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The Powers-That-Be Were Everywhere Yesterday

 -- Published: Tuesday, 11 December 2018 | Print  | Disqus 

By Ed Steer

11 December 2018 -- Tuesday


The gold price went vertical the moment that trading began in New York at 6:00 p.m. EST on Sunday evening in New York.  but the short sellers of last resort were there in seconds -- and from that point the price chopped quietly sideways until shortly before 3 p.m. China Standard Time on their Monday afternoon.  From that point, the gold price was sold quietly and unevenly lower until the low tick of the day was set sometime between 2 and 3 p.m. in the thinly-traded after-hours market in New York.  It crawled higher by a few dollars over the next hour -- and then traded quietly sideways into the 5:00 p.m. EST close.


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


Gold was close on Monday at $1,243.80 spot, down $4.00 on the day.  Net volume was pretty quiet at only about 177,500 contracts -- and there was a bit over 14,000 contracts worth of roll-over/switch volume on top of that.



The silver price was forced to follow a similar price path to gold, at least up until the equity markets opened in New York on Monday morning.  The low tick of the day was set at that juncture -- and it chopped unsteadily higher until shortly after 10:30 a.m. EST -- and was then sold lower until about 2:15 p.m. in after-hours trading.  Then, like gold, it rallied a bit for an hour or so -- and didn't do a thing after that.


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


Silver was closed at $14.495 spot, down 8.5 cents on the day.  Net volume was very quiet as well at about 47,800 contracts -- and there was only 4,429 contracts worth of roll-over/switch volume in this precious metal.



Platinum's trading pattern was very similar to gold's on Monday -- and mostly similar to silver's as well.  Its low tick was also set around 2:20 p.m. in after-hours trading in New York.  It rallied a bunch off its low -- and finished the Monday session at $783 spot, down 9 bucks from Friday's close.



Palladium's price was down seven or eight dollars during the first hour after trading began in New York on Sunday evening.  It edged quietly sideways from that point until shortly after 1 p.m. CST -- and then crawled lower -- and back below $1,200 spot by a bit.  It began to head strongly higher by around 10:20 a.m CET in Zurich -- and that lasted until shortly after 2 p.m. CET/8 a.m. EST.  It was sold a bit lower from there, before chopping erratically sideways until trading ended at 5:00 p.m. EST in New York.  Palladium closed on Monday at $1,210 spot, up a dollar from Friday.



The dollar index closed very late on Friday afternoon in New York at at 96.71 -- and began to trend lower very shortly after trading began at 6:00 p.m. EST in New York on Sunday evening.  Its 96.38 low tick was set at 10:08 a.m. China Standard Time on their Monday morning.  It began to trend higher from there until around 10:25 a.m. in New York.  It shot up at that juncture -- and most of the gains that mattered were in by 11:06 a.m. EST -- and its 92.24 high tick was set at 2:26 p.m.   It traded flat into the close from there.  The dollar index finished the Monday session at 97.22...up 51 basis points on the day.


Like for the Dow -- and the other New York indices...the dollar index certainly benefited from those always present 'gentle hands'.  They were everywhere they had to be yesterday. There's still nothing from the folks at  Today's  dollar index chart is one I borrowed from the folks over at -- and although very large, I like it because it starts the daily trading session at the 6:00 p.m. open in New York the previous evening -- and I'm tempted to use this one going forward.  Like the chart I've been posting for the last week, this Bloomberg chart is on the Grade-A large size as well -- and the 'click to enlarge' feature is a must if you want to examine it in more detail.



And the folks over at the Internet site have no 6-month U.S. dollar index chart once again, amongst others they're missing.



The gold stocks gapped down a bit at the open, but found their feet minutes after -- and away they went to the upside.  They were up a bit over 2 percent by shortly after 12 o'clock noon in New York, but it was all down-hill from there until about five minutes after the COMEX close.  They chopped quietly sideways from that point until around 2:45 p.m. EST -- and then edged back into the green by a whisker a few minutes before the markets closed at 4:00 p.m.  They sagged in those last few minutes, as the HUI closed down a minuscule 0.03 percent.  Call it unchanged.



In almost every respect, the silver equities followed the gold shares.  The only thing that wasn't the same was the close, as Nick Laird's Intraday Silver Sentiment finished the Monday session down 0.41 percent, which wasn't all that bad.  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 662 gold and only 2 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.


In gold, of the four short/issuers in total, the only one that mattered was HSBC USA with 633 contracts out of its in-house/proprietary trading account.  There were ten long/stoppers in total -- and the three largest were Goldman Sachs with 388 for its own account.  JPMorgan came in second with 139 for its client account -- and Advantage was in third place with 60 for its client account.  I'll also point out that HSBC USA stopped 43 contracts for its client account.


In silver, I was rather surprised at the dinky number of contracts that were issued and stopped.  RCG issued both -- and JPMorgan picked them up 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 December fell by 129 contracts, leaving 1,567 still open, minus the 662 mentioned a few paragraphs ago.  Friday's Daily Delivery Report showed that 98 gold contracts were actually posted for delivery today, so that means that 129-98=31 gold contracts vanished from the December delivery month.  Silver o.i. in December dropped by 92 contracts, leaving only 473 left, minus the 2 contracts mentioned a few paragraphs ago.  Friday's Daily Delivery Report showed that 91 contracts were actually posted for delivery today, so that means that 92-91=1 silver contract disappeared from the December delivery month.



There was a smallish increase in GLD on Monday, as they added 18,911 troy ounces.  There were no reported changes in SLV.


The folks over at Switzerland's Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, December 7.  Their gold ETF declined by 13,202 troy ounces -- and their silver ETF fell by a scant 900 troy ounces. Not surprisingly, there was no sales report from the U.S. Mint on Friday.  They're now done for the year I would think.


There was more activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  There was 48,226.500 troy ounces/1,500 kilobars [SGE kilobar weight] -- and that all ended up at HSBC USA as usual.  That will ultimately end up being delivered during the December delivery month.  There was only 160.750 troy ounces/5 kilobars [U.K./U.S. kilobar weight] shipped out of Scotiabank.  The link to that is here.


It was far busier in silver, as 576,000 troy ounces was reported received -- and 813,601 troy ounces shipped out.  All of the 'in' activity was at the International Depository Services of Delaware -- and all the 'out' activity was at Brink's, Inc.  There was also a 25,680 troy ounce transfer from the Eligible category -- and into Registered over at HSBC USA.  The link to that activity is here.


There wasn't much activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  Nothing was reported received -- and only 252 were shipped out.  All of this activity was at Brink's, Inc. of course -- and the link to that, in troy ounces, is here.



Here are the usual two charts that Nick Laird passes around on the weekend.  They show all the visible and known physical gold and silver held by all the world's depositories, mutual funds and ETFs, as of the close of business on Friday, November 7.  For the reporting week, there was 122,000 troy ounces of gold added on a net basis, but there was 2,638,000 troy ounces of silver removed.  The 'click to enlarge' feature helps with both charts.




The Commitment of Traders Report, for positions held at the close of COMEX trading last Tuesday, showed less deterioration in silver than Ted was expecting, which he was happy to see...but quite a bit more in gold, but not...on an historical basis...overly negative.


In silver, the Commercial net short position increased by 6,577 contracts.  [Ted was expecting "around 10,000 net contracts".]  That amount translates into 32.9 million troy ounces of paper silver...about 14 days of world silver production.


They arrived at that number by selling 12,705 long contracts -- and  they also decreased their short position by a further 6,128 contracts -- and it's the difference between those two numbers that represents their change for the reporting week.


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.  JPMorgan is long gone -- and even Citigroup's short position in silver would probably not be big enough to make it into the Big '5 through 8' traders category.  The only big bank or Commercial trader left, would be Canada's Scotiabank -- and their short position would be somewhere near the bottom of the 'Big 4' category.


Under the hood in the Disaggregated COT Report, it was all the brain-dead moving-average following Managed Money traders -- and a bit more, as they increased their long position by 1,282 contracts -- and reduced their short position by 8,079 contracts.  It's the sum of those two numbers...9,361 contracts...that represents their change for the reporting week.


The difference between that number -- and the change in the Commercial net short position...9,361 minus 6,577 equals 2,784 contracts...was made up, as it always is, by the traders in the other two categories.  The traders in the 'Other Reportables' category increased their net long during the reporting week...970 contracts worth -- and the 'Nonreportable'/small traders decreased their net long position by 3,754 contracts.  The difference between those numbers...3,754 minus 970 equals 2,784...which is the difference between what the Managed Money and Commercial traders did.  Here's a snip from the Disaggregated COT Report so you can see these changes for yourself.  Click to enlarge.



The Commercial net short position in silver is now up to 15,418 contracts, or 77.1 million troy ounces of paper silver, which is still a very low number by historical standards. Ted said "that JPMorgan added few if any new shorts", which is certainly happy news.


Here's the 3-year COT Report for silver, updated with last Tuesday's data -- and there really isn't much to see.  Click to enlarge.



The set-up in silver is still very bullish, but not quite as bullish as it was at this time last week.



In gold, Ted's estimate was off his 25,000 contract number by about fifty percent, but he wasn't overly worried about it, as gold broke above -- and closed above its 50-day moving average every day during the reporting week.  The commercial net short position increased by a very hefty 42,149 contracts, or 4.21 million troy ounces of paper gold.


They arrived at that number by selling 37,291 long contracts, plus the added 4,858 short contracts -- and it's the sum of those numbers that represents their change for the reporting week.


Like for silver, the position changes of the Big 4 -- and Big '5 through 8' traders are back to being mostly immaterial once again because of the contamination of that data by the large number of Managed Money traders that still inhabit this group.  I would certainly expect that Scotiabank is somewhere in the Big 8 category -- and if there is a U.S. bank in that lot, it would be Citigroup, but their position would be somewhere near the bottom of the pile.


Under the hood in the Disaggregated COT Report it was, like in silver, all Managed Money traders -- and then some that made up the change for the reporting week.  As they bought 19,422 long contracts -- and they reduced their short position by 29,181 contracts -- and it's the sum of those two numbers...48,603 contracts...that represents their change for the reporting week.


The difference between that number -- and the commercial net short position...48,603 minus 42,149 equals 6,454 contracts and, as always, that was made up by the traders in the 'Other Reportables' and 'Nonreportable'/small trader categories.  The former category decreased their long position by a bit -- and the latter decreased their long position by quite a bit more.   Their changes had to add up to 6,454 contracts...the difference between what the Managed Money traders and commercial traders did during the reporting week -- and they did.


Here's a snip from the Disaggregated COT report for gold, so you can see these changes for yourself.  Click to enlarge as well.



The commercial net short position in gold is now up to 6.12 million troy ounce, which is still extremely low on an historical it's not really much to worry about.  Ted had this to say about our friend JPM in his COT commentary late yesterday afternoon EST..."JPMorgan may have added a small number of gold short contracts, but not many, based upon changes in the Producer/Merchant category of the disaggregated COT and Bank Participation Reports."


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



As in silver, the commercial net short position in gold is still very much in the bullish camp, despite the deterioration during the reporting week.


Gold and silver still seem to be in what I call 'care and maintenance' mode -- and waiting for 'whatever' to happen.  This 'care and maintenance' situation has been ongoing for many months now.  And thanks to Ted Butler, it's good to know that JPMorgan appears to be shying away from the short side in both gold and silver.


In the other metals, the Managed Money traders in palladium increased their net long position by a scant 388 contracts during the reporting week.  But because it's such a tiny and illiquid market, it doesn't take much to move it.  The Managed Money traders are net long about 54 percent of the entire open interest in that precious metal.  That's a lot!  In platinum, the Managed Money traders went mega short during the reporting 9,473 contracts in total.  It was the act of them doing that, that caused platinum prices to collapse during the last reporting week -- and that trend is continuing into this reporting week as well.  And for the first time in many months, these Managed Money traders as a group, are now net short platinum, but only by a tiny 370 contracts.  In copper, these same Managed Money traders decreased their net long position by a rather immaterial 3,151 contracts -- and are about market neutral in this metal.



Here's Nick Laird's "Days to Cover" chart updated with yesterday's COT data for positions held at the close of COMEX trading last 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.



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 and maybe one U.S. bank...most likely Citigroup...the positions of the Big 4 and Big 8 traders in silver are back to being made up of the brain-dead/moving average-following Managed Money traders now.


For the current reporting week, the Big 4 traders are short 107 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 48 days of world silver production, which is up 6 days from last week's report-for a total of 155 days held short, which is five months and a bit of world silver production, or about 361.7 million troy ounces of paper silver held short by the Big 8. [In last week's COT Report the Big 8 were short 155 days of world silver production as well.]


The Big 8 commercial traders are short 40.1 percent of the entire open interest in silver in the COMEX futures market, which is up a very decent amount from the 36.3 percent that they were short in last week's COT Report. And once whatever market-neutral spread trades are subtracted out, that percentage would be around 45 percent. In gold, it's 37.5 percent of the total COMEX open interest that the Big 8 are short, up a bit from the 34.7 percent they were short in last week's report -- and also pushing 45 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 unchanged from what they were short last week -- and the '5 through 8' are short another 13 days of world production, which is down 1 day from what they were short the prior week, for a total of 52 days of world gold production held short by the Big 8 -- which is down 1 day from what they were short in last week's report. Based on these numbers, the Big 4 in gold hold about 75 percent of the total short position held by the Big 8...which is up 1 percentage point from last week's COT Report.


And, once again, don't forget that like in silver...most 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 69, 69 and 77 percent respectively of the short positions held by the Big 8.  Silver is down 4 percentage points from the previous week's COT Report, platinum is also also down 4 percentage points from a week ago. And palladium is unchanged from last week's COT Report.



The December Bank Participation Report [BPR] data is extracted directly from the above Commitment of Traders Report.  It shows the number of 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 in all COMEX-traded products.  For this one day a month we get to see what the world's banks are up to in the precious metals -and they're usually up to quite a bit.


In gold, 5 U.S. banks were net short 62,191 COMEX contracts in the December BPR.  In November's Bank Participation Report [BPR], these same 5 U.S. banks were net short 52,203 contracts, so there was a fairly big increase...9,988 contracts...since a month ago.  At the July lows, these same U.S. banks were only short only 16,384 COMEX contracts.  A big increase in the last four months, yes...but not big on an historical basis.


Also in gold, 28 non-U.S. banks are net short 26,074 COMEX gold contracts, which is less than a thousand contracts per bank.  In the November BPR, 27 non-U.S. banks were net short only 8,340 COMEX contracts, so the month-over-month increase is a pretty chunky 17,734 contracts, which is still 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 the lion's share of that amount all by the 26,074 contracts is a net number.  But it should be noted that these same non-U.S. banks were only net short 1,960 COMEX gold contracts back at their August lows.  So they've been piling onto the short side in pretty hefty fashion since then.


As of this Bank Participation Report, 33 banks [both U.S. and foreign] are now net short 22.1 percent of the entire open interest in gold in the COMEX futures market, which is up a material amount from the 12.2 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 in October of 2012.  Click to enlarge.



In silver, 5 U.S. banks are net short 24,883 COMEX silver contracts in December's BPR.  According to Ted, JPMorgan holds little, if any of that amount.  In November's BPR, the net short position of these U.S. banks was 27,093 contracts, so the short position of the U.S. banks is down by around 2,200 contracts from a month ago.


Also in silver, 19 non-U.S. banks are net short 15,626 COMEX contracts...which is down about 4,000 contracts from the 19,563 contracts that these same non-U.S. banks were short in the November BPR.  I would suspect that Canada's Scotiabank still holds a goodly chunk [if not all] 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 18 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 18 non-U.S. banks are immaterial - and have always been so.


As of December's Bank Participation Report, 24 banks [both U.S. and foreign] are net short 22.5 percent of the entire open interest in the COMEX futures market in silver-which is up a hair from the 21.8 percent that they were net short in the November BPR - with much, much more than the lion's share of that now held by Citigroup...and Scotiabank.  But by far the largest is 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 11,039 COMEX contracts in the December Bank Participation Report.  In the November BPR, these same banks were net short 10,564 COMEX it's a smallish increase month-over-month.  At the 'low' back in July, these same five U.S. banks were actually net long the platinum market by 2,573 contracts.  That's quite a change in four months.


Also in platinum, 17 non-U.S. banks are net short 5,752 COMEX contracts, which is down from the 6,910 contracts they were net short in the November 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. [Note: Back at July's low, these same non-U.S. banks were net short only 1,192 COMEX contracts.]


And as of December's Bank Participation Report, 22 banks [both U.S. and foreign] are net short 21.8 percent of platinum's total open interest in the COMEX futures market, which is down a bit from the 23.5 percent they were net short in November's BPR.


Here's the Bank Participation Report chart for platinum.  Click to enlarge.



In palladium, 4 U.S. banks were net short 7,031 COMEX contracts in the December BPR, which is up a bit from the 6,885 contracts they held net short in the November BPR.


Also in palladium, 13 non-U.S. banks are net short 1,857 COMEX contracts-which is down an immaterial amount from the 1,895 COMEX contracts that 14 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, 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, 17 banks [U.S. and foreign] are net short 33.8 percent of the entire COMEX open interest in palladium.  In November's BPR, the world's banks were net short 31.5 percent of total open interest, so there's been a smallish increase in the concentrated short position of the banks in this precious metal.


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 December Bank Participation Report -- and in the COT Report, the set-up still remains very bullish in both gold and silver.  But, as I said further up, 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.



House Habsburg, Charles VI, 1711-1740, Ducat 1739 Transylvania      [Price: €1,685.00]


Origin: Roman Empire.....Mint: Alba lulia     Material: gold     Full weight: 3.45 grams


I have an average number of stories for you today.




America's "Franz Ferdinand" Moment -- Bill Bonner

The U.S. stock market warmed to the idea of a ceasefire last Monday morning. Then came word that the U.S. government had arrested Meng Wanzhou, the chief financial officer of Chinese technology firm Huawei. The feds got the Canadians to collar the poor woman while she was changing planes in Vancouver.


Few people in the U.S. have ever heard of Huawei. Still, the event had a pin-like look to it. And by the end of the week, investors had lost $1 trillion. This morning, by inference from futures trading, they are set to lose a half a trillion more.


What was Ms. Wanzhou's crime? Mass murder? Grand larceny?


Nope. Even she didn't know what the charges were.


But whatever they were, the U.S. government had not only made a federal case of it, but an international "cause célèbre," too.


This commentary by Bill put in an appearance on the Internet site early on Monday morning EST -- and another link to it is here.


Meanwhile In Brexit...Total Chaos

It has been a furiously chaotic day for Brexit developments, which considering the "organized" nature of the process to date, is saying something.


Just a few hours after the embattled U.K. prime minister announced to the House of Commons she would "unexpectedly" delay the critical Brexit vote - facing certain and humiliating defeat - and return to Brussels to seek "assurances" from European Union leaders, the fate of any upcoming votes to ratify the deal is now in limbo.


As ITV's Richard Peston reported, "it appears that U.K. PM May could keep the current talks with E.U. going well past January 21st...perhaps right up to Brexit day 29 March, and avoid any parliamentary Brexit vote," effectively eliminating a popular vote of disapproval for her process.


That, as Bloomberg notes, raises the prospect that May will be back in Parliament in January with virtually the same deal, relying on tanking markets, a crashing pound and frightening no-deal preparations - including even more doomsday rhetoric from the Bank of England - to convince lawmakers to back her. Sadly for May, the parliamentary arithmetic won't have changed, as only an election can do that. And an election is out of the question as May will almost certainly lose her job, potentially resetting the Brexit process back to square one (or perhaps minus one).


Even so, Corbyn won't table a "no confidence" motion against Theresa May's government until there's been a formal vote on the withdrawal agreement, effectively trapping May in a no way out situation.


This news item showed up on the Zero Hedge website at 7:21 p.m. EST on Monday evening -- and another link to it is here.  There was a Bloomberg story from their website in the wee hours of Monday morning headlined "Pound tumbles to 20-month low after May aborts Brexit vote". I found that on Doug Noland's Internet site.


India and United Arab Emirates to stop using U.S. dollars in trade

India and the UAE on Tuesday signed currency swap agreement to boost trade and investment ties between the two countries.


The development came during the visit of Indian External Affairs Minister Sushma Swaraj to Abu Dhabi to take part in the ministerial meeting of the 12th session of the UAE-India Joint Commission Meeting (JCM) and held exhaustive discussions with Shaikh Abdullah Bin Zayed Al Nahyan, UAE's minister of foreign affairs and international cooperation.


He also said two documents were signed during the visit including an agreement on currency swap and Memorandum of Understanding (MoU) for Development Cooperation in Africa. Through the currency swap agreement, both India and the UAE can make payments in their respective currency to boost and trade investment without the involvement of a third currency like dollar. Clarifying the currency swap agreement Indian embassy in Abu Dhabi said the swap is for an amount of Dh2 billion or 35 billion Indian rupees, depending on the central bank which is requesting the amount.


"The bilateral currency swap agreement between India and UAE is expected to reduce the dependency on hard currencies like U.S. dollar," Indian embassy said.


This story appeared on the Internet site a week ago today -- and I found it in a GATA dispatch on the weekend.  Another link to it is here.


Chinese Imports From the U.S. Plummet 25% as Trade War Takes Toll

In the latest confirmation that global trade war and shifting supply chains are taking their toll on China, resulting in growing economic turmoil, overnight Beijing reported that growth in China's exports decelerated meaningfully to 5.4% yoy in November, the lowest print since April 2018, half the consensus estimate of 9.9% and far below October's 15.6% print; at the same time import growth tumbled to just 3.0% yoy, a huge miss to the 14% Wall Street estimate and an even bigger drop from October's 20.8% print.


In sequential terms, exports contracted 2.8% M/M and imports declined 6.1% M/M, reversing October's strong 2.9% gain; as a result of the disproportional drop in imports, China's trade surplus widened to $44.7 billion from $34 billion. That was the highest this year.  The notable deceleration in headline trade growth was primarily due to a very high base (i.e. exports up 6% M/M and imports up 7% in November last year). Notwithstanding, sequential momentum was pretty weak.


In terms of exports to major destinations, growth decelerated broadly, with exports to the E.U. slowing the most to +6.0% yoy in November (from +14.6% yoy in October), while exports to the U.S. slowed to +9.8% yoy in November (from +13.2% yoy in October), supported by continued front-loading ahead of potential tariff increases. Exports to Japan increased +4.8% yoy in November, down from +7.9% yoy in October. For major EMs, exports to ASEAN slowed meaningfully to +5.1% yoy in November following several months of double-digit growth.


But the most notable, and politically-relevant observation by far, was the sharp plunge in Chinese imports from the U.S., which tumbled 25% in November from a year earlier: this was the single biggest monthly decline since January 2016 when China's economy and capital markets were reeling in the aftermath of the Yuan devaluation and Shanghai Composite bubble bursting.


This Zero Hedge story from Saturday morning EST was something I found in yesterday's edition of the King Report.  Another link to it is here.


Offshore Gold Storage -- Jeff Thomas

"If your gold is outside the U.S., it gives you another degree of insulation should the United States decide that you shouldn't own it-it's not a reportable asset." -- Doug Casey, May 2017


I've been a holder of gold since the 1970's. At that time, I was purchasing gold and silver for business reasons and found that, as the price was steadily increasing, I'd be wise to buy more than I needed immediately, as I'd most certainly profit from it in the near future.


At that time, I was buying most of my precious metals in Hatton Garden, the centre for physical metals usage in London and, in talking with my more experienced associates there, I learned that gold doesn't just make pretty jewellery, it has, for over 5000 years, served as man's best economic insurance policy.


Since the creation of the first fiat currency in China, ca. 600 AD, governments have had the annoying habit of creating fiat currencies. It has taken many forms, including tobacco, shells, cattle, even tulips in 17th Century Holland.


Over the centuries there have been countless fiat currencies. Most of them have been paper currencies and, with the exception of the present-day fiat currencies, all have eventually become worth exactly zero.


This worthwhile commentary by Jeff appeared on the Internet site on Monday morning EST sometime -- and another link to it is here.


Illegal gold rush destroying Amazon rain forest: study

A rise in small-scale illegal gold mining is destroying swathes of the Amazon rainforest, according to research released on Monday that maps the scale of the damage for the first time. Researchers used satellite imagery and government data to identify at least 2,312 illegal mining sites across six countries in South America - Brazil, Bolivia, Colombia, Peru, Ecuador and Venezuela.

The maps show the spread and scale of illegal mining and were produced by the Amazon Socio-environmental, Geo-referenced Information Project (RAISG), which brings together a network of nonprofit environmental groups in the Amazon.


"The scope of illegal mining in the Amazon, especially in indigenous territories and protected natural areas, has grown exponentially in recent years, with the rise in the price of gold," said Beto Ricardo, head of the RAISG.


Soaring prices in the decade to 2010 sparked a gold rush and hundreds of thousands of illegal miners poured into the Amazon rainforest hoping to strike it rich.


This gold-related Reuters news item, filed from Bogota, was posted on their website at 11:20 a.m. EST on Monday morning -- and it's another article that I found on the Internet site.  Another link to it is here.


Russia seeks to speed up cutting VAT on gold -- deputy finance minister

Russia's finance ministry is seeking to speed up cutting VAT on investments in gold in part to support a Russian gold refiner which has been struggling after it was hit by U.S. sanctions, Deputy Finance Minister Alexei Moiseev told Reuters.


The ministry said earlier this year it would propose cutting VAT on gold, and it is awaiting approval by the government on the issue which has been a matter of debate among Russian officials for years.


"We are striving to cancel (VAT) not only to increase the demand for domestic gold, although, of course, we are interested in filling (capacity of) refineries ... An additional reason is that some of them came under sanctions and thus lost the 'good delivery' status," Moiseev said.


In April, Washington imposed sanctions on Russian businessman Viktor Vekselberg and his holding, which includes Ekaterinburg Non-Ferrous Metals Processing Plant, along with some other Russian tycoons, citing "malign activities" by Russia.


The London Bullion Market Association suspended the plant's "good delivery" status, making it harder for the plant to access the London bullion market, the world's largest.


"The experience of colleagues from China and Kazakhstan shows that they recorded an increase in demand for gold - and not by twofold but in much larger volumes - after the abolition of VAT."


I posted a story about this issue a month or so ago -- and I'm glad to see that the idea is still alive -- and gaining traction at the highest levels.  This very interesting Reuters news item, filed from Moscow showed up on their Internet site last Friday morning EST -- and I found it on the Sharps Pixley website.  Another link to it is here.


South African Gold Industry Enters Final Phase of Slow Death

Back in 1987, South African President Cyril Ramaphosa -- then a 34-year-old labor union leader -- led 300,000 black miners in a strike that symbolized resistance to the apartheid regime. Now, striking gold workers face a less politically charged battle, but one they can't win.


The nation's 130-year-old gold industry -- which has produced half the bullion ever mined on earth -- is locked in the final stages of a decades-long death spiral. Most of South Africa's gold mines are unprofitable at current prices.


Dwindling output has cut gold's contribution to little more than 1 percent of the South African economy, down from 3.8 percent in 1993 -- the year before Nelson Mandela's African National Congress won the country's first democratic elections. While the industry's demise won't reverberate in the way it once would have, the mines minister has criticized Gold Fields Ltd.'s plan to cut jobs as the ruling ANC seeks to shore up its base before elections next year.


South Africa's gold industry now employs just over 100,000 people, less than a fifth of the number that used to power the apartheid economy. The economic and social impact of a further contraction in the industry will be magnified as every gold miner supports between five and 10 dependents, while creating two jobs elsewhere, according to the country's Minerals Council.


Higher wages and power prices, combined with the geological challenges of the world's deepest mines, will mean more job losses and less production in the country over the next five years, said Gold Fields Chief Executive Officer Nick Holland.


As Chris Powell commented..."How obliging of South Africa's miners, unions, and government not to care about gold price suppression. They'll deserve what they get, but the rest of the country won't."  This story put in an appearance on the Bloomberg website at 1:00 a.m Pacific Standard Time on Sunday morning -- and it's another gold-related news item I plucked from a GATA dispatch yesterday.  Another link to it is here.


The Nobel Prize: A unique gold medal

All medals have some differences in design (expect Physics and Chemistry that look the same) but they all are "a gold medal bearing the image of the testator and an appropriate inscription." The front side of all medals features a portrait of Alfred Nobel in various versions. On the reverse side of all three "Swedish" Nobel Prize medals, the main inscription is the same: "Inventas vitam iuvat excoluisse per artes,"while the images vary according to the symbols of the respective prize-awarding institutions. The Peace medal has the inscription "Pro pace et fraternitate gentium" and the Economics medal has no quotation at all on the reverse.


On all "Swedish" Nobel medals the name of the laureate is engraved fully visible on a plate on the reverse, whereas the name of the Peace Laureate as well as that of the Laureate for the Economics Prize is engraved on the edge of the medal, which is less obvious. For the 1975 Economics Prize winners, the Russian Leonid Kantorovich and the American Tjalling Koopmans, this created problems. Their medals were mixed up in Stockholm, and after the Nobel Week the Prize Winners went back to their respective countries with the wrong medals. As this happened during the Cold War, it took four years of diplomatic efforts to have the medals exchanged to their rightful owners.


Up to 1980 the "Swedish" medals, each weighing approximately 200 g and with a diameter of 66 mm, were made of 23 carat gold. Since then they have been made of 18 carat recycled gold. The weight is set to 175 g for all medals, except for the Medal for the Prize in Economic Sciences. Its weight is set to 185 g.


This interesting article, complete with a 21-photo slide show, is posted on the Internet site -- and it comes courtesy of Swedish reader Patrik Ekdahl.  Another link to it is here.


Europe's glitziest 'Christmas tree' made of pure gold unveiled

Ahead of the much-anticipated festive season German gold dealer Pro Aurum has erected the most expensive Christmas tree in all of Europe. The unusual decoration is made of gold coins worth €2.3 million ($2.6 million).


According to the dealer, the tree could've been worth more, but gold's value declined during the second half of the current year.


The glittering pyramid, displayed at Pro Aurum's Munich Goldhaus, is three-meters high (almost 10 feet). The 'tree' was made in cooperation with the Austrian mint. The company's employees spent more than an hour decorating the art object with 2,018 gold coins and topped it with a golden star.


"The tree is almost three meters high and is made of 63 kilograms of pure gold. That's 2,018 1-ounce-coins of Gold Philharmonic. It's a commercial quality bullion coin - well, 2,018 of them - and the tip of the gold tree is formed with a 20 ounce Vienna Gold Philharmonic coin, which alone is worth €21,000," the spokesman said.


This photo-filled story was posted on the Internet site at 8:35 a.m. Moscow time on their Sunday morning, which was 12:35 a.m. in Washington -- EDT plus 8 hours.  It comes to us courtesy of Dave Stirling -- and another link to it is here.




I'm taking a one-day break from the award-winning photos I've been featuring lately, to bring this very interesting 'critter' from New Zealand.  I've featured it before, but it's been years.  It's the endangered kea...the world's only alpine parrot.


It's found in the forested and alpine regions of the South Island of New Zealand. About 48 cm (19 in) long, it is mostly olive-green with a brilliant orange under its wings and has a large, narrow, curved, grey-brown upper beak. Its omnivorous diet includes carrion, but consists mainly of roots, leaves, berries, nectar, and insects. Now uncommon, the kea was once killed for bounty due to concerns by the sheep-farming community that it attacked livestock, especially sheep. In 1986, it received full protection under the Wildlife Act.  Click to enlarge.








The powers-that-be where everywhere on Monday...starting long before the New York open -- and their activity extended all through the New York trading session as well...whether it was precious metals, the currencies, or the equity markets.  Nothing was left to chance...or the free markets.


Of course setting that all aside for the moment, despite the deterioration in the commercial net short positions in both silver and gold, the happy news was the Ted didn't detect much, if any shorting activity by JPMorgan in either of those precious metals in yesterday's Commitment of Traders or Bank Participation Reports...particularly in silver.  But there may have a been a bit in gold, but nothing material.


And as Ted also pointed out in his Saturday column, JPMorgan hasn't stopped any gold contracts for its own account in the December delivery month so far, although they have picked up 536 silver contracts for their own account.  This DoJ/JPMorgan thingy is top-of-mind for Ted -- and it has been since the news first came out back on November 6th.  We're only eight days away from the sentencing date -- and it remains to be seen if it gets postponed or not.


Once again I only have the almost 1-year charts for the four precious metals, as the pages for the almost 1-year U.S. dollar index, copper and WTIC are still coming up blank over at the Internet site.  I'm starting to wonder if the feed problems that is having with their intraday dollar index chart, might have the same root cause as the charts at stockcharts.comClick to enlarge.






And as I type this paragraph, the London open is less than ten minutes away -- and I note that the gold price edged unevenly higher starting almost since trading began in New York at 6:00 p.m. EST yesterday evening. That lasted until shortly before 1 p.m. CST -- and it's been chopping sideways since -- and is currently up $2.80 an ounce. Silver followed the same unsteady price pattern as gold -- and is currently up 6 cents. The platinum price crawled quietly lower until shortly after 12 o'clock noon in Shanghai on their Tuesday morning. It has edged unsteadily sideways since -- and is down 4 dollars. The palladium price didn't do much of anything until a few minutes before 2 p.m. CST. It rallied a handful of dollars from there, but gave it all back going into the Zurich open -- and is currently sitting at unchanged.


Net HFT gold volume is very quiet at a bit under 27,500 contracts -- and there's only 837 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is 8,100 contracts -- and there's a tiny 49 contracts worth of roll-over/switch volume in that precious metal.


The dollar index crept quietly lower until 1:52 p.m. China Standard Time on their Tuesday afternoon. It jumped a bit higher at that point going into the 2:15 p.m. afternoon gold fix in Shanghai -- and has sunk lower since -- and is down 13 basis points as of 7:50 a.m. in London/8:50 a.m. in Zurich.


Today, at the close of COMEX trading, is the cut-off for this Friday's Commitment of Traders Report -- and I'll wait until my Wednesday column to venture a guess as to what it might show at that time.


And as I post today's column on the website at 4:02 a.m. EST, I see that gold is up a bit as the first hour of London trading draws to a close...$4.10 the ounce -- and silver is now up 8 cents.  Platinum is still down 4 dollars, but platinum has jumped higher  -- and is up 6 bucks after one hour of trading in Zurich.


Gross gold volume is around 36,700 contracts -- and net of what little roll-over/switch volume there is, net HFT gold volume is about 34,800 contracts.  Net HFT silver volume is around 10,700 contracts -- and there's still only 67 contracts in this precious metal.


The dollar index took a bit of a nose dive starting around 8:15 a.m. in London trading -- and is now down 25 basis points -- and back below the 97.00 mark by a hair.  I guess that explains the pop in precious metal prices during the last hour.


That's all I have for today -- and I'll see you here tomorrow.




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