Well, the HFT boyz, along with their algorithms and spoofing, were nowhere to be seen on Wednesday as the gold price traded in about a seven dollar price range. However, a new low price tick was set for this move down minutes after the COMEX open. The highs and lows from yesterday aren't worth the effort of looking up.
Gold closed in New York yesterday at $1,188.00 spot, up the magnificent sum of 20 cents the ounce. Gross volume, as expected, was over the moon at 363,000 contracts, but it all netted out at only 37,000 contracts as the large traders had to be out at the close of COMEX trading.
Silver traded basically unchanged until shortly after the morning gold fix in London yesterday---and its new low tick for this move down also came minutes after the COMEX open---no coincidence, I'm sure. The silver price rallied a bit until 10:20 a.m. EDT, before getting sold down until 11:15 a.m. EDT. From there it traded flat into the close of electronic trading.
The high and low ticks in silver were recorded by the CME Group as $16.81 and $16.58 in the July contract.
Silver finished the Tuesday session at $16.65 spot, down 7 cents from Tuesday's close. Gross volume was 38,500 contracts, but netted out to only 25,500 contract. The surprise in these numbers was the heavy roll-overs out of July, with 2,156 contracts into September---and 3,918 contracts into December. I don't know if it means anything---and I'll try to remember to ask Ted today.
The platinum price traded a small handful of dollars higher through all of Far East trading---and into early trading in London. Then, like silver, the price got rolled over just after 10:30 a.m. BST/11:30 a.m. in Zurich---and its new low price for this move down came shortly before and after the close of COMEX trading at 1:30 p.m. EDT. Platinum finished the Wednesday session at $1,117 spot, down 6 bucks from Tuesday.
Palladium followed platinum pretty closely up until the price got turned over at 11:30 a.m. Zurich time as well. Its low of the day came during early trading in New York---and it rallied back to unchanged---$778 spot---by the close.
The dollar index closed late on Tuesday afternoon in New York at 97.22. It rallied about 15 basis points in early Far East trading on their Wednesday morning before heading lower. It dipped to its 96.90 low of the day around 2:45 p.m. Hong Kong time, but at that point 'gentle hands' appeared and brought it back above the 97.00 mark. After trading flat for a couple of hours, a 'rally' began that took it to its 97.78 high minutes after 9 a.m. in New York---and from there it chopped lower in the close. It finished the Wednesday session at 97.30---up 8 basis points from Tuesday's close.
The gold stocks gapped down about 2 percent at the open---and managed to rally into positive territory shortly after 10:30 a.m. EDT on gold's tiny rally after its new low tick---and then they faded from there, with the HUI closing down 0.32 percent.
The silver equities got sold down at the open as well, but they never got a sniff of positive territory---and Nick Laird's Intraday Silver Sentiment Index closed down 1.38 percent.
The CME Daily Delivery Report showed that 10 gold and 51 silver contracts were posted for delivery within the COMEX-approved depositories on Friday. The largest short/issuer was Canada's Scotiabank with 39 contracts---and the largest long/stopper was JPMorgan with 42 for its in-house [proprietary] trading account.
The CME Preliminary Report for the Wednesday trading session showed that gold open interest in May fell by 26 contracts---and is now down to 10 contracts remaining. Those contracts are being delivered tomorrow as per the above paragraph. Silver's open interest fell an amazing 147 contracts, leaving 71 still open, but only 51 were posted for delivery on Friday. What's with the other 20 contracts left over undelivered? Beats the hell out of me---and I await the First Notice Day report this evening for some sort of resolution to this.
There were no reported changes in GLD yesterday---an an authorized participant added a smallish 143,355 troy ounces to SLV.
For the third day in a row there was no sales report from the U.S. Mint.
It was another quiet day in gold at the COMEX-approved depositories on Tuesday, as only 2,500 troy ounces were received, all at HSBC USA---and nothing was shipped out. And it was pretty quiet in silver as well. Only 94,733 troy ounces were received---and 130,239 troy ounces were shipped out. The 'in' activity was at HSBC USA---and most of the 'out' activity was at the CNT Depository.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, they received 4,092 kilobars---and shipped out 3,416 of them. The link to that activity, in troy ounces, is here.
I have a decent number of stories for you today, but I'm a little short of precious metal-related stories, as not much has been happening this week. I hope you'll find a few that you feel are worth reading.
What do you do when month after month you have nothing but bad data to report, such as in this case McDonalds with its weekly comparable store sales shown on the ugly charts below?
Simple: you have two choice - you either seasonally adjust the data (or in the case of U.S. GDP, double-seasonally adjust it), or if that is not possible since unlike U.S. GDP, your numbers are at least somewhat indicative of underlying reality, you stop reporting them altogether.
That's what McDonalds just did.
This commentary appeared on the Zero Hedge website at 9:41 a.m. EDT on Wednesday morning---and today's first story is courtesy of reader M.A.
Bill Gross, the widely followed investor, admitted in his June Investment Outlook on Wednesday that his bet against the German Bund market was well timed but not profitable.
"My famous (infamous?) 'Short of a lifetime' trade on the German Bund market was well timed but not necessarily well executed," Gross, who runs the Janus Global Unconstrained Fund, wrote in his latest report to clients titled "Mr. Bleu."
Gross's Janus Global Unconstrained portfolio is down 0.40 percent so far this year, underperforming its peers by 1.88 percentage points and lagging 93 percent of its non-traditional bond category, according to Morningstar data on Tuesday.
This Reuters article from around 8 a.m. EDT yesterday, was picked up by the CNBC website---and the second story of the day is courtesy of Dan Lazicki.
First it was Gross, then Gundlach. Now billionaire hedge fund manager Paul Singer of Elliott Management has unveiled what he believes is the trade of this generation: being short "long-term claims on paper money, i.e., bonds." He calls it the "bigger short." First hinted at during the Grant's Spring 2015 conference, he now goes into excruciating detail.
Select excerpts from Paul Singer's latest letter.
The Big Short, of course, refers to short positions in credit in the period 2005-2007, more specifically structured credit. To be even more precise, it refers to subprime residential mortgage securitizations. It is also the name of a best-selling book by Michael Lewis about the housing and credit bubble. It was called the Big Short because many forms of credit were so overpriced that the risk/reward of taking on short positions before the financial crisis was extraordinarily favorable.
Today, six and a half years after the collapse of Lehman, there is a Bigger Short cooking. That Bigger Short is long-term claims on paper money, i.e., bonds.
This longish commentary was posted on the Zero Hedge Internet site at 6:07 p.m. EDT yesterday evening---and it's the second offering in a row from Dan Lazicki.
Wondering why economic growth can’t seem to take off or why inflation continues to fall? According to Dr. Lacy Hunt, Executive Vice President of Hoisington Investment Management, it all comes down to debt, which helps to explain most of the world’s economic problems today. Lacy describes the six characteristics of over-indebted economies, the most toxic type of debt to economic growth and financial stability, his view of the endgame, and why he still sees "significant value" in long-dated US Treasury bonds.
This partial transcript, along with a 6:25 minute audio clip was posted on the financialsense.com Internet site yesterday sometime---and it's another contribution from Dan Lazicki.
Policymakers must ensure that financial industry creditors do not expect government bailouts and must be willing to let firms fail in order to restore market discipline, a top Federal Reserve official said.
The remarks by Jeffrey Lacker, president of the Richmond Federal Reserve Bank, repeated much of what he has previously said about what regulators need to do to make the financial system safer. Lacker, a voting member this year on the Fed's policy-setting committee, did not discuss monetary policy.
The long-term solution to ending too-big-to-fail banks is restoring market discipline "so that financial firms and their creditors have an incentive to avoid fragile funding arrangements," Lacker said in remarks prepared for delivery at the Louisiana State University Graduate School of Banking.
His remarks come amid heightened concern among Fed officials about financial stability as the U.S. central bank prepares to raise interest rates. But Lacker says less regulation, not more, is needed to make the system safer.
It's incredible what passes for 'news' these days---and there's no way on God's green earth that the U.S. government will ever allow any U.S. bank, like JPMorgan for instance, to fail. I don't know what's in the Kool-Aid this guy is drinking. This 'story' put in an appearance on the newsmax.com Internet site at 7:43 a.m. EDT yesterday morning---and I thank Brad Robertson for sending it.
Earlier today, when commenting on the latest global criminal scandal, that of "rampant corruption" at FIFA, we - jokingly - said: "And now we just sit back and wait to see how many of the defendants sent "donations" to the Clinton Foundation and how many speeches Hillary and/or Bill gave at the Baur au Lac in the past two decades."
Then we decided to make sure the joke wouldn't be on us and that FIFA hadn't indeed donated to the Clinton foundation.
The joke was on us... because not only did FIFA donate to the Clinton Foundation...
This very interesting new story showed up on the Zero Hedge website at 2:14 p.m. EDT yesterday---and I thank Dan L. for finding it for us.
A senior Bank of England official received emails that were part of an alleged campaign to rig benchmark interest rates, according to evidence presented in a London trial Wednesday.
Martin Mallett, who at the time was the chief currencies dealer at the Bank of England, was among a couple dozen recipients of emails sent in 2007 by brokers allegedly working at the behest of former bank trader Tom Hayes. The recipients were blind carbon-copied on the messages.
In the emails, the brokers sent out daily suggestions for where a variety of banks should set the London interbank offered rate, or Libor. Mukul Chawla, the prosecutor trying Mr. Hayes, said those emails were used in an attempt to skew interest rates for the benefit of Mr. Hayes, at the time a trader in Tokyo at UBS AG .
Mr. Mallett, nicknamed “The Hammer,” was sent the emails at his email@example.com address.
This story was posted on The Wall Street Journal website yesterday morning sometime---and I found it embedded in a GATA release. The actual headline reads "Bank of England Official Received E-mails Relating to Libor Manipulation, Prosecutor Says". The Zero Hedge spin on this is headlined " Need to Manipulate Markets? Just E-mail the Bank of England at firstname.lastname@example.org"---and I thank Dan Lazicki for that as well.
Finance ministers and central bank governors of the Group of Seven wealthiest nations meet in Dresden this week to discuss the health of the global economy and financial regulation, with Greece also on the agenda.
German Finance Minister Wolfgang Schaeuble has invited his counterparts and their central bank chiefs from Britain, Canada, France, Italy, Japan and the United States, for a meeting starting Wednesday and "an in-depth exchange of views" in the eastern German city.
But there will also be other experts seated around the table, Schaeuble said in an interview with German public radio Deutschlandfunk at the weekend.
For the first time, "we've also specifically invited a number of the world's leading economists and monetary policy experts so that we can think about and find better solutions" to today's pressing economic policy issues, he said, such as striking a balance between budget consolidation and investment, and the rules of the international financial architecture.
I don't care how many so-called experts they invite, nothing will change. This AFP story, filed from Berlin yesterday morning, was picked up by the news.yahoo.com Internet site---and it's the first offering of the day from Roy Stephens.
On Tuesday, Greece postponed a scheduled Eurogroup meeting in Brussels without offering a reason as officials conducted “preparatory” discussions and held an evening teleconference with creditors. Face-to-face meetings will take place today with just 9 days to go until June 5 when Athens will miss a payment to the IMF, triggering an unprecedented default the repercussions of which no one can accurately predict.
Also on Tuesday, Greek FinMin Yanis Varoufakis allegedly told Greek reporters that one measure under consideration to help stem the outflow of deposits from Greek banks was a levy on ATM withdrawals designed to encourage the use of credit cards over cash, a rather ironic suggestion coming from a government crippled by debt. The Finance Ministry was quick to deny that such a levy was being considered because after all, one way to ensure that ATM lines will get quite a bit longer is to suggest that depositors will soon be subject to a levy on withdrawals. Unfortunately, it appears as though the move to dispel the ATM tax “rumor” came too late because according to Kathimerini, deposit flight accelerated meaningfully on Tuesday.
This Greece-related story showed up on the Zero Hedge website at 7:48 a.m. EDT on Wednesday morning---and I thank reader M.A. for passing it around.
European creditors dashed hopes that Greece was finally nearing the end-stage of its bail-out negotiations, insisting both sides remained far apart on securing the embattled country’s future in the eurozone.
Greek stock markets jumped after comments from prime minister Alexis Tsipras that the country was "close" to a deal, following reports the two sides had begun the process of drafting an agreement.
"We have made many steps. We are on the final stretch towards a positive deal," said Mr Tsipras.
"This agreement will be positive for the Greek economy, this agreement will redistribute the [financial] burdens and I believe that, very soon, we will be in a position to present more information," said the Leftist premier.
Athens' benchmark closed nearly 4pc up on the day.
This news item appeared on The Telegraph's website early yesterday morning, but has been edited in the interim---and it has also undergone a headline change, as it used to read "Greek markets jump as Alexis Tsipras says Greece is on the 'final stretch' towards bail-out deal". It's the second contribution of the day from Roy Stephens.
The world’s top finance ministers and central-bank chiefs meeting in Dresden this week are already struggling to stick to an agenda set by their German hosts that doesn’t mention Greece.
In a sign of deepening global concern over the country’s stumbling bailout talks, U.S. Treasury Secretary Jacob L. Lew spoke with Greek Prime Minister Alexis Tsipras on Wednesday for the second time in less than a week and told a London audience that “everyone has to double down” on reaching an accord. European Commission Vice President Valdis Dombrovskis denied a Greek government statement that a deal is close.
The Group of Seven meeting starting on Wednesday will officially focus on big-picture themes of economic growth, tax evasion and strengthening the global financial architecture. Yet the most pressing matter for many of the policy makers attending is whether Greece can stay in the euro, and whether the world can handle the consequences if it can’t.
This Bloomberg story from 5 p.m. Denver time on Tuesday afternoon has a lot of similarities to the AFP story further up headlined "G7 finance ministers, central bankers to meet in Dresden". But there are enough differences that I though it worth posting on its own. I thank West Virginia reader Elliot Simon for bringing it to our attention.
The political noose is tightening on the global fossil fuel industry. It is a fair bet that world leaders will agree this year to impose a draconian “tax” on carbon emissions that entirely changes the financial calculus for coal, oil, and gas, and may ultimately devalue much of their asset base to zero.
The International Monetary Fund has let off the first thunder-clap. An astonishing report - blandly titled "How Large Are Global Energy Subsidies" - alleges that the fossil nexus enjoys hidden support worth 6.5pc of world GDP.
This will amount to $5.7 trillion in 2015, mostly due to environmental costs and damage to health, and mostly stemming from coal. The World Health Organisation - also on cue - has sharply revised up its estimates of early deaths from fine particulates and sulphur dioxide from coal plants.
The killer point is that this architecture of subsidy is a "drag on economic growth" as well as being a transfer from poor to rich. It pushes up tax rates and crowds out more productive investment. The world would be richer - and more dynamic - if the burning of fossils was priced properly.
Well, dear reader, I'll believe it when I see it. This Ambrose Evans-Pritchard offering showed up on the telegraph.co.uk Internet site at 5:23 p.m. BST yesterday afternoon---and it's certainly worth reading. It's the first of three in a row from Roy Stephens.
The investment is aimed at doubling oil production in the coming years, Maduro said on Wednesday, after a meeting with CEO of Russian oil giant Rosneft Igor Sechin in Venezuela's capital, Caracas.
The agreement concerns the development of the so-called Orinoco Belt — one of the richest oil reserves in the world — and projects in the gas sector, according to Maduro.
Since last summer, global oil prices have drastically dropped due to oversupply in the market. In November, the Organization of the Petroleum Exporting Countries (OPEC) decided to maintain its oil production levels, contributing to a further drop in prices and severe crises in many oil exporting nations, particularly Venezuela.
This brief article appeared on the sputniknews.com Internet site at 3:14 a.m. Moscow time this morning which was 8:14 p.m. EDT in Washington Wednesday evening. I thank Roy Stephens for finding it for us.
Tony Blair’s time as Middle East envoy representing the US, Russia, the U.N. and the E.U. has finally come to an end. Eight years after he took up the role, Blair tendered his resignation and left one question: how come a war criminal ever became a “peace envoy” in the first place?
The people of the Middle East – and much of the world – have been asking this question ever since Blair was appointed the Quartet’s man in Jerusalem, solemnly and hopelessly tasked to bring “peace” between Israelis and Palestinians. Was his new mission supposed to wash the blood from his hands after the catastrophe of the Bush-Blair invasion of Iraq and the hundreds of thousands of innocents who died as a result?
For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – Blair’s appointment was an insult. The man who never said he was sorry for his political disaster simply turned up in Jerusalem four years later and, with a team which spent millions in accommodation and air fares, managed to accomplish absolutely nothing in the near-decade that followed.
This short must read commentary by Robert Fisk was posted on the independent.co.uk Internet site early this morning in London---and my thanks go out to Roy Stephens for sliding it into my in-box very late last night Denver time.
These are sad days in Washington and Wall Street. The once unchallenged sole Superpower at the collapse of the Soviet Union some quarter century ago is losing its global influence so rapidly that most would not have predicted anything comparable six months ago. The key actor who has catalyzed a global defiance of Washington as Sole Superpower is Vladimir Putin, Russia’s President. This is the real background to the surprise visit of US Secretary of State John Kerry to Sochi to meet with Russian Foreign Minister Sergei Lavrov and then a four hour talk with “Satan” himself, Putin.
Far from a “reset” try, Washington’s hapless geopolitical strategists are desperately trying to find a better way to bring the Russian Bear to her knees.
Kerry was clearly sent to Sochi to sniff out possible soft points for a renewed assault in the future. He told the rogue U.S.-backed lunatics in Kiev to cool it and respect the Minsk cease-fire accords. The demand came as a shock in Kiev. U.S.-installed Prime Minister Arseniy Yatsenyuk told French TV, “Sochi is definitely not the best resort and not the best place to have a chat with Russian president and Russian foreign minister.”
At this juncture the only thing clear is that Washington has finally realized the stupidity of its provocations against Russia in Ukraine and globally. What their next scheme will entail is not yet clear. Clear is that a dramatic policy shift has been ordered on the Obama administration from the highest levels of US institutions. Nothing else could explain the dramatic shift. If sanity replaces the neo-con insanity remains to be seen. Clear is that Russia and China are resolute about never again leaving themselves at the mercy of an incalculable sole superpower. Kerry’s pathetic attempt at a second Russia “reset” in Sochi will bring Washington little at this point. The US Oligarchy, as Shakespeare’s Hamlet put it, is being “hoist with their own petard,” as the bomb maker blows himself up with his own bomb.
This commentary by Engdahl put in an appearance on the journal-neo.org Internet site on Monday---and is an absolute must read for any serious student of the New Great Game. I thank South African reader B.V. for bringing it to our attention.
The CPB Netherlands Bureau for Economic Policy Analysis, a division of the Ministry of Economic Affairs, just released its latest Merchandise World Trade Monitor, which covers global import volumes as well as global export volumes. The index dropped 0.1% in March to 136.5, after having already dropped 0.7% in February, and 1.7% in January. The index, which was set at 100 in 2005, is now down 2.5% from the peak of 140.0 in December. That 3.5-point decline was the sharpest since the Financial Crisis.
This chart, going back to January 2012, doesn’t exactly inspire confidence in the current state of the global economy.
This commentary from the wolfstreet.com Internet site was picked up by the businessinsider.com website on Tuesday---and it's something I found in yesterday's edition of the King Report.
If only Mad Men in real life were like Don Draper – channeling his true inner self, after many a rocky season, to finally click on “I’m OK, you’re OK.”
Instead, we have a bunch of (Pentagon) madmen provoking every major geostrategic competitor all at once.
The Masters of War at the self-described “Don’t Do Stupid Stuff” Obama administration are now announcing they’re ready to dispatch military aircraft and ships within 18 kilometers of seven artificial islands China has built up in the Spratly Islands.
Beijing’s response, via the Global Times, couldn’t be other than There Will be War; “If the United States’ bottom line is that China has to halt its activities, then a U.S.-China war is inevitable in the South China Sea … The intensity of the conflict will be higher than what people usually think of as ‘friction’.”
This must read commentary by Pepe appeared on the Asia Times website yesterday---and it's the final contribution of the day from Roy Stephens and, once again, I thank him on your behalf.
Zijin Mining Group will buy US$710 million worth of gold and copper mining assets from two Canadian companies in the Democratic Republic of Congo and Papua New Guinea with funds raised through a private placement in the Shanghai stock market.
Zijin told the Shanghai and Hong Kong stock exchanges on Tuesday it would buy a 49.5 per cent stake in the Kamoa copper project in the Democratic Republic of Congo from Ivanhoe Mines for US$412 million.
Zijin already owns 9.9 per cent of Ivanhoe, which recorded a net loss of US$52.9 million last year following a net loss of US$80.6 million in 2013.
Fujian-based Zijin will also pay Barrick Gold Corp US$298 million for a 49.5 per cent interest in the Porgera gold mine in Papua New Guinea.
This news item showed up on the South China Morning Post on their Wednesday---and I found it embedded in a GATA release.
The Direxion Shares ETF Trust II has decided to liquidate and close the Direxion Daily Gold Bull 3X Shares (BAR) exchange-traded fund based on the recommendation of Direxion Asset Management LLC, the fund's sponsor.
Due to the fund's inability to attract sufficient investment assets, Direxion believes the fund cannot continue to conduct its business and operations in an economically efficient manner. As a result, Direxion concluded that liquidating and closing the fund would be in the best interests of the fund and its shareholders.
Shares of the Fund will stop trading on the NYSE Arca Inc. and will no longer be open to purchase by investors after the close of regular trading on June 19, 2015. Shareholders may sell their holdings in the fund prior to June 19 and those transactions may be subject to customary brokerage charges. Between June 22 and June 26 shareholders may be able to sell their shares only to certain broker-dealers and there is no assurance that there will be a market for the fund during that time.
This gold-related story appeared on the prnewswire.com Internet site on Tuesday---and it's another article I found on the gata.org Internet site yesterday.
The South African mining industry is in trouble. That is not in question. The only debatable point is exactly how much trouble it is in.
The industry on which this country’s modern economy was built has been stuttering since the global financial crisis. What investors and anyone else with an interest in mining’s role in the economy wants to know, is where this is headed.
Are we nearing a point where we will start to see a turnaround? Or is there a chance that things will simply continue to deteriorate?
Speaking at the JSE’s Power Hour in Cape Town, Peter Major, mining specialist at Cadiz Corporate Solutions, warned that one must be wary of thinking that things will always revert to an historically established mean. The mining environment in South Africa has changed so much over the last few decades that “the old rules no longer apply”.
Well, dear reader, as long as these so-called experts and current crop of mining executives don't get on stick pretty soon, ALL of the world's precious metal miners are going to be heading in the same direction. I know for a fact that there isn't a mining executive out there that doesn't know that the metals they mine isn't being managed by JPMorgan et al. They just won't do anything about it.
This article was posted on the mineweb.com Internet site yesterday afternoon London time---and it's worth reading.
Here are three red-winged blackbird photos, one female---and two different males, that I took from the car as I was driving down a country road just outside the city limits about ten days ago. There's no way that they would allow you to get close enough for a good photo if you were just on foot.
Integra's Lamaque South Gold Project and Sigma-Lamaque Milling Complex and Mines are located directly east from the city of Val-d’Or along the prolific Abitibi Greenstone belt in the Province of Québec, Canada, approximately 550 km northwest of Montréal. Québec is rated one of the best mining jurisdictions in the world. Infrastructure, human resources and mining expertise are readily available.
The Company’s primary focus is on production planning for its high-grade Lamaque South project. The Lamaque South property is divided into three clusters, the North, South and West cluster. The primary targets are the high-grade Parallel Zone in the North Cluster and the Triangle Zone in the South Cluster. The acquired Sigma Mill, located 1 kilometer from the Parallel Zone and 3 kilometers from the Triangle Zone, is a fully-permitted, 2,200 ton per day mill and tailings facility. The Sigma-Lamaque Mill and Mining Complex include the historic Sigma and Lamaque Mines which operated for 75 and 52 years respectively and produced more than 9 million ounces of gold in total. Please visit our website for more information.
If, for instance, copper futures experienced 53 or 61 days of world copper production (50,000 tons per day) being bought and sold by speculators on the COMEX during one week, as just occurred in silver futures, that would mean between 210,000 to 240,000 COMEX copper contracts would be repositioned, an impossibility for a market with a total open interest of less than180,000 contracts. Further, the concentrated short position of the eight largest traders in COMEX copper comes to 15 days world production, less than a tenth of the 163 days of world production in COMEX silver.
If NYMEX crude oil experienced 53 days of world oil production (93 million barrels a day) being sold in one week, as just occurred in COMEX silver, that would be the equivalent of 5 billion barrels of oil or 5 million NYMEX futures contracts. NYMEX crude oil is the largest oil futures contract in the world and has a current total open interest of around 1.6 million contracts and it would be impossible for any group of speculators to sell or buy 53 days of world production in a year or longer, no less in a week as just occurred in COMEX silver. In terms of the concentrated short position of the 8 largest traders in NYMEX crude oil, it comes to less than 4 days of world oil production, compared to the 163 days of production held short in COMEX silver.
It is only when you compare what just occurred in COMEX silver to other commodities does the extent of the manipulation come through. I’d use the words preposterous and absurd to describe the situation, but the COT report is factual and as real as rain. Instead, what is preposterous and absurd is for anyone to pretend that what is going on in silver is somehow normal. This is particularly true for silver investors and mining companies and their shareholders which are being held hostage to the most defective price discovery process in history. -- Silver analyst Ted Butler: 27 May 2015
It was a very quiet trading day from a price perspective, but three of the four precious metals set new lows for this move down yesterday, although they did not close at them---so the slicing continues.
Volume in gold, of course, was enormous as the big traders had to be out yesterday at the COMEX close---and all the rest have to be out by the end of today's close. Volume will be lighter, but still very decent.
Here are the 6-month charts for all four precious metals updated with Thursday's price/volume data.
If you read Ted's quote above, I urge you to read it one more time---and if you didn't, it's not too late to make amends. Here's Nick Laird's "Days of World Production to Cover COMEX Short Positions" graph in all physically traded commodities on the COMEX. This chart was in my Saturday column, but I thought I'd post it here for reference purposes. Ted mentions that the Big 8 traders are short 163 days of world silver production, but Nick's chart indicates the number is actually 178 days.
And as I type this paragraph, the London open is about fifteen minutes away. Gold, silver and platinum are up a hair---and palladium is flat. Nothing to see here. Net gold volume is around 10,500 contracts at the moment, with virtually all of it in the new front month, which is August. Net silver volume is a bit over 3,600 contracts. Nothing to see in the volume data, either.
The dollar index made it up to 97.39 around 11 a.m. Hong Kong time on their Thursday morning---and it's been heading south at a goodly pace since. It kissed the 97.00 mark around 2:30 p.m Hong Kong time, but 'gentle hands' were at the ready. However, it's still hovering very close to that mark with the London open less than five minutes away at this point---and is currently down 28 basis points.
Today is the last trading day in the June contract---and First Day Notice numbers will be posted on the CME's website this evening---and I'll have them for you in tomorrow's column.
And as I send today's effort off into cyberspace at 5:35 a.m. EDT, I see that all four precious metals have crept a bit higher, but it's obvious that a willing seller was present shortly after 9 a.m. BST in London, as gold, silver and platinum all got sold down a bit. With three wildly different supply/demand fundamentals, this sort of co-ordinated 'action' would never happen in a free market.
As expected, gold's gross volume is getting up there, but the net volume is only 21,000 contracts. Silver's net volume is sitting right at 6,000 contracts---and the dollar index, which has bounced off the 97.00 mark three times in the last couple of hours, is down 22 basis points. I get the impression that it would like to move a lot lower, but those 'gentle hands' are obviously still around.
I have no idea what will happen during the Thursday trading session, but we certainly aren't out of the woods yet from a down-side perspective. Of course there's always a chance that JPMorgan et al could get over run with some black swan event coming out of left field. But if it does happen, it will be---as Ted Butler has been saying for at least a decade now---the first time.
So we wait.
I'm off to bed---and I'll see you here tomorrow.