Casey Research Publication
Gold & Silver Daily
"It was another textbook case of a JPMorgan Chase et al-engineered price smash"
 

¤ Yesterday In Gold & Silver

The early rally in the gold price in Far East trading got dealt with in the usual manner---and the high tick of the day came just before 3:30 p.m. Hong Kong time, which was shortly before the London open.  Then shortly after London opened, the price got sold down to $1,198 in the February contract.  It recovered a bit and then traded more or less sideways until shortly after 1 p.m. in London, which was about 15 minutes before the Comex open.  From there it was all down hill into the 5:15 p.m. EST close of electronic trading in New York.

The CME recorded the high and low ticks as $1,226.00 and $1,186.00 in the February contract.

Gold closed the Thursday trading session at $1,187.80 spot, which was down $30.90 on the day.  Net volume was over the moon at 220,000 contracts.  The gold price came within a handful of dollars of taking out its 2013 low set back in late June.

There certainly was no mercy shown in the silver price action either, but it's interesting to note that all the real damage was done shortly before 9 a.m. GMT in London, which was the low tick of the day.  After that, silver recovered about twenty cents from its low and didn't do much for the remainder of the day---and basically traded flat during the entire Comex trading session, including the electronic session that followed.

The high and low ticks were $19.905 and $19.10 in the March contract.  That's an intraday move over 4 percent.  On Wednesday, silver had an intraday move of over 3 percent.

Silver closed at $19.25 spot, which was down 48 cents from Wednesday.  Net volume was very decent at 51,000 contracts, but I wouldn't call it heavy, at least not compared to gold.

The sell-offs extended to platinum and palladium as well, but were far more subdued---and as I mentioned in The Wrap in yesterday's column, it was probably a sympathy move rather than direct intervention.  Platinum finished the Thursday session down 1.28 percent---and palladium finished unchanged.  Here are the charts.

Just for the record, Kitco recorded gold finishing down 2.54% yesterday, whereas silver was 'only' down 2.43%.

The dollar index closed late on Wednesday afternoon in New York at 80.59---and then proceeded to trade flat in an extremely tight range on Thursday, closing at 80.65, which was up a whole 6 basis points.  It was obvious that the currency moves had nothing to do with the precious metal price action yesterday, as it was equally as obvious that it was all "da boyz" just doin' the dirty.

The gold stocks gapped down over 2 percent at the open, hitting their low shortly after 10 a.m. in New York.  From there they worked their way slowly higher at glacial speed---and the HUI finished down only 1.72%.

The silver stocks gapped down---and stayed down.  Nick Laird's Intraday Silver Sentiment Index closed down 2.04%.

The CME's Daily Delivery Report showed that 210 gold and 11 silver contracts were posted for delivery on Monday within the Comex-approved depositories.  It was Goldman Sachs as the big short/issuer with 130 contracts, followed in distant second by Canada's Scotiabank with 52 contracts.  JPMorgan Chase as the only long/stopper of note picked up another 204 contracts in its in-house [proprietary] trading account.  The silver contracts were split up between JPM and Scotiabank. The link to yesterday's Issuers and Stoppers Report is here.

Gold continues to exit GLD.  Yesterday an authorized participant withdrew 125,388 troy ounces.  And as of 8:25 p.m. yesterday evening, there were no reported changes in SLV.

The U.S. Mint had a sales report yesterday, if you wish to dignify it with that name, as they only sold 3,000 troy ounces of gold eagles---and that was all.

It was a very busy day over at the Comex-approved depositories in gold on Wednesday, as they reported receiving 128,504 troy ounces---and shipped 125,224 troy ounces out the door.  Just eye-balling the numbers, it appears that every one of the 125,224 ounces shipped out [from two different warehouses] ended up in JPMorgan's vault.  This is obviously JPMorgan taking physical delivery of some of the contracts that they've stopped so far this month.  The link to all that action is here---and it's worth a peek.

It was even more frantic in silver, as 1,011,875 troy ounces were reported received [all in Scotia Mocatta] and 1,005,204 troy ounces were shipped out.  Of the amount shipped out, 885,000 troy ounces came out of Scotia Mocatta as well, so the forklift operators had a busy day.  The link to that action is here.

I have the usual number of stories for you today---and some of the gold-related ones are definitely must reads.  But, as always, the final edit is in your hands.

 

¤ Critical Reads

Jim Rickards: Don’t worry Wall Street, the Fed’s (still) got your back

The charming and super-smart Lauren Lyster interviews the equally super-smart [but not too sexy] Jim Rickards on the Yahoo Finance Internet site yesterday.  The video clip runs for 4:04 minutes...and it's definitely worth watching.  I thank reader Harold Jacobsen for today's first story.

Read more...

Alasdair Macleod: Tapering - Join the dots and end up with ZIRP

In my opinion the Fed showed through its FOMC statement yesterday it has little control over events, something that should dawn on markets in the coming days. To debate this we must put aside the question as to whether or not quantitative easing is sensible in the first place and only focus on this FOMC compromise. There is an argument that any reduction in QE should be confined to purchases of Treasuries, because the budget deficit is reducing and the market probably needs more of this paper for collateral purposes. If that argument had been presented it would have made sense and the Fed’s stock would have likely soared. Instead the tapering is to be split between mortgage bonds and Treasuries, which suggests a “pluck a figure out of the air” approach rather than a more reasoned one. The scale of tapering is in the lower range of expectations, so presumably was intended to be market-neutral. This tells us that the FOMC probably came to its decision based on what was expected of it rather than from a sense of conviction that the policy is correct. But the greater inconsistency is over forward interest rate guidance.

This short commentary by Alasdair is definitely worth reading.  It was posted on the goldmoney.com Internet site yesterday...and I found it on the gata.org Internet site.

Read more...

Previously Owned Home Sales in U.S. Drop for Third Month

Previously owned U.S. home sales declined for the third consecutive month in November to the lowest level of the year as rising mortgage rates and a limited supply of properties discouraged buyers.

Purchases dropped 4.3 percent to a 4.9 million annual rate, the National Association of Realtors reported today in Washington. The median forecast of economists in a Bloomberg survey called for the pace to slow to 5.02 million. Still, the group projects 2013 will be the best year for the industry in seven years, with an estimated 5.1 million properties sold.

Rising prices and borrowing costs have put homes out of reach for many first-time buyers and a partial federal government shutdown in October may have delayed some purchase decisions. At the same time, builder confidence has picked up along with new construction, signaling gains in housing will be sustained.

This Bloomberg article was posted on their website yesterday morning MST...and it's the first offering of the day from Roy Stephens.

Read more...

CFTC Announces it is Under-counting Size of Swaps Market By as Much as $55 Trillion

Regulators aren't sure how much the repositories are under-counting. One CFTC official familiar with the matter said the discrepancy could be as high as $55 trillion, though another official said the figure is closer to $10 trillion once regulators cancel out certain transactions to prevent double counting.

One just has to laugh: the total US swaps market is what - roughly $400 trillion? So... just add enough notional to that number equal to the GDP of the entire world - or 4 times the size of US GDP - and call it a day. And in this environment somehow the Fed and other central planners are expected to have any clue what they are doing on a day to day basis?

Naturally this discovery makes a mockery of such transparency enhancing initiatives as Dodd-Frank.

This Zero Hedge piece was posted on their website yesterday morning...and it's courtesy of Manitoba reader Ulrike Marx.

Read more...

U.S. Prosecutor Defends Charges Against Indian Diplomat

The federal prosecutor whose decision to charge an Indian diplomat in New York City last week touched off a furor in India has made an unusual and robust public defense of that decision, saying “there can be no plausible claim that this case was somehow unexpected or an injustice.”

The prosecutor, Preet Bharara, the United States attorney for the Southern District of New York, said Wednesday night that the diplomat’s conduct showed that “she clearly tried to evade U.S. law designed to protect from exploitation the domestic employees of diplomats and consular officers.”

The diplomat, Devyani Khobragade, 39, the deputy consul general in New York, has been accused of submitting false documents to obtain a work visa for a housekeeper. Indian officials have been quoted as saying that she was arrested and handcuffed as she was leaving her daughter at school, and there had been accounts that she was strip-searched and then held with drug addicts before being released on $250,000 bail.

This very interesting news item was posted on The New York Times website yesterday sometime...and I thank Phil Barlett for sending it our way.  It's a first rate follow-up story to initial article on this issue in my Thursday column.

Read more...

E.U. ministers clinch deal on failed banks

E.U. finance ministers have agreed new rules on how to wind up failed banks - the key pillar of a "banking union" designed to stop a repeat of the crisis.

The deal, finalised in Brussels late on Wednesday (18 December) after more than 12 hours of talks, makes good on earlier promises to reach a common position by the end of the year.

The new regime applies to all 17 eurozone countries, but allows non-euro states to sign up if they want.

Speaking with journalists following the conclusion of talks, Lithuanian finance minister Rimantas Sadzius, who chaired the meeting on behalf of its EU presidency, noted: "These regulations are as complicated as today's financial world."

This financial news story, filed from Brussels, was posted on the euobserver.com Internet site yesterday morning Europe time...and it's another offering from Roy Stephens.

Read more...

Special Report: Why Ukraine spurned the E.U. and embraced Russia

On September 4, Ukrainian President Viktor Yanukovich called a meeting of his political party for the first time in three years, summoning members to an old Soviet-era cinema called Zoryany in Kiev.

For three hours Yanukovich cajoled and bullied anyone who pushed for Ukraine to have closer ties to Russia. A handful of deputies from his Party of Regions complained that their businesses in Ukraine's Russian-speaking east would suffer if Yanukovich didn't agree to closer ties with Russia. That set him off.

"Forget about it ... forever!" he shouted at them, according to people who attended the meeting. Instead the president argued for an agreement to deepen trade and other cooperation with the European Union.

Some deputies implored him to change his mind, people who attended the meeting told Reuters. Businessmen warned that a deal with the EU would provoke Russia - Ukraine's former master in Soviet times - into toughening an economic blockade on Ukrainian goods. Yanukovich stood firm.

This longish deep background story, filed from Kiev, was posted on the Reuters Internet site very early yesterday morning EST.  Normally I'd leave this as weekend reading material, but I don't have that many stories today, so here it is now.  It's certainly worth reading if your a student of the New Great Game.

Read more...

Putin: I envy Obama, because he can 'spy' and get away with it

"I envy Obama because he can spy on his allies without any consequences," said Putin when asked about how his relations had changed with the U.S. following Snowden’s espionage revelations.

During an annual question-and-answer session with journalists, Putin praised Edward Snowden’s actions, saying that he was working for a “noble cause.” At the same time he accepted the importance of espionage programs in the fight against global terrorism, but said the NSA needed guidelines to limit its powers.

“There is nothing to be upset about and nothing to be proud of, spying has always been and is one of the oldest professions,” said Putin.

Referring to the vast amounts of metadata gathered on citizens by the NSA, Putin said it is impossible to sift through all of that information. It is “useless” to look at the analysis of spy agencies because it is the opinion of analysts and not facts and as such can be misleading.

Putin's candor in this Russia Today story is amazing.  It was posted on their website yesterday morning Moscow time...and is worth reading, at least in my opinion.  It's also courtesy of Roy Stephens, for which I thank him.

Read more...

Eyes everywhere: NSA's second tier spying partners identified

Denmark, Belgium, the Netherlands and several other EU countries were named among “third party partners” in the NSA-led global signal intelligence program, a new leak submitted by journalist Glenn Greenwald to Danish TV reveals.

According to the document, obtained by Swedish TV program ‘Mission: Investigate’, that has been probing Sweden's participation in global spying operations, nine European countries were added to the list of NSA accomplices.

The "third party partners" to the Five Eyes nations has now grown to include nine states - Denmark, Sweden, Norway, Belgium, France, Germany, Italy, the Netherlands and Spain.

The newly-leaked document from Edward Snowden is the first written confirmation of Denmark's formal agreement with the NSA, the Copenhagen Post writes.

Here's another story from the Russia Today website.  This one was posted there late yesterday evening Moscow time...and it's another amazing piece of journalism courtesy of Edward Snowden...and I thank Roy Stephens for bringing it to our attention.

Read more...

'To respect and protect right to privacy': U.N. votes for end to excessive electronic spying

The U.N. General Assembly has unanimously called on a curb of super-normal surveillance of communications. The resolution drafted by Brazil and Germany was in response to revelations over the eavesdropping conducted by the US on a global scale.

All 193 U.N. member states agreed “to respect and protect the right to privacy, including in the context of digital communication.”

The document maintains that internationally recognized human rights should be applied to a person online, specifically singling out the right of privacy.

The resolution suggests making sure national legislation complies with international human rights law to prevent possible breaches.

Here's another news item from the Russia Today website...and it's definitely worth reading.  It was posted on their Internet site late yesterday morning Moscow time...and it's the final contribution of the day from Roy Stephens.

Read more...

Jim Rickards: Gold, Bitcoin, Stimulus and Stocks

Lelde Smits: Jim, one of the most striking developments since we last spoke on Sydney’s harbor in October last year [2012] is the gold price, which has since shed about 30 per cent. What do you believe prompted the plunge?
 
Jim Rickards: There are probably a number of things going on, not just one thing. I would expect that there is some central bank price manipulation. We know that this goes on, this is not speculation, it is actually disclosed in certain ways.
 
You know, whenever you are trying to solve a crime you say, ‘Who has the motive?’. The person with the greatest motive to keep the price of gold low is actually China, because they have the most to buy. So, people point the finger at the Fed, but you might suspect China, but also hedge funds are involved.
 
Traditionally hedge funds were not very involved in gold, they are now. Hedge funds don’t care if they trade gold or base ball cards, for them it is all about making money. And, they engage in manipulation. And, the enforcement side in the United States is very weak right now, so it’s almost an invitation for hedge funds to come in and play games.

Jim Rickards was the keynote speaker at GATA's conference in London in August of 2011...and knows where all the bodies are buried.  This interview, both in video and transcript form, was posted on Australia's Finance News Network late yesterday morning AEDT.  It's an absolute must watch, or read.  I thank Harold Jacobsen for providing us with the second Jim Rickards video clip of the day.

Read more...

Bloomberg correspondents discuss gold's flight from London to Asia

The depletion of London gold warehouses by shipments to Swiss refineries where metal is recast for export to Asia was discussed by Bloomberg News correspondents yesterday on Bloomberg Television. The 2:53 minute segment is headlined "What's Happening to All the Gold?" and it was posted at the Bloomberg Internet site on Friday, December 13, which was a week ago today.  I found this story in a GATA release yesterday.

Read more...

Secret currency traders' club devised biggest market's rates

It’s 20 minutes before 4 p.m. in London and currency traders’ screens are blinking red and green. Some dealers have as many as 50 chat rooms crowded onto four monitors arrayed in front of them like shields. Messages from salespeople and clients appear, get pushed up by new ones and vanish from view. Orders are barked through squawk boxes.

This is the closing “fix,” the thin slice of the day when foreign-exchange traders buy and sell billions of dollars of currency in the largely unregulated $5.3-trillion-a-day foreign-exchange market, the biggest in the world by volume, according to the Bank for International Settlements. Their trades help set the benchmark WM/Reuters rates used to value more than $3.6 trillion of index funds held by pension holders, savers and money managers around the world.

Now regulators from Bern to Washington are examining evidence first reported by Bloomberg News in June that a small group of senior traders at big banks had something else on their screens: details of each others client orders. Sharing that information may have helped dealers at firms, including JPMorgan Chase & Co., Citigroup Inc., UBS AG and Barclays Plc, manipulate prices to maximize their own profits, according to five people with knowledge of the probes.

This is precisely the technique that JPMorgan et al are using in the precious metal price management scheme.  They share each others client orders and can play the technical funds like a Stradivarius...right down to their last long contract if need be.  But not only are "da boyz" managing it for big profits, they are also doing double duty by keeping precious metal prices under control.  This is the operation that the CFTC has not been allowed to tamper with.

In some ways, this Bloomberg story from yesterday morning MST, is one of the most important news items that I've ever posted in this column, as it strips bare the price management scheme for all to see...if they wish to see it, that is.  It's a must read for sure...and it's another news item I found posted over at the gata.org Internet site yesterday.

Read more...

OMG! Bloomberg commentary cites gold rigging, cites GATA consultant Dimitri Speck

Authorities around the world are gradually piecing together a shocking picture of how banks have manipulated benchmarks that influence the price of everything from mortgage loans to foreign currencies.

Another area deserves their scrutiny: gold and silver.

In recent weeks, Bloomberg News and others have reported on concerns, among market participants and regulators, that the process for establishing the price of gold may lend itself to insider trading and other forms of unfair dealing. The available evidence strongly suggests manipulation and, given the structure of the market, possibly collusion.

The price-setting mechanism, known as the fixing, provides an easy vehicle for manipulation. Twice every business day in London, representatives of five banks and some select clients participate in a phone call in which offers to buy and sell gold are put forward. These calls determine the morning and afternoon gold fixings, which serve as the benchmark for trillions of dollars in transactions around the world. Silver fixings work similarly, with only three banks involved.

Wow! Long-time readers of this column will know his name and have seen his charts in this column over the years, as I've been using Dimitri's work for at least a decade...and his charts [now produced in more detail by Nick Laird over at sharelynx.com] have finally appeared in the main stream media.  It's been a long time coming...and I'm happy to see him get the recognition he so richly deserves.  This is an absolute must read as well.  The first person [of many] through the door with this story yesterday was reader M.A...followed a minute later by Washington state reader S.A.  Thanks guys!

Read more...

Russia's largest TV network reports on gold price suppression, cites GATA

Gold price suppression and GATA figured heavily in the monthly "GeoEconomics" program broadcast yesterday by Russia's biggest television network, Russia 24.

GATA's secretary/treasurer Chris Powell was interviewed for the program a week ago and his cockeyed and wrinkled face [His words, not mine! - Ed] turns up a few minutes into the program and again at the 15:20...and 19-minute marks. At the 20-minute mark he brandishes a copy of the secret March 1999 report of the staff of the International Monetary Fund that confirms that Western central banks conceal their gold swaps and leases to facilitate their secret interventions in the gold and currency markets.

We'll need our Russian-speaking friends to provide any better idea of what the program said, but Chris can report from the many questions put to him on camera...and in advance...that the producers had done extensive research and were well-informed about many gold issues. They asked even about efforts in various U.S. states to recognize gold and silver as regular currency.

As Chris says, this TV program is all in Russian, except for the comments by himself and former Assistant U.S. Treasury Secretary Paul Craig Roberts.  This GATA release, with extensive commentary by Chris Powell, was posted on the gata.org Internet site yesterday...and is definitely a must read.

Read more...

 

¤ The Funnies

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¤ The Wrap

The surprise is that JPMorgan has also taken, in its proprietary account, delivery of 1,930 silver contracts or 61% of the 3,157 total contracts issued this month. This is a surprise because JPM is not only net short COMEX silver futures, but the above-the-law crooked bank dramatically increased its manipulative silver short position in the latest COT report. This raises a separate concern that JPMorgan may be shorting COMEX silver futures contracts to artificially depress the price so that it can pick up real metal on the cheap. I’m sure no one reading this would put this illegal motive beyond JPMorgan. - Silver analyst Ted Butler: 14 December 2013

It was another textbook case of a JPMorgan Chase et al-engineered price smash.  As Ted Butler keeps mentioning to all those who are not willfully blind---first their high-frequency traders set the prices lower in the most thinly-traded markets, tripping sell stops---and then the technical fund/small traders are either forced to sell more long positions, or may decide to put on short positions for technical reasons.  Either way, the collusive commercial traders are there to scoop up all the longs sold, or take the long side of the short sale.  This scenario has been going on for many years---and should be completely obvious to you by now, dear reader.

But what was really impressive about yesterday was all the main stream media press that occurred at the same time that this price smash was taking place.  As I've said before, I don't know why JPMorgan didn't hire a brass band---and/or take out a front-page ad in either The New York Times or The Wall Street Journal, because what their doing is becoming blatantly obvious to all---well, almost all.

If you read the Bloomberg story in the Critical Reads section that contained Dimitri Speck's famous charts from this latest book, then you need to look at these same charts as produced by Nick Laird.  These are five-year rolling charts for both gold and silver.

There are three things to note on the gold chart.  On average, over the current 5-year period, the high of the day comes about 40 minutes before the London open. [Note: If you check the Kitco gold chart at the top of today's column, that's about the time "da boyz" first hit the gold price on Thursday. - Ed]  The gold price gets bombed at the London a.m. and p.m. gold "fixes"---and then the cycle repeats.  This is the gold price suppression scheme laid bare.

The price management scheme in silver has a couple of other features associated with it.  The high, before the price gets turned over, comes at the 8 a.m. London open.  Then there's the a.m. gold fix, the noon silver fix in London, the perennial low that comes 10 minutes after the Comex open---and last but not least, the London p.m. gold fix.  Then the pattern repeats.  With five years of data condensed into one chart, the price management scheme is equally obvious here as well.  All you need is open eyes---and and equally open mind---in order to see it.  Some choose not to.

Today we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday, December 17.  Both Ted and I are expecting improvements in the Commercial net short positions of both gold and silver.  It's just too bad that the price/volume activity from both Wednesday and Thursday won't be included.

Here are the one-year charts for all four precious metals, so you can see where we stand now that we are at, or almost at, the bottom of the price barrel for the second time this year, the last being in late June.

It was fairly quiet in Far East trading in all four precious metals on their Friday---but not lost on me was the new low tick in silver that came just a few minutes before the London open.  All four precious metals are in positive territory at the moment [4:39 a.m. EST] and volumes are about average for this time of day---and virtually all in the front month, which means it's mostly of the HFT variety.  And, not that it matters, the dollar index is up about 11 basis points.

And as I hit the send button on today's column at 5:20 a.m. EST, the quiet rallies in all four precious metals are continuing.  Volumes are also getting up there a bit, especially in gold.  The dollar index has sagged back close to almost unchanged.

With today being Friday, I have no idea what to expect in New York trading, but if we're not at the lows, we aren't that far off.  And as Ted Butler always says, its what "da boyz" do on the next rally that determines how high we go---and how fast we get there.

Enjoy your weekend---or what's left of it---and I'll see you here tomorrow.