT silver volume is now up about 12,200 contracts — and there’s still only 132 contracts worth of roll-over/switch volume on top of that. It certainly looks like these tiny rallies in both silver and gold are running into the usual ‘opposition’.

The dollar index crept unsteadily lower in the last hour of trading before the London open — and right on the 8:00 a.m. GMT dot, the dollar index was turned higher — but is now down 4 basis points as of 8:30 a.m. over there.

With the very divisive mid-term elections in the U.S. today, expect anything as far as precious metal prices are concerned.  But unless today is the day the JPMorgan lets precious metal prices fly, I expect that they’ll be at battle stations all day long where required.

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

Ed

The Manic In/Out Activity in COMEX Silver Continues

03 November 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price edged a bit lower until around 10:30 a.m. in Far East trading on their Friday morning — and crawled higher from there — and was up about two bucks by shortly before 10 a.m. in London.  That lasted until the noon silver fix — and it was sold a bit lower from there and back into negative territory by 9 a.m. in New York.  The subsequent rally, such as it was, was capped and sold back into negative territory, the moment it hit its noon silver fix high.  From there it didn’t do anything for the remainder of the day.

The gold price was forced to trade a few dollars either side unchanged all day on Planet Earth — and the high and low ticks, such as they were, aren’t my time to look up.

Gold was closed in New York yesterday at $1,232.20 spot, down 70 cents on the day.  Gold volume was nothing special at just under 236,500 contracts — and there was just under 14,000 contracts worth of roll-over/switch volume in this precious metal.

In most respects, the price action in silver was very similar…at least up until shortly after the afternoon gold fix in London. It spiked higher at that point, but was capped and driven lower almost immediately — and the sell-off lasted until the COMEX close. It traded flat from there until the session ended at 5:00 p.m. EDT.

The low and high ticks in this precious metal were reported by the CME Group as being only 9 cents apart, so that post-afternoon gold fix price spike you see on the chart below, was confined to the spot market.

Silver finished the Friday session at $14.715 spot, down 0.5 cents on the day.  But net volume was sky high at a hair over 97,000 contracts — and there was 7,413 contracts worth of roll-over/switch volume on top of that.  What the heck was that all about, I wonder?  I mentioned it to Ted yesterday — and I’ll see if he says anything about it in his weekly commentary today…but something doesn’t pass the smell test here.

The platinum price was up 7 bucks or so by the Zurich open — and then traded ruler flat until the noon silver fix in London…8 a.m. EDT in New York. Like silver and gold, it was sold down a bit from there, but recovered right away — and rallied a bit more until around 10:20 a.m. EDT.  It chopped quietly sideways into the close from there.  Platinum finished the day at $867 spot, up 9 dollars from Thursday.

Palladium didn’t do much of anything when trading began at 6 p.m. EDT in New York on Thursday evening, but was up a couple of dollars by shortly after 2 p.m. China Standard Time on their Friday afternoon.  It began to creep quietly higher from that juncture — and its spike high tick of the day came about 12:45 p.m. in New York trading.  It was capped and sold lower into the COMEX close from there, but tacked on a few more dollars in after-hours trading.  Palladium was closed in New York on Friday at $1,105 spot, up 23 bucks on the day. And it was another day where it would have closed far higher in price than it was allowed to.

The dollar index closed very late on Thursday afternoon in New York at 96.30 — and crept about 10 basis points higher once trading began at 6:00 p.m. EDT a few minutes later.  That lasted until very shortly before 10 a.m. CST on their Friday morning — and from there it began to roll over.  The usual ‘gentle hands’ appeared at the 95.99 mark, its low tick of the day, which came minutes after 11 a.m. in London.  The ensuing ‘rally’ chopped higher until around 12:10 a.m. in New York — and it crept lower into the close from there.  The dollar index finished the Friday session at 96.50…up 20 basis points from Thursday.

And here’s the 6-month U.S. dollar index chart — and the delta between its close…96.34…and the intraday chart above, was 16 basis points yesterday.

The gold shares opened down a percent and change when trading began at 9:30 a.m. in New York yesterday morning — and then proceeded to chop very unevenly sideways until shortly before 1 p.m. EDT.  A quiet, but steady rally developed at that point, but they couldn’t quite squeeze a positive close, as the HUI finished down a tiny 0.17 percent.

The silver equities opened down about a percent, but were back in positive territory in very short order — and stayed mostly in the green from there.  A rally ensued starting around 12:40 p.m. EDT — and they chopped quietly higher into the close from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index finished up 0.83 percent.  Click to enlarge if necessary.

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

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

Here’s the weekly chart — and it’s a lot happier looking than it was this time last week — and the gold shares outperformed the silver equities by a bit, but that’s not overly surprising considering how badly beat up silver was during the week just past.  Click to enlarge.

There’s no month-to-date chart this week, as the month is only two days old — and Nick’s chart program is not set up to capture just one or two trading days.  However, if we could see it, it would be wall-to-wall green. The month-to-date chart will return in this space next week.

The year-to-date chart continues to be [mostly] a sea of red, but improving — and it’s still clear from this chart that the silver equities are ‘outperforming’ their golden brethren, however that’s not saying much.  Click to enlarge.

As I said in this space last week…this bull market in the precious metals is just getting started.  This past week was a happy one — and we can only hope that this trend will continue.  But it’s still JPMorgan’s world — and they’ll do whatever they want, or until they’re told to step aside.


The CME Daily Delivery Report showed that 17 gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  I’m not going to bother breaking down these tiny amounts — and if you wish to see the numbers for yourself, 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 November declined by 3 contracts, leaving only 24 left, minus the 17 contracts mentioned just above.  Thursday’s Daily Delivery Report showed that 20 gold contracts were actually posted for delivery on Monday, so that means that 20-3=17 more gold contracts just got added to the November delivery month — and it’s a very safe bet that those 17 contracts are the ones out for delivery on Tuesday, as per the above Daily Delivery Report.  Silver o.i. in November dropped by 8 contracts, leaving 399 still around, minus the 3 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 6 silver contracts were actually posted for delivery on Monday, so that means that 8-6=2 silver contracts vanished from the November delivery month.


There was a small withdrawal from GLD on Friday, as an authorized participant took out 56,757 troy ounces.  There was also a smallish withdrawal from SLV, as an a.p. removed 142,594 troy ounces.  I doubt very much that they’re a fee payment, as both withdrawals are a bit too chunky for that.  Ted may or may not have something to say about this in his weekly commentary later today.

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

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

But it was yet another big day in silver — and although nothing was reported received, there was 2,086,297 troy ounces shipped out for parts unknown.  The biggest was two truckloads…1,199,193 troy ounces…out of Malca-Amit USA.  Another truckload…605,629 troy ounces…left CNT — and smaller amounts…240,186 troy ounces — and 41,287 troy ounces…departed Scotiabank and Delaware respectively.  The link to all this activity is here.

In my discussion with Ted yesterday, he mentioned that a bit over/under 13 million troy ounces of silver was moved into, or shipped out of, the COMEX approved depositories over the last five business days.  Why all this manic activity — and why don’t the so-called precious metal commentators other than Ted…and by extension, myself…want to deal with this issue head on?

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 1,350 of them — and shipped out 473.  All of this occurred at the Brink’s, Inc. depository of course — and the link to that, in troy ounces, is here.


Here are two charts from Nick Laird that show bullion coin sales for The Perth Mint, updated with October’s sales data.  For the month they sold 36,840 troy ounces of gold — and 1,079,684 troy ounces of silver.  Click to enlarge for both.

Nick also sent along the charts for U.S. Mint sales for October as well, but I had that sales data in my Thursday column I believe, so I’ll save these charts for Tuesday.


The numbers in the Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, came in pretty much as expected, as there were improvements in the commercial net short positions in both silver and gold for the reporting week.

In silver, the Commercial net short position declined by 3,502 contracts, or 17.5 million troy ounces of paper silver.  I was sort of expecting a bigger number than that, considering the fact that silver close below its 50-day moving average for three of the five reporting days.

They arrived at that number by adding 5,819 long contracts, plus they increased their short position by 2,317 short contracts — and it’s the difference between those two numbers that represents the change for the reporting week.

Despite the increases in the Commercial net short position in silver recently, the position changes of the Big 4 and Big ‘5 through 8’ traders are still immaterial because of the contamination of that data by the large number of Managed Money traders that still inhabit this group.  However, it should be pointed out that JPMorgan’s short position is probably just large enough to make the #7 or #8 spot of the Big ‘5 through 8’ category.  But even that number is pretty small when compared to any member of the Big 4.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bit more…as they reduced their long position by 224 contracts — and they added 3,927 short contracts — and it’s the sum of those two numbers…4,151 contracts…that represents their change for the reporting week.  The difference between that number — and the Commercial net short position…4,151 minus 3,502 equals 649 contracts…was, like it always is, made up the traders in the ‘Other Reportables’ — and ‘Nonreportable’/small trader category.  I won’t bother with a ‘snip’ from the Disaggregated Report this week, as they’re nothing to see.

The Commercial net short position in silver is down to 9,760 contracts, or 48.8 million troy ounces which, in historical terms, is a very tiny number.

Ted didn’t think that JPMorgan did much during the reporting week — and he pegs their short position at a bit over 10,000 contracts…the same as it was last week at this time.

Here’s the 3-year COT Report for silver — and the change is not overly material.  Click to enlarge.

As I stated in Friday’s column, the data in this COT Report is very much yesterday’s news after the big price spike through silver’s 50-day moving average on Thursday. It remains to be seen what happens during the final two trading days of next week’s COT Report, as a lot can happen between now and then.

And along with next Friday’s COT Report, we get the monthly Bank Participation Report as well — and this will allow Ted to recalibrate JPMorgan’s short position.  It also may shed some light on Citigroup’s short position in silver as well, which is certainly much smaller than JPMorgan’s.


In gold, the commercial net short position declined by a pretty hefty 15,315 contracts, or 1.53 million troy ounces of paper gold.

They arrived at that figure by adding 2,443 long contracts — and they also reduced their short position by 12,872 contracts — and it’s the sum of those two numbers that represents the change for the reporting week.

And, as in silver, despite the increases in the Commercial net short position in gold recently, the position changes of the Big 4 and Big ‘5 through 8’ traders are still immaterial because of the contamination of that data by the large number of Managed Money traders that still inhabit this group…although JPMorgan’s short position in gold might be getting very close.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders as well — and then some, as they reduced their long position by a very hefty 19,263 contracts — and they reduced their short position by 1,856 contracts — and it’s the difference between those two numbers…17,407 contracts…that represents their change for the reporting week.  Ted was somewhat mystified by the big drop in the Managed Money long position, as there were no major moving averages penetrated during the reporting week — and he’ll certainly be commenting on that in his weekly column later today.

The difference between what the Managed Money traders sold — and what the commercial traders bought…17,407 minus 15,315 equals 2,092 contracts…was made up by the traders in the other two categories…the ‘Other Reportables’ and the ‘Nonreportable’/small traders.  Here’s the clip from the Disaggregated Report for gold so you can see the surprising decline in the Managed Money long position, which is now at historically low levels.  Click to enlarge.

The commercial net short position in gold is down to 31,205 contracts, or 3.12 million troy ounces of paper gold.

Here is the 3-year COT chart for gold — and the weekly change should be noted.  Click to enlarge.

Of course there’s been some increase in the commercial net short position in gold since the Tuesday cut-off, but there are still two more trading days left in the reporting week and, like in silver, anything could happen between now and then to change what next Friday’s COT Report will show. 

It was certainly disappointing that there was no price follow-through after the big precious metal rallies that occurred on Thursday — and Ted mentioned that the Managed Money traders in silver may be getting set up to be harvested once again by the Commercial traders running  the price back down through the 50-day moving average one more time…just like they did after the big rally in silver on October 12.  That would apply to gold as well, but not to the same extent, as it never got below its 50-day moving average before Thursday’s rally.

But I’ll point out one more time that despite Thursday’s rally — and resulting increases in the commercial net short positions of both silver and gold, the set-ups for a major rally are still very much in place…if JPMorgan wishes it to happen.  Not a thing has changed in that respect.

In the other two precious metals, the Managed Money traders increased their net long position in platinum by 3,232 contracts during the reporting week.  The Managed Money traders in palladium didn’t do much during the reporting week, they decreased their long position by a rather immaterial 641 contracts.  That’s not a lot of contracts for an approximately 40 dollar decline in the palladium price during the reporting week.  Copper got smacked back below its 50-day moving average during the reporting week — and Pavlovian brain-dead Managed Money traders followed the script to the letter, increasing their net short position by just under 10,000 contracts during the reporting week…with the commercial traders going long the lion’s share of that amount.


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

But, like the COT Report itself, the chart above is basically irrelevant at this point as well — and for the same reason. Except for Scotiabank — and one or two U.S. banks…the positions of the Big 4 and Big 8 traders are mostly made up of the brain-dead/moving average-following Managed Money traders now.

For the current reporting week, the Big 4 traders are short 104 days of world silver production, down 6 days from what they were short in last week’s report — and the ‘5 through 8’ large traders are short an additional 53 days of world silver production, which is up 4 days from last week’s report—for a total of 157 days held short, which is five months and change of world silver production, or about 366.4 million troy ounces of paper silver held short by the Big 8. [In last week’s COT Report the Big 8 were short 160 days of world silver production.]

The Big 8 commercial traders are short 35.1 percent of the entire open interest in silver in the COMEX futures market, which is down a bit from the 37.5 percent that they were short in last week’s COT Report. And once whatever market-neutral spread trades are subtracted out, that percentage would be something around 40 percent. In gold, it’s 32.8 percent of the total COMEX open interest that the Big 8 are short, down from the 36.2 percent they were short in last week’s report — and something close to 40 percent once the market-neutral spread trades are subtracted out.

As I stated in my COT discussion on silver, JPMorgan’s short position in silver would put in back in the Big ‘5 through 8’ large trader category.  But I doubt that Citigroup’s short position in silver is anywhere near large enough to fall into that category.

In gold, the Big 4 are short 37 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 17 days of world production, which is down 2 days from what they were short the prior week, for a total of 54 days of world gold production held short by the Big 8 — which is down 6 days from what they were short in last week’s report. Based on these numbers, the Big 4 in gold hold about 69 percent of the total short position held by the Big 8…which is up about 1 percentage point from last week’s COT Report.

And, once again, don’t forget that like in silver…a lot of the traders in the Big 4 and Big 8 categories in gold are still Managed Money traders — and not the commercial variety.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 66, 70 and 75 percent respectively of the short positions held by the Big 8. Silver is down 3 percentage points from the previous week’s COT Report, platinum is up another 1 percentage point from a week ago. Palladium is down 1 percentage point from last week’s COT Report.

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


CRITICAL READS

Bolton Calls National Debt ‘Economic Threat’ to U.S.

U.S. National Security Adviser John Bolton called the national debt a “threat to the society” that requires significant cuts to the government’s discretionary spending.

Bolton, speaking Wednesday at an event hosted by the Alexander Hamilton Society in Washington, said he expects U.S. defense spending “to flatten out” in the near term. He said he didn’t anticipate major cuts to entitlements such as Medicare and Social Security.

It is a fact that when your national debt gets to the level ours is, that it constitutes an economic threat to the society,” Bolton said. “And that kind of threat ultimately has a national security consequence for it.

This Bloomberg news item, courtesy of Paul Fillion, appeared on their website at 11:06 a.m. PDT time on Wednesday — and was updated about ten minutes later. Another link to it is here.


The Fed’s QE Unwind Hits $321 Billion — Wolf Richter

Over the four-week period from October 3 through October 31, the Federal Reserve shed $35 billion in assets, according to the Fed’s weekly balance sheet released Thursday afternoon. This brought the balance sheet to $4,140 billion, the lowest since February 12, 2014. Since October 2017, when the Fed began its QE unwind, or “balance sheet normalization,” it has now shed $321 billion…

The Fed acquired Treasury securities and mortgage-backed securities (MBS) as part of QE, which ended in 2014. Between the end of QE and the beginning of the QE Unwind in October 2017, the Fed replaced maturing securities with new securities to keep their levels roughly the same. In October last year, the Fed kicked off the QE unwind and began shedding those securities. But the balance sheet also reflects the Fed’s other activities, and the amount of its total assets is always higher than the sum of Treasury securities and MBS it holds.

October was a new milestone: the QE unwind left the ramp-up phase and entered the cruising-speed phase, according to the Fed’s plan. In the cruising-speed phase, the Fed is scheduled to shed “up to” $30 billion in Treasuries and “up to” $20 billion in MBS a month, for a total of “up to” $50 billion a month.

This 3-chart article was posted on the wolfstreet.com Internet site on Thursday sometime — and I thank Richard Saler for bringing it to our attention.  Another link to it is here.


Doug Noland: MBS and the Core

At the same time, I don’t believe the U.S./China trade spat has been the major force behind global de-risking/deleveraging. Stated differently, this dispute worsened the situation but was not the catalyst behind the bursting of the global Bubble. Indeed, from a de-risking/deleveraging perspective, Friday’s yield jump was ominous. Fixed-income investors and speculators have no doubt been hoping that “risk off” would provide some relief on the market yield front. With an equities short squeeze and strong payrolls data, the pressure just became too intense.

MBS [Mortgage Backed Securities] yields have broken out to the upside, with corporate and Treasury yields close behind. Equity market players are certainly hoping a trade deal is in the works. Fixed-income players not so much. And it is within fixed-income on a global basis that problematic leverage lurks. Leveraged “risk parity” strategies saw some relief from this week’s equities rally, but they must look at rising market yields with increasing trepidation.

We’re now only days from the midterms. It’s an especially difficult event to handicap from a market standpoint. Red wave or blue wave. I don’t recall midterm elections where the outcome had the potential to be so market moving. Blue wave – big. Red wave – big. Making things all the more interesting, there has been major market instability heading into the elections. This ensures there have been major shorting and hedging efforts – to hedge/speculate both on the markets and midterm outcomes.

I’ll assume large quantities of put options and derivative protection have been purchased. In the event of a red wave, there is ample firepower for an unwind of hedges and short covering to spark a rally. In the event of a blue wave, a market downdraft would see aggressive hedge-related selling by players caught on the wrong side of derivative protection previously sold. The stock market response to the anticipated blue House and red Senate split decision is not clear at all. But maybe equities have become a diversion. In a week where the focus was on short squeezes and tantalizing equities rallies, perhaps the more decisive development was in surging MBS and corporate yields.

This very worthwhile commentary from Doug put in an appearance on his website in the very wee hours of Saturday morning EDT — and another link to it is here.


What Americans Really Need Right Now — Bill Bonner

What America most lacks is cynicism.

People listen to a news conference without laughing. They read the headlines without even guffawing.

They believe their “warriors” are protecting them abroad. At home, they think their elected officials have their backs.

And they think their president should be treated with the respect normally reserved for traffic cops and drill sergeants.

As for their money… they are ready to believe almost anything.

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


A senior Russian diplomat confirms: “Russia is preparing for war” – is anybody listening? — The Saker

Andrei Belousov, deputy director of the Russian Foreign Ministry’s Department of Nonproliferation and Arms Control, has recently made an important statement which I shall quote in full.

Recently at a meeting the United States stated that Russia is preparing for war. Yes, Russia is preparing for war, I can confirm it.  Yes, we are preparing to defend our homeland, our territorial integrity, our principles, our values, our people. We are preparing for such a war.  But there is a major difference between us and the United States.  Linguistically, this difference is just in one word, in both Russian and English: Russia is preparing for war while the United States is preparing a war” (emphasis added).

We are so used to western diplomats and politicians saying more or less anything and everything (as the joke goes: when do you know that a politician is lying? When his lips move) that many of us stopped paying attention to what is being said. If tomorrow Trump or some “Congressperson” goes on national TV and declares “read my lips – up is down, dry is wet and yes means no” – most of us will just ignore it. The truth is that being exposed to that constant stream of empty, bombastic and always dishonest statements makes most of us immune to verbal warnings, even when they come from non-western political figures.

It is, therefore, crucial to fully realize that Russian official and diplomats carefully measure every word they say and that when they repeat over and over again that Russia is ready for war, they actually and truly mean it!

This commentary by the Saker showed up on his Internet on Friday morning sometime — and I thank Larry Galearis for pointing it out.  Another link to it is here.


Trump to reinstate all U.S. sanctions on Iran, targeting over 700 entities and individuals

All sanctions on Iran lifted under the 2015 nuclear deal will be back in force on November 5, the US administration has announced.

The sweeping sanctions will see 700 people blacklisted, the U.S. Treasury has announced. These include persons that were granted relief under the 2015 deal, as well as over 300 new names, Treasury Secretary Steven Mnuchin told reporters.

Sanctions will also target payments through the special mechanism that the E.U. has been creating specifically to avoid Washington’s penalties and to keep buying Iranian oil.

Mnuchin has also threatened sanctions against the transaction service SWIFT.

SWIFT is no different than any other entity,” Mnuchin told reporters. “We have advised SWIFT that it must disconnect any Iranian financial institutions that we designate as soon as technologically feasible to avoid sanctions exposure.”

Secretary of State Mike Pompeo has confirmed earlier reports that eight nations will receive exemptions from the reimposed penalties, but refused to name them and said the E.U. as a singular entity was not among them. Earlier reports suggested that the list of exemptions would include Japan, India and South Korea.

Swedish reader Patrik Ekdahl dropped this in my in-box about one minute after I’d sent out the e-mail version of today’s column, but I thought I’d add it to the website copy.  This rt.com news item was posted on their website at 14:33 Moscow time on their Friday afternoon, which was 7:33 a.m. in Washington — EDT plus 7 hours.  The story was updated about two hours later.  Another link to it is here.


Chris Powell at New Orleans conference: Gold market manipulation update, November 2018

Since we met at this conference last year much new evidence of manipulation of the gold market by central banks and their bullion bank agents has been compiled and disclosed by the Gold Anti-Trust Action Committee.

For example, a month ago a major bullion bank, the Bank of Nova Scotia, admitted to the U.S. Commodity Futures Trading Commission that it had manipulated the gold and silver futures markets from June 2013 through June 2016.

Ironically, in September 2013 the CFTC had closed its long-running investigation of silver market manipulation, announcing that the commission could not find anything actionable. That was three months after the Bank of Nova Scotia now admits its market rigging began.

In January the U.S. government charged three other banks and eight traders with “spoofing” the monetary metals futures markets. The banks paid $47 million in fines:

Also in January GATA published the price discounts given by CME Group, operator of the major futures exchanges in the United States, to governments and central banks for secretly trading ALL major futures contracts in the country — not just monetary metals futures, whose trading discounts are highlighted in the red box on the screen, but even agricultural futures:

Have you ever seen mainstream financial news organizations report that governments and central banks get discounts for secretly trading all major futures contracts in the United States, even cattle futures?

CME Group’s filings with the U.S. Securities and Exchange Commission and the Commodities Futures Trading Commission acknowledge that its clients include governments and central banks, but otherwise this surreptitious trading is a state secret preserved by our timid press…

This is the speech that GATA secretary/treasurer Chris Powell gave at the New Orleans Investment Conference on Friday — and it’s certainly worth your while if you have the time for it.  Another link to it is here


The PHOTOS and the FUNNIES

I was going to continue with the award-winning photo series that I started in my Friday column, but reader Richard McVay sent me a photo that changed my mind.  This ‘critter’ is commonly called the ‘peacock spider‘…a species of jumping spider only found in Australia, which is a pity.  These spiders are so named due to the males’ colorful and usually iridescent patterns on the upper surface of the abdomen often enhanced with lateral flaps or bristles, which they display during courtship.  Females lack these bright colors, being cryptic in appearance. Depth-of-field is a major issue at these micro distances…measured in millimetres — and my hat is off to the photographers that took these shots. Click to enlarge.


The WRAP

I don’t know why today’s pop ‘blast from the past’ popped into my head about fifteen minutes ago, but it did — and totally out of the blue…so it made today’s selection easy.  This dates from 1957 — and I was 9 years young at the time.  This singer, with a velvet voice, is world-renown — and was born in Gilmer, Texas, on September 30, 1935.  This song came in as #14 on Billboard’s Top 100 tunes of that year.  It’s a classic…timeless…and it’s been decades since I’ve heard it played anywhere.  The link is here.

Today’s classical ‘blast’ from the past is somewhat more ancient, of course.  The Nocturnes, Op. 9 are a set of three nocturnes written by Frédéric Chopin between 1830 and 1832, published that year, and dedicated to Madame Marie Pleyel. The second nocturne of the work is regarded as Chopin’s most famous piece.  If you haven’t heard this work before, you just gotta get out more!  Ukrainian-born Valentina Lisitsa does the honours — and the link is here.


It was a very subdued trading session as far as gold and silver prices were concerned on Friday, with no hint of follow-through from Thursday’s big up day in all four precious metals.  That’s somewhat of a surprise, as even though the dollar index rallied in morning trading in New York yesterday, there was little hint of that in the price paths of either silver or gold during that time period.  And on top of that, there was blow-out volume in silver…97,000 contracts on a net basis — and with only 9 cents difference between silver’s high and low ticks in the December contract, you have to wonder what that was all about. Friday’s Preliminary Report above showed no change [14 contracts] in silver’s total open interest.  Hopefully something will be revealed in next Friday’s COT report.

Here are the 6-month charts for the Big 6 commodities.  Gold and silver weren’t allowed to do anything, but platinum and palladium are being allowed to rally…but not by too much each day.  Copper broke above its 50-day moving averages yesterday, so the commercial traders are harvesting the brain-dead Managed Money in that commodity.  WTIC took another hit on Friday — and it’s getting seriously oversold, so it’s time for the commercials to rake in big profits from the Managed Money traders there as well.  Today, the ‘click to enlarge‘ feature only helps with the four precious metal charts.

Just about everything that involves the deep state outside the U.S. appears to have ground to a halt in light of the mid-term elections coming up on Tuesday — and I’m certainly not going to speculate on how the precious metals will ‘react’ to election night news…but presume they’ll ‘react’ the way that the powers-that-be want them to.

But underneath all this is a world wide economic debacle that’s coming to a rolling boil — and it will be interesting to see if this newly-floated U.S. trade deal with China will amount to anything, or is it just an election ploy?  The internal structures of most of the world’s equity markets are now broken beyond repair — and it’s only through the efforts of the PPT and the hedge fund community…that’s hemorrhaging cash from all pores…that’s keeping things on what appears to be an even keel.  But out of sight, the situation is hopeless — and it remains to be seen whether this whole edifice crashes and burns all in one go, or dies a death by a thousand cuts.  It also remains to be seen if the world’s central banks will do anything as these financial and economic events unfold — and if they do make the effort…will it matter?

Since Nixon ripped the world of the gold standard in August 1971…it’s only been a matter of when, not if, this now-Frankenstein financial system — and the economies on which it was built, breaths is last.  As far as I’m concerned we’re well past the “best before” date on all this.

And despite the fact that precious metal prices — and their associated equities, are not doing what you and I want them to…our day is still coming.  All that matters now, is when it’s best for JPMorgan, or when they’re told to step aside and let the precious metals market clear.

And from a purely COMEX perspective, we’re still on the launch pad, as the market structure is still very bullish.

So we wait some more.

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

Ed

Silver Closes Well Above Its 50-Day Moving Average

02 November 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crept quietly higher until around noon China Standard Time on their Thursday — and from there it traded sideways until the 2:15 p.m. afternoon gold fix in Shanghai. It began to stair-step its way higher in price from there — and was on the verge of going parabolic at the COMEX close in New York, but the price was capped and driven lower by a bit at that juncture.  That quiet sell-off lasted until around 4 p.m. EDT — and it didn’t do much after that.

The low and high tick were reported by the CME Group as $1,216.10 and $1,239.30 in the December contract.

Gold was closed in New York on Thursday at $1,232.90 spot, up $18.80 on the day — and off its high tick by at least five dollars.  Net HFT gold volume was high, but not that high at 281,000 contracts — and there was a hair over 34,000 contracts worth of roll-over/switch volume on top of that.

It was the same general price path for silver — and its price was capped a few minutes after the COMEX close as well — and was sold down a bit during the ensuing ten minutes.  From there it traded sideways until the market closed at 5:00 p.m. EDT.

Silver was closed yesterday at $14.72 spot, up 50.5 cents on the day.  The 50-day moving average got taken out with a vengeance, so net volume was enormous at a bit under 115,000 contracts — and there was 9,055 contracts worth of roll-over/switch volume in that precious metal.

Platinum also followed a similar price path to gold — and that trend lasted until shortly after 11 a.m. in New York.  From that point it didn’t do much for the rest of the Thursday session.  Platinum finished the day at $858 spot, up 23 dollars from Wednesday’s close.

Palladium rallied a bit in Far East trading as well, but was sold down a hair into the Zurich open.  It was sold down even more from there — and was down a dollar or so on the day by noon CET over there.  It edged higher into the COMEX open — and then went vertical.  The price was capped in an instant — and except for an two hour long up/down move in morning trading in New York, wasn’t allowed to do anything for the remainder of the Thursday session.  Palladium was closed at $1,082 spot, up 15 bucks on the day.

The dollar index closed very late on Wednesday afternoon at 97.11 — and that was pretty much its high of the day when it opened a few minutes later at 6:00 p.m. EDT on Wednesday evening.  An hour and change after that, it began to head lower with real authority — and it stair-stepped its way to its 96.20 low tick of the day, which came about five minutes before the COMEX close in New York.  It crawled quietly higher from there — and finished the Thursday session at the 96.30 mark…down 81 basis points on the day.

I’m also posting the 3-day dollar index chart today, so you can see the move down from when it began in New York on Wednesday evening.

And here’s the 6-month U.S. dollar index — and the delta between its close…96.08…and the close on the intraday charts above, was 22 basis points yesterday.

The gold stocks gapped up a bit over two percent at the open — and then continued to rally until a few minutes after the 1:30 p.m. EDT COMEX close.  From that point, they faded a hair as the trading day wound down.  The HUI finished higher by 4.76 percent.

It was mostly the same price path for the silver equities, but Nick Laird’s Intraday Silver Sentiment/Silver 7 Index only closed higher by 4.34 percent.  I must admit that I was expecting better than that.  Click to enlarge if necessary.

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

And even though they aren’t very happy looking, here are two charts from Nick Laird that I normally post in my Saturday column — and will again.  But these two charts below show the changes for October, as of Wednesday’s close — and the changes year-to-date as of the end of October as well.  They’ve certainly improved a great deal since yesterday — and those positive changes will show up in the charts in my column tomorrow.  Click to enlarge for both.

The CME Daily Delivery Report showed that 20 gold and 6 silver contracts were posted for delivery within the COMEX-approved depositories on Monday. In gold, the two short/issuers were ABN Amro — and Advantage, with 13 and 7 contracts out of their respective client accounts.  The two long/stoppers were JPMorgan and Advantage, with 12 and 8 contracts for their respective client accounts as well.  In silver, the sole short/issuer was Advantage — and there were three long/stoppers in total.  Morgan Stanley and HSBC USA picked up 2 contracts apiece for their respective in-house/proprietary trading accounts.  JPMorgan picked up the other 2 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in November fell by 27 contracts, leaving 27 left, minus the 20 contracts mentioned just above.  Wednesday’s Daily Delivery Report showed that 32 gold contracts were actually posted for delivery today, so that means that 32-27=5 more gold contracts were added to the November delivery month.  Silver o.i. in November dropped by 456 contracts, leaving 407 left, minus the 6 contracts mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 467 silver contracts were actually posted for delivery today, so that means that 467-456=11 more silver contracts just got added to November.


There was a large deposit into GLD on Thursday, as an authorized participant added 217,569 troy ounces.  There was a small withdrawal from SLV, as an a.p. took out 33,296 troy ounces and, like the tiny withdrawal from GLD on Wednesday, this amount of silver withdrawn would represent a fee payment of some kind as well.

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

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

But it was another huge day in silver, as 2,510,574 troy ounces were received, but only 129,866 troy ounces were shipped out.  In the ‘in’ category, there were three truckloads…1,801,914 troy ounces…left at CNT. There was yet another truckload…603,593 troy ounces dropped off at JPMorgan — and the remaining 105,066 troy ounces found a home over at HSBC USA.  All of the ‘out’ activity…129,866 troy ounces…was from CNT. There was also a transfer of 541,983 troy ounces from the Eligible category — and into Registered over at CNT as well — and that’s certainly delivery related.  The link to all this action is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 1,000 of them — and shipped out 280.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

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


CRITICAL READS

A Memento Mori for the Bull Market — Bill Bonner

Trends tend to go on longer than you expect… and then fall harder and faster than you thought possible.

Who imagined in 1929 – at the peak of the Roaring Twenties – that a Great Depression was coming?

Who foresaw – at the height of the 1960s prosperity – that we would soon be waiting 33 years for stocks to recover?

What sage forecaster knew that the fabulous “Information Age” technology would be a bust?

And today… just in case…we leave you with a warning: What those crashes and depressions were, so will this bubble become.

Buy gold. Sell stocks.

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


Is the Fed Engineering a Market Crash? — Dennis Miller

Can the Fed cause a market crash?
In 2017 Fed Chair Janet Yellen reassured us:

Would I say there will never, ever be another financial crisis? …. That would be going too far but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be. The capital positions of the major banks are very much stronger….

Current Fed Chair, Jerome Powell continues to reassure us. Judy Woodruff asked whether the rosy current moment can last indefinitely.

Indefinitely is a long time. Not every business cycle is going to last forever, but no reason to believe this cycle can’t go on for quite some time, effectively indefinitely.

We don’t see the kind of buildup in risks in the financial markets, let alone the banking system.”

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


Washington’s Silent Weapon for Not-so-quiet Wars. “A World Full of Dollars”, A 2019 Global Economic Crisis — F. William Engdahl

Today by far the deadliest weapon of mass destruction in Washington’s arsenal lies not with the Pentagon or its traditional killing machines. It’s de facto a silent weapon: the ability of Washington to control the global supply of money, of dollars, through actions of the privately-owned Federal Reserve in coordination with the US Treasury and select Wall Street financial groups. Developed over a period of decades since the decoupling of the dollar from gold by Nixon in August, 1971, today control of the dollar is a financial weapon that few if any rival nations are prepared to withstand, at least not yet.

Ten years ago, in September, 2008, U.S. Treasury Secretary, former Wall Street banker Henry Paulson, deliberately pulled the plug on the global dollar system by allowing the mid-sized Wall Street investment bank, Lehman Bros go under. At that point, with aid of the infinite money-creating resources of the Fed known as Quantitative Easing, the half-dozen top banks of Wall Street, including Paulson’s own Goldman Sachs, were rescued from a debacle their exotic securitized finance created. The Fed also acted to give unprecedented hundreds of billions of U.S. dollar credit lines to E.U. central banks to avert a dollar shortage that would clearly have brought the entire global financial architecture crashing down. At the time six Eurozone banks had dollar liabilities in excess of 100% of their country GDP.

Since that time a decade ago, the supply of cheap dollars to the global financial system has risen to unprecedented levels. The Institute for International Finance in Washington estimates the debt of households, governments, corporations and the financial sector in the 30 largest emerging markets rose to 211% of gross domestic product at the start of this year. It was 143% at the end of 2008.

This interesting commentary, which is certainly worth reading, was posted on the globalresearch.ca Internet site yesterday sometime — and I thank Larry Galearis for pointing it out.  Another link to it is here. 


Euro’s bid to challenge King Dollar collides with political risk

Europe’s dream of turning the euro into a global reserve currency that can rival the dollar is proving more elusive than ever.

A rally on Thursday notwithstanding, the euro is trading within striking distance of its low this year as a confluence of political risks looming large over Europe damp sentiment toward the common currency.

Angela Merkel said this week that she won’t contest to be Germany’s Chancellor again in 2021 after her party suffered electoral setbacks in regional elections, while Italy’s coalition government is embroiled in a stand-off with the European Union over a wider deficit in its planned budget.

The flare-up of political risk across a landscape that shares the euro as its common currency shows European Commission President Jean Claude Juncker has his work cut out before realizing his vision of upending the global dominance of the dollar. The euro has lost almost a fourth of its value since before the euro-area debt crisis erupted in 2011, suggesting that central banks aren’t quite embracing Juncker’s dream just yet.

This Bloomberg article showed up on their Internet site at 12.38 a.m. Pacific Daylight Time on Thursday morning — and was updated about eight hours later.  I found it in a GATA dispatch — and another link to it is here.


Russia ‘assessing’ military base in Cuba as U.S. leaves INF treaty

A senior Russian official and former military officer said on Tuesday that an “assessment” of establishing a military base in Cuba was under way in Moscow.

The comments from Vladimir Shamanov, who currently is head of the Russian parliament’s defense committee, were in response to the U.S. administration’s decision to leave the Intermediate-Range Nuclear Forces Treaty.

Now the active phase of impact assessment [of establishing a base in Cuba] is under way, and proposals will be prepared with estimates,” Shamanov was quoted by Interfax news agency as saying on Tuesday.

I do not exclude the possibility that this issue will be touched upon at the upcoming meeting with the Cuban leader in Moscow,” he added.

Cuba’s new president, Miguel Diaz-Canel, traveled to Moscow on Thursday to discuss the countries’ strategic relationship.

This brief article put in an appearance on the Asia Times website at 5:23 a.m. Hong Kong Time on their Thursday morning, which was 5:23 p.m. on Wednesday afternoon in Washington — EDT plus 12 hours.  I thank Tolling Jennings for bringing it to our attention — and another link to it is here.


1MDB: Ex-Goldman bankers and Jho Low face U.S. charges

Two former Goldman Sachs bankers and Malaysian financier Jho Low have been hit with U.S. criminal charges in connection with one of the world’s biggest financial scandals.The Department of Justice alleges the men participated in a scheme that stole billions of dollars from Malaysia’s development fund, 1MDB.

One former Goldman banker pleaded guilty, the department said.

The other banker has been arrested, while Mr. Low remains at large.

Mr. Low, who prosecutors say had ties to government officials and acted as an informal advisor to the 1MDB fund, maintains his innocence, according to a statement issued by his legal team.

This story was posted on the bbc.com Internet site very early on their Thursday morning — and it comes to us courtesy of Swedish reader Patrik Ekdahl.  Another link to this news item is here.  The Zero Hedge spin on this is headlined “Ex-Goldman Banker To Plead Guilty to 1MDB Criminal Charges, Forfeit $44 Million” — and I thank Brad Robertson for that one.


Trump Signs Executive Orders Targeting Venezuela Gold Exports

In the latest move to pressure Venezuela’s president Nicolas Maduro, Donald Trump signed an executive order enabling new sanctions on Venezuela’s gold sector, in a bid to disrupt trade with Turkey which U.S. officials believe is undermining efforts to cripple Venezuela’s economy and force Maduro and members of his government out of office.

I hereby report that I have issued an Executive Order with respect to Venezuela that takes additional steps with respect to the national emergency declared in Executive Order 13692 of March 8, 2015,” Trump wrote in his letter to the leaders of the House of Representatives and Senate.

According to Bloomberg, the order which was signed by Trump on Wednesday and will be announced at a speech Thursday by National Security Adviser John Bolton, targets those “operating corruptly within the gold sector” and will have a “fairly significant” effect on the country’s economy.

The new sanctions will target networks operating within corrupt Venezuelan economic sectors and deny them access to stolen wealth,” Bolton will say, according to an advanced copy of his speech seen by Bloomberg. “Most immediately, the new sanctions will prevent U.S. persons from engaging with actors and networks complicit in corrupt or deceptive transactions in the Venezuelan gold.

While it was not initially clear what form the sanctions will take, the Treasury Department is will announce details of how the latest sanctions will be implemented later on Thursday. And while the initial effort will focus on Venezuela’s gold sector, whose exports Venezuela allegedly uses to circumvent financial sanctions, Trump’s order gives the State and Treasury departments authority to target additional industries in the future.

This news item put in an appearance on the Zero Hedge website at 1:46 p.m. on Thursday afternoon EDT — and I thank Brad Robertson for sending it along.  Another link to it is here.


China’s monetary policy must change — Alasdair Macleod

The next credit crisis poses a major challenge to China’s manufacturing-based economy, because higher global and yuan interest rates are bound to have a devastating effect on Chinese business models and foreign consumer demand. Dealing with it is likely to be the biggest challenge faced by the Chinese Government since the ending of the Maoist era. However, China does have an escape route by stabilising both interest rates and the yuan by linking it to gold.

But will the Chinese have the gumption to take it? This article examines the challenges and the possible solution. It concludes there is a reasonable chance China will embrace sound money, because it is in a position to do so and the dangers of not doing so could destroy the State.

This very long, but very interesting commentary/opinion piece was posted on the goldmoney.com Internet site on Thursday sometime — and I found it on the gata.org website.  Another link to it is here.


The PHOTOS and the FUNNIES

For the next little while I’ll be feature some award-winning photos that Swedish reader Patrik Ekdahl sent my way the other day. The first is a pair of rare Quinling golden snub-nosed monkeys. They are restricted to the Qinling Mountains in China. Among the most striking primates in the world, these monkeys are in danger of disappearing. Their numbers have steadily declined over the decades and there are now fewer than 4,000 individuals left. Photo Credit: Marsel van Oosten, The Netherlands.  Click to enlarge.


The WRAP

Yesterday’s rallies in the precious metals were certainly related to the big decline in the dollar index, but even then it certainly looked like their respective prices were being actively managed.  That was particularly the case at the COMEX close, as both gold and silver certainly looked like they were about to head sharply higher at that juncture, but weren’t allowed.

Gold’s volume was not as high as one would normally expect, but then again, no moving averages of note were broken during the Thursday trading session.  That certainly wasn’t the case in silver, as it blew through its 50-day moving average with real authority — and the volume number indicates that the commercial traders were out and about in force, as the Managed Money traders covered short positions and went long. Of course none of this will show up in today’s new Commitment of Traders Report.

Here are the 6-month charts for all four precious metals, plus copper and West Texas Intermediate Crude Oil.  WTIC was closed a new low for this move down, but everything else was up.  The ‘click to enlarge‘ feature helps with all six charts.

And as I mentioned just above, we get the latest and greatest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, somewhere around 3:30 p.m. EDT today.  In almost all respects it’s “yesterday’s news” after the big rallies on Thursday.  But regardless of that, I’ll have it all for you in my Saturday column.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price edged quietly lower until around 10:30 a.m. China Standard Time on their Friday morning.  It chopped back to the unchanged mark by 2 p.m. CST over there — and  is currently up 50 cents an ounce.  Silver followed the same general price path — and is now up 2 cents.  Platinum has been crawling unsteadily higher throughout the entire Far East trading session — and is up 7 dollars at the moment.  Ditto for palladium — and it’s up 7 bucks as well as the Zurich open looms.

Gross gold volume is already up to around 61,000 contracts — and there’s only 546 contracts worth of roll-over/switch volume on top of that, so net HFT gold volume is around 60,000 contracts.  Net HFT silver volume is way up there at around 21,100 contracts — and there’s only 334 contracts worth of roll-over/switch volume in this precious metal.

The dollar index rallied a bit under 10 basis points by shortly before 10 a.m. CST — and it’s been heading lower ever since — and thirty minutes before the London open, it’s down 16 basis points.

Also today, at 8:30 a.m. EDT, we get the latest job numbers — and that might move the markets.  But which way precious metal prices will be allowed to go on that number, remains to be seen.

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

Ed

JPMorgan’s COMEX Silver Stockpile Hits 150 Million Ounces

01 November 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold lower until a few minutes before noon China Standard Time on their Wednesday morning — and from there it traded unevenly sideways until the noon silver fix in London, which was 8 a.m. in New York.  It was sold down some more from that point — and the low tick of the day was set at, or just before, the afternoon gold fix in London.  It rallied a few dollars from there until noon EDT — and didn’t do much of anything after that.

It was yet another day where the gold price traded in less than a one percent range — and the high and low ticks aren’t worth looking up.

Gold was closed in New York on Wednesday at $1,214.10 spot, down $8.50 on the day — and another new low close for this engineered price decline.  Net volume was pretty quiet at a bit under 209,500 contracts — and there was 25,000 contracts worth of roll-over/switch volume on top of that.

The silver price was taken lower by about a dime by minutes before the 12 o’clock noon in Shanghai — and from that point it traded flat until the London open.  From that juncture it was sold quietly, but unevenly lower until the market closed at 5:00 p.m. EDT in New York — and also finished the day at another new low close for this move down.

The high and low ticks in this precious metal were recorded by the CME Group as $14.49 and $14.24 in the December contract.

Silver finished the Wednesday session at $14.215 spot, down 22.5 cents on the day.  Net volume was pretty decent at 71,500 contracts — and there was 5,337 contracts worth of roll-over/switch volume in this precious metal.

The platinum price traded sideways within a two dollar price range either side of unchanged, right up until the COMEX open in New York yesterday morning.  It chopped unsteadily higher from there — and back above unchanged by a bit.  But shortly after 12 o’clock noon in New York it was sold lower until around 2 p.m. EDT — and didn’t do a lot after that.  Platinum closed at $835 spot, up a dollar on the day.

Palladium was up four or five dollars by the Zurich open on their Wednesday morning, but that all vanished and a bit more by 11 a.m. CET…Central European Time.  It crawled quietly higher from there — and jumped up to its high of the day around 9:30 a.m. in New York.  It was sold down into the COMEX close — and didn’t do a lot after that.  Palladium finished the Wednesday session in New York at $1,067 spot, up 3 dollars on the day.

The dollar index closed very late on Tuesday afternoon in New York at 97.01 — and then traded flat once the currencies began to trade a few minutes later at 6:00 p.m. EDT.  That lasted until around 3 p.m. China Standard Time on their Wednesday afternoon — and it began to chop erratically higher in a very wide range, with the 97.20 high tick coming around 9:35 a.m. in New York.  But when all was said and done, the dollar index closed the Wednesday session at 97.11…up only 10 basis points on the day.

And here’s the almost 1-year U.S. dollar index chart — and the delta between its close…96.90…and the close on the intraday chart above was 30 basis points yesterday.  Click to enlarge.

The gold stocks fell about a percent and a half at the open in New York yesterday morning — and then proceeded to chop aimlessly sideways for the remainder of the Wednesday session.  The HUI closed down 1.58 percent.

It was the same trading pattern for the silver equities — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.80 percent.  Click to enlarge if necessary.

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

But if you look at the HUI and the Silver 7 charts more closely, you can see that someone was ‘buying the dips’ all day long yesterday.


The CME Daily Delivery Report showed that 32 gold and 467 silver contracts were posted for delivery with the COMEX-approved depositories on Friday.  In gold, Advantage issued 22 contracts — and ADM 10.  The two long/stoppers were JPMorgan with 22 contracts — and Advantage with 10.  All contracts, issued and stopped, were from and for their respective client accounts.  In silver, of the two short/issuers, the only one that mattered was ABN Amro with 462 contracts out of its client account.  There were six long/stoppers in total — and the three biggest were Morgan Stanley with 136 for its own account, plus another 39 for its client account.  In second spot was HSBC USA with 142 for its own in-house/proprietary trading account.  And thirdly came JPMorgan with 96 contracts for its client account. The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in November fell by 71 contracts, leaving 55 contracts still around…minus the 32 mentioned just above.  Tuesday’s Daily Delivery Report showed that 116 gold contracts were actually posted for delivery today, so that means that 116-71=45 more gold contracts were added to the November delivery month.  Silver o.i. in November dropped by 425 contracts, leaving 863 still open, minus the 467 mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that 459 silver contracts were posted for delivery today, so that means that 459-425=34 more silver contracts were added to November.


There was a tiny withdrawal from GLD yesterday, as an authorized participant took out 28,378 troy ounces.  A withdrawal of that size usual represents a fee payment of some kind.  There were no reported changes in SLV.

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

For the month of October, the mint sold 22,000 troy ounces of gold eagles — 6,500 one-ounce 24K gold buffaloes — and 1,405,000 silver eagles.  I’m sure that Nick Laird will have the updated charts for us soon.

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received, but 20,178 troy ounces was shipped out of JPMorgan.  A link to this activity is here.

As always, it was another very busy day in silver, as 1,873,327 troy ounces were reported received — and 600,347 troy ounces were shipped out…3 truckloads in — and 1 truckload out.  Two truckloads…1,272,980 troy ounces ended up at JPMorgan — and the other truckload…603,610 troy ounces…was dropped off at Brink’s, Inc.  The lone truckload shipped out…600,347 troy ounces…departed CNT.  The link to this action is here.

As Ted pointed out on the phone yesterday, the amount of silver taken in by JPMorgan during October is now far in excess of the 10.6 million ounces that they stopped for their own account in the September delivery month.  He thought it possible that they may now be storing silver for their client account as well. It’s a good bet he’ll have lots to say about this in his weekly review on Saturday. But regardless of that, JPMorgan’s COMEX silver stockpile is now up to a new record high once again…150.38 million troy ounces.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They received 2,000 of them — and didn’t ship out any.  This activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

I only have a handful of stories for you today.


CRITICAL READS

G.E. Locked Out of Commercial Paper Market After Moody’s Downgrade

Yesterday we asked if, as a result of its ongoing operational troubles and recent downgrade by S&P, GE was facing another Commercial Paper “moment”, with a Moody’s downgrade now imminent. The reason is that GE has traditionally been one of the biggest issuers of Commercial Paper to fund daily operations, and used to be one of the biggest issuers of the debt: veteran readers may recall that during the financial crisis, GE’s loss of access to the frozen CP/Money Market nearly resulting in a terminal liquidity crisis at the industrial conglomerate.

Since then, GE’s reliance on commercial paper was material, and in the second quarter, GE had on average around $16.6 billion of the debt outstanding – a sizeable portion of its total $116 billion in debt.

A warning shot came in early October, when S&P cut GE’s short-term grade to A-2, a level below the top tier. That’s a rating of commercial paper that some classic prime money market funds are reluctant to buy. In fact, prime money market funds historically had to have at least 97% of their securities rated at least A-1 from S&P and P-1 from Moody’s, but those rules were loosened amid this decade’s money market reform. Even so, as Bloomberg noted, many funds would be far less willing to buy securities with a split rating, i.e., where at least one rating is below A-1 or P-1.

And with fewer funds interested in buying GE paper, the company would be forced to pay higher rates to sell its commercial paper, according to Peter Crane, president of Crane Data, which tracks money market funds. “They’ll still be able to find buyers, but at a cost of course,” Crane said. It cost 2.34% for a top-tier corporation to borrow for 90 days, according to U.S. Federal Reserve data. Companies the next tier down, where one ratings firm has GE, paid 2.71%.

Fast forward to today when moments ago GE found itself completely shut out of the Commercial Paper market, when Moody’s downgraded its senior unsecured rating to Baa1, from A2, and downgraded the short-term rating to P-2, from P-1, making future sales of C.P. impossible.

This news item showed up on the Zero Hedge website at 3:24 p.m. on Wednesday afternoon EDT — and another link to it is here.


Worst October For Junk Bonds Since 2008 As Yields Surge

According to Bloomberg, after a period of surprising resilience which saw junk spreads touch the narrowest since the financial crisis as recently as a month ago, October was the worst month for junk bonds since 2008.

October has been positive for high-yield bonds in every year since 2008, when the market tumbled almost 16 percent in the month.

And while October has been typically a good month for high yield, this month is on track for the biggest loss since December 2015 as equity volatility, economic fears, earnings and trade worries weigh.

After months of outperformance, U.S. high yield finally cracked, generating a -1.81% return in October, making it the second-worst performer of all the main bond market indexes and exceeded only by the 1.87 percent decline for global high yield.

The October rout wiped out more than two-thirds of all high yield YTD gains, and while the sector is still up 0.72% in 2018, it is well short of the 2.57% racked up by the close on Sept. 28. The former star performer in the space, the “triple hooks” or CCC rated bonds, gave up half their YTD gains, and were up by 3.07%, compared to a 6.24% return at the end of last month. Meanwhile, investment grade bonds are now well in the red for the year, losing 3.5% after a 1.2% drop this month.

This story was posted on the Zero Hedge website at 2:51 p.m. EDT on Wednesday afternoon — and I thank Brad Robertson for sending it along.  Another link to it is here.


Treasury Announces Record Debt Sale In Upcoming Refunding Auction

Treasury Secretary Steven Mnuchin is about to surpass Timothy Geithner’s achievement of selling a record amount of notes and bonds as he seeks to finance America’s soaring budget deficit.

According to the latest quarterly refunding statement, the U.S. Treasury is about to sell a record amount of debt, surpassing levels seen both in the aftermath of the Great Depression and the Global Financial Crisis.

On Wednesday, the U.S. Treasury Borrowing Advisory Committee unveiled that it will increase the amount of debt to be sold at the upcoming quarterly refunding auctions to $83 billion from $78 billion three months earlier. This will be the fourth straight quarter of increasing refunding auction sizes and is driven by the soaring U.S. deficit shortfall, which in 2018 hit $779 billion the highest since 2012, as well as the Fed’s ongoing balance sheet shrinkage.

This is another Zero Hedge item courtesy of Brad Robertson.  It put in an appearance on their website at 11:28 a.m. EDT yesterday — and another link to it is here.


We Received a Surprising Phone Call… — Bill Bonner

The Dow closed up more than 400 points. End of the correction? Mr. Market’s fake-out?

In a bull market, you buy the dips. In a bear market, you sell the bounces. Which is it?

We don’t know yet, but our guess is that you won’t regret selling now.

In the meantime… when we left off yesterday, we had just connected some dots. And a disturbing picture was coming into clearer focus.

Here’s what we’re looking at…

Government spending is now impossible to restrain. Donald J. Trump probably had the last opportunity to bring it under control. We suspected that the promise of “draining the swamp” was just a political feint. But we kept an open mind.

Now, we know… Instead of cutting the budget, he increased it. The deficit is projected to hit $1.3 trillion next year. And now, between the Deep State insisting on more money for “defense” and aging voters insisting on their pills and pensions, deficits are certain to increase.

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


The Hidden Secrets of Money…Episode 10: American Bread & Circus — Mike Maloney

I posted Episode 9 in Wednesday’s column — and Episode 10 is now up on the youtube.com Internet site as well.  This segment runs for 41 minutes.  I’ve listened to all of it — and it’s definitely worth your while.  I thank Harold Jacobsen for bringing it to my attention — and now to yours.


Saudi Coup “Imminent” as Crown Prince’s Uncle Arrives to Oust “Toxic” MbS

The youngest brother of Saudi Arabia’s King Salman has returned from self-imposed exile to “challenge” Crown Prince Mohammed bin Salman (MbS) “or find someone who can,” reports the Middle East Eye.

Prince Ahmad bin Abdulaziz is reportedly hoping to oust his 33-year-old nephew in the wake of an allegedly state-sanctioned murder of journalist Jamal Khashoggi. MbS has virtual control over Saudi Arabia after a June 2017 shakeup in which King Salman removed Muhammad bin Nayef as heir apparent.

The septuagenarian prince, an open critic of bin Salman (MBS), has travelled with security guarantees given by U.S. and U.K. officials.

He and others in the family have realised that MBS has become toxic,” a Saudi source close to Prince Ahmad told Middle East Eye.

Prince Ahmad has reportedly been meeting with other members of the Saudi royal family living outside the kingdom, along with “figures inside the kingdom” who have encouraged him to usurp his nephew. According to MEE, “there are three senior princes who support Prince Ahmad’s move,” who remain unnamed to protect their security.

According to Saudi dissident Prince Khalid Bin Farhan Al Saud, he expects a coup to be orchestrated against King Salman and MbS, as reported by the Middle East Monitor, which reports that a coup is “imminent.”

The coming period will witness a coup against the king and the crown prince,” said Prince Khalid while commenting on the Khashoggi murder.

This very interesting news story was posted on the Zero Hedgewebsite at 12:57 p.m. EDT on Wednesday afternoon — and we should find out reasonably quickly if anything comes of this.  I thank Brad Robertson for pointing it out — and another link to it is here.


Rupee Slump to Push India to Seek Yuan Trade Settlement

India is considering allowing some imports from China to be settled in yuan, people familiar with the proposal said, as the South Asian nation moves to limit its currency’s loss against the dollar.

The plan would enable direct convertibility between the rupee and yuan and will help cut transaction and hedging costs, the people said, asking not to be identified citing rules. The proposal would allow Indian exports of pharmaceuticals, oil seeds and sugar to China to be settled in rupee, while keeping out trade in high volume products such as electronics, they said.

India-China trade is mainly settled in U.S. dollars since currencies between the two nations aren’t directly convertible. By allowing Indian importers to pay for Chinese goods in yuan, the South Asian nation would be able to save on dollars to pay for escalating oil import costs in the face of higher crude prices and the rupee’s slump to a record low.

Oil is India’s biggest import item and the government estimates it will pay a record $125 billion, or 8.8 trillion rupees, for crude imports this fiscal year, the highest in rupee terms since 2001.

This Bloomberg news item put in an appearance on their website back on Sunday — and I found it embedded in a GATA dispatch.  Another link to it is here.


India Calls Trump’s Bluff, Will Pay For Russian S-400s in Rubles

After facing down U.S. threats of possible economic sanctions should it follow through with its plans to purchase nearly $5.4 billion in Russian S-400 anti-ballistic missile systems, India has successfully called the U.S.’s bluff.  After India stood its ground and insisted on moving ahead with the arms deal, the White House said it would consider giving India a waiver on the deal, according to RT.

For anybody who has followed our coverage of the growing mutiny against the dominant dollar-based trade paradigm – a rebellion that’s being led by Russia and China – the U.S.’s reasons for granting the concession should be self-evident. After the U.S. threatened to block the deal via SWIFT, the supposedly “politically independent” system for international payments over which the U.S. Treasury exercises de facto veto power via economic sanctions, Russia and India found a viable workaround: Carry out the transaction in rubles and rupees.

New Delhi and Moscow officially agreed on the deal during a summit earlier this month, where they also pledged to work toward closer military and economic ties, much to the chagrin of the U.S. In addition to the S-400s, India is also reportedly planning to buy Russian T-14 Armata tanks and guided-missile frigates, and could even pursue the development of next-generation submarines and fighter jets in cooperation with Moscow.

By deciding to tolerate the deal, the U.S. is, in effect, acknowledging that Russian President Vladimir Putin had a point when he said earlier this month that the U.S.’s willingness to impose economic sanctions is a “colossal strategic mistake.”

This story showed up on the Zero Hedge website at 7:25 p.m. on Wednesday evening EDT — and another link to it is here.


Enormous 1.1 kilogram emerald found worth an estimated $2.5 million

A giant and extremely rare emerald worth an estimated £2 million ($2,549,954) has been discovered at a mine in Zambia. The gemstone is a whopping 5,655 carats.

The 1.1kg emerald, named “Inkalamu,” meaning lion in the local Bemba language, was discovered by geologist Debapriya Rakshit and miner Richard Kapeta on October 2 at Kagem, the world’s largest emerald mine. The site is majority-owned by London-based Gemfields.

Naming is reserved for only the rarest and most valuable gems, and the lion emerald is only the second the company has ever named. The 6,225-carat “Insofu” or elephant stone, was its first to be named, back in 2010.

The discovery of this exceptional gemstone is such an important moment both for us and for the emerald world,” London-based gemologist at Gemfields Elena Basaglia said as cited by MSN news.

This very interesting news item appeared on the rt.com Internet site at 2:56 p.m. Moscow time on their Wednesday afternoon, which was 7:56 a.m. in New York — EDT plus 7 hours.  The photo is definitely worth the trip — and I thank Larry Galearis for sharing it with us.  Another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the hermit thrush.  “It’s a medium-sized North American thrush. It is not very closely related to the other North American migrant species of thrushes, including the robin, but rather to the Mexican russet nightingale-thrush. Hermit thrushes breed in coniferous or mixed woods across Canada, southern Alaska, and the northeastern and western United States. They make a cup nest on the ground or relatively low in a tree.”  They’re supposed to make it this far north in Canada during the breeding season, but I have never seen one — and if I have, I didn’t recognize it for what it was.  Click to enlarge.


The WRAP

It was another day of new intraday and/or closing lows in four of the Big 6 commodities…gold, silver, copper and WTIC — and it’s most unfortunate that this data won’t be in tomorrow’s Commitment of Traders Report.

We’re now well below silver’s 50-day moving average, but JPMorgan has work to do in gold — and I doubt very much if they’ll be satisfied with just a tiny penetration of its 50-day moving average, but you just never know.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and for the second day in a row the handiwork of JPMorgan et al is easy to spot.  The ‘click to enlarge‘ feature works for all six charts.

And as bad as the obvious price management of the Big 6 commodities is, here is what Bill King of the King Report fame had to say about the shenanigans in the stock market on Tuesday…”During the final seventy minutes of trading, money managers and traders did the necessary manipulation to game performance. The manipulation to boost miserable October performance was one of the most blatant manipulations in decades. The S&P 500 Index rallied 31 handles from 14:50 ET to the close…Another egregious manipulation occurred after the NYSE close when Facebook reported disappointing results. The stock immediately sank 5%. Then, someone from the scores of hedge funds, traders and money managers that own large amounts of FB forced the stock to a 2% gain.”

As GATA’s secretary/treasurer Chris Powell stated ten years ago…”There are no market anymore, only interventions.”

And as I post today’s column on the website at 4:04 a.m. EDT…the London open is less than ten minutes away — and I note that the gold price rose quietly until about noon China Standard Time on their Wednesday morning.  From there, it traded sideways into the afternoon gold fix in Shanghai — and it’s been heading higher ever since.  It’s up $9.80 currently.  It was the same price action in silver — and it’s now up 17 cents the ounce.  Ditto for platinum and palladium, with the former up 12 dollars — and the latter by 6 as Zurich opens.

Gross gold volume is around 54,000 contracts — and minus 1,231 contracts worth of roll-over/switch volume, net HFT gold volume is about 51,500 contracts.  Net HFT silver volume is around 13,700 contracts — and there’s only 137 contracts worth of roll-over/switch volume in that precious metal.

The dollar index didn’t do much for the first hour of trading once it began in New York at 6:00 p.m. EDT yesterday evening…then it began to head sharply lower — and back below the 97.00 mark.  And thirty minutes before the London open, it’s down 35 basis points.

Friday morning at 8:30 a.m. EDT, we get the latest job numbers — and it will be interesting not only to see what they are, but how all markets…particularly the precious metals…will be allowed to ‘react’ to them.

I’m off to bed — and I’ll see you here tomorrow.

Ed

The Salami Slicing Begins Again

31 October 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price traded flat for the first two hours and change once it began at 6:00 p.m. EDT in New York on Monday evening.  From that juncture, it was sold very unevenly lower until its low tick of the day [and a new low for this move down] was set at the 10:30 a.m. GMT morning gold fix in London.  From there it rallied quietly until shortly after 9 a.m. in New York.  It didn’t do much from there until around 12:10 p.m. EDT, where it was sold a few dollars lower over the next thirty minutes — and drifted quietly sideways into the 5:00 p.m. close.

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

The gold price finished the Tuesday session in New York at $1,222.60 spot, down another $6.00 from Monday’s close…another new low close for this move down.  Net volume was pretty quiet at just under 211,500 contracts — and there was only 7,357 contracts worth of roll-over/switch volume on top of that.

Silver was up 8 cents or so by shortly before 11 a.m. China Standard Time on their Tuesday morning, but that was as high as it was allowed to get.  From that point it traded sideways for an hour, before the selling pressure began.  The low tick of the day came a bit after the morning gold fix in London — and it was a new intraday low for silver as well at that juncture. Its quiet rally from the point got capped around 9:45 a.m. in New York — and it didn’t do much for the rest of the day.

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

Silver was closed on Tuesday at $14.44 spot, up 3 cents from Monday, but still finished below its 50-day moving average for the second day in a row.  Net HFT silver volume was very decent at a hair under 70,000 contracts — and there was 3,555 contracts worth of roll-over/switch volume in this precious metal.

Platinum was up 4 dollars by shortly before 11 a.m. CST on their Tuesday morning — and it then traded flat until 2 p.m. over there.  It was quietly sold down to its low tick of the day, which came at the same time as silver’s low…shortly after the morning gold fix in London.  Then, also like silver, it rallied until around 9:45 a.m. in New York, where the price was capped — and immediately sold lower.  That sell-off lasted until 1 p.m. EDT — and it rallied a few dollars into 5 p.m. close from there.

Palladium was up 8 bucks by 11 a.m. CST on their Tuesday morning — and it was quietly sold lower until 1 p.m. in New York.  It crawled equally quietly higher from that point until 4 p.m. EDT in the thinly-traded after-hours market — and then traded flat into the 5 p.m. close from there.  The down/up spike in after-hours trading looked like a data feed error to me.  Palladium finished the Tuesday session in New York at $1,064 spot, down 14 dollars from Monday’s close.

The dollar index closed very late on Monday afternoon in New York at 96.68 — and was down 5 basis points or by shortly before noon in Shanghai on their Tuesday morning.  It rallied unsteadily from there until a minute or so before noon in London…8 a.m. in New York.  It slid a bit until about 9:40 a.m. EDT — and began to rally anew.  The 97.02 high tick was set very shortly after 2 p.m. — and it traded flat from there into the close.  The dollar index finished the Tuesday session at 97.01…up 34 basis points from Monday.

And here’s the 1-year U.S. dollar index chart.  The delta between its close…96.79…and the close on the intraday chart above, was 22 basis points yesterday.  Click to enlarge.

The gold shares dipped a hair at the open — and then quickly jumped to their respective high ticks a few minutes before 10 a.m. in New York trading…which was a few minutes after the dollar index low tick — and the point where the gold price stopped rallying.  From that juncture they were sold lower until around 11:30 a.m. — and back into negative territory.  They didn’t do much from that point until exactly 2:00 p.m. EDT — and then they caught a bid.  They jumped back into positive territory — and the HUI finished the Tuesday session up 0.85 percent…which was a surprise to be sure, considering the fact that JPMorgan et al closed gold down 6 bucks on the day.

The price path for the silver equities was virtually a carbon copy of what happened with the gold stocks…complete with the 2 p.m. afternoon rally in New York.  But, alas, they weren’t able to squeeze a positive close — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.67 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report for First Day Notice for November deliveries showed that 116 gold and 459 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday. In gold, the three short/issuers were Morgan Stanley, ADM and Advantage with 60, 39 and 17 contracts out of their respective client accounts.  The three long/stoppers were JPMorgan, Advantage and ABN Amro, with 68, 35 and 13 contracts for their respective client accounts.  In silver, the only short/issuer that mattered was International F.C. Stone with 454 contracts out of their client account.  There were six long/stoppers in total — and the three largest were Morgan Stanley, with 135 contracts for its own account, plus 36 more for its client account.  In second spot was HSBC USA with 142 for its own in-house/proprietary trading account — and in third spot was JPMorgan with 95 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in October was zero for both metals, as the balance of the gold contracts for October were delivered yesterday — and the 2 remaining silver contracts are being delivered today.

Gold open interest in November rose by 28 contracts, leaving 126 still open, minus the 116 mentioned just above.  Silver o.i. in November rose by 55 contracts, leaving 1,315 still around, minus the 459 contracts mentioned in the previous paragraph.


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

There was a sales report from the U.S. Mint on Tuesday.  They sold 3,000 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — and 75,000 silver eagles.

The only activity in gold over that COMEX-approved depositories on the U.S. east coast on Monday was 100 troy ounces that was shipped out of Manfra, Tordella & Brookes, Inc. — and I certainly won’t bother linking this.

It was another big day in silver, as 601,749 troy ounces was received — and another 1,226,395 troy ounces were shipped out.  In the ‘in’ category, one truck load…599,810 troy ounces…ended up at Canada’s Scotiabank — and the remaining 1,939 troy ounces was dropped of at Delaware.  In the ‘out’ category, two truck loads…1,225,438 troy ounces…departed CNT — and the remaining one good delivery bar…957 troy ounces…was taken out of Delaware.  The link to all this activity is here.

It was fairly busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They received 2,000 of them – and shipped out another 2,671.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

I have an average number of stories for you today.


CRITICAL READS

Hedge Fund Meltdown Accelerates — and There is No End in Sight

It’s already been an abysmal month for hedge funds, as the Goldman Hedge Fund VIP Index clearly demonstrates…having just suffered its worst month on record.

With every passing day, it’s only getting worse as hedge funds, forced to deleverage in this chaotic market, are unable to pick a correct side of the market and stay on it.

Consider that according to Nomura’s Charlie McElligott, Monday was fifth worst one-day drawdown for his U.S. Equities Long-Short Hedge Fund model year-to-date, as the now daily shakeout continued in the form of accelerated deleveraging of legacy status quo positioning, i.e., popular shorts/underweights in “Value” and “Quality” ripping higher, while consensual longs overweights in “Growth” and “Momentum” were once again violently reduced.

The above is bad news for hedge funds: as shown in the chart below, equity hedge fund performance continues to suffer due to legacy positioning effectively being “long high beta” vs “short low beta”, which means that despite cutting net exposure to lows, they still bleed on high “market” exposure…

That said, McElligott believes that “THIS current freak-out is not “the one”—instead, it will be the early-to-mid 2019 event where after the 2nd hike the market “sniffs the slowdown,” the curve powerfully steepens, and we see the “ultimate” risk-off trade (and the “sustainable” Value over Growth” move).” Instead, the current market in my eyes remains a “de-leveraging cleanse” off the back of a Fed “policy error” scare.

Unfortunately, for battered hedge funds – who just saw a spike in redemption requests in September – it doesn’t matter: once their LPs see the latest disastrous performance, the outflows will accelerate forcing even more derisking, deleveraging and debuying.

This article showed up on the Zero Hedge website at 10:46 a.m. EDT on Tuesday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.


The U.S. Secretly Halted JPMorgan’s Growth for Years

For almost six years, Washington secretly shackled JPMorgan Chase & Co., the nation’s biggest bank.

Now the chains are off, thanks to bank-friendly regulators in the Trump administration.

In actions never before made public, Obama administration regulators prevented the bank from opening branches in new states as punishment for violating banking rules, according to people familiar with the matter. JPMorgan’s ambitious plan to expand nationally, announced earlier this year, was made possible by the Trump administration’s rollback of those restraints, which date from 2012, said the people, who asked not to be identified discussing regulators’ impact on the bank’s plans.

JPMorgan has racked up more than $30 billion in penalties, legal costs and related obligations since the 2008 financial crisis, some of which stemmed from its acquisitions of Bear Stearns Cos. and Washington Mutual Inc. Missteps include excessive risk taken by the London Whale trader and failing to flag transactions related to Bernard Madoff’s Ponzi scheme. Privately, the U.S. Office of the Comptroller of the Currency stopped JPMorgan from expanding into additional states while resolving compliance breakdowns as part of an unwritten regulatory policy, the people said.

While banks often have private conversations with regulators and even gauge their reactions to potential plans, the people with knowledge of the matter described the ban as one of the more extreme ways they exerted their control behind the scenes.

This very interesting Bloomberg story/commentary put in an appearance on their Internet site last Friday — and I thank ‘Zoey’ for sharing it with us.  Another link to it is here.


America’s Debt: A Recipe for Disaster — Bill Bonner

Little-noticed yesterday was a report from the U.S. Treasury admitting that budget deficits are running wild. The feds are now borrowing at a rate of $1.6 trillion a year and forecasting a deficit of $1.3 trillion next year – about twice the deficit the Trump team inherited from the previous administration.

And here, you can connect the dots yourself. The deficit is going to get bigger, not smaller.

First, people are getting older… Budgets for Medicare, Medicaid, Social Security, and other “non-discretionary” items are rising. This spending is baked in the cake, so to speak. It is the result of open-ended entitlements granted by the feds.

Defense spending, too, is increasing. This is discretionary, but effectively out of congressional control, since the military/security/surveillance wing of the Deep State calls the shots.

Defending the nation could be very cheap, since we have no capable or motivated enemies; it could be done for, say, a quarter of the present $700 billion budget.

Archenemy Russia spends only $60 billion per year on defense, for example. Apparently, that’s enough to keep the Chinese or the Poles from invading.

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


First, Secure the Borders — Jeff Thomas

As Ludwig von Mises correctly stated, in a free state, no one is forced to remain within the state. Anyone who seeks to emigrate is free to do so. This is, in fact, one of the primary tenets of liberty – if you don’t like it, you can leave.

And so, it follows that, if the right to exit is curtailed in any way, the state has ceased to be free.

There are those, including myself, who feel that, once this line has been crossed by a state, it’s time to skedaddle. Don’t wait for conditions to “get better.” They won’t. History shows us that, in every case where migration has become curtailed, the state never reverses to a more open policy; in fact, it becomes decidedly more restrictive.

We’re presently living in a period in which most of the countries that were formerly the most free, half a century ago, have declined considerably and many are approaching a state of totalitarianism.

Readers of this publication will be familiar with my forecasts that the principle countries that are at the forefront of this decline will be steadily increasing both their capital controls and their migration controls. With regard to the latter concern, the emphasis will not be on keeping non-productive people out, it will be on keeping productive people in.

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


Is America Finished? — Paul Craig Roberts

Americans are now so polarized that they “no longer share basic sympathies and trust, because they no longer regard each other as worthy of equal consideration.” Codevilla blames the progressives and their attitude of moral superiority, but his explanation is independent of who is to blame. I blame both sides. The Constitution and our civil liberties took a major hit from the “conservative” Republican regime of George W. Bush.

The consequence has been to weaponize government for use against the domestic adversary. In other words, unity has departed us. The absence of unity makes it easy for the ruling oligarchy to achieve its material interests at the expense of the welfare of the American people. Indeed, it is amazing to find progressives aligned with the military/security complex to block Trump from normalizing relations with Russia.

The provocations of Russia, which have been ongoing since the Clinton regime, have reached unprecedented levels under the neoconservative regimes of Obama and Trump. The conflict that has been orchestrated is good for the $1,000 billion annual budget of the military/security complex at the cost of maximizing the chance of nuclear war. The demonizations of Russia, Putin, China, and Iran are so extreme as to have convinced Russia and China that Washington intends war.

For Russia, Trump’s withdrawal from the intermediate range missile treaty (INF) confirms that an attack on Russia is being prepared. Intermediate range missiles cannot reach the US. The treaty gave safety to Russia and Europe, which is why Washington’s claim that Russia is violating the treaty is absurd. The only reason for Washington to withdraw from the treaty is to be able to place intermediate range nuclear missiles on Russia’s borders that would substantially increase the likelihood of success of a US first strike against Russia.

This very worthwhile commentary by Paul was posted on his Internet site on Tuesday sometime — and I thank Richard Connolly for bringing it to my attention — and now to yours.  Another link to it is here.


Italy’s economy stalls as eurozone slows down

Italy’s economy came to a standstill in the third quarter of the year, registering no growth at all,

It comes as the new coalition government is arguing with the European Commission over the need for an expansionary budget to boost growth.

Meanwhile, figures from the European Union showed economic growth in the 19 countries using the euro currency slowed by more than expected.

Eurozone growth slowed to 0.2%, from 0.4% in the previous quarter.

Growth across all 28 countries of the E.U. fell to 0.3% from 0.5%.

Italian Prime Minister Giuseppe Conte said the zero growth in Italy justified Rome’s expansionary 2019 budget, which the European Commission has rejected because it breaks EU rules.

This story showed up on the bbc.com Internet site on Tuesday morning GMT sometime — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.


Fall of Empires: Rome vs. USA (Hidden Secrets of Money Episode 9) — Mike Maloney

In Episode 9 of Hidden Secrets of Money, Mike Maloney draws eerie parallels to the misguided leaders and monetary policies that doomed civilizations from Ancient Rome to modern-day America.

Can President Trump save America? Will the Federal Reserve Board be able to pull off yet another round of extremist interference and postpone a crisis?

Find out how Mike he believes it will play out.

This 28:26 minute video from Mike, which I’ve watched from beginning to end, is worth your while.  I know most of it already, but this is certainly a new and alarming spin on it.  This video was posted on the youtube.com Internet site very yearly on Tuesday morning — and I thank Harold Jacobsen for bringing it to our attention.  Another link to it is here.


Zimbabwe Gold Producers Warn Currency Shortage Threatens Output

Zimbabwean gold producers may suspend operations because a foreign-exchange shortage has left them with insufficient funds to cover production costs, the main industry lobby group said.

Curbing output would deprive the country of a key source of export earnings as Finance Minister Mthuli Ncube tries to stabilize an economy wrecked by the misrule of former leader Robert Mugabe.

Zimbabwe’s mining industry is facing “severe viability challenges” because of the shortage of hard currency, the Gold Producers Committee, an affiliate of the Chamber of Mines of Zimbabwe, said in a report to be submitted to the central bank and seen by Bloomberg. Producers are only allowed to retain 30 percent of the proceeds of gold sales, which isn’t adequate to cover the cost of mining the metal, it said.

If this situation is not addressed the majority of (gold) mining houses, whose going concern have been undermined, may find it impossible to continue in production,” the committee said. It proposed allowing mineral producers to retain a larger share of the proceeds from metal sales.

Zimbabwe is projected to produce 30 metric tons of gold in 2018, up from 24.8 tons last year. The metal is Zimbabwe’s second-biggest export, after tobacco, according to World Trade Organization data.

The above five paragraph are all there is to this brief Bloomberg article that showed up on their website at 4:58 a.m. Pacific Daylight Time on Monday.  I found it on the gata.org Internet site — and another link to it is here.


LBMA’s new trade volume data will do nothing for the transparency of the London Gold Market — Ronan Manly

At its annual conference this week in Boston, the London Bullion Market Association (LBMA) announced that commencing 20 November, it will begin publishing data showing the size of trading activity in the London gold and silver markets, a move which it claims will make the London precious markets more transparent. This trade data initiative of the LBMA is an initiative that has been promised for over 4 years now, but which sadly but predictably now appears to be a lost opportunity to provide real transparency to that market.

For the LBMA has now confirmed that the new data will only cover “LBMA’s membership share of the loco London and Zurich OTC market and will reflect 5 day aggregate of trades.” Unbelievably, the LBMA will not even begin publishing a daily rolled up trade volume number for the first 3 months of the data releases, until early 2019.

There is nothing transparent about this initiative. A rolled up aggregate number of trading volumes in any market is by definition opaque not very useful. The LBMA reporting will provide no granularity of trades by trade type, transaction type, client profile (eg ETF trades, central bank trades, miner trades, refiner trades), no breakdown of physical gold trades vs paper gold trades, and no information on the secretive central bank gold trades, gold loans and gold swaps.

Given that the London precious metals market trade data is now being collected in an LBMA database, all of the above granular trade data could be published. The fact that the LBMA will not publish any of this data speaks volumes about its true intention which is to continually stifle the availability of any real data about the London gold and silver markets.

Availability of trade data is crucial to the efficiency of any financial market and to the proper functioning of price discovery in that market. Bond markets and equity markets are in general efficient because of the full availability of granular trading data. Without granular trade data for the London gold and silver markets, these markets will remain completely untransparent and open to the continued abuse by the very bullion banks of the LBMA (and their central bank supporters) which thrive on market secrecy while paying lip-service to the notion of increasing transparency.

The above five paragraphs are all there is to this worthwhile commentary by Ronan.  It appeared on the bullionstar.com Internet site yesterday — and I found it in a GATA dispatch.  Another link to the hard copy is here.


Precious Times Ahead — Kamran Ghalitschi 

Behind the scenes, the dynamics steering the gold price are undergoing some fundamental changes that could lead to this breakout, Eric Strand of Swedish Pacific Fonder suggests. One indication, he believes, came when the CFTC (Commodity Futures Trading Commission) reported in early September 2018, that for the first time in 17 years, commercial participants in gold futures flipped their COMEX positioning from short, to being net long.  Retail, and technical funds, however, now have big short positions, “which could lead to a big short squeeze”, Strand adds.

The price of gold has been suppressed artificially for too long, Strand believes, and now may be the time for a change”.

Strand refers to Silver expert Ted Butler who has monitored the market every single day for over 30 years and describes it as follows: “Every time we’ve had a rally in the last 10 years, ever since J.P. Morgan took over the investment bank Bear Stearns, J.P. Morgan has added aggressively to its paper short division on the COMEX as retail speculators and technical funds come in to chase rallies higher. J.P. Morgan has always been the seller of last resort, and they sell whatever is required to satisfy all buying. And, ultimately, after that buying is satisfied, the prices roll over and come back down. J.P. Morgan adding short positions has stopped every rally in silver – and gold, for that matter – over the last 10 years.

J.P. Morgan never sells on the way down. They only sell and add short positions on the way up. And, when J.P. Morgan adds short positions, once they’re done selling and the buyers are done buying, the price stops going up and people turn to sell. That’s when J.P. Morgan rings the cash register and buys back all the shorts that they’ve added at lower prices than where they sold, meaning they always make a profit.”

This worthwhile precious metal-related commentary put in an appearance on the Stockholm, Sweden-based hedgenordic.com Internet site on Tuesday sometime — and I thank reader E.S. for finding it for us.  Another link to it is here.


Divers searching for ‘extremely rare’ gold coins on 1840 shipwreck off South Carolina

There’s a mysterious spot about 20 miles off South Carolina where centuries-old gold coins have been found strewn across the ocean floor for decades.

It’s believed to be the final resting place of the S.S. North Carolina, a steamship that historians say sank in 1840 under bizarre circumstances.

In November — 178 years after the ship went down — an expedition is being launched to “reconfirm with absolute proof” the wreck’s identity and unravel the mystery of why the North Carolina seemingly sank itself by heading straight into the path of another ship.

But make no mistake: It’s the stories of gold coins the are driving the expedition.

Project partners Blue Water Ventures International and Endurance Exploration Group are convinced hundreds of highly prized gold and silver coins are still on the wreck, promising a big pay off.

The S.S. North Carolina sank so quickly that few of its affluent passengers could gather their belongings before boarding a rescue ship, say the organizers. Among the passengers was a businessman who reportedly lost $20,000 in gold pieces, says Blue Water Ventures International.

This very interesting gold-related news story showed up on the charlotteobserver.com Internet site on Sunday morning EDT — and was updated about 24 hours later.  I found this item in a GATA dispatch as well — and another link to it is here.


The PHOTOS and the FUNNIES

Yesterday’s ‘critter’ was the mountain goat…today it’s the bighorn sheep.  It’s a species of sheep native to North America named for its large horns. These horns can weigh up to 14 kg (30 lb), while the sheep themselves weigh up to 140 kg (300 lb).  They originally crossed to North America over the Bering land bridge from Siberia; the population in North America peaked in the millions, but by 1900, the population had crashed to several thousand, due to diseases introduced through European livestock and over hunting.  A program of reintroductions, natural parks, and reduced hunting, allowed the bighorn sheep to make a comeback. I saw about 40 or so in a herd last weekend…very impressive.  I’ll have those photos later.  Click to enlarge.


The WRAP

It appears that the salami-slicing is back, as JPMorgan et al either set new low closes, or new intraday lows…or both…not only in three of the four precious metals, but in copper and WTIC as well. Copper was closed back below its 50-day moving average for the first time in over a month.

How long this process will take in this cycle of engineered price declines remains to be seen, but ‘the bottom’ isn’t anywhere near as far away as it used to be. All we can do is sit here and wait it out.

Here are the 6-month charts for the Big 6 commodities — and yesterday’s handiwork by ‘da boyz’ is on display.  The ‘click to enlarge‘ feature only helps with the four precious metal charts.

And as I type this paragraph, the London/Zurich opens are less than ten minutes away…now 4:00 a.m. EDT, as the U.K. and Europe are off Daylight Saving Time.  Normally the time difference from New York to London is five hours, but that time difference won’t revert back to normal until North America goes off Daylight Saving Time in about two weeks.  So, as of 4:00 a.m. EDT, the gold price was sold quietly lower until minutes before 12 o’clock noon in Shanghai.  It traded sideways from there, but got smacked to a new intraday low right at the London open — and it’s currently down $7.00 the ounce.  It was the same price path for silver, with its new intraday low coming at the same time as gold’s — and is now down 11 cents.  Platinum was more or less forced to follow the same general price trajectory as silver and gold — and is down 3 bucks at the moment.  Palladium ticked quietly higher throughout the Wednesday session in the Far East — and that lasted until 2 p.m. China Standard Time on their Wednesday afternoon, when it was up 5 dollars the ounce.  It was sold lower from there — and is now back at unchanged as Zurich opens.

Gross HFT gold volume is a bit under 55,000 contracts — and there’s 1,730 contracts worth of roll-over/switch volume on top of that, so net HFT gold volume is around 51,300 contracts.  Net HFT silver volume is coming up on 10,800 contracts — and there’s only 73 contracts worth of roll-over/switch volume in that precious metal.

The dollar index was up 5 basis points by early afternoon trading in the Far East, but the index is now down 3 basis points on the day thirty minutes before the London/Zurich opens.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report.  I would suspect that there might be some improvement in the commercial net short position in gold, but about unchanged wouldn’t surprise me, either.  But there should be a definite improvement in silver, because it closed lower for four of the five trading days during the reporting week, plus it was closed below its 50-day moving average both days this week.  But as to how much improvement, I shan’t hazard a guess.  Ted won’t have a mid-week column today, because he’s on the road, so we’ll see how my guesses stand up without his guiding hands.

And because the U.K. and Europe are back on regular hours, I’ll be filing an hour earlier than normal for the rest of this week and next, until North America is back on Standard Time.  I’m not prepared to stay up that extra hour, as the hours I spend working on this daily column are crazy enough as it is.

See you here tomorrow.

Ed