-- Published: Monday, 11 December 2017 | Print | Disqus
09 December 2017 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price was up a dollar or so in Far East trading on their Friday, but was turned lower once London opened. That tiny downturn lasted until at, or shortly after, the 10:30 a.m. GMT morning gold fix in London — and the price began to tick higher from that point. The big price slam that I was expecting on the release of the jobs numbers never materialized, but the volume between 8:30 and 10:00 a.m. in New York yesterday was amazing. That tiny rally in gold was capped and turned lower starting around 9:40 a.m. EST. That tiny sell-off ended at precisely 1:30 p.m….which was the COMEX close. That tick is not visible on the Kitco chart below, but stands out clearly on the New York Spot [bid] chart. From that juncture the price began to creep higher until shortly after 3 p.m. in the thinly-traded after-hours market — and it didn’t do much after that.
The low and high ticks certainly aren’t worth looking up.
Gold finished the Friday session in New York at $1,248.20 spot, up $1.40 on the day, but a new intraday low was set just after 8:30 a.m. in New York, albeit not by much. Considering the ‘quiet’ price action, net volume was pretty heavy at something under 263,000 contracts, with at least 54,000 contracts of that amount coming between 8:35 and 8:50 a.m. EST. One wonders what that was all about — and in light of yesterday’s dramatic changes in Friday’s COT Report, I’m now ultra-sensitive about things like yesterday’s price activity.
And here’s the 5-minute tick chart courtesy of Brad Robertson — and I’m including it just so you can see the dramatic volume that occurred during the above mentioned time period. Once the COMEX closed at 11:30 a.m. Denver time/1:30 p.m. in New York, volume evaporated.
The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1 p.m. China Standard Time [CST] the following day in Shanghai — and don’t forget to add two hours for EDT. The ‘click to enlarge‘ feature is a must.
Silver was up about 8 cents the ounce by the London open, but was sold down a bit until shortly before 10 a.m. over there. It began to inch higher from that point — and the price action starting just before the noon GMT silver fix — and ending at noon in New York, was rather erratic. It began to edge higher from there until 3:30 p.m. in the very thinly-traded after-hours market — and then traded pretty flat into the 5:00 p.m. close.
Like for gold, the low and high ticks certainly aren’t worth looking up.
Silver closed in New York yesterday at $15.82 spot, up 12.5 cents from Thursday. Net volume was pretty decent, all things considered, at just under 71,000 contracts. That’s a higher volume number than Thursday’s, when the price action in silver was far more dramatic — and I’m wondering what that might mean…or portend.
Here’s the 5-minute tick chart for silver, courtesy of Brad as well — and it’s a very mini version of what happened in gold yesterday. You’ll note that volume dissolved into fumes and vapours once the COMEX closed at 11:30 a.m. MDT.
Like for gold, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1 p.m. China Standard Time [CST] the following day in Shanghai — and don’t forget to add two hours for EDT. The ‘click to enlarge‘ feature is a must as well.
Platinum was up a few dollars by the Zurich open — and its high of the day at the $897 mark came a few minutes after 10 a.m. CET in Zurich. ‘Da boyz’ and their long knives showed up at that point — and they set the $880 spot low tick a minute or so after 12 o’clock noon in New York. It traded pretty flat from there into the COMEX close and, like the gold and silver, crept higher until 3 p.m. in the very thinly-traded after-hours market. Platinum was closed at $885 spot, down another 7 dollars from Thursday.
Palladium was sold down a few dollars in morning trading in the Far East on their Friday, but began to tick higher around 1:30 p.m. CST over there. It’s high of the day…$1,008 spot…was printed right at the Zurich open, but it was sold down to a dollar below unchanged two hours later. From there it traded flat until the COMEX open. JPMorgan et al showed up at that juncture — and that, as they say, was that. The $989 low tick was printed shortly before 10:30 a.m. in New York — and it chopped higher from there until 2 p.m. in after-hours trading. It traded flat from there into the 5:00 p.m. close. ‘Da boyz’ closed palladium at $997 spot — and down 8 dollars from Thursday.
The dollar index closed very late on Thursday afternoon in New York at 93.76 — and then rallied about ten basis points over the next three hours once trading began at 6:00 p.m. EST Thursday evening. It faded a bit from there until a ‘rally’ began at precisely 2:00 p.m. China Standard Time on their Friday afternoon. That topped out at the 94.09 mark around 12:20 p.m. in London — and then didn’t do a lot until minutes after the job numbers were released in New York. It got sold down hard from there, but the usual ‘gentle hands’ appeared at exactly 9:00 a.m. EST — and the low at that juncture was around the 93.82 mark. It chopped higher until a few minutes after London closed…11 a.m. EST — and it drifted quietly lower for the rest of the day. The dollar index finished the Friday session in New York at 93.90 — and up 14 basis points from Thursday’s close.
And here’s the 6-month U.S. dollar index chart — and the current engineered price declines in gold, silver and platinum have all occurred during this very uninspiring countertrend rally in the dollar index over the last two weeks. And that includes the dramatic, record-breaking — and totally unexpected changes in this week’s COT Report, which I will get to momentarily.
The gold stocks gapped up about a percent and a half at the open — and that was their highs of the day, as they quietly sold off from there until shortly after the COMEX close. At that point the gold price began to rally a bit — and the shares followed it like a shadow for the rest of the Friday trading session. The HUI closed up 0.44 percent.
The silver equities also rallied right out of the chute the moment that trading began in New York at 9:30 a.m. EST on Friday morning. They topped out about 11:50 a.m. EST — and then sold off, like the gold stocks, until shortly after the COMEX close. And with silver and gold following the same price paths after the COMEX close, the silver equities mirrored the silver price — and their golden brethren as well. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 1.49 percent. Click to enlarge if necessary.
And here’s the 1-year Silver Sentiment/Silver 7 Index. Let’s hope that we’ve seen the bottom in the silver equities. Click to enlarge.
Here are the usual three charts from Nick that show what’s been happening for the week, month-to-date — and year-to-date. The first one shows the changes in gold, silver, platinum and palladium for the past trading week, in both percent and dollar and cents terms, as of their Friday closes in New York — along with the changes in the HUI and the Silver 7 Index. ‘Click to enlarge‘ for all three.
Here’s the 1-week chart — and it’s pretty ugly.
And here’s the month-to-date chart, which is only one day longer than the weekly chart — and it ain’t pretty, either.
And here’s the year-to-date chart — and it isn’t very happy looking. ‘Da boyz’ actually have silver down on the year — and of course the shares are lagging badly.
As I said last week in this space, the share price action, along with the precious metals themselves, are still in the iron grip of JPMorgan et al — and that won’t change until they’re through doing what they’re doing — and judging by yesterday’s COT Report — and the price action in the precious metals since the Tuesday cut-off, the bottom is within sight, if not already upon us.
The CME Daily Delivery Report showed that only 4 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Tuesday. JPMorgan stopped them all for their in-house/proprietary trading account. The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Friday trading session showed that gold open interest in December increased by 11 contracts, leaving 2,178 still open, minus the 4 contracts mentioned just above. Thursday’s Daily Delivery Report showed that 62 gold contracts were actually posted for delivery on Monday, so that means that 62+11=73 more gold contracts were added to the December delivery month. Silver o.i. in December fell by 31 contracts, leaving 805 still around, minus the 1 mentioned in the previous paragraph. Thursday’s Daily Delivery Report showed that 54 silver contracts were actually posted for delivery on Monday, so that means that another 54-31=23 silver contracts just got added to December.
There were no reported changes in GLD yesterday, but that wasn’t the case over at SLV, as an authorized participant, most likely with the initials JPM, added 1,509,802 troy ounces of silver.
In the last four business days there have been 5,284,435 troy ounces of silver added to SLV — and that more than covers the 4.5 million ounce increase in the short position in SLV reported two weeks ago for positions held at the close of trading on November 15. I’m expecting the next short report [for positions held at the close of trading on Friday, November 29] from the folks over at the shortsqueeze.com Internet site any day now — and if not this evening, then Monday for sure.
There was no sales report from the U.S. Mint yesterday.
Month-to-date the mint has sold 1,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 120,000 silver eagles. Worse than awful.
There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday. They reported receiving 96,453.000 troy ounces — and shipped out 26,485 troy ounces. All of the ‘in’ activity…96,453.000 troy ounces/3,000 kilobars [SGE kilobar weight] ended up at HSBC USA. In the ‘out’ category, there was 10,410 troy ounces shipped out of HSBC USA as well — and the remaining 16,075.000 troy ounces/500 kilobars [U.K./U.S. kilobar weight] ended up at Canada’s Scotiabank. The link to that activity is here.
There wasn’t a lot of activity in silver on Thursday. Nothing was reported received — and 412,003 troy ounces were shipped out of Scotiabank. The link to that activity is here.
It was a good bit busier over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday. They reported receiving 2,000 of them — and shipped out 4,294. All of this action was at Brink’s, Inc. as usual — and the link to that, in troy ounces, is here.
The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, was a real WTF moment, as I could hardly believe what I was seeing — and Ted was even mores astonished than I.
In silver, the Commercial net short position cratered by an eye-watering 26,721 contracts, or 133.6 million troy ounces of paper silver. That is, without doubt, the biggest one-week decline in COMEX history.
They arrived at that number by adding 9,701 long contracts, plus they reduced their short position by an incredible 17,020 contracts — and the sum of those two numbers is the change for the reporting week.
Ted said that the Big 4 traders reduced their short position by about 6,400 contracts — and the ‘5 through 8’ large traders reduced their short position by around 4,700 contracts. Ted’s raptors, the 36-odd small Commercial traders other than the Big 8, added approximately 15,600 contracts to their long position.
Under the hood in the Disaggregated COT Report, it was all Managed Money traders and then some, as they not only reduced their long position by 12,339 contracts, they also went hugely short as well, adding 22,576 short contracts. The sum of those two numbers…a knee-wobbling 34,915 contracts…was the change for the reporting week. The difference between that number — and the Commercial net short position…8,194 contracts…was made up by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small traders categories, as they went net long that amount.
The other very notable thing I was waiting to see was the remaining long position held by the Managed Money traders — and that number cratered to 57,446 contracts. At the last price low, that number was 56,000 contracts, so all that remains in this category now, are the ‘unblinking’ non-technical Managed Money longs waiting in the weeds.
The Commercial net short position in silver fell to 46,354 contracts, or 231.7 million troy ounces of paper silver. Ted pegs JPMorgan’s short position at around 29,000 contracts, which is an 11,000 contract decline from their short position they held just two weeks ago — and down 7,000 contracts from last Friday’s COT Report.
The Big 8 traders, including JPM, are net short 439.8 million troy ounces of paper silver, or 181 days of world silver production. The difference between that number and what the commercial net short position…439.8 minus 231.7 = 208.1 million troy ounces, is held on the long side by Ted’s raptors, the 36-odd small commercial traders.
Here’s the 3-year COT chart from Nick Laird — and this week’s change is dramatic. Click to enlarge.
I’m totally shocked by these numbers — and words are difficult at the moment. Of course there has been further improvement in the Commercial net short position since the Tuesday cut-off — and what I wouldn’t pay to see what the COT Report looked like at the end of COMEX trading on Friday!!! Ted said that this report passed the ‘duck test’ for what a bottom in silver would look like — and it came with no stand-out changes in the price, which I found shocking. Yes, prices declined during the reporting week, but nothing that would substantiate the internal changes in the COT Report just out. I know that Ted will have plenty to say about this in his weekly review later today.
In gold, the changes were just as stunning. Ted’s estimate of “30,000 contracts…and hopefully more” was totally blown out of the water, as the commercial net short position crashed by 56,651 contracts, or 5.65 million troy ounces of paper gold.
They arrived at that number by adding 15,678 long contracts, plus they decreased their short position by an incredible 40,973 contracts — and the sum of those two numbers is the change for the reporting week.
Ted said that the ‘Big 4’ traders decreased their short position by a whopping 28,800 contracts, or thereabouts — and the big ‘5 through 8’ large traders decreased their short position by around 16,900 contracts. Ted’s raptors, the 47-odd small commercial traders other than the Big 8, added 11,000 contract to their long position.
Under the hood in the Disaggregated COT Report it was, again, a Managed Money show — and much more, as they not only sold 41,344 long contracts, they also added 22,686 short contracts, for a weekly change of 64,030 contracts.
And as incredible as that was, there were two more show-stoppers in the Disaggregated Report — and those were the changes in the other two categories. Yes, as is always the case, they made up the difference between what the Managed Money traders did — and what the commercial traders did…64,030 minus 56,651 = 7,379 contracts. But it was how it was divided up that was an eye-opener. The traders in the ‘Other Reportables’ category went net long 12,942 contracts — and the traders in the ‘Nonreportable’/small trader category went net short by 5,563 contracts. I’ve never seen such a dichotomy in the numbers between these two categories — and unless its a reporting error that will be corrected next week, these changes are astounding as well.
The commercial net short position in gold fell all the way down to 18.99 million troy ounces.
Here’s the 3-year COT Report for gold — and it’s as equally amazing as silver. And, like silver, there have been further improvements since the Tuesday cut-off. And also, like for silver, my kingdom…such as it is…for just a peek at a COT Report in gold as of Friday’s close!
As Ted said on the phone yesterday, this was JPMorgan pulling off every dirty trick in the book behind the scenes to cover their massive short positions in what was probably their last swing for the fences. I’ll go one step further than that. I suspect that this was a co-ordinated and carefully crafted exercise by the major big short holders…HBSC USA, Scotiabank, Goldman Sachs, Citi maybe, along with JPMorgan as capo di tutti capi. And it’s also no stretch to assume that the CFTC and/or the CME Group had full or partial knowledge of what was going down.
And still the most amazing thing about this as far as I’m concerned, is that it was accomplished on plain vanilla engineered price declines in both silver and gold that looked no different than any of the others that we’ve seen over the years. It was all done without slamming silver for several dollars — and gold for perhaps $50 to $100…which is what it would have probably taken under ‘normal’ circumstances to get the Managed Money traders to do what they did. And why they would do it on these smallish price declines during this past reporting week, is a huge mystery to me. That’s why this thing looks suspicious as hell, as it reeks of collusion at the highest levels.
Ted’s commentary this afternoon should certainly be one for the ages as well.
Here’s Nick Laird’s “Days to Cover” chart…which I consider to be the most important chart of all in today’s column…updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday. It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX. These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above. Click to enlarge.
For the current reporting week, the Big 4 are short 128 days of world silver production—and the ‘5 through 8’ large traders are short an additional 54 days of world silver production—for a total of 181 days, which is six months of world silver production, or about 439.8 million troy ounces of paper silver held short by the Big 8. [In the COT Report last week, the Big 8 were short 204 days of world silver production.]
In the COT Report above, the Commercial net short position in silver was reported as 231.7 million troy ounces. The short position of the Big 8 traders is 439.8 million troy ounces. The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 439.8 minus 231.7 = 208.1 million troy ounces. The reason for the difference in those numbers is that Ted’s raptors, the approximately 36-odd small commercial traders other than the Big 8, are long that amount…which was a fact that I also mentioned in the COT Report on silver as well.
As I also stated in the above COT Report analysis, Ted pegs JPMorgan’s short position at about 29,000 contracts, or around 145 million troy ounces, which is down a chunky 35 million troy ounces from what they were short in last week’s COT Report. 145 million ounces works out to around 60 days of world silver production that JPMorgan is short. That’s compared to the 181 days that the Big 8 are short in total. JPM is short about 33 percent of the entire short position held by the Big 8 traders.
I estimate the short position in silver held by Scotiabank/ScotiaMocatta at approximately 32 days of world silver production minimum, a number that hasn’t changed much in the last while — and that’s most likely because they’re not doing much in the COMEX futures market anymore as they continue to try and unload that ‘pig-in-a-poke’.
JPMorgan has been forced by circumstance to pick up Scotiabank’s trading duties in silver and gold. So JPMorgan is by far the No. 1 silver short on Planet Earth — and likely to remain that way indefinitely, unless they can engineer the mother of all price declines. Of course they have 650 million troy ounces of physical silver [and counting!] stashed away to cover that, so they are in no danger. That can’t be said of the remaining Big 7.
The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 92 days of world silver production between the two of them—and that 92 days represents about 72 percent of the length of the red bar in silver in the above chart… about three quarters of it. The other two traders in the Big 4 category are short, on average, about 17.5 days of world silver production apiece, which is unchanged from last week’s COT Report. The four traders in the ‘5 through 8’ category are short, on average…13.5 days of world silver production each, which is a big drop from the 16 days each that they were short last week’s COT Report.
This is just more proof of the fact, if any was needed, that it’s only what JPMorgan does in the COMEX silver market that matters, as it’s only their position that ever changes by any material amount.
The silver short positions of Scotiabank and JPMorgan combined, represents about 51 percent of the short position held by all the Big 8 traders. How’s that for a concentrated short position within a concentrated short position?
The Big 8 commercial traders are short 45.6 percent of the entire open interest in silver in the COMEX futures market, which is a huge decline from the 53.2 percent they were short in last week’s COT Report — and that number would be about 50 percent once the market-neutral spread trades are subtracted out. In gold, it’s now 46.4 percent of the total COMEX open interest that the Big 8 are short, compared to the 52.6 percent they were short in last week’s COT Report — and about 50 percent once the market-neutral spread trades are subtracted out. They may seem like small changes, but they are not. It’s almost a paradigm shift.
For more than three months, the Big 8 have been short a larger percentage of the total open interest in silver, than they have in gold. That changed with yesterday’s COT Report, as the Big 8 now hold a bigger short position in gold by a hair.
In gold, the Big 4 are short 55 days of world gold production, which is down 10 days from what they were short last week — and the ‘5 through 8’ are short another 23 days of world production, which is down 6 days from what they were short the prior week, for a total of 78 days of world gold production held short by the Big 8 — which is down 16 days from the 94 days they were short in last week’s report. These are monster weekly changes. Based on these numbers, the Big 4 in gold hold about 70 percent of the total short position held by the Big 8…which is up 1 percentage point from last week’s COT Report.
The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 70, 70 and 79 percent respectively of the short positions held by the Big 8. Silver and platinum are both up 1 percentage points from last week’s report — and palladium is up 2 percentage points from what they were in last week’ COT Report.
The December 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 100,297 COMEX contracts in the December BPR, which is a bit more than 50 percent of this week’s commercial net short position shown in the above COT Report. In November’s Bank Participation Report [BPR], that number was 104,457 contracts, so they’ve decreased their collective short positions by a rather immaterial 4,200 contracts. Four of the five U.S. banks would certainly include JPMorgan, HSBC USA and Citigroup — and Goldman. As for who the fifth might be—I haven’t a clue, but I doubt very much if their positions, long or short, would be material.
Also in gold, 29 non-U.S. banks are net short 57,449 COMEX gold contracts, which isn’t much per bank. In the November BPR, 27 non-U.S. banks were net short 64,788 COMEX contracts, so the month-over-month change shows a decrease of about 7,300 contracts. I suspect that there’s at least one large non-U.S. bank in this group that might hold a third of this short position all by itself — and the remaining contracts, divided up between the remaining 28 non-U.S. banks, would be immaterial. ‘Pig-in-a-poke’ Scotiabank/ScotiaMocatta comes to mind as that “one large non-U.S. bank”.
As of this Bank Participation Report, 34 banks [both U.S. and foreign] are net short 33.4 percent of the entire open interest in gold in the COMEX futures market, which is a small increase from the 31.5 percent they were short in the November 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. Click to enlarge.
In silver, 5 U.S. banks are net short 26,512 COMEX silver contracts in December’s BPR — and Ted figures that JPMorgan is the proud owner of all of that amount, plus a bit more…29,000 contracts worth. This means that the remaining 4 U.S. banks obviously have to be net long the silver market in order for the numbers to work out — and they are long to the tune of 4,223 COMEX silver contracts. In November’s BPR, the net short position of these U.S. banks was 36,445 contracts, a monster decline of about 9,900 contracts since the last reporting month, with virtually every contract accredited to JPMorgan.
Also in silver, 21 non-U.S. banks are net short 25,164 COMEX contracts. I would suspect that Canada’s Scotiabank holds a goodly chunk of this amount all by itself…around 60 percent of it. That most likely means that a number of the remaining 20 non-U.S. banks might actually be net long the COMEX silver market by a bit. But even if they aren’t, the remaining short positions divided up between these remaining 20 non-U.S. banks are immaterial — and have always been so.
As of December’s Bank Participation Report, 26 banks are net short 29.4 percent of the entire open interest in the COMEX futures market in silver—which is down quite a bit from the 34.2 percent that they were net short in the November BPR — with much, much more than the lion’s share of that held by only two banks…JPMorgan and Canada’s Scotiabank.
Here’s the BPR chart for silver. Note in Chart #4 the blow-out in the non-U.S. bank short position [blue bars] in October of 2012 when Scotiabank was brought in from the cold. Also note August 2008 when JPMorgan took over the silver short position of Bear Stearns—the red bars. It’s very noticeable in Chart #4—and really stands out like the proverbial sore thumb it is in chart #5. Click to enlarge.
In platinum, 5 U.S. banks are net short 12,123 COMEX contracts in the December Bank Participation Report. In the November BPR, these same banks were short 9,342 COMEX platinum contracts, so there’s been a big increase of about 2,800 contracts in the short position of the 5 U.S. banks in question during the last reporting month, which is a 30 percent increase.
I suspect that, like in silver and palladium, JPMorgan holds virtually all of the platinum short position by itself.
Also in platinum, 18 non-U.S. banks are net short 8,485 COMEX contracts, which is up a bit from the 7,961 contracts they were net short in the November BPR.
If there is a large player in platinum among the non-U.S. banks, I wouldn’t know which one it is. However I’m sure there’s at least one large one in this group. The reason I say that is because before mid-2009 when the U.S. banks showed up, the non-U.S. banks were always net long the platinum market by a bit—see the chart below—and now they’re net short. The remaining 17 non-U.S. banks divided into whatever contracts are left, isn’t a lot, unless they’re all operating in collusion—which I doubt. But from the numbers it’s easy to see that the platinum price management scheme is an American show as well, with one big non-U.S. bank possibly involved. Scotiabank perhaps.
And as of December’s Bank Participation Report, 23 banks were net short 26.1 percent of the entire open interest in platinum in the COMEX futures market, which is up a decent amount from the 22.1 percent they were collectively net short in the November BPR. Click to enlarge.
In palladium, 4 U.S. banks were net short 12,342 COMEX contracts in the December BPR, which is up about 24 percent from the 9,928 contracts they held net short in the November BPR.
Also in palladium, 11 non-U.S. banks are net short 3,912 COMEX contracts—which is virtually unchanged from the 3,988 COMEX contracts that 12 non-U.S. banks were short in the November BPR. When you divide up the short positions of these non-U.S. banks more or less equally, they’re immaterial.
But, having said all that, as of this Bank Participation Report, 15 banks are net short 48.2 percent of the entire COMEX open interest in palladium…which is a monstrous amount…and more than the short positions held by the Big 8 traders in gold and silver. In November’s BPR, the world’s banks were net short 39.0 percent of total open interest, so it has jumped by a huge percentage in the last thirty days as the [obvious] U.S. banks continue to go short the current rally in 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. I would still be prepared to bet big money that, like platinum and silver, JPMorgan holds the vast majority of the U.S. banks’ short position in this precious metal as well. Click to enlarge.
Special note on platinum and palladium: To give you some idea of the monstrous and grotesque short positions held by the U.S. banks [read JPMorgan] in both these precious metals…in the December Bank Participation Report, four or five of these U.S. banks were long a total of 319 platinum contracts — and long a piddling 33 palladium contracts. But on the short side, these same banks were short 12,442 platinum contracts and 12,375 palladium contracts! You couldn’t make this stuff up! The only reason to hold short positions this grotesque is to control the price. That’s all, there ain’t no more. Like for silver, one can only fantasize on what the true free-market prices of these two precious metals would be if JPMorgan et al weren’t sitting on them in the COMEX futures market.
If you want to check all this out for yourself, the link to December’s Bank Participation Report is here.
As I say every month at this time, there’s a maximum of four U.S. banks—JPMorgan, HSBC USA, Goldman and maybe Citigroup—along with Canada’s Scotiabank—that are the tallest hogs at the precious metal price management trough.
JPMorgan and Scotiabank still remain the two largest silver short holders on Planet Earth in the COMEX futures market, with JPMorgan back in the #1 spot by a country mile once again, even after this week’s huge improvement in Friday COT Report. And with Scotiabank’s precious metals division ScotiaMocatta up for sale, it certainly appears that they are no longer a player in the precious metals market.
I don’t have all that many stories for you today — and I have a couple that I’ve been saving for today’s column for length and/or content reasons. For the second week in a row, there’s no Cohen/Batchelor interview.
CRITICAL READS
In a continuation of the recent theme shown by the labor market, the BLS reported that November payrolls rose by a seasonally adjusted 228K, beating expectations of 200K, if lower than October’s downward revised 244K (from 261K) while September was revised up from +18,000 to +38,000. With these revisions, employment gains in September and October combined were 3,000 more than previously reported.
There were few surprises in the report, which saw the labor force participation rate flat at 62.7%, near a 30+ year low, while the unemployment rate also remained unchanged at 4.1%, the lowest since Dec 2000.
And while overall the labor report was strong, there was once again disappointment in wage growth, with average hourly earnings rising 0.2% m/m, below the consensus estimate of est. 0.3%, with the October number revised lower to -0.1%. The year over year number also missed, printing at 2.5%, up from October’s 2.3% but below the consensus print of 2.7%.
This Zero Hedge story was posted on their Internet site at 8:42 a.m. EST on Friday morning — and I thank Brad Robertson for pointing it out. Another link to it is here. I also got another Zero Hedge piece on the jobs report from Brad headlined “Where The Jobs Were In November: Who’s Hiring… Who Isn’t”
Despite soaring stock market values and an endless array of positive survey data from various establishment-based entities, University of Michigan confidence tumbled in November.
Consumer sentiment in the U.S. cooled for a second month. While current conditions managed to improve, expectations for the future slumped…
“Perhaps the most important changes in early December were higher income expectations as well as a higher expected inflation rate in the year-ahead,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.
This tiny 2-chart Zero Hedge piece showed up on their Internet site at 10:09 a.m. on Friday morning EST — and it comes courtesy of Brad Robertson as well. Another link to it is here.
To the naked eye, percentage debt growth figures for the most part don’t appear alarming. But there’s several unusual factors to keep in mind. First, the outstanding stock of debt has grown so enormous that huge Credit expansions (such as Q3’s) don’t register as large percentage gains. Second, overall system debt growth continues to be restrained by historically low interest-rates and market yields. Debt simply is not being compounded as it would in a normal rate environment. And third, it’s a global Bubble and a large proportion of global Credit growth is occurring in China, Asia and the emerging markets. U.S. securities markets continue to a big target of international flows.
With global Bubble Dynamics a dominant characteristic of this cycle, it’s appropriate to place Rest of World (ROW) data near the top of Flow of Funds analysis. ROW holdings of U.S. Financial Assets jumped $724 billion (nominal) during the quarter to a record $26.347 TN. This puts growth over the most recent three quarters at a staggering $2.124 TN (16% annualized). What part of these flows has been associated with ongoing rapid expansion of global central bank Credit? It’s worth recalling that ROW holdings ended 2007 at $14.705 TN and 1999 at $5.639 TN. As a percentage of GDP, ROW holdings of U.S. Financial Assets ended 1999 at 57%, 2007 at 100%, and Q3 2017 at a record 135%.
ROW holdings increased a seasonally-adjusted and annualized basis (SAAR) $1.657 TN during the quarter. ROW holdings of U.S. Debt Securities increased SAAR $956 billion during Q3, led by a SAAR $749 billion jump in Treasuries. Corporate Bond holdings rose SAAR $204 billion. Holdings of Equities and Mutual Fund Shares increased SAAR $114.9 billion during the quarter. Direct Foreign Investment rose SAAR $305 billion. Big numbers.
One doesn’t have to look much beyond the booming Rest of World and Domestic Financial Sector to explain ongoing over-liquefied securities markets. The numbers confirm a historic financial Bubble.
Doug’s Credit Bubble Bulletin showed up on his Internet site in the wee hours of Saturday morning EST — and another link to it is here.
What you’ll learn in this film you won’t learn in school… this is perhaps one of the greatest tricks of the elite. Convincing us we are learning what we think is ultimate truth when in reality much of the time they are careful lies.
Two big and a globally important conspiracies are the JFK assassination and what happened in NYC on 9/11. Examining the utter lies of 9/11 and creating media about it, has awoken millions and millions of people to the truth of how our world really works behind the curtain. This has been a hugely important event when it comes to that.
The assassination of President John F. Kennedy lingers as one of the most traumatic events of the twentieth century. The open and shut nature of the investigation which ensued left many global citizens unsettled and dissatisfied, and nagging questions concerning the truth behind the events of that fateful day remain to this day. Evidence of this can be found in the endless volumes of conspiracy-based materials which have attempted to unravel and capitalize on the greatest murder mystery in American history.
Now, a hugely ambitious documentary titled Everything is a Rich Man’s Trick adds fuel to those embers of uncertainty, and points to many potential culprits whose possible involvement in the assassination has long been obscured by official historical record.
Authoritatively written and narrated by Francis Richard Conolly, the film begins its labyrinthine tale during the era of World War I, when the wealthiest and most powerful figures of industry discovered the immense profits to be had from a landscape of ongoing military conflict. The film presents a persuasive and exhaustively researched argument that these towering figures formed a secret society by which they could orchestrate or manipulate war-mongering policies to their advantage on a global scale, and maintain complete anonymity in their actions from an unsuspecting public. Conolly contends that these sinister puppet masters have functioned and thrived throughout history – from the formation of Nazism to the build-up and aftermath of September 11.
The election of President Kennedy in 1960 represented a formidable threat to these shadowy structures of power, including high-profile figures within the Mafia, crooked politicians, and the world’s most influential and notorious war profiteers. Thus, a plot was hatched which would end Kennedy’s reign prior to any chance of re-election, thereby restoring the order and freedoms of these secret societies.
After wandering around on the Internet for 17+ years, I thought I was pretty jaded…although G. Edward Griffen’s book “Creature From Jekyll Island: A Second Look at the Federal Reserve” threw me for a loop. Then someone sent me the above video earlier this year, which I watched in horror from start to finish on a weekend. It filled in a lot of blanks for me — and brought a whole new meaning and depth to the words “deep state“. So if you decide to watch this, be prepared to have your brain rewired, as it’s pretty explicit. It was posted on the lewrockwell.com Internet site on Thursday — and I consider it an absolute must watch. I thank Jim Rodgers for sending it our way yesterday evening — and another link to this 3.5 hour long video is here.
In a bucket lift, in branches, an arborist slit into a trunk with his chainsaw. He did not find wood inside. The sky was getting dark as the silver maple began to spark.
“Man, what is in this tree?” said Clarence Talbot to his three crew mates on the ground. “It looked like someone took a big handful of debris and stuck it in the middle of the tree.”
Talbot did not find a clothesline pulley, as often engulfed by a tree, nor did he find staples nor nails nor a portion of a backyard fence. Rooted into Albert Street in the north end of Halifax, this tree contained none of the usual man-made intruders.
“There was no way any activity in the last 10 or 20 years would’ve put that in the tree,” Talbot says, noting the entire core of the trunk was a column of metal shards. “It dawned on me, ‘wow, man, this is from the Halifax Explosion.’”
One hundred years after the detonation, Halifax trees are notoriously impure. On Dec. 6, 1917, a French ship containing nitroglycerine and trinitrotoluene (TNT), among other explosives, collided with a Norwegian vessel in the Halifax Harbour, and many of the 2,000 victims were killed by debris. Shards of unidentified flying objects also got lodged into the city’s canopy, and today, lumber mills as far as the southern United States still don’t dare touch logs from Halifax, knowing some hidden metal artifact could wreck their machinery. By the time of the disaster’s centennial, few human survivors remain to tell their stories, but the oldest trees of Halifax were there, and they have lived to preserve a secret arboreal museum.
This amazing story was one of the ones that I saved for today’s column for content reasons. It appeared on the Maclean’s magazine website two days ago — and was subsequently picked by the msn.com Internet site. Another link to it is here.
Britain and the European Union struck a preliminary divorce deal early on Friday that paves the way for “phase two” talks to begin on trade, easing pressure on Prime Minister Theresa May and boosting hopes of an orderly Brexit.
The European Commission said “sufficient progress” had been made after London, Dublin and Belfast worked through the night to break an impasse over the status of the Irish border that derailed an attempt to clinch a deal on Monday.
May, speaking in Brussels, said the deal opened the way for talks that would bring certainty to Britain’s future after quitting the EU. European Council President Donald Tusk cautioned, however, that while the Brexit divorce was a challenge, building a new relationship would be even harder.
“So much time has been devoted to the easier part of the task,” Tusk said. “And now, to negotiate a transition arrangement and the framework for our future relationship, we have de facto less than a year.”
One senior banker said the deal signalled Britain was heading towards a much closer post-Brexit relationship with the E.U. than many had expected and that trade will likely keep flowing smoothly between the world’s biggest trading bloc and the sixth-largest national economy.
This news item appeared on the france24.com Internet site sometime yesterday, but there was no time given. I thank Roy Stephens for sharing it with us — and another link to it is here. Here’s a Reuters story about this headlined “Britain heads for Brexit in name only” — and I thank Richard Saler for this one.
With ISIS (Daesh) now fully eliminated as a military force in eastern Syria, the Syrian Arab Army and its international partners are concentrating on the last primary hotbeds of terrorism in the country: Idlib Governorate and the Golan Heights.
In both areas, pockets of al-Qaeda (aka al-Nusra, aka HTS) as well as FSA terrorists continue to incur losses. The Syrian Arab Army continues to make gains in the Golan, in spite of increasingly frequent acts of Israeli aggression, while in Idlib, the Syrian Arab Army is rapidly making gains from the south with Russia air support, while Turkey continues its controversial (from Syria’s perspective) role near its border with Syria.
Speaking after a meeting with US Secretary of State Rex Tillerson, Russia’s Foreign Minister Sergey Lavrov said the following,
“The situation in Idlib continues to be complex, and we are working, above all, with our Turkish, Iranian (Russia, Turkey and Iran are the guarantor nations of Syria’s ceasefire) and Syrian counterparts to launch the de-escalation zone in that part of the Syrian Arab Republic as effectively as possible. There are no plans with the United States on this specific region of Syria. I believe that’s totally counterproductive”.
Lavrov expressed his feelings that the remaining operations against terrorist groups will be completed in short order. He stated,
“As for Syria and the joint fight against ISIS, ISIS has been completely defeated, in fact. The president gave corresponding assessments. The remaining flashpoints do not pose a serious threat and will be quashed”.
This news item was posted on theduran.com Internet site at 4:27 p.m. EST on Friday afternoon — and I thank Roy Stephens for sending it along. Another link to it is here.
Palestine’s Ambassador to Moscow, Hafiz Nofal has issued a statement, saying that his country will no longer engage in talks over peace plans with the United States.
Instead, he insisted that Palestine will look elsewhere for a peace broker in future discussions.
The fact that this statement was issued from Palestine’s Ambassador to Moscow, is an indication that Palestinian leaders may look to Russia as a mediator in from now on.
This brief news item put in an appearance on theduran.com Internet site at 3:55 p.m. on Friday afternoon EDT — and it’s another contribution from Roy Stephens. Another link to it is here.
The expected announcement by President Trump that the U.S. recognises Jerusalem as the capital of Israel and will move the U.S. embassy there could mark a critical stage in the reduction of U.S. influence in the world. Seldom, if ever, has such an important U.S. policy initiative been so universally criticised or condemned by almost every country in the world.
President Trump has previously provoked anger in important countries allied to the U.S. since the Second World War such as the U.K., Japan, Australia and Germany, but they have tried to continue their past relationship and ignore or play down Mr Trump’s explosive tweets and departure from international treaties. But this time round expressions of extreme disagreement are more than usually mixed with scorn and bemusement at a move which may help Mr Trump in U.S. domestic politics but will seriously damage U.S. political primacy in the region. Even steadfast U.S. allies do not want to become collateral damage.
The fury is greatest in Muslim states: the Turkish government’s spokesman said on Wednesday said that the U.S. decision to recognise Jerusalem as the capital of Israel will plunge the region and the world into endless conflict.Deputy Prime Minister Bekir Bozdag said on Twitter that “declaring Jerusalem a capital is disregarding history and the truths in the region, it is a big injustice/cruelty, short-sightedness, foolishness/madness, it is plunging the region and the world into a fire with no end in sight.”
Turkish President Recep Tayyip Erdogan said President Trump’s action would be a “red line for Turkey” and could lead to Ankara cutting diplomatic ties with Israel.
This worthwhile commentary was posted on the independent.co.uk Internet site on Wednesday — and was picked by the unz.com website yesterday — and I thank Larry Galearis for bringing it to our attention. Another link to it is here.
The Pakistan Air Force (PAF) has just been ordered to shoot down any foreign drones that violate the country’s airspace including attack drones operated by the United States, Chief Marshal Sohail Aman said on Thursday.
The announcement is a complete change from the air force’s previous view, of which foreign drone strikes on its soil were condemned but the air force never threatened to shoot them out of the sky. “We will not allow anyone to violate our airspace. I have ordered PAF to shoot down drones, including those of the U.S., if they enter our airspace, violating the country’s sovereignty and territorial integrity,” Air Chief Marshal Sohail Aman told an audience in Islamabad.
The statement was made about two weeks after a U.S. drone strike targeted a militant compound in Pakistan’s tribal region along the border of Afghanistan, leading to multiple causalities, The Times of India reported.
This is the first time, the Pakistani government has taken a hard stance against foreign drones, especially the ones operated by U.S. forces based in Afghanistan. The comment from Aman was shocking despite the U.S. has been launching missiles into Pakistan and violating the country’s sovereignty since about 2004. The CIA was responsible for most U.S. drone strikes in Pakistan until November 30, 2017, said The Times of India.
It’s believed, senior members of terrorist groups have been killed over the years in drone strikes, but it has come at a cost of “hundreds of civilian” deaths in the form of collateral damage.
This decision is long overdue. This story showed up on the Zero Hedge website at 7:35 p.m. on Friday evening EST — and another link to it is here.
What was once called “imperialism” is now “globalization”, and China taking a lead is no reason for celebration by opponents of the U.S.’s Empire.
In estimating the significance of geopolitical maneuvering by the USA, E.U., China, and Russia, more can be discerned by looking at the organ grinders rather than their monkeys. One might expect this to be axiomatic, but apparently not, and it can be readily dismissed as “conspiracy theory” by journalists, academics and other intellectually banal types; unless it is a Clintonesque conspiracy theory that is of a Russophobic character. I would still contend that when looking at Russia under Putin, it is usually that “what one sees is what one gets,” but not so the other major geopolitical world players. One must look beyond the public figures of the USA, China and E.U., to get a fuller picture of what is transpiring on the world stage among these players. For example, while President Trump and the Pentagon brass might take the decades of shadow-boxing between the USA and China seriously, there is another power structure in the USA whose outlook might be at variance with a president and his military chiefs.
For several decades, one has been increasingly hearing the name Goldman Sachs, where one had long heard the names Rothschild and Rockefeller as the apex of international finance. While the Rockefeller banking and oil dynasty played a significant pioneering role in opening up China for global investment, working through think tanks such as the Council on Foreign Relations the Asia Society, and Trilateral Commission, the latter two being largely founded for the purpose. Goldman Sachs has assumed a pivotal position in promoting China not merely as a player but as a – and perhaps the – leader of the globalization process.
This absolute must read commentary is one I posted in my Thursday newsletter, I believe. I said then that I would post it in Saturday’s column as well — and here it is. If you didn’t read it on Thursday, you now have a chance to make amends. It appeared on the foreignpolicyjournal.com Internet site back on October 19…but nothing has changed since — and another link to it is here.
Max Keiser of the Keiser Reports talks the real deal on bitcoin – Which he says is going to crush the U.S. dollar and “blow the roof” off of every bank in America.
He also says [in Part 2] that there is still room for growth for the world’s largest cryptocurrency, as he sees it headed to $100,000. He also says that it has the power to help gold with its rally and will revolutionize how the metal is traded.
The link to Part 1 is in the headline — and the link to Part 2 is here. I found this in a GATA dispatch yesterday evening. There was also a Bloomberg piece headlined “Swiss Banks Say Bitcoin’s Best Days Are Still Ahead” — and that comes courtesy of Swedish reader Patrik Ekdahl. Jim Rickards has something to say about bitcoin in this 8:11 minute youtube.com video headlined “Economist Jim Rickards on Gold Versus Bitcoin“. I thank Harold Jacobsen for pointing that one out.
There is a certain amount of controversy over whether Shanghai Gold Exchange actual gold withdrawal levels are equivalent to the country’s true gold demand or not. The major gold consultancies like Metals Focus, GFMS and CPM Group all aver that they are not, yet the monthly and annual gold withdrawal figures as published by the SGE bear a far closer relationship to known Chinese gold assimilations (gold imports + domestic production + scrap supply) than the consultancies’ demand estimates and therefore we stick by our opinion that SGE gold withdrawal figures are a far better representation of Chinese gold consumption (in terms of the amount of gold bullion being absorbed by the nation) than other estimates of Chinese demand despite a major discrepancy with the figures provided by the consultancies. In any case SGE gold withdrawal comparisons on a month by month level have to be indicative of Chinese internal demand.
Many media reports have been suggesting weak Chinese demand this year – probably based on the sharpish drop in gold export figures to the Chinese mainland from Hong Kong, which used to be the main import route for foreign gold entering China. But to counter this, the most up to date SGE withdrawals figures suggest that 2017 is heading to come in at over 2,000 tonnes. If December withdrawal figures come in at close to last year’s 196 tonnes, then the full year total will be comfortably over 2,000 tonnes, but given the Chinese New Year in 2018 falls around 3 weeks later than in the current one, the December withdrawals level could well be higher than last year bringing the annual total within range of the 2013 and 2014 totals –previously the second and third highest on record.
This very worthwhile commentary by Jim was posted on the Sharps Pixley website yesterday — and another link to it is here.
The PHOTOS and the FUNNIES
Today’s ‘critter’ is the greater bird of paradise. They are spectacular in every respect, as are all members of their genus. It is restricted to the lowland and hill forests of southwest New Guinea and Aru Islands — and Indonesia. The diet consists mainly of fruits, seeds and small insects. Click to enlarge.
The WRAP
Today’s pop ‘blast from the past’ is one I’ve posted before — but I’m so far behind with my column today that I haven’t had time to do any more research. It’s been a while since posted it last, but it never grows old, even though it was released 45 years ago. The intro to the tune is instantly recognizable — and the link is here.
Today’s classical ‘blast from the past’ is from the oratorio, Solomon…composed by George Frideric Handel in May or June of 1748 — and its first performance was on 17 March 1749 in London. This particular instrumental passage for two oboes and strings in Act Three, known as “The Arrival of the Queen of Sheba” has become famous on its own merits outside the context of the complete work. The link is here.
Although the Friday trading session appeared to be a ‘nothing’ event when you looked at the price trace from Friday, it was the goings-on in New York between 8:30 and 9:40 a.m. that was the real stand-out for me, as huge volume was transacted in that time period — and a new intraday low for gold was set. It wasn’t by much, but it certainly set off a frenzy of selling by the Managed Money traders, as they sold more longs and put on more shorts — and JPMorgan et al were standing there picking up the other sides of those trades hand over fist.
Combine that with the price action in both gold and silver since the Tuesday cut-off, it certainly suggests that we are at, or very near, the bottom of this current “wash, rinse, spin — and repeat” cycle.
And based on the way this was all done…in the most careful, cunning, well-concealed — and most likely underhanded way it was pulled off, there may be no “repeat” cycle from this point onward.
Here are the 6-month charts for all four precious metals, plus copper, once again — and you should note the new intraday low price that was set in gold moments after the job number were released at 8:30 a.m. EST in New York yesterday morning. The ‘click to enlarge‘ feature helps with the first four charts.
It’s my opinion that something is definitely afoot behind the scenes — and my suspicions are further heightened by how quickly JPMorgan covered it short position in SLV, depositing 5.3 million troy ounces during the last four trading days of this week. And of course the fact that both JPMorgan and Goldman Sachs showed up as stoppers for their own accounts in the December delivery month was another red flag.
Nick Laird sent around the chart showing the changes for silver in all known depositories, mutual funds and ETFs as of the close of business on Friday afternoon — and I was astonished by what I saw. Despite the ongoing engineered price decline in silver over the last two weeks, there have been net deposits in these silver depositories for the last four weeks in a row, including about 6 million ounces added two weeks ago, plus another 10.6 million ounce this past week. JPMorgan added 5.3 million troy ounces to SLV, so there’s been about the same amount added in other depositories to make up this weekly total. Nick said most of this difference went into the COMEX. Click to enlarge.
I look forward to what Ted has to say about all this in his weekly review for his paying subscribers latter this afternoon.
The internal politics in Washington have become a multi-ring circus — and I have long since given up trying to keep track of what’s going on, but it now is borderline farce…Kabuki theatre, American style.
On the international scene, there is still North Korea on the back burner, but now the U.S. has tossed another grenade into Middle East politics by announcing that it recognizes Jerusalem as the capital of Israel. The opportunities for false flags over there has grown exponentially since then. The U.S. deep state is just itching for a fight somewhere…anywhere. And if no one is willing to oblige them, then they’ll precipitate their own, as false flag operations have been used effectively for thousands of years. It now just seems that it’s a matter of time — and the only questions that remain unanswered are…where — and how big, or maybe even, how many?
And with the unbelievable speed and circumstance under which things have changed in both silver and gold in the COMEX futures market, it suggests that the powers-that-be just might use one of the above ‘events’ to allow precious metals to be repriced skyward, as JPMorgan et al seem to be well positioned for it as of the close of COMEX trading yesterday.
And talking about events, I still haven’t forgotten about that extraordinary exchange between CME CEO Terry Duffy and Neil Cavuto on Fox Business back on July 12. Here’s the link to the interview again — and the important bits begin at the 4:55 minute mark.
As I’ve told Ted on numerous occasions, when ‘da boyz’ finally let precious metal prices run to the upside, it will not happen in a news vacuum. Some ‘event’…most likely stage managed…will be the reason given for a dramatic rise in precious metal prices.
That stage has never been set more perfectly than it is now.
So we wait some more.
I’m done for the day — and the week — and I’ll see you here on Tuesday.
Ed
https://edsteergoldsilver.com/
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-- Published: Monday, 11 December 2017 | E-Mail | Print | Source: GoldSeek.com
