Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1199.70 down $8.40 (comex closing time)
Silver: $16.25 down 11 cents (comex closing time)
In the access market 5:15 pm
Gold $1212.30
silver $16.48
For the past two days, we have seen a lot of important stories on three fronts:
i) The Greek crisis
ii) the failed Ukrainian ceasefire.
iii) the turmoil at the West coast terminals as freighter backlogs continue to cripple the USA economy.
With respect to the Greek economy, the ECB decided to increase the ELA to 68 billion euros or an additional 3 billion will be granted to the banks due to the huge amount of bank runs in Greece this past week. However sovereign Greece announced that it has only one week’s worth of cash left which would put her out of money on Feb 24.2015. Headaches mount for our big underwriting banks who bet huge amounts of money on Greece’s survival. A Grexit will cause massive losses for the ECB bank and other official EU centres and the IMF. A lot of these losses must be transferred to other members of the EMU. Countries like Italy, Spain and France will not be available to absorb those losses.
The Ukrainian situation looks dire. The big push by Poroshenko to capture Debaltseve has failed as 700 of his troops surrendered having been surrounded by the rebels. It certainly looks like sovereign Ukraine will fail and that will cause headaches again for the 5 big USA underwriting banks and, Deutsche bank.
And now for gold/silver trading today.
Gold/silver trading: see kitco charts on right side of the commentary.
Today, we really had no change with respect to the Greek situation.
Following is a brief outline on gold and silver comex figures for today:
The gold comex today had a poor delivery day, registering 50 notices served for 5,000 oz. Silver comex registered 0 notices for nil oz .
Three months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 256.81 tonnes for a loss of 46 tonnes over that period.
In silver, the open interest rose by an astonishing 4178 contracts despite the fact that yesterday’s silver price was down by 92 cents. The total silver OI continues to remain relatively high with today’s reading at 175,193 contracts. What is more surprising is the fact that the front month of March only contracted by 2850 contracts with only 7 days before first day notice.
We had 0 notices filed for nil oz
In gold we had another surprisingly rise in OI even though gold was down by $18.40 yesterday. The total comex gold OI rests tonight at 389,530 for a gain of 5,290 contracts. Today we had 50 notices served upon for 5,000 oz. We are still pretty close to rock bottom OI gold support being around 359,000.
Today, we had a slight withdrawal of 0.3 tonnes with respect to inventory at the GLD no doubt to pay for fees/Inventory 767.96 tonnes.
In silver, /SLV no change in of silver inventory to the SLV/Inventory 320.327
We have a few important stories to bring to your attention today…
Let’s head immediately to see the major data points for today
.
First: GOFO rates: the crooks are no longer reporting.
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest rose by another 5290 contracts today from 384,240 all the way up to 389,530 even though gold was down by $18.40 on yesterday (at the comex close). We are now in the big delivery month of the active February contract and here the OI fell by 0 contracts remaining at 651. We had 0 contracts served upon yesterday. Thus we neither lost nor gained any gold ounces in this delivery month . The next contract month of March saw it’s OI fall by 102 contracts down to 910. The next big active delivery month is April and here the OI rose by 4743 contracts up to 262,024. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was awful at 48,344. The confirmed volume on Friday ( which includes the volume during regular business hours + access market sales the previous day) was fair at 189,561 contracts with mucho help from the HFT boys. Today we had 50 notices filed for 5,000 oz.
And now for the wild silver comex results. Silver OI surprisingly rose by a whopping 4178 contracts from 171,0365 all the way up to 175,193 even though silver was down by 92 cents yesterday. The bankers are still not able to shake any silver leaves from the silver tree and thus the reason for continuous raids by the bankers. I guess the CME needs to resort to another silver margin hike as this would be the only way to shake some longs to depart. The bankers are burning the midnight oil tonight trying to figure out what on earth is going on in silver. We are now in the non active contract month of February and here the OI remained constant at 56. We had 0 notices filed on yesterday so we neither gained nor lost any silver ounces in this contract month. The next big active contract month is March and here the OI fell by only 2,850 contracts down to 70,791. First day notice for the gold and silver February contract months is on Friday, Feb 27.2015 or 7 trading days away. The March OI is extremely high. The estimated volume today was poor at 22,764 contracts (just comex sales during regular business hours. The confirmed volume yesterday was unbelievable (regular plus access market) at 108,832 contracts with no appreciable rolls. We had 0 notices filed for nil oz today.
February initial standings
Feb 18.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil oz
Withdrawals from Customer Inventory in oz
64.30 oz (Manfra/2 kilobars
Deposits to the Dealer Inventory in oz
5000.02 (Brinks)
Deposits to the Customer Inventory, in oz
3407.47 oz (Brinks)
No of oz served (contracts) today
50 contracts (5,000 oz)
No of oz to be served (notices)
551 contracts (55,100 oz)
Total monthly oz gold served (contracts) so far this month
636 contracts(63,600 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
Total accumulative withdrawal of gold from the Customer inventory this month
164,207.6 oz
Today, we had 1 dealer transactions
we had 0 dealer withdrawals:
total dealer withdrawal: nil oz
we had 1 dealer deposit:
i) Into Brinks: 5000.02 oz (is the xxx.02 to make me happy?)
total dealer deposit: 5,000.02 oz
we had 1 customer withdrawals
i ) Out of Manfra; 64.30 oz (2 kilobars)
total customer withdrawal: 64.30 oz
we had 1 customer deposits:
i) Into Brinks: 3407.47 oz
total customer deposits; 3407.47 oz
We had 0 adjustments
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 50 contract of which 0 notices were stopped (received) by JPMorgan dealer and 48 notices were stopped (received) by JPMorgan customer account.
To calculate the total number of gold ounces standing for the December contract month, we take the total number of notices filed for the month (636) x 100 oz or 63,600 oz , to which we add the difference between the OI for the front month of February 601 contracts) minus the number of notices served today x 100 oz (50 contracts) x 100 oz = 118,700 oz, the amount of gold oz standing for the February contract month.( 3.692 tonnes)
Thus the initial standings:
636 (notices filed for the month x( 100 oz) or 63,600 oz + { 601 (OI for the front month of Feb)- 50 (number of notices served upon today} x 100 oz per contract} = 118,700 oz total number of ounces standing for the February contract month. (3.692 tonnes)
we neither gained nor lost any gold ounces standing.
Total dealer inventory: 809,950.970 oz or 25.19 tonnes
Total gold inventory (dealer and customer) = 8.256 million oz. (256.80) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 46 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real. I cannot see continual additions of strictly kilobars.
end
And now for silver
February silver: initial standings
feb 18 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
532,516.86 oz (Delaware, CNT HSBC,Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
498,299.500 oz (Scotia)
No of oz served (contracts)
0 contracts (nil oz)
No of oz to be served (notices)
56 contracts (280,000 oz)
Total monthly oz silver served (contracts)
384 contracts (1,920,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
5,170,861.0 oz
Today, we had 0 deposit into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 0 customer deposits:
total customer deposit: nil oz
We had 4 customer withdrawals:
i) Out of CNT: 8,322.210 oz
ii) Out of HSBC: 30.097.24 oz
iii) Out of Scotia: 491,186.910 oz
iv) Out of Delaware; 2910.500 oz
total customer withdrawal: 532,516.86 oz
we had 1 adjustment
i) Out of Delaware:
249,855.93 oz was adjusted out of the customer and this landed into the dealer account at Delaware.
Total dealer inventory: 68,100 million oz
Total of all silver inventory (dealer and customer) 175.081 million oz
.
The total number of notices filed today is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in February, we take the total number of notices filed for the month (384) x 5,000 oz = 1,920,000 oz to which we add the difference between the OI for the front month of February (56)- the number of notices served upon today (0) x 5,000 oz per contract = 2,200,000 oz, the number of silver oz standing for the February contract month
Initial standings for silver for the February contract month:
384 contracts x 5000 oz= 1,920,000 oz + (56) OI for the front month – (0) number of notices served upon x 5000 oz per contract = 2,200,000 oz, the number of silver ounces standing.
we neither gained nor lost any silver ounces standing in this February contract month.
It sure looks like something is brewing inside the silver comex. We are within a fraction of all time high in OI and yet the silver price is at all time lows. Something must eventually give out!!
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com or http://www.harveyorganblog.com
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
Feb 18/ a small withdrawal of .3 tonnes/no doubt to pay for fees/Inventory 767.96 tonnes
Feb 17/no changes in gold inventory at the GLD/Inventory 768.26 tonnes
feb 13. we another another withdrawal f 3.25 tonnes of gold from the GLD/Inventory 768.26 tonnes
Feb 12: we had a withdrawal of 1.8 tonnes of gold from the GLD/Inventory 771.51 tonnes
Feb 11.no change in gold inventory at the GLD/Inventory 773.31 tonnes
Feb 10 no change in gold inventory at the GLD/inventory 773.31 tonnes
Feb 9 no change in gold inventory at the GLD/Inventory 773.31 tonnes
feb 6/ no change in gold inventory tonight/inventory 773.31 tonnes
feb 5. we had another addition of 5.38 tonnes of gold to the GLD/Inventory tonight at 773.31 tonnes
Feb 4/2015; we had another addition of 2.99 tonnes added to the GLD inventory/Inventory tonight 767.93
Feb 19/2015 /we had a small withdrawal of .3 tonnes in gold inventory at the GLD
inventory: 767.96 tonnes.
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 767.96 tonnes.
end
And now for silver (SLV):
Feb 18.2015/ no change in silver inventory at the SLV/Inventory at 320.327 million oz
Feb 17 no changes in silver inventory at the SLV/Inventory at 320.327 million oz
Feb 13 no change in silver inventory at the SLV/inventory at 320.327 million oz.
Feb 12 no change in silver inventory at the SLV/inventory at 320.327 million oz
Feb 11 no change in silver inventory at the SLV/inventory at 320.327 million oz
Feb 10 no change in silver inventory at the SLV/inventory at 320.327 million oz
Feb 9 no change in silver inventory/SLV inventory at 320.327 million oz
Feb 6 no change in silver inventory/SLV’s silver inventory at 320.327 million oz.
Feb 5.we had no change in silver inventory/320.327 million oz/
Feb 4/we had a small withdrawal of 136,000 oz of silver from the SLV vaults/Inventory/320.327 million oz
feb 3.2015: we had a good addition of 1.149 million oz of silver inventory/inventory 320.463 million oz
feb 18/2015 we had no change in silver inventory/
SLV inventory registers: 320.327 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 5.0% percent to NAV in usa funds and Negative 5.4 % to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.5%
Percentage of fund in silver:38.0%
cash .5%
( feb18/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to + 3.24%!!!!! NAV (Feb 18/2015)
3. Sprott gold fund (PHYS): premium to NAV rises to +.12% to NAV(feb 18 /2015)
Note: Sprott silver trust back into positive territory at +3.24%.
Sprott physical gold trust is back into positive territory at +.12%
Central fund of Canada’s is still in jail.
end
And now for your most important physical stories on gold and silver today:
Early gold trading from Europe early Wednesday morning:
(courtesy Mark O’Byrne)
Gold Essential “Safe Haven” Due to Greece … Spain, Italy, Ukraine, Lehman and “Bad Stuff”
By GoldCore Research February 18, 2015 0 Comments
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Newstalk interviewed GoldCore’s Mark O’Byrne this morning about the investment asset that is not well understood – gold.
The interview began with Nick Bullman of Newstalk asking Mark to explain the poor performance of gold in recent years as it has underperformed since 2008.
Click here to listen
Gold prices rose every single year from 2000 to 2013 responded O’Byrne.
It had “massively outperformed” due to many risks and on the expectation of major financial crisis and had as such had priced in the financial crisis of 2008 and protected investors during and after the crisis.
Mark said that it was a matter of a classic bull market which frequently see “two steps forward and one step back” and lengthy periods of correction and consolidation.
He pointed out that Goldcore had warned in 2013 that a sharp correction might be due as is normal in all bull markets. He referred to the severe retracement of the gold bull market of the 1970s where gold prices fell over 50% between 1975-76 before rising a further 800% in less than 4 years.
Similar price performance could be seen in the coming years.
Gold had not performed very well in recent years but he believes that the unfolding crisis in the Eurozone and the very uncertain economic picture globally would likely lead to higher gold prices in the coming years.
He explained that the cost of mining one ounce of gold was, on average globally, $1,200 per ounce and that prices therefore could not fall below that level for any extended period of time He acknowledged that lower oil prices may bring costs of production down to some extent but that the cost of protection should stay above $1,000 per ounce.
At the same time the current low prices relative to costs of production had caused some mining companies to fold or postpone production which will lead to tighter supply in the future.
When asked why one should buy gold in a strong dollar environment and with deflation taking hold around the world he said that gold acts as a hedge against dollar and all paper currency devaluations.
Monetary policy across that world is still incredibly loose with interest rates near 0% and with the EU about to begin its QE money printing program or “experiment”. He used the example of Russia whose gold owners have been very well protected during that country’s recent painful economic and currency crisis.
He referred to recent academic research and the views of asset allocation experts like Ibbotson and Mercer who have shown gold is a classic “hedging instrument.”
He said that gold’s ideal conditions are not those of deflation but that the degree of uncertainty in the world today was a compelling reason to own gold. Gold does in well in deflation as gold cannot go bust – “that’s why central banks are the biggest buyers of gold today.”
The interviewer questioned gold’s hedge status referring to the brief fall in the gold price during the 2008 crisis, suggesting that investors used liquidity in gold to cover their losses.
Mark responded by clarifying that it was not gold investors selling physical gold but speculators and hedge funds who deal in futures contracts liquidating all positions en masse.
The paper price of gold fell in the very short term after the Lehman crisis but within weeks prices had recovered and closed the year higher – from $838 at the start of 2008 to close the year at $872 per ounce for an annual gain of 4 per cent.
Other assets were sharply lower in 2008 and so in a deflationary environment, gold outperformed and that outperformance continued in 2009, 2010, 2011 and 2012 prior to a sharp fall in 2013 (see chart above).
He added that gold had already anticipated and begun to price in the crisis. He clarified that gold is not an “absolute hedge” and that no such thing exists, but in the medium to long term gold always serves it’s purpose as essential financial insurance and a vital safe haven asset.
The short Newstalk interview can be listened to here (From 7th minute to 15 minute, 20 seconds)
MARKET UPDATE
Today’s AM fix was USD 1,206.50, EUR 1,059.36 and GBP 781.77 per ounce.
Yesterday’s AM fix was USD 1,221.75, EUR 1,072.56 and GBP 793.86 per ounce.
Gold fell 1.63 percent or $20.00 and closed at $1,208.50 an ounce yesterday, while silver slid 4.51 percent or $0.78 closing at $16.51 an ounce.
Gold fell to a six week low in the prior session to $1,203.80 after opening at $1,231.30 as some speculators closed out positions ahead of the week long Lunar New Year holiday that began today in China.
Gold in London continued to fall but remained above the $1,200 level.
Spot gold was down 0.1 percent at $1,207.21 an ounce in early London trading and Comex U.S. gold futures for April delivery were down $1.20 an ounce at $1,207.40. Spot prices hit their lowest since early January on Tuesday at $1,203.30.
Silver was down 0.5 percent at $16.48 an ounce. Spot platinum was unchanged at $1,170.95 an ounce, close to the previous session’s 5 and a 1/2 year low, while spot palladium was flat at $779.05 an ounce.
Today the U.S. Fed releases its minutes from their policy meeting from January 27-28th at 1800 GMT. The U.S. dollar rose 0.2 percent against the euro on Wednesday ahead of the U.S. Fed minutes release.
The British pound is close to a seven year high versus the euro after it was reported that UK unemployment figures dropped and earnings rose. The Bank of England commented that it sees inflation climbing “fairly sharply” as the effects of cheaper oil prices fade.
Greece’s government confirmed it would ask for a six month extension to its loan agreement with the euro zone, which it rightfully distinguishes from its ‘bailout’ programme.
Greek Prime Minister Alexis Tsipras told Germany’s Stern magazine an economic war with Russia was in no-one’s interests and that imposing sanctions on Moscow over the crisis in Ukraine was “hypocritical”.
“If you want to punish Russia, you need to punish all the countries where Russian multi-billionaires have invested their assets,” he told Stern in an interview released today.
Currency wars continue as nations continue to seek competitive advantage by devaluing their currencies through QE and now negative real interest rates.
Last week, Sweden’s Riksbank slashed its main policy rate to negative. It thus became the 14th central bank to ease monetary policy so far this year, but the first to actually take its “repo rate” below zero to -0.1 per cent.
Incredibly and some would say insanely, this means that Sweden is now charging its banks to lend money. In Britain, the same interest rate currently stands at a historic low of 0.5 per cent, but could well be cut further according to Mark Carney.
Switzerland and Denmark have already sent their deposit rates into negative territory – to -0.75 per percent to prevent currency appreciation.
All of this is extremely bullish for gold and silver. Prudent buyers will use weakness to accumulate physical bullion.
Breaking News and Updates Here
end
We brought the Paul Mylchreest story to your attention a few months ago whereby it looked like gold was being used as the short vehicle and the long part of that carry trade was the Nikkei. It now is true!!
(courtesy zero hedge/GATA)
Zero Hedge claims vindication for Mylchreest’s study of gold-suppressing yen trade
Submitted by cpowell on Tue, 2015-02-17 22:09. Section: Daily Dispatches
5:10p ET Tuesday, February 17, 2015
Dear Friend of GATA and Gold:
Zero Hedge today claims vindication for market analyst Paul Mylchreest’s study in December, conveyed to you by GATA —
http://gata.org/node/14822
— concluding that the price of gold has been suppressed for two years as part of a massive trade involving the Japanese yen and Japan’s stock index.
Zero Hedge’s commentary is headlined “Is The Bank Of Japan ‘Managing’ US Stocks Today?” and it’s posted here:
http://www.zerohedge.com/news/2015-02-17/bank-japan-managing-us-stocks-t…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
We now have a lawyer who is a consultant to the CFTC
give his opinion as to whether HFT trading constitutes manipulation.
He did this in his personal capacity and not necessarily for the CFTC.
His conclusions are remarkable!!
(courtesy Ted Butler)
A Remarkable Proposition
Theodore Butler
|
February 17, 2015 – 10:41am
A remarkable new paper by a Cornell law professor and CFTC staff counsel suggests that many aspects of high frequency computer trading (HFT) may be, in fact, illegal under various provisions of basic commodity law. Heretofore, it was generally assumed that HFT was legal, but disabused and impacted markets in disruptive manner on occasion. Many, like myself, never looked on HFT favorably, but few have tried to make the legal case against it. The author, Gregory Scopino, writes in his personal capacity and not on behalf of the CFTC. Not a short or easy read (at 90 pages), I feel Scopino makes a well-researched case and even offers answers to questions asked of me by readers, such as definitions for commodity terms and the like. Please take the time to scan the document.
If you would prefer a brief interpretation, try this.
There are many points to draw from this paper and I’ll offer my most salient takeaway. By looking at what is accepted by “everyone” as legally appropriate activity with a different perspective, the activity can instead look highly inappropriate and even illegal. Scopino looked at HFT not through the universal perspective of something that’s here to stay and that we must get used to; to looking at it through an interpretation that it might violate existing law. His conclusion appears to be that much of HFT is not properly aligned with existing commodity law. Not being a lawyer, I can only agree with him by what I’ve observed firsthand about the disruptive and manipulative effect of HFT. Not explicitly stated in the paper is my suggestion that only the one percent of market participants actively engaged in HFT seem to be for it, while the 99% of market participants not engaged in HFT wish it didn’t exist.
About the only difference I hold with Prof. Scopino is that he suggests that certain aspects of HFT may be manipulative on their face, where I consider HFT to be a manipulative price tool employed to extend the larger ongoing price manipulation in silver. He suggests HFT may be the manipulation; I claim the commercials first rig the price of silver (up or down) through HFT in order to force the technical funds and other price momentum speculators to buy or sell so that the commercials can take counterparty positions. I’ve alleged that the manipulation in silver existed long before HFT arrived on the scene some years ago, although I fully admit that HFT has made it easier for the silver commercial manipulators.
I was taken with something in the paper that is generally very hard to find – a good definition of the word “manipulation.” It’s a word, as you know, that I tend to overuse. Here is the definition in question (page 655) –
“The phrase price manipulation . . . means the elimination of effective price competition in a market for cash commodities or futures contracts (or both) through the domination of either supply or demand and the exercise of that domination intentionally to produce artificially high or low prices. Price manipulation is kindred to the exercise of monopoly power to dictate prices that would be unachievable in a truly competitive environment. The existence of price manipulation is largely a factual question involving determinations whether the requisite domination or of monopoly exists, whether an artificial price is caused by the exercise of that power and whether the dominant party specifically intended to bring about that artificial price.”
While Prof Scopino is referring to HFT only, I hope you recognize that “no competition, domination, monopoly and dictating prices” are words frequently used by me to describe the control of the 8 big short traders in COMEX silver. This definition clearly states that price manipulation first revolves around the factual question of whether the domination or monopoly exists, followed by the willful and successful exercise of that domination.
First things first – does a monopoly exist on the short side of COMEX silver? There would be no question of monopoly if one to eight traders controlled 100% of one side of any market; then it would be easy to prove manipulation as it would be self-evident. Conversely, if no one trader held more than 1% of any market, it would be absurd to allege manipulation by means of a dominant concentrated position. So, we know the range of domination (concentration) lies between 1% and 100% of market share. Because no one could argue that a 100% concentration by one or a small number of traders would not constitute manipulation on its face, it would never be allowed to exist despite any intent by the CFTC to ignore such an absurd market share. Therefore, the definition of domination or monopoly given above presupposes that some level less than 100% could determine manipulation. Otherwise no anti-manipulation statute would make sense.
Therefore, the question comes down to what degree of concentration, openly stipulated to be less than 100%, would constitute manipulation? The answer is not some specific hard number written in stone, like 30% or 70%; if it was that simple we wouldn’t need a body of law or a federal agency to safeguard against manipulation. Instead, the answer has to be some reasonable percentage supported by other evidence of artificial pricing. That is precisely the circumstance in silver.
For starters, the facts of concentration are not in dispute because they come from the CFTC in the form of the weekly Commitments of Traders Report (COT). Concentration data is available and accurate and the CFTC compiles and publishes the data because it is the early warning system for manipulation. The problem is that the agency, at least in silver, stops at compiling and publishing the concentration data and refuses to consider the results. It’s as if a thousand incoming enemy ICBM’s were detected to hit the US on the NORAD missile defense system and the operators ignored the radar and clocked out for lunch.
The CFTC doesn’t publish concentration data just to give me something to write about; the system was set up to detect and eliminate the concentration that is a necessary component of domination, control and monopoly. What should the CFTC do with the concentration data in silver? At a minimum, it should consider its own data in relative and practical terms.
The trick is to convert the concentrated short positions published by the CFTC into the equivalent real world quantities the short positions represent and do that for every regulated physical commodity, including COMEX silver. After all, commodity law has established that a commodity’s price should be determined by changes in actual supply and demand and that futures trading must not dictate prices to the real world. Every physical commodity, from oil to cotton to copper to silver has easy to establish world annual production and consumption data. By converting the concentrated short positions of the four and eight largest traders in every regulated commodity futures market to what that represents in terms of actual days of world production, this normalizes the data in a reasonable and practical manner that allows an apples vs apples comparison for every commodity.
It’s not just that silver always has the largest concentrated short position in terms of days of world production of all commodities, in some cases standing with an equivalent short position fifty times larger than in some commodities, like crude oil or wheat. One has to look at the total picture – the rarity of a commodity priced below its average primary cost of production and documented net physical investment buying coupled with the most extreme relative concentrated short position of all physical commodities.
Add into the mix the certain knowledge the extraordinary and easily proved circumstances that in 2008 the former largest holder of the concentrated short position in silver (and gold), Bear Stearns, needed to be bailed out and acquired by JPMorgan, most likely because of losses Bear Stearns suffered on its massive silver and gold short positions. Since then it has been easy to track what JPMorgan has been up to because its concentrated silver short position has remained so large and manipulative.
What makes Prof. Scopino’s paper remarkable is that he is stating the obvious in the case that HFT may violate the law. And what could be more obvious than the documented case for manipulation in silver by virtue of a concentrated short position that can’t be explained in legitimate terms and stands far above any other short position?
Please don’t think I am depending on any action, immediate or otherwise, by the CFTC to Scopino’s paper, despite his affiliation with the agency. Likewise, there is zero chance of the agency ever doing anything about the silver manipulation. What’s great about the paper is that states, in legal terms, what the vast majority of market participants already know – that HFT appears manipulative on its face. If that is correct, the remedy must be a legal resolution.
It’s different with the silver manipulation where no legal resolution is likely, but as and when enough market participants and investors realize what the world’s largest concentrated short position has done to the price, the resolution will come when that newfound knowledge results in enough physical silver buying to break the back of the short paper manipulators.
This article is based on a commentary of Ted Butler’s premium service atwww.butlerresearch.com which contains the highest quality of gold and silver market analysis. Ted Butler is specialized in precious metals market analysis for over four decades.
end
John Hathaway discusses the price rigging suit against the London fix
participants
(courtesy John Hathaway/Kingworldnews/Eric King/GATA).
Tocqueville’s Hathaway discusses price-rigging suit against London gold fix participants
Submitted by cpowell on Wed, 2015-02-18 00:25. Section: Daily Dispatches
7:25p ET Tuesday, February 17, 2015
Dear Friend of GATA and Gold:
Tocqueville Gold Fund manager John Hathaway today discusses with King World News his hopes for the pending class-action lawsuit against London gold fix participants for price rigging. Also discussed is today’s counterintuitive action in monetary metals prices. With Asia taking more gold than the world is producing, Hathaway says, eventually Asia will be setting prices and not the futures markets in London and New York. Hathaway’s interview is excerpted at the KWN blog here:
http://kingworldnews.com/wests-great-charade-coming-end/
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Dave and I think alike!1
(courtesy Dave Kranzler/IRD)
Comex Gold Open Interest Numbers Show Massive Manipulated Gold Hit In Progress
February 18, 2015Financial Markets, Gold, Market Manipulation, Precious Metals, U.S. EconomyComex, HSBC, JP Morgan, Scotia, silver
The Comex is a complete fraud. It’s one of the biggest Ponzi schemes in history.
With China and Viet Nam (the latter being a major gold importing country) now closed until next Wednesday in observance of their Lunar New Year, the bullion banks have engaged in a major attempt to drive the price of gold lower. Yesterday (Tuesday) 99,000 gold contracts – 9.9 million ounces or 287 tonnes – were sold into the market between 9 a.m and 11 a.m. EST, which had the effect of driving the price of gold down over $26. To put this into context, a total of 179,833 contracts traded between 6 p.m. Monday and 5 p.m. Tues. The entire daily trading period is 23 hours.But 55% of yesterday’s total trading volume – the volume used to slam gold – was traded in a two-hour window of NY trading.
Think about it this way: in that two-hour window, 35 days worth of daily global gold mine production traded in the form of paper gold. The open interest expanded by 5,290 contracts, which translates into just over 15 tonnes of gold. The total amount of gold available for delivery – the “registered” account gold – is 804.9k ounces, or 23 tonnes. In just one day, the bullion banks (JP Morgan, HSBC and Scotia) sold forward 65% of the entire stock of deliverable gold on the Comex. And that’s if you really believe the unaudited bank reports which produce the gold warehouse stock reports. I do not.
Gold was raided again today (Wednesday, Feb 18) – again at 11:00 a.m. EST. This time gold was slammed another $9 in the space of 30 minutes, most of it in the first seven minutes. Today 18,000 April gold contracts traded in the 30 minute space, representing 24% of the total volume in the April gold contract up to that point since 6:00 p.m EST the previous evening. This is 52 tonnes of paper gold – more than twice the amount of gold in Comex vaults available for delivery.
This is very painful for most of us to watch unfold because we understand how corrupt our entire system is and we also somewhat understand just how devasting the consequences will be for the entire population of the United States (and, really, the entire world) when this giant Ponzi scheme blows up.
Folks, these are not free markets by any remote stretch of the imagination. These are markets controlled by dangerous criminals who are in the process of stealing everyone’s wealth and, in the process, destroying our system. Unless something is done, your children’s lives will become a very unpleasant experience. I don’t have children so I don’t have equity in the future of this system other than I was raised with a very strong sense of “right” and “wrong.” I’m just the messenger.
Sometimes I wonder if I might have been better off being one of the 95%’ers who are oblivious to the size and the velocity of the giant two-by-four being swung at the back of their head by those in control of our system…
If you found this post to be value-added, please share it with others: (please share this with anyone who might care, if even just a little, we need to pry open any doors that are cracked open in the minds of those who care about our country)
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(courtesy Koos Jansen/Willem Middelkoop)
a must read….
Posted on 17 Feb 2015 by Koos Jansen
Willem Middelkoop: A New Gold Standard In The Making
Written by Willem Middelkoop
“Putin is the biggest gold bug”, was the title of a recent Bloomberg op-ed by Leonid Bershidsky the founding editor of Vedomosti, Russia’s top business daily. He explains why the Russian central bank has accumulated almost 100 tons of gold in the last four months of 2014. It is an acceleration of the gold buying program which started in 2007, a year before the Lehman collapse.
Besides accumulating gold the Russians have been quite active sellers of US Treasuries. Between November 2013 and December 2014 they have sold around $30 billion of US government bonds while they grew their gold reserves from $43 to over $50 billion in a clear effort to de-Americanize the Russian economy. Just like the Chinese they as well signed bilateral currency-swap-deals in a move away from the dollar.
The Russian activities can be seen as part of an all-out financial war between Russia and the West as best described by Putin’s economic advisor Sergei Glazyev in a recent interview:
I believe that in a situation of growing military and political confrontation the gold price will move up again. And let’s not forget that America’s refusal to honour their debt will undermine trust in the dollar not just in this country but also in others. It will be a step towards the end of the American financial empire. It will give us a chance to be among the first to suggest a new configuration for the world financial system, in which the role of national currencies will be significantly higher.
The Chinese, who have shown all kind of financial and economic support for Russia in recent months, have been on a gold buying spree as well. In the last ten years Chinese buyers have accumulated over 10,000 tonnes of gold.
While Western banks are trying to scare customers away from buying gold, the Chinese have opened up over 100.000 retail outlets to promote gold and silver among the public. In my book I quote from an article by Sun Zhaoxue, the former president of both the China National Gold Corporation (CNG) and China Gold Association (CGA), first published by gold analyst Koos Jansen:
Individual investment demand is an important component of China’s gold reserve system; we should encourage individual investment demand for gold. Practice shows that gold possession by citizens is an effective supplement to national reserves and is very important to national financial security. Because gold possesses stable intrinsic value, it is both the cornerstone of countries’ currency and credit as well as a global strategic reserve. Without exception, world economic powers established and implement gold strategies at the national level.
Mr Sun outlines why substantial national gold reserves are so important for countries like China:
In the global financial crisis, countries in the world political and economic game, we once again clearly see that gold reserves have an important function for financial stability and are an ‘anchor’ for national economic security. Increasing gold reserves should become a central pillar in our country’s development strategy. International experience shows that a country requires 10% of foreign reserves in gold to ensure financial stability while achieving high economic growth concurrently. At the moment, the US, France, Italy and other countries’ gold accounts for 70%
of forex reserves. After the international financial crisis erupted, (our) gold reserves were increased to 1054 tons
but gold reserves account for less than 1.6% of financial reserves – a wide gap compared to developed countries.
According to him, the Chinese government is intent on accumulating additional high quality (gold) assets:
The state will need to elevate gold to an equal strategic resource as oil and energy, from the whole industry chain to develop industry planning and resource strategies… increasing proven reserves, merger and acquisitions, base construction and opening up offshore gold resources to accelerate increase of national gold reserves. Concurrently, actively implement a globalization strategy that will exploit overseas resources and increase channels to grow China’s gold reserves. We should achieve the highest gold reserves in the shortest time.
According to Bloomberg the Chinese have stopped buying US Treasuries as well. Instead the Chinese have signed contracts worth $100’s of billions with Russia; this is a strong diplomatic sign of support for Russia. The two countries even signed a contract for a $240 billion investment for a 7000 km high-speed link between Beijing and Moscow.
These developments illustrate a growing divide between the financial interest between East and West. Now sovereign bond and deposit yields at or below zero we have reached the financial endgame, as the Saxo bank and Deutsche Bankhave been writing recently. The IMF has published a report in which the economists Rogoff and Reinhart point to the need for debt restructurings in advanced economies. Debt restructurings and finding a new world reserve currency are the main aspects of a coming Monetary Reset.
Recently we have seen some more confirmation major countries are preparing for a new phase of the international monetary system. During two conferences in China last year, a coming financial reset has been discussed. At the 2014 edition of the Chinese International Finance Forum (IFF) “[..] a new global financial order has been discussed with China.” According to the former ECB President Jean-Claude Trichet. Chinese media reported the three days the forum (including U.N., World Bank, IMF participations) discussed “the new framework for the global financial and economic system”.
Preparations for a monetary reset were also confirmed by Zhou Ming, General Manager of the Precious Metals Department at ICBC during the LBMA Forum in Singapore;
With the status of the US dollar as the international reserve currency being shaky, a new global currency setup is being conceived.
In 2012 the former Bank of England Governor Mervyn King already predicted advanced economies would probably not be able to get out of the current crisis without large debt restructurings and a recapitalization of the financial system (banks):
I am not sure that advanced economies in general will find it easy to get out of their current predicament without creditors acknowledging further likely losses, a significant writing down of asset values and recapitalization of their financial systems…. Only then will it be possible to return to a more normal provision of the vital banking services so crucial to an economic recovery.
Yes even Alan Greenspan acknowledged that, ‘It is mathematically impossible to cover future government promises’.The US unfunded liabilities (pension and health costs) are as high as $128 trillion.
Japan is the best and most worrying example of the sheer magnitude of public debt, which will reach 250% of GDP in 2015. At the end of 2014 the architect of Japan’s radical economic policies, often describe as ‘Abenomics’ Koichi Hamada called the aggressive moves by the Japanese central bank a Ponzi-scheme:
In a Ponzi game you exhaust the lenders eventually, and of course Japanese taxpayers may revolt. But otherwise there are always new taxpayers, so this is a feasible Ponzi game, though I’m not saying it’s good.
One more insider who is very vocal about the need for a monetary reset and who’s views we shouldn’t ignore, is the legendary hedge fund manager George Soros:
The system we now have has broken down, only we haven’t quite recognized it. So you need to create a new one and now is the time to do it… You need a new world order where China has to be part of the process of creating it. They have to buy