25 August 2015 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
JPMorgan et al were all over the gold price within minutes of the New York open on Sunday evening—and they kept a tight rein on it up until at, or just after, the noon London silver fix. It lurched higher from there—and the high was in minutes after the equity markets opened in New York. It was all down hill until the down/up low tick spike around 2:40 p.m. in electronic trading. The price didn’t do much after that. This, despite the fact that the U.S. dollar index got crucified.
The high and low tick were recorded by the CME Group as $1,169.80 and $1,145.10 in the December contract.
Gold was closed in New York yesterday at $1,154.90 spot, down $5.50 from Friday’s close. Gross volume was an unbelievable 274,713 contracts—and even the net volume was over the moon at 237,000 contracts.
Here’s the 5-minute gold tick chart courtesy of Brad Robertson. 6 p.m. EDT on Sunday evening is the first gray line—and noon in Hong Kong on their Monday is the second vertical gray line. All the big volume came between the COMEX open—and the 4 p.m. BST London close—6:20 a.m. and 9 a.m. on this chart, which is Denver time. Add two hours to the ‘x’ axis for EDT—and don’t forget the ‘click to enlarge’ feature.
And what a number “da boyz” did on silver! It’s 6 p.m. Sunday evening rally at the open met the same fate as the other three precious metals—and the price was under pressure the entire Far East, London and early new York sessions, with the coup de grâce coming minutes after the COMEX open. The low tick was in minutes after 9 a.m.—and the subsequent rally got hit shortly after 10:45 a.m. EDT. It was pretty much all down hill from there into the close.
The high and low ticks were reported as $15.39 and $14.555 in the September contract, and intraday move of almost 5.5 percent. JPMorgan et al came within 40 cents of taking out the early August low tick.
Silver finished the Monday session in New York at $14.79 spot, down 56 cents from Friday’s close. Gross volume was an unbelievable 139,575 contracts, but it still netted out to an incredible 57,000 contracts.
Platinum was also capped at the open—and after that the HFT selling pressure was relentless, culminating in the low tick spike down at, or moments after, the London p.m. gold fix. The subsequent rally wasn’t allowed to get far—and it traded flat from noon EDT onwards. Platinum was closed at $990 spot, down $28 on the day.
Palladium was similar, with the big downdraft beginning around 1 p.m. in Zurich—and ending about thirty minutes later. After that the palladium price chopped sideways into the New York close. This precious metal was closed $29 lower at $573 spot—and “da boyz” set a new low price by a goodly amount yesterday.
According the ino.com Internet site, the dollar index closed on Friday afternoon in New York at 94.82—and that’s what I reported in my Saturday column. Once it opened on Sunday evening it began heading south immediately—and was down a bit over 100 basis points just minutes before 9 a.m. EDT in New York yesterday morning. Then in less than ten minutes it cratered another 100 basis points before the Plunge Protection Team and their ‘gentle hands’ showed up. The low tick was 92.62—and “da boyz” rallied it back a bit more than the second 100 basis points it lost by 1 p.m. EDT. After that it chopped lower into the close. The dollar index closed at 93.42—down 140 basis points.
And on that fearful U.S. dollar move, the precious metal prices were crushed.
And here’s the 2-year U.S. dollar index so you can see how big the dollar crash has been.
The gold stocks opened lower by a couple of percent—and made it back to just about unchanged by 1 p.m. EDT, but then selling began—and by the time the slaughter was over, the HUI closed down 8.29 percent.
It was the same in the silver stocks, but they made it back to unchanged by 10:20 a.m. in New York—and after chopping sideways for a bit, before also getting sold off staring just before the 1:30 p.m. EDT COMEX close. Nick’s Intraday Silver Sentiment Index closed lower by 8.57 percent.
The precious metal stocks more than held their own up until the Dow began to head lower minutes after 1 p.m. EDT—and everything got sold, as the rout was on across the board. I would also guess that there was a lot of margin selling in the precious metal stocks as well as the day wore on.
The CME Daily Delivery Report showed that 59 gold and 24 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday. In gold, the only short/issuer was HSBC USA out of its in-house [proprietary] trading account. The two largest long/stoppers were Goldman Sachs with 44 contracts for its in-house trading account—and JPMorgan stopped 10 for its client account. In silver, ABN Amro issued 24 contracts and then stopped 23 contracts—all in its client account. I don’t know what to make of that, as it seemed rather strange. 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 August dropped by only 16 contracts, leaving 1,460 still open—minus the 59 mentioned above. Silver o.i. sits unchanged at 25 contracts, but 24 were issued yesterday, so that leaves one left. But the mystery still remains. Who is the short/issuer that’s holding out on to all these gold contracts? They’ve got Thursday and Friday [and maybe Monday in a pinch] to show their face[s].
There was another deposit in GLD yesterday. This time it was a very decent 105,388 troy ounces. But after Monday’s stock wipe out, it’s a good bet that a goodly chunk of the gold that has been deposited during the last two weeks, will be coming out again. We’ll see. And as of 8:25 p.m. EDT yesterday evening, there were no reported changes in SLV.
For the second day in a row there was no sales report from the U.S. Mint.
My usual reliable source has advised me that they A-Mark is still not accepting orders for Sunshine Mint products until sometime in October, at a date yet to be determined. He also mentioned that it’s a good bet that the reason why Sunshine isn’t making their own product right now is because they’ve got every available stamping machine turning out silver eagle blanks for the U.S. Mint—and probably blanks for silver maple leafs for the Royal Canadian Mint as well. Ted Butler’s big buyer[s] appear to have have an insatiable appetite—and I look forward to the next sales report from the U.S. Mint with great interest.
A-Mark also advised its customers that delivery on 1-ounce silver rounds and bars—and 10 oz. bars—is currently October 30 from any mint whose product they distribute.
Friday was another day when there was virtually no activity in gold over at the COMEX-approved depositories. There were 7 kilobars shipped out of the Manfra, Tordella & Brookes, Inc. depository—and that was it.
Of course it was much busier in silver, as 602,106 troy ounces were reported received—and 768,781 troy ounces were shipped out the door to parts unknown. Virtually every ounce of activity was at the CNT Depository—and the link to that action is here.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, they reported receiving 3,946 kilobars—and shipped out 1,528 kilobars. All of the ‘in’ activity was at the Brink’s, Inc. depository—and with the exception of 8 kilobars which was removed from the Loomis depository, the rest came out of Brink’s, Inc. as well. The link to that action is here.
I don’t have all that many stories today, at least at the moment—and a goodly number have to do with the global sell-off in everything yesterday.
CRITICAL READS
A Plunge in China Rattles Markets Across the Globe
Stocks around the world tumbled in volatile trading on Monday, leaving investors to wonder how much government officials can and will do to insulate the global economy from the turmoil.
The upheaval in the markets began with another rout in China that drew comparisons to the 1987 crash in the United States known as “Black Monday.”
Concerns about China’s ability to be a powerful engine of global economic growth have added to worries about the potential impact of higher interest rates in the United States, driving stocks sharply lower in Asia and Europe on Monday.
When trading opened in New York, the major market measures went into what was essentially a free fall. While the steepest losses ended within minutes, share prices spent the rest of the day sharply rising and reversing course multiple times. When the day’s roller-coaster ride ended, the benchmark for stocks, the Standard & Poor’s 500-stock index, was down 3.9 percent. That left the index off 11 percent from its May high, in what in market parlance is called a “correction,” its first since 2011.
This story was posted on The New York Times website late on Sunday evening, but was updated at the close of trading on Monday afternoon EDT. I thank Patricia Caulfield for today’s first news item. The original headline read “Global Stocks Tumble Further Amid Doubts About China“.
China share plunge smacks world markets; S&P, NASDAQ in correction
A near-9 percent dive in China shares sent world stocks and commodity prices tumbling on Monday, and U.S. stocks ended a volatile day with the S&P 500 and NASDAQ composite indexes sliding into correction territory.
After dropping more than 1,000 points, or almost 7 percent, at Wall Street’s open, the Dow Jones industrial average cut its losses but still finished down 3.6 percent. The Standard & Poor’s 500 index closed down 3.9 percent for the day and was 11 percent lower than its May record high.
The benchmark S&P index has accumulated 9.95 percent of losses in just five sessions.
A key measure of U.S. equity volatility, the CBOE Volatility Index, or VIX, shot above the 50 mark for the first time since 2009, dropped back near 30 and then rose to 40.
This Reuters story was sent to me by Patricia Caulfield at 8:29 a.m. EDT yesterday morning. It’s had a page one rewrite since then—and the link is now datelined 5:55 p.m. EDT Monday afternoon. The original headline read “Great fall of China sinks world stocks, dollar tumbles“.
Wall St. suffers worst day in four years, S&P confirms correction
Investors rattled about China sent U.S. stock indices almost 4-percent lower on Monday in an unusually volatile session that confirmed the S&P 500 was formally in a correction, even after a dramatic rebound by Apple.
The Dow Jones industrial average briefly slumped more than 1,000 points, its most dramatic intraday trading range ever.
Monday’s drop followed an 8.5 percent slump in Chinese markets, which sparked a selloff in global stocks along with oil and other commodities.
Wall Street had stayed in s narrow range for much of 2015, but volatility jumped this month as investors became increasingly concerned about a potential stumble in China’s economy and after Beijing surprisingly devalued its currency.
This Reuters article appeared on their website at 6:55 p.m. EDT yesterday evening—and it’s another offering from Patricia Caulfield.
Trading was halted 1,200 times on Monday
The selling on Wall Street was so dramatic Monday that it triggered unprecedented emergency freezes on stocks.
Stocks and exchange-traded funds were automatically halted more than 1,200 times, according to NASDAQ.
The high level of trading pauses highlights just how extreme the selloff was in a short span of time. Fears about China’s economic slowdown caused the Dow to plummet over 1,000 points when the market opened. The Dow ended down 588 points, its worst decline since August 2011.
Installed after the May 2010 flash crash, the so-called circuit breakers are designed to slow down dramatic selling or buying. They are typically triggered when stocks dive or spike by a certain amount in a matter of minutes. Think of it as a time out. Trading is halted for five minutes, giving investors a chance to calm down and allowing cooler heads to step into the market.
“Cooler heads” probably is a euphemism for the PPT. This story appeared on the money.cnn.com Internet site yesterday sometime—and Patricia Caulfield slid it into my inbox a few minutes after I’d filed today’s column.
Deutsche Bank Sums It Up “The Fragility of This Artificially Manipulated Financial System Was Finally Exposed”
Today’s dose of vile tinfoil hattery magic comes straight from the bank with the cool $55 trillion or so in derivatives, Deutsche Bank:
The fragility of this artificially manipulated financial system was exposed over the last couple of days of last week. It all ended with the S&P 500 falling -3.19% on Friday – its worst day since November 9th 2011.
* * *
We’ve long felt that the only thing preventing another financial crisis has been extraordinary central bank liquidity and general interventions from the global authorities which we still expect to continue for a long while yet. So when policy changes, risks arise. The genesis of this recent sell-off has been the threat of the Fed raising rates next month, but China’s confrontational move two weeks ago and the subsequent knock-on through EM have accelerated us towards something more serious. We always thought something would get in the way of the Fed raising rates in September and we’re perhaps seeing this now. With 24 days to go until we find out, the probability of a hike has gone down to 34% from a 54% recent peak on August 9th. Having said we always thought something would come along to derail a Fed rate hike we probably should have gone underweight credit. However with trading liquidity poor and with a reasonably high desire to be long amongst investors there has to be a big move to justify the change in stance. Also with a strong possibility that the Fed will relent and that China could add more stimulus soon, there may be a small window to be short European credit. So at the moment this could be a dangerous time to sell. However if it wasn’t for expected intervention and extraordinary central bank policy we would be very bearish as the global financial system remains an artificial construct reliant on the largesse of the authorities.
That pretty much sums it up. I found this Zero Hedge article on the Sharps Pixley website yesterday evening—and this particular item showed up on the ZH website at 9:05 a.m. EDT yesterday morning.
Did Tim Cook Violate Regulation “Fair Disclosure” by Emailing Jim Cramer to Save AAPL Stock This Morning
Earlier today, as AAPL stock was plummeting and had lost a whopping $75 billion in market cap, dropping as low as $92/share, CNBC’s Jim Cramer pulled a rabbit out of a hat, or in this case a previously undisclosed email out of his inbox. An e-mail from AAPL CEO Tim Cook which said the following (as subsequently conveyed by Cramer to CNBC viewers):
Jim,
As you know, we don’t give mid-quarter updates and we rarely comment on moves in Apple stock. But I know your question is on the minds of many investors.
I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August. Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks.
Obviously I can’t predict the future, but our performance so far this quarter is reassuring. Additionally, I continue to believe that China represents an unprecedented opportunity over the long term as LTE penetration is very low and most importantly the growth of the middle class over the next several years will be huge.
Tim
While we are delighted by Tim Cook’s subjective take of AAPL’s Chinese prospects, we have a different question: where is the public filing that accompanies this letter which constitutes nothing short of a private business update with an outside, and unregulated by Apple, market cheerleader?
This very interesting Zero Hedge commentary put in an appearance on their Internet site at 2:02 p.m. EDT Monday afternoon—and it’s definitely worth reading. I thank Brad Robertson for sharing it with us.
China’s market Leninism turns dangerous for the world
The world financial system is at a dangerous juncture. Markets no longer believe that China’s Communist leaders are in full control of the country’s $27 trillion debt bubble, or know how to manage fast-moving events beyond their ken.
This sudden loss of confidence in the anchor economy of East Asia has struck before the West is fully back on its feet after its own debacle seven years ago.
Interest rates are still near zero in the US, the eurozone, Britain and Japan. Fiscal deficits are at unsafe levels. Debt is 30 percentage points of GDP higher than it was at the onset of the Lehman crisis. The safety buffers are largely exhausted.
“This could be the early stage of a very serious situation,” said Larry Summers, the former US Treasury Secretary. He compared it to the two spasms of the Asian crisis in the summer of 1997 and again in August 1998.
Here’s some commentary by Ambrose Evans-Pritchard, where he calls it the way he sees it, I think—and then attempts to cheerlead the world out of it. Being one of the fair-haired boys of the New World Order crowd, I don’t quite trust him sometimes—and if you read this, pick your way through it carefully and with your eyes wide open. It’s also courtesy of Patricia Caulfield. It was posted on the telegraph.co.uk Internet site at 9:19 p.m. BST in London yesterday evening, which was 4:19 p.m. in New York—EDT plus 5 hours.
Behold: Insanity
This is not normal… Dow futures moved over 4,500 points intraday today!!!
This 1-chart item showed up on the Zero Hedge website at 8:11 p.m. yesterday evening—and it’s definitely worth a look. I thank reader M.A. for sending it along.
Marc Faber: Markets have become very oversold near term
This 5:59 minute video clip featuring Dr. Marc and Maria Bartiromo was conducted before the markets opened in New York on Monday morning. It was posted on the foxbusiness.com Internet site at some point—and I got it from reader Ken Hurt at 4:17 p.m. EDT yesterday afternoon.
All Global Prices Are Artificial Thanks to Central Banks: Jim Grant
Jim Grant appeared on CNBC [yesterday] morning with an explanation of the underlying reason why United States stocks just plummeted. His core message is that capitalism requires both success and failure. When central bank monetary policy corrupts pricing as thoroughly as it currently has, it ruins the market’s ability to withstand healthy business failures. Grant doesn’t talk about it in this interview, but just a month ago he reminded us of the best assets to hold as protection from this distorted financial world – precious metals.
“The prices themselves are the cosmetic evidence of underlying difficulty. So if you misprice something, it’s not just the price that’s wrong, it’s the thing itself that has been financed by the price. So you have perhaps too many oil derricks, too many semi-conductor fabs. We have too much of something, which is financed by an excess of credit or debt. That, to me, is the essential back-story to this morning’s difficulties. It’s the mispricing of asset values, led by central banks who think that by inflating or lifting up stocks, bonds, real estate, they will thereby engender prosperity…“
This 5:27 minute CNBC video clip was something I found embedded in a piece that was posted over at the schiffgold.com Internet site yesterday—and I thank Roy Stephens for digging it up for us.
New Jersey Supermarkets [A&P] Laying Off 8,648 Employees on Thanksgiving
More than 8,000 employees at New Jersey A&P grocery stores will be released from their jobs on Nov. 26 – Thanksgiving Day – this year, according to WARN notices filed by the company last week.
The Bergen County-based supermarket chain announced earlier this year it would be filing for bankruptcy. Many store locations were purchased by other companies, including ACME Markets, Inc., Ahold’s Stop & Shop Supermarket Co., and Key Food Stores Co-operative Inc.
A&P owns stores of the same name, Pathmark, Superfresh, and Waldbaums. The company declined comment on the layoffs on Monday.
According to the website apteanotice.com, designed to keep employees and consumers up to date on what’s happening with the company, 10 New Jersey locations are scheduled to close completely
This news story appeared on the patch.com Internet site yesterday sometime—and it’s the second offering of the day from reader M.A.
Forget The Dips, Sell The Rips: David Stockman
Now that was fast!
When I posted a piece a week ago noting that the S&P 500 had crossed the 2100 line from below for the 13th time this year, it signified that the market had been thrashing sideways since February 13th. Perhaps that was an omen, but technically speaking it was just further proof that the stock market is driven by Fed-following day traders and algos that reflexively buy the dips.
But on Thursday and Friday last week, the casino gamblers got a rude awakening. Not only did they lose their lunch in a violent plunge during the last half-hour of trading two days in a row, but they also gave back another seven months of gains, as well as the crucial chart points that have kept the robo-machines aggressively buying the dips for the past six years.
As shown below, the S&P 500 has now retreated to the level it first crossed nearly 14 months ago on July 1, 2014; and it has also sliced through both the 50-day and 200-day moving averages like a hot knife through butter.
Worse still, in Monday’s pre-market futures the SPX is down another 60 points. If that holds, the market will be down 10% from its May 21 peak and off nearly 8% from its 200-DMA. The latter is double the short-lived 4% swoon back on October 15.
This short novel by David appeared on his website early yesterday morning—and it’s obvious he started it before the markets opened in New York yesterday morning. I thank Richard Saler for sending it our way.
James Rickards: ‘We Are in a Global Depression‘
The latest statistics don’t paint a pretty condition of the global economy.
Here in the United States, GDP grew a mediocre 2.3 percent in the second quarter and likely is slowing from that pace this quarter. The eurozone economy grew only 1.3 percent in the second quarter, and Japan contracted 1.6 percent.
In China, meanwhile, the government reported growth of 7 percent for the second quarter, but many economists say the true figure is 3 to 5 percent.
So what’s the upshot of all this? “We are in a global depression,” star financial author James Rickards told the Canadian Broadcast Corporation. “The whole world is slowing down.”
China’s currency devaluation last week — the yuan has slid 3 percent against the dollar since then — illustrates the country’s economic weakness, he said. “Currency wars have no logical conclusion except systemic reform or systemic collapse,” he said.
Not one to mince words, is he? But of course he’s been saying this for a very long time, but now everyone is listening. This article showed up on the newsmax.com website at 1:02 p.m. EDT yesterday afternoon—and it’s courtesy of West Virginia reader Elliot Simon.
Joe Stiglitz: The Dangerous Economic Thinking That’s Killing Greece and Threatening the European Union
On August 18, Nobel laureate Joseph Stiglitz joined Harper’s Magazine deputy editor Christopher Beha at Book Culture in New York to discuss the Greek financial crisis. In Stiglitz’s view, the latest bailout not only ensures that the country’s depression will worsen, but undermines the entire European project.
Bad economic ideas inflict untold human suffering. When they come cloaked in a fog of Orwellian obfuscation, their poison and effects can spread with little hindrance. The public is misled. Power plays are hidden from view.
In Greece, where suicide rates have risen sharply in the wake of austerity measures, people lose hope.
Joseph Stiglitz, who has been following the Greek crisis closely and is recently returned from Athens, sets himself to the task of cutting through the fog. His plain English and fearless use of moral language to expose the ugliness behind economic and political abstractions lend clarity to a situation that is not just bringing a nation to its knees, but threatening to destroy the European project and bring on a future of conflict and hardship.
This commentary put in an appearance on the alternet.org Internet site last Friday—and it’s the second contribution of the day from Roy Stephens.
Mass migration: Destroyer of empires and super powers
There is much the ancient world can still teach us, and one of the key lessons today is that mass migration – motivated by war, societal collapse, and poverty – is capable of destroying even the mightiest of empires.
At the height of its power, the Roman Empire was so vast and omnipotent that it was run on the basis of the dictum: “Roma locuta est. Causa finita est.” (Rome has spoken. The cause has finished).
The names of its most powerful figures are as familiar to us as our own – Pompey, Caesar, Augustus, Nero, Hadrian, Vespasian, Constantine – men whose rule over the ancient world was so dominant that the only threat they faced came from within Rome itself.
Indeed, it would have been the very definition of insanity to claim that an empire stretching from the Italian peninsula all the way across Western Europe and down into North Africa and the Middle East, enforced by legions whose very presence in the field of battle induced terror in any army unwise enough to challenge its writ, was anything other than invincible and eternal.
Yet in the year 476 A.D. what was then known as the Western Roman Empire came to an abrupt end after a century of successive barbarian invasions finally succeeded in bringing Rome to its knees. The symbols of its power – in the form of the emperor’s imperial vestments, diadem, and purple cloak – were sent to Constantinople, the seat of power of the eastern half of the empire. Thus the curtain was closed on Rome’s glorious 1,000-year history. It was proof that no empire, regardless of its economic and military power, lasts forever.
This worthwhile Op-edge piece showed up on the Russia Today website at 12:12 p.m. Moscow time on their Monday afternoon, which was 5:12 a.m. in Washington—EDT plus 7 hours. I thank U.K. reader Tariq Khan for bringing it to our attention.
Iran reopens embassy in London as Britain does the same in Tehran
Iranians celebrated the long-awaited reopening of their London embassy on Sunday with Qur’anic verses, soft drinks, expressions of florid goodwill and relentless hopes for a better future for the often stormy relationship between the Islamic Republic and the U.K.
Taking its cue from the parallel ceremony in Tehran, the event at the Iranian ambassador’s residence in Kensington was long on formal expressions of mutual respect and short on matters of substance or contention.
Mehdi Danesh-Yazdi, one of Iran’s deputy foreign ministers, set the tone with a call for relations based on mutual respect and good faith. He also called for a new era of cooperation following last month’s landmark nuclear deal and the steadily improving atmosphere between the two governments since a 2011 attack on the British embassy.
Guests were offered bottled water and French macaroons in the grand first-floor drawing room of the residence, a few doors down the white stucco terrace from the embassy itself, scene of the SAS’s famous hostage rescue in 1980.
This article was posted on theguardian.com Internet site at 5:50 p.m. BST on Sunday afternoon—and it’s courtesy of Patricia Caulfield.
Philip Hammond declares new chapter with Iran in search for end to Syrian war
The U.K. foreign secretary, Philip Hammond, has said that “a new phase” has been entered in the search for a resolution to the Syrian conflict with the thawing of relations between the west and Iran paving the way for possible talks.
Hammond spoke on Monday after meeting the Iranian president, Hassan Rouhani, on the second day of a two-day trip to Iran, during which he opened the U.K. embassy after a four-year closure. He said Iran and Britain were keen to use the conclusion of an agreement on the former’s nuclear programme in July as an opportunity to discuss Syria and other regional issues.
He said: “Up to now, we’ve been having a discussion among ourselves in the west, without the two most important and influential players in Syria – Iran and Russia – being in the room. That may be very gratifying to us, but it is not going to get us to a political solution. If we’re going to get to a political solution, we need to have the Iranians and Russians in the process as well.”
This is the second news item in a row from The Guardian yesterday—and the second offering in a row from Patricia Caulfield.
‘Unacceptable’: Lavrov blasts Biden idea on splitting Iraq into parts
The idea of partition for Iraq would never be agreed by Moscow, Russian FM Sergey Lavrov said, stressing that this kind of ‘state structure manipulation’ is obsolete and Iraqis should define the future of their country themselves
“We would never adopt a position voiced without any constraint by US Vice President Joe Biden, who said directly that Iraq should be split into Shia and Sunni parts and that the Kurds should be given what they want,” Lavrov told the participants of the youth forum ‘Territory of meanings’ near Moscow.
Lavrov labeled Biden’s position as “highly irresponsible and what’s more important – unacceptable,” because someone from overseas is lecturing Iraqi people on what to do with their country.
“We won’t commit to such things, telling Sunnis to get out today and urging Shia to move on next time. This is ‘social engineering,’ state structure manipulation from far outside,” Lavrov said, stressing that the destructiveness of such a plan is obvious.
This news item was posted on the Russia Today website at 7:10 p.m. Moscow time, which was 12:10 p.m. in Washington—EDT plus 7 hours. I thank Roy Stephens for sending it our way.
Deadly suicide bomb attack on NATO convoy in Kabul
At least 12 people were killed and more than 60 wounded when a car bomb exploded outside a hospital in central Kabul on Saturday afternoon, the latest in a wave of attacks to hit the Afghan capital in recent weeks.
The suicide bomber, who is thought to have targeted a foreign convoy, killed three American contractors. The vast majority of casualties, however, were Afghan civilians.
With more than 5,000 civilian casualties so far this year, 2015 may become the most violent year for Afghan civilians since the war began in 2001.
In a statement on Saturday night, NATO said one of the Americans was killed in the blast, while the two others later died of their wounds. The contractors were not named.
According to Reuters, the contractors worked for DynCorp International, a private US security firm with a long involvement in the war.
This is the third story that Patricia has plucked from theguardian.com Internet site. This one was posted there at 8:20 p.m BST on Saturday evening.
South and North Korea reach agreement to ease tensions on Korean peninsula – video
South and North Korea conclude three days of talks by reaching an agreement to ease tensions in the Korean peninsula. The six agreements included the North expressing regrets over the injury of two South Korean soldiers in the demilitarised zone and the South agreeing to cease broadcasting propaganda along the military demarcation line. The decision to hold these latest talks came days ahead of a Saturday deadline set by North Korea for the South to dismantle the propaganda loudspeakers.
This short item has a 1:05 minute video clip embedded as well—and it’s another story that Patricia found while skulking around The Guardian‘s website late yesterday afternoon EDT.
65 tonnes out of SGE: Another enormous week for Chinese gold demand — Lawrence Williams
Another week’s gold withdrawal figures from the Shanghai Gold Exchange (SGE) and it appears that the demand momentum is holding up – if not accelerating. The latest figures are from the week ending August 14th with the Exchange reporting flows of 65.3 tonnes out . This is an enormous figure for an August week when historically Chinese demand is usually at its lowest and follows several weeks of plus 50 tonne withdrawals at a time of year when 30 tonnes would normally be seen as a strong figure.
There are reports that demand has slowed over the past week given the recent recovery in the gold price, with Shanghai premiums falling accordingly, so the next week’s withdrawal figures will be viewed with additional interest to see if this really is the case, or whether Chinese overall ‘demand’, as expressed by SGE is still holding up well.
The latest figure for total SGE withdrawals for the year to date is now a massive 1,585 tonnes, fully 161 tonnes more than in the record 2013 year at the same time – see www.sharelynx.com chart below. A quick calculation of SGE withdrawals to date (close to 50 tonnes a week so far this year), if extended over the full year would suggest a total figure for 2015 at over 2,500 tonnes – hugely higher than the record 2013 figure of 2,181 tonnes. While one should perhaps regard a continuing weekly withdrawal rate of 50 tonnes as being an optimistic projection, it is also worth bearing in mind that SGE withdrawals are usually far stronger in Q4 than in Q3!
This gold-related news item by Lawrence Williams put in an appearance on his lawrieongold.com Internet site on Saturday—and it’s certainly worth reading.
Gold soars as fear strikes the Dow — Lawrence Williams
And as for demand, is that as weak as some analysts would have you believe, particularly with respect to China? There is again a media swell suggesting Chinese gold demand is crashing as the Chinese economy falters, but this is just not borne out by gold flows through the Shanghai Gold Exchange. This hit an enormous 65 tonnes at a normally weak time of year in the latest reported week ended August 14th. As we have stated before, whether these are an accurate representation of Chinese demand or not, they are certainly a huge indicator of Chinese sentiment towards the yellow metal.
These views on Chinese demand, and also on India’s too, have just been borne out by Swiss refiner Valcambi’s CEO, Michael Mesaric speaking at a high-powered gold conference in Goa on Friday. He estimated demand in India and China would be enhanced this year by the earlier lower prices with 2015 Chinese demand seen as being more than 1,000 tonnes and India’s getting close at 950 tonnes. These compare with the World Gold Council figures (somewhat disputed as being far lower than reality by the gold bulls) for 2014 demand of 974 tonnes and 811 tonnes respectively. And with the Swiss refiners being the biggest source of imported gold for both nations, they have perhaps a better grasp of the true situation in terms of trends than even the bank analysts.
As I write today, Asian stock markets were closing down another 4% plus and European ones opening sharply weaker again too. The global geopolitical situation is again looking scary with North Korea’s Kim Jong-Un preaching war against the South – not for the first time though – escalation of conflict in the Ukraine, Islamic State seemingly consolidating its position in North Africa and holding its ground in the Middle East, while economically the recent Chinese yuan devaluation may well have been the shock that really initiated the recent market downturns. With gold demand seemingly holding up well, outflows from the ETFs suddenly seeming to have come to a halt, scrap supplies continuing to fall and new mine production is just about flat except perhaps in China where it is all absorbed anyway, even fundamentals are beginning to look positive for gold. It looks like we have a very interesting few weeks ahead.
Despite the headline, which is more than slightly misleading, this commentary by Lawrie is definitely worth reading. It was posted on the mineweb.com Internet site at 12:49 p.m. BST in London yesterday afternoon, which was 7:49 a.m. in New York—EDT plus 5 hours. It’s the final contribution of the day from Patricia Caulfield, for which I thank her on your behalf.
India’s imports of gold-silver alloy may almost double, refiner says
India’s imports of doré, a semi-pure alloy of gold and silver, are rising fast and could nearly double this fiscal year, the head of the country’s top gold refiner said on Saturday.
A lower duty of 8.24 percent on doré, versus the overall tax of 10.30 percent on the import of refined gold, is pushing refineries to buy more.
In a further boost to doré imports, the central bank, the Reserve Bank of India, and the finance ministry are considering scrapping bulk import licences of the commodity, officials with direct knowledge of the discussions told Reuters last month.
This Reuters article, filed from Panaji, was posted on their website at 3:31 p.m. IST on their Saturday afternoon—and I found this story embedded in a GATA release.
The PHOTOS and the FUNNIES
The first photo is a lesser scaup mom and her brood of ten young ‘uns that I took on August 2—and I’ve posted it before.
Here’s the same mom once again [on the right] with four of her ten ducklings that I took a of photo of two weeks later on August 16. As you can tell, they’ve grown quite a bit, but they still have some of their down left. Here’s where a shallow depth-of-field with a big telephoto lens isn’t so great, as there’s only about 50 centimeters here—and only two of them, mom and one duckling, are in sharp focus. The further away from the point of sharp focus, the more out of focus they get. Don’t forget the ‘click to enlarge’ feature for full-screen viewing.
These four Canada geese appeared out of nowhere—and I managed to squeeze off three shots as they flew by. This was the only one fit to post.
THE WRAP
One of the commodities away from gold and silver where I have detailed the same distortion of the price discovery process by the managed money traders is COMEX copper. As I reported previously, since May 19, managed money traders have sold 70,000 net contracts of COMEX copper or the equivalent of nearly 900,000 tonnes of copper, a truly massive quantity and almost singlehandedly responsible for the 20% decline in copper prices over the past three months. Yes, I know I have been virtually alone in pinpointing this factor as the prime catalyst for the copper price decline, but that may have changed this week.
Unless he was channeling me (I don’t think he’s a subscriber), the CEO of the large mining entity and trading giant, Glencore Plc, seems to have reached the same conclusion as me for what’s driving copper prices. As Ivan Glasenberg said on an earnings conference call, the flow of actual copper supply/demand and inventories has had little to do with the decline in copper prices and instead he blames it on hedge funds. [The link to that Bloomberg story from last week, which is a must read is headlined “Glencore Blames ‘Aggressive’ Short Selling for the Slump in Copper Prices“—and linked here. – Ed]
Granted, Glencore is suffering mightily as a result of the downdraft in prices and some may suggest he’s looking for a scapegoat to take the blame away from him. Maybe so, but I don’t have any vested interest in copper prices, other than knowing that the price discovery process on the COMEX is broken, just as it is for silver and gold. I am highly encouraged to see one of the sharpest guys in any room, Glasenberg, agree with me; not because I’m looking for validation, but because the facts are clear and what is happening is so wrong it’s not funny. The problem is not enough industry leaders know the real story of how prices are being set. But it is also always true that you can’t begin to solve a problem unless you first recognize it. It’s a very good thing that Glasenberg sees the problem. — Silver analyst Ted Butler: 22 August 2015
It was a day when the powers-that-be closed all the exit doors. It didn’t matter that the markets around the world were crashing, or the fact that the dollar index had it’s worst intraday performance that I can remember in the last fifteen years, there was no way that JPMorgan et al—the BIS—or whoever, was going to let the precious metals be a safe harbour. They must had to work at it to close gold down five bucks—and the fact that they were able to trash the other three precious metals, is a testament to the power they have, if and when they wish to use it—and they used it yesterday.
There wasn’t a damn thing out there that was free and fair—and that certainly included the U.S. equity markets, as the prop job on them after the open took even my breath away. I’ve already mentioned the dollar index—crashing over a 100 basis points in well under ten minutes starting at 9:00 a.m. EDT—and it was at that point that the PPT/BIS showed up and rescued it. Simply amazing.
“Da boyz” set new low prices for this move down in palladium, copper and crude oil. All three of them were also closed at new lows for this move down as well. They came reasonably close in silver too. Here are the 6-month charts for the Big 6 once again.
In my daily telephone conversation with Ted, he said that the deterioration in the Commercial net short position in gold during yesterday’s price action will probably be one for the record books when the COT Report comes out on Friday. He figures we’ve got from very bullish to very bearish in just one day. Volume was massive, although the gold volume in the CME’s Preliminary Report didn’t look all that bad, but those numbers can be horribly misleading.
On the other hand, silver was smashed—and closed far below its 50-day moving average, so the technical funds in the Managed Money category were pitching longs and going short in that precious metal. But, as in gold, the net volume in the Preliminary Report for the Monday trading session shows absolutely no sign of that. I’ll certainly be interested in the final numbers when they’re posted on the CME’s website later this a.m. EDT, but even then I’m not going to put much stock in them, because I know from past [and ugly] experience, that they can’t be relied on.
If the numbers in both gold and silver discussed above are confirmed on Friday, we’ll have a bifurcated market. Ugly as sin in gold, but back to wildly bullish in silver. But, as Ted also said—and I agree totally, Friday is a long way off at this juncture.
And as I write this paragraph, the London open is less than five minutes away—and the HFT boyz have not been idle, as they started spinning their algorithms shortly after 2 p.m. Hong Kong time. After trading mostly flat in the Far East, gold was down about ten bucks at one point. Silver, which had been up a bit over a dime, is now down that amount. Platinum had been up ten bucks, and then down over twenty at one point—and is now off its low tick, but still down 13 dollars. Palladium got crucified to the tune of $44 at one point, but is now down ‘only’ 21 dollars at the moment.
JPMorgan et al obviously don’t care who is watching, because the miners aren’t going to say a word in their company’s defence—and to hell with what the shareholders think. And both the CFTC and the CME Group are complicit. HFT gold volume in the December contract is fast approaching 33,000 contracts—and silver’s September volume is just under 8,700 contracts—and 50 percent of that volume is roll-overs into future months, mostly December.
The dollar index, which was up over 40 basis points at one point around 10 a.m. Hong Kong time on their Tuesday morning, is now up only 20 basis points. And if you were paying close attention yesterday, it obviously matters not what the dollar index is doing, as price are set by “da boyz” on the COMEX irrespective of what the currencies are doing. Case closed.
Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report. All of Monday’s volume data should be in it—and it only remains to be seen if most of Tuesday’s price/volume action will be in it as well. With first day notice for delivery into the September silver contract coming up hard, there are only three trading days left, including today, to get ‘er all done. Silver’s outstanding volume in last night’s Preliminary Report was still 42,536 contract—and except for those contract holder who are standing for delivery, all the remaining contracts have to rolled or sold by the close of COMEX trading on Friday. The roll-over volumes will be ferocious between now and then.
I’m off to bed earlier than usual—and as I put today’s column up on the website at 4:35 a.m. EDT I see that gold is off its earlier low tick and only down 6 bucks, silver is down 6 cents, platinum is down an even ten spot—and palladium is now down ‘only’ 27 dollars.
December gold volume is 43,000 contracts—and only 1,600 or so contracts are roll-overs, as the rest is HFT volume. September volume in silver is about 11,400 contracts with half of that roll-overs into future months. The dollar index is now up 41 basis points.
I have no idea what to expect from precious metal prices going forward. It’s obvious that “da boyz” can do whatever they want, whenever they want, as there’s nobody to stop them. So even trying to fathom what might occur is a mug’s game at the moment. But with a hugely bearish COT structure in gold, combined with a wildly bullish configuration in silver, absolutely nothing will surprise me as the month comes to a close.
That’s all I have for today, which is more than enough—and I’ll see you here tomorrow.
Ed
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