McEwen Mining Inc (MUX)

[JD400]

"There is no cause to worry. The high tide of prosperity will continue."

Andrew W. Mellon, Secretary of the Treasury, September 1929





xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Another Superb COT Report For Silver


MMgys

Hope Your Having A Good Weekend

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

-- Published: Sunday, 8 April 2018

By Ed Steer

07 April 2018 -- Saturday


YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM



The gold price was up about seven bucks or so by around 9:20 a.m. China Standard Time on their Friday morning, but at that moment, the dollar index was turned higher -- and gold turned lower. By shortly before 9 a.m. BST in London, the price was down a bit over four dollars. It didn't do a lot until about ten minutes before the COMEX open -- and it began to head higher. Gold then blasted higher the moment that the job numbers hit the tape, but was hauled down immediately. Twenty minutes later it was heading higher once again -- and that rally was capped right at the 9:30 a.m. EDT open of the equity markets. The gold price chopped quietly sideways for the remainder of the Friday session.



The low and high ticks aren't worth looking up.



Gold was closed in New York on Friday at $1,333.40 spot, up $7.20 from Thursday -- and back above its 50-day moving average. Net volume was sky high at a hair under 354,000 contracts -- and there was only about 7,900 contracts worth of roll-over/switch volume on top of that.



Up until 9:30 a.m. in New York on Friday morning, the price path for silver was a virtual carbon copy of what happened in gold. But at, or minutes before the London p.m. gold fix, the silver price was sold lower until around 11:20 a.m. EDT -- and from there it chopped quietly sideways into the close.



The low and high ticks in this precious metal were reported by the CME Group as $16.24 and $16.475 in the May contract.



Silver was closed on Friday at $16.355 spot, down a penny on the day. Net volume was exactly 71,000 contracts, plus there was another 12,000 contracts worth of roll-over/switch volume on top of that.



The platinum price was sold down to its low tick of the day by shortly after 1 p.m. CST on their Friday afternoon -- and was bounced off that low multiple times before it began to chop irregularly higher, including the price do-si-do/dos-à-dos around the job numbers in New York. Like for silver, it got sold lower starting just before the afternoon gold fix in London -- and had its low at the same 11:20 a.m. time. It rallied quietly higher into the close from there. Platinum finished the Friday session at $916 spot -- and up 6 dollars on the day.



Palladium was up 4 dollars by around 10 a.m. CST, but was down the same amount by around 2:30 p.m. CST on their Friday afternoon. It rallied quietly to its high tick of the day, which came on the jobs number at 8:30 a.m. in New York. 'Da boyz' drove the price down to its low tick of the day -- and a new intraday low for this move down, by around 11:20 a.m. EDT...the same as platinum and silver. It's rally back to the unchanged mark by 12:30 p.m. EDT was hauled lower by 1 p.m. -- and it managed to add a few more dollars in the thinly-traded after-hours market. Palladium was closed lower by 2 bucks -- and back at $900 spot.



The dollar index closed very late on Thursday afternoon in New York at 90.45 -- and began to chop unsteadily lower until around 9:15 a.m. China Standard Time on their Friday morning. The 'rally' that followed topped out at the 90.60 mark about 8:25 a.m. in London -- and it faded a bit into the 8:30 a.m. jobs report in New York. After a down/up move of some size, the index began to head lower with a vengeance starting around 8:50 a.m. EDT. Most of the losses that mattered were in by 9:30 a.m...as it certainly looked like the usual 'gentle hands' appeared at that juncture. From that point, the index chopped generally lower for the remainder of the Friday session -- and it closed at 90.14...down 31 basis points from Thursday.



Here's the 5-year U.S. dollar index -- and 80.00 looks like 'jacks for openers'...as the engineered devaluation of the U.S dollar index that began on January 2, 2017 continues.



The gold stocks gapped up a bit at the open -- and then carried on to their highs of the day, which came shortly before 11 a.m. in New York trading. They were back at almost unchanged an hour later, but chopped quietly higher for the rest of the Friday session. The HUI closed up 0.72 percent.



The silver equities did not join in the fun. Although they opened up a bit, there began to head lower almost immediately, with their respective low ticks coming about 11:25 a.m. EDT. They rallied quietly into the 1:30 p.m. COMEX close -- and then were equally as quietly sold lower until trading ended at 4:00 p.m. in New York. Nick Laird's Intraday Silver Sentiment/Silver 7 Index closed down 0.75 percent. Click to enlarge if necessary.



And here's the 1-year Silver Sentiment/Silver 7 Index chart from Nick. Click to enlarge as well.



Here are the usual charts from Nick that show what's been happening for the week, month-to-date -- and year-to-date. The first one shows the changes in gold, silver, platinum and palladium for the past trading week, in both percent and dollar and cents terms, as of their Friday closes in New York - along with the changes in the HUI and the Silver 7 Index.



Here's the weekly chart, which is also the month-to-date chart as well, since only one week is gone in the month so far -- and there's not a lot to see, as there weren't big changes during the reporting week. Click to enlarge.



However, the year-to-date graph is somewhat uglier -- and the gold shares continue to underperform badly. But it's obvious that the silver equities are still under quiet accumulation. Click to enlarge as well.



As I said last week -- and the week before, we're getting close to the end of this engineered price decline, particularly in silver, with the only negative factor still being gold's 200-day moving average, which may no longer be a worry at the moment. But it's unwise to underestimate the treachery of the powers-that-be.

The CME Daily Delivery Report showed that 2 gold and 120 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. In gold, International F.C. Stone issued -- and JPMorgan stopped both contracts for its own in-house/proprietary trading account. In silver, it was International F.C. Stone once again as the sole short/issuer out of its client account. Of the four long/stoppers in total, the largest three were JPMorgan, Morgan Stanley and ADM with 83, 18 and 14 contracts for their respective client accounts. The link to yesterday's Issuers and Stoppers Report is here.



The CME Preliminary Report for the Friday trading session showed that gold open interest in April fell by 136 contracts, leaving 1,499 still around, minus the 2 mentioned in the previous paragraph. Thursday's Daily Delivery Report showed that 60 gold contracts were actually posted for delivery on Monday, so that means that 136-60=76 more gold contracts disappeared from the April delivery month by mutual consent between the long/stoppers and short/issuers involved...most likely because the shorts didn't have physical metal backing their positions -- and the longs let them off the delivery hook, rather than force them to buy gold in the spot market, driving the price higher in the process. Silver o.i. in April rose by 1 contract, leaving 337 still open, minus the 120 contracts mentioned in the previous paragraph. Thursday's Daily Delivery Report showed that zero silver contracts were posted for delivery on Monday.



Ted's comments in his weekly review last Saturday about the April delivery month in gold being "sticky"...still applies -- and I'll be more than interested in what he has to say on this issue in his weekly review this afternoon.

There was another deposit in GLD yesterday...this one of some size...as an authorized participant added 189,628 troy ounces. One would expect that his was used to cover an existing short position, but that won't be known with any degree of certainty until the report from the folks at the shortsqueeze.com Internet site post the changes in the short report for GLD on April 24. The next short report is on Tuesday, but the cut-off for that one was at the end of March. There were no reported changes in SLV.



And no sales report from the U.S. Mint, either.



Month-to-date...one week...they've sold 210,000 silver eagles -- and that is all.



There was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.



There was some action in silver, as 669,516 troy ounces were reported received -- and another 633,255 troy ounces were shipped out the door for parts unknown. Of the amount received, one truck load...605,295 troy ounces...was dropped off at JPMorgan. This brings their COMEX silver stash up to the 141.53 million troy ounces mark. The other 64,221 troy ounces received, found a home over at Canada's Scotiabank. The entire 'out' amount departed Canada's Scotiabank as well. A link to this activity is here.



And, must to my surprise, there was no in/out activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday. That's a rare day of no activity for them.

With the Dow down a bit over 750 points at 3:05 p.m. EDT yesterday afternoon, it certainly appeared that the powers-that-be were there to catch the proverbial falling knife, as they carved 180 basis points off that loss during the last fifty-five minutes of trading. If they hadn't, a 1,000+ point loss would have been pretty much a slam dunk...then look out below on Monday!



The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, showed very decent declines in the commercial net short positions in both silver and gold...but particularly in gold.

In silver, the Commercial net short position declined by 4,715 contracts, or 23.6 million troy ounces of paper silver.



They arrived at that number by adding 4,329 long contracts, plus they reduced their short position by 386 contracts -- and the sum of those two numbers is the change for the reporting week.



Ted said that the Big 4 traders, read JPMorgan, reduced their short position by around 2,000 contracts -- and his raptors, the 38-odd small Commercial traders other than the Big 8, added 4,900 long contracts. The '5 through 8' large traders actually increased their short position during the report week by about 2,200 contracts -- and that's entirely due to the fact that there is at least one, if not two, Managed Money traders in that category now.



Under the hood in the Disaggregated COT Report, it was all Managed Money traders -- and much more. They increased their long position by 1,506 contracts, plus they added a whopping 7,580 contracts to their short position, which is now at another new record high. The difference between those two numbers...6,074 contracts...was their change for the reporting week. And the difference between that number -- and the commercial net short position...6,074 minus 4,715 equals 1,359 contracts...was all snapped up by the traders in the 'Other Reportables' category. Plus these 'Other Reportables' also gorged on what the 'Nonreportable'/small traders were selling during the reporting week, as they dumped a net 1,400 long contracts.



The Commercial net short position is back down to 2,637 contracts, or 13.2 million troy ounces -- and it's a lead-pipe cinch that if we could see the COT Report for silver as of the close of trading on Friday, it would show that there would be a Commercial net long position in silver for the first time in history.



With the new Bank Participation Report in hand, Ted estimates JPMorgan's short position in silver at 19,000 contracts -- and it's a safe bet that it's far lower than that since the Tuesday cut-off.



Here's the 3-year COT Report for silver -- and it's still "white-hot bullish" -- and even more extreme than that since Tuesday. Click to enlarge.



I look forward to what Ted has to say about all this, as I know that he's still scratching his head over why the Managed Money traders have put themselves this far into the danger zone on the short side -- and how the Commercial net short position [particularly JPMorgan's] got to be this low without triggering a major engineered decline in the silver price.

In gold, the commercial net short position fell by 37,459 contracts, or 3.75 million troy ounces of paper gold.



They arrived at this number by increasing their long position by 5,165 contracts, plus they reduced their short position by a very chunky 32,330 contracts -- and it's the sum of those two numbers that represents the change for the reporting week.



Ted said that the Big 4 traders reduced their short position by approximately 12,200 contracts during the reporting week -- and his raptors, the 39-odd small commercial traders other than the Big 8, increased their long position by an eye-watering 31,900 contracts, or thereabouts. The big '5 through 8' traders actually increased their short position during the reporting week -- and it's a given that his came about because there's now at least one Managed Money trader with a large enough short position to be included in this category.



Under the hood in the Disaggregated COT Report, it was mostly, but not all Managed Money trading that accounted for the change in the commercial net short position. During the reporting week just past, they reduced their long position by 27,490 contracts, plus they increased their short position by 8,031 contracts -- and it's the sum of those two numbers...35,521 contracts...that represents their change for the reporting week. And as is always the case, it was the traders in the 'Other Reportables' and 'Nonreportable'/small trader category that made up the difference.



The commercial net short position in gold is down to 18.89 million troy ounces -- and it would be a stretch to call this market neutral, as it's rather bearish.



Here's the 3-year COT chart for gold -- and even though there was improvement, it wasn't by what I would call an appreciable amount. Click to enlarge.



But whether there's been any improvement in gold since the Tuesday cut-off is very much open to debate. We'll have to see what happens during the two days left in the current reporting week before we'll have a clue -- and there's still that 200-day moving average situation that remains unresolved.



But all eyes should be on silver and its historically bullish set-up. And to get a deeper understanding of how extreme it is, you have to spend a little time in the Days to Cover and Bank Participation Reports posted directly below.

Here's Nick Laird's "Days to Cover" chart updated with yesterday's COT data for positions held at the close of COMEX trading on Tuesday. It shows the days of world production that it would take to cover the short positions of the Big 4 - and Big '5 through 8' traders in each physically traded commodity on the COMEX. These are the same Big 4 and '5 through 8' traders discussed in the COT Report above. Click to enlarge.



For the current reporting week, the Big 4 are short 113 days of world silver production-and the '5 through 8' large traders are short an additional 48 days of world silver production-for a total of 161 days, which is a bit over five months of world silver production, or about 391.2 million troy ounces of paper silver held short by the Big 8. [In the COT Report last week, the Big 8 were short the same amount...161 days of world silver production, but the internal changes between the Big 4 and Big '5 through 8' traders is a lot different.]



In the COT Report above, the Commercial net short position in silver was reported as 13.2 million troy ounces. As mentioned in the previous paragraph, the short position of the Big 8 traders is 391.2 million troy ounces. The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 391.2 minus 13.2 = 378.0 million troy ounces. The reason for the difference in those numbers is that Ted's raptors, the 38-odd small commercial traders other than the Big 8, are long that amount, which is beyond ridiculous.



As I also stated in the above COT Report analysis, Ted pegs JPMorgan's short position at about 19,000 contracts, which is down 2,000 contracts from the prior reporting week, or around 95 million troy ounces. 95 million ounces works out to around 39 days of world silver production that JPMorgan is short. That's compared to the 161 days that the Big 8 are short in total. JPM holds about 24 percent of the entire short position held by the Big 8 traders.



It's highly likely that JPMorgan's short position is actually less than this, especially since the Tuesday cut-off. But that won't be known with any degree of accuracy until the big Managed Money trader that currently inhabits the Big 4 category, is long gone -- and that won't happen until we've had a decent rally in the silver price.



As I said last week -- and the week before, with Scotiabank now publicly admitting that they couldn't find a sucker to buy ScotiaMocatta, I would suspect that they will continue to exit their short positions in both gold and silver as quickly as they can -- and if they can. It certainly doesn't appear on the surface that they've been doing much in that regard lately, except maybe pick away at it quietly. However, there are big changes in silver in the non-U.S. bank category in this month's Bank Participation Report -- and you can read all about it further down, as I have a lot to say about it. Any major move by Scotiabank to cover, would show up in the price immediately -- and Jamie Dimon would not be amused.



JPMorgan has been forced by circumstance to pick up Scotiabank's trading/price management duties in silver and gold. So JPMorgan is by far the No. 1 silver short on Planet Earth [but the big Managed Money trader is now close behind in #2 spot] -- and will obviously remain in that position until JPM brings this price management scheme to an end. That end appears to be in sight. Of course they have 700 million troy ounces of physical silver stashed away to cover that, so they are in no danger. That can't be said of the remaining Big 7, unless JPMorgan plans to bail out some, or all of them. But Ted doesn't think that Jamie is that altruistic -- and he's probably right about that.



With JPMorgan short about 39 days of world silver production, that leaves the other three traders in the Big 4 category short 113-39=74 days of world silver production divided up between them...a bit under 25 days of world silver production each. That's exactly unchanged from last week's COT Report [And not to be forgotten, is that one of those traders is the big Managed Money short that's still 'just visiting' in this category.] And it's a given that those 74 days aren't divided up equally between the remaining Big 3.



The four traders in the '5 through 8' category are short 48 days of world silver production in total, which is 12 days of world silver production each, which is up one full day from what each was short in last week's COT Report. As I stated earlier in my discussion on the COT Report, at least one -- and maybe two -- Managed Money traders now have a big enough short position to have invaded the spot[s] normally held by the Commercial traders in this category -- and they actually increased their short positions during the reporting week just past...2,200 contracts worth...11 million troy ounces...4.5 days...divide by 4 equals 1.1 day each.



I would suspect, based on the numbers tossed about in the last two paragraphs that Scotiabank is still a member of the Big 4 Commercial shorts, but way down in third or fourth spot at the moment.



The Big 8 commercial traders are short 33.6 percent of the entire open interest in silver in the COMEX futures market, which is down from the 35.6 percent that they were short in last week's COT Report. Once whatever market-neutral spread trades are subtracted out, that percentage would be something over 35 percent. In gold, it's now 50.1 percent of the total COMEX open interest that the Big 8 are short, up from the 47.7 percent they were short in last week's report -- and a bit under 55 percent once the market-neutral spread trades are subtracted out.



In gold, the Big 4 are short 67 days of world gold production, which is down 4 days from what they were short last week -- and the '5 through 8' are short another 21 days of world production, which is up 4 days from what they were short the prior week, for a total of 88 days of world gold production held short by the Big 8 -- which is down 2 days from the 90 days they were short in last week's report. Based on these numbers, the Big 4 in gold hold about 76 percent of the total short position held by the Big 8...which down 3 percentage points from last week's COT Report.



The "concentrated short position within a concentrated short position" in silver, platinum and palladium held by the Big 4 commercial traders are 70, 69 and 80 percent respectively of the short positions held by the Big 8. Silver is down 3 percentage points from the previous week's COT Report, platinum is also down 3 percentage points from last week's COT Report -- and palladium is up 1 percentage point -- and back at its all-time high. A quick check of the four precious metals in the above chart will confirm these preposterous concentrations.

The April Bank Participation Report [BPR] data is extracted directly from the above Commitment of Traders Report. It shows the COMEX futures contracts, both long and short, that are held by all the U.S. and non-U.S. banks as of Tuesday's cut-off. For this one day a month we get to see what the world's banks are up to in the COMEX futures market, especially in the precious metals-and they're usually up to quite a bit.



In gold, 4 U.S. banks were net short 95,163 COMEX contracts in the April BPR, which is a hair over 50 percent of this week's commercial net short position shown in the above COT Report. In March's Bank Participation Report [BPR], 5 U.S. banks were short 99,862 contracts, so they've decreased their collective short positions by around 4,700 contracts, which is barely a rounding error. The four U.S. banks would certainly include JPMorgan, HSBC USA, Citigroup -- and Goldman.



Also in gold, 30 non-U.S. banks are net short 69,631 COMEX gold contracts, which isn't much per bank. In the March BPR, 29 non-U.S. banks were net short 69,826 COMEX contracts, so the month-over-month change is immaterial. I suspect that there's at least one large non-U.S. bank in this group that might hold a third of this short position all by itself -- and the remaining contracts, divided up between the remaining 29 non-U.S. banks, would be immaterial. I would suspect that Scotiabank is the guilty party.



As of this Bank Participation Report, 34 banks [both U.S. and foreign] are net short 33.4 percent of the entire open interest in gold in the COMEX futures market, which is exactly unchanged from the 33.4 percent they were short in the March BPR.



Here's Nick's chart of the Bank Participation Report for gold going back to 2000. Charts #4 and #5 are the key ones here. Note the blow-out in the short positions of the non-U.S. banks [the blue bars in chart #4] when Scotiabank's COMEX short position was outed by the CFTC in October of 2012. Click to enlarge.



http://news.goldseek.com/GoldSeek/1523190360.php