10 November 2015 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price rallied three or four bucks in mid-morning trading in the Far East on their Monday—and more or less stayed there until about fifteen minutes before the COMEX open. By the open of the equity markets in New York, it had been sold back to unchanged—and then traded flat until the COMEX close. From there it crept higher into the 5:15 p.m. close of electronic trading.
With gold trading in not much more than a six dollar price range yesterday, the highs and lows are pretty immaterial.
Gold closed in New York yesterday at $1,091.90 spot, up $2.50 from Friday. Net volume was pretty light at just over 108,500 contracts.
Silver got sold down a few pennies in Far East trading—and then didn’t do a lot until the same time as gold got rolled over, which was about fifteen minutes before COMEX trading began yesterday morning in New York. JPMorgan et al spun their algorithms at that point—and the low tick came about five minutes before the COMEX close. The price rallied about 15 cents between the low and close of electronic trading.
The high and low tick in this precious metal was recorded as $14.76 and $14.395 in the December contract.
Silver finished the Monday session at $14.58 spot, down 16 cents on the day, as “da boyz” took another slice off the silver salami. Net volume was a bit heavier than normal at just over 38,000 contracts.
The platinum price chopped around unchanged until Zurich opened at 9 a.m. in Europe on Monday morning—and by the time “da boyz” were done with it at, or just after, the London p.m. gold fix, they’d carved about $30 off the price. Platinum was closed at $911 spot, down 29 dollars from Friday’s close.
Palladium was under some selling pressure right from the Sunday evening open in New York, but the real selling began at the Zurich open—and the powers-that-be had the price back below the $600 spot mark by the London morning gold fix two and a half hours later. Every rally attempt back above the $600 the ounce mark after that got met by a not-for-profit seller. Palladium was closed in New York on Monday at $597 spot, down 23 bucks from Friday’s close, as “da boyz” took back all of Friday’s gains—and then some.
The dollar index closed in New York late on Friday afternoon at 99.15—and then chopped quietly lower until it’s 98.83 low tick, which came shortly after 12 o’clock noon in London. The subsequent rally topped out at 99.23 a minute or so before the equity markets opened in New York—and then sank back to its low of the day around 11:25 a.m. EST. It rallied back to just above the 99.00 spot mark in late afternoon trading in New York, but closed just below it at 98.99—down 16 basis points from Friday.
And here’s the 6-month U.S. dollar index chart for reference purposes. From a technical perspective, the dollar index certainly looks overbought.
The gold stocks opened down a hair—and then rallied into positive territory briefly before rolling over. They hit their respective lows around noon [although you can’t tell it from this chart, as there’s a big chunk of missing data] and then began to rally strongly. They topped out around 3:15 p.m. EST—and then chopped sideways, closing just off their highs. The HUI finished up a chunky 2.52 percent.
The silver equities followed a very similar pattern—and Nick Laird’s Intraday Silver Sentiment Index closed higher by 1.26 percent, which is quite amazing considering the price action in the metal itself.
The CME Daily Delivery Report showed, once again, that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.
The CME Preliminary Report for the Monday trading session showed that November gold open interest was unchanged at 211 contracts—and silver’s November o.i. was also unchanged at only 5 contracts left.
There was another withdrawal from GLD on Monday. This time an authorized participant removed 95,724 troy ounces. And as of 6:47 p.m. EST yesterday evening, there were no reported changes in SLV.
Now that JPMorgan has pounded gold and silver prices back into the dirt, it appears that they stepped up as big buyers at the U.S. Mint yesterday. They sold 10,500 troy ounces of gold eagles—1,500 one-ounce 24K gold buffaloes—and 1,016,500 silver eagles. Just looking at the way that the sales numbers have been reported so far in November, I’d venture a guess that Ted Butler’s ‘big buyer’ may have showed up on Friday as well, as sales at the mint were pretty robust on that day as well.
From what my bullion dealer is telling me—and what Ted’s retail bullion connections are telling him—business sucks, big time. So it sure as heck isn’t John Q. Public buying these kind of quantities.
There was very little in/out movement in gold over at the COMEX-approved depositories on Friday, as only 4 kilobars were shipped in—and 103 troy ounces were shipped out.
It was much busier in silver, as 303,988 troy ounces were reported received—and 803,216 troy ounces were shipped out the door. JPMorgan wasn’t involved in any of this silver movement. The link to that action is here.
It was pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, as they reported receiving 10,029 kilobars—and shipped out 937 of them. All of this activity was at Brink’s, Inc.—and the link to that, in troy ounces, is here.
Here are a couple of charts that Nick Laird passed around on the weekend—and I thought they were worth sharing. They show gold and silver coin sales from the Perth Mint for the month of October. There wasn’t any change in gold coin sales—and despite the fall-off in silver coin sales, it still an pretty impressive month nevertheless.
I don’t have all that many stories for you today—and that makes your final edit a lot easier.
CRITICAL READS
Central Banker Jabberwocky — David Stockman
The financial system of the world has been turned into a doomsday machine by central bankers stranded in an intellectual puzzle palace. That is, they are marching financial markets straight into another giant bubble implosion owing to their embrace of a fundamental error about why there is an apparent lack of consumer inflation in the official indices.
For example, the chief economist of the IMF, Maurice Obstfeld, recently trotted out the chart below to prove that “lowflation” is a deadly threat everywhere on the planet to growth, jobs, living standards, public finances, and even capitalist viability.
The ill of lowflation can only be remedied, he averred, by resort to “out of the box” central bank expedients designed to compensate for the purported drastic shortfall of that Keynesian ether called “aggregate demand”.
What he had in mind, of course, was negative interest rates and further massive monetization of the public debt and other existing assets in the name of QE.
This commentary from Dave appeared on his website last Friday sometime—and I thank Roy Stephens for today’s first story.
Banking Giants Learn Cost of Preventing Another Lehman Moment
Seven years after the collapse of Lehman Brothers jolted the global economy, the world’s biggest banks may need to raise as much as $1.2 trillion to meet new rules laid down by financial regulators.
After years of work, the Financial Stability Board, created by the Group of 20 nations in the aftermath of the crisis, published its plan for making sure giant lenders can be wound down and recapitalized in an orderly way, without taxpayer bailouts.
Under the rule for total loss-absorbing capacity, or TLAC, most systemically important banks must have liabilities and instruments “readily available for bail in” equivalent to at least 16 percent of risk-weighted assets in 2019, rising to 18 percent in 2022, the FSB said on Monday. A leverage ratio requirement will also be imposed, rising from 6 percent initially to 6.75 percent. The banks’ shortfall under the 18 percent measure ranges from 457 billion euros to 1.1 trillion euros ($1.2 trillion), depending on the instruments considered, according to the FSB.
“TLAC is one of the last bricks in the wall of the post-crisis reform agenda,” said Richard Barfield, a financial-services risk and regulation director at PricewaterhouseCoopers LLP. Many big banks “will now resume the debt issuance that has been put on hold while waiting for today’s details,” he said. The FSB’s impact analysis shows that most of them “should be able to meet the requirements.”
This Bloomberg item, obviously filed from London, showed up on their Internet site at 1:30 a.m. Denver time on their Monday morning—and was updated about eight hours later. I thank Patricia Caulfield for this story.
The Re-enserfment of Western Peoples — Paul Craig Roberts
The re-enserfment of Western peoples is taking place on several levels. One about which I have been writing for more than a decade comes from the offshoring of jobs. Americans, for example, have a shrinking participation in the production of the goods and services that are marketed to them.
On another level we are experiencing the financialization of the Western economy about which Michael Hudson is the leading expert (Killing The Host). Financialization is the process of removing any public presence in the economy and converting the economic surplus into interest payments to the financial sector.
These two developments deprive people of economic prospects. A third development deprives them of political rights. The Trans-Pacific and Trans-Atlantic Partnerships eliminate political sovereignty and turn governance over to global corporations.
These so called “trade partnerships” have nothing to do with trade. These agreements negotiated in secrecy grant immunity to corporations from the laws of the countries in which they do business. This is achieved by declaring any interference by existing and prospective laws and regulations on corporate profits as restraints on trade for which corporations can sue and fine “sovereign” governments.
This commentary by Paul put in an appearance on the sputniknews.com Internet site at 12:38 p.m. Moscow time on their Monday afternoon, which was 4:38 a.m. in Washington—EDT plus 8 hours. It’s definitely worth reading. I thank U.K. reader Tariq Khan for sharing it with us.
Venezuela Default Countdown Begins: After Selling Billions in Gold, Caracas Raids $467 Million in IMF Reserves
What is even more understandable is what Venezuela should have done in the first place before dumping a fifth of its gold, but got to do eventually, namely raiding all of the IMF capital held under its name in a special SDR reserve account.
Recall that this is precisely what Greece did in July when everyone was speculating when it would default. Now its Venezuela’s turn.
The details: Reuters reports that Venezuela withdrew some $467 million from an IMF holding account in October, according to information posted on the fund’s web-site, as the OPEC nation seeks to improve the liquidity of its reserves amid low oil prices and a severe recession.
Venezuela holds part of its reserves with the International Monetary Fund in an instrument called Special Drawing Rights (SDR), a basket of international currencies made up of the euro, Japanese yen, pound sterling and U.S. dollar.
The withdrawal will allow Venezuela to use the funds for imports or debt service, but does not change its total reserve holdings as SDRs are already accounted for.
This Zero Hedge article from yesterday evening EST is their spin on a Reuters piece that appeared on their website last Friday—and I thank Richard Saler for his first of three contributions to today’s column.
Anti-Austerity Socialists Topple Portugal’s Two-Week Old Government; Modern Day Brezhnev Doctrine Review
The recent Portuguese election on October 4th were “inconclusive”. The center-right scored the most votes but could not muster a coalition majority.
A coalition of leftist parties could form a government, but the president of Portugal (a largely symbolic position except in cases like these) refused to appoint a leftist prime minister on the grounds that they represent anti-European forces. Instead the president allowed the pro-E.U. Prime Minister to stay in place.
That government will fall this week, but first let’s recap what Nigel Farage said about yet another Eurozone puppet government.
This commentary appeared on the globaleconomicanalysis.blogspot.ca Internet site late Sunday morning EST—and it’s worth reading as well. I thank Roy Stephens for his second offering of the day.
Germany loses key ally in Portugal as austerity regime crumbles
Portugal’s Communists and radical Left Bloc are poised to take power in a historic departure as part of an anti-austerity coalition led by the Socialists, despite being branded too dangerous for office by the country’s president just 11 days ago.
While it is not a replay of the “Syriza moment” in Greece last January, the ascendancy of the Left marks a clear break with the previous austerity regime and with the policies of the now-departed EU-IMF Troika.
“Political risks are rising,” said Alberto Gallo from RBS. While Portugal has been a model of good behaviour in the eurozone until now, largely immune to radical politics, it has extremely high debt levels. He warned that the country may be skating on thin ice.
A Socialist-led government under Antonio Costa will deprive Germany of a stalwart ally in its efforts to uphold fiscal discipline and drive reform in the eurozone. It has always been crucial to the German political narrative of the EMU debt crisis that the pro-austerity arguments should be made for them by political leaders in the peripheral states.
This commentary by Ambrose Evans-Pritchard was posted on the telegraph.co.uk Internet site at 7:00 p.m. GMT on their Monday evening, which was 2:00 p.m. in Washington—EDT plus 5 hours. I thank Roy Stephens for sliding it into my in-box just after midnight Denver time this morning.
A Fifth of Spain’s GDP Just Voted to Secede – What Now?
Everywhere you look there are signs that Europe is coming apart at the seams. Just a month after the crisis in Greece abated, the influx of refugees fleeing the war-torn Mid-East finally overwhelmed the Balkans leading directly to border closures and precipitating a spat in Brussels regarding how best to handle the people flows.
In short, not everyone agrees with Angela Merkel’s open door policy and indeed, Hungary’s Viktor Orban has led the push for the preservation of what he calls Europe’s “Christian heritage” by keeping asylum seekers out. Now, there’s a serious rift developing and further efforts to force recalcitrant countries to accept migrants they don’t want could well spell the end of the Schengen project.
Meanwhile, Portugal is on the brink of a political crisis as Costa’s Socialists move to align with the Communists and the Left Bloc in an effort to overthrow the government and roll back austerity, presaging a debt showdown with Brussels and Berlin.
As if all of this weren’t enough – and we didn’t even mention the potential for “Brexit” – the Catalan black swan is back on the heels of what amounted to an independence referendum in September. On Monday, Catalonia’s parliament approved a “democratic disconnection” resolution which will see the region push to separate from Spain and establish an independent republic.
This longish but very interesting Zero Hedge commentary appeared on their Internet site at 11:10 a.m. on Monday morning EST—and it’s the second contribution of the day by Richard Saler, for which I thank him.
China to Allow Direct Conversion Between Yuan and Swiss Franc
China took another step to boost the yuan’s global usage, saying it will start direct trading with the Swiss franc, as the nation pushes its case for reserve-currency status at the International Monetary Fund.
The link will start on Tuesday, the China Foreign Exchange Trade System said in a statement, making the franc the seventh major currency that can bypass a conversion into the U.S. dollar and be directly exchanged for yuan. The rate will be allowed to fluctuate a maximum 5 percent on either side of a daily fixing, according to CFETS.
“This is an important step in strengthening bilateral economic and trade connections between China and Switzerland,” the People’s Bank of China said in a statement on its website on Monday. The link will help lower conversion costs and facilitate the use of both currencies in bilateral trade, it added.
The announcement, which confirmed an earlier report, comes as the IMF prepares to meet this month to review its Special Drawing Rights. The executive board of the Washington-based institution will gauge whether the Chinese currency has fulfilled the criterion of being “freely usable,” after rejecting its bid in 2010. The other major currencies that can be directly converted into yuan are the U.S., Australian and New Zealand dollars, the British pound, the Japanese yen and the euro.
This very interesting Bloomberg item appeared on their Internet site at 2:59 a.m. Denver time on their Monday morning—and I found it embedded in a GATA release.
Polluting smog reaches record levels in China
Large parts of China are blanketed with some of the worst levels of dangerous acrid smog on Monday. Levels of the most dangerous airborne particulates PM2.5, which are linked to cancer and heart disease, reached almost 50 times the World Health Organisation maximums in Liaoning province
There’s a 25 second video clip embedded in this article, plus a link to another story if you wish to read further. All of this appeared in a Reuters story that was picked up by theguardian.com Internet site at 11:24 a.m. GMT on their Monday morning, which was 6:24 a.m. EST in New York. I thank Patricia Caulfield for this news item.
With Long Handshake, China and Taiwan Affirm Better Ties
It was the 80 seconds China and Taiwan had waited almost 70 years for.
Chinese President Xi Jinping and his Taiwanese counterpart, Ma Ying-jeou, smiled in dark suits –Xi wearing a Communist red tie, Ma, a Nationalist blue one — as they shook hands for more than a minute before hundreds of reporters in Singapore. The first face-to-face encounter since 1945 between leaders of China’s civil war foes provided a new high-water mark in efforts to resolve one of the last century’s biggest unsettled conflicts.
The handshake and the 50-minute closed door meeting that followed cap a seven-year effort by Ma to strengthen economic ties across the 180-kilometer (110 mile) Taiwan Strait before he leaves office next year. It may bring Xi one step closer to realizing China’s dream of reunification. While investment, tourism and trade have flourished between the two sides under Ma, they remain politically distant, one democratic, the other ruled by the Communist Party. Saturday’s handshake is the closest they’ve come to bridging that divide.
This Bloomberg news story was posted on their website at 9:28 a.m. MST on Saturday morning—and was updated about twenty-seven hours later. I thank Brad Robertson for bringing it to our attention. It’s worth reading if you have the interest.
EM Exodus: Emerging Economies See Half Trillion In Capital Flight
When Janet Yellen and the rest of the Eccles cabal decided to stay on hold in September, the “new” reaction function was all anyone wanted to talk about.
Of course, the idea that the Fed was to that point “data dependent” (versus market dependent) was something of a joke in the first place, but the specificity the FOMC employed when referring to global financial markets still took some observers off guard. The worry for the Fed revolved primarily around the possibility that a hike could accelerate EM capital outflows at a time when a series of idiosyncratic factors (like a civil war in Turkey, a political crisis in Brazil, and the 1MDB scandal in Malaysia) had already pushed the emerging world to the brink of crisis. Enormous outflows from China as a result of the yuan devaluation didn’t help.
Now, as we look back at Q2 and Q3, we learn that all told, well more than a half trillion in capital fled EM over six months. Here’s JP Morgan who calls the capital flight “unprecedented”—
One can only image the capital flight that will commence once the Fed makes good on their interest rate hike next month. This Zero Hedge piece showed up on their Internet site at 6:20 p.m. on Monday evening EST—and I thank Richard Saler for this third and final offering in today’s column.
What An Industrial Depression Looks Like: Photos From An Australian Heavy-Machinery Auction
Today we get visual evidence of this, courtesy of an Australian heavy industrial equipment auction where machines such as a Caterpillar 992C wheel loader, which normally costs $2.9 million, can now be bought for just $15,000, a 99% discount!
As Australia’s ABC reports, now that the commodity bubble has burst for good, auctioneers are hard at work selling tens of millions of dollars of suddenly useless coal mining machinery for just a fraction of its original market value.
The reason is known: the severe downturn in the Australian resources sector (courtesy of China’s whose commodity imports are declining with every passing month) has led to a massive oversupply of equipment, and much of it is unsuitable for use in any other industry. This means unwanted excavators, trucks and sundry heavy machinery will end up as scrap, if not sold at auction.
ABC‘s reporter visited just one such auction in New South Wales, which was owned by Big Rim, a mining services contractor which also collapsed after the miners it serviced also closed.
Wow! This depressing story was posted on the Zero Hedge website at 8:59 p.m. EST yesterday evening—and it’s obviously been updated since it was originally posted, as reader U.D. passed it around at 11:35 a.m. EST yesterday morning. It’s certainly worth reading.
Hugo Salinas Price: What is a bitcoin?
Bitcoins, Mexican Civic Association for Silver President Hugo Salinas Price writes on Monday, are no more real than government-issued currency, both being little more than computer entries.
Salinas Price’s commentary is headlined “What Is a Bitcoin?” and it’s posted at the association’s Internet site, plata.com.mx Internet site—and it’s an item I found on the gata.org Internet site last night.
Sean Fieler: Competition for the Fed’s money monopoly
History suggests that the only way to rein in the sprawling Federal Reserve is to end its money monopoly and restore the American people’s ability to use gold as a competing currency.
The legislative compromise that created the Fed in 1913 recognized that the power to print money, left unchecked, could corrupt both the government and the economy. Accordingly, the Federal Reserve Act created the Federal Reserve System without a centralized balance sheet, a central monetary-policy committee or even a central office.
The Fed’s regional banks were prohibited from buying government debt and required to maintain a 40-percent gold reserve against dollars in circulation. Moreover, each of the reserve banks was obligated to redeem dollars for gold at a fixed price in unlimited amounts.
Over the past century, every one of these constraints has been removed. Today the Fed has a centrally managed balance sheet of $4 trillion and is the largest participant in the market for U.S. government bonds. The dollar is no longer fixed to gold, and the IRS assesses a 28-percent marginal tax on realized gains when gold is used as currency.
This commentary by Sean put in an appearance on The Wall Street Journal website back on Sunday, November 1—and it was posted in the clear in a GATA release on Sunday.
Merge or die, major gold miners told by Randgold’s Bristow
The biggest gold miners, weighed down by record debt and with prices near a five-year low, will have to merge with others to survive, according to Randgold Resources, the best-performing producer of the metal in the past 10 years.
“The big producers have the biggest challenges of all,” Randgold CEO Mark Bristow said on Thursday. “Eventually, you’re going to see survival mergers.”
Gold’s 42-percent price slump from a record set four years ago is cutting profits and stressing balance sheets for mining companies, with the largest producers weighed down by debt totalling almost $35 billion.
In September the benchmark 30-member Philadelphia Stock Exchange gold and silver index, which includes Barrick Gold and Newmont Mining, fell to the lowest level since 2000.
Of course none of these problems would exist if it weren’t for the precious metal price management scheme that’s been ongoing for two generations now. This story, filed from London, appeared on the bdlive.co.za Internet site on Friday—and it’s another item I found on the gata.org Internet site.
Join GATA at the Silver Summit in San Francisco November 23-24
GATA Chairman Bill Murphy and Board of Directors member Ed Steer will be among many speakers of interest to GATA supporters at the 2015 Silver Summit and Resource Expo, co-sponsored by Cambridge House and Katusa Research, to be held Monday and Tuesday, November 23 and 24, at the Park Central Hotel in beautiful San Francisco.
In addition to Murphy, proprietor of LeMetropoleCafe.com, and Steer, editor of Ed Steer’s Gold and Silver Digest, speakers will include Mike Maloney of GoldSilver.com, Frank Holmes of U.S. Global Investors, Rick Rule of Sprott U.S. Holidings Inc., David Morgan of Silver-Investor.com, McEwen Mining CEO Rob McEwen, Grant Williams of Vulpes Investment Management and Real Vision, First Majestic Silver CEO Keith Neumeyer, retired Gold Mining Stock Report editor Bob Bishop, and CPM Group Managing Director Jeff Christian.
Dozens of resource companies will be exhibiting at the conference as well.
While admission to the conference ordinarily will cost $40, GATA supporters can gain free admission by registering at the conference’s Internet site—and using the promotion code “SFGATA.”
This GATA release was posted on their website on Sunday—and please come up and introduce yourself if you’re planning on attending.
China’s Central Bank Buys Another 14 Tonnes of Gold … Bullion Falls To 3 Month Low
PBOC declared gold reserves now about 55.38 million troy ounces or 1,722.5 metric tonnes
– Central bank gold rose to $63.26 billion by end-month – less than 2% of $3.53 trillion FX reserves
– China disclosed on July 17th that its gold holdings had surged 57% since 2009
– China officially owns around 1,720 tonnes of gold – true total figure likely much larger
– China’s total gold holdings much higher as also owns gold in CIC
This gold-related commentary showed up on the goldcore.com Internet site on Monday—and it’s worth reading.
Central Bank Gold Purchases. Where we are and will they continue? — Lawrie Williams
An important element in gold demand over the past three years has been continuing officially-reported purchases of gold by some national central banks and quite probably, unreported purchases by others. Per contra, what we don’t know is whether there have also been corresponding unreported sales of gold by some central banks – and, because of the accounting systems in place, how much of central bank published gold reserves are actually not readily available due to gold leasing and swap arrangements currently in place.
While always officially denied, the recent spate of gold reserve repatriations by some nations does suggest there is too little transparency on the state of the gold holdings within the principal vaulting nations which hold other countries’ gold reserves – the U.S. the U.K. and France – and there is the possibility of more such gold movements ahead – either flagged in advance as with the German gold repatriations, or announced as a fait accompli after the event as with The Netherlands. Central banks are, and probably always will be, somewhat reticent regarding their true reserve positions. Any breaking of the ranks in this respect and any doubts as to the veracity of the true gold holdings figures are naturally suppressed as a destruction of confidence in the integrity of any central bank would likely snowball into a distrust of all. And in global finance and economics perception of integrity of key players is probably the most important factor of all.
This gold-related commentary by Lawrie was posted on the Sharps Pixley website on Sunday—and is certainly worth reading as well.
The PHOTOS and the FUNNIES
The first photo is of a ‘little’ [blue] penguin—and they are little, as this adult isn’t must more than 13 inches/33 cm. tall.
This next photo is of a chickadee which I took on November 1. He was right at my feet, picking up the walnut crumbs I had dropped. The flash stopped his wing motion in mid beat. The ‘click to enlarge‘ feature will bring this photo up to full-screen size.
The WRAP
The turnover or physical movement of metal brought into or taken out from the COMEX-approved silver warehouses picked up [last] week to 4.8 million oz. I wanted to say that’s close to the “normal” average weekly movement over the past 4.5 years, but I caught myself; as how could a physical inventory movement equal to 30% of world mine production possibly be considered normal, particularly when it occurs in only a few warehouses around NYC? Total COMEX silver inventories fell by a slight 0.3 million oz., but set another two-year low water mark.
While on the topic of COMEX warehouses, 76,500 oz of gold were moved into the COMEX warehouse of JPMorgan, undoubtedly reflecting the gold deliveries taken by the bank during the October gold delivery process on futures contracts. These are not big quantities but JPM was the only net gold stopper last month on the COMEX and this is the same pattern that JPMorgan employed this year in COMEX silver, in taking 20 million oz of silver on futures contract deliveries and moving it all into the bank’s COMEX facility. Not that it needs mentioning, but this is further evidence that JPM is the lead sled dog in everything related to gold and silver (and other commodities), most particularly in manipulating prices.
Sticking with gold, the past week has seen sizable withdrawals from the big gold ETF, GLD, on the order of 750,000 oz, worth more than $850 million. While sizable in dollar terms ($850 million would buy more than 55 million oz of silver), the reduction in the holdings of GLD looks like plain vanilla investor liquidation. In contrast, holdings in the big silver ETF are only down slightly (so far). I do believe that the GLD investor selling was in reaction to the downward price manipulation on the COMEX; with my point being that the manipulation affects more things than you can shake a stick at. That’s why price manipulation is the number one market crime, even if the CFTC continues to look away. — Silver analyst Ted Butler: 07 November 2015
With the exception of gold, there were slices off the other three precious metal salamis again yesterday. But despite that, it’s my guess that we haven’t seen the lows in any of the four precious metals yet for this move down. It appears from the 6-month charts below that JPMorgan et al are certainly in a hurry to get things done—and it remains to be seen whether the rest of the engineered price declines are as vicious as what we’ve seen to date.
And of all the Big 6 commodities, only gold wasn’t closed at a new lock tick.
And as I type this paragraph, the London open is less than ten minutes away—and I see that gold didn’t do much in Far East trading on their Tuesday, as it wandered around a dollar or so either side of unchanged. Silver, which had been down a dime in mid-afternoon trading in Hong Kong, is almost back to unchanged. Platinum and palladium are up 4 dollars and 7 dollars the ounce respectively.
Net HFT gold volume is just over 16,500 contracts—and in silver, that volume is just a hair over 5,000 contracts. There’s not a lot of roll-over activity in either precious metal at the moment. The dollar index has been wandering around just above the 99.00 level through all of Far East trading—and is up 5 basis points as London opens.
Today, at the close of COMEX trading at 1:30 p.m. EST, is the cut-off for this Friday’s Commitment of Traders Report—and my hope is that all of today’s price/volume action will be in it. And unless we have really large rallies in the precious metals today, Friday’s report should show more very substantial improvements in the Commercial net short positions of all four precious metals.
And as I post today’s column on the website at 4:25 a.m. EST, I see that gold is still chopping around unchanged, silver is down about a dime, platinum is up a buck—and palladium is the winner, as it’s up 9 dollars.
Gold volume is just over 25,000 contracts—and silver’s net volume is just under 7,500 contracts. The dollar index still isn’t doing much—and is hanging on to the 99.00 mark by its proverbial fingernails.
As Ted has mentioned on several occasions over the last number of years, we won’t know when the bottom of this engineered price decline is in until we’re looking at it in the rear-view mirror. I’m expecting some down-side capitulation, both in price and volume, before I’ll get the sense that we’re done to the downside.
But since we don’t know what the powers-that-be have planned, it’s really difficult, if not impossible, to know what signs to look for when the bottom is in this time around. All we can do is wait patiently, or impatiently, as the case may be. And as I said above, it appears that based on the current down-side price action, that there seems to be some urgency to clean-out done quickly. Or not!
That’s all I have for today—and I’ll see you here sometime on Wednesday.
Ed
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