12 March 2016 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The vertical price spike in gold that began at 9:00 a.m. HKT on their Friday morning was capped—and then those gains were all taken away by noon local time—and gold sold down some more when London opened. Then it got sold down even more once the p.m. gold ‘fix’ was in—and then again, even more blatantly I might add, minutes after 3 p.m. in the thinly-traded after-hours market. JPMorgan et al were leaving nothing to chance, as they didn’t want positive closes in either gold or silver yesterday.
The high and low tick were recorded as $1,287.80 and $1,249.00 in the April contract.
Gold was closed in New York yesterday afternoon at $1,250.10 spot, down an even $22 from Thursday’s close. Net volume was sky high again at just over 190,000 contracts.
And here’s the 5-minute gold tick chart courtesy of Brad Robertson once again. The volume associated with the price spike at 9 a.m. in Hong Kong is more than obvious—and then not much happened until 6:00 a.m. Denver time on this charts, which was 8 a.m. in New York—and 1 p.m. in London. At that point volume picked up—and spiked at the take-down after the London p.m. gold fix. The engineered price decline in after hours trading on the right-hand side of this chart didn’t involve a lot of volume—and it usually never does when the markets are that illiquid and thinly traded. That’s when ‘da boyz’ do their best work. It’s possible that the table is being set for a Sunday evening take-down when the markets open in New York at 6:00 p.m. EST.
The vertical gray line is midnight in New York—add two hours for EDT—and although the ‘click to enlarge‘ feature doesn’t work with Internet Explorer, a right mouse click with Google Chrome or the Firefox browser will allow you to view it full-screen size.
The price path in silver was similar to what it was in gold—and silver would have closed in positive territory if the HFT boyz and their algos hadn’t shown up shortly after 3 p.m. EST.
The high and low tick in silver were recorded by the CME Group as $15.755 and $15.48 in the May contract. Net volume was very decent at just over 39,000 contracts.
After the 9 a.m. HKT price spike in platinum got squashed, it was under selling pressure for the rest of the trading day, as every rally attempt got met with a wave of COMEX paper by ‘da boyz’—and that came complete with kick in the butt minutes after 3 p.m. EST. These guys couldn’t be more obvious. Platinum finished the Friday session at $962 spot, down 17 dollars from Thursday’s close.
Palladium was the outlier yesterday, as it traded mostly flat until a rally of substance began at the COMEX open. There was a bit of an up/down price spike once the London p.m. gold fix was done for the day—and then it traded flat until shortly after the COMEX close. It began to inch higher from there until JPMorgan and their HFT buddies showed up minutes after 3 p.m. Palladium was only allowed to close up 3 bucks at $573 spot.
The dollar index closed late on Thursday afternoon in New York at 96.17—and after a down/up dip to the 96.00 mark shortly after 9 a.m. HKT, it traded mostly sideways until 2 p.m. HKT. At that point it began to rally a bit, with the 96.72 high tick coming shortly after 11:30 a.m. GMT in London. It rolled over from there and got saved by ‘gentle hands’ at its 95.94 Friday low, which came around 11:40 a.m. in New York. It edged higher from there, finishing the Friday session at 96.23—up 6 basis points from Thursday’s close.
It’s obvious once again that the dollar index wants to go much lower than it’s being allowed to.
Here’s the 6-month U.S. dollar index so you can see how this fiat turkey is faring in the medium term.
The gold stocks opened in positive territory, but once ‘da boyz’ showed up after the London p.m. gold fix, the stocks quickly followed. But considering how badly the metal got beaten down, the gold share hung in there pretty good, as the HUI closed lower by only 2.03 percent.
The silver equities followed a very similar route at the outset, but once their low ticks were set shortly after 11 a.m., they rallied back into positive territory—and stayed there for the rest of the day, despite the vicious 3 p.m. sell-off. Nick Laird’s Intraday Silver Sentiment Index closed in the green by a smallish 0.41 percent, but we’ll take it!
For the week, the HUI closed higher by 4.08 percent—and the ISSI by 3.43 percent.
The CME Daily Delivery Report showed that zero gold and 40 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. There were three different short/issuers, all out of their respective client accounts—and the largest long/stopper needs no introduction, as it was JPMorgan picking up 37 contracts for its own in-house [proprietary] trading account. Canada’s Scotiabank stopped the other 3 contracts. The link to yesterday’s Issuers and Stoppers Report is here.
Of the 487 silver contracts issued so far this month, JPMorgan has stopped 413 of them, or 85 percent—147 contracts for its clients, and another 266 for itself. I just know that Ted will have lots to say about this in his weekly commentary for his paying subscribers later today.
The CME Preliminary Report for the Friday trading session showed that gold open interest in March fell by 4 contracts, leaving 142 left—and in silver March o.i. dropped by another 199 contracts, leaving 1,140 still open. Since 101 silver contracts were posted for delivery in Thursday’s preliminary report, that means that 199-101=98 contract holders for the March delivery month were most likely let off the hook by JPMorgan yesterday.
There were no reported changes in GLD yesterday, but an authorized participant added a chunky 1,903,740 troy ounces to SLV.
Since the beginning of March there has been 691,026 troy ounces of gold added to GLD—and 14.25 million troy ounces of silver added to SLV. That’s a lot of precious metal.
There was a tiny sales report from the U.S. Mint yesterday, as they sold only 2,000 troy ounces of gold eagles.
Month-to-date the mint has sold 16,000 troy ounces of gold eagles—2,000 one-ounce 24K gold buffaloes—and 1,263,500 silver eagles. Year-to-date the mint has sold 223,500 troy ounces of gold eagles—55,000 one-ounce 24K gold buffaloes—-and precisely 12,000,000 silver eagles.
And retail bullion sales are less than stellar on both sides of the U.S./Canada border, so it’s a given that whatever the public isn’t buying, JPMorgan is, because the U.S. Mint is making silver eagles at its maximum 24/7 production capacity according to Ted.
There was almost no movement in gold over at the COMEX-approved depositories on Thursday. Nothing was reported received—and only 196 troy ounces were shipped out of Canada’s Scotiabank.
It was busier in silver, as 600,604 troy ounces were reported received, all of it at the CNT depository—and only 47,091 troy ounces were shipped out the door. The link to that activity is here.
It wasn’t overly busy at the COMEX-approved gold kilobar depository in Hong Kong on their Thursday as 1,554 kilobars were reported received—and only 132 were shipped out. All of the activity was at Brink’s Inc.—and the link to that, in troy ounces, is here.
It should come as no surprise that the Commitment of Traders Report for positions held at the close of COMEX trading in New York on Tuesday did not make for happy reading once again.
In silver, the Commercial net short position increased by another 5,578 contracts, or 27.9 million troy ounces of paper silver. They did this by selling 591 long contracts—and picking up 4,987 short contracts that the technical funds and the small traders were dumping. The Commercial net short position is an incredible 354 million troy ounces of paper silver—and the Big 8 are short 406 million troy ounces, which is 47.8 percent of the entire open interest in silver. And if you subtracts the spread trades from total open interest, that percentage jumps to 55 or so percent. And the CFTC, the CME Group and the silver miners don’t say a word.
Ted was disappointed, but not entirely surprised to see that the Big 4 short holders in silver increase their short position by around 3,400 contracts during the reporting week—and he puts JPMorgan’s short position back up to 21,000 contracts or so. That’s up 3,000 contracts from the prior week. The ‘5 through 8’ traders increased their short position by another 900 contracts—and the raptors, the Commercial traders other than the Big 8, sold 1,300 of their long contracts. It was, as Ted Butler is wont to say, “all for one, and one for all” with the Commercial traders during the reporting week.
Under the hood in the Disaggregated COT Report, the Managed Money traders only accounted for 3,018 contracts of the change. They did this by purchasing 1,186 long contracts—and covering 1,832 short contracts. The other 1,500 or so contracts to make up the 5,578 contract change, came from the ‘Other Reportable’ and the Nonreportable/small trader category.
In gold, the Commercial net short position blew out by a further 23,941 contracts, or 2.39 million troy ounces. They did this by by increasing their short position by 24,863 contracts, but they also added 922 long contracts. The difference in those two numbers equals the change in the Commercial net short position. As of the close of COMEX trading on Tuesday, the Commercial net short position in gold stood at 19.54 million troy ounces.
The Big 4 traders added a chunky 12,100 contracts or so to their short positions, the ‘5 through 8’ traders actually covered around 1,100 contracts during the reporting week—and Ted’s raptors, the Commercial traders other than the Big 8, added another 13,900 contracts to their growing short position.
Under the hood in the Disaggregated COT Report, it was mostly a Managed Money affair, as they went long to the tune of 26,494 contracts, but they also added 3,437 contracts to their short position as well. All-in-all they went net long to the tune of 23,057 contracts. The other 900 or so contracts came courtesy of the ‘Other Reportable’ and the Nonreportable/small trader categories.
There’s no way to sugar-coat this, dear reader, as these are ugly numbers. As both Ted and I have been saying for some time now, there are only two ways out of this for the Commercial traders—they either get over run, or we get another engineered price decline which, Ted says, will probably be the last one.
So we wait some more.
Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data. It shows the days of world production that it would take to cover the short positions of the Big 4 and Big 8 traders in each physically traded commodity on the COMEX.
As I say in every Saturday column—the short positions of the Big 4 and 8 traders in silver continues to redefine the meaning of the words ‘obscene’ and ‘grotesque.’ This week the Big 4 are short 136 days of world silver production—and the ‘5 through 8’ traders are short 56 days of world silver production—for a total of 192 days, more than 6 months of world silver production, or 441 million troy ounces of paper silver.
And as an aside, the two largest silver shorts on Planet Earth—JPMorgan and Canada’s Scotiabank—are short about 97 days of world silver production between the two of them—and that 97 days represents about 70 percent of the length of the red bar in silver. The other two traders in the Big 4 category are short, on average, about 19 days of world silver production apiece.
To put it another way, if the short positions of JPMorgan and Scotiabank disappeared off the face of the earth, the rest of the traders in the Commercial category would be net long the silver market, just like the traders in all the other categories are at the moment.
Here’s another chart that Nick whipped up for us at my request. It shows the performance year-to-date for all seven constituents of the Silver 7/Silver Sentiment Index—and CDE is the hands-down winner so far.
I have very few real news items for you today, as there just isn’t that much happening at the moment—and so even if you read them all, it shouldn’t take too long.
CRITICAL READS
Attorney General Loretta Lynch has “considered taking legal action against climate change deniers“
The United States’ top lawyer told the Senate Judiciary Committee on Wednesday that the Justice Department has ‘discussed’ the possibility of a civil lawsuit against the fossil fuel industry.
She said any information her office has received has been sent to the FBI in a bid to build a case.
Her comments came as she was questioned by Democratic Senator Sheldon Whitehouse from Rhode Island.
He compared the climate change deniers to members of the tobacco industry – the advocates the Clinton administration won a racketeering case against.
Whitehouse said: ‘The similarities between the mischief of the tobacco industry pretending that the science of tobacco’s dangers was unsettled and the fossil fuel industry pretending that the science of carbon emissions‘ dangers is unsettled has been remarked on widely, particularly by those who study the climate denial apparatus that the fossil fuel industry has erected.
I can’t believe that it may come to this. It would be a tough case to prove, but the fact that it’s even being considered is alarming in and of itself. This ‘news’ item put in an appearance on the dailymail.co.uk Internet site on Thursday afternoon GMT—and I thank P.T. Holland for bringing it to our attention. Another link to this article is here.
The Seven Most Vitriolic Passages in DOJ’s Response to Apple
In case there was ever any doubt, the Justice Department declared war on Apple on Thursday.
Prosecutors demanded that a federal judge force Apple to unlock San Bernardino killer Syed Rizwan Farook’s iPhone in a brief that bristled with so much venom that Apple’s top lawyer, Bruce Sewell, said it “reads like an indictment.”
Sewell, Apple’s senior vice president of legal and global security, was outraged.
“In 30 years of practice, I don’t think I’ve seen a legal brief that was more intended to smear the other side with false accusations and innuendo, and less intended to focus on the real merits of the case,” he said.
“For the first time we see an allegation that Apple has deliberately made changes to block law enforcement requests for access. This should be deeply offensive to everyone that reads it.”
This very interesting, but rather disturbing news item appeared on theintercept.com Internet site at 2:01 p.m. EST yesterday afternoon—and I thank Patricia Caulfield for sending it. Another link to this article is here.
The Sea Island Conspiracy — Patrick Buchanan
Over the long weekend before the Mississippi and Michigan primaries, the sky above Sea Island was black with corporate jets.
Apple’s Tim Cook, Google’s Larry Page and Eric Schmidt, Napster’s Sean Parker, Tesla Motors’ Elon Musk, and other members of the super-rich were jetting in to the exclusive Georgia resort, ostensibly to participate in the annual World Forum of the American Enterprise Institute.
Among the advertised topics of discussion: “Millennials: How Much Do They Matter and What Do They Want?”
That was the cover story.
As revealed by the Huffington Post, Sea Island last weekend was host to a secret conclave at the Cloisters where oligarchs colluded with Beltway elites to reverse the democratic decisions of millions of voters and abort the candidacy of Donald Trump.
Here’s another very interesting, but deeply disturbing story. This one appeared on Pat’s website at 8:03 p.m. EST on Thursday evening—and it’s courtesy of Roy Stephens. Another link to this article is here.
John Perkins: The Shadow World of the Economic Hitman
John Perkins, author of The New Confessions of an Economic Hit Man, is someone we’ve been trying to get on the program for some time. He tells a dark story of an elite cabal working in the shadows to subjugate governments as it pursues ever-greater control of the planet’s resources.
What’s most frightening about this story is how credible it is. Anybody paying attention to world developments will have a hard time dismissing Perkins’ claims out-of-hand; and a harder time not being sickened at how on the mark his claims may likely prove to be:
“Economic hitmen – I’m a former one, actually – created the world’s first truly global empire. It’s really a corporate empire, not an American empire although the U.S. government certainly supports it.”
“We work many different ways, but perhaps the most common is that we will identify a country that has resources that corporations want, like oil. We arrange huge loans of that country from the World Bank or one of its sisters. Yet, the money never actually goes to the country. It is primarily there to make the our companies — that build the infrastructure projects like the power plants, and the industrial parks, highways, and ports — very rich.”
“These [country’s] leaders are very aware that if they do not accept these deals; if we economic hitmen fail to bring them around, the jackals are likely to show up. These are people that will either assassinate those leaders or overthrow their governments.”
I’ve featured John’s books many times in this column—and here’s a 42-minute audio interview that he did with Chris Martenson over at the peakprosperity.com Internet site last Sunday. If you want to know about one of the primary ways that the U.S. subjugates other countries, it’s a must listen. Reader U.D. passed it around on Sunday—and for obvious reasons, it had to wait for my Saturday column. Another link to this interview is here.
Doug Noland: Thesis Update
We’ve witnessed history’s greatest financial Bubble. The Bubble has been fueled by a confluence of extraordinary financial innovation (i.e. securitized finance, leveraged speculation, derivatives, state-directed finance, etc.), unmatched debt growth, unprecedented central bank Credit expansion and market manipulation and the global adoption of all of the above. Especially since 2009, global central bankers have adopted extreme monetization and rate measures specifically to target rapid Credit expansion and securities market inflation.
The upshot has been the greatest expansion of speculative finance ever – finance operating as one massive “risk on” global speculative dynamic. When market participants were embracing risk-taking, this massive pool of global finance easily inflated securities and market prices virtually across the board. Over time, the divergence between inflating securities market Bubbles and deflating global economic widened to precarious extremes. Simplistically, the prospect of faltering Chinese and EM Bubbles proved a catalyst for a problematic collapse in energy and commodities prices. Rather quickly, the global Bubble began to deflate as prospects for literally Trillions of rotten Credit began to unfold – commodities-related, China, EM and risky corporate debt more generally. Confidence that policy measures could hold things together began to wane, and market vulnerabilities rather quickly reemerged.
I believe that confidence in global finance and faith in government policy measures have been irreparably damaged. This is central to my thesis that the global Bubble has burst. At the same time, now catastrophic risks ensure that policymakers employ all means to bolster the markets (sustain Bubbles). The outcome, as we’ve witnessed over recent months, is acute global market instability and volatility. When the massive pool of global finance turns risk averse, selling and hedging quickly overwhelm the market into illiquidity and “flash crash” susceptibility. Then, when policy measures are employed to buttress frail markets, the subsequent unwind of substantial short positions and hedges spurs abrupt “rip your face off” market rallies. In short, epic market speculation is one massive Crowded Trade built on a flimsy foundation of faith in experimental policymaking, prone to the type of volatility and uncertainties that create a management and performance nightmare.
I found Doug’s weekly Credit Bubble Bulletin on his website at 1:15 p.m. Denver time on Saturday afternoon—and it’s a must read for sure. Another link to his commentary is here.
The Ukraine, Russia, Turkey, Syria, USA Imbroglio — John Batchelor Interviews Stephen F. Cohen
Our pundits take a step back from present day events to some extent to look at what is driving them – from the standpoint of the polarized political realm of the governments. The focus is mainly on Russia, the United States and Ukraine, and what is behind the rabid demonization of Putin and Russia in the West. How does the demonization of Putin manifest itself in the crisis flash points in the New Cold War—and what is really driving the policies in the West—and why have they gone so disastrously wrong? Both Batchelor and Cohen are very clear in their conclusions that the blame is ultimately Washington’s.
But there is some news from Ukraine as Washington and the E.U. become more and more concerned over corruption issues in the Kiev government. There has already been a failed effort to remove Prime Minister, Yatsenyuk (thwarted by Washington) and the Kiev government is left with the embarrassing situation that its choices for a new president – from a population in the West of the country of some 40 million people – are a discredited ex-Georgian President, Mikheil Saakashvili and the present Minister of Finance, the American born, Natalie Jaresko. The latter is already under a cloud off accusations of misallocation of funds. And recent statements out of the E.U. are equally devastating: On March 3rd, European Commission President, Jean-Claude Junker stated, “Ukraine will definitely not be able to become a member of the EU in the next 20 to 25 years and not of NATO either”. It is difficult not to see that there are more declines ahead for Ukraine.
But the main theme of the discussion is about Washington animosity and the demonization of Putin and of Russia. What did he do to deserve this? Cohen puts it down to coming from a foreign policy of the last four presidents in Washington based on “exceptionalism” of the United States by which these administrations took the position that they had the right to change regimes that they thought were in their interests and those of the West. Essentially this is true, but it does not explain the fervour of the War Faction in Washington in its all out campaign for the vilification of Putin – which Cohen deems is even greater than past Soviet Union leaders. Yes, the Wolfowitz Doctrine supports the hostility. But from where does the hate originate? Psychologically all hate is driven by fear and perhaps we need only look that far for cause with members of the War Party. Putin, in my humble opinion, is operating from the foundation of huge successes: He has virtually rebuilt his country since the late 1990’s, as almost a looted colony of the West, to rebuild Russia as a major world power; he has gained the admiration of a world as its leading statesman, and he has usurped the moral integrity of a relationship to the world that was formerly considered (by Washington) as enjoyed by the United States. Washington has very real reasons for fear.
This 40-minute audio interview certainly falls into the must listen category for any serious student of the New Great Game. It was posted on the audioboom.com Internet site on Tuesday—and I thank Ken Hurt for the link but, as always, the big THANK YOU goes out to Larry Galearis for the above executive summary. Another link to this interview is here.
Putin’s Invitation to War
Putin’s unwelcomed invitation to rescue Bashar Al-Assad from collapse was issued on television in the summer of 2015 when the world was told that four years of constant warfare had decimated the ranks of the Syrian National Army. The revelation of a pending disaster was in fact an ultimatum to Putin. The collapse of Al-Assad’s regime would result in Russia’s losing its only foreign port at Tardus and Russia’s remaining regional influence. Putin had no options but was forced into a war that he cannot afford to lose nor afford to fight.
Preserving national dignity and his own political career left Vladimir Putin with no other choice than to join forces with Assad. However, he is faced with the dilemma of how to engage in a war without becoming embroiled in that war. He faced a similar problem in the Ukraine and managed successfully to achieve his limited objectives of neutralizing the Ukraine by blocking it from joining NATO and the E.U. This was accomplished by keeping the conflict below a level at which NATO would be forced to be involved.
The tool was those infamous “little green men” who organized local resistance to the Kiev administration. The real Army remained on the Russian side of the frontier as a warning to NATO.
While Russia has to minimize its profile in the Ukraine, it has to maximize it in Syria. Putin is being forced to deploy the military when its modernization is still in its early stages and is handicapped by budget restrictions from collapsing oil prices and sanctions.
Creating from the outset the image of a powerful modern military was an essential part of what was “Surprise and Awe.” Russian air forces arrived in Syria in grand style by reaching their base in Latakia undetected.
This commentary, which is certainly worth reading if you’re a serious student of the New Great Game, appeared on the informationclearinghouse.com Internet site on Thursday—and I thank Larry Galearis for sending it our way yesterday. Another link to this short essay is here.
Islamic State defector brings ‘goldmine’ of details on 22,000 supporters
A disillusioned former member of Islamic State has passed a stolen memory stick of documents identifying 22,000 supporters in over 50 countries to a British journalist, a leak that could help the West target Islamist fighters planning attacks.
Leaks of such detailed information about Islamic State are rare and give Britain’s spies a potential trove of data that could help unmask militants who have threatened more attacks like those that killed 130 people in Paris last November.
A man calling himself Abu Hamed, a former member of Islamic State who became disillusioned with its leaders, passed the files to Britain’s Sky News on a memory stick he said he had stolen from the head of the group’s internal security force.
On it were enrolment forms containing the names of Islamic State supporters and of their relatives, telephone numbers, and other details such as the subjects’ areas of expertise and who had recommended them.
This very interesting Reuters story, filed from London, was posted on their Internet site at 8:11 p.m. EST on Thursday evening—and I think Doug Clark for sliding it into my in-box just after midnight Denver time this morning. Another link to this news item is here.
India’s Gold imports may be cut sharply keeping current account deficit under control
The strike by gold traders over the imposition of 1% excise duty may end up helping the government as imports of the metal are expected to be cut sharply in Mach from a year earlier, keeping the current account deficit under control. The strike has also brought down the premium on gold.
“No consignments of gold bar, dore gold and gold jewellery have arrived in the last 10 days as the requirement for the metal has dried up once the strike was announced. The government will be able to narrow down the country’s CAD situation,” aid Mukesh Kothari, a director at RiddiSiddhi Bullions, a gold dealer.
India’s CAD is likely to narrow to 0.7% of GDP in the current financial year from 1.3% in FY15 owing to lower commodity prices, Nomura said in a report.
Today’s only gold-related news item, filed from Kolkata, put in an appearance on the Economic Times of India website at 4:00 a.m. IST on their Friday morning—and it’s something I found late last night on the Sharp Pixley website. The above three paragraphs are all there is to read.
The PHOTOS and the FUNNIES
The first photo is of a Peary Caribou—and I saw quite a few of these when I was stationed at Alert, N.W.T. back in the early 1970s. They’re deer size—and nowhere near as big as their cousins that live further south on the mainland of Canada. Like most native high-arctic animals, they have little or no fear of humans, as they’ve never been hunted. The other is a 13-lined ground squirrel—and is ubiquitous in southern Manitoba where I grew up in the 1950s and 1960s.
The WRAP
If JPMorgan succeeds in arranging a price sell-off, the potential benefit to the bank would be immense. It would also be about the most bullish thing that could occur in silver, to my mind, since it would appear to remove the last obstacle for a silver price liftoff. Along with JPMorgan not adding to its silver shorts through last Tuesday, for the first time ever, a significant reduction in the bank’s existing short position would be bullish beyond description.
Unfortunately, you can’t make an omelet without cracking some eggs and neither can JPM nor the other commercials buy silver (and gold) contracts without technical fund selling. And since technical fund selling only occurs on lower prices, it would appear that lower prices would be the commercials’ plan. There is no guarantee that JPM and the commercials will succeed in arranging a sell-off, but history appears to have been on that side. This brings us to the only bearish factor that I can see – the current market structure according to the COT report.
Based upon the current market structure, I’ve seen predictions for a certain sell-off and other predictions that the commercials will fail this time and get overrun. Both sets of predictions are made with equal implied certainty and seem made to achieve maximum benefit to those making the correct prediction. I’m not smart enough to predict with guaranteed precision, but I’m comfortable with the idea that things will likely work out in a way that most benefits JPMorgan. That’s what I mean when I say the probabilities favor lower prices on COT considerations alone.
If we do get an eventual price resolution to the downside, as the COT probabilities suggest, the actions of JPMorgan (described above) do suggest, more strongly than ever before, that this will be the final sell-off. That is, if JPMorgan succeeds in buying back and closing out a significant portion of its COMEX silver short position, it would then appear to be ideally positioned for silver price fireworks to the upside. I suppose the fireworks could come sooner and that JPMorgan won’t be able to buy back a big chunk of its silver shorts on lower prices, but then again, the world of silver seems to resolve around what’s best for JPMorgan. — Silver analyst Ted Butler: 09 March 2016
Today’s pop ‘blast from the past’ is an instrumental piece [remember them?] from back in 1968—and if you’re of a certain vintage you’ll certainly remember it well. The last time I heard it was in an elevator late last year. The link is here.
Today’s classical ‘blast from the past’ is a short work by Richard Wagner—and I’ll be the first person to admit that I’m not a fan of most his work, but this piece is an exception. It’s the Prelude to Act III of his 3-act opera “Lohengrin“. The video isn’t the greatest, but the audio is terrific—and that’s all that matters. The link is here.
I certainly wasn’t happy to see the heavy hand of JPMorgan et al in the precious metal market yesterday, particularly in early Far East trading, but especially the sell-off in the thinly-traded after hours market late on a Friday afternoon when virtually nobody was around. This is as crass as it gets. They had an easy time of it because the market was so illiquid—and that’s why the associated volumes in both gold and silver were so light during that event—but that certainly wasn’t the case as far as volume was concerned during the take-down in the Far East yesterday morning. It was brutal.
Here are the 6-month charts for the Big 6+1 commodities once again—and I must admit that from a technical point of view the four precious metals appear ripe for an engineered price decline starting on Sunday evening.
But will they, or can they…that is the question, as it’s an entirely different precious metal market out there now than it was when the New Year started. There are lots more players in the game at this juncture—and that can be seen both in the COMEX volume numbers in both gold and silver—and also in the strong performances of their associated equities.
With negative interest rates on trillions of dollars worth of bonds and other fixed income investments extending out for many years, there are very few options left for investors, both large and small, to put their money in order to just stand still. So ‘da boyz’ may not have an easy time of it, as I’m sure that some big players are just waiting for an entry point—and those may come at prices not advantageous for the powers-that-be.
All we can do is wait it out and see what happens.
As I, along with many other pundits have pointed out, the Draghi disaster of a few days ago will seriously infect any statement coming out of next week’s FOMC meeting, as central banking is finally seen for the spent force that it has become.
That only leaves the gold card unplayed, along with the financial reset that comes with it. But will they—and if so, how soon?
It’s now the only option left regardless of the fact of whether they want to play it or not.
Along with this ‘new and improved’ gold price will come a new price for all precious metals, particularly silver. The boys over at JPMorgan are crooks, but they’re also nobody’s fools—and I would guess that they’re hording all the silver they can for the day when that comes, because when it does, the price of gold will be out of reach for all but the super rich—and silver will become the ‘new gold’.
I’m done for the day—and the week—and I’ll see you here on Tuesday.
Ed
The post Will Silver Become the ‘New Gold’? appeared first on Ed Steer.