The gold price traded a few dollars higher up until 10:00 a.m. Hong Kong time...and then got sold down for the next four hours. From there it traded more or less sideways through the London open.
Then around 1:00 p.m. BST...about twenty minutes before the Comex open...a rally of some substance developed. That got hammered flat an hour later...about 9:01 a.m. in New York...and from that point, the gold price slowly declined right into the 1:30 p.m. Eastern Comex close, before trading quietly into the 5:15 p.m. electronic close. The New York high tick...$1,720.40 spot...came at 10:15 a.m.
Gold finished the trading day in New York at $1,711.10 spot...up 80 cents from Thursday. Volume wasn't overly heavy at 139,000 contracts.
Silver's price path was virtually identical to gold's. The only notable difference was that JPMorgan Chase et al showed up at 9:30 a.m. in New York...whereas gold got hit a half hour sooner. Silver's high tick was also at 10:15 a.m. Eastern...and after that the silver price pattern followed gold's price path pattern, right to the tick.
Silver closed at $32.02 spot...up 2 whole cents. Volume was only 36,500 contracts.
It should be obvious to anyone with more than a room temperature I.Q. in degrees Fahrenheit that both metals would have finished the Friday trading session materially higher if a willing not-for-profit seller hadn't shown up. And it wasn't just gold and silver the got hammered flat, the charts for platinum and palladium show that these two white metals got hit even harder...especially platinum.
The dollar index opened at 80.04 in Tokyo on their Friday morning...and spent most of the day above the 80.00 mark, with the high tick of 80.25 coming about 11:40 a.m. BST in London. From there, the index rolled over a bit...and hit its nadir [79.94] about 10:15 a.m. in New York. It recovered back above the 80.00 mark during the East Coast lunch hour...and then slid slowly back below it to close at 79.997.
The precious metals began to rally strongly shortly after the dollar index hit its high...but the rallies in all four were so powerful, that the "da boyz" had to step in long before the dollar index hit its low tick...but it's worth noting that the high ticks for both gold and silver came at the dollar index nadir at 10:15 a.m. in New York.
The gold stocks opened mixed...and only began to head south shortly after 11:30 a.m. Eastern time. The low for the stocks came just minutes before the 1:30 p.m. Comex close...and then they rallied a bit from there until the equity markets closed at 4:00 p.m. The HUI finished down 0.85%.
The silver stocks finished mixed as well...and Nick Laird's Silver Sentiment Index closed down 0.62%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that 115 gold and 12 silver contracts were posted for delivery within the Comex-approved depositories this coming Tuesday. The Issuers and Stoppers Report showed that it was 'all the usual suspects'...and the link to that activity is here.
That should pretty much do it for the October delivery month, although there may be a handful of contracts in each metal left to deliver before November first notice day on Wednesday.
There was a small 19,385 troy ounces of gold withdrawn from GLD yesterday...and it looked like it could have been a fee payment of some kind. There were no reported changes in SLV.
The U.S. Mint had no sales report.
Over at the Comex-approved depositories, they reported receiving 253,457 troy ounces of silver on Thursday...and shipped 801,417 ounces of the stuff out the door. The link to that activity is here.
Well, yesterday's Commitment of Traders Report was another surprise. Yes, there was the expected improvement in the Commercial net short position in gold...but not as much as I was hoping. In silver, there was a tiny improvement...but that was all. Both Ted and I were amazed...and we were both scratching our heads.
In silver, the Commercial net short position declined by only a tiny 1,595 contracts. The Commercial net short position is still a whopping 277.5 million ounces...and the 'Big 4' short holders are short 246.1 million ounces of that amount...and 44.5% of the entire Comex futures market in silver. The '5 through 8' traders are short an additional 8.6 percentage points. So the 'Big 8' are short 53.1% of the entire futures market in silver on a net basis...and these percentages are minimum numbers.
I would also guess that JPMorgan Chase, along with one non-U.S. bank...the Bank of Nova Scotia?...are short almost 40% of the entire Comex silver market [on a net basis] between the two of them.
In gold, the Commercial net short position declined by a pretty decent 14,718 contracts, or 1.47 million ounces. This net short position is now down to 23.27 million ounces...still light years away from its low several months back...and the 'Big 8' are short 20.97 million ounces of that amount.
The 'Big 4' traders, on a net basis, are short 35.4% of the entire Comex gold market...and the '5 through 8' traders are short an additional 13.9 percentage points. The 'Big 8' in total are short 49.3% of the Comex futures market on a net basis...and these are minimum percentages.
The 'Big 8' traders are short 20.97 million ounces of the 23.27 million ounce Commercial net short position...or 90.1%. In silver, the 'Big 8' traders are short 293.9 million ounces of the 277.5 million ounce Commercial net short...or 105.9%.
Here's the current "Days of World Production to Cover Short Positions" chart for all the physical commodities traded on the Comex. This is for the week that was...and nothing has changed, as the short positions held by the '4 or less' traders are still egregious. It's my guess that JPMorgan Chase, the Bank of Nova Scotia[?], HSBC USA and Citigroup make up the entire red bar on the silver chart. I'll have more on the COT Report in 'The Wrap'.
(Click on image to enlarge)
From the Too-Cute-For-Words file folder this week comes this photo of an ocelot kitten having a power nap. I thank my daughter Kathleen for sharing it with us.
Since it's Saturday, all the stories that I've been saving all week are posted below...and I hope you have the time to at least read the parts I've cut and paste from each one.
A mysterious Libyan ship -- reportedly carrying weapons and bound for Syrian rebels -- may have some link to the Sept. 11 terror attack on the U.S. Consulate in Benghazi, Fox News has learned.
Through shipping records, Fox News has confirmed that the Libyan-flagged vessel Al Entisar, which means "The Victory," was received in the Turkish port of Iskenderun -- 35 miles from the Syrian border -- on Sept. 6, just five days before Ambassador Chris Stevens, information management officer Sean Smith and former Navy Seals Tyrone Woods and Glen Doherty were killed during an extended assault by more than 100 Islamist militants.
On the night of Sept. 11, in what would become his last known public meeting, Stevens met with the Turkish Consul General Ali Sait Akin, and escorted him out of the consulate front gate one hour before the assault began at approximately 9:35 p.m. local time.
This story showed up on the foxnews.com Internet site on Thursday...and is one that I borrowed from yesterday's King Report. The link is here.
God help them if Obama and Romney ever had to participate in a real debate about a real issue at the Oxford Union. They would be massacred.
The "debates" revealed that not only the candidates but also the entire country is completely tuned out to every real problem and dangerous development. For example, you would never know that US citizens can now be imprisoned and executed without due process. All that is required to terminate the liberty and life of an American citizen by his own government is an unaccountable decision somewhere in the executive branch.
No doubt that Americans, if they think of this at all, believe that it will only happen to terrorists who deserve it. But as no evidence or due process is required, how would we know that it only happens to terrorists? Can we really trust a government that has started wars in seven countries on the basis of falsehoods? If the US government will lie about Iraqi weapons of mass destruction in order to invade a country, why won't it lie about who is a terrorist?
America needs a debate about how we can be made more safe by removing the constitutional protection of due process. If the power of government is not limited by the Constitution, are we ruled by Caesar? The Founding Fathers did not think we could trust a caesar with our safety? What has changed that we can now trust a caesar?
Always controversial...but never far off the mark...Paul lets it all hang out in this longish essay that was posted over on thedailybell.com website on Wednesday. I thank reader Carl Lindfors for bringing it to our attention...and the link is here.
I am convinced – actually, at this point, it seems rather obvious - that global policymakers have made a very problematic situation worse. The global system would be less vulnerable today had speculative markets not again fixated on aggressive policy measures. I argued at the time that the ECB’s Long-Term Refinancing Operations (LTRO) only exacerbated European fragilities. In particular, the $1.3 TN of central bank liquidity ensured that Spanish, Italian and other European banks increased their exposure to suspect sovereign debt. It was a policy roll of the dice. The LTROs did incite big rallies in European debt and equities, along with global risk markets more generally. Not unpredictably, within months Europe was succumbing to an ever deeper crisis. Global markets and economies were hanging in the balance.
In desperation, ECB president Draghi fashioned his “big bazooka:” Outright Monetary Transactions (OMT) – the promise of open-ended support for Spain and other troubled issuers. Importantly, Mr. Draghi made an extraordinary warning to those that had positioned bearishly against Europe. And while the jury is very much out on whether Draghi has much of a bazooka, this somewhat misses the point. The Draghi Plan incited a major short-covering rally in Spain, Italy and periphery bonds, in European equities, and global risk markets more generally. Indeed, the Draghi Plan forced the sophisticated speculators to cover their European shorts and even go leveraged long. Instead of a roll of the dice, it was betting the ranch.
Doug's weekly Credit Bubble Bulletin is always a must read for me...and this one is no exception to that rule. It's posted on the prudentbear.com Internet site...and I thank reader U.D. for sending it our way. The link is here.
About a month ago I asked a former colleague in the British Foreign and Commonwealth Office what Hague saw as the endgame in the Julian Assange asylum standoff, and where the room for negotiation lay. My friend was dismissive – the policy was simply to wait for the Presidential election in Ecuador in February. The United States and allies were confident that Correa will lose, and my friend and I having both been senior diplomats for many years we understood what the United States would be doing to ensure that result. With Correa replaced by a pro-USA President, Assange’s asylum will be withdrawn, the Metropolitan Police invited in to the Embassy of Ecuador to remove him, and Assange sent immediately to Sweden from where he could be extradited to the United States to face charges of espionage and aiding terrorism.
I have been struck by the naivety of those who ask why the United States could not simply request Assange’s extradition from the United Kingdom. The answer is simple – the coalition government. Extradition agreements are government to government international treaties, and the decision on their implementation is ultimately political and governmental – that is why it was Teresa May and not a judge who took the final and very different political decisions on Babar Ahmad and Gary Mackinnon.
CIA supporters in the UK have argued vociferously that it would be impossible for Sweden to give Assange the assurance he would not be extradited to the United States, with which he would be prepared to return to Sweden to see off the rather pathetic attempted fit-up there. In fact, as extradition agreements are governmental not judicial instruments, it would be perfectly possible for the Swedish government to give that assurance. Those who argue otherwise, like Gavin Essler and Joan Smith, are not being truthful – I suspect their very vehemence indicates that they know that.
This very interesting article was written by Craig Murray, Former U.K. ambassador to Uzbekistan, about Julian Assange and Ecuador...and I thank U.K. reader Tariq Khan for sending it to me on Monday. It's posted on the craigmurray.org.uk Internet site...and the link is here.
Argentine President Cristina Fernandez de Kirchner’s foreign-exchange controls are driving pesos underground.
A quarter of Argentines are keeping their pesos at home, up from 19 percent a year ago, according to a survey conducted in September by the Catholic University of Argentina and TNS Gallup. The increase reflects how people are shifting money out of banks to trade dollars in a cash-dominated black market where the cost of the U.S. currency has surged 35 percent this year, according to Buenos Aires-based research company EconViews.
“Money’s moving out of the banking system and out of the formal economy,” Ritondale said in a telephone interview from Buenos Aires. “As much as the government wants to promote the use of pesos, the truth is they won’t be able to achieve it. You can’t get it done” with interest rates below inflation.
This longish Bloomberg story was posted on their website early yesterday afternoon Mountain Standard Time...and I thank Washington state reader S.A. for sending it along. I consider it well worth reading...and the link is here.
According to the National Association of Pension Funds, 48 per cent of all workers are planning to work in paid or volunteer work beyond the state pension age.
Eight in ten of the people choosing to stay in paid work will do so because they will not have enough money to stop working, the group found.
The findings prove that Britain is facing a “pension time-bomb” as people have not saved enough for their retirement, experts said.
The NAPF found that over half of all workers are not members of a workplace pension scheme. Even among 55-64 year-olds, just 40 per cent of people have a workplace pension.
This story was posted on The Telegraph's website earlier this morning BST...and I thank Roy Stephens for his first offering in today's column. The link is here.
Tens of thousands of jobs were lost between July and September raising the number of unemployed to 5.78 million people, Spain’s National Statistics Institute reported, a level unseen since the dictatorship of Francisco Franco ended in the mid-1970s.
The number of Spanish households in which every member is out of work climbed to 1.74 million, roughly one tenth of all Spanish families.
The rise in the number of jobless comes as Spain sinks deeper into recession, with output expected to decline for the third consecutive quarter.
This story was posted on the telegraph.co.uk Internet site late yesterday morning BST...and is Roy Stephens second offering in a row. The link is here.
In austerity-ravaged Greece, neo-Nazi party Golden Dawn is on the rise. Their MPs give fascist salutes, while on the streets black-shirted vigilantes beat up immigrants. And some of their most enthusiastic supporters are in the police.
It's a warm October evening and children on bicycles are riding up and down among the young men with crew cuts, the sleeves of their black T-shirts tight over pumped-up biceps, strolling with the stiff swagger of the muscle-bound. They look relaxed, off-duty. Two of them slap a handshake: "Hey, fascist! How's it going?"
Trestle tables are stacked with Golden Dawn merchandise: black T-shirts bearing the party's name in Greek, Chrysi Avgi, the sigma shaped like the S on SS armbands; mugs with the party symbol, a Greek meander drawn to resemble a swastika; Greek flags and black lanyards, lighters and baseball caps. I lean over to talk to one woman stallholder, dressed in Golden Dawn black with thickly kohl-rimmed eyes, but as soon as she opens her mouth a man in a suit strides up: "What are you writing? Are you a journalist? Tear that page out of your notebook. No, no, you can't talk to anyone."
It sounds very much like the activities of the Hitler Youth back in the 1930s. This very long must read story showed up in The Guardian yesterday...and is Roy's third story in a row. The link is here.
The finance ministers of Germany, Netherlands and Finland go rogue; they claim that legacy bank debts are none of their business. All the while, the people at the top of the European pyramid react to these local and national solo-runs by calling for more federalism, something that nobody wants.
This is an elite that is out of touch with the people. This is probably not surprising because, despite everything that has happened, the people who are running the European project are dancing to bankers’ and financiers’ tunes rather than listening to the people who are pulling in the opposite direction.
The people in Brussels and deep in the policy-making establishments in every European capital claim that they are increasing moves towards more federalism in order to save the euro. This is their prerogative. However, in order to save the euro, they will risk destroying the EU.
This story was written by one of Ireland's most well-respected economists...David McWilliams. It was posted on his website about ten days ago...and I thank reader "Declan from Ireland" for bringing it to my attention...and now to yours. It's worth reading if you have the time...and the link is here.
Using shadowy middle men, multiple bank accounts and a fleet of ghost ships, Iran's coal trade is quietly booming as the Islamic Republic tries to sidestep Western sanctions and prevent its industrial economy from crashing.
Tougher measures imposed by the European Union and the United States have tightened the screws on Tehran, which relies on its shipping trade for many imports including food, consumer and industrial goods. Many foreign companies, including shipping firms, have pulled out for fear of losing business in the U.S. and due to the complexities of arranging non-sanctioned deals.
Despite the setbacks, industry sources say producers in Ukraine are providing Iran with coking coal, also known as metallurgical coal, and coke - key steel ingredients.
This Reuters story showed up on their Internet site early yesterday morning Eastern time...and is Roy Stephens final contribution in today's column. The link is here.
China overtook the U.S. as the world's top destination for foreign direct investment in the first half of 2012, according to the United Nations Conference on Trade and Development.
China absorbed $59.1 billion in foreign direct investment (FDI) in the first six months, down slightly from $60.9 billion a year earlier, the agency said in a report.
The United States attracted $57.4 billion in 2012's first half, down 39 percent from a year earlier, it said.
During 2011, the U.S. received $227 billion in FDI while China attracted $116 billion, according to UNCTAD.
This Reuters story ended up as a posting on the cnbc.com Internet site in the wee hours of Thursday morning. I thank Federico Schiavio for sending it our way...and the link is here.
Official figures released yesterday reveal foreign share ownership is at a 20-year high, with overseas investors owning 47 per cent of all shares for a total value of $550 billion.
"Foreigners are certainly in love with Australia. Not only do foreign investors hold almost half our listed shares they also hold almost 80 per cent of Australian government bonds," CommSec chief economist Craig James said yesterday.
Elsewhere, locally based companies and households are increasingly turning to cash as their preferred investment sector.
This very interesting story appeared in Australia's Herald Sun back in late September...but it's still worth reading. It's posted in the clear on the news.com.au Internet site...and I thank reader Gary Black...a Kiwi in Oz...for bringing it to our attention. The link is here.
Any time a bank, and especially an entire banking sector, is willing to pay you paper "dividends" for your gold, run, because all this kind of quid pro quo usually ends up as a confiscation ploy.
Sure enough, as Dow Jones reports today, the gold, which did not belong to the banks and was merely being warehoused there (or so the fine print said), was promptly sold by these same institutions to generate cash proceeds and to boost liquidity reserves using other people's gold, obtained under false pretenses.
And now, it is time for the forced sellers to become forced buyers, as "the State Bank of Vietnam, the country's central bank, may allow local banks to buy up to 20 metric tons of gold over the next two months to improve their liquidity ahead of a ban soon on their use of gold as a means of boosting their operating capital." What they mean is that having been caught engaging in an illegal reserve boosting operating, the banks are now "allowed" to undo their transgressions ahead of a "ban" on what inherently was not a permitted practice.
This story showed up on the Zero Hedge website yesterday...and I thank Washington state reader S.A. for his second and final offering in today's column. It's a must read...and the link is here.
The Zero Hedge story above was based on a Dow Jones story filed from Hanoi yesterday...and since there was no link to it in the ZH item above, I thought I'd post it on its own. I thank Manitoba reader Ulrike Marx for finding it for us...and the link is here.
GATA secretary/treasurer Chris Powell's dispatch yesterday...criticizing The Telegraph's international business editor, Ambrose Evans-Pritchard, and CNBC Senior Editor John Carney for not getting comment from the German Bundesbank and the Bank of England for their reports about the mysterious and long-secret removal of some German gold reserves from London -- drew a cordial explanation from Evans-Pritchard yesterday.
I'll let Chris carry on in this GATA dispatch from yesterday...and the link is here.
The Bundesbank said the Federal Reserve Bank of New York will help it meet auditing requirements related to its gold reserves that were demanded by Germany's Audit Court.
"We have been in discussions with the Federal Reserve Bank of New York about the Bundesbank's holdings of gold," the Bundesbank said yesterday in a letter to the German parliament's budget committee. "The discussions have been fruitful and the Federal Reserve has expressed a commitment to work with the Bundesbank to explore ways to address the audit observations, consistent with its own security and control processes and logistical constraints."
The agreement is part of a compromise between the German central bank and the Audit Court, which has called on the Bundesbank to take stock of its gold holdings outside Germany, saying it has never verified their existence.
I found this Bloomberg story in a GATA release yesterday. It's certainly worth reading...and the link is here.
Bayfield Ventures Corp. (TSX.V: BYV) is exploring for gold and silver in the Rainy River District of NW Ontario. The Company’s 100% owned “Burns” Block property adjoins the immediate east of Rainy River Resources’ (TSX.V: RR) world-class gold deposit which includes an indicated resource of 5.72 million ounces of gold, averaging 1.18 g/t, in addition to an inferred resource of 2.25 million ounces of gold, averaging 0.79 g/t. Drilling to date on Bayfield’s Burns Block demonstrates that the ODM17gold zone extends from Rainy River Resources' ground onto the Burns Block. Bayfield is currently carrying out 100,000 metres of diamond drilling on its Rainy River properties. Drill results thus far have been very encouraging. Notable drill results include 60.05 grams per tonne gold and 362.96 grams per tonne silver over 11.2 metres within 26.70 grams per tonne gold and 170.69 grams per tonne silver over 25.5 metres, as well as 35.93 grams per tonne gold and 359.65 grams per tonne silver over 10.0 metres. Bayfield also holds a 100% interest in two other properties in the Rainy River District. Claim blocks “B” and “C” are well located to the immediate east and west (respectively) of Rainy River Resources’ #433 and ODM17 gold zones. Please visit our website to learn more about the company and request information.
If, as I contend, the prime driver of the silver (and gold) price on the rally was technical fund buying, it follows that an approximate same amount of technical fund selling would cause prices to decline in similar proportion. That’s where my “alarming and dangerous” market structure concerns come from. Compounding the matter is that the commercials have perfected their collusive trading techniques for more than 30 years in trading against the technical funds. All the commercials have learned to let the technical funds liquidating long positions to come to the commercials. The commercials, who will be happy to buy every contract offered for sale by the technical funds, will not reach up in price to buy those contracts, but will let the technical funds come to them. It really is a mafia-style operation; the commercials will rig prices through key technical points and only put in below market bids to the selling that the commercials instigated. - Silver analyst Ted Butler...24 October 2012
Today's 'blast from the past' features a world famous American music duo that hit their stride on the music scene in the early to mid 1960s...and this particular song linked here, has to be my favourites. It was a smash hit in 1966...the year I graduated from high school. While I'm at it, here's another big hit of theirs.
I've featured several child prodigies in this section...and here's another. This 10-year old girl plays the drums like a seasoned pro. I was amazed...and I'm sure you'll be impressed as well. I thank Roy Stephens for sliding this video clip into my in-box on Monday...and the link is here.
As I mentioned in my comments at the top of this column, all four precious metals blasted off to the upside...but got hammered flat about half way through the 30-basis point decline in the dollar index. Nothing free market about that.
The COT report both this week and last, were head scratchers...as it's obvious that this liquidation cycle is quite a bit different than anything either Ted or I have seen before. Despite the price drops in both gold and silver...and the penetration of the 50-day moving averages to the downside on both metals...there has been little volume and no real serious technical fund liquidation to this point.
I can only guess as to why that's the case. The only thing I could come up with is that the long holders in the Non-Commercial category appear to be hanging tough...and meeting all margin calls...especially in silver, where there has only been the smallest of indications of tech fund long liquidation, despite the three dollar decline in the silver price. Is that liquidation coming later, or are these tech fund longs privy to information that we mere mortals don't have? Beats me...but we'll find out in the fullness of time.
However, as I mentioned a couple of times already this week, the share prices...especially in silver...are bucking this sell-off in the metals...and that, along with the strange COT action, might be another sign that something is going on behind the scenes that we don't know anything about.
My quest to find out if the Bank of Nova Scotia/Scotia Mocatta are the new "non-U.S. bank" that has just showed up in October's Bank Participation Report, ran into a 'non-answer' from someone at Scotiabank HQ in Toronto on Monday. Here's my original e-mail to the CEO which I posted in my Tuesday column...
22 October 2012
44 King Street West
Toronto, Ontario M5H 1H1
Attention: Mr. Rick Waugh, CEO
Dear Mr. Waugh,
I'm a keen observer of the financial scene, both here in Canada and abroad...but my main area of expertise is in the precious metal markets. I write a daily blog on this subject for Casey Research out of Stowe, Vermont...and here is the link to my webpage.
Part of my reading material includes two reports that are issued by the U.S. Commodity Futures Trading Commission...the CFTC. The most notable of those are the weekly Commitment of Traders Report and the monthly Bank Participation Report.
If you click on the Bank Participation Report link, you'll note that the CFTC has included a comment about its October figures that took quite a few people who follow this report, completely by surprise...including me.
The comment states... "The October 2012 Bank Participation Report includes COMEX gold and COMEX silver futures and options positions for a newly classified non-U.S. bank, based upon the entity's self-description on its latest CFTC Form 40. Given the methodology of the Bank Participation Report, the entity's most recent Form 40 submission results in all of its futures and options positions now being included within the report. For more information on the methodology used for the Bank Participation Report, see Explanatory Notes" [Emphasis is mine. - Ed]
Looking through the list of market-making members of the LBMA...my first thought was that the bank most likely to fit that description would be The Bank of Nova Scotia - Scotia Mocatta. So I called Andy Montano at your head office about a week ago. We had a pleasant chat...and he said that he knew nothing about it. I asked him who might know...and he had no suggestion.
So I thought I would write directly to you, sir.
All I need to know is if the "non-U.S. bank" that the CFTC is referring to in its comments above...and on its Bank Participation Report home page...is The Bank of Nova Scotia - Scotia Mocatta.
A simple 'yes' or 'no' answer will suffice.
Thank you for your attention in this matter...and I remain,
Edward Steer, Editor
Ed Steer's Gold & Silver Daily
On Tuesday I received this reply...and as you can tell right away, the 'non-answer' avoided my question entirely...
Dear Mr. Steer,
Thank you for your email of October 22nd addressed to Rick Waugh, President & CEO of Scotiabank. I have been asked to review your inquiry and provide a response to you on behalf of the Scotiabank Group.
We have determined from our review, the Scotiabank Group is not involved in the research or publication of the Commitment of Traders Report and as a result we are unable to comment on the data provided in the report. We respectfully recommend you consider making direct contact with the Commodity Futures Trading Commission CFTC) as we understand they are the source of the report and would be better positioned to respond to you with answers to any inquiries you may have about the report.
Once again, thank you for writing, giving us an opportunity to review and respond to your inquiry.
Senior Manager - Office of the President
Scotiabank - Executive Offices
Telephone: (416) 933-1700 or (877) 700-0043
Fax: (416) 933-1777 or (877) 700-0045
Of course I had to reply...and here it is...
This reply I received from you is a 'non answer'...and avoids the question entirely.
Nowhere in my original e-mail did I remotely suggest that Scotiabank Group was involved in the production of any data from the CFTC reports mentioned.
The Form 40 referred to by the CFTC, would have to have been filled out by a very senior member of the Scotiabank Group...either within the bank itself, or within the Scotia Mocatta division.
Here are the pertinent contents of my previous e-mail to Mr. Waugh once again...
"Part of my reading material includes two reports that are issued by the U.S. Commodity Futures Trading Commission...the CFTC. The most notable of those are the weekly Commitment of Traders Report and the monthly Bank Participation Report.
"If you click on the Bank Participation Report link, you'll note that the CFTC has included a comment about its October figures that took quite a few people who follow this report, completely by surprise...including me.
"The comment states... "The October 2012 Bank Participation Report includes COMEX gold and COMEX silver futures and options positions for a newly classified non-U.S. bank, based upon the entity's self-description on its latest CFTC Form 40. Given the methodology of the Bank Participation Report, the entity's most recent Form 40 submission results in all of its futures and options positions now being included within the report. For more information on the methodology used for the Bank Participation Report, see Explanatory Notes" [Emphasis is mine. - Ed]
"Looking through the list of market-making members of the LBMA...my first thought was that the bank most likely to fit that description would be The Bank of Nova Scotia - Scotia Mocatta. So I called Andy Montano at your head office about a week ago. We had a pleasant chat...and he said that he knew nothing about it. I asked him who might know...and he had no suggestion.
"So I thought I would write directly to you, sir.
"All I need to know is if the "non-U.S. bank" that the CFTC is referring to in its comments above...and on its Bank Participation Report home page...is The Bank of Nova Scotia - Scotia Mocatta.
"A simple 'yes' or 'no' answer will suffice.
So, Dave, I'll ask the question one more time, which is it...yes, or no?
I haven't heard a thing since...and will be sending another e-mail on Tuesday if I hear nothing from Mr. Shearim on Monday. But I already have the feeling that I hit the jackpot on the first try...as if they weren't 'the one' they would have denied it immediately...and this b.s. non-answer I got pretty much confirms that they are. I'll keep you posted.
The rest of 2013 could be very interesting in the precious metals. With the October delivery month going off the board early next week, we're left with November, which is not a big delivery month in either silver or gold. But December is. It's the biggest delivery month of the year in both metals...and open interest is massive.
It remains to be seen whether prices go down from here...or up. As I've said on many occasions, I can make a strong case for either scenario...although I'd definitely prefer 'up'...as I know you would as well. But the best any of us can do is blow the froth off a cold one...and hope that we've done everything we can to prepare for whatever scenario turns up. However, nothing has changed with me, as I'm still "all in".
Enjoy what's left of your weekend...and I'll see you on Tuesday.