It was a lot quieter on Tuesday as far as price action was concerned, but I'm sure you've already noted gold made a new low for this move down, and as is usually the case, it came at the London p.m. gold fix. The subsequent rally didn't get far, or wasn't allowed to get far. From there the gold price traded flat into the close.
The high and low ticks recorded by the CME were $1,225.80 and $1,214.60 in the February contract.
Gold closed at $1,224.30 spot, up and even $5.00 from Monday's close. Net volume, although not heavy, wasn't exactly light either at 124,000 contracts.
The silver price didn't do much either, and it's a coin toss as to whether the low tick came at 11 a.m. in London, or at the London p.m. gold fix. Not that it mattered when it happened, I suppose, but it was another new low for this move down. The tiny rally off the low at the p.m. fix met the same fate at the precise same time as the gold rally did.
The highs and lows, such as they were, were $19.335 and $18.975 in the March contract as posted on the CME's website.
Silver finished the Tuesday trading session at $19.175 spot, down 3 cents from Monday. Considering the lack of price movement, net volume was pretty chunky at 46,000 contracts.
Platinum had a tiny rally in early morning trading in the Far East that didn't last. But the next rally attempt that began at the Comex open, lasted until noon before trading sideways into the close. Palladium finished in the black as well, but platinum was the star of the day. Here are the charts.
The dollar index closed on Monday afternoon in New York at 80.90. It rallied to its 80.99 high shortly before 1 p.m. in Far East trading, and then began to decline steadily until it hit its low of 80.51 around 11:45 a.m. in New York. The index rallied slowly and unsteadily into the close from that low, finishing the Tuesday session at 80.61, down 29 basis points from Monday.
The gold stocks attempted to rally at the start of trading in New York, but quickly fell into negative territory as gold hit its low at the London p.m. fix, which came shortly after 3 p.m. GMT, or 10 a.m. in New York. The attempted rally off that low got nowhere, and the gold stocks slid some more into the close. The HUI finished down another 1.55%. The HUI is already down 7.5% in the first two trading days of December.
The chart pattern for the silver equities looked similar, but Nick Laird's Intraday Silver Sentiment Index only closed down 0.10%.
The CME Daily Delivery Report showed that 328 gold and 126 silver contracts were posted for delivery within the Comex-approved depositories on Thursday. The shocking thing about the gold deliveries was not that the big short/issuer was JPMorgan out of its client account with 300 contracts, but that the big long/stopper [drum roll, please!] was JPMorgan out of it's in-house [proprietary] trading account with 336 contracts. How's that for insider trading!!! You either trick or lie to your clients into going short, and then the company itself scoops up their positions by standing for delivery against them. You couldn't make this stuff up!!! The Volcker Rule can't get enacted soon enough for either Ted Butler, or for me.
In silver, the largest short/issuer was Jefferies with 103 contracts. And it should come as no surprise that JPMorgan was by far the biggest long/stopper with 98 contracts; 84 for its in-house account, and the balance for its client account. In distant second was Canada's Bank of Nova Scotia with 19 contracts stopped.
The link to yesterday's Issuers and Stoppers Report is here, and it's worth a quick look for obvious reasons.
It was no surprise to find that an authorized participant had made another withdrawal from GLD yesterday. This time it was 57,881 troy ounces. There was a withdrawal from SLV as well, but only 145,587 troy ounces. That's too small an amount for a 'plain vanilla' withdrawal because of price, and also too small to be a fee payment, so I'd guess that the owner of that silver needed it elsewhere.
Over at Switzerland's Zürcher Kantonalbank for the week ending on November 29, they reported smallish declines in both their gold and silver ETFs. Their gold ETF dropped by 22,122 troy ounces, and their silver ETF fell by 256,081 troy ounces.
The U.S. Mint had another sales report yesterday. They sold 9,000 troy ounces of gold eagles and 110,500 silver eagles.
Gold movement inside the Comex-approved depositories on Monday is hardly worth writing about, as only 314 troy ounces were reported received, and nothing was shipped out. Here's the link to that 'activity'.
In silver, nothing was reported received, but 642,141 troy ounces were reported shipped out of HSBC USA's vault on Monday. The link to that action is here.
I have the usual number of stories for a mid-week column, and I hope you find something of interest in today's selection.
U.S. stocks fell Tuesday, with the S&P 500 and the Dow Jones Industrial Average falling for a third straight day on uncertainty over when the Federal Reserve will begin to scale back stimulus and self-fulfilling fears the market was overdue for a pullback from record levels.
The Dow Jones Industrial Average dropped more than 100 points during the session before settling at 15,914.62, down 94.15 points, or 0.6%, taking it well below the psychologically important 16,000 level. The drop was the index’s biggest one-day decline since Nov. 7.
The S&P 500 lost 5.75 points, or 0.3%, to 1,795.15 and the Nasdaq Composite declined 8.06 points, or 0.2%, to 4,037.20.
“I hate to use the words, ‘we’re due,’ but we’ve gone straight up,” said J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago.
This news item was posted on the marketwatch.com Internet site just after the markets closed in New York yesterday afternoon...and I thank Roy Stephens for today's first story.
It seems some among the mainstream media believe "the economy is improving." In the interests of clearing up that little misunderstanding, we hope the following chart will clarify which "economy" is improving...
That's all there is to this tiny story, but the chart in this Zero Hedge article from yesterday afternoon is a must to see...and I thank reader M.A. for bringing it to our attention.
What keeps us up at night? Well I can’t speak for the others, having spoken too much already to please PIMCO’s marketing specialists, but I will give you some thoughts about what keeps Mohamed and me up at night. Mohamed, the creator of the “New Normal” characterization of our post-Lehman global economy, now focuses on the possibility of a” T junction” investment future where markets approach a time-uncertain inflection point, and then head either bubbly right or bubble-popping left due to the negative aspects of fiscal and monetary policies in a highly levered world.
Investors are all playing the same dangerous game that depends on a near perpetual policy of cheap financing and artificially low interest rates in a desperate gamble to promote growth. The Fed, the BOJ (certainly), the ECB and the BOE are setting the example for global markets, basically telling investors that they have no alternative than to invest in riskier assets or to lever high quality assets. “You have no other choice,” their policies insinuate. “Get used to negative real interest rates, move out on the risk spectrum and in the process help heal the real economy,” they seem to command.
This commentary was posted on the Zero Hedge website early yesterday morning EST...and my thanks go out to Manitoba reader Ulrike Marx for her first offering in today's column.
Overnight, The Wall Street Journal reported a financial factoid well-known to regular readers: namely that as a result of a broken system that ever since the LTCM bailout has encouraged banks to become take on so much risk they become systematically important (as in their failure would "end capitalism as we know it"), and thus Too Big To Fail, there has been an unprecedented roll-up of existing financial institutions especially among the top, while the smaller, less "relevant", if far more prudent banks have been forced out of business. "The decline in bank numbers, from a peak of more than 18,000, has come almost entirely in the form of exits by banks with less than $100 million in assets, with the bulk occurring between 1984 and 2011. More than 10,000 banks left the industry during that period as a result of mergers, consolidations or failures, FDIC data show. About 17% of the banks collapsed."
The point here is that the number of banks is largely irrelevant: it is obvious that the big will keep on getting bigger, and the Big 5 banks will do all in their power to either acquire their profitable competition or put everyone else out of business. However, the far bigger question is what happens to bank deposits once the Fed start to taper, ends QE or outright unwinds its balance sheet, which ultimately would soak up trillions from bank deposits. Because if there is one thing that is clear is that without the Fed, and without commercial bank loan creation (which has been non-existent in the past 5 years), bank balance sheet would be exactly where they were the day Lehman died.
Finally, one does not need to go any further than the following chart from the OCC [See Table 9, Page 36 for the precious metals. - Ed] showing total bank derivative holdings for all US banks and just the Top 4. The punchline: just the 4 biggest U.S. banks hold $217.5 trillion, or 93% of the total $233.9 trillion in derivatives.
This Zero Hedge piece is worth spending a few minutes on...and I'll have more on the precious metal derivatives in The Wrap. This is the second news item in a row from Ulrike Marx.
As somewhat expected - though hoped against by many Detroit union workers - Judge Steven Rhodes appears to have confirmed Detroit is eligible for bankruptcy protection (after pointing out that the city's accounting was accurate...and it is indeed insolvent) making this the largest ever muni bankruptcy.
The city will now begin working toward its next major move - the submission of a plan to re-adjust its more than $18 billion in debt - including significant haircuts for pension funds and bondholders. With Detroit as precedent, we can only imagine the torrent of other cities in trouble that will be willing to fold.
He did provide an "out" though: Rhodes warns the city that just because pension rights can be impaired, doesn't mean he will approve a plan with steep cuts.
This is another article from Zero Hedge, this one from late yesterday morning EST...and I thank reader M.A. for his second contribution to today's missive. There was also a 2-page story about this in The New York Times yesterday...and it's worth your while as well. It's courtesy of Roy Stephens.
Grant Williams "pulls no punches" in this all-encompassing presentation as the "Things That Make You Go Hmmm" author reflects on what is behind us and looks ahead at the ugly reality that we will face when "the impurities of QE are finally flushed from the system."
Central bankers of today have "changed everything" he chides, "in ways that will ultimately end in disaster." Following extraordinarily easy monetary policies across all of the world's central banks, Williams explains why "we are now near the popping point of the 3rd major bubble of the last 15 years," each bigger than the last.
The only way Janet Yellen avoids being at the helm when this ship goes down is to blow an even bigger bubble than Bernanke's government bond experiment, "which is highly unlikely." From how QE works, why many don't "feel" wealthy anymore, to the fact that "the geniuses that gave this thing life, don't have the guts to kill it," Williams warns, ominously, "the bills have come due on the blissful latest 30 years."
This absolute must watch 32-minute video is another piece from the Zero Hedge website yesterday. Grant's presentation begins at the 2:00 minute mark...and I thank reader Joe Nordgaard for finding it for us.
Households are pulling money out of their savings accounts at the fastest rate in modern record, according to Bank of England figures.
In the past year, families have withdrawn £23bn from their long-term savings accounts to convert into cash and put into current accounts - the equivalent of around £900 for every household in the country.
It is the most dramatic evidence yet that Britons are paying for the rising cost of living by raiding their savings accounts.
No surprises here, as this is happening in just about every country in the Western world at the moment. This SkyNews story was picked up by the uk.news.yahoo.com Internet site early yesterday morning GMT...and my thanks go out to West Virginia reader Elliot Simon.
The cost of insuring British debt against default has fallen below the levels for the US, Switzerland, Japan and every major eurozone state except Germany, marking a dramatic change of view on UK’s economic prospects.
Credit default swaps (CDS), used for insuring and trading sovereign debt, are “pricing” British bonds as if they were top-notch AAA quality. This comes amid growing speculation that rating agencies may soon shift gears and start to upgrade the UK.
The CDS contracts for the UK have been on a downward trend for months as growth picks up, cutting below countries that still have AAA ratings such as Austria, Australia and Canada.
As you already know, dear reader, computer algorithms and high-frequency trading can set a price/value on anything that they choose to...including affecting credit ratings if necessary. This Ambrose Evans-Pritchard article was posted on the telegraph.co.uk Internet site on Monday evening...and my thanks go out to Roy Stephens once again. It's worth reading.
A committee of MPs challenged the existing system of oversight for the security services by asking the head of MI5 to justify his claims that the Guardian has endangered national security by publishing leaks from the former NSA contractor Edward Snowden.
In an unprecedented step, Keith Vaz, the chairman of the home affairs select committee, announced that spy chief Andrew Parker had been summoned to give evidence in public to the Commons committee next week.
The decision was taken at a private session of the select committee on Tuesday before the body heard evidence from Guardian editor Alan Rusbridger seeking to justify the Guardian's decision to publish a string of stories based on US and UK intelligence agency files leaked by Snowden to the media.
This very interesting news item was posted on The Guardian's website late yesterday evening GMT...and it's another offering from Roy Stephens, for which I thank him.
Ukrainian President Viktor Yanukovych prevented a palace coup against his government on Tuesday. His party managed to see off a vote of no confidence initiated by opposition leader Vitali Klitschko. Yanukovych didn't even bother to show up to the turbulent debate.
When they heard that the opposition had lost the vote of no confidence on Tuesday, thousands of anti-government protestors gathered outside Ukraine's parliament in Kiev vented their anger with deafening chants of "Shame, shame!" They had moved as close to the building as police roadblocks let them. Buses blocked the entrances to parliament, while a large contingent of police cordoned off a wider area.
Inside, the plans of the opposition leadership to force Yanukovych's prime minister, Nikolai Azarov, out of office went up in smoke. A total of 187 MPs voted for the motion of no confidence introduced by the alliance led by boxing world champion Vitali Klitschko. That was nine more than the 178 that had been pledged to the opposition before the vote. Even a member of Yanukovych's ruling Party of Regions voted against the government.
This article was posted on the German website spiegel.de very early yesterday evening Europe time...and it's another contribution from Roy Stephens.
the Netherlands, our close cultural kin.
But before we all flagellate ourselves – let alone think of copying the Shanghai success formula – just remember one thing. There is a body of scholarship showing that the collapse of the fertility rate to dangerously low levels across east Asia is the direct consequence of school cramming and "education fever".
This is well-known to demographers and those who follow the Far East closely, but less known in the West. The CIA World FactBook says fertility rates have fallen to: Hong Kong (1.04%), Singapore (1.10), Taiwan (1.15), Japan (1.20), Korea (1.22%). These figures may be a little too low. Japan and Singapore have seen a small bounce lately.
But the picture is clear enough, and Shanghai is thought to be around 1.08 percent at this point, a harbinger of things to come across China's eastern seaboard. They are all far below the stability level of 2.1 percent. The whole of east Asia faces an acute ageing crisis. It has already begun in Japan.
This blog from Ambrose Evans-Pritchard yesterday is a very interesting read and it's the second-last offering of the day from reader Roy Stephens.
United States Vice President Joe Biden said during a tour of Asia on Tuesday that the US is “deeply concerned” about recent efforts by China to re-draw airspace surrounding a series of islands between Taiwan and Japan.
"We, the United States, are deeply concerned by the attempt to unilaterally change the status quo in the East China Sea," Biden said during a Tuesday news conference alongside Japanese Prime Minister Shinzo Abe.
The airspace in that area has traditionally been controlled by Japan, but claimed by the Chinese as well. Late last month China proclaimed a portion of that area in the East China Sea as within their own air defense zone, prompting international tensions to tighten between all those involved in the Pacific Rim.
This Russia Today news item was posted on their Internet site early on Tuesday evening Moscow time, which was late yesterday morning in New York. I thank Roy Stephens for his final offering in today's column.
British Prime Minister David Cameron faced demands for the return of priceless artifacts looted from Beijing in the 19th century on Wednesday, the last day of his visit to China.
"When will Britain return the illegally plundered artifacts?" the organisation asked, referring to 23,000 items in the British Museum which it says were looted by the British Army, part of the Eight-Nation Alliance that put down the Boxer Rebellion at the end of the 19th century, a popular uprising against the incursion of European imperial powers in China.
To the Chinese, the ransacking of the Forbidden City, and the earlier destruction of the Old Summer Palace in Beijing in 1860 -- about which one British officer wrote: "You can scarcely imagine the beauty and magnificence of the places we burnt. It made one?s heart sore to burn them" -- remain key symbols of how the country was once dominated by foreign powers.
Well, dear reader, if you want to know one of the reasons that Britain gave Hong Kong back to China without a whimper, this is one of them...along with the other opium war that occurred earlier in the 19th century. This absolute must read commentary was posted on the france24.com Internet site early this morning...and I thank South African reader B.V. for sliding it into my in-box in the wee hours of this morning. That link to the "opium war" in this paragraph is a must read as well, as it includes China's connection to silver, amongst other things. We haven't heard the last of this, and one has to wonder what new direction China will go from here, as they're obviously turning up the heat on many fronts now.
Huawei Technologies Co., China’s largest maker of phone network equipment, said there is no basis for U.S. scrutiny of its contract to supply broadband equipment for a project in South Korea.
“Our gear is world-proven and trusted, connecting almost one-third of the world’s population,” Scott Sykes, a spokesman for Shenzhen-based Huawei, said in an e-mail today. “The motivations of those that might groundlessly purport otherwise are puzzling.”
U.S. Senator Dianne Feinstein, chairman of the Select Committee on Intelligence, and Senator Robert Menendez, who leads the Committee on Foreign Relations, sent a letter last week to Defense Secretary Chuck Hagel, Secretary of State John Kerry and James Clapper, the director of national intelligence. The lawmakers expressed concern that Huawei’s involvement creates risks for the U.S.-South Korea alliance, including for U.S. troops based on the peninsula.
If this isn't a case of the pot calling the kettle black, I don't know what is. This Bloomberg news item was posted on their website early yesterday evening Mountain Time...and I thank reader 'David in California' for bringing it to my attention, and now to yours.
1. Grant Williams: "Stunning Event is About to Completely Alter the War on Gold". 2. Jean-Marie Eveillard: "There Are Absolutely Terrifying Risks Facing Global Markets". 3. Ron Rosen: "60-Year Market Veteran - This Will Send Gold and Oil Soaring".
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]
According to World Gold Council, gold is entering the country unofficially through India’s porous borders helped to meet pent-up demand, together with an influx of recycled gold that was drawn out by higher prices and promotions offered by retailers during the third quarter to end-September.
“Reports that a good market for 10-tola (100 grams) bars is re-emerging, due to the relative ease with which they can be concealed, reinforce this view,” the WGC said in a report last month.
The WGC report also noted that Thailand is being used as a route to channel gold into other markets, notably India and Vietnam.
“Investigations and seizures by financial intelligence agencies in the recent past have revealed that smugglers are now flying consignments of gold to Bangladesh and Nepal and then using couriers to carry them across the border,” the report said.
No story surprises me regarding gold smuggling into India. This one was posted on the firstpost.com Internet site yesterday...and it's worth reading. My thanks go out to Ulrike Marx once again.
Gold smugglers are adopting the methods of drug couriers to sidestep a government crackdown on imports of the precious metal, stashing gold in imported vehicles and even using mules who swallow nuggets to try to get them past airport security.
"Gold and narcotics operate as two different syndicates but gold smuggling has become more profitable and fashionable," said Kiran Kumar Karlapu, an official at Mumbai's Air Intelligence Unit.
"There has been a several-fold increase in gold smuggling this year after restrictions from the government, which has left narcotics behind."
From travellers laden head-to-toe in jewellery to passengers who conceal carbon-wrapped gold pieces in their bodies - in the mistaken belief that metal detectors will not be set off - Indians are smuggling in more bullion than ever, government officials say, driven by the country's insatiable demand for the metal.
This news item was posted on the Economic Times of India website this morning IST...and it's another contribution from Ulrike Marx.
Korea Exchange Inc. will begin physical gold trading on March 24 as Park Geun Hye’s government seeks to wring tax revenue out of a market that’s dominated by illegal transactions.
The exchange will use 1 gram units of bullion of 99.99 percent purity to spur liquidity and delivery will be in 1 kilogram bars, the bourse said in a statement today. Trading will start on a test basis for two weeks from Feb. 10 before full operations, it said.
South Koreans hold seven times as much gold as the 104.4 metric tons in their central bank’s vaults and the majority of trading is on the black market to evade import duty and value- added tax, according to government estimates. Park, who marks the one-year anniversary of her election as president this month, scaled back welfare pledges in September as her administration forecast the first drop in revenue in four years.
This Bloomberg story found a home over at the mineweb.com Internet site yesterday...and it's the final contribution of the day from Ulrike Marx.
For gold and silver bullion buyers, the question arises of where to take delivery of and safeguard your precious metals.
Taking physical delivery of your gold or silver is often the most rewarding part of the purchasing experience, as it gives you, the bullion investor, a fuller understanding of the real value of tangible monetary assets.
As one of the industry's leading bullion dealers, we at GoldSilver.com pride ourselves on investing and buying bullion right alongside our customers.
Because we are such proponents of taking physical delivery first, we have compiled a few creative storage solutions based on voluntary, anonymous, customer feedback.
This very interesting commentary was posted on the 24hgold.com Internet site on Monday...and it's definitely worth reading. My thanks go out to Elliot Simon for sending it our way.
A GATA supporter wrote the other day to the investor relations officer of a silver mining company in which he is invested to complain about the company's seeming indifference to the manipulation of the monetary metals markets. He soon received this reply:
"Thanks for your email. We share your frustration about the silver price. However, we don't attempt to take action against the bullion bankers for manipulation because 1) it is primarily the responsibility of the U.S. Commodity Futures Trading Commission, not the companies, to regulate these markets, so the companies would have to sue the bullion banks too; 2) manipulation is just too difficult to prove; 3) such a lawsuit would take many years and cost many millions of dollars with no certainty as to the outcome; and 4) every company invests its cash where it thinks it can create the biggest return to shareholders.
"In our case, we think investing shareholder money in things we can control, such as growing our business and our profits, is of greater benefit to our shareholders than investing in things we cannot control, such as suing the bullion bankers and the CFTC, both of which have far more financial and human clout than we companies do. They would just outspend us and stall for time."
This is the biggest bulls hit cop-out I can think of. There are a multitude of ways that the silver/gold mining industry [or a group of its members] can take a stand without a lawsuit of any kind...and it would put enormous pressure on the CFTC and the bullion banks involved. Of course it would be helpful if the World Gold Council and The Silver Institute would get onside on this...but these two organizations are there for precisely the purpose of insuring that this sort of action is never taken. All current and past directors of these organizations sold out to the dark side of The Force long before they were "invited" to serve in them.
I found this story on the gata.org Internet site last evening...and it's a must read for sure.
Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization
Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.
Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.”
Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained.
Please visit our website for more information about the project.
By knowing that gold and silver prices only fall sharply when the commercials are looking to buy, one does not need to know much more. JPMorgan and the other collusive commercials are not rigging prices lower and buying more gold and silver contracts in order to sell at still lower prices. That’s not something you do when you control a market. I can’t tell you the ultimate bottom; but I can tell you JPMorgan and the commercials are not buying to sell those contracts lower still. Even if you guess that prices will fall lower as JPMorgan rigs prices lower in order to buy, there is a terminal point. That point is closer than ever before. - Silver analyst Ted Butler: 02 December 2013
Besides the fact that another new low for this move down in both gold and silver was set, not much else happened during the trading day on Tuesday, and Ted Butler's quote above tells you all you need to know about the who is doing it and why.
Since yesterday's data will be in this Friday's Commitment of Traders Report, and the accompanying Bank Participation Report, we'll get a real good look at how much more the Commercial net short position in both gold and silver have improved during the reporting week that ended at the Comex close on Tuesday.
In the Critical Reads section further up, I posted a ZH story entitled "Top 4 U.S. Banks Holding $217 Trillion in Derivatives". In my commentary on that piece, I mentioned Table 9 in the latest derivatives report from the Office of the Comptroller of the Currency. Here's the table in question posted below, and the "click to enlarge" feature is a must here.
Forget the Total Assets and Total Derivatives numbers and just concentrate on the "Gold Maturity" and other "Precious Metals Maturity" numbers on the right. In gold, JPMorgan and Citigroup hold $90.874 billion dollars in gold derivatives between them, out of a total of $121.328 billion dollars held by all U.S. banks. I'm prepared to bet serious money that the more than 95% of the remaining $30.454 billion is held by HSBC USA, a U.S. bullion bank that doesn't show up in the "Top 4" shown here, because they are listed by "Total Derivatives", and would be #5 or #6 on the list if it were to include them.
Before the financial crisis rearranged the big derivatives players in this report, HSBC USA was always in the top five banks, and they held major quantities of precious metal derivatives at that time, and I doubt very much that that has changed much since then.
In other "Precious Metals Maturity", JPMorgan and Citi hold $21.941 billion in derivatives between them out of the total of $28.234 billion. Most of those amounts would be silver derivatives, because platinum and palladium are tiny markets by comparison. I'd also bet serious money that HSBC USA holds the lion's share of the $6.293 billion dollar balance as well.
You should also note that Goldman Sachs and BofA hold zero derivatives in any precious metal.
Based on these numbers, it's pretty easy to see who runs the show in the precious metals. It's JPMorgan Chase by a country mile, with Citi and HSBC USA playing supporting rolls; along with [in my opinion] Canada's Scotiabank giving it an "international flavour".
As Ted Butler said in the quote in The Wrap yesterday, JPMorgan Chase holds a bit more than 50% of all the long positions in the Commercial category of the latest Commitment of Traders Report. That report shows that there are 58 traders holding long positions in the Commercial category in gold, and just one trader, JPMorgan Chase, holds 50+% of those long positions all by itself.
I'm running very late today, and London has been open about an hour and a half at this point, and I see that JPMorgan et al are still at it, as their high-frequency trader set new lows going into the London open this morning. Volumes for this time of day in both metals are not overly heavy, so one has to wonder just how effective these new lows are. As Ted Butler said in the quote above: "there is a limit." And, not that it matters, but the dollar index is up about 11 basis points.
And as I hit the send button at 5:20 a.m. EST, gold is hitting another new low once again, silver is off its low by a bit, and platinum and palladium aren't doing much. Volumes have changed very little since I wrote the above paragraph about 45 minutes ago, so all this price action, such as it is, is occurring on fumes and vapours from a volume standpoint, so I wouldn't read much into it. However, the trading day has miles to go, and anything can happen between now and the 5:15 p.m. electronic close in New York this afternoon.
It wouldn't surprise me in the slightest if "da boyz" set another new low at the London p.m. gold fix today. We're really in terra incognita from hereon in, as JPMorgan et al shake the tree one last time. To say that everyone is demoralized would be an understatement at this point, but it only matter what happens on the next rally, and based on the pounding the precious metals have taken this year so far, I'd be prepared to be that JPMorgan et al will [initially] be M.I.A. when it does.
I'm off to bed. See you tomorrow.