It was a very quiet trading day in gold everywhere on Planet Earth yesterday. There was a bit of a pop with the release of the jobs numbers at 8:30 a.m. Eastern time in New York yesterday morning, but it sure didn't amount to much...and got put in its place in very short order.
The New York low came around 10:40 a.m...and the price didn't do much after that. Gold closed down $10.40 on the day at $1,754.00 spot. Net volume was a tiny 81,000 contracts, give or take.
Silver's high price tick of the day came shortly after the London open...and it was all down hill from there, with the low for Friday coming at 10:40 a.m. Eastern time, the same as gold. From there, the silver price basically traded sideways into the close. Nothing to see here, folks.
Net volume was about 20,500 contracts...and the silver price closed at $34.13 spot, down 35 cents on the day.
The dollar wasn't doing much until the jobs numbers were release at 8:30 a.m. Of course the dollar blasted off on the 'good news'...and by 10:45 had reached its zenith...up about 65 basis points from its 8:30 a.m. low.
As you can see from the above gold and silver charts, both metals were rallying right along with the dollar until for about twenty minutes, before a willing seller showed up.
The gold stocks gapped down about a percent at the open...and hit their nadir at gold's low and the dollar's high tick...around 10:40 a.m. Eastern. The stocks recovered just about all their losses on the day by the close of trading...and the HUI only finished down 0.69%.
All things considered, most of the silver stocks turned in a pretty decent, if mixed, performance...and Nick Laird's Silver Sentiment Index close down a miniscule 0.18%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed almost no action at all, as only 3 gold and 8 silver contracts were posted for delivery on Tuesday. As of this column, I will no longer report November deliveries on a daily basis, because there just aren't enough to warrant the effort. I will begin again with First Day Notice for the December delivery month...and that will be posted on the CME's website on November 30th.
The GLD ETF showed an increase of 48,645 troy ounces yesterday...and there were no reported changed in SLV.
The U.S. Mint had a small sales report yesterday. They sold 1,500 ounces of gold eagles and 351,000 silver eagles. November sales from the mint are off to a very slow start.
It was a big day over at the Comex-approved depositories on Thursday, as they reported receiving 1,824,127 troy ounces of silver...three semi-trailers full...and only shipped 31,029 ounce out the door. The bulk of the receipts were at HSBC and Brinks...and the link to the action, which is worth a peek, is here.
Yesterday's Commitment of Traders Report, for positions held at the close of trading on Tuesday, November 1st, showed that the Commercial traders decreased their net short position in silver by a smallish 674 contracts. As of Tuesday, the Commercial net short position stood at 22,842 contracts, or 114.2 million ounces.
As of that date, the '4 or less' commercial traders were short 157.0 million ounces...and the '5 through 8' commercial traders were short 42.9 million ounces of silver. So the 8 largest traders in the Commercial category combined, were short a hair under 200 million ounces...or 25.0 million ounces apiece on average.
The COT report shows a total of 42 traders holding short positions in the Commercial category. Grade 3 arithmetic yields the fact that the balance of the short positions in the Commercial category [110.3 million ounces to be precise] were held by 34 traders.
Again, using Grade 3 arithmetic, that works out to be 3.24 million ounces per small trader...Ted Butler's raptors.
Which group of traders do you feel has more control over the price? The 8 traders that hold 200 million ounces short between them...which works out to 175% of the entire Commercial net short position...or the 34 small traders that are short 3.24 million ounces each?
It was a completely different story in gold, as the bullion banks increased their net short position by a very chunky 14,286 contracts, or 1.43 million ounces of gold.
The Commercial net short position in gold is now back up to 18.2 million ounces. Of that amount, the '4 or less' Commercial traders are short 14.0 million ounces...and the '5 through 8' traders are short 4.8 million ounces of gold. Straight addition shows that the '8 or less' Commercial traders [mostly all bullion banks] are short 18.8 million ounces, which is a hair over 100% of the entire Commercial net short position in gold.
At 100% of the Commercial net short position, you can see that the big bullion banks have a stranglehold on the gold price...but in silver, these same 8 bullion banks have a death grip on the silver price as they are short 175% of the total net short position.
The Bank Participation Report for November was also released. The data for it was compiled from Tuesday's COT report...and this is the one day every month when we can compare apples to apples. Here's the Reader's Digest version of the report.
In silver, 3 or less U.S. bullion banks [probably only two...JPMorgan and HSBC USA] increased their short position in silver from 14,388 Comex contracts in October's report, to 16,120 Comex contracts as of the close of trading on Tuesday, November 1st. That's equivalent to 80.6 million ounces.
Now if you got back to the COT report for Tuesday...the 8 largest commercial traders in the short category were short a hair under 200 million ounces of silver...so JPMorgan and HSBC are short 80.6 million ounces of that amount all by themselves. So you've got six traders left that are short about 120 million ounces between the six of them...about 20 million ounces short apiece. And don't forget the other 36 small commercial traders/raptors that are short 3.24 million ounces [on average] each.
It's very obvious that JPMorgan is the main crook...and the ringleader of this price management scheme.
As for the 12 non-U.S. banks in this report, they are actually net long 144 Comex contracts, which is down a hair from the long position they held in October. These 12 banks, on average, are net long 12 Comex contracts apiece...which is 60,000 ounces per bank. So they are obviously not a factor in the silver price manipulation.
In gold, the 4 U.S. banks reported increasing their Comex short positions by 8,265 contracts...and the 19 non-U.S. banks increased their Comex short position by 7,088 contracts. It's obvious from these numbers that virtually all of the world's bullion banks increased their short positions in the Comex futures market during October...to the tune of 15,353 contracts.
As of last Tuesday's COT report, these 23 banks were short 110,935 Comex contracts, which translates into 11.1 million ounces of gold. Last Tuesday's COT report showed that the Commercial net short position was 18.2 million ounces. So these 19 banks are short 61% of the Commercial net short position in gold. In silver, 15 banks are short 70% of the Commercial net short position in silver...and of that 70%...JPMorgan holds virtually all of it.
I got a very interesting e-mail from a reader yesterday regarding MF Global...and here's what he had to say..."Well, I am one of the unfortunate investors in MF Global. I have NOT been able to trade my position yesterday, or the day before that, or at all since this bankruptcy has been filed [no metals trading allowed]. I was able to "cover" one Nasdaq short two days ago, however I am still "long" one big December silver future. The good news is that silver is up today, but the bad news is that I don't know when I will be able to sell that position, but more importantly, if I ever will be able to see any of the money in my account again."
Here's a graph that Washington state reader S.A. sent my way yesterday. It's entitled The Debt that Overwhelms All Others. That is the U.S. Every other country combined pales into insignificance.
(Click on image to enlarge)
I have more stories than I care to talk about today, so I hope you get the time to pick through most of them over the weekend.
Missing customer funds from MF Global Holdings Ltd. have been found in a custodial account at J.P. Morgan Chase & Co., Bloomberg News reported Friday, citing two people close to the matter.
This marketwatch.com piece was sent to me by Florida reader Donna Badach yesterday...and the link is here.
JP Morgan Chase shot down a report that it was holding hundreds of millions of dollars in missing MF Global client funds.
JP Morgan told CNBC Friday that, much like other banks, it has been holding MF funds and awaiting instructions from the bankrupt company's trustee.
The bank said the funds are not the missing client funds and the account has always been "transparent" to MF and its trustee.
The link to this cnbc.com story, which I dug up myself, is here.
Gary Gensler, the chairman of the Commodity Futures Trading Commission, and Jon Corzine, who recently resigned as MF Global's chief executive, worked at Goldman Sachs Group Inc at the same time and held prominent positions. They both left the investment bank in the late 1990s.
"I don't know if there is an official recusal but he's said he's not going to participate in the MFG inquiry. He's done with it," said a source who has participated in meetings on MF Global.
Gensler has not participated in meetings during the last few days, and has chosen to not participate in the review because he doesn't want to create an appearance of a conflict of interest, the source said.
This Reuters story was posted in The Baltimore Sun shortly after midnight. I thank Washington state reader S.A. for sending it my way...and the link is here.
The contagion from the rapid downfall of the once little-known financial firm MF Global continues to spread through Wall Street. The investment bank Jefferies is the latest potential casualty.
Dozens of Jefferies hedge fund clients are scrambling to find another investment bank where they can warehouse client's money and execute trades, according to sources in the prime brokerage divisions at three competing banks. These sources said they spent all day Thursday fielding calls from hedge funds who could be potential clients.
An exodus of hedge fund clients that use Jefferies prime brokerage services could hamper the bank's ability to fund itself. However, it was not clear how many clients -- if any -- have left Jefferies.
Jefferies, at most, would be one of the smaller traders in The Commercial category of the COT. I've mentioned their name numerous times regarding deliveries in gold and silver in the CME's Daily Delivery Report. [MF Global is another trader in the Commercial category as well]
This item was sent to me by Ilona Pluschau, for which I thank her. It's certainly a must read...and the link to this money.cnn.com story is here.
The most important news announcement of the day was not anything to came out of Cannes (as nothing did), nor from Greece (the merry go round farce there continues unabated). No, it was a brief paragraph distributed by the CME long after everyone had gone home, and was already on their 3rd drink.
It is critical, because not only is this announcement a direct consequence of what happened with MF Global several days ago, but because also it confirms one of our biggest concerns: systemic liquidity is non-existent.
This zerohedge.com story was all over the Internet last night and, quite frankly, I'm prepared to admit that I'm not exactly sure what it means...although Tyler Durden has gone apoplectic about it.
Dr. Dave Janda, of WAAM 1600 fame in Ann Arbor, Michigan was the first one through the door with this story yesterday evening...and it's an absolute must read. We'll find out on Monday if there's any substance to it...and the link is here.
Five times since 2003 the Securities and Exchange Commission has accused Citigroups’s main broker-dealer subsidiary of securities fraud. On each occasion the company’s SEC settlements have followed a familiar pattern.
Citigroup neither admitted nor denied the SEC’s claims. And the company consented to the entry of either a court injunction or an SEC order barring it from committing the same types of violations again. Those “obey-the-law” directives haven’t meant much. The SEC keeps accusing Citigroup of breaking the same laws over and over, without ever attempting to enforce the prior orders. The SEC’s most recent complaint against Citigroup, filed last month, is no different.
Enough is enough. Hopefully Jed Rakoff will soon agree.
Rakoff, the U.S. district judge in New York who was assigned the newest Citigroup case, is saber-rattling again, threatening to derail the SEC’s latest wrist-slap. The big question is whether he has the guts to go through with it. Twice since 2009, Rakoff has put the SEC through the wringer over cozy corporate settlements, only to give in to the agency later.
This most excellent op-ed piece was posted over at Bloomberg on Wednesday...and I thank Washington state reader S.A. for sending it along. The link is here.
When Goldman got huffy at a credit union honouring OWS and pulled its anniversary dinner funding, much more was at stake.
Mega-bank Goldman Sachs (assets $933bn), has declared war on one of the smallest banks in New York (assets $30m), the customer-owned community bank that happens to also be the banker for Friends of Liberty Plaza, Inc, also known as Occupy Wall Street. And you thought Goldman didn't care.
This is an excellent story...and has a 13:30 interview with investigative journalist Greg Palast imbedded in it. The story was posted over at The Guardian on October 27th...and I thank reader Eldon Johnson for sharing it with us. The link is here.
A post-imperial virus has infected foreign policy. We've been here before, we know the human cost, and now we must stop.
This time there will be no excuses. Plans for British support for an American assault on Iran, revealed in today's Guardian, are appalling. They would risk what even the "wars of 9/11" did not bring: a Christian-Muslim Armageddon engulfing the region. This time no one should say they were not warned, that minds were elsewhere, that we were told it would be swift and surgical. Nobody should say that.
To western strategists, Iran today is exactly where Iraq was in 2002. The country posed no threat to the west. Yet "weapons of mass destruction" were said to be primed and had to be urgently eliminated. The offending regime could be subjugated by air power or, if not, by regime change. The cause was noble, and the outcome sure.
There any comparison ends. Iran is not a one-man, two-bit dictatorship, but a nation of 70 million people, an ancient and proud civilisation with a developed civil society and a modicum of pluralist democracy. Certainly its insecure leader, Mahmoud Ahmadinejad, wants a weapons-ready nuclear enrichment programme, as next week's United Nations report by the International Atomic Energy Authority is expected to repeat. But he leads a country which, like Pakistan, Britain or Israel, craves status, prestige and the vague security that these unusable weapons seem to convey.
This story, posted in The Guardian on Thursday evening, is well worth your time. I thank Roy Stephens for sharing it with us...and the link is here.
Here's a very interesting video that's posted over at youtube.com. It's a 12:03 Russia Today interview with William F. Engdahl...and I consider it a must view. I thank reader U.D. for sending it along earlier this week...and the link is here.
Traders sold Italian, German, French and Spanish equities as world leaders left Cannes without delivering concrete resolutions for the eurozone - just hours before Greek prime minister George Papandreou won a crucial a vote of confidence in parliament. The PM won by 153 votes to 145, clearing the way for a new coalition government and the next tranche of EU bail-out money to be paid.
The leaders said they had agreed that the International Monetary Fund (IMF) would "monitor" Italy's economy. But even this, the only significant advancement on last week's Brussels accord, failed to reassure the markets on Italy's €1.9 trillion (£1.6 trillion) public debt pile.
The yield on Italy's 10-year bonds soared to 6.4pc - the highest level since the euro was launched. Analysts have warned that Europe's third-biggest economy will need a bail-out if its borrowing costs are not brought down. In Milan the stock market fell 2.66pc, leading the German DAX down 2.72pc and the French CAC down 2.25pc. In London, the FTSE 100 held out, closing down 0.33pc.
This story was posted over at The Telegraph very late last night...and is another Roy Stephens offering that's well worth the read. The link is here.
Greece has backed away from holding a referendum on the euro bailout package. This week's tumult, however, shows that Europe is still far away from solving the euro crisis. German editorialists on Friday warn that the worst-case scenario may arrive sooner rather than later.
Even as Papandreou abandoned his referendum plans, he reinforced the image of a bumbling euro zone unable to get a grip on its currency crisis. His about face came within 24 hours of an emergency meeting with euro-zone leaders in Cannes -- and under tremendous pressure from German Chancellor Angela Merkel and French President Nicolas Sarkozy.
As the uncertainty over Greece's future worsened this week, the debt crisis in Italy also intensified. On Thursday, Merkel made clear to the Italian prime minister that he needed to accelerate his planned austerity measures. Later that night, a draft of the G-20 closing statement emerged including language with Italy agreeing to come close to balancing its budget by 2013. G-20 leaders also pressured Berlusconi to agree to have Italy's progress in implementing savings measures and reforms monitored by both the International Monetary Fund (IMF) and the EU.
Roy Stephens sent me this piece from the German website spiegel.de on Thursday...and the link is here.
Because I have so many stories today, I was going to delete this Nick Laird offering without even opening it...but I'm sure glad that I didn't!
There's only one short paragraph of text...and here it is is...Is it any wonder that a deal among European Union leaders is hard to come by? Just look at what they say about each other. British Prime Minister David Cameron called French President Nicolas Sarkozy “a hidden dwarf” as part of a joke told to a journalist. German Chancellor Angela Merkel referred to Sarkozy as “Mr. Bean,” while Sarkozy called her “La Boche,” or the Kraut. Spanish Prime Minister José Zapatero is “too pink” because of the high proportion of women in his cabinet, said Italian Prime Minister Silvio Berlusconi. And Berlusconi’s opinion of the euro? “A disaster,” he said, that has “screwed everybody.”
The balloon diagram that follows this text is absolutely hilarious...and is a must see. The link to this businessweek.com item is here.
In what many are hailing as a breakthrough solution to Greece’s crippling debt crisis, Greece today offered to repay a bailout from the European Union nations by giving them a gigantic horse.
Finance ministers from sixteen EU nations awoke in Brussels this morning to find that a huge wooden horse had been wheeled into the city center overnight.
The horse, measuring several stories in height, drew mixed responses from the finance ministers, many of whom said they would have preferred a cash repayment of the EU’s bailout.
But German Chancellor Angela Merkel said she “welcomed the beautiful wooden horse,” adding, “What harm could it possibly do?”
This story was posted over at the borowitzreport.com website late last week...and I thank reader Gordon Perry for sending it along. The imbedded photo is well worth the trip...and the link is here.
Forklift drivers, the future’s at HSBC.
It’s to vaults owned by custodians such as HSBC that gold is taken when investors buy shares in physically backed ETFs (exchange traded funds). Bars are also removed when holdings are sold, but recently the traffic has been going decidedly in one direction – as has the value of the ETFs.
Gold held by vaults on behalf of investors in physically backed ETFs reached 2,365 tonnes at the end of October. And, say commodity specialists at RBS (who produced the graph above), while 2011’s increase in physical gold ETF holdings is unlikely to match last year’s 19% rise, appetite remains strong.
I thank reader George Findlay for sending me this citywire.co.uk story on Thursday...and the link is here. The graph alone is worth the trip.
U.S. Commodity Futures Trading Commissioner member Bart Chilton told King World News yesterday that he has been impressed by silver market observers who have accurately predicted smash-downs in the price. Chilton adds that the public is entitled to an accounting of the commission's seemingly interminable investigation of the silver market, which he believes has been criminally manipulated.
If he's so impressed, then why isn't he doing something about it???
Eric sent me the full audio interview shortly after midnight...and the link to this must listen interview is here. I thank Chris Powell for wordsmithing the preamble for me.
A multiyear investigation into the possibility of unlawful acts in the silver market is continuing after regulators analyzed more than 100,000 documents, the U.S. Commodity Futures Trading Commission said.
“In September of 2008, the commission announced the existence of an enforcement investigation into the possibility of unlawful acts in silver markets,” the CFTC said today in a statement on its website. “Since that time, the staff has analyzed over 100,000 documents and interviewed dozens of witnesses and obtained expert advice. It has been a long, detailed and thorough investigation, and it continues in an appropriate and considered manner.”
All they have to do is look at one document...the Commitment of Traders Report...as that will tell them all they need to know. This Bloomberg story from Thursday was sent to me by West Virginia reader Elliot Simon...and the link is here.
Here's a lengthy GATA release that Chris Powell dispatched last night...and goes over in some detail the presentation that GATA's Bill Murphy and Adrian Douglas made to the CFTC hearing a year ago in March 2010. Whistleblower Andrew Maguire's complaint on silver manipulation was read into the record at that time.
While this CFTC hearing was going on in public, silver analyst Ted Butler flew to Washington and met in private with several members of the CFTC enforcement division...and their respective legal council...so the CFTC knows exactly what's going on, whose doing it...and why.
As Chris Powell said in the closing remarks of his preamble..."So thanks, CFTC, but we don't need your silver investigation anymore. You've already told us all we need to know."
This GATA release is a must read...and the link is here.
Gold traders are the most bullish in three weeks after hedge funds boosted their wagers on higher prices amid speculation Europe’s debt crisis and slow U.S. growth will spur demand for the metal as a protection of wealth.
Twenty-eight of 32 people surveyed by Bloomberg expect bullion to rise on the Comex in New York next week, the most since Oct. 14 and the second increase in a row. Money managers boosted their combined net-long position in New York gold by 8.7 percent in the week to Oct. 25, U.S. government data show.
This Bloomberg story from Thursday was sent to me by Roy Stephens...and the link is here.
In commentary published on Monday at GoldMoney, economist and former banker Alasdair Macleod examines fiat money's facilitation of war. Macleod writes: "Any electorate can be patriotically roused for war, so long as it doesn't have to pay for it. And that is the lie behind monetary inflation. If you print money to finance a war instead of raising taxes, for a time no one notices the cost."
I thank Chris Powell for providing the introduction...and this very interesting and very short essay is posted over at the goldmoney.com website. The link is here.
In the latest GoldMoney video interview, the historian Adam Fergusson, author of the definitive account of the Weimar inflation, "When Money Dies," discusses with GoldMoney founder James Turk how inflation destroyed the German economy and corrupted German society in the 1920s and how that experience may relate to the inflationary solution for governments today.
The interview is 35 minutes long...and once again I thank Chris Powell for wordsmithing the preamble. I also thank reader Marc De Villiers for originally bringing this video interview to my attention...and the link is here.
How America's cheap money addiction is inflating the next bubble and undermining faith in government.
Time magazine starred Alan Greenspan on its cover in 1998 for cutting interest rates, naming him one as of three people comprising a “Committee to Save the World.” Eleven years later, the same magazine indicted him as one of three people most culpable for the great economic collapse of 2008–09. Then, in 2009, Time named Greenspan’s successor, Ben Bernanke, as “Man of the Year” for cutting interest rates as part of “an effort to save the world economy.” Guess what comes next in this sequence of praise and blame, relief and recrimination. You have to work hard not to see it on the horizon, and the reason is clear: When money is too cheap for too long, it inevitably creates a problem.
This is my final offering in today's column...and it's your big read of the day. It's very well written...and I thank reader Michael Cheverton for sharing it with us. It's posted over at the-american-interest.com website...and the link is here.
MAX Resource Corp. (TSX.V: MXR; OTCBB: MXROF; Frankfurt: M1D), Focused on Gold & Silver Exploration in Nevada. Clancy Wendt, P. Geo, VP Exploration of MAX Resource Corp., states “we are extremely pleased with the results from our drilling at Majuba Hill. The significant intervals of high-grade silver and copper intercepted near surface in five of the eight holes, as well as the gold values recently encountered, confirm that Majuba Hill is a newly-defined copper/silver/gold porphyry system that is highly prospective for a bulk-tonnage, open pit deposit.” Highlights of recent drilling include: 44.2 metres of 71.0 grams per tonne (2.28 oz/t) Silver and 1.14% Copper. Drill permits have been received and roads are built for a Phase II drill program to commence immediately. New targets have been identified to the west, east and south of the past producing Majuba Hill property. MAX has experienced management, with an extensive track record of exploration success. For more information, please visit our website.
A liberal is someone who feels a great debt to his fellow man, which he proposes to pay off with your money. - G. Gordon Liddy
Today's 'blast from the past' is sung by a budding young singer that was discovered on "The X Factor" recently. This kid definitely has a set of pipes on him...and it's well worth the listen. So turn up your speakers and then click here...and I thank Roy Stephens for digging this up for us. I found it took a while for this webpage to load on my rather ancient computer.
Even though it was a quiet trading day on Friday...and volume was the lowest its been in quite some time, the preliminary open interest numbers for both gold and silver were absolutely sky high...well over 10,000 contracts in both. I don't know what to make of them, as they certainly don't look believable...all things considered.
The final open interest numbers for Thursday's trading day didn't show much improvement from the preliminary numbers...and gold o.i. was up a big chunk...and silver o.i. was hardly up at all.
With the obvious problems associated with MF Global...and the possible problems over at Jefferies, it's hard to say how relevant all these numbers are on a daily basis. As I said yesterday, it may take a while for this to all sort itself out. Then there's the little matter of that zerohedge.com posting further up in this column. So rather than trying to make sense out it, I just think I'll let it alone for the moment and see what Monday brings.
All I can say is that we certainly do live in interesting times. I wish we had more clarity at the moment, but we don't...as the situation is very fluid...and I'm making this up as I go along, at least for the time being.
I await the Sunday night opening in Far East trading with a certain amount of unease. It may be something, but it could end up being nothing...and we'll find out soon enough.
Enjoy what's left of your weekend...and I'll see you here on Tuesday.