Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

The gold price wasn't allowed to do much in early Far East trading on their Thursday---and developed a negative bias around 1 p.m. Hong Kong time---and by the time JPMorgan et al were through, with the low tick coming at 11:30 a.m. EDT, they had gold down around fifteen bucks from it's Thursday close.  It recovered a few dollars off that low by noon, but then chopped sideways for the remainder of New York trading session.

The high and low tick were recorded as $1,216.50 and $1,195.50 in the December contract.

Gold closed yesterday at $1,198.80 spot, down $12.80 from Thursday's close.  Net volume was very high at 195,000 contracts.

The silver price didn't do much in Far East trading up until shortly before 2 p.m. Hong Kong time.  At that point the HFT boyz and their algorithms showed up---and the rest, was they say, was history.  The low tick was in at 11:15 a.m. EDT---and from there it bounced off that low a few times before rallying a bit.  After 12:30 p.m., the price chopped sideways in a tight range until the 5:15 p.m. EDT close of electronic trading.

The high and low in silver were reported as $17.205 and $16.33 in the December contract, which was an intraday move of a hair over 5 percent.

Silver finished the Thursday session at $16.46 spot, down 63 cents from Thursday's close.  That's a new low price for silver going back to March of 2010.  Net volume was a whopping 74,000 contracts.

Platinum also ran into the same not-for-profit seller shortly before 2 p.m. in Hong Kong.  It's low came minutes before 12 o'clock noon in New York.  It rallied a few bucks from there before trading flat for the remainder of the Thursday session.  Platinum was closed down 17 bucks.

The palladium price got smacked twice yesterday.  The first time was at the New York open at 6 p.m. on Wednesday evening---and the second time was at the London p.m. gold fix on Thursday.  Like platinum, JPMorgan et al set the low of the day just minutes before noon EDI---and the price didn't do much after that.  Palladium was closed down 16 dollars on the day.

The dollar index closed at 85.99 late on Wednesday afternoon in New York---and then took three steps up to its 86.41 high tick, which came shortly after London opened on their Thursday.  From there it quietly sold back to the 86.00 mark by 12:20 p.m. EDT.  It gained some back by 2 p.m.---and then traded sideways into the close.  The index finished the Thursday session at 86.18---up 19 basis points on the day.

Once again the gold shares got crushed, as the HUI closed lower by 7.44%---the biggest one-day decline that I can remember---and I can remember quite a lot.  The HUI is down almost 12 percent in the last two trading days.

The silver equities fared better, but that's only a relative term in this situation, as Nick Laird's Intraday Silver Sentiment Index got hammered for another 5.65 percent.

The CME Daily Delivery Report for Day 1 of the November delivery month showed that 2 gold and 44 silver contracts were posted for delivery on Monday.  In silver, the only short/issuer was Jefferies---and R.J. O'Brien and Canada's Scotiabank stopped 25 and 18 contracts respectively. The link to yesterday's Issuers and Stoppers Report is here.

As I said in yesterday's missive, barring any surprises, the November delivery month will be a yawner---and it's certainly lived up to its advanced billing.

The CME Preliminary Report for the Thursday trading session showed that November open interest declined by 207 contracts and now sits at only 67 contracts left---minus the two in the previous paragraph.  In silver, the November open interest is now down to 164 contracts, minus the 44 posted for delivery tomorrow that were mentioned above.

There was another withdrawal from GLD yesterday, as an authorized participant took out 38,449 troy ounces and, once again, there was no change in SLV.

Since there were no withdrawals or additions to SLV during the reporting week, which ended on Wednesday,  there was no report from Joshua Gibbons yesterday.

For the second day in a row, there was no sales report from the U.S. Mint.

I'll certainly be interested if they update their sales report for today, which is the last business day of the month.  If they don't, the sales report for Monday should be quite something, as the mint has now gotten into the practice of withholding sales at the end of the month if it pushes silver eagles sales for the current month, too high.

There was no gold received at the Comex-approved depositories on Wednesday, but 96,450.000 troy ounces were shipped out---and that amount is precisely 3,000 kilobars, probably heading to China.  The link to that activity is here.

It was a very quiet day in silver, as nothing was received---and only 7,060 troy ounces were shipped out.

Nick Laird surprised me with the latest withdrawal from the Shanghai Gold Exchange for the week ending October 24.  It was another very chunky amount, as 59.684 tonnes were reported withdrawn---and here's Nick's most excellent chart.

Once again I don't have a lot of stories for you today---but there are several in here that fall into the absolute must read category so I hope you can make time for them.

 

¤ Critical Reads

Q.E. central bankers deserve a medal for saving society

The final word on quantitative easing will have to wait for historians. As the US Federal Reserve winds down QE3 we can at least conclude that the experiment was a huge success for those countries that acted quickly and with decisive force.

Yet that is not the ultimate test. The sophisticated critique - to be distinguished from hyperinflation warnings and "hard money" bluster - is that QE contaminated the rest of the world in complicated ways and may have stored up a greater crisis for the future.

What we can conclude is that extreme QE enabled the US to weather the most drastic fiscal tightening since demobilisation after the Korean War, without falling back into recession. Much the same was true for Britain.

The Fed's $3.7 trillion of bond purchases did not drive up debt ratios, as often claimed. It reduced them.

Ambrose is a paid whore/mouthpiece for the 'establishment'---and will print whatever he's told to print.  This should be kept in mind should you read this commentary posted on The Telegraph's Internet site at 9:00 p.m. GMT on Thursday evening.  I thank Roy Stephens for his first offering in today's column.

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The $75 trillion shadow hanging over the world

Global shadow banking assets rose to a record $75 trillion (£46.5 trillion) last year, new analysis shows.

The value of risky investment products, mortgage-backed securities and other non-bank entities increased by $5 trillion to $75 trillion in 2013, according to the Financial Stability Board (FSB).

Shadow banking, which is not constrained by bank regulation, now represents about 25pc of total financial assets - or roughly half of the global banking system. It is also equivalent to 120pc of global gross domestic product (GDP).

The FSB, which monitors and makes recommendations on financial stability issues, said that while non-bank lending complemented traditional channels by expanding access to credit, data inconsistencies together with the size of the system meant closer monitoring was warranted.

This commentary is also from The Telegraph.  It was posted there at 4:01 p.m. GMT on their Friday afternoon---and I thank South African reader B.V. for sharing it with us.

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Prosecutors Suspect Repeat Offenses on Wall Street

It would be the Wall Street equivalent of a parole violation: Just two years after avoiding prosecution for a variety of crimes, some of the world’s biggest banks are suspected of having broken their promises to behave.

A mixture of new issues and lingering problems could violate earlier settlements that imposed new practices and fines on the banks but stopped short of criminal charges, according to lawyers briefed on the cases. Prosecutors are exploring whether to strengthen the earlier deals, the lawyers said, or scrap them altogether and force the banks to plead guilty to a crime.

That effort, unfolding separately from a number of well-known investigations into Wall Street, has ensnared several giant banks and consulting firms that until now were thought to be in the clear.

As I and others have been saying for years, unless they start throwing people in jail---Wall Street and their bankster friends aren't going to change their behaviour.  This essay appeared on The New York Times website at 3:56 p.m. EDT on Thursday---and I thank Phil Barlett for sending it along.

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Russian lawmaker asks Nobel Committee to strip Obama of Peace Prize

A representative of the populist LDPR nationalist party claims in an official letter that the US President should be blamed for thousands of innocent people’s deaths and therefore cannot keep his 2009 Nobel Peace Prize.

More and more international experts are calling Obama’s presidency dark times. The reason for that is the brutal policy that he is conducting all over the world, like Napoleon or Hitler had done before. But I want to warn Obama so that he pays more attention to history and understands that he can end up like Hitler,” MP Roman Khudyakov said in an interview with Izvestia daily.

The politician added that under Obama the United States participated in the “dirty war” in the Middle East, financed the armed conflict in Ukraine and violated international law by torturing suspected terrorists. All this makes the US President complicit in the violent deaths of several thousand innocent civilians and such a person cannot remain the holder of the Nobel Peace Prize, Khudyakov said.

I wholeheartedly agree, as he should never have been awarded the Peace Prize in the first place.  This news item was posted on the Russia Today website at 9:50 a.m. Moscow time on their Thursday morning, which was 1:50 a.m. EDT.  It's the second contribution of the day from Roy Stephens.

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France denies warship delivery, as Russian bombers skirt E.U. airspace

France's controversial warship deal with Russia is hitting the headlines again, with a cacophony of statements and denials after a Russian minister published a French invitation to the hand-over ceremony.

Russian deputy prime minister Dmitry Rogozin on Wednesday (29 October) published a letter on his Twitter page by the French constructor of Mistral warships, supposedly inviting Russian authorities to the ceremony in St. Nazaire on 14 November.

He tweeted that the Russian state-owned arms company Rosoboronexport was invited for the delivery of one ship and for next steps on construction of the second one in the contract.

But a spokesperson of the constructor (DCNS) said a few hours later that the Mistral delivery has not yet been confirmed.

This news story, filed from Brussels, showed up on the euobserver.com Internet site at 9:56 a.m. Europe time yesterday morning---and it's also courtesy of Roy Stephens.

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France on alert after mystery drones spotted over nuclear plants

France has launched an investigation into unidentified drones that have been spotted over nuclear plants operated by state-owned utility EDF, its interior minister said on Thursday.

Seven nuclear plants across the country were flown over by drones between Oct. 5 and Oct. 20, an EDF spokeswoman said, without any impact on the plants’ safety or functioning.

“There’s a judicial investigation under way, measures are being taken to know what these drones are and neutralise them,” Interior Minister Bernard Cazeneuve told France Info radio on Thursday, without specifying the measures.

The drone sightings may renew concerns about the safety of nuclear plants in France, the world’s most nuclear-reliant country with 58 reactors on 19 sites operated by EDF.

This news item appeared on the france24.com Internet site yesterday sometime---and it's the second offering of the day from reader B.V.

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Has the E.U. lost the ability to enact sanctions?

The E.U. has had a rotten time trying to punch its weight on the international scene. Internal disagreements and treaty limitations mean it is little wonder that it is known as an economic giant but a political dwarf.

With the U.S. increasingly urging the E.U. to share the burden of keeping world order, the Union is finding out that the main mischief-maker is not some stubborn member state but one of its own institutions - the European Court of Justice.

The E.U.'s highest court has been busy unravelling the foreign agenda of the Union – by consistently overturning sanctions enacted by Brussels.

In its most recent ruling on 16 October, the court struck down anti-terrorism sanctions imposed on the Tamil Tigers in 2006, citing that the council’s decision to place the group on a list of terrorist organisations had been based on "imputations derived from the press and the Internet". 

This euobserver.com story, filed from Brussels, put in an appearance on their website at 9:28 a.m. Europe time on their Thursday morning.  The offerings from Roy just keep on coming.

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Russia Agrees to Terms With Ukraine Over Gas Supply

Russia agreed to terms for restoring natural-gas exports to Ukraine, laying the groundwork to prevent residents going without heat as temperatures drop.

The gas negotiations, brokered by the European Union, came as pro-Russian rebels stepped up attacks on Kiev government forces. European leaders said they hoped the deal would help improve ties between the two countries.

“This breakthrough will not only make sure that Ukraine will have sufficient heating in the dead of the winter,” European Energy Commissioner Guenther Oettinger said at a news conference in Brussels last night. “It is also a contribution to the de-escalation between Russia and Ukraine.”

This Bloomberg article, co-filed from Kiev and Brussels, appeared on their Internet site at 7:32 p.m. Denver time on Thursday evening.

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Vladimir Putin is the Leader of the Moral World — Paul Craig Roberts

Vladimir Putin’s remarks at the 11th meeting of the Valdai International Discussion Club are worth more than a link in my latest column. These are the remarks of a humanitarian political leader, the like of which the world has not seen in my lifetime. Compare Putin to the corrupt war criminal in the White House or to his puppets in office in Germany, UK, France, Japan, Canada, Australia, and you will see the difference between a criminal clique and a leader striving for a humane and livable world in which the interests of all peoples are respected.

In a sane Western society, Putin’s statements would have been reproduced in full and discussions organized with remarks from experts such as Stephen F. Cohen. Choruses of approval would have been heard on television and read in the print media. But, of course, nothing like this is possible in a country whose rulers claim that it is the “exceptional” and “indispensable” country with an extra-legal right to hegemony over the world. As far as Washington and its prostitute media, named “presstitutes” by the trends specialist Gerald Celente, are concerned, no country counts except Washington. “You are with us or against us,” which means “you are our vassals or our enemies.” This means that Washington has declared Russia, China, India, Brazil and other parts of South America, Iran, and South Africa to be enemies.

This is a big chunk of the world for a bankrupt country, hated by its vassal populations and many of its own subjects, that has not won a war since it defeated tiny Japan in 1945 by using nuclear weapons, the only use of such terrible weapons in world history.

No one can read Putin’s remarks without concluding that Putin is the leader of the world.

I'd been saving Putin's incredible Sochi speech for my Saturday column, but current events have forced my hand---and here it is in now.  It's a long read, but an absolute must read, especially those who are serious students of the New Great Game.  It was posted on Paul's website on Sunday and, not surprisingly, it's courtesy of Roy Stephens.

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Putin to Western Elites: Play-Time is Over

Most people in the English-speaking parts of the world missed Putin's speech at the Valdai conference in Sochi a few days ago, and, chances are, those of you who have heard of the speech didn't get a chance to read it, and missed its importance. Western media did their best to ignore it or to twist its meaning. Regardless of what you think or don't think of Putin (like the sun and the moon, he does not exist for you to cultivate an opinion) this is probably the most important political speech since Churchill's “Iron Curtain” speech of March 5, 1946.

In this speech, Putin abruptly changed the rules of the game. Previously, the game of international politics was played as follows: politicians made public pronouncements, for the sake of maintaining a pleasant fiction of national sovereignty, but they were strictly for show and had nothing to do with the substance of international politics; in the meantime, they engaged in secret back-room negotiations, in which the actual deals were hammered out.  Previously, Putin tried to play this game, expecting only that Russia be treated as an equal. But these hopes have been dashed, and at this conference he declared the game to be over, explicitly violating Western taboo by speaking directly to the people over the heads of elite clans and political leaders.

This commentary on Putin's speech was posted on the Zero Hedge website at 7:35 p.m. EDT yesterday evening---and I thank reader M.A. for sending it our way.  It's a must read as well.  Another commentary on this, written by Justin Raimondo, appeared on the antiwar.com Internet site on Thursday sometime---and it's definitely worth your while as well.  It's headlined "Putin’s Complaint"---and I thank International Man's senior editor Nick Giambruno for passing it around yesterday afternoon.

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Iraqi Kurdish forces enter Syria to fight Islamic State

A first group of Iraqi Kurdish peshmerga fighters entered the besieged Syrian town of Kobani on Thursday to help push back Islamic State militants who have defied U.S. air strikes and threatened to massacre its Kurdish defenders.

Kobani, on the border with Turkey, has been encircled by the Sunni Muslim insurgents for more than 40 days. Weeks of U.S.-led air strikes have failed to break their stranglehold, and Kurds are hoping the arrival of the peshmerga will turn the tide.

The siege of Kobani -- known in Arabic as Ayn al-Arab -- has become a test of the U.S.-led coalition's ability to stop Islamic State's advance, and Washington has welcomed the peshmerga's deployment. It has intensified its air strikes in the past two days ahead of their arrival.

This Reuters article, filed from Suruç, Turkey, showed up on their website at 7;24 p.m. EDT yesterday evening---and it's the final offering of the day from Roy Stephens, for which I thank him.

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Japan Pension Fund Said to Unveil Asset Allocations Today

Japan’s public pension fund will announce new asset allocations today, a government official said, as the Nikkei newspaper reported that the fund will raise its targets for Japanese and foreign stocks to 25 percent each.

The 127.3 trillion yen ($1.2 trillion) Government Pension Investment Fund will also reduce its domestic debt allocation to 35 percent of assets and increase overseas bonds to 15 percent, the newspaper reported, without saying where it got the information. The figures are exclusive of short-term assets. Health Minister Yasuhisa Shiozaki will today approve the changes, which will be implemented over the medium to long term, according to the Nikkei. The government official who spoke on the timing asked not to be named due to not being authorized to comment publicly on the matter.

The contents of the Nikkei report were news to him, Shiozaki told reporters today. Investors have been awaiting GPIF’s revised strategy since a government panel that reviewed public pensions said last year the fund was too reliant on domestic bonds. The expected tilt to higher-yielding assets comes as the Bank of Japan stokes inflation and as pension payouts mount for the world’s oldest population.

This Bloomberg article, co-filed from Sydney and Tokyo, was posted on their Internet site at 9:56 p.m.  MDT last night, which was 8:56 a.m. Friday morning in Japan.  I thank Howard Wiener for finding it for us.

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Koos Jansen: Chinese Gold Demand 1,541 Tonnes Y.T.D.

First things first, Chinese gold demand is still very strong and it’s in a uptrend since July.

Apologies for my late reporting on the latest SGE withdrawals numbers – which are the best benchmark for Chinese gold demand. I was trying to figure out some details on gold trade rules between the mainland and the Shanghai Free Trade Zone. I still haven’t got confirmation, so will get back to it.

Chinese wholesale gold demand is at least 1541 metric tonnes year to date (inc. week 42 – until  October 17). Shanghai Gold Exchange (SGE) withdrawals, as disclosed by the Chinese SGE reports, were 52 tonnes in week 42 and according to my estimates China has approximately net imported 991 tonnes year to date.

Perhaps the ones with a sharp eye noticed the title of this post claims Chinese gold demand is 1541 tonnes year to date, but in the chart above we read total SGE withdrawals stand at 1547 tonnes year to date. Do SGE withdrawals still equal Chinese wholesale gold demand? Not anymore, sadly.

This gold-related story is definitely worth reading---and it was posted on the Singapore website bullionstar.com yesterday sometime.  I found it embedded in a GATA release.

Read more...

 

¤ The Funnies









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¤ The Wrap

Since the commercials are so collusive and in control of the technical funds’ trading activities, they can do with the technical funds as they see fit. I truly believe that the key to understanding the manipulation is to know that the commercials control everything that the technical funds do; just like a puppeteer controls a puppet. If it were otherwise, we wouldn’t see the clear pattern in managed money behavior in silver (and other COMEX/NYMEX metals) of massive technical fund buying as prices rise and selling on declining prices, always ending in extreme positions at reversal points.

With this in mind, the only explanation that seems plausible to me as to why the commercials let the technical funds off the hook the last two occasions of extreme managed money shorting is because the commercials were biding their time and waiting for a more opportune time to put it to the technical funds. Let’s face it, the technical funds have been like the goose that laid golden eggs for the commercials. You don’t cook and eat a goose like that without a thought. What I’m saying is that the commercials know that they can maneuver the technical funds into any extreme position at any time they want and that earlier in the year the commercials let the technical funds off the hook because they knew they could do it again whenever the commercials desired. (That’s my explanation, but if anyone has a different take, please drop me a note). - Silver analyst Ted Butler: 29 October 2014

Yesterday's price action in all four precious metals in general, but gold and silver in particular, should have come as no surprise, as JPMorgan et al attempt to drive as many of the Managed Money traders as possible off the long side and onto the short side in gold.

I must admit that I was more than taken aback by the hatchet job that they managed to perform on the silver price, because with the Managed Money already holding a record short position, the selling had to come from somewhere other than the Commercial category---and that only leaves the small traders in the Nonreportable category as the long sellers/short buyers.

Of course it's possible that the Managed Money has gone even shorter than they already have, but without a Commitment of Traders Report to look at, it's impossible to tell---and none of the price action of the last three trading days, including today, will be in the COT Report that comes out later this afternoon.

Here are the 6-month charts for both both gold and silver---and as I mentioned at the top of this column, the silver price is now back to where it was in the first quarter of 2010.

As of the close yesterday, the double bottom in gold was about 15 bucks away---and it's a given that they'll be gunning for it---plus more, if what they did to the silver price yesterday is any indication.

And as I type this paragraph at 12:45 a.m. EDT gold, which had traded mostly flat for the greater part of the thinly-traded Far East trading day on their Friday, came under pressure shortly before 1 p.m. Hong Kong time---and is down a bit more than 10 bucks.  Silver came under the same price pressure shortly after 9 a.m. Hong Kong time and is down about two bits.  Platinum isn't doing much.  Palladium tried to rally during the early going in Far East trading, but then got sold down below its New York close by 9 a.m. Hong Kong time---and is actually up a buck or so at the moment.  Volumes in both gold and silver are astonishingly high already.  The dollar index, which was trading flat, began to rally around 12:40 p.m. in Hong Kong---and is now up 40 basis points.

Today, at 3:30 p.m. EDT, we get the latest COT Report for positions held at the close of Comex trading on Tuesday.  I'd guess we'll see slight improvements in the Commercial net short positions in both gold and silver, but that is entirely inconsequential compared to what the report would show if one could be produced at precisely this moment.

It's obvious that JPMorgan et al are going all out to get as favourably positioned as possible in the Comex futures market, as I expect whatever lows are set going forward will never be seen again once the the inevitable rallies that will follow all this, begin.  The Fed meeting---and the ensuing 'strength' in the dollar index---are just the smoke screen that they're using to do the dirty.

And as I hit the 'send' button on today's column at 4:57 a.m. EDT, I see that the HFT boyz and their algorithms are back---showing up in all four precious metals at 7 a.m. GMT in London.  The LBMA must open at 7 a.m. and not 8 a.m GMT this week.  They dropped the gold price another $18 in minutes---and at one point silver was down over 50 cents from its Thursday close.  Both are now off their lows by a bit.  Platinum and palladium also got hit as well, but they've rallied back to almost unchanged, at least for the moment.

Here's the silver chart as of 4:55 a.m. EDT.

Gold volume has exploded to 95,000 contracts---and silver's volume is 21,000 contracts.  The dollar index, which had been up over 50 basis points at one time, is now up 'only' 42 basis points.

With today being month end---and Hallowe'en---it appears that JPMorgan et al have nothing but tricks up their sleeves for all the precious metal enthusiasts today---and I must admit that I'm not expecting great things when I roll out of bed and check the charts later this morning.

But this too, shall pass.

See you tomorrow.