Tuesday, June 22, 2021

Midweek: Gold & Silver Burst onto Scene as Fear Just Crashed the Party

from SilverDoctors:

As vacationers return from summer trips and make the trip for back-to-school clothes and supplies, a huge dose of reality has entered the markets this week, even as everybody was talking about how awesome stock markets are around the world happen to be right now. The Dow is on fire and 22,000 has been firmly taken out. In the US, jobs are coming back and growth is coming back. There is even harmony and unity the around the globe in tightening down the ratchet on North Korea. However, this all changed yesterday, with a 10{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} move in the fear barometer, and there is now another more than 12{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} surge in the VIX as markets look to open today:

With Dow and cryptocurrency euphoria nailing all the karaoke hits, landing all their pong balls, and crushing the keg stands as the life of the party, somebody called the VIX police and things are getting out of hand. Specifically, the market is not taking well to the stern warnings on the topic of war. On Tuesday, President Trump turned up the pressure with a stark warning of “fire and fury”. North Korea was not not backing down from the pressure, however, and came back with a warning of its own: Guam is in sights with a missile strike that could be pre-preemptive as opposed to reactive. With two days of increased tension coming off of, as the UK put it, rare unity, in the newest round of sanctions on North Korea, markets are suddenly realizing that war is a very real possibility.

Gold and silver are now stepping up. Gold prices and silver prices made it through Monday night without getting clobbered, and on Tuesday, everybody in the mainstream financial press was still talking about what a great time it is to be a job seeker in the United States with the abundance of jobs and now an abundance of job openings confirming that growth in the United States is back.

To a lesser extent than last Friday, gold and silver prices sold off Tuesday on more job market data coming from the United States. However, yesterday afternoon, after analysts we’re discounting gold as weak and the dollar strong, everything turned on a dime. On Wednesday morning, fear looks to be increasing again, and regardless of sentiment in gold and silver prices right now, the metals are holding up as markets go to the asset class that does not take uncertainty lightly.

Silver seems to have stopped the fall. A look at silver in light of crude oil, however, shows that silver is poised for a rally regardless. On the daily of WTI below, black gold has formed a bull flag over the last several trading days. In the eyes of technical traders, this is bullish, but check out how the chart looks when we compare crude to silver.

Silver looks like it has some catching up to do to crude oil, and if oil is indeed set up for a bounce, which looks to be the case forming on the daily, silver will have to do the catching up at an even faster pace. So fear trade aside, silver is looking good right now.

Gold is holding up nicely:

In gold prices, the attack on the jobs data sticks out like a sore thumb. Notice, however, the action into the war card. Gold has held on from last night and is currently above $1275 in pre-market action.

A closer look at the commodities in general, this time coming from copper, show that the base metals are also forming bullish chart signals, and if we look at the price of copper of late, we have further reasons to get excited about the precious metals as silver is not just a precious metal but also an industrial commodity, and industry is paying more for metals these days. Copper has been putting in excellent chart action as dips are bought and the 50-day moving average is turning up on the daily:

Looking at the dollar, this may be a sign of things to come. Let’s zoom in real close on the US Dollar/Mexican Peso. Sure, not as fun as the dollar index, the Dollar/Japanese Yen, or Dollar/Euro, but look at what has happened on a technical basis:

Two days ago, the dollar tapped the 50-day moving average against the peso, but closed well below. Yesterday, the dollar didn’t even tap the 50-day. While the dollar has bounced over the last couple of weeks, it seems to have lost the momentum. If this is the case of dollar weakness overall, this bounce in the dollar could very well be coming to an end.

It is of interest to put things into perspective on the dollar and stock market fronts as we pulled up this calendar on Monday in our Outlook. The Fed is back to the speaking circuit today. Today we get real estate data, productivity data and wholesale trade data, and after all of those releases are made, the Fed, if they so choose, can do a little bit of cheer leading just in time for traders coming back from grabbing some burgers at SHAK. If the waters get really rough, they have four more opportunities to convey their messages to the markets before we close out the week, so we will know soon enough how things shape up on the broader markets front:

More than anything, we find reason to be optimistic for gold and silver prices. If gold can manage a close above $1275 and silver above $16.75 today, by the end of the week, we may have a whole new outlook. But let’s not hold our breath waiting for confirmation we have seen the bottom.

USA 10 YR AND 30 YR YIELDS BREAK NORTHBOUND

by Harvey Organ, Harvey Organ Blog:

ATTEMPTED RAID FOILED: GOLD UP $2.00 TO $1778.65//SILVER UP 15 CENTS TO $27.07//GOLD TONNAGE STANDING FOR DELIVERY AT THE COMEX: SLIGHTLY OVER 112 TONNES//11 MILLION OZ OF SILVER STANDING FOR DELIVERY//CORONAVIRUS UPDATE//VACCINE UPDATES//USA 10 YR AND 30 YR YIELDS BREAK NORTHBOUND!//UK SUPREME COURT RULES AGAINST UBER AND THUS THEIR DRIVERS ARE EMPLOYEES: THIS IS DISASTROUS FOR THE COMPANY//IRAN SNUBS BIDEN/BIDEN FINALLY ACCEPTS CALL FROM ISRAEL’S NETANYAHU//GOP DEMAND AN INVESTIGATION INTO CUOMTO NURSING HOME DEATHS//HOUSE RELEASES ITS 1.9 TRILLION DOLLAR STIMULUS BILL//SWAMP STORIES FOR YOU TONIGHT

Keiser Report: Cash and debt pile (E1462)

from RT:

In the second half, Max talks to Professor Steve Keen about the rapidly climbing pile of U.S. debt now over $23 trillion and whether or not it matters.

ALEX BERENSON NOTES FOR THE FIRST TIME: MYOCARDITIS IN TEENS AFTER VACCINE JABS

by Harvey Organ, Harvey Organ Blog:

CPI NUMBERS FROM GOVERNMENT TODAY, A RED HOT 5% PER ANNUM (REAL NUMBERS: CLOSER TO 12%)/CPI SPARKED GOLD AND SILVER A LITTLE: GOLD UP $1.40 TO $1893.50//SILVER ADVANCED TO THUNDEROUS APPLAUSE GAINING ONE CENT//STRONG QUEUE JUMP IN GOLD AS NEW STANDING 70.29 TONNES//SILVER AT 13.025 WITH A SMALL QUEUE JUMP//CORONAVIRUS UPDATES/VACCINE UPDATES/IVERMECTIN UPDATES//A LITTLE LATE BUT THE G7 CALL FOR A FRESH PROBE INTO THE ORIGINS OF THE COVID (A JOKE)//MONGOLIA HAS A BIG OUTBREAK OF COVID WITH THE DELTA STRAIN THE LIKELY SUSPECT//ALEX BERENSON NOTES FOR THE FIRST TIME: MYOCARDITIS IN TEENS AFTER VACCINE JABS//15 MILLION AMERICANS STILL ON THE DOLE//INFLATION WATCH: MICHAEL EVERY AND DR. DANIEL LACALLE/SWAMP STORIES FOR YOU TONIGHT

HUGE AMOUNTS OF REPO MONEY MUST BE SUPPLIED AS IT IS 550% OVERSUBSCRIBED

by Harvey Organ, Harvey Organ Blog:

GOLD DOWN 15 CENTS TO $1484.60//SILVER DOWN 9 CENTS TO $17.48//HUGE QUEUE JUMPING AGAIN AT THE GOLD COMEX//WE NOW HAVE OVER 37 TONNES OF GOLD STANDING AT THE COMEX//RUSSIA AND TURKEY MAKE A DEAL ON SYRIA ALLOWING A SAFE ZONE FOR THE KURDS//IN THE USA HUGE AMOUNTS OF REPO MONEY MUST BE SUPPLIED AS IT IS 550% OVERSUBSCRIBED: WATCH FOR OCT 31/2019 WHEN HUGE GOVERNMENT DEMANDS FOR MONEY COME DUE

A Modest Proposal For Price Discovery In The Silver Market

by Dave Kranzler, Investment Research Dynamics:

We know that price discovery is impossible until the paper exchanges in NYC and London blow up. Or is it?

There’s plenty of above-ground silver around the world. Yes most of it is “spoken for” by the owners of that silver. Silver producers can’t produce enough silver to satisfy demand at the current price. Just ask the SLV sponsor, who quietly implemented provisions in the Prospectus which are harmful to SLV investors because it is unable to source enough silver to back the shares issue from recent demand.

A Bottom or THE Bottom in COMEX Gold?

by Craig Hemke, Sprott Money:

There are many signals we can use in our search for THE bottom in COMEX gold’s seven-month consolidation. Let’s explore a few of those today.

First, let’s note that the current consolidation, though long and grueling, is just a simple basing and flagging phase on the long-term charts. While the past few months have been no fun at all, the long-term picture remains very solid and projects gains to at least $2300 per ounce in the next up leg.

Eight Crooks Against The World – Ted Butler

by Ted Butler, SilverSeek:

I’d like to share what may be a different way of looking at the gold and silver market, but still remain focused on what has been the primary driver of price – changes in the COMEX futures market structure. It has become fairly common knowledge that prices rise when the managed money traders buy and prices fall when these traders sell. So great is the effect on price of this COMEX derivatives positioning that it is discussed in more commentaries than ever before. And that is due to what has become a clearly observable pattern of cause and price effect.

Let me first quantify the amount of gold in existence throughout the world in all forms as 5.6 billion ounces, an amount on which there is near universal agreement. Not all of this gold is thought to be available for sale at some price, such as religious and other artifacts and some jewelry, but much of it could find a way to the market depending on price. Quite arbitrarily, let me assert that 4 billion ounces of gold might find its way to market at some point, including all government holdings and the amount held by the earth’s 7.5 billion inhabitants. Don’t get caught up with the precise amount, as it doesn’t make much of a difference whether the number is 3 billion or 5 billion oz.

Just like in any investment asset, those entities and individuals which hold gold would prefer and would generally be benefited by a rise in the price. Conversely, all the holders of gold would generally be adversely affected by lower prices. This is very basic stuff and in no way is intended to trick anyone; I’m just speaking in very simple terms.  In addition to all the existing physical gold in the world, there is a large gold mining and production industry that extracts 100 million oz of new gold each year; which in turn, is owned by all types of investors, all of which would prefer to see rising gold prices for the obvious reasons.

In summary, the holders of 4 billion oz of gold, as well as those who own the mining companies that extract 100 million gold oz annually, all have a vested interest in higher gold prices and virtually all would be financially damaged by lower prices. This is exactly the same point that could be made in any investment asset, from stocks and bonds to real estate – up in price is good for holders, down in price is not so good. Of course, it’s not simply a matter of good versus not so good, as investment assets and markets can get overpriced or underpriced, depending on collective investment behavior and other factors.

The difference between gold (and silver) and all other markets is that what determines price going up or down has already been established as positioning in COMEX futures. I’m not saying that futures positioning doesn’t exert pricing influence on stocks and bonds, because it does – just nowhere near the extent as in gold or silver. I’m not aware of any influence futures positioning has on real estate, or collectibles, but its influence is rampart among commodities. 

Against all the holders of the existing gold in the world, as well as all the owners of the mining industry that extracts 100 million new ounces annually are configured those who stand to benefit should prices decline and who are worse off should gold prices rise. These are the short sellers, or those who bet on a price decline by selling that which they don’t already own in the hopes of buying later at a lower and more profitable price. Of course, if the short sellers guess wrong and prices rise instead, losses begin to mount as the buyback price rises.

While short selling in gold and silver takes many forms, such as short sales against mining company shares or metal ETFs and the buying and selling of options, the key form of short selling is the shorting of COMEX futures contracts.  No need to reinvent the wheel here – it has already been stipulated by now that COMEX futures positioning is the main (if not sole) gold and silver price driver.  Having established the physical market parameters of gold – 4 billion oz in existence and 100 million new oz produced annually, let me do the same with the COMEX futures positioning opposed to the physical market. In doing so, we happen to be blessed by exquisitely detailed and reliable data from a federal agency, the CFTC, in the form of COT and Bank Participation Reports.

Since COMEX futures contracts are derivatives contracts that means there is both a long and a short for every open contract.  Up front, we know that the long futures contract holders’ interests are aligned with the owners of physical gold and its producers, as all benefit on higher prices and suffer on lower prices. The only entities not aligned with the interest of higher prices are the short sellers of COMEX futures contracts. Here’s where the CFTC’s reports are quite revealing.

The basic glaring fact is that the short positions in COMEX gold and silver futures are incredibly concentrated; meaning they are quite large and held by just a few traders. In both versions of every COT futures only report (legacy and disaggregated), the long form report gives detailed concentration data on the 4 and 8 largest traders’ holdings to the nearest contract. Let me make my point using the 8 largest traders, but I could do so just as easily with the 4 largest traders.

A quick word on the concentration data. As regular readers know, I’ve harped on the concentrated short position is silver for years and even decades. It is the key to manipulation, for without an extremely concentrated position, manipulation is impossible. And while I could never get the CFTC to admit that they monitor and publish concentration data as the best early warning sign of potential price manipulation (out of fear they might appear to agree with anything I wrote), there is no other plausible reason for the Commission to collect and record such data.

But as important as the concentration data is to the silver (and gold) manipulation, it is not just the CFTC that continues to ignore this vital information. Despite the literal explosion in the amount of interest now focused on the COT market structure approach, I can’t recall a single independent reference or article on the concentration data (not quoting me). That’s a shame, because the concentration data always provide insight vital to understanding what makes these markets tick. Not to consider changes in concentration data, particularly in COMEX gold and silver, is a waste of epic proportions.

In trying to understand why there is continued aversion to pondering the concentration data in gold and silver, despite the explosion of COT commentary overall, the only explanation I have been able to come up with is that getting the concentration data requires the additional step of doing a simple calculation involving multiplication in order to get a very precise contract amount. It’s certainly not a case of the calculation being difficult (although I do use a $3 solar-powered calculator that has to be 20 years old), I think it’s more a case of a lack of awareness about how to derive the concentration data. Let’s face it, when someone first observes the COT report, it looks like a mumbo jumbo of incomprehensible numbers; now I’m telling you to whip out your pocket calculator to create more numbers. Be that as it may, that’s the way it is.  

The way the CFTC presents the concentration data, in percentage terms of total open interest, mandates one additional calculation and, quite frankly, I believe this prevents many from considering the data. And while I am not shy about criticizing the agency on a variety of matters, having considered this issue for many years, I’m convinced the CFTC is presenting the data efficiently. I suppose I would prefer the concentration data be presented in contract terms, but personal preferences aside, there is no real barrier to arriving at the data. Only two numbers matter, the net short positions of the four and eight largest traders; disregard gross completely and the concentrated long positions, as they don’t matter.

Read More @ SilverSeek.com

Surging COMEX Silver Deliveries – Craig Hemke (29/05/2018)

by Craig Hemke, Sprott Money:

We’ve written about the COMEX silver “delivery” process multiple times in the past. However, with “deliveries” for the May18 contract surging to totals not seen since 2007, we thought it might be time to write about this again.

First, a disclaimer:

This is NOT meant as some sort of “the COMEX is about to default” hyperbole. Instead, this post is intended simply as a look at the absolute numbers in an attempt to discern any trend worth noting.

And we might start by referring you to the two most recent articles we’ve published on this topic:

If Jamie Dimon Hates It So Much, Why Is JPMorgan Buying Bitcoin In Europe?

from Zero Hedge:

Unless you have been living under a rock for the past week, you will be well aware of JPMorgan CEO Jamie Dimon’s panicked outburst with regard the ‘fraud’ that Bitcoin’s ‘tulip-like’ bubble is. To paraphrase:

“It’s a fraud. It’s making stupid people, such as my daughter, feel like they’re geniuses. It’s going to get somebody killed. I’ll fire anyone who touches it.”

Anecdotally, the post-Dimon collapse in crypto prices seems to confirm his view (though of course this is much more due to China concerns than a vested interest fearmonger), which makes us wonder… why is JPMorgan buying Bitcoin ETFs on European exchanges?

Nasdaq Stockholm has an actively traded Bitcoin ETN…

‘Bitcoin Tracker One – SEK’ is an open-end Exchange Traded Note incorporated in Sweden. The ETN is denominated in SEK and provides investors with access to the returns of the underlying asset, US Dollar per bitcoin, less investor fees.  The average USD exchange rate of bitcoin from the exchanges:- Bitfinex, Bitstamp and GDAX provides the underlying reference price which is converted into SEK.

In the last few days – as the underlying price collapsed – the ETN has remained bid, with heavy inflows, and now trades at around 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} premium to Net Asset Value…

And guess who has been buying?

JPMorgan Securities was the 4th biggest buyer…

 

Which suggest two scenarios… Either

i) JPMorgan is buying for its own account at Dimon-manipulated-lower prices (remember Dimon said any trader who bought Bitcoin would be fored for being “stupid”), or

ii) JPMorgan is buying for clients, seemingly offering no sense of fiduciary care amid Dimon’s warning to the world that the cryptocurrency is a fraud (is JPMorgan Securities knowingly allowing clients to buy securities it believes are a fraud?)

Read More @ ZeroHedge.com

RELATED: Jamie Dimon BUSTED Buying Bitcoin! 

GOLD DOWN 50 CENTS TO $1291.55/SILVER REFUSES TO GO DOWN AS IT RISES BY 5 CENTS TO $16.50 DESPITE THE CONSTANT TORMENT

by Harvey Organ, Harvey Organ Blog:

ITALIAN 10 YR BOND YIELD SPIKES TO 2.39% AS INVESTORS STARTING TO WORRY ABOUT THEIR NEW EURO SKEPTIC GOVERNMENT/DEPT OF JUSTICE TO PROBE THE FBI SPY INTRUSION INTO THE TRUMP CAMPAIGN/ MORE SWAMP STORIES FOR YOU TONIGHT

FIRST FORGIVE ME AS I THOUGHT THAT TODAY WAS THE USA MEMORIAL DAY. I NOW FIND OUT THAT IT IS NEXT WEEK. THE CANADIAN HOLIDAY IS TODAY.

AS SUCH I DID NOT RETRIEVE SOME OF THE EARLY MORNING DATA. HOWEVER I DID RETRIEVE FINAL CLOSINGS/AND COMEX DATA