22 November 2016 — Tuesday


The gold price traded mostly within an $11 price range on Monday, but only because it was forced to do so.  The first price capping came shortly after 9:30 a.m. China Standard Time on their Monday morning — and then again at, or just after, the noon London silver fix was in.  From there it was sold down to its New York low, which was 1 minute after the COMEX close.  It rallied 4 dollars from there until the gold market closed at 5:00 p.m. EST.

The low and high ticks aren’t worth looking up, but here they are anyway.  The low was $1,205.40 — and the high tick was $1,217.80 in the December contract.

Gold finished the Monday trading session at $1,214.00 spot, up $6.60 from Friday’s close.  Net volume was just under 132,000 contracts — and roll-over activity out of December wasn’t overly heavy.

It was more or less the same price pattern in silver, although the price cappings in Far East and London trading came at slightly different times for this precious metal.  But the New York low tick appeared to come at the precise same time as it did for gold — a minute after the COMEX close.  The tiny rally in silver after that got capped within an hour — and it chopped quietly sideways into the close.

Silver traded in a 25 cent range for all of the Monday session, so I shan’t bother with the highs and lows.

Silver was closed in New York yesterday at $16.56 spot…up a penny on the day.  But, like gold, would have closed materially higher if allowed to do so.  Net volume was just under 34,500 contracts — and roll-over activity out of December wasn’t overly heavy, either.

Platinum traded more or less sideways until 1 p.m. China Standard time on their Monday afternoon — and was up around 8 bucks by 10 a.m. Zurich time, but faded a bit a the COMEX open approached.  It began to rally with more enthusiasm around 9:30 a.m. in New York, but both attempts to rally too far, were met by ‘da boyz’.  Platinum finished the Monday session at $936 spot, up 14 dollars from its close on Friday.

Palladium wasn’t allowed to do much to the upside — and the price was capped at the $730 spot mark multiple times starting shortly before the Zurich open — and continued for another hour and change.  The low price tick came moments before the Zurich close, which was 11 a.m. in New York.  It rallied a handful of dollars during the next hour or so — and finished the day at $728 spot, up 5 bucks.

The dollar index closed very late on Friday afternoon in New York at 101.30 — and when it opened shortly before noon on Sunday in New York, it made it as high as the 101.43 mark shortly after 6 p.m. EST.  From there it began to chop lower in a very wide range, making it down to the 100.78 mark minutes before 9 a.m. in New York.  It began to head higher at 10:30 a.m. — and that rally topped out a few minutes before the COMEX close.  It was all down hill from there, as the dollar index finished the Monday session in New York at 100.88 — down 42 basis points from its close on Friday afternoon.

Here’s the 3-day dollar index chart so you can see Monday’s trading action in some context.

And here’s the 6-month U.S. dollar index — and you can read into this whatever you wish.

The gold shares opened up a percent and change yesterday — and then traded more or less sideways in a fairly broad range in morning trading in New York, before settling down a bit in the afternoon.  The HUI closed higher by 1.26 percent.

It was more or less the same trading pattern in the silver equities.  But after their huge up/down move in morning trading, they began to sneak higher once again — and took a 1 percent plus vertical jump shortly before 3:30 p.m. EST.  I’m not sure what caused that, as I saw no such movement in any of the stocks that make up Nick’s index.  They didn’t do much after that.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by a very decent 3.24 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report shows that zero gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  Canada’s Scotiabank stopped all three contracts.

And just as a FYI data point here, there have been 468 silver contracts, plus 2,655 gold contracts posted for delivery so far in November, which are pretty decent amounts considering the fact that November is not a traditional delivery month for either precious metal.

The CME Preliminary Report for the Monday trading session showed that gold open interest in November dropped by 536 contracts, leaving 17 left — and that would be the second half of that Goldman issue/Scotiabank stop that appeared out of thin air last week.  The Friday Preliminary Report showed that 522 gold contracts were actually posted for delivery today, so that means that 536-522=14 short/issuers in gold for November were let off the delivery hook by those holding the long side of their contracts.  Silver o.i. in November rose by 3 contracts, leaving 4 still open.  Friday’s Daily Delivery Report showed that zero silver contracts were posted for delivery today, so that means, obviously, that there are still 4 contracts left to delivery in November.

There was another big gold withdrawal from GLD, as an authorized participant removed 209,736 troy ounces on Monday.  There were no reported changes in SLV.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, November 18 — and this is what they had to report.  For the second week in a row, there gold ETF declined, this week by 40,399 troy ounces.  Their silver ETF dropped as well, by exactly 116,000 troy ounces.

There was a sales report from the U.S. Mint yesterday.  They sold 1,000 troy ounces of gold eagles — and a rather impressive 525,000 silver eagles.

There wasn’t a lot of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  There was 40,629 troy ounces received — and nothing was reported shipped out.  Of the amount received, there 3,400 troy ounces deposited at Brink’s, Inc. — and the remaining 37,229.700 troy ounces/1,158 kilobars [U.K./U.S. kilobar weight] went into the vault over at Canada’s Scotiabank.  The link to that activity is here.

It was very quiet in silver as well.  Nothing was reported received — and only 60,807 troy ounces were shipped out.  That small amount came out of Scotiabank.  I shan’t bother linking that activity.

The action over at the COMEX-approved gold kilobar depositories in Hong Kong sort of made up for the lack of U.S. depository activity, as they received 4,126 kilobars — and shipped out 5,371 of them.  All of that action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

I have the usual number of stories for a week-day column — and there should be at least a couple that you’ll find worth reading.


Donald Trump’s media summit was a “f—ing firing squad“

Donald Trump scolded media big shots during an off-the-record Trump Tower sit-down on Monday, sources told The Post.

“It was like a f–ing firing squad,” one source said of the encounter.

“Trump started with [CNN chief] Jeff Zucker and said “I hate your network, everyone at CNN is a liar and you should be ashamed,““ the source said.

“The meeting was a total disaster. The TV execs and anchors went in there thinking they would be discussing the access they would get to the Trump administration, but instead they got a Trump-style dressing down,” the source added.

A second source confirmed the fireworks.

This news item showed up on The New York Post‘s website at 5:12 p.m. EST on Monday afternoon — and I thank ‘David in California’ for sharing it with us.  Another link to it is here.

Editorial: Trump’s Fed Chairman — The Washington Post

It’s none too soon for President-elect Trump to think about whom he wants for chairman of the Federal Reserve. Come January, he will have little more than a year to make this decision, given that Janet Yellen’s term as chairman expires in February of 2018. She has so firmly interpreted congressional oversight as a form of political interference that it’s hard to see how she could be anything but an obstructionist in respect of monetary reform. She seems cool even to a centennial review of the Fed’s performance as the central bank commences its second century.

So what about a brilliant and tough-minded constitutional lawyer? Many of the questions surrounding the Fed, after all, have to do with the constitutional concept of money. To what were the Founding Fathers referring when, in the Constitution, they twice used the word dollars? How should that affect our thinking today? Could one find a constitutional maven who also had some political experience, a leader who has even campaigned for the idea of honest money when others were ignoring the issue? Even one prepared to open up the question of a gold standard?

It turns out that there is a figure that meets every one of those particulars — Senator Cruz. The constitutional Texan was the first candidate in the 2016 Republican primary to announce for the gold standard. That happened at the CNBC debate at Boulder, where Rick Santelli asked him for his thoughts on the Federal Reserve and whether he wanted the Congress to get involved in monetary policy. Mr. Cruz was waiting for him. He answered that the Fed was doing a great job ­— inflating stock prices for Wall Street. That, though, wasn’t helping working men and women, Mr. Cruz averred.

This editorial was posted on The New York Sun‘s website on Saturday sometime — and I found it embedded in a GATA release.  It’s certainly worth reading if you have the interest — and another link to it is here.

Dallas Stares Down a Texas-Size Threat of Bankruptcy

Picture the next major American city to go bankrupt. What springs to mind? Probably not the swagger and sprawl of Dallas.

But there was Dallas’s mayor, Michael S. Rawlings, testifying this month to a state oversight board that his city appeared to be “walking into the fan blades” of municipal bankruptcy.  “It is horribly ironic,” he said.

Over six recent weeks, panicked Dallas retirees have pulled $220 million out of the fund. What set off the run was a recommendation in July that the retirees no longer be allowed to take out big blocks of money. Even before that, though, there were reports that the fund’s investments — some placed in highly risky and speculative ventures — were worth less than previously stated.

What is happening in Dallas is an extreme example of what’s happening in many other places around the country. Elected officials promised workers solid pensions years ago, on the basis of wishful thinking rather than realistic expectations. Dallas’s troubles have become more urgent because its plan rules let some retirees take big withdrawals.

Now, the Dallas Police and Fire Pension System has asked the city for a one-time infusion of $1.1 billion, an amount roughly equal to Dallas’s entire general fund budget but not even close to what the pension fund needs to be fully funded. Nothing would be left for fighting endemic poverty south of the Trinity River, for public libraries, or for giving current police officers and firefighters a raise.

I’ve posted a couple of stories about this subject over the last six months — and here’s the latest update on the situation.  This news item appeared on The New York Times website on Sunday sometime —  and it comes to us courtesy of Richard Saler.  Another link to it is here.

The Fall of House Clinton — Jonah Goldberg

Dear Reader (and all ships at sea),

Last night was the traditional National Review smoker on our splendid post-election cruise. This is an ancient tradition, the origins of which stretch back into the mists before time and the stories of a young solo sailor by the name of William F. Buckley Jr. — sweat, sea water, and shark blood glistening off his chest — who settled in to enjoy a relaxing cigar after killing the great white beast with his bare hands.

I bring this up for two reasons. First, to alert the reader that I am feeling a bit hung over from both smoke and spirit alike (so please, stop reading so loudly!); second, because I think I must say goodbye to another great white beast: Bill Clinton — and his remora bride, Hillary.

This is a good time to do it. The feeding frenzy atmosphere around the Trump transition is bananas given that there’s so little to say about it. My position on Trump remains unchanged from last week’s G-File: Like Bill Clinton after taking a blood test, I am entirely in wait-and-see mode.

Meanwhile, if I wait too long to give the Clintons a send-off, it will seem not only gratuitous — which would be fine, that’s what I’m going for — but also stale. The bad taste of the Clintons lingers on enough, though — like the acidic after-burp from my lunch in Mexico yesterday — that it still seems a bit relevant.

I’d never heard of Jonah Goldberg until this commentary from the National Review appeared in my in-box yesterday afternoon…but I won’t soon forget him.  This guy has a way with words!  It was posted on their website at 4:00 a.m. on Saturday morning EDT — and it comes to us courtesy of reader U.D.  It’s definitely worth reading — and another link to it is here.

Former CEO of UBS and Credit Suisse: “Central Banks Are Past the Point of No Return, It Will All End in a Crash“

In an interview with Swiss Sonntags Blick titled appropriately enough “A Recession Is Sometimes Necessary“, the former CEO of UBS and Credit Suisse, Oswald Grübel, lashed out by criticizing the growing strength of central banks and their ‘supremacy over the markets and other banks’. The former chief executive officer claimed that the use of negative interest rates and huge positive balance sheets represent ‘weapons of mass destruction’. He calls for an end to the use of negative interest rates.

Sounding more like a “tinfoil” blog than the former CEO of the two largest Swiss banks, Grübel warned that central banks have “crossed the point of no return” which will ultimately “end in a crash.”

Joining Deutsche Bank in slamming NIRP, Grubel said that banks are losing hundreds of millions of francs each year to negative interest rates paid to central banks.

Worse, he warned that central banks will eventually lose their credibility in the markets but that this could take 10 years or more, at which point it will “all end in a crash.” What happens then? The former CEO believes that the final outcome will be wholesale financial nationalization: “after that all banks could belong to the state”

This article was posted on the Zero Hedge website at 4:58 p.m. on Sunday afternoon EDT — and I thank Brad Robertson for pointing it out.  Another link to this story is here.

Jim Rickards: The War on Cash Just Escalated Big-Time

“I expected this soon,” Jim Rickards alerted us this morning…“but it’s playing out [in India] now.”

Jim introduced his concept of “ice-nine” in Saturday’s reckoning. “Ice-nine” is a Frankenstein water molecule from Kurt Vonnegut’s science fiction classic Cat’s Cradle.

Once released, it freezes every normal water molecule it contacts. Then it spreads…and spreads…until every body of water in the world is frozen solid.

In his brand-new book, The Road to Ruin, Jim applies the “ice-nine” metaphor to the global financial system. One part of the system freezes. Then it spreads… and spreads… until the entire financial system freezes over.

Ninety percent of all transactions in India are conducted in cash. And India just shocked its citizens this week by suddenly banning its popular 500-rupee and 1,000-rupee bills, worth $7.50 and $15 respectively. Hundreds of millions who depend almost exclusively on cash have been reduced to barter.

I’m now awaiting the day when the U.S. government pulls that stunt with the US$100 bill.  This commentary, which is definitely worth reading, showed up on the dailyreckoning.com Internet site last Thursday — and the first person through the door with it was Australian reader ‘J.W.’  Another link to it is here.

This Is Where I Get Off — Jeff Thomas

We began writing on the War on Cash some time ago, when it was still just a theoretical ploy that we believed banks and governments were likely to employ as their economic adventurism continued to unravel.

But, in the last year, several countries have, as a part of the War on Cash, begun removing larger bank notes from circulation in order to force people to perform all economic transactions through the banking system, ensuring that the banks would gain total control over the movement of money.

Of course, the banks could not admit their true goal to the public. They instead used the governments to claim that the measure was being undertaken to restrict crime (money laundering, drug deals, black marketing, terrorism, etc.).

Recently, without any fanfare, ATMs in Mexico have ceased issuing the 500-peso note (US$24). The largest note is now the 200-peso note (US$10).

This worthwhile commentary by Jeff showed up on the internationalman.com Internet site yesterday — another link to it is here.

Doug Noland: As Exciting as the 1930s

“One trouble with every inflationary creation of credit is that it acts like a delayed time bomb. There is an interval of indefinite and sometimes considerable length between the injection of the stimulant and the resulting speculation. Likewise, there is an interval of a similarly indefinite length of time between the injection of the remedial serum and the lowering of the speculative fever. Once the fever gets under way it generates its own toxics.” “The Memoirs of Herbert Hoover – The Great Depression 1929-1941”

There are few apt comparisons to today’s extraordinary backdrop. Late in the “Roaring Twenties” period offers the closest parallel – the global nature of vulnerabilities and faltering booms; policymaker confusion and increasing ineffectiveness; fundamental deterioration in the face of impenetrable speculative impulses. It was by 1929 deeply embedded in speculator psyche that the enlightened Federal Reserve would never allow a market or economic collapse.

Top Federal Reserve officials (Yellen, Dudley, Bullard) this week suggested that Trump policies specifically target productivity. It must be a tough pill to swallow for the Fed to admit that their policies have succeeded in stimulating Credit growth and record securities prices, while coming up dreadfully short with respect to productivity gains.

By the late 1920s it had become an objective of the Federal Reserve to stimulate productive Credit. While there was deepening concern for market speculation, the weakened economic backdrop had the Fed determined to support ongoing Credit expansion.

An increasingly entrenched speculative Bubble had over years fomented financial and economic fragilities. Meanwhile, the Federal Reserve’s focus on the increasingly vulnerable economy worked to underpin speculator enthusiasm. Even as the fundamental backdrop turned alarming, a manic inflationary psychology grew only more powerfully entrenched in the marketplace. In the end, efforts to promote productive Credit fatefully prolonged the life of “Terminal Phase” Bubble excess.

Doug’s weekly Credit Bubble Bulletin never crossed my mind when I was writing Saturday’s column — and I only thought of it very late on Saturday evening Denver time.  I inserted it into the website version at 1 a.m. EDT on Sunday morning.  Here it is again, as it obviously never made the e-mail version — and you probably missed it on my website.  Another link to it is here.

Sarkozy Concedes Defeat In First Republican Primary, Backs Fillon

It’s official – not only is Sarkozy out, but he is backing Francois Fillon, in a setback for the alleged – if only according to the ever more embarrassing industry of pollsters — front runner for the presidency, Alain Juppe, and another big win for Marine Le Pen.

Less than four months after he announced (what he hoped would be) his triumphal return to politics, the hopes of former French president Nicolas Sarkozy have imploded, as a result of a poor showing in today’s first presidential primary in France in which the conservatives will pick their candidate for president.

Indeed, according to many pollsters – especially those who can not conceive of a Le Pen presidency – Juppe was expected to be the next president of France; which is why his surprisingly poor showing, in second place with just 26% of the vote per exit polls, could mean he has an uphill climb in his fight with Le Pen, who may be the biggest winner from today’s primary.

This news story appeared on the Zero Hedge Internet site at 3:49 p.m. EST on Sunday afternoon — and another link to it is here.

The Big Short: is the next financial crisis on its way?

In the Oscar-winning The Big Short, Steve Carell plays the angry Wall Street outsider who predicts (and hugely profits from) the great financial crash of 2007-08. He sees sub-prime mortgages rated triple-A but which, in reality, are junk – and bets billions against the banks holding them. In real life he is Steve Eisman, he is still on Wall Street, and he is still shorting stocks he thinks are going to plummet. And while he’s tight-lipped about which ones (unless you have $1m to spare for him to manage) it is evident he has one major target in mind: continental Europe’s banks – and Italy’s are probably the worst.

Why Italy? Because, he says, the banks there are stuffed with “non-performing loans” (NPLs). That’s jargon for loans handed out to companies and households where the borrower has fallen behind with repayments, or is barely paying at all. But the Italian banks have not written off these loans as duds, he says. Instead, billions upon billions are still on the books, written down as worth about 45% to 50% of their original value.

The big problem, says Eisman, is that they are not worth anywhere near that much. In The Big Short, Eisman’s staff head to Florida to speak to the owners of newly built homes bundled up in “mortgage-backed securities” rated as AAA by the investment banks. What they find are strippers with loans against multiple homes but almost no income, the mortgages arranged by sharp-suited brokers who know they won’t be repaid, and don’t care. Visiting the housing estates that these triple-A mortgages are secured against, they find foreclosures and dereliction.

This time around, Eisman is not padding around the plains of Lombardy because he says the evidence is in plain sight. When financiers look to buy the NPLs off the Italian banks, they value the loans at what they are really worth – in other words, how many of the holders are really able to repay, and how much money will be recovered. What they find is that the NPLs should be valued at just 20% of their original price. Trouble is, if the Italian banks recognise their loans at their true value, it wipes out their capital, and they go bust overnight.

“Europe is screwed. You guys are still screwed,” says Eisman. “In the Italian system, the banks say they are worth 45-50 cents in the dollar. But the bid price is 20 cents. If they were to mark them down, they would be insolvent.”

This very worthwhile news item was posted on theguardian.com Internet site at 7:00 a.m. GMT on Saturday morning, which was 2 a.m. in New York…EST plus 5 hours — and another link to it is here.  It’s the second contribution of the day from Australian reader ‘J.W.’

Dmitry Orlov: Trump, Financial Crisis and the New Cold War

This 26:24 minute audio interview with Dmitry put in an appearance on the saker.is Internet site last Wednesday — and there is no transcript.  But it’s certainly a must listen for any serious student of the New Great Game — and I thank Larry Galearis for bringing it to our attention.

Duterte Meets Putin, Lashes Out at Western “Hypocrisy“, While “Fed-up” Turkey Wants to Join Shanghai Bloc

As China’s president Xi was setting the stage for a new regional free-trade deal dubbed the Free Trade Area of Asia-Pacific at the Asia-Pacific Economic Co-operation summit in Lima, Peru now that Obama’s TPP has suffered a quiet death, a new geopolitical axis was being formed.

In the first meeting between the Philippines’ outspoken president with Russian leader Vladimir Putin in Peru, Duterte held nothing back in his views about major powers like the United States, suggesting he is sticking to his guns on re-aligning foreign policy away from Washington, despite his warm words for incoming U.S. president, Donald Trump.

Reiterating a recurring talking point from his national addresses, Duterte lashed out at Western “bullying” and “hypocrisy” in his first meeting with Russian counterpart Vladimir Putin and said when it came to alliances, the United States could not be trusted. “Historically, I have been identified with the Western world. It was good until it lasted,” he told the Russian leader. “And of late, I see a lot of these Western nations bullying small nations. And not only that, they are into so much hypocrisy,” he said, according to a transcript of Saturday’s meeting provided by his office cited by Reuters.

The Philippines wasn’t the only nation expressing a desire to drift away from western-influence. On Sunday Turkish president Tayyip Erdogan was quoted by Reuters as saying that Turkey did not need to join the European Union “at all costs” and could instead become part of a security bloc dominated by China, Russia and Central Asian nations.

Sensing that Turkey’s prospects of joining the E.U. look more remote than ever after 11 years of negotiations, after European leaders have been critical of its record on democratic freedoms, while Ankara has grown increasingly exasperated by what it sees as Western condescension, the Turkish president is increasingly resorting to scorched earth diplomacy, and increasingly more vocal threats of drifting away from the European sphere of influence. Yesterday Turkey announced it is considering the purchase of a Russian-made S-400 long-range air defense missile system as an alternative to western unwillingness to help Turkey develop an anti-missile defense shield.

This story showed up on the Zero Hedge website at 10:27 a.m. EST on Sunday morning — and another link to it is here.

OPEC oil cut nears as battered Saudis bow to indomitable U.S. shale — Ambrose Evans-Pritchard

The OPEC cartel is poised to slash crude output after weeks of feverish shuttle-diplomacy by Saudi Arabia, halting the ‘pump and dump’ price war that has ravaged the oil industry for the last two years.

Officials from the cartel’s 14 member states will gather in Vienna as soon as Monday to start hammering out the final details of a deal to clear the enormous surplus hanging over on the market. They have received quiet assurances from the Kremlin that Russia will play its part by freezing production.

“OPEC talked themselves into a corner and they have to come away from Vienna with something,” said David Fyfe, market chief at oil traders Gunvor.

“Prices could easily fall below $40 again if this ends without a deal. They need to cut by at least 1m barrels a day (b/d) to eat into inventories in early 2017.”

“It will be tricky: the Saudi red line is that they are not going to do this alone...”

The above is all there is to the AE-P offering that’s posted in the clear over at the telegraph.co.uk Internet site.  It showed up there at 5:42 p.m. GMT on their Sunday afternoon — and the rest of it is hidden behind a subscription wall.  I thank Roy Stephens for sending it our way.

Asian export nations wary dollar boost gives Trump pretext to beat them

Asian currency policymakers are worried that the strengthening of the dollar on expectations of U.S. President-elect Donald Trump’s fiscal policies could be used by his administration as a stick to beat them with on trade protectionist grounds.

China, Japan, South Korea and Taiwan are already on the U.S. Treasury’s monitoring list, along with Germany and Switzerland, having met some of the conditions to be labeled a currency manipulator, and are wary of the criteria being changed to make it easier.

The dollar’s post-election surge, which has taken it to eight-year highs against China’s yuan and 5-1/2 month highs against Japan’s yen this week, has been driven by views that Trump’s spending and tax plans will lead to higher interest rates.

“Weaker currencies will give an excuse for Trump to blame Asian countries, particularly China, for manipulating exchange rates,” a Japanese official with knowledge of currency policy told Reuters.

This Reuters article, co-filed from Tokyo and Seoul, was posted on their Internet site at 9:31 p.m. EST on Saturday evening — and I thank Swedish reader Patrik Ekdahl for sending it our way.  Another link to it is here.

China Devalues Yuan For Longest Streak Ever to 8 Year Lows

For the 12th consecutive day, China has weakened the official fix of the Yuan against the USD, slashing its currency by over 2.2% in that time – a move only beaten by the “one-off” devaluation in August 2015 that crashed global stock markets. With a 189 pip ‘devaluation’ tonight, Yuan is now trading at its weakest since June 2008…

In December 2015, China weakened Yuan 10 days straight  leading into The Fed’s rate-hike decision. The current 12-day weakening streak is an all-time record for the Yuan fix.

The last four times that Yuan has plunged, U.S. equity market volatility has exploded (and stocks have tumbled).  But this time is different…as Yuan has collapsed, VIX has crashed too…so far.

This 2-chart Zero Hedge piece put in an appearance on their website at 8:40 p.m. EST on Sunday evening — and both charts are worth a quick look.  Another link to this article is here.

The Gold Market: Where Transparency means Secrecy — Ronan Manly

Transparency is an important concept in financial markets mainly because it encourages informational and market efficiency. Applied to the gold market for example, this would prevent larger gold traders having an information and trading advantage over the retail gold buying public such as ourselves. So transparency is not just an abstract concept, it has real world implications.

To illustrate this contradiction of transparency versus secrecy, I’ll look at two main sets of gold market participants:

– firstly the central bank or official sector, which includes central banks and organisations such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS),

– and secondly the wholesale London gold market as represented by the London Bullion Market Association (LBMA) and its bullion bank members.

I have chosen the official sector and the investment sector since together they represent two of the largest areas of gold ownership and gold activity globally, with central banks claiming to hold about 33,000 tonnes of gold, and bullion banks being the largest traders of gold globally.

This very, very, very long speech/commentary by Ronan showed up on the bullionstar.com Internet site yesterday — and if you’re pressed for time, you should run through the ‘Conclusions‘ section at the end.  That’s what I ended up doing, once I’d scrolled through its novel-sized length.  Another link to this short story is here.

Gold is Trump’s trump — Reg Howe

Gold market rigging litigator Reginald H. Howe writes that as president Donald Trump will have the opportunity to return the United States to a gold-based currency system that will restore prosperity to the country and the world. Howe outlines step by step how it could be done.

In part, Reg’s bio reads as follows…”He is a graduate of Harvard College, Harvard Law School and the Bologna (Italy) Center of the Johns Hopkins School for Advanced International Studies.”  These are identical to the credentials that Jim Rickards has.  I’ve know Reg for about 15 years — and he was a guest in our house for several days many moons ago.  There are absolutely no flies on this guy!

His commentary is headlined “Trump’s Trump: Gold” — and it’s posted at his internet site, the Golden Sextant.  And as you are probably already beginning to suspect, I highly recommend you read it!  Another link to it is here.  It’s an essay that I found posted on the gata.org Internet site on Sunday.

Langbord family petitions U.S. Supreme Court for return of 1933 double eagles

The Langbord family filed a petition with the United States Supreme Court on Nov. 4, asking the nation’s highest court to overturn a District and Appellate court who each held that the family’s 10 1933 Saint-Gaudens double eagles were stolen government property.

The filing repeatedly warns that the issues at hand are bigger than the 10 coins that were allegedly found by Joan Langbord in her family’s safe deposit box in 2003 and directs the Supreme Court to two key questions.

First, the petition asks whether the government can avoid the rules set forth in the Civil Asset Forfeiture Reform Act of 2000 (CAFRA) when it seizes property from private citizens and intends to keep it by asserting that it was stolen government property and declaring that it has no intention of seeking forfeiture. The second question is whether the government can avoid CAFRA’s protections by waiting for years and then filing a declaratory judgment claim that seeks the same relief.

In asking these two questions, the filing states that the court would give clear guidance to the government, property owners and lower courts in determining when CAFRA’s timelines and protections are triggered. Assessing a broader interest beyond a specific pattern is crucial in making a persuasive request to the Supreme Court, who only hears a small fraction of the cases presented to it.

And so the saga continues.  I’m sure they’ll make a movie out of this at some point.  This gold-related news item showed up on the coinworld.com Internet site on November 11 — and it I thank Tolling Jennings for sending it our way.  Another link to it is here.

Gold Fields, Silver Standard withdraw offer for Kirkland Lake

Gold Fields Ltd. and Silver Standard Resources Inc. withdrew their offer to buy Kirkland Lake Gold Inc. after the Canadian miner asked its shareholders to vote in favor of its takeover bid for Australia’s Newmarket Gold Inc.

Kirkland had confirmed a Reuters report last week that South Africa’s Gold Fields and Canada’s Silver Standard had made three joint bids for the company and recently sweetened their offer to about C$1.4 billion ($1.04 billion).

Gold Fields said on Friday it would pursue negotiations with Kirkland if the miner’s shareholders rejected the Newmarket transaction.

This Reuters news item, filed from London, was posted on their Internet site on Monday evening — and it’s another new item I found in a GATA release — and another link to it is here.

Bidding far more than expected, Chinese firm wins Barrick’s half of big Australian gold mine

Half of Australia’s most famous gold mine will fall into Chinese hands after a little-known group blew Australian bidders out of the water with a $1.3 billion-plus bid for a stake in Kalgoorlie’s Super Pit.

In what is shaping as another stern test for the Foreign Investment Review Board, Minjar Gold — a subsidiary of Shanghai-listed property group Shandong Tyan Home — will buy the 50 percent Super Pit stake owned by North American mining giant Barrick Gold.

The deal, which is expected to be announced today, is conditional on FIRB approval and will give Minjar a half share of the 800,000 ounces of gold produced from the Super Pit each year. …

Minjar is understood to have beaten a rival bid from Australia’s biggest gold producer, Newcrest Mining. A successful offer from Newcrest would have returned the Super Pit into Australian hands for the first time since 2002.

The US$1bn (A$1.36 billion) price comfortably eclipses market expectations for the sale. Analysts had predicted the Barrick stake, which was put on the market in August, would fetch up to US800 million.

This gold-related news item appeared on theautralian.com.au Internet site on their Monday — and the above four paragraphs are all that are posted in the clear from this GATA release.  That actual headline reads “Chinese Make a Gold Rush for Super Pit Stake“.  The rest of the story is hidden behind a subscription wall.


Here are two more finalists from the 2016 Comedy Wildlife Photography Awards.  I’ll be featuring a couple of these very day until I run out.  Click to enlarge.


It was just another day where ‘da boyz’ showed up only when they had to — and kept a quiet lid on things, as there were several times during the Monday trading session that things would have certainly gotten out of hand to the upside from a price perspective in gold, silver and platinum if they hadn’t shown up.

How long this will continue remains to be seen, but it appears that prices are being held in place.  But for what reason — and for how long — I have no idea.

Here are the 6-month charts for all four precious metals, plus copper once again — and only silver set a new low closing price for this move down during the Monday trading session.

And as I type this paragraph, the London open is less than ten minutes away — and I note that gold was rallying steadily in Far East trading on their Tuesday morning, just like it was on Monday.  But the short buyers/long sellers of last resort showed up shortly before 10 a.m. China Standard Time — and the price has been chopping lower ever since — and is up $2.10 the ounce at the moment, as it rallies anew.  Silver was really on a tear, but as you can see, ‘da boyz’ were all over the price as necessary — and at 2 p.m. CST they had to step in for the second time during the Shanghai trading session.  They drove it down to the $16.70 spot mark, but it’s attempting to rally once more — and is up 23 cents at the moment.  Platinum and palladium’s respective rallies also met the same fate at 2 p.m. CST, but have turned higher in the last few minutes — and the former is currently up 10 bucks — and the latter by 5.

Net HFT gold volume is already pretty chunky at just over 45,000 contracts — and that number in silver is up there as well at just under 12,000 contracts.  December roll-over volume is rather light at the moment.

The dollar index shed a bit over 20 basis points the moment that trading began in New York at 6:00 p.m. EST yesterday evening — and began to head higher a bit over an hour later.  The real rally began minutes after 2 p.m. China Standard Time — and made it up to the 101.10 mark, but is off that by a bit — and up 12 basis points currently.

I would guess that JPMorgan et al used the 2 p.m. rally in the dollar index to smack the precious metal prices, but the moment the index headed lower, they headed higher once again.

Ted and I spent a good deal of time on the phone yesterday discussing why the Managed Money traders were ‘no shows’ on the short side during the reporting week.  And it’s not just one or two of these traders that didn’t show up, it was all of them.  What happened to make them decide to abandon the short side en masse at this critical juncture?  A question with no answer at the moment.

Today, at the close of the COMEX trading, is the cut-off for this week’s Commitment of Traders Report — and because of the U.S. Thanksgiving holiday on Thursday, this report won’t be posted on the CFTC’s website until next Monday.

Ted and I were also discussing the possibility that not all of last week’s trading data made it into this past week’s report.  But the price activity since the cut-off seems to negate that option — and why would it just be short-side sales that weren’t reported in a timely manner?  Monday’s report will tell all.

And as I post today’s column on the website at 4:05 a.m. EST — I see that all four precious metals continue with their respective rally attempts during the first hour of London and Zurich trading, but are obviously running into ‘resistance’…especially gold and silver.  At the moment, gold is up $3.50 — and silver is up 28 cents.  Platinum is up 11 dollars now — and palladium is higher by 9 bucks.

Net HFT gold volume is now up to 52,000 contracts, with still not a lot of roll-over/switching volume — and that number in silver is 13,600 contracts, which isn’t a huge change from an hour ago.  Roll-over volume has picked up in silver by a bit.

The dollar index continues to slide from its 101.10 high tick, which came forty-five minutes before the London open — and the index is now down on the day by 6 basis points.

If you subtract Thursday’s trading session because of the U.S. Thanksgiving holiday, plus a good chunk of the following ‘Black Friday’ trading session, there sure isn’t much time left for the December contract holders in both silver and gold to roll out of December.  First Day Notice is next Wednesday, so there are really less than five full trading days left before those contract holders that aren’t standing for delivery, have to roll or sell these positions.  It should be action-packed on the COMEX from now until then.

That’s all I have for today — and the rest of the Tuesday session could prove interesting.

See you on Wednesday.


The post Silver Closed At a New Low For This Move Down appeared first on Ed Steer's Gold and Silver Digest.

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