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The Set-Up in Silver is Even More Wildly Bullish

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June 23, 2015 - 7:10pm

20 June 2015 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM

Well, there really wasn’t a gold ‘market’ worthy of the name on Friday, as gold traded within a five dollar price band everywhere on Planet Earth. The tiny positive bias that the gold price did have that started shortly before 10 a.m. BST in London, got summarily dealt with around 10:40 a.m. It was all over at 11 a.m. EDT, which was the London close. Gold recovered back above the $1,200 spot mark—and went back to sleep shortly afterwards.

There is really no high or low to look up, so I shan’t.

Gold finished the Friday session at $1,200.30 spot, down $1.70 from Thursday’s close. Net volume was very quiet at 78,000 contracts.

200615gold

It was more or less the same price action, or lack thereof, in silver as well—complete with the HFT spoofing down/up price move, but at a slightly different time—and with a totally different character.

The high and lows were reported by the CME Group as $16.19 and $15.87 in the July contract.

Silver closed yesterday at $16.08 spot, down 7.5 cents on the day. Net volume was very quiet at only 21,000 contracts.

200615silver

I thought I’d toss in the New York Spot Silver [Bid] chart so you can see the shenanigans for yourself. A few minutes before the London close the HFT boyz spun their algorithms, but by 12:10—less than 75 minutes later, the price was back above $16 spot to stay. It beats the hell out of me what that was all about. But I know that whatever it was, it had nothing to do with either supply or demand—and was all COMEX paper trading.200615nysilver

Ditto for platinum, which closed at $1,084 spot, up 3 bucks from Thursday’s close. Once again the long knives were out for palladium, as ‘da boyz’ showed up shortly before the London close in that metal as well, except it never recovered after its smack-down. It was closed down another $12 at $706 spot. Here are their respective charts.

200615platinum

200615palladium

The dollar index closed late on Thursday afternoon at 94.01—and proceeded to trade sideways in a very tight range up until noon on Friday in Hong Kong. It began to rally from there, but it had all the appearances of an engineered rally—and after its 94.50 spike high shortly before the COMEX open, the ‘gentle hands’ disappeared. At that point, gravity took over, with the 94.00 low tick coming shortly after 2 p.m. EDT. The tiny rally after that didn’t get far—and the dollar index finished the day at 94.10—up 9 basis points on the day.200615intraday

Here’s the 6-month chart in the ongoing saga of the U.S. dollar index.

200615 6-month USD

The gold shares opened down a percent, but managed to hit positive territory for about one minute around 10:35 a.m. EDT. And starting around 12:15 in New York, the stocks rolled over for good—and by the time the dust settled at the close, the HUI was down 2.21 percent.

On Thursday, gold closed up $16.90—and the HUI finished up 1.17 percent. On Friday, gold closed down $1.70—and the HUI got clocked for 2.21 percent. What’s wrong with this picture?200615HUI

It was the same counterintuitive action in the silver equities, as almost all of Thursday’s gains in the silver equities vanished on a 7.5 cent drop in the silver price yesterday. Nick Laird’s Intraday Silver Sentiment Index closed down 3.33 percent.

200615Silver 7

The CME Daily Delivery Report showed that 30 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. The issuer turned out to be Credit Suisse, a name you don’t see often as either an issuer or stopper. Of the 30 contracts issued, HSBC USA picked up 11 for its in-house [proprietary] trading account—and JPMorgan picked up the other 19 in its client account. The activity isn’t worth linking.

The CME Preliminary Report for the Friday trading session showed that gold open interest in June continues to get whittled away. This time 56 contracts vanished, leaving only 465 left. In silver, o.i. for June remained unchanged at 73 contracts.

There were no reported changes in GLD yesterday—and as of 10:26 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was another sales report from the U.S. Mint yesterday. They sold 6,500 gold eagles—1,500 one-ounce 24K gold buffaloes—and 150,000 silver eagles.

Month-to-date the mint has sold 46,500 troy ounces of gold eagles—12,500 one-ounce 24K gold buffaloes—and 2,600,000 silver eagles. Based on these sales, the silver gold/ratio is now down to 44 to 1.

Gold eagles sales in June so far are more than double what they were in all of May—and sales in silver eagles and buffaloes have already surpassed May’s sales as well, but not to the same extent.

Over at the COMEX-approved depositories on Thursday, there was 105,374 troy ounces of gold received, with almost all of it going into the HSBC USA depository. Only 196 troy ounces were shipped out—and the link to all this activity is here.

In silver, there was 929,899 troy ounces received—and all of that ended up at Brink’s, Inc. Only 84,846 troy ounces were shipped out the door. The link to that action is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 9,014 kilobars—and shipped out 6,874 kilobars. That’s a lot of gold moving around—and all of the activity was at Brink’s, Inc. The link to that action is here.

The Commitment of Traders Report was a very big, but positive, surprise—particularly in silver—and I’ll start with that metal.

In silver, the Commercial net short position declined by a very surprising 7,086 contracts, or 35.4 million troy ounces. The Commercial net short position is now down to 144.3 million troy ounces. And because the short position in the Managed Money category has now blow out to a near record, Ted speculates that there may be one Managed Money trader now in the ‘Big 4′ category—and if not there, certainly in the ‘5 through 8′ category.

Ted says that the Big 4 only covered only 600 contracts during the reporting week—and that number may be have been much higher if the Managed Money short hadn’t crept into the Big 4 category. The ‘5 through 8′ traders covered about 600 contracts as well—and the balance was made up by the raptors, the Commercial traders other than the Big 8, as they went long 5,800 contracts.

Ted says that, based on the current Commercial net short position, JPMorgan’s short position is still around the 12.5 to 13,000 contract mark. But if there is Managed Money component to the short position of the Big 4 traders, it’s entirely possible that JPM’s short position could be in the single digits by now.

In the Manged Money category, these technical funds added a huge 9,128 short contracts. Ted says that the current short position held by these traders is within 1,500 contracts of the record short position they held in late October of 2014. Also in the Managed Money category, the ‘unblinking’ non-technical funds added 1,179 contracts to their already awesome long position, which currently sits at 45,020 contracts. Like I said last week—“Who are these guys?”

In gold, there wasn’t much change, but the change showed a slight improvement in the Commercial net short position by a smallish 1,952 contracts, or 195,200 troy ounces. The Commercial net short position now stands at 7.66 million troy ounces. But that has certainly changed after Thursday’s price action, but by how much won’t be known until next’s Friday’s COT Report.

The Big 4 Commercial traders covered 700 short contracts—and the ‘5 through 8′ traders covered about 600 short contracts. The raptors bought about 700 long contracts to round things out.

In the Managed Money category, these technical funds added 6,043 short contracts, which is another new record—and the ‘unblinking’ non-technical funds in this category added another 3,402 long contracts to their impressive long position, which now stands at 124,527 contracts.

It was a great COT Report—and except for the deterioration in gold on Thursday, we still look locked and loaded—particularly in silver. I’ll be more than interested in what Ted has to say about all this in his weekly missive tomorrow, as his comments are far more in-depth than mine. After studying the COT for about 30 years, he’s the leading world authority on it—a fact that I figured out about ten years ago—and I’m just happy to ride on his coat tails for your benefit, and mine.

Here’s Nick Laird’s now-famous “Days of World Production to Cover COMEX Short Positions” for all physically traded commodities on the COMEX—and silver is still the sore thumb nailed to the right hand side of this chart. It’s a position it’s held almost exclusively for the last fifteen years—and only palladium knocked it out of it’s #1 spot for a few months many, many years ago.

200615Days to Cover

Since the 20th of the month falls on a Saturday, the folks over at The Central Bank of the Russian Federation updated their website with their May data—and it showed that they added 100,000 troy ounces of gold to their reserves during that month. Here’s Nick’s most excellent chart showing that change. The ‘click to enlarge’ feature works wonders on all these charts.

200615Russian Reserves

Nick also provided the updated weekly withdrawals from the Shanghai Gold Exchange for the week ending Friday, June 12—and according to their statistics, they withdrew 46.151 tonnes during that reporting week.

200615SGE

I have a decent number of stories today, including a few I’ve been saving for Saturday’s column, so I hope you find the odd one of interest. The most amazing thing is that there isn’t one single solitary precious metal story on any website that’s fit to post here. It’s been feast or famine for gold/silver related stories lately—and today I struck out.


CRITICAL READS

As U.S. Soars, Chinese Stocks Crash 13% – Worst Week Since Lehman

As the carnage began last night in China we noted the extreme levels of volatility the major indices had experienced in recent weeks. By the close, things were ugly with the broad Shanghai Composite down a stunning 13.3% on the week – the most since Lehman in 2008 (with Shenzhen slightly better at down 12.8% and CHINEXT down a record-breaking 14.99%).

Over 1,000 Chinese stocks were limit-down Thursday night!

The current crop of farmer/housewife-turned-trader has never experienced anything like this and so Monday’s (Sunday night) open will be fascinating especially if Greek events are roiling.

This short 2-chart Zero Hedge commentary put in an appearance on their website at 10:21 a.m. Friday morning EDT—and it’s worth a quick look. I thank Dan Lazicki for today’s first story.


Sales Of “Esoteric” Junk ABS Highest Since 2008

Coming soon to markets: a bond deal backed by … dirty laundry?

The $400 million of asset-backed securities (ABS) from Alliance Laundry Systems is the latest example of wacky assets being bundled into bonds that are then put up for sale to yield-hungry investors. According to a ratings report from Standard & Poor’s, the bond’s payments ultimately depend on people’s dirty laundry, or at least on their washing it. The deal is backed by a pool of equipment loans used to finance the purchase of washing machines.

The laundry deal is the most recent “esoteric ABS” being sold to the market. Such bonds might include such things as time-share loans and cash flows from shipping containers leases, but can also stretch to more unusual things such as music royalties and restaurant franchises. Other assets that have been sliced and diced into structured securities include the rights to the Peanuts cartoon strip in 2012 and, back in 2007, some race horse stud rights.

Such deals have proved popular with investors in recent years thanks to the higher yields available from buying the securities. The computer giant Dell in April sold a $1 billion deal tied to leases on heavy technology equipment, which paid a coupon as big as 2.84 percent over just 2.7 years — far more than the 1.12 percent yield on offer from buying a three-year U.S. Treasury, for example.

In fact, sales of esoteric ABS are now higher than at any point since 2008, according to J.P. Morgan analysts Amy Sze, Kaustub Samant, and Christy Wong.

This very interesting Bloomberg article put in an appearance on David Stockman’s website yesterday sometime—and I thank Roy Stephens for finding it for us.


For Caterpillar, the Second Great Depression Has Never Been Worse

When one strips away all the “double seasonal adjustments”, all the non-GAAP masking tape, all the pro-forma add-backs, all the constant brainwashing propaganda where if one excludes all the bad things are great, and certainly the $22 trillion in central bank liquidity injections to keep crony capitalism as we know it alive in what is now a 7-year-old attempt to restore the post-crash confidence (which is failing thanks to the $57 trillion in debt added since then) what is one left with?

Well, the monthly retail sales of Caterpillar is a good place to start. Because far from confirming a “recovery” or ever stagnation, one look at the ongoing destruction in end demand for products of this industrial and heavy-machinery bellwether confirms nothing short of the second great depression.

And while in the past few months there had been some hope that the US was indeed decoupling from the rest of the world following a 5% Y/Y increase in retail sales in April, the tumble in May to just 1% for North America indicates that contrary to hopes that the US may pull the rest of the world up from its epic slump, it is the rest of the world (where China just posted a 17% drop in demand, while Latin America cratered by -50%) that is succeeding in dragging the U.S. down into an upcoming global recession.

This short, but must read Zero Hedge article appeared on their website at 1:18 p.m. EDT on Friday afternoon—and it’s courtesy of Dan Lazicki.


Treasury Reveals What JPMorgan Was Really Doing With London Whale Trades

The U.S. Treasury’s Office of Financial Research (OFR), the body created under the Dodd-Frank financial reform legislation to make sure another 2008 epic crash never happened again, quietly released a report last week which not only suggests another 2008-style crash is possible but that regulators will likely be blindsided again.

The report, written by Jill Cetina, John McDonough, and Sriram Rajan, reveals that the big Wall Street banks are ginning up their capital measures by engaging in opaque and potentially dangerous “capital relief trades.”

To illustrate how dangerous this kind of capital relief arbitrage can be, the report says that JPMorgan’s London Whale trades (which blew a $6.2 billion hole in the insured bank) was a capital relief trade.

This short, but worthwhile article was posted on the wallstreetonparade.com Internet site on Monday—and it’s a little something I found in Friday’s edition of the King Report.


Deflation and Disruption: Jim Rickards

Most economists agree that long-run potential growth in a developed economy such as the United States is about 3%. They also agree that price stability is a desirable goal and that neither inflation nor deflation should play much of a role in spending and investment. Monetarists, staring with Irving Fisher in the 1920s and continuing through Milton Friedman in the 1970s, believed that velocity was constant.

Using these inputs of 3% real growth, price stability and constant velocity, monetarists concluded that a slow, steady increase in the money supply — just enough to accommodate real growth — would produce maximum real growth with no inflation or deflation. This is central bank nirvana.

Of course, reality is messier than the theory implies, and there are leads and lags in the response to monetary policy. Real growth could be higher or lower than 3% for certain periods. But the basic idea that steady monetary growth could produce steady economic growth was taken as gospel by Friedman and his followers.

There was only one problem with this neat, tidy monetarist theory. Like a lot of economic theories, it worked better in the faculty lounge than in the real world. In particular, one of the core assumptions — that velocity is constant — turns out to be false.

This longish commentary by Jim appeared on the dailyreckoning.com Internet site yesterday sometime—and it’s another Dan Lazicki offering.


Are We on the Verge of a Nuclear Breakdown?

For two and a half years, Air Force Capt. Blake Sellers donned a green U.S. Air Force flight suit, and motored across barren Wyoming grassland in sun, rain, sleet or blizzard, for 24-hour shifts, 60 feet below ground, in a fluorescent-lit buried capsule. Sellers was one of the roughly 600 officers, known as missileers, who are responsible for launching America’s 450 nuclear-tipped intercontinental ballistic missiles. Each ICBM in the arsenal is capable of rocketing to the other side of the planet in 30 minutes or less and incinerating 65 square miles. Missileers are the human beings who have agreed to render whole cities — like Moscow, Tehran or Pyongyang, but really anywhere there is civilization— into, in the jargon of the base, smokin’ holes. Air Force Academy graduates like Sellers tend to dream of flying jets. In a corps full of eagles, he and his compatriots are the moles.

The route down America’s underground WMD silos begins with five months of training at Vandenberg Air Force Base in California. There, the first requirement is signing a document committing to end the world if so ordered by the president. But what if, somewhere along the way, a missileer has a change of heart and decides he or she is not OK incinerating millions of civilians? “They say, ‘Well that’s OK, but we are going to separate you from the Air Force and you will pay back everything we paid for your education,'” Sellers recalls. “In the Air Force Academy, that’s $300,000. So you will be unemployed and owe $300,000.”

During training at Vandenberg, pairs of missileers enter a simulated launch capsule, with swivel chairs facing a console — four black-and-green screens, and two keyboards — that resembles Matthew Broderick’s workstation in the 1983 movie, War Games. The pairs open a small metal box with two coded padlocks, and the senior member of the crew removes The Key. A grid on one of the screens displays the status of 50 nuclear missiles, 10 of which are under his or her control. The senior commander and the deputy read and repeat a series of steps and codes from various manuals. When the word “critical” flashes in small red letters on a screen, the senior missileer inserts The Key.

Together they turn three switches at once. A missile grid on the screen blinks and in each box the green letters “EN” for “enabled,” changes to “LIP,” for “Launch in Progress.” Minutes later, the weapons enter the upper atmosphere. There is no turning back.

This morbidly fascinating—and extremely disturbing essay showed up on the rollingstone.com website on Thursday—and obviously had to wait for today’s column. It’s definitely worth reading if you have the interest—and it’s courtesy of Roy Stephens, for which I thank him.


Tree planting sure isn’t what it once was

Tree planting is a job so demanding that when the BBC sent three young Brits to B.C. to give it a try, two didn’t even make it through the first week.

“It really is the hardest job in the world,” said Dirk Brinkman, whose company, the Brinkman Group, hosted the three woefully unprepared twenty-somethings at a camp in Prince George.

When that episode of World’s Toughest Jobs aired in March, it showed the pasty trio grumbling about the tough physical work and the lack of creature comforts.

Even lifelong tree planters will tell you the job requires Olympian levels of exertion and can be cruel in its monotony. Although the work doesn’t involve much heavy lifting, planters must carry huge bags filled with seedlings and repeatedly dig holes with one hand and plant with the other, aiming to put a tree in the ground in every few seconds. Most live in tents for the entire season and eat their meals in mess halls.

This very interesting article put in an appearance on the vancouversun.com Internet site last Sunday—and for obvious content reasons, had to wait for today’s column. I thank reader Sean McLaren for sharing it with us.


Europe Has Never Been Riskier

Europe’s VIX has never been higher relative to the U.S.’ VIX… ever.

Europe’s VIX is now trading 2.2 times that of US’ VIX…

How much longer can U.S. equity volatility ignore the rest of the world?

This 2-chart Zero Hedge essay is worth thirty seconds of your time—and it showed up on their website at 12:34 p.m. yesterday afternoon EDT. It’s another contribution from Dan Lazicki.


Failed Mistral Deal Causes Fight Among French Government Agencies

French government agencies are fighting over the future of the Mistral deal, French political analyst Xavier Moreau told Radio Sputnik.

Commenting on the failed Mistral deal, Moreau said that there is a disagreement on the state level between the Defense Ministry and the Ministry of Foreign Affairs.

The Ministry of Foreign Affairs deceived the government in Paris by telling that first of all it would be easy to “buy Russians for a song,” second, France would easily find other buyers for its Mistrals and third, that the deal would be quickly resolved, Moreau said.

This news item showed up on the sputniknews.com Internet site at 4:25 p.m. Moscow time on their Friday afternoon, which was 7:25 a.m. EDT in Washington. It’s courtesy of Roy Stephens.


The Grecian Kabuki Theatre: 9 Stories

1. Troika Exploits Greek Bank Run as Varoufakis Slams “Pernicious” Banking Sector “Leaks”: Zero Hedge 2. ECB boosts emergency funding as Greek banks bleed, Tsipras calm: Reuters 3. European Central Bank agrees emergency funding for Greece: The Guardian 4. ECB Gives Greek Banks Barely Enough Cash to Cover One Day’s Bank Run: Zero Hedge 5. ‘This road of austerity is spiral of death’ – Greek minister: Russia Today 6. Greece’s Ruling Party Goes to War With Its Own Central Bank: Bloomberg 7. Europe in Denial as Tsipras Cuts Deals With Moscow: Russia Insider 8. Why Greek Government Bonds Are Not Crashing (Spoiler Alert: There’s NO Trading): Zero Hedge 9. “Bank Holiday” Preparations Begin In Greece, Lines Form At Athens ATMs: Zero Hedge

The above stories are courtesy of Dan Lazicki, Roy Stephens, reader M.A.—and reader ‘David in California


Russia, Greece sign €2bn deal on Turkish Stream gas pipeline

Russia and Greece have signed a deal to create a joint enterprise for construction of the Turkish Stream pipeline across Greek territory, Russian Energy Minister Aleksandr Novak said. The pipeline will have a capacity of 47 billion cubic meters a year.

The construction costs are about €2 billion and the parties will sign a road map Friday, Novak told RIA at the St. Petersburg Economic Forum.

The Greek extension of the Turkish Stream project is called the South European pipeline in the memorandum signed on Friday, Novak said, adding that the construction will start in 2016 and be completed by 2019.

The two countries will have equal shares in the company, Novak said.Construction of the pipeline in Greece will be financed by Russia, and Athens will return the money afterward.

This news item appeared on the Russia Today website at 7:44 a.m. Moscow time on their Friday morning, which was 12:44 a.m. in New York. I thank Roy Stephens for sending it our way.


Moscow will respond in kind to seizure of its assets abroad – FM Lavrov

Moscow will take reciprocal action in response to the seizure of its foreign assets, Foreign Minister Sergey Lavrov has warned.

“Our response would be in kind. This is inevitable. This is the only way of acting in international affairs,” he told RBK-TV in an interview.

Lavrov was commenting on the seizure in Belgium and France of Russian state-owned assets. The arrest were made on request of beneficiaries of the now-defunct oil giant Yukos, who were awarded damages from Russia by an arbitration court in The Hague. Russia is in the process of challenging the ruling.

The minister added that his priority in this situation now is to unfreeze the accounts of the Russian Embassy in Belgium. This is another story from the Russia Today website. It appeared on their Internet site at 9:50 a.m. Moscow time—and I thank Roy Stephens once again.

The Ukraine Imbroglio: John Batchelor Interviews Stephen F. Cohen

The sabres are rattling most loudly on both sides of NATO for a change. Putin, within the past 24 hours of the broadcast, stated that he was prepared to position 40 nuclear armed missiles near the Russia borders of the Baltic states in response to NATO’s increasingly belligerent actions towards Russia. Cohen acknowledges that the Washington/Brussels/NATO “war party” has been on the march since the end of May. All of these events – and they are numerous and are described in detail – according to Cohen are the war parties attempts to destroy the Minsk2 Agreement with the goal of military confrontation with Russia. This is a truly disturbing change, and things “just got worse”.

Cohen levies additional attention on Ambassador to the U.N. Samantha Power’s visit to Ukraine on June 11th – essentially cementing for the Kiev regime a support for Kiev in its war aims, and even for Crimea to be returned as a condition for the Minsk2 Agreement to be realized. All this is background to V.P. Biden repudiating Kerry and his position at the Sochi meeting. In other words Minsk2 is probably dead. (Meanwhile we wait for a response from Merkel.)

There is much more in this podcast to worry over…the discussion about the recent Pew Report is also succinct. This 39:48 minute interview appeared on the johnbatchelorshow.com Internet site on Tuesday—and is always worth listening to if you really want to know what’s going on in the Ukraine without the spin from any side. This particular edition is a must listen in my opinion. I thank Larry Galearis for bringing it to our attention.


A Net Assessment of East Asia: George Friedman

When I began this series a month ago, I pointed out that the most significant feature of the global system currently is the ongoing destabilization of the Eurasian land mass, from the Atlantic to the Pacific, from the Arctic to the Arabian Sea. One important aspect of this is that the destabilization isn’t, at this point, a single systemic crisis, but a series of relatively self-contained disorders. Thus the European, Russian and Middle Eastern systems have different dynamics, and while they touch on each other, they have not yet reached the point of having merged into a single crisis.

It is in this context that I turn to the question of East Asia. Asia is so vast and diverse and geographically fragmented that it is impossible to speak of Asia as a whole. East Asia is that part of Asia east of the Central Asian deserts that extend deep into China, and north of the Himalayas and hilly jungles east of the Himalayas. It consists of two main parts: One is the mainland, the region between the southern barriers and Siberia, which is Han China and its subordinate states, Tibet, Xinjiang, Inner Mongolia and Manchuria. The other is the East Asian archipelago, a string of islands and peninsulas stretching from the Aleutians to the Malay Peninsula-Java interface. Of particular importance to an East Asian net assessment are Taiwan, the Philippines and Japan. One additional feature is noteworthy: the Korean Peninsula, wedged between China and the archipelago. In the simplest terms, at this moment, the critical question is the dynamic in the northeast, involving China, Japan, the Koreas and, of course, the global power, the United States.

East Asia shares one major feature with the rest of Eurasia. It was part of World War II, which both transformed the region and defined it. In East Asia, World War II involved two issues: The first was Japan’s ability to access raw materials and manpower from the Asian mainland and the rest of the archipelago. The second was the military balance between the two major Pacific powers, Japan and the United States. The two issues became intertwined.

This commentary has appeared on various websites this week—and it’s definitely worth reading if you have a keen interest in the New Great Game. It’s also directly related to the audio interview with Stephen F. Cohen about Ukraine posted above this story. This particular version was posted on the financialsense.com Internet site on Tuesday—and I thank reader M.A. for finding it.


The PHOTOS and the FUNNIES

200615Blue Jay200615Piggy200615Donald Trump200615Donald Trump (2)200615Ramirez 1200615Gender Transition200615Bruce Jenner's Cat

The WRAP

When I spoke of the coming silver price melt up in the past, JPMorgan was hardly on the silver scene. But starting with the rescue of Bear Stearns in early 2008, JPMorgan had become the new big Kahuna in silver, holding net short positions on the COMEX that exceeded 200 million ounces on a number of occasions.

Then, in 2011, the bank switched strategies and in addition to remaining the big COMEX short seller (and milking untold hundreds of millions and even billions of dollars of profits from the technical funds), began to accumulate the largest privately owned physical silver position in history, an amount I place at upwards of 350 million oz. Over the past few months, JPMorgan has taken a significant amount (12 million oz) in COMEX silver futures deliveries in its own name and moved all that silver into its own warehouse. As I’ve remarked previously, this highly transparent acquisition of silver suggests JPM’s accumulation may be near completion.

Very recently (meaning over the past 2 or 3 weeks), I believe the bank has made aggressive moves to close out its giant short positions in both SLV (based upon the large and highly counterintuitive metal deposits of 11 million oz into the trust) and on the COMEX. When anyone appears to be finishing an epic accumulation of an asset, combined with an aggressive short covering in that same asset, it is not unreasonable to think upside fireworks may be close at hand.Silver analyst Ted Butler: 17 June 2015


I don’t normally post ‘blasts from the past’ that readers send me, as I know what I like. But once in a while something does pop into my in-box that I jump on right away—and Dan Lazicki punched my ticket with this 1972 Uriah Heep hard rock tune which I’d forgotten all about. The link is here. Enjoy!

Here’s another violin concerto. I was listening to this on the way to the bullion store on Thursday—and thought it was Max Bruch. I was somewhat embarrassed to find out at the end that it was Robert Schumann’s violin concerto in D minor. He composed it in less than a month—between 11 September and 03 October 1853. Frank Peter Zimmermann is the soloist, the Cologne Symphony accompanies—and Jukka Pekka Saraste conducts. The link is here.


There’s nothing to talk about regarding yesterday’s price action in gold and silver, although I’d liked to have been a fly on the wall when the HFT boyz were doing their thing in gold and silver between 10:50 a.m. and 12:15 p.m. in New York yesterday. And I’m also curious to know why they’re hammering the crap out of palladium, which is at another low for this move down.

Here are the 6-month charts for all four precious metals, plus copper, once again.

200615 6-month gold200615 6-month silver200615 6-month platinum200615 6-month palladium200615 6-month copper

I was very happy to see the silver numbers in yesterday’s COT Report—and if one of the big technical fund shorts in the Managed Money category is now ensconced in the ‘Big 4′ category, that really does put the fox amongst the pigeons if JPMorgan et al decide to put their hands in their pockets.

We know what happened in May when the COT Report was this bullish, the subsequent rally was over almost as soon as it began, as JPMorgan et al killed it stone-cold dead in five business days. Does that fate await the rallies off these lows?

Perhaps—but I just can’t shake the feeling that after loading their boat with hundreds of millions of ounces of physical silver, paying down their massive short position in SLV—and then topping it off by possibly reducing their COMEX short position to single digits by [possibly] hiding behind the skirts of a technical trader in the Managed Money category—that they’d throw this carefully-crafted scenario out the window one more time.

This is the dream set-up that Ted Butler has been rhapsodizing on for years—and which he speaks of once again in the quote above—and at length in his mid-week column on Wedneday. Ted’s been focused on the COMEX short position in silver—and in gold to a lesser extent—for nearly three decades.

This will be the sixteenth year that I’ve been at it in my involvement with GATA—and I just want it to end.

Without doubt, I would presume that you feel that way as well.

I’m done for the day—and the week.

See you on Tuesday.

Ed

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