http://www.caseyresearch.com/gsd/edition/silver-steals-spotlight-gold-watch-out-silvers-volatility
Silver Steals the Spotlight from Gold: But Watch Out for Silver's Volatility
Sep
8
"All we can hope for is that we've covered all the bases in our own personal efforts to protect ourselves from what lies ahead."
¤ YESTERDAY IN GOLD AND SILVER
Gold got sold off about ten bucks during the morning trading session in the Far East. But the bottom was in by 1:00 p.m. Hong Kong time...and the gold price crawled higher from there until the jobs numbers were released at 8:30 a.m. in New York. The rest, as they say, is history.
Gold blasted thirty dollars higher in about fifteen minutes...and this had all the hallmarks of a short-covering rally. Once that was done, the gold price worked its way higher from there until it ran out of gas...or into a not-for-profit seller...about ten minutes before London closed for the weekend. From there it more or less traded sideways into the 5:15 p.m. Eastern close.
Gold finished the Friday trading session at $1,735.50 spot up $34.20 spot. Volume was an absolutely gargantuan 230,000 contracts.
The 'big 4' shorts in the Commercial category are short 210.9 million ounces of silver...and the '5 through 8' big shorts add another 40.6 million ounces. In total, the 'Big 8' are short 251.5 million ounces of silver.
On a net basis, the 'big 4' are short 43.0% of the entire Comex futures market...and the '5 through 8' add another 8.3 percentage points to that total. Adding it up, eight traders are short 51.3% of the entire Comex futures market in silver.
Ted said that JPMorgan's short position is now 26,000 contracts [130 million ounces] at a minimum...and that represents 26.3% of the entire Comex futures market in silver. Ted was incensed...and you should be as well, dear reader. One trader holding such a position is outrageous beyond belief. The CFTC and CME should be doing the perp walk for this...along with Jamie Dimon at JPMorgan.
In gold, the Commercial net short position increased another chunky 15,762 contracts, or 1.56 million ounces. Ted Butler said that all of the increase was the 'Big 4' traders going short against all comers. The Commercial net short position now sits at 21.94 million ounces.
The 'big 4' traders are short 11.51 million ounces of gold...and the '5 through 8' traders are short an additional 5.29 million ounces. The 'big 8' are short 16.8 million ounces of gold, or 76.6% of the Commercial net short position.
On a net basis, once you subtract the market-neutral spread trades out of the Non-Commercial category, the 'big 4' are short 27.7% of the entire Comex futures market in gold...and the '5 through 8' are short an additional 12.7 percentage points. Straight addition shows that the 'Big 8' are short 40.4% of the entire Comex futures market in gold.
The BPR states that these four U.S. banks are now net short 28,760 Comex silver contracts...29.3% of the entire Comex futures market. Don't forget that Ted figures that JPMorgan is short 26,000 Comex silver contracts on its own, so that doesn't leave too many short positions left to be divided up between the other three U.S. banks in this category, now does it?
Reader E.W.F...who sends me a complete set of COT charts based on the Disaggregated Commitment of Traders Report made the following comment..."The U.S. bank net short position in silver hasn't been this large since 11/2/2010, the day before QE2 was announced."
The 13 non-U.S. banks that hold Comex futures positions in the silver market were netlong 828 Comex futures contracts in silver in the August report, but in the September report, they now are net short 2,801 contracts...a swing of 3,629 contracts in one month, but only 215 Comex contracts per bank on average, which is a rounding error in the grand scheme of things...especially when JPM is short 26,000 Comex silver contracts on its own.
So, in one month, the world's banks have increased their short position in the Comex silver futures market by 11,924 contracts...or 59.6 million ounces of silver. But it's still a "Made in the U.S.A. by JPMorgan" silver price management scheme from top to bottom.
In gold the situation is just about as egregious. The 4 U.S. banks that hold Comex futures contracts are now net short 84,583 contracts, or 8.46 million ounces...an increase of 26,894 contracts [2.69 million ounces] from the August Bank Participation Report.
Gold blasted thirty dollars higher in about fifteen minutes...and this had all the hallmarks of a short-covering rally. Once that was done, the gold price worked its way higher from there until it ran out of gas...or into a not-for-profit seller...about ten minutes before London closed for the weekend. From there it more or less traded sideways into the 5:15 p.m. Eastern close.
Gold finished the Friday trading session at $1,735.50 spot up $34.20 spot. Volume was an absolutely gargantuan 230,000 contracts.
The silver chart looks the same as the gold chart, so I'll spare you the play-by-play on that. Silver's low tick [under $32.00 spot] came during the Hong Kong lunch hour...and the high tick [$33.80 spot] came shortly before the Comex close in New York.
Silver closed up 98 cents at $33.69 spot...but had an intraday move of 5.5%. Volume was way up there at 57,000 contracts.
The dollar index opened at 81.12...and began to slide lower starting at the open of London trading. The real decline began at 8:30 a.m. in New York...and by 10:40 a.m. most of the decline was in...and the dollar more or less traded sideways into the close. The dollar index finished the Friday trading session at 80.17...down 96 basis points, or 1.23%.
Silver closed up 98 cents at $33.69 spot...but had an intraday move of 5.5%. Volume was way up there at 57,000 contracts.
Gold and silver prices were almost the inverse of the move in the dollar index...but to say that there was an exact relationship between the two is a bit of a stretch.
* * *
The CME's Daily Delivery Report showed that 23 gold and 3 silver contracts were posted for delivery on Tuesday. Nothing to see here.
For the second day in a row, there were no reported changes in either GLD or SLV. One can only imagine just how much metal is owed to both these ETFs...especially SLV. I'm sure that the authorized participants were forced to short the shares again both Thursday and yesterday.
In an e-mail from Nick Laird in the wee hours of this morning, he informed me that Sprottdid an offering on their Physical Gold Trust...and added 172,270 troy ounces of gold to it yesterday...along with another 89,848 troy ounces of silver to PSLV. I have more on Sprott's gold offering in the 'Critical Reads' section further down.
The U.S. Mint had a sales report yesterday. They sold 4,000 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 304,000 silver eagles. For the first four business days of September, the mint has sold 10,500 ounces of gold eagles...1,500 one-ounce 24K gold buffaloes...and 679,000 silver eagles. The silver/gold ratio based on these sales is just a bit under 57 to 1.
It was a rather quiet day over at the Comex-approved depositories on Thursday. They reported receiving 600,848 troy ounces of silver...and shipped a smallish 30,599 ounces of the stuff out the door. The link to that activity is here.
Here's a rather interesting chart that Nick Laird sent me early this morning...and the chart title says it all. The 'click to enlarge' feature comes in handy here.
For the second day in a row, there were no reported changes in either GLD or SLV. One can only imagine just how much metal is owed to both these ETFs...especially SLV. I'm sure that the authorized participants were forced to short the shares again both Thursday and yesterday.
In an e-mail from Nick Laird in the wee hours of this morning, he informed me that Sprottdid an offering on their Physical Gold Trust...and added 172,270 troy ounces of gold to it yesterday...along with another 89,848 troy ounces of silver to PSLV. I have more on Sprott's gold offering in the 'Critical Reads' section further down.
The U.S. Mint had a sales report yesterday. They sold 4,000 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 304,000 silver eagles. For the first four business days of September, the mint has sold 10,500 ounces of gold eagles...1,500 one-ounce 24K gold buffaloes...and 679,000 silver eagles. The silver/gold ratio based on these sales is just a bit under 57 to 1.
It was a rather quiet day over at the Comex-approved depositories on Thursday. They reported receiving 600,848 troy ounces of silver...and shipped a smallish 30,599 ounces of the stuff out the door. The link to that activity is here.
Here's a rather interesting chart that Nick Laird sent me early this morning...and the chart title says it all. The 'click to enlarge' feature comes in handy here.
(Click on image to enlarge)
For the second week in a row, the Commitment of Traders Report was not happy reading. The Commercial net short position increased by another 6,346 contracts, or 31.7 million ounces. Ted Butler said that JPMorgan went short an additional 4,000 contracts...and the raptors sold another 1,000 long positions...and the rest of the increase was spread related. The Commercial net short position now stands at 224.6 million ounces.The 'big 4' shorts in the Commercial category are short 210.9 million ounces of silver...and the '5 through 8' big shorts add another 40.6 million ounces. In total, the 'Big 8' are short 251.5 million ounces of silver.
On a net basis, the 'big 4' are short 43.0% of the entire Comex futures market...and the '5 through 8' add another 8.3 percentage points to that total. Adding it up, eight traders are short 51.3% of the entire Comex futures market in silver.
Ted said that JPMorgan's short position is now 26,000 contracts [130 million ounces] at a minimum...and that represents 26.3% of the entire Comex futures market in silver. Ted was incensed...and you should be as well, dear reader. One trader holding such a position is outrageous beyond belief. The CFTC and CME should be doing the perp walk for this...along with Jamie Dimon at JPMorgan.
In gold, the Commercial net short position increased another chunky 15,762 contracts, or 1.56 million ounces. Ted Butler said that all of the increase was the 'Big 4' traders going short against all comers. The Commercial net short position now sits at 21.94 million ounces.
The 'big 4' traders are short 11.51 million ounces of gold...and the '5 through 8' traders are short an additional 5.29 million ounces. The 'big 8' are short 16.8 million ounces of gold, or 76.6% of the Commercial net short position.
On a net basis, once you subtract the market-neutral spread trades out of the Non-Commercial category, the 'big 4' are short 27.7% of the entire Comex futures market in gold...and the '5 through 8' are short an additional 12.7 percentage points. Straight addition shows that the 'Big 8' are short 40.4% of the entire Comex futures market in gold.
Without doubt, the situation has deteriorated significantly once you consider the price action during the Friday trading session in both silver and gold.
Here's Nick Laird's "Days of World Production to Cover Short Contracts". Over two thirds of the red bar in silver is JPMorgan's short position. At 26,000 Comex futures contracts...130 million ounces...that's about 65 days of world silver production. The tiny difference between the red and green bar in silver, is the short position of the '5 through 8' largest traders. It's easy to see that the bulk of the short position in silver is held by only four traders...and almost all of that is held by JPMorgan.
Here's Nick Laird's "Days of World Production to Cover Short Contracts". Over two thirds of the red bar in silver is JPMorgan's short position. At 26,000 Comex futures contracts...130 million ounces...that's about 65 days of world silver production. The tiny difference between the red and green bar in silver, is the short position of the '5 through 8' largest traders. It's easy to see that the bulk of the short position in silver is held by only four traders...and almost all of that is held by JPMorgan.
(Click on image to enlarge)
It should come as no surprise, that the September Bank Participation Report, which is derived from the same data set as yesterday's Commitment of Traders Report, was pretty ugly as well. During the prior month, the 4 U.S. banks that hold Comex futures contracts in the silver market, increased their short position by 8,295 Comex futures contracts...and I'm guessing that most of that amount would have been JPMorgan.The BPR states that these four U.S. banks are now net short 28,760 Comex silver contracts...29.3% of the entire Comex futures market. Don't forget that Ted figures that JPMorgan is short 26,000 Comex silver contracts on its own, so that doesn't leave too many short positions left to be divided up between the other three U.S. banks in this category, now does it?
Reader E.W.F...who sends me a complete set of COT charts based on the Disaggregated Commitment of Traders Report made the following comment..."The U.S. bank net short position in silver hasn't been this large since 11/2/2010, the day before QE2 was announced."
The 13 non-U.S. banks that hold Comex futures positions in the silver market were netlong 828 Comex futures contracts in silver in the August report, but in the September report, they now are net short 2,801 contracts...a swing of 3,629 contracts in one month, but only 215 Comex contracts per bank on average, which is a rounding error in the grand scheme of things...especially when JPM is short 26,000 Comex silver contracts on its own.
So, in one month, the world's banks have increased their short position in the Comex silver futures market by 11,924 contracts...or 59.6 million ounces of silver. But it's still a "Made in the U.S.A. by JPMorgan" silver price management scheme from top to bottom.
In gold the situation is just about as egregious. The 4 U.S. banks that hold Comex futures contracts are now net short 84,583 contracts, or 8.46 million ounces...an increase of 26,894 contracts [2.69 million ounces] from the August Bank Participation Report.
The 20 non-U.S. banks are short 53,434 Comex contracts in gold...5.34 million ounces, an increase of 12,861 contracts [1.29 million ounces] since the August BPR.
On a net basis, the 4 U.S. banks are short 20.3% of the entire Comex futures market...and the 20 non-U.S. banks are short 12.8%...making the grand total 33.1% of the entire Comex futures market in gold.
The short positions in gold are much more spread out between all the world's banks...but in silver, it's all U.S.A...and virtually all JPMorgan.
On a net basis, the 4 U.S. banks are short 20.3% of the entire Comex futures market...and the 20 non-U.S. banks are short 12.8%...making the grand total 33.1% of the entire Comex futures market in gold.
The short positions in gold are much more spread out between all the world's banks...but in silver, it's all U.S.A...and virtually all JPMorgan.
* * *
many great articles highlighted - just a few noted below....
Investors yank $3.7 billion out of stocks
The move out of the U.S. stock market continued through the final week of summer, as investors remained stuck in a rut and refrained from making any big moves ahead of Federal Reserve chairman Ben Bernanke's big speech in Jackson Hole.
In fact, investors pulled another $3.7 billion from U.S. stock market mutual funds during the week ended Aug. 31, according to the Investment Company Institute, bringing the 2012 outflow total to more than $76 billion. By comparison, those funds lost in the neighborhood of $70 billion during the first eight months of 2011, and just $52 billion during the first eight months of 2010.
This story was posted over at the money.cnn.com Internet site on Thursday...and I borrowed it from yesterday's edition of the King Report. The link is here.
In fact, investors pulled another $3.7 billion from U.S. stock market mutual funds during the week ended Aug. 31, according to the Investment Company Institute, bringing the 2012 outflow total to more than $76 billion. By comparison, those funds lost in the neighborhood of $70 billion during the first eight months of 2011, and just $52 billion during the first eight months of 2010.
This story was posted over at the money.cnn.com Internet site on Thursday...and I borrowed it from yesterday's edition of the King Report. The link is here.
The World from Berlin: 'The ECB Is Doing Governments' Dirty Work'
The ECB's announcement on Thursday that it is prepared to make unlimited bond purchases in order to lower borrowing costs for countries in crisis could mark a turning point in the euro crisis. German commentators, however, criticize the bank for becoming a hostage to politics.
But the criticism of the ECB's course continued in Germany. Bundesbank President Weidmann reiterated his opposition to the move, saying it was too close to "state financing via the money presses." Alexander Dobrindt, general secretary of Bavaria's conservative Christian Social Union, said that the ECB must be "a stability bank and not an inflation bank".
Jörg Asmussen, a German member of the ECB's Executive Board, defended the decision, however. "We have no inflationary pressure," he said. "Everyone has to do their part to make the euro irreversible."
On Friday, German commentators expressed their considerable doubts about the plan.
This story showed up on the German website spiegel.de yesterday...and I thank Ulrike Marx for her second offering in a row. The link is here.
But the criticism of the ECB's course continued in Germany. Bundesbank President Weidmann reiterated his opposition to the move, saying it was too close to "state financing via the money presses." Alexander Dobrindt, general secretary of Bavaria's conservative Christian Social Union, said that the ECB must be "a stability bank and not an inflation bank".
Jörg Asmussen, a German member of the ECB's Executive Board, defended the decision, however. "We have no inflationary pressure," he said. "Everyone has to do their part to make the euro irreversible."
On Friday, German commentators expressed their considerable doubts about the plan.
This story showed up on the German website spiegel.de yesterday...and I thank Ulrike Marx for her second offering in a row. The link is here.
Record Corn Imports by China to Drive Rally, Rabobank Says
The biggest-ever imports of corn by China, the world’s largest livestock producer, may help sustain a record rally in Chicago that’s been driven by drought across the U.S. Midwest, according to Rabobank International.
Shipments may climb to 7 million metric tons in the year starting Oct. 1 from about 5 million tons this year, Daron Hoffman, Shanghai-based director of research, said in an interview. That compares with a U.S. Department of Agriculture forecast for a 60 percent drop to 2 million tons in 2012-2013.
Record imports by China may spur higher prices, lifting global food costs and forcing rival importers to cut purchases. China’s demand needs to be met by imports no matter what the price, according to Nathan Broders, director of feed ingredients at INTL FCStone Inc. Corn has rallied 24 percent to a record this year as the worst U.S. drought since 1936 slashed output.
This Bloomberg story, filed from Shanghai early yesterday morning local time, is Ulrike Marx final offering in today's column. It's a short read, and well worth your time...and the link is here.
Shipments may climb to 7 million metric tons in the year starting Oct. 1 from about 5 million tons this year, Daron Hoffman, Shanghai-based director of research, said in an interview. That compares with a U.S. Department of Agriculture forecast for a 60 percent drop to 2 million tons in 2012-2013.
Record imports by China may spur higher prices, lifting global food costs and forcing rival importers to cut purchases. China’s demand needs to be met by imports no matter what the price, according to Nathan Broders, director of feed ingredients at INTL FCStone Inc. Corn has rallied 24 percent to a record this year as the worst U.S. drought since 1936 slashed output.
This Bloomberg story, filed from Shanghai early yesterday morning local time, is Ulrike Marx final offering in today's column. It's a short read, and well worth your time...and the link is here.
Fractal Analysis: Huge dollar devaluation will drive gold much higher
The gold bull is still intact but tempered by U.S. Fed spin. The parabolic printing of Dollars leads to a parabolic devaluation of the Dollar and parabolic Gold.
The Fractal Gold chart work is a direct comparison of Gold, today, to the late 70's Gold Parabola. Thus, "timing" is taken directly from the late 70's cycle, with price targets created from a combination of the late 70's Gold price and different technical analysis techniques. We developed a price target back in 2006/ 2007 for Gold to reach the $10,000 to $12,000 range during this Gold Bull. Anything above that range would mean that the "Stagflation" comparison to the late 70's was exceeded and "Hyper-inflation" would become a real possibility.
This very interesting commentary, along with an even more interesting set of charts, was posted on the mineweb.com Internet site yesterday...and is also courtesy of Donald Sinclair. The link is here.
The Fractal Gold chart work is a direct comparison of Gold, today, to the late 70's Gold Parabola. Thus, "timing" is taken directly from the late 70's cycle, with price targets created from a combination of the late 70's Gold price and different technical analysis techniques. We developed a price target back in 2006/ 2007 for Gold to reach the $10,000 to $12,000 range during this Gold Bull. Anything above that range would mean that the "Stagflation" comparison to the late 70's was exceeded and "Hyper-inflation" would become a real possibility.
This very interesting commentary, along with an even more interesting set of charts, was posted on the mineweb.com Internet site yesterday...and is also courtesy of Donald Sinclair. The link is here.
Sprott Physical Gold Trust prices follow-on offering of trust units in an aggregate amount of US$341,320,000
Sprott Asset Management LP, announced today that it has priced its follow-on offering of 23,000,000 transferable, redeemable units of the Trust ("Units") at a price of US$14.84 per unit (the "Offering"). As part of the Offering, the Trust has granted the underwriters an over-allotment option to purchase up to 3,450,000 additional Units. The gross proceeds from the Offering will be US$341,320,000 (US$392,518,000 if the underwriters exercise in full the over-allotment option).
The rest of the press release can be found posted on the mining.com Internet site...and I thank Nick Laird for sharing it with us. The link is here.
The rest of the press release can be found posted on the mining.com Internet site...and I thank Nick Laird for sharing it with us. The link is here.
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