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Ed Steer
JP Morgan’s COMEX Silver Stash Tops 100 Million Troy Ounces
9 days ago




18 April 2017 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price vaulted higher the moment that trading began in New York at 6:00 p.m. EDT on Sunday evening — and ran into the usual short buyers and long sellers of last resort almost immediately.  At 9:00 a.m. China Standard Time on their Monday morning, they turned the price the price lower — and had it back to unchanged by 2 p.m. CST.  It chopped sideways from there until a rally of some substance began around 9 a.m. in New York — and that was capped and turned lower just minutes after the 11 a.m. EDT London close.  The final sell-off started around 2 p.m. in the thinly-traded after-hours market — and the low tick of the day was set around 3:31 p.m. EDT.  It rallied a couple of dollars into the close from there.

The high and low tick were reported as $1,297.40 and $1,283.10 in the June contract.

Gold was closed in New York yesterday at $1,284.00 spot, down $3.80 from Friday.  Net volume was pretty healthy at around 183,000 contracts — and a bit more than 50,000 contracts of that amount occurred before the London open.

And here’s the 5-minute gold tick chart courtesy of Brad Robertson.  There was decent volume in early Far East trading on Monday, with the most occurring at the 9 a.m. CST engineered price decline — and again at 2 p.m. CST.  Of course most of the volume came during the COMEX trading session, although there was a fair amount in the thirty minute time period leading up to the COMEX open.  Note the tiny gap up on the rally at the New York open on Sunday evening — and how much paper gold had to be throw at the price to prevent it from blasting higher.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ feature is a must.

Silver price rally on Sunday night in New York was far more anemic, but it ran into ‘da boyz’ immediately as well.  And, like gold, was turned lower at 9 a.m. China Standard Time in Shanghai.  It chopped around a nickel or so above unchanged for many hours, before getting turned lower once the noon silver fix was in, in London.  It was sold lower in fits and starts from there, with the low tick of the Monday session coming at 3:15 p.m. in the thinly-traded after-hours market.  It rallied a few pennies into the close.

The high and low ticks in this precious metal were recorded by the CME Group as $18.655 and $18.37 in the May contract.

Silver closed on Monday in New York at $18.38 spot, down 13.5 cents on the day.  Net volume was a bit heavier than I like to see at just under 44,000 contracts, with a bit over 9,000 contracts of that amount coming before the London open.  Roll-over volume out of the May contract was pretty decent.

And here’s the 5-minute tick chart for silver, courtesy of Brad as well.  The two big volume spikes in Far East trading in New York on Sunday evening — and three hours later in Shanghai on their Monday morning, are the stand-out features on the left-hand side of the chart, so you can see that JP Morgan et al were ruthless in dealing with the silver price on its break-out attempt.  The rest came starting at the price decline just after the noon silver fix in London —  5 a.m. Denver time/7 a.m. EDT in New York — and during the COMEX trading session that followed.  Silver had a tiny gap up at the New York open on Sunday evening as well, but ‘da boyz’ were right there.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ feature is a must as well.

Platinum was forced to follow the same price path as gold in Far East trading on Monday — and was also back to unchanged by 2 p.m. in Shanghai.  But once Zurich opened, it began to head a bit higher — and really took off once trading began at the COMEX open in New York at 8:20 a.m. EDT on Monday morning.  The price was capped around 10:30 a.m. EDT at $988 spot — and wasn’t allowed to trade higher than that, but was sold off a bit in the very thinly-trader after-hours session.  Platinum finished the Monday session at $982 spot, up 10 bucks from Friday’s close.

The palladium price chopped around a few dollars either side of unchanged until shortly after the COMEX open on Monday morning…then down it went.  The low tick was printed just minutes before 4 p.m. — and it rallied a couple of dollars into the close from there, finishing the day at $787 spot — and down 7 dollars on the day.

The dollar index closed very late on Friday afternoon in New York at 100.51 — and rallied to its 100.57 high tick of the day within the first hour of trading in New York on Sunday evening.  It began to head rather unsteadily lower from there — and the 100.00 low tick was set at precisely 11:00 a.m. EDT, which was the London close.  It was obvious that ‘not-so-gentle hands’ were there to pick it up — and it ‘rallied’ quietly until precisely 2:00 p.m. EDT, when it showed signs of rolling over once more.  At that juncture, it began to ‘rally’ anew until around 3:15 p.m. — and it chopped quietly lower from there, but got ‘saved’ again at precisely 5:00 p.m. EDT.  The index finished the Monday session in New York at 100.30 — and down 21 basis points from Friday.

The index also got saved shortly after 3 a.m. in New York as well, when it fell off the proverbial cliff, which was minutes after London opened on their Monday morning.

Here’s the 3-day dollar index chart so you can see Friday, Sunday and Monday’s action all in one chart.

And here’s the 6-month U.S. dollar index chart — and heaven only knows how low it would have closed on Monday without those ever-present ‘gentle hands’.

The gold shares opened unchanged — and chopped around either side of that number until it fell to its low tick around 3:20 p.m. EDT, at the dollar’s New York high tick.  The tiny rally in the gold price at the end of the day, wasn’t enough to save the gold stocks, as they closed down 0.19 percent.

Although the silver equities opened unchanged as well, they began to sell lower immediately.  There was a weak rally into the London close at 11 a.m. EDT, but it rolled over from that point, with the low tick of the day coming around 3:15 p.m. EDT when the dollar index reaches its zenith after being ‘saved’ at the 100.00 mark at the 11:00 a.m. EDT London close.  Like the gold stocks, they rallied a bit into the close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.09 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 26 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  The largest short/issuer was Morgan Stanley with 18 contracts out of its client account — and JP Morgan stopped 15 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in April dropped by 24 contracts, leaving 1,096 still open, minus the 26 contracts mentioned above.  The CME Daily Delivery Report on Thursday showed that only 7 gold contracts were actually reported for delivery today, so that means that 24-7=17 gold contracts disappeared from April without either making or taking delivery.  Silver o.i. in April rose by 6 contracts, leaving 86 still around — and Thursday’s Daily Delivery Report showed that no silver contracts were posted for delivery today.

It’s amazing to watch all the silver contracts being added to the April delivery month as the month moves along.

There were no reported changes in GLD yesterday — and as of 7:30 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was no sales report from the U.S. Mint.

It was pretty quiet in gold over at the COMEX-approved gold depositories on the U.S. east coast on Friday.  Nothing was reported received — and 2,025.450 troy ounces/63 kilobars [U.K./U.S. kilobar weight] were shipped out.  All this activity, such as it was, occurred at Canada’s Scotiabank — and I shan’t bother linking it.

But, as is usually the case, it was pretty wild in silver, as 2,392,041 troy ounces were received — and 611,422 troy ounces were shipped out.   There were two container loads into CNT totalling 1,198,827 troy ounces — and two more went into JP Morgan totalling 1,193,213 troy ounces.  A container load…606,333 troy ounces…was shipped out of CNT as well, along with minor amounts out of HSBC USA and Brink’s, Inc.  The link to all this action is here — and it’s worth a look if you have the interest.

With those two containers received on Friday, they add enough to JP Morgan’s COMEX stash to put them over the 100 million ounce mark at 100.17 million troy ounces.  That’s a bit over 52 percent of all the silver currently held on the COMEX.

And, except for Ted Butler — and by extension, me — none of the so-called precious metal analysts out there have breathed a word about it.

It was very busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They received 8,700 of them — and shipped out 8,902.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

I have the usual number of stories for a Tuesday column, which is a few more than normal.


CRITICAL READS

U.S. retail sales, inflation data highlight weak first quarter growth

U.S. retail sales fell for a second straight month in March and consumer prices dropped for the first time in just over a year, underscoring the magnitude of the loss of economic growth momentum in the first quarter.

But with the labor market near full employment, Friday’s weak reports failed to change views that the Federal Reserve will raise interest rates again in June. Economists expect a rebound in both retail sales and monthly inflation.

For the Fed, the underlying momentum is more important in terms of policy decisions, and that looks to be strong, supported by a tightening labor market, rising incomes and high consumer confidence,” said Gregory Daco, head of U.S. macroeconomics at Oxford Economics in New York.

The Commerce Department said retail sales dropped 0.2 percent last month after a 0.3 percent decrease in February, which was the first and biggest decline in nearly a year. Compared to March last year retail sales increased 5.2 percent.

Economists had forecast retail sales slipping 0.1 percent. Excluding automobiles, gasoline, building materials and food services, retail sales rebounded 0.5 percent last month after falling 0.2 percent in February.

This Reuters article, filed from Washington, showed up on their Internet site last Friday — and it’s something that I found in yesterday’s edition of the King Report.  Another link to it is here.


Payless ShoeSource bankruptcy is the latest blow for retail bondholders

Payless ShoeSource’s bankruptcy filing has propelled Fitch Ratings’ U.S. retail default rate higher and kept the sector on track for up to $6 billion of defaults this year in the latest blow to retail bondholders.

The rating agency’s trailing 12-month loan default rate for the retail sector has climbed to 1% in April from 0% in March and 0.5% at the end of February, according to the rating agency.

Fitch is expecting the rate to spike to 9% by year-end as retailers continue to struggle with slowing traffic, shrinking margins caused by steep discounting and the competition from juggernaut Amazon.com. Consumer behavior is also changing with experiences and services more in demand than “stuff”.

Retailers have also suffered from the ebb and flow of brand popularity,” Fitch said in a report. “Negative comparable-store sales and fixed-cost deleverage have led to negative cash flow, tight liquidity and unsustainable capital structures.”

Payless was one of nine retailers on Fitch’s “Loans of Concern” list, which comprises issuers with a significant risk of defaulting on their debt in the next 12 months. The other eight with combined loan debt of nearly $6 billion are Sears Holding Corp. with about $2.5 billion of debt, 99 Cents Only Stores LLC, Charming Charlie LLC, Gymboree Corp., Nine West Holdings Inc.; NYDJ Apparel LLC; rue21, Inc.; and True Religion Apparel Inc.

This news item was posted on the marketwatch.com Internet site ten days ago — and I thank Richard Saler for pointing it out.  Another link to it is here.


Almost anyone can get a car loan now — and that’s not a good thing for the country

People with credit scores of about 600 and below are considered especially risky by lenders. That’s why they issue so-called subprime loans to them that generally have higher interest rates. Subprime auto loans make up $179 billion of the auto-loan market, a 16% share, but that balance has been increasing at a rapid clip.

According to data from Experian, the balance of deep subprime loans – those given to people with credit scores of 300 to 500 – increased 14.6% from 2015 to 2016.

Subprime loans – those given to people with credit scores in the range of 501 to 600 – increased by 8.6%. This is far higher than the growth of prime loans, which witnessed 6.2% growth.

But subprime loans are a horse of a different color. The report from the Federal Reserve Bank of New Work said the subprime delinquency rate for the trailing four-quarter period moved to 2% in the third quarter. The only other time it was 2% or more was in the immediate aftermath of the 2008 financial crisis.

In other words, the subprime delinquency rate is creeping up while the subprime market is ballooning in size.

As I mentioned a few days ago, I have some first-hand knowledge of North American car sales, as I bought a new car last week — and took delivery on Friday.  It’s the first new one I’ve owned since 1992.  It wasn’t this year’s model, but a new 2016 the dealers are still having lots of trouble unloading…and the only reason I went the ‘new’ route is because my brother-in-law works for Ford Credit — and I got the deal of a lifetime. When I took the owners manual out of the glove compartment, the date of manufacture was 19 August 2016…so it was almost 8 months to day between when the car was built — and when I took delivery.   Automakers are in a real world of hurt — and it’s going to get far worse.  This long news item was posted on the nordic.businessinsider.com Internet site on Friday evening at 9:28 p.m. Europe time — and it comes courtesy of Patrick Ekdahl.  Another link to it is here.


Despite What They Say, GM’s Inventory Build is Anything But ‘Normal’

For months now we’ve been warning that the great auto ‘plateau’ is nothing more than a debt-fueled bubble, courtesy of the Fed, that is on the verge of collapse.  Of course, bubbles typically get exposed when customer sell-through starts to slow but OEM’s go on believing that 10% volume growth is possible in perpetuity…that usually results in inventory growth that looks something like this:

The second sign of a bubble usually comes when companies issue carefully crafted excuses for their inventory build.  And that’s where Alan Batey, GM President of the America’s, comes in to explain that his company’s inventory glut isn’t a sign of the auto industry’s impending implosion but rather a modest build up ahead of planned shut downs and retooling efforts later this summer.

Of course, factory shutdowns and retooling for model change overs are fairly common in the auto industry.  Therefore, if Batey is correct in his assertion that GM’s inventory build is just a ‘normal’ preparation for retooling then we should see a similar pattern in inventory builds last year.

But, per the chart below, and to our complete ‘shock’, that is simply not the case.  For all of 2015 and the first half of 2016, GM inventory ranged between 625k – 750k units in dealer lots.  That said, since July 2016, GM inventory has ballooned from 700k units to well over 900k which is way more than anything that could reasonably be attributed to ‘normal’ seasonality.

But maybe we’re too naturally pessimistic.  So what say you?  Just ‘normal’ seasonal patterns or signs that the auto bubble is about to pop?

This brief 2-chart Zero Hedge news item was posted on their Internet site at 7:20 p.m. EDT yesterday evening — and another link to it is here.


The Trump Reflation Fantasy Ends on Day 100 — David Stockman

In honor of the Donald’s “Mother of All Bomb” (MOAB) attack on the Hindu Kush mountains Thursday, let me introduce MOAD.

I’m referring to the “Mother of All Debt” crises, of course. The opening round is coming when Washington goes into shutdown mode on April 28, which happens to be Day 100 of the Donald’s reign.

In theory, this should be just a routine extension of the fiscal year (FY) 2017 continuing resolution (CR) by which Congress is funding the $1.1 trillion compartment of government which is appropriated annually.

The remaining $3 trillion per year of entitlements and debt service is on automatic pilot, but the truth is Washington can’t agree on what to do about either component — except to keeping on borrowing to pay the bills.

There is a problem with this long-running game of fiscal kick-the-can, however. Namely, a 100 year-old statute requires Congress to raise the ceiling for treasury borrowing periodically, but the Imperial City has now reached the point in which there is absolutely no way forward to accomplish this.

This must read commentary by David was posted on the dailyreckoning.com Internet site on Saturday — and I lifted it from a Zero Hedge article from yesterday afternoon EDT that Brad Robertson sent out way.  Another link to it is here.


Doug Noland: “Risk Off” Making Some Headway

Global “Risk Off” has been Making Some Headway. This week saw ten-year Treasury yields drop 15 bps to 2.23%, the low since the week following the election. German bund yields declined another four bps to a 2017 low 19 bps. The Crowded Trade hedging against higher rates is blowing apart. The Crowded yen short has similarly been blown to pieces, with the Japanese currency surging an additional 2.3% this week (increasing 2017 gains to an impressive 7.7%). Japan’s Nikkei equities index dropped 1.8% this week, with y-t-d losses rising to 4.1%.

Meanwhile, this week Gold surged 2.5%, Silver jumped 2.9% and Platinum gained 1.9%. In contrast to the safe haven precious metals, Copper dropped 2.8%, Aluminum fell 2.7% and nickel sank 4.2%.

European periphery spreads (to bunds) widened meaningfully. Italian spreads widened 14 to 213 bps, the widest since early-2014. Spanish spreads widened 13 to an eight-month high 152 bps. Portuguese spreads widened six bps and French spreads seven. Italy’s stocks fell 2.6%, with Italian banks down 5.9%. Spanish stocks lost 1.9%. European bank stocks dropped 2.6% this week.

As for the U.S. stock market, it appears a decent amount of hedging has taken place over the past couple weeks. Previously such dynamics often created the firepower to squeeze the shorts and force the risk averse to unwind hedges and scamper back aboard the bull market. Complacent markets may have forgotten that put options and myriad “portfolio insurance” strategies can as well provide firepower for a self-reinforcing downside. North Korea, Syria, Russia and France provide potential for clear and present danger.

There is as well the risk of a U.S. government shutdown at the end of the month, along with all the ambiguity surrounding the Trump Administration’s shifting agenda. What appeared a united group determined to go right down the list of campaign promises – keen to focus on tax cuts/reform and infrastructure spending – these days appears confused, less than cohesive and without much of a list. If markets abhor uncertainty, it’s hard to see them enamored with the stunning degree of policy reversals and flip-flopping. Return to healthcare and deal with tax and spending legislation later? Roused from a state of deep depression, the Democrats now count down the days until next year’s mid-terms.

Doug’s Credit Bubble Bulletin was posted on his Internet site in the wee hours of Saturday morning EDT — and I must admit that I forgot all about it for my Saturday missive, so I’m making amends now.  Another link to it is here.


Creating Another “Crash of 1929” — Jeff Thomas

Regarding the Great Depression… we did it. We’re very sorry… We won’t do it again. – Ben Bernanke

Waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road—either too much inflation, financial instability, or both. – Janet Yellen

In his speech above, future Federal Reserve Chairman Ben Bernanke acknowledged that, by raising interest rates, the Fed triggered the stock market crash of 1929, which heralded in the Great Depression.

Yet, in her speech above, Fed Chair Janet Yellen announced that “it makes sense” for the Fed to raise interest rates “a few times a year.” This is a concern, as economic conditions are similar to those in 1929, and a rise in interest rates may have the same effect as it did then.

So let’s back up a bit and have a look at what happened in 1929. In the run-up to the 1929 crash, the Federal Reserve raised rates to 6%, ostensibly to “limit speculation in securities markets.” As history shows, this sent economic activity south rather quickly. Countless investors, large and small, who had bought stocks on margin, would be unable to pay increased interest rates and would be forced to default. (It’s important to understand that the actual default was not necessary to crash markets. The knowledge that investors would be in trouble was sufficient to send the markets into a tailspin.)

This very worthwhile commentary by Jeff showed up on the internationalman.com Internet site on Monday sometime — and another link to it is here.


A Government of Morons — Paul Craig Roberts

It has become embarrassing to be an American. Our country has had four war criminal presidents in succession. Clinton twice launched military attacks on Serbia, ordering NATO to bomb the former Yugoslavia twice, both in 1995 and in 1999, so that gives Bill two war crimes. George W. Bush invaded Afghanistan and Iraq and attacked provinces of Pakistan and Yemen from the air. That comes to four war crimes for Bush. Obama used NATO to destroy Libya and sent mercenaries to destroy Syria, thereby committing two war crimes. Trump attacked Syria with US forces, thereby becoming a war criminal early in his regime.

To the extent that the U.N. participated in these war crimes along with Washington’s European, Canadian and Australian vassals, all are guilty of war crimes. Perhaps the U.N. itself should be arraigned before the War Crimes Tribunal along with the E.U., U.S., Australia and Canada.

Quite a record. Western Civilization, if civilization it is, is the greatest committer of war crimes in human history.

And there are other crimes—Somalia, and Obama’s coups against Honduras and Ukraine and Washington’s ongoing attempts to overthrow the governments of Venezuela, Ecuador, and Bolivia. Washington wants to overthrow Ecuador in order to grab and torture Julian Assange, the world’s leading democrat.

These war crimes committed by four U.S. presidents caused millions of civilian deaths and injuries and dispossessed and dislocated millions of peoples, who have now arrived as refugees in Europe, U.K., U.S., Canada, and Australia, bringing their problems with them.

This commentary by Paul appeared on thedailycoin.org Internet site very early on Sunday morning EDT — and it I thank Judy Sturgis for sharing it with us.  Another link to it is here.


As nuclear war looms in Korea, the U.S. Congress vanishes

The need for the U.S. Congress – to which the U.S. Constitution gives the sole right to declare war – to at least ask the President to explain what is going on and what he is proposing to do, and to ask Congress for at least some form of authorisation, or to engage in at least some form of consultation, before he takes action which might set in train events which might cause millions of deaths, ought to be compelling and obvious.

Instead Congress is silent and there is no pressure in the U.S. establishment media for it to be otherwise.  The result is that for all we know the U.S. could soon be at war with a nuclear power without Congress having said or done anything about it.

Over the last few months Congress has devoted an incredible amount of time and energy investigating fictitious links between the President’s campaign team and the Russians despite repeated confirmation from those in the know that actual evidence of inappropriate links between the President’s campaign team and the Russians does not exist.  Yet when faced with the actual possibility of a war which might easily go nuclear Congress does nothing.

The spirits of the Founding Fathers, if they have any knowledge of what is happening, must be in despair.

This news item over at the duran.com Internet site was written by Alex Mercouris — and showed up there on Friday sometime.  I received it from Larry Galearis on Saturday — and another link to it is here.


Jim Rogers discuss all things political, geopolitical and economic

http://marketsanity.com/jim-rogers-discuss-things-political-geopolitical-economic/  [broken link]

There are many worrisome things happening, but of course, there are always worrisome things happening in Washington D.C.

This very interesting 40-minute audio interview was conducted by The Guerilla Economist on April 13, but was reposted on the marketsanity.com Internet site on Saturday.  Ken Hurt sent it our way on Sunday.


Erdogan’s referendum win no clean sweep

Turkey’s April 16 popular referendum amending the constitution to establish an executive presidency passed 51.41% to 48.59%. The results were virtually identical to the estimates of Turkey’s two leading polling firms, Gezici and Konda.

Yet several dynamics suggest the referendum will be anything but the climactic showdown that would have given Turkish President Recep Tayyip Erdogan a clear mandate to unify a deeply divided Turkey and prepare the country for his executive presidency. (The amendments do not come into effect until 2019.)

The major problem was that hours before polling stations closed, the Supreme Election Board (YSK), Turkey’s highest electoral authority composed of high court judges, reached a controversial decision. The YSK said that it will count unstamped ballots “unless there is … proof that ballots and envelopes are brought from outside.” The YSK’s seal on ballots and envelopes marks the voting accoutrement as genuine. In past elections, votes would be invalidated if they lacked the proper YSK stamp.

The YSK’s decision stood in contrast with Turkey’s electoral laws and political traditions, inviting a furious backlash from the “no” camp. According to Hurriyet Daily News, Bulent Tezcan, the deputy chairman of the main opposition Republican People’s Party (CHP), said, “The YSK is paving the way for us to enter an unfortunate period that accepts the principle of elections under judicial manipulation rather than elections under judicial supervision. The decision that the YSK made after the voting began will bring the reliability of the elections into question. The elections will face a serious legitimacy problem. The YSK changed the rules after voting began.”

This news story was posted on the al-monitor.com Internet site on Monday sometime — and I thank Roy Stephens for sharing it with us.  Another link to it is here.  Here’s another story on this from theduran.com Internet site.  It’s headlined “Erdogan’s first post-victory policy statement: Bring back the death penalty” — and it’s courtesy of Roy Stephens as well.  And for a different take on things, here’s a piece that was in The Guardian yesterday.  It’s headlined “Erdogan’s referendum victory spells the end of Turkey as we know it” — and comes courtesy of Patricia Caulfield.


Stephen Cohen: This is Most Dangerous Moment in U.S.-Russian Relations Since Cuban Missile Crisis

Secretary of State Rex Tillerson has wrapped up a visit to Moscow, where he met with Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov. The meetings come at a time of increased tension between Washington and Moscow. On Wednesday during a press conference, President Trump said relations with Russia had reached a new low point. Trump’s comments came a day after the White House accused Russia of attempting to cover up the role of the Syrian government in the recent chemical attack in Syria that killed 87 people. Russia has rejected the claim, saying the U.S. has been too quick to blame Syrian President Bashar al-Assad. We speak to Stephen Cohen, professor emeritus of Russian studies and politics at New York University and Princeton University.

This 12-minute video interview was conducted last Thursday on the democracynow.org Internet site — and already has had more than 42,000 views.  I thank Larry Galearis for pointing it out — and another link to it is here.


Trump Appoints Fiona Hill Russia Adviser on National Security Council

Last month, Fiona Hill, a preeminent Kremlinologist and Harvard alumna, joined the National Security Council staff as deputy assistant to the president and senior director for European and Russian Affairs. This is one of the most important positions within government shaping the US relationship with Russia. A dual US-UK citizen, Hill is also a member of the US Council on Foreign Relations, and a member of the board of trustees of The Eurasia Foundation.

The new adviser holds a master’s degree in Soviet studies and a doctorate in history from Harvard University. British-born, she started at Brookings in 2000, taking a three-year break to serve on the National Intelligence Council under the George W. Bush and Obama administrations. Prior to joining Brookings, Hill was director of strategic planning at The Eurasia Foundation in Washington, D.C. From 1991 to 1999, she held a number of positions directing technical assistance and research projects at Harvard University’s John F. Kennedy School of Government. She pursued studies at Moscow’s State Linguistic University (former Maurice Thorez Institute of Foreign Languages).

A frequent commentator on Russian and Eurasian affairs, Fiona Hill boasts an extensive research experience on the Caucasus and Central Asia, among other issues. She is co-author of the second edition of «Mr. Putin: Operative in the Kremlin» (2015). Lashing out at the Russian leader, Hill emphasizes it would be a mistake to underestimate Vladimir Putin.

She is also known for her book «The Siberian Curse: How Communist Planners Left Russia Out in the Cold» (2003). Hill proposed to actually evacuate Siberia and start developing its resources working in shifts. The book was praised by Jeffrey Sachs who had advised Russia to adopt «shock therapy» methods to implement economic reforms, Richard Pipes, a former member of the National Security Council known for his belligerent stance on Russia, and Zbigniew Brzezinski, former assistant to the president of the United States for national security affairs, widely believed to be behind the Obama’s hostile policy toward Moscow.

Well, dear reader, I doubt very much that she’ll be looking to mend fences or build bridges.  She just looks like another sociopathic foaming-at-the-mouth pit bull to me.  This article showed up on the strategic-culture.org Internet site last Thursday — and it comes to us courtesy of Larry Galearis.  Another link to it is here.


$43 Million In Cash Found In Empty Nigerian Apartment

It appears that at least one “Nigerian prince” had the cash to back his claims.

Nigeria’s anti-corruption unit discovered more than $43 million in US dollars at an upscale apartment in Lagos, after receiving an anonymous tip. As CTV News reports, the Economic and Financial Crimes Commission received a tip from a whistleblower who reported suspicious activity when they noticed someone moving bags in and out of the apartment, according to a Facebook post.

On getting to the building, operatives met the entrance door locked. Inquiries from the guards at the gate explained that nobody resides in the apartment, but some persons come in and out once in a while. In compliance with the magisterial order contained in the warrant, the EFCC used minimum force to gain entrance into the apartment.

Monies were found in two of the four bedroom apartment. Further probe of the wardrobe by operatives in one of the rooms, was found to be warehousing three fire proof cabinets hidden behind wooden panels of the wardrobe. Upon assessing the content of the cabinets, neatly arranged U.S. Dollars, Pound Sterling and some Naira notes in sealed wrappers.

This Zero Hedge news item is datelined 7:02 p.m. EDT on Sunday evening, but has obviously been updated since it was originally posted, because Ellen Hoyt sent it our way at 9:50 a.m. EDT on Sunday morning.  The photos are worth the trip — and another link to it is here.


U.K. Royal Mint’s Sales Surge 20% In Q1

As gold continued to climb on increased geopolitical tensions, U.K. Royal Mint saw a growing demand for its products — with sales jumping 20% during the first three months of the year, according to a report published by Bloomberg.

The impressive quarterly numbers were driven solely by March, which saw sales surge 263% in volume-terms, the news agency cited figures obtained under freedom of information legislation.

We saw strong sales across all markets, but particularly from Germany and the U.K.,” Chris Howard, director of bullion for The Royal Mint, was quoted as saying. “We experienced strong demand for gold in physical products during the period, notably with our Britannia 1-ounce coin.

Gold products being sold under the U.K. Royal Mint’s Signature Gold program, rose 178% in March, compared to a year ago.

This brief new story showed up on the kitco.com Internet site last Thursday evening — and I thank ‘Tom’ for sharing it with us.  Another link to it is here.


Miami man in middle of billion-dollar gold-smuggling case fights for release before trial

In mid-March Juan Granda was summoned from Colombia to Miami to attend a meeting with his employer, a precious metals refinery.

NTR Metals fired him from his job as a South American gold dealer. Later that day, Granda’s mother called to say that federal agents were at her Cutler Bay home looking for him. Rather than head back to South America, he immediately went over to her house and was arrested.

At no point did Mr. Granda ever take a single step suggesting any intent to flee,” his defense attorney, Daniel Rashbaum, said in court papers.

Granda, 35, a U.S. citizen born in Ecuador, is now fighting his detention as a flight risk before trial in one of the biggest money laundering cases in South Florida history. It’s an alleged scheme centered on South American drug traffickers suspected of funneling billions of dollars of illegally mined Amazon gold through Granda and two other NTR Metals employees to the Miami refinery.

This news item, filed from Miami, appeared on the miamiherald.com Internet site very early on Friday morning EDT — and I thank Swedish reader Patrik Ekdahl for finding it for us.  Another link to it is here.


Junior Gold Miner ETF Suspends Creation Orders Due to Shortage of Underlying Instruments

Over the last several weeks, two years after Howard Marks first brought attention to the topic with a letter in which he asked “What Would Happen If ETF Holders Sold All At Once?” some investors have once again quietly voiced concern about the inordinate and rising influence passive investing in general, and ETFs in particular, exert on stocks but especially on fixed income securities, including illiquid bonds and loans. To address some of these concerns, earlier last week, Goldman Sachs released a report titled “A closer look at years of passive (aggressive) investing in credit” in which it observed that the growth patterns shown in Exhibits 1 to 3, particularly the increase in the ownership share of ETFs…

However, while equity and credit ETFs have been relatively blemish-free, at least in the post August 2015 period, commodity funds have seen their share of snafus. In fact, just this past Thursday, the Direxion levered junior gold miner ETF, the JNUG, announced it was suspending daily creation orders.

While details are scarce, according to Direxion, the 3x levered cousin of the GDXJ, announced on Thursday after the close, that “effective immediately, daily creation orders in the Direxion Daily Junior Gold Miners Index Bull 3X Shares leveraged exchange traded fund (Ticker: JNUG) are temporarily suspended until further notice.

The stated reason: suspension is due to the limited availability of certain investments or financial instruments used to provide requisite exposure to the MVIS Global Junior Gold Miners Index. Redemption orders for the Fund will not be affected, and will continue to be accepted in the ordinary course of business.

I’ve posted a couple of stories about this issue during the last ten days — and here’s another one. This very interesting, but somewhat complex news item was posted on the Zero Hedge website on Saturday afternoon — and it’s worth reading if you have the interest.  It comes to us courtesy of Richard Saler — and another link to it is here.


China Q1 gold demand 7.7% Up On 2016 — Lawrie Williams

While the detailed Shanghai Gold Exchange (SGE) Monthly Report figures on its website still seem stuck on the February figures (released on March 7), trawling elsewhere through the site suggests that the March withdrawals figure actually came through at 192.25 tonnes and totalling up the reported year to date figures show that Q1 withdrawals totalled 555.9 tonnes – some 7.7% up on the 2016 Q1 figure, although still 11% behind that for the record 2015 calendar year.

While China’s gold demand as expressed by SGE withdrawals may be up on that of a year ago, it is early days yet for 2017 and it should be recalled that Chinese gold demand was probably at its lowest for four years in 2016, and way below that of the record 2015 year.  There are, however,  also a number of other factors out there – not least a potential for economic conflict – or even, but probably unlikely,  military conflict – between China and the USA over a number of flashpoints such as trade equality, North Korea and the South China Sea any of which could affect gold demand positively.

Whether SGE gold withdrawals should be equated to the real gold flows into China remains a contentious point.  As we have pointed out here beforehand the withdrawals data as reported appears to offer a far closer correlation to the sum of Chinese gold imports plus domestic gold production and an estimate of scrap recycling than some of the estimates of demand produced by independent specialist consultancies.  In part this divergence of estimates tends to relate to how Chinese demand is calculated, with the consultancies tending to dismiss gold going into the financial and banking sectors.  None of the figures take into account anything that may, or may not, be being absorbed by the government for the nation’s gold reserves.  Officially these have not increased for the past five months, but doubts are being raised again as to whether China is again hiding gold reserve additions in separate accounts now that the nation has achieved its aim of having the Yuan (Renminbi) incorporated as an integral part of the IMF’s Special Drawing Rights.

I sent this commentary to Nick Laird asking if he had the SGE chart with the March updates — and this was his response…”They have not released the data yet — and I don’t know where Lawrie is getting his numbers from.”  This short commentary from Lawrie appeared on the Sharps Pixley website on Monday — and another link to it is here.


The PHOTOS and the FUNNIES

My photos of the North American and Eurasian badger drew a response from Arman Dobbs from Cape Town in South Africa, who made the comment that the honey badger would eat these guys for breakfast.  When I went searching I discovered that despite its name, the honey badger does not closely resemble other badger species; instead, it bears more anatomical similarities to weasels.  It is primarily a carnivorous species and has few natural predators because of its thick skin and ferocious defensive abilities.  One look at its face — and you just know that this creature is not to be trifled with.  Click to enlarge.


The WRAP

Here’s why the news doesn’t matter much in gold and silver price movements – those doing the most buying and selling don’t pay attention to the news in deciding when to buy and sell COMEX futures contracts. I didn’t say that those actually buying and selling don’t read the newspapers or follow world events, like any other market observer; I’m saying none of that goes into deciding when they buy or sell. The undisputed initiators of buying and selling in COMEX futures contracts are the managed money traders I identify as technical funds. By definition, all buys and sells made by the technical funds are purely mechanical and exclusively dependent on price movement and nothing else. I know, I know – it sure seems like world events dictate price movement – until you factor in COMEX positioning and price movement.

The COMEX positioning premise dovetails almost perfectly when tracing the price pattern in gold and silver since November. In gold, the managed money technical funds sold 100,000 net gold contracts (10 million oz) from Election Day to year end, causing prices to decline by $150, before the selling dried up and the technical funds began to buy, driving gold prices irregularly higher through this week.

The wonder here, of course, is why would the commercials, led by JP Morgan, sell short so aggressively to the managed money buyers at such low silver prices when much higher prices could be achieved by not selling as aggressively? The regulators at the CFTC and the CME Group have managed to avoid asking this most obvious question for decades and as you know – see no evil, find no evil.Silver analyst Ted Butler: 15 April 2017


The powers-that-be were all over the precious metals almost from the moment that trading began in New York at 6:00 p.m. on Sunday evening — and they weren’t about to let what was happening in North Korea influence prices, as volumes were enormous in both gold and silver long before London opened.  Then they finished the job during the New York trading session, closing all four down on the day.

I noted that Sharp’s Pixley’s grand poobah, Ross Norman’s target break-out price of $1,291 spot was broken to the upside during Far East trading, but it obviously wasn’t allowed to stand — and there should be no doubt in anyone’s mind that ‘da boyz’ knew that too.  They can read a chart better than most, as they’re the ones that paint these charts with their price management scheme.

Here are the 6-month graphs for all four precious metals, plus copper, once again.  As you can see, gold is now into overbought territory, but the other three precious metals still have a ways to go.  The click to enlarge feature helps with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price was sold down a few dollars when trading began in New York at 6:00 p.m. EDT on Monday evening.  Since then, every rally attempt back above unchanged has been turned lower — and gold is down $1.30 the ounce at the moment.  It’s been the same sort of price activity in silver — and it’s down 2 cents currently.  Ditto for platinum and palladium, as both are down a dollar as the Zurich open approaches.

Net HFT gold volume is coming up on 36,000 contracts — and that number in silver is just a bit over 9,900 contracts.  Roll-over/switch volume out of May is fairly healthy already.

The dollar index hasn’t been doing much, just trading a few basis points either side of unchanged — and that’s where it sits…unchanged…as London opens.

So, do we get another engineered price decline from here, or do we get more upside before that event?  Who knows for sure.  With the COMEX market structure in extreme territory in silver, there’s always the chance the commercial traders could get over run and be forced to cover their short positions in a rising price environment, a fact that Ted pointed out once again in his weekly review on Saturday.

Of course if it does happen, it will be…as he always points out as well…the very first time it has.  All we can do, as we’ve done before, is just wait it out and see what happens.  But JP Morgan et al are still in total control of precious metal prices, until they aren’t — and using the past as prologue, I’d guess that another engineered price decline is most likely in our future.  But, as always, I’d love to be proven spectacularly wrong.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and I would suspect that unless we get a big smash to the downside the downside during the Tuesday trading session, the commercial net short position in silver for this reporting week, will set a new and even uglier high-water mark.  Gold’s number will be higher as well, but nowhere near record territory.

And as I post today’s column on the website at 4:02 a.m. EDT, I see that gold has rallied a bit now that London has been open for an hour — and it’s up 40 cent.  Silver is back to unchanged — and platinum and palladium are down a dollar…and unchanged, respectively.

Net HFT gold volume is up to about 43,000 contracts — and that number in silver is approaching 12,000 contracts.  Both numbers are more than respectable considering the price action.

The dollar index is down 6 basis points.

There’s not much going on at the moment, or not being allowed to go on.

With the early Monday morning precious metals rallies in the Far East being snuffed out in short order, I’d be surprised if we see much in the way of up-side price action today.  Of course, I’m always hoping for the best, however I must admit that that’s not what I’m expecting.

But whatever happens, I’ll have it all for you in tomorrow’s column — and I’ll see you then.

Ed

 

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