Another made-to-order day for an upwards revaluation in the gold price
The gold price did precisely nothing until shortly before 10 a.m. GMT in London, with the price reacting to the upside the moment the news broke about the Swiss National Bank dropping its euro peg. But around 11:15 a.m. GMT the powers-that-be stepped in as short sellers of last resort. The gold price continued to chop higher from there, but it was obvious that 'da boyz' weren't going to allow the price to run away to the upside, even though it broke above—and closed above—it's 200-day moving average. The high tick came shortly after London closed—and the traders in New York made sure that the price didn't do much for the rest of the day.
The low and high tick were reported by the CME Group as $1,226.10 and $1,267.20 in the February contract.
Gold closed in New York on Thursday at $1,262.60 spot, up $33.50 on the day. Volume, net of what few roll-overs there were, was monstrous at 255,000 contracts.
Silver was under some selling pressure during most of the Far East and early going in London on their Thursday, but rallied back above $17 spot on the SNB news. The price of this precious metal also got capped at the same time as gold—and JPMorgan et al almost closed it down on the day—and back below $17 the ounce—before it rallied in the last few hours of electronic trading in New York.
The low and high ticks were recorded as $16.71 and $17.24 in the March contract.
Silver finished the Friday session at $16.955 spot, up only 11.5 cents. Net volume was way up there as well, at 54,500 contracts. Ted said that it was more than obvious that JPMorgan capped the silver price, as it's still their “problem child”—and want as little excitement as possible in this metal for the moment.
The platinum price had a similar trading pattern to gold, as it closed up $34 on the day.
After getting the living crap pounded out of it on Wednesday, palladium was sold down for a loss on the day once the price was capped on the SNB news. Palladium was closed down another $10—and is now down an even $50 from Tuesday's close. Nothing free market about this.
The dollar index closed around the 92.10 mark late on Wednesday afternoon in New York—and then had a wild and crazy time of it on the announcement from the Swiss National Bank—with an intraday move of about 120 basis points. When the dust settled, the index finished the day at 92.09—up 19 basis points.
The gold stocks gapped up a bit more than 4 percent at the open—and climbed to their highs by very early afternoon in New York, but gave up a hair of those gains starting shortly after the COMEX close. The HUI finished up 7.32 percent.
The silver equities also gapped up about 4 percent, but their high tick was in shortly after 11 a.m. EST, which was shortly after London closed. From that point they chopped quietly lower, as Nick Laird's Intraday Silver Sentiment Index only closed up 2.80%.
The CME Daily Delivery Report showed that zero gold and a rather chunky 120 silver contracts were posted for delivery within the COMEX-approved depositories on Monday. The short/issuer was Jefferies on all 120 contracts—and the only long/stopper worth mentioning was Canada's Scotiabank with 117 contacts. The link to yesterday's Issuers and Stoppers Report is here.
January is not a traditional delivery month for either gold or silver but, having said that, there have already been 354 silver contracts posted for delivery year to date.
The CME Preliminary Report for the Thursday trading session showed that there are only 87 gold contracts currently open in January, unchanged from Wednesday's report. Silver's January open interest now sits at 200 contracts, up 74 contracts from Wednesday—less the 120 contracts mentioned in the previous paragraph that will be delivered tomorrow.
I wasn't writing down any deposits and withdrawals from either GLD or SLV while I was on vacation, so the numbers below represent the aggregate of what happened since the start of 2015, as there were no reported changes in either ETF for the first reporting day of January that I did have a column.
Since the beginning of the year, the GLD ETF declined, on a net basis, by 45,789 troy ounces. During that time period—and not including yesterday's price gain—the gold price had increased by about 20 bucks.
During the same period, the amount of silver in SLV declined by a whopping 4.55 million troy ounces, of which 1,627,651 ounces were withdrawn by an authorized participant on Wednesday, along with another 1,340,393 ounces yesterday. Since the first of the year, the silver price has rallied about $1.10—not including yesterday's price move.
Ted Butler is still looking for an alternative explanation from anyone as to why physical silver is being removed from SLV in the face of a rising silver price. His theory—that a big buyer, or buyers, are removing silver in order to prevent them from having to disclose the fact to the SEC that they hold more than a 5 percent of the outstanding shares of that ETF—remains unchallenged. And, with the exception of myself, the rest of the so-called precious metal analysts won't touch this issue with the proverbial 10-foot cattle prod. You have to ask yourself, dear reader, why this is the case.
Here are the long-term charts for both GLD and SLV. The ounces held are in black—and the prices are in blue.
While on the subject of SLV, Joshua Gibbons, the “Guru of the SLV Bar List,” updated his website with the data from the last two weeks of business over at the iShares.com Internet site. Here's his report on the activity that occurred for the reporting week ending January 7.
“Analysis of the 07 January 2015 bar list, and comparison to the previous week's list: 149,187.7 troy ounces were removed (all from Brinks London), no bars were added or had serial number changes.“
“As of the time that the bar list was produced, it was overallocated 371.5 oz.“
“There was a 957,538.0 oz withdrawal on Tuesday that is not yet reflected on the bar list.“
And here's his report from yesterday for the week ending on Wednesday, January 14.
“Analysis of the 14 January 2015 bar list, and comparison to the previous week's list: 2,873,136.0 troy ounces were removed (all from Brinks London), 1,436,690.0 oz were added, and no bars had serial number changes.“
“The bars removed were from: Handy Harman (0.9M oz), Britannia (0.5M oz), Noranda (0.5M oz), and 23 others. The bars added were from: Britannia (1.0M oz) and 9 others.“
“As of the time that the bar list was produced, it was overallocated 192.5 oz. The bars removed were all bars that had been in SLV for many years.“
“There was a 1,627,651.4 oz withdrawal on Wednesday night that is not yet reflected on the bar list.“
Also while I was away, the people that run the shortsqueeze.com Internet site updated the short positions in both GLD and SLV for the the last half of December.
They showed that SLV's short position increased by 6.7 percent during that time, from 16.51 million shares/troy ounces, to 17.62 million shares/troy ounces. That's 524 metric tonnes of the stuff. According to Ted Butler, the number of SLV shares held short with no metal backing them, was a hair over 5 percent of the total shares outstanding.
The short position in GLD went in the other direction, as it fell by 9.35 percent from 1.541 million troy ounces, all the way down to 1.397 million troy ounces, or 43 tonnes.
And before leaving GLD and SLV—there were a couple of reports from the good folks over at Switzerland's Zürcher Kantonalbank while I was away. These two reports cover the period from December 23 up to and including Friday, January 9. Both reports showed declines in their gold and silver ETFs. During that period their gold ETF declined by 41,812 troy ounces—and their silver ETF dropped by 243,665 troy ounces.
Since January 5, the U.S. Mint has reported some pretty impressive sales numbers in both gold and silver. As of the close of business yesterday, they had sold 70,000 troy ounces of gold eagles—29,000 one-ounce 24K gold buffaloes—and 3,701,500 silver eagles.
That works out to 3 metric tonnes of gold sold by the mint in the first ten business days of January. They didn't even sell 2 metric tonnes in all of November and December combined last year. Both Ted and I are still wondering what's going on, because based on retail coin sales so far this year, business is still extremely soft, so the question remains as to who is buying all these coins, as it ain't John Q. Public.
Over at the COMEX-approved depositories, there was no in/out activity at all in gold on Wednesday but, as always, it was another busy day in silver, as 498,115 troy ounces reported received—and 512,555 troy ounces were shipped out. The deposit was all at Canada's Scotiabank—and the two withdrawals were from CNT and Scotiabank. The link to that action is here.
There was another big withdrawal from the Shanghai Bullion Exchange for the week ending on Friday, December 9. This time the report showed that 61.126 tonnes were taken out—and here's Nick Laird's most excellent chart that shows that.
Koos Jansen had a story on this headlined “Chinese Lunar Year Gold Buying at Full Steam: 61 Tonnes Withdrawn From SGE Vaults in One Week“—and it's linked here.
Here are two more charts for your viewing pleasure. Nick sent me these the day before I left on vacation. These are the monthly intraday moving averages for both gold and silver for December. If you average the same two minute tick for each trading day of the month, the chart patterns for silver and gold appear as shown below. Unless your job depends on you not seeing it, it's obvious that the selling pressure in both gold and silver starts minutes after trading begins on the COMEX—and ends shortly before the close of electronic trading in New York—so 'da boyz' are still there.
Here are three more charts from Nick. He sent them around yesterday evening—and I thought they were worth sharing. They are the price of gold in Russian roubles, Belarus roubles and the Swiss franc at the close of trading yesterday.
I've hacked and slashed a goodly bit, but I'm more than happy to leave the final edit in your capable hands—but that said, there are still a goodly number of must read stories for you today.
I’d peg JPMorgan’s concentrated and manipulative short position in COMEX silver to be 14,000 contracts at a minimum; but perhaps I am being too conservative, as a fair reading of the U.S. bank category of the companion Bank Participation Report [BPR] would allow for this crooked bank to be holding as many as 5,000 additional short contracts. In any event, even 14,000 contracts would represent a substantial increase from its silver short position in the December BPR of 7,000 contracts – at least a doubling and perhaps more.
If one were looking for incontrovertible proof that the price of silver has been and is manipulated in price by JPMorgan’s excessive short selling (and for the purpose of illegally picking up physical silver on the cheap), then look no further. One U.S. bank accounted for almost all of the new short selling both in the Bank Participation Report and in the concentrated net short position of the four largest shorts since December 2. The new concentrated short selling by JPMorgan took place in a flat-to-down price environment—and at prices averaging no more than $16.25—and a price well below the average primary mining cost of production and $3 less than the average price of silver in the third quarter (in turn the lowest quarterly price in years). How can this new short selling be considered legitimate and not purely intended to be manipulative to the price of silver?
Almost unbelievably, this new concentrated short selling by JPMorgan was described by me in advance as being the key element as to what the price of silver would, or wouldn’t do. On this there can be no argument. In the event JPMorgan sold short, the price of silver would struggle; if it didn’t, silver would soar. Nothing else has really mattered up to this point – not any other market factor, like actual mining and consumption or how much China or India buys. Clearly, I can’t control what this crooked bank does or doesn’t do; but there should be no question that silver’s rotten price performance is directly related to JPMorgan’s actions. That’s what makes this bank crooked and explains everything pricewise concerning silver. – Silver analyst Ted Butler: 10 January 2015
Yesterday was another made-to-order day for an upwards revaluation in the gold price, as it became obvious to all and sundry that the wheels were starting to fly off the world's financial and monetary system for real, taking the world's economies with it. But, for the moment, “da boyz” were having none of it.
At the root of it all is a global fiat currency system that's now totally out of control—complete with a garden of price management schemes that encompasses almost all asset classes, that now requires constant tending.
As I've been saying for at least the last ten years; if the powers-that-be weren't propping up everything that wanted to crash and burn—and suppressing the price of everything that wanted to explode to the outer edges of the known universe, the world's economic, financial and monetary system would be a smouldering ruin within five business days.
I'm still of that opinion—and the “end of all things” draws ever closer.
As I write this paragraph, the London open is about 40 minutes away. All four precious metals are up a hair, but prices have been generally flat in Far East trading on their Friday. However net gold volume is already north of 26,000 contracts—and silver's net volume is over 4,400 contracts. This is huge volume for such small price movements—and well over 95 percent of it is in the current front months, which means the HFT boyz and their algorithms are hard at work keeping prices as flat as they are. The dollar index isn't doing much, either—and is up 6 basis points as of this writing.
I'm somewhat surprised that we haven't seen more roll-over activity out of the February contract in gold, as options and futures expiry is only about ten days away—and gold open interest in the February contract is still way up there at 192,777 contracts, with 14,281 contracts of that being added yesterday as traders went long—as JPMorgan et al took the other side of the trade. All that volume, except those standing for delivery, has to disappear before First Notice Day.
Today we get the latest Commitment of Traders Report for positions held at the close of trading on Tuesday, January 13—and I expect it will show more deterioration in the Commercial net short positions in both gold and silver. It's what's going on under the hood that matters of course, but that doesn't alter the fact that the headline numbers in the legacy COT Report are already ugly—and much uglier still after yesterday's price action.
It remains to be seen whether things will end up the same way as all other rallies have in the past, but prices can also run for a good bit as well if the powers-that-be decide that it is in their best interests. They could also get over run by events, but that has never happened, at least up to this point—and after three years of heavy sledding, even the lunatic fringe has ceased talking about that particular outcome.
And as I hit the send button on today's column at 4:45 a.m. EST, I note that the gold price is down a few bucks; but silver, which had rallied above the $17 price mark in early Far East trading, has now been sold down below that price once again—and is back to unchanged. Platinum is down five bucks—but palladium is up seven dollars at the moment. Gold's net volume is around 37,000 contracts, with a decent increase in roll-over activity—and silver's net volume is around 6,800 contracts. The dollar index is up 10 basis points.
So there's been no follow-through whatsoever from yesterday's big news, almost like it never happened at all—and “da boyz” are determined to keep it that way. That's why we've seen such huge volumes both yesterday—and early this morning. All price excitement has to be capped—and it will be interesting to see how the precious metal markets are allowed to react once trading begins on the COMEX this morning.
I'm off to Vancouver later today for the Cambridge Resource Conference where GATA chairman Bill Murphy and I are guest speakers, so I must admit in advance that Saturday's column—along with the one on Tuesday—will be as brief as I can make them. It's also one of the reasons that today's column is as long as it is, as I wanted to bring you as up-to-date as I could and clear out my in-box, which had been getting rather full of “stuff” that had to be posted.
And before heading off to bed, I'd like to mention a new book that Casey Research's Terry Coxon has just had published. It's entitled “Keep What You Earn“. If you're tired of feeling like you’re working to support the government—and want your money and your assets to be safe from people looking for any reason to sue—and if you need to figure out how to keep a bigger chunk of your paycheck—you should check out Terry's new book, as it’s got easy-to-implement methods to achieve all this and more. You can find out all the details by clicking here.
Enjoy your weekend, or what's left of it if you live west of the International Date Line—and I'll see you here tomorrow.
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.