– Harvey Organ Posted on April 13, 2017 by The Doc
THE ASSAULT ON $18.50 SILVER BEGINS!!/AND THEN $1291 GOLD WHICH WILL LEAD TO A BREAKOUT OVER $1300!
DOW PLUMMETS BY 138 POINTS/NASDAQ FALTERS BY 31. PTS/SILVER OPEN INTEREST CLIMBS TO WITHIN 600 CONTRACTS OF A RECORD DESPITE BEING $1.90 OFF WHEN THAT RECORD WAS SET/USA FIRES A HUGE NON NUCLEAR MOAB BOMB WHICH WAS PROBABLY MEANT TO DETER NORTH KOREA/USA GOVERNMENT RECEIPTS FALTER BADLY IN FIRST HALF OF THIS FISCAL YEAR
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 2 NOTICE(S) FOR 200 OZ.
TOTAL NOTICES SO FAR: 625 FOR 62,500 OZ (1.9440 TONNES)
For silver: For silver: APRIL
0 NOTICES FILED TODAY FOR NIL OZ/
Total number of notices filed so far this month: 744 for 3,720,000 oz
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
END
The open interest in silver continues to advance with today’s reading just under 224,000 contracts or about 700 contracts below the record set last year. The price of silver is a good $2.00 below the price when the record OI was set.
I wrote the following yesterday:
“Late in the day, three important developments:
Trump wanted a lower dollar with lower interest rates North Korea’s Kim stated that there is going to be a big event Talks with the Russia’s Lavrov and Putin did not go off too well
gold shot straight up to $1286.00 with silver trading above $18.50 resistance level. The bankers sure have their work cut out for them. If they cannot contain gold and silver prices their derivatives will blow up!
Since gold and silver made their big move after the comex closed, I do not think that the OI’s for both gold and silver will advance to a higher degree. However I may be wrong. I will know let tonight…”
boy was I wrong.. the open interest in silver climbed by 3591 contracts up to 223,763 setting the stage for another banker resistance at that $18.50 level.
Gold and silver held their own today despite the higher USA dollar. As everyone knows, the modus operandi of the crooks is that they never allow for a follow through rally. So I am happy how our precious metals traded today. Late tonight I will receive the preliminary OI for both gold and silver and with James McShirley’s excellent reading of the tea leaves, he expects that the OI in gold to advance by 12,000 to 16,000 contracts. I would think that silver’s OI will rise 4,000 contracts to about 227,000 contracts.
In silver, the total open interest ROSE BY A HUGE 3591 contracts UP to 223,763 DESPITE THE SMALL RISE IN PRICE ( 5 CENTS) WITH RESPECT TO YESTERDAY’S TRADING. THE HEDGE FUNDS (MANAGED MONEY) CONTINUE TO REMAIN STEADFAST WITH THEIR POSITIONS ON DOWNDRAFT DAYS WHILE SLOWLY ADDING TO THEIR LONGS ON GOOD DAYS. THE BANKERS ARE DESPERATELY TRYING TO COVER THEIR EVER BURGEONING SHORTS (OVER 555 MILLION OZ) BUT TO NO AVAIL. IT IS BECOMING ALMOST IMPOSSIBLE FOR THE BANKERS TO SUPPLY THE NECESSARY PAPER. In ounces, the OI is still represented by just OVER 1 BILLION oz i.e. 1.119 BILLION TO BE EXACT or 160% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MARCH MONTH/ THEY FILED: 0 NOTICE(S) FOR NIL OZ OF SILVER
In gold, the total comex gold ROSE BY GIGANTIC 8,273 contracts WITH THE RISE IN THE PRICE OF GOLD ($4.00 with YESTERDAY’S TRADING). The total gold OI stands at 464,404 contracts.
With respect to our two criminal funds, the GLD and the SLV:
GLD:
We had a huge changes in tonnes of gold at the GLD: a deposit of 6.51 tonnes into the GLD
Inventory rests tonight: 848.92 tonnes
.
SLV
We had no changes in silver inventory at the SLV today/
THE SLV Inventory rests at: 328.201 million oz
end
.
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver ROSE BY A HUGE 3,591 contracts UP TO 223,763 DESPITE THE SMALL RISE IN SILVER YESTERDAY ( 5 CENTS). We no doubt had some attempted short covering which badly failed as the longs keep piling on making it difficult for them to cover and overpowered the bankers. Our managed money sector (the hedge funds) continue to remain steadfast in their conviction as they added to their positions with yesterday’s attempted raid. This time around, silver found company in gold as it’s OI skyrocketed northbound by 8,273 contracts WITH THE RISE IN THE PRICE OF GOLD ($4.00 YESTERDAY’S TRADING).
(report Harvey
.
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg 3. ASIAN AFFAIRS
i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 2.13 POINTS OR 0.07%/ /Hang Sang CLOSED DOWN 51.84 POINTS OR .21% . The Nikkei closed DOWN 125.77 OR 0.68% /Australia’s all ordinaires CLOSED DOWN 0.72%/Chinese yuan (ONSHORE) closed UP at 6.8883/Oil UP to 53.30 dollars per barrel for WTI and 55.90 for Brent. Stocks in Europe ALL DEEPLY IN THE RED ..Offshore yuan trades 6.8856 yuan to the dollar vs 6.8883 for onshore yuan. NOW THE OFFSHORE IS STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY STRONGER AND THE OFFSHORE YUAN STRONGER TO THE ONSHORE AND THIS IS COUPLED WITH THE WEAKER DOLLAR.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
i)NORTH KOREA
This is scary!! Voice of America claims that North Korea has apparently placed a nuclear device in a tunnel and it could be detonated by Saturday
( zerohedge)
ii)A good look at the military strength of both sides of the Korean Peninsula:
( zero hedge)
iii)Trump reissues his ultimatum to China to fix the North Korean problem or else@!
( zerohedge)
iv)And that big North Korean important event: a street opening!! go figure.. (courtesy zero hedge)
v)Trump’s Armada is steaming towards North Korea. It seems that Trump want to try additional economic sanctions to paralyze this nation
( zero hedge) b) REPORT ON JAPAN
JAPAN/NORTH KOREA/GLOBE
Abe claims that North Korea may be capable of sarin tipped missiles
( zerohedge) c) REPORT ON CHINA
i)Not sure why China after 13 days decided to provide a huge liquidity injection but they did. It was either the huge problem with iron ore or in response to the weaker dollar. The offshore yuan rebounds hugely in value as does the onshore yuan.
( zerohedge)
ii)Chinese exports surge in March but Goldman Sachs warns that it will not continue because of their tightening
( zero hedge/GoldmanSachs) 4. EUROPEAN AFFAIRS 5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
i)Turkey
A good look at what is going on inside Turkey. All of Erdogan’s barks are basically ignored by the west and Russia
( Bekdil/Gatestone Institute)
ii)Syria
Syria claims that the USA led coalition hit an iSIS controlled chemical weapons depot and killed hundreds. It is interesting in that this is exactly what the Russians claimed what happened on an earlier strike last week
( zero hedge) 6 .GLOBAL ISSUES
Canada
A terrific commentary by Wolf Richter describing the irrational exuberance in my home city of Toronto. He claims that the government must continue with this game or else face a total collapse
(courtesy Wolf Richter/WolfStreet) 7. OIL ISSUES
Rig counts in the USA surge to a 2 yr high and this will play havoc to our OPEC production cuts. No question about it: the shale boys will kill the oil rally!
(courtesy zero hedge) 8. EMERGING MARKETS
Venezuela
Venezuela continues on a downward spiral. However it did pay 2.6 billion uSA bond payment. It has another 62 billion due in the next two years. Please recall that Russia has lent money to PDVSA and received collateral, its 49% interest in USA CITGO, an integrated oil and gas company with 800 gas stations. If PDVSA defaults then it is inevitable that Russia will control gas stations in the USA
( zero hedge) 9. PHYSICAL MARKETS
i)This may be telling: the CME is to close its derivative CME Europe and CME Clearing Europe at the end of 2017
( MarketWatch/GATA)
ii)As we reported to you yesterday India’s gold imports is said to have jumped 582% on wedding demand”
( Bloomberg)
iii)I brought this story to you yesterday in that the London gold fix was 12 dollars off from spot. This story should get to our class action lawyers as there is no answer as to why this happened except that our mining companies suffered.
( Reuters/GATA)
iv)The big story of yesterday; Trump warns that the USA dollar is getting too strong
( Reuters/GATA)
v)Technical analysts will be looking to see if gold will break out past the 1290.00 level. Just like $18.50 on silver, this the upper resistance level and if pierced, gold will have clear sailing into the 1300’s
( Ross Norman/Sharp Pixley) 10. USA stories
i)A big story…Government revenues are faltering badly. In March, the USA treasury brought in total receipts of $216 billion well below $228 billion expected. However March recorded a massive 392 billion outlay. Thus a deficit in March of $176 billion instead of $167.For six months the deficit is already$527 billion, and no doubt the deficit for the year will exceed 1 trillion dollars. Also may I remind you that in the deficit totals they do not include student loans and auto loans because they deem them assets!!!
( zero hedge)
ii)Wells Fargo tumbles considerably after Warren Buffet dumps 9 million shares
( zerohedge)
iii)No wonder Buffet sold his stock in a hurry: Wells Fargo’s mortgage application tumbled by 23 billion dollars to only 59 billion dollars in the 4th quarter. In the prior quarter, alarm bells went off when it plunged by 25 billion dollars down to 75 billion.
( zero hedge)
iv) Soft data University of Michigan Confidence index rebounds
( zero hedge)
v) Well that sure ended fast: The Donald has now flipped on five key campaign promises in 24 hours:
1.Goodbye to the strong USA dollar
2.China is not a currency manipulator
3.NATO is needed
4. Yellen may be invited back to the Fed in 2018
5. He now supports to the IMPORT-EXPORT back to which he was opposed during the election
( zero hedge)
vi)A terrific commentary by Ryan McMaken of the Mises Institute. He correctly states that Trump has abandoned all economic reforms and seems to embrace war spending
( Ryan McMaken/Mises Institute)
vii) This no doubt will send a strong message to North Korea; the MOAB bomb strikes Afghanistan
(courtesy zero hedge) Let us head over to the comex:
The total gold comex open interest ROSE BY 8,273 CONTRACTS UP to an OI level of 464,404 WITH THE RISE IN THE PRICE OF GOLD ( $4.00 with YESTERDAY’S trading). The bankers again were certainly not shy in supplying the necessary paper to our newbie longs. We are now in the contract month of APRIL and it is one of the BETTER delivery months of the year. In this APRIL delivery month we had A LOSS OF 123 contract(s) FALLING TO 1,799. We had 2 notices served yesterday so we LOST 121 contracts or 12,100 oz will NOT stand for delivery in the active delivery month of April AND THESE GUYS NO DOUBT WERE CASH SETTLED THROUGH THE OBSCURE EFT ROUTE DESCRIBED BY JAMES TURK LAST WEEK.
At the end of April/2016 only 12.3917 tonnes stood for physical delivery, although 21.306 tonnes stood initially at the beginning of April 2016.
The non active May contract month LOST 153 contract(s) and thus its OI is 2380 contracts. The next big active month is June and here the OI ROSE by 7,278 contracts UP to 336,135.
And now for the wild silver comex results. Total silver OI ROSE BY 3,591 contracts FROM 220,172 UP TO 223,763 DESPITE YESTERDAY’S TINY 5 CENT PRICE RISE. Whereas in gold, the bankers supplied the necessary paper to contain gold’s excitement, they had no choice but to supply the short silver paper. As I stated yesterday:
“They knew that they were cornered and they are now trying to figure out how to extricate themselves from their mess!!”
Please remember that the price of silver did not rise appreciably until after 2:00 pm or so and this was after the comex closed. The open interest for silver will no doubt climb to record levels when I retrieve the data for today, close to midnight.
We are moving CLOSER TO the all time record high for silver open interest set on Wednesday August 3/2016: (224,540). The closing price of silver that day: $20.44. WE ARE ONLY 7000 CONTRACTS AWAY FROM RECORD HIGHS IN OI AND YET WE ARE $2.00 BELOW THE PRICE OF $20.44 WHEN THAT RECORD WAS SET.
We are in the NON active delivery month is APRIL Here the open interest GAINED 134 contracts up to 199 contracts. We had 0 notices filed yesterday so we GAINED ANOTHER 134 contracts or an additional 670,000 oz will stand for delivery.
The next active contract month is May and here the open interest LOST ONLY 2,966 contracts DOWN to 133,630 contracts which is astonishingly high. It is this front month that the crooked bankers are targeting as they must be frightened to see such a mammoth amount of contracts still standing for metal. Also remember that Good Friday was much earlier last year: after today, we have only 10 trading days before first day notice. The non active June contract LOST 105 contracts to stand at 207. The next big active month will be July and here the OI gained 6716 contracts up to 59,549.
FOR COMPARISON SAKE, ON APRIL 13/2016 WE HAD 98,575 CONTRACTS STANDING FOR DELIVERY. SO YOU CAN VISUALIZE FOR YOURSELF THE HUGE DIFFERENCE BETWEEN 2016 AND THIS YEAR.
For those keeping score, the initial amount of silver oz that stood for delivery for the May 2016 contract month: 28.01 million oz. By conclusion of the month only 13.58 million oz stood and the rest was cash settled.(EFP ROUTE)
.
We had 0 notice(s) filed for NIL oz for the APRIL 2017 contract
VOLUMES: for the gold comex
Today the estimated volume was 226,132 contracts which is good.
Yesterday’s confirmed volume was 257,756 contracts which is good.
volumes on gold are STILL HIGHER THAN NORMAL!
INITIAL standings for APRIL April 13/2017.
Gold Ounces Withdrawals from Dealers Inventory in oz nil Withdrawals from Customer Inventory in oz
289.359 oz
Brinks
Deposits to the Dealer Inventory in oz nil oz Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
2 notice(s) 200 OZ
No of oz to be served (notices) 1797 contracts 179,700 oz
Total monthly oz gold served (contracts) so far this month
625 notices 62,300 oz 1.9440 tonnes Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz Total accumulative withdrawal of gold from the Customer inventory this month 443,448.1 oz
Today we HAD 0 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits: 0 oz
We had NIL dealer withdrawals:
total dealer withdrawals: NIL oz
we had 0 customer deposit(s):
total customer deposits; nil oz
We had 1 customer withdrawal(s)
i) Out of Brinks: 289.359 oz
total customer withdrawal: 289.359 oz
we had 0 adjustments:
For APRIL:
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 2 contract(s) of which 0 notices were stopped (received) by jPMorgan dealer and 1 notice(s) was (were) stopped/ Received) by jPMorgan customer account.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the initial total number of gold ounces standing for the APRIL. contract month, we take the total number of notices filed so far for the month (625) x 100 oz or 62,500 oz, to which we add the difference between the open interest for the front month of APRIL (1799 contracts) minus the number of notices served upon today (2) x 100 oz per contract equals 242,200 oz, the number of ounces standing in this active month of APRIL.
Thus the INITIAL standings for gold for the APRIL contract month: No of notices served so far (625) x 100 oz or ounces + {(1799)OI for the front month minus the number of notices served upon today (2) x 100 oz which equals 242,200 oz standing in this non active delivery month of APRIL (7.533 tonnes)
we LOST 121 contracts or an additional 12,100 oz will NOT stand and THESE were cash settled via the PRIVATE EFP route. IT SURE SEEMS THAT THE COMEX IS OUT OF PHYSICAL METAL TO SUPPLY TO OUR LONGS.
I have now gone over all of the final deliveries for this year and it is startling. First of all: in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month. Here are the final deliveries for all of 2016 and the first 4 months of 2017 Jan 2016: .5349 tonnes (Jan is a non delivery month) Feb 2016: 7.9876 tonnes (Feb is a delivery month/deliveries this month very low) March 2016: 2.311 tonnes (March is a non delivery month) April: 12.3917 tonnes (April is a delivery month/levels on the low side And then something happens and from May forward deliveries boom! May; 6.889 tonnes (May is a non delivery month) June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge) July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!) August: 44.358 tonnes (August is a good delivery month and it came to fruition) Sept: 8.4167 tonnes (Sept is a non delivery month) Oct; 30.407 tonnes complete. Nov. 8.3950 tonnes. DEC/2016. 29.931 tonnes JAN/2017 3.9004 tonnes FEB/ 18.734 tonnes March: 0.5816 tonnes April/2017: 7.533
total for the 16 months; 252.362 tonnes average 15.772 tonnes per month
Total dealer inventory 990,497.01 or 30.808 tonnes DEALER RAPIDLY LOSING GOLD Total gold inventory (dealer and customer) = 8,969,945.794 or 279.00 tonnes
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 279.00 tonnes for a loss of 24 tonnes over that period. Since August 8/2016 we have lost 75 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process and are being used in the raiding of gold!
The gold comex is an absolute fraud. The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction. This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
IN THE LAST 9 MONTHS 75 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
APRIL INITIAL standings April 13. 2017 Silver Ounces Withdrawals from Dealers Inventory nil Withdrawals from Customer Inventory
1,276,557.700 oz
SCOTIA CNT
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
1,205,429.308 oz
JPMorgan
No of oz served today (contracts) 0 CONTRACT(S) (NIL OZ) No of oz to be served (notices) 199 contracts (995,000 oz) Total monthly oz silver served (contracts) 744 contracts (3,720,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz Total accumulative withdrawal of silver from the Customer inventory this month 7,729,601.3 oz
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had Nil dealer withdrawals: total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of CNT: 621,153.900 oz ii) Out of Scotia: 653,403.800 oz
TOTAL CUSTOMER WITHDRAWALS: 1,276,557.700 oz
We had 1 Customer deposits: i) Into JPMorgan: 1,205,429.308 oz
***deposits into JPMorgan have now resumed. In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver???
total customer deposits; 1,205,429.308 oz
we had 0 adjustment(s)
The total number of notices filed today for the APRIL. contract month is represented by 0 contract(s) for NIL oz. To calculate the number of silver ounces that will stand for delivery in APRIL., we take the total number of notices filed for the month so far at 744 x 5,000 oz = 3,720,000 oz to which we add the difference between the open interest for the front month of APRIL (199) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing
Thus the initial standings for silver for the APRIL contract month: 744(notices served so far)x 5000 oz + OI for front month of APRIL.(199 ) -number of notices served upon today (0)x 5000 oz equals 4,715,000 oz of silver standing for the APRIL contract month.
We gained 134 contracts or an additional 670,000 oz will stand for delivery in this non active delivery month of April
FOR COMPARISON
Initially for the April 2016 contract, 1,180,000 oz stood for delivery. At the end of April 2016: 6,775,000 oz stood as bankers needed much silver to fill major holes elsewhere.
Volumes: for silver comex
Today the estimated volume was 88,209 which is gigantic Yesterday’s confirmed volume was 95,046 contracts OR 475 MILLION OZ /gigantic. (THE 475 MILLION OZ = 67 % OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA)
Total dealer silver: 30.289 million (close to record low inventory Total number of dealer and customer silver: 189.792 million oz
The total open interest on silver is now very close to its all time high with the record of 224,540 being set AUGUST 3.2016.
end
NPV for Sprott and Central Fund of Canada
will update later tonight the central fund of Canada figures
1. Central Fund of Canada: traded at Negative 6.4 percent to NAV usa funds and Negative 5.9% to NAV for Cdn funds!!!! Percentage of fund in gold 60.4% Percentage of fund in silver:39.5% cash .+0.2%( April 13/2017)
SPROTT FUNDS NAV WILL BE UPDATED LATER TONIGHT
2. Sprott silver fund (PSLV): Premium RISES to .49%!!!! NAV (April 13/2017) 3. Sprott gold fund (PHYS): premium to NAV RISES to +0.36% to NAV ( April 13/2017) Note: Sprott silver trust back into NEGATIVE territory at -.49% /Sprott physical gold trust is back into POSITIVE/ territory at +0.36%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada
Ted Butler: Another opportunity to induce the CFTC to do its job Submitted by cpowell on Thu, 2017-04-13 14:04. Section: Daily Dispatches
By Ted Butler
Thursday, April 13, 2017
An unusual confluence of seemingly unrelated factors may have created an opportunity to do something about the silver (and gold) manipulation.
On Monday, April 10, two new officials assumed key roles with the Commodity Futures Trading Commission -- a new director of the Enforcement Division and the first chief officer of the newly-created Market Intelligence Unit. The main mission of both departments is to uncover and terminate market fraud and manipulation, the same overall prime mission of the agency itself.
There's little wonder that price manipulation is the prime regulatory mission, since it is the most serious market crime possible -- damaging even to those not directly involved in trading. ...
An unusual confluence of seemingly unrelated factors may have created an opportunity to do something about the silver (and gold) manipulation. On Monday, April 10, two new officials assumed key roles with the Commodity Futures Trading Commission (CFTC) – a new director of the Enforcement Division and the first chief officer of the newly-created Market Intelligence Unit. The main mission of both departments is to uncover and terminate market fraud and manipulation, the same overall prime mission of the agency itself. There’s little wonder that price manipulation is the prime regulatory mission, since it is the most serious market crime possible; damaging even to those not directly involved in trading.
At the same time and as I discussed in Saturday’s review, the most recent Commitments of Traders (COT) Report for COMEX silver futures featured the largest ever concentrated short position by the four largest traders and a new record large total commercial net short position. As I have been intoning for years, nothing suggests a possible market manipulation being in place than a large concentrated position. This is not my opinion alone; I’ve basically learned this from the CFTC. The only reason the agency calculates and publishes concentration data in every regulated futures market weekly is because an extremely large concentrated position is the first tipoff of potential market manipulation.
A concentrated position is a large market position held by a small number of traders that could grow large enough to overly influence price. Think Hunt Bros. in silver or Mr. 5% in the Sumitomo copper manipulation, where a few buyers caused prices to be much higher than warranted by actual supply/demand fundamentals. While it’s easy for most to understand how a concentrated long position could result in a price considered to be artificially high, it’s harder for many to understand the concept of concentration on the short side, due to the nature of short selling being difficult for most to grasp.
Commodity law does not distinguish between an upward or downward price manipulation and the CFTC calculates and publishes concentration data on both the long side and short side of all regulated futures markets. The problem is that while the CFTC publishes the data that indicate that COMEX silver has the highest level of concentration ever seen on the short side of COMEX silver futures, thus providing the strongest possible evidence of a downward price manipulation, the agency refuses to do anything about it or even acknowledge it in any way.
But thanks to the unexpected confluence of events as described above, there may be an opportunity for you to pressure the regulators to address the concentrated short position in COMEX silver futures. And let me not beat around the bush – silver would be substantially higher in price were there to be no extreme concentrated short position. That’s a personal guarantee based upon simple market mechanics.
So, for anyone with an interest in higher silver prices or who is a believer that free markets, not controlled by large traders gaming the system, is the right way, then there is something you might consider doing. Now is an ideal time to raise these very important issues about concentration and manipulation in COMEX silver. The two officials most responsible for uncovering manipulation at the CFTC just started in this capacity on Monday and should be more open to the facts than otherwise. I can understand how many might feel that contacting these officials and others might be a waste of time, given the agency’s failed record over the years in this regard. Still, I’m not talking about any burdensome effort, just sending a few emails or letters to get straight answers to some very good questions.
I’ve already written to the two new officials (both by email and hard copy) and feel free to use what I sent. I would ask you not to improvise and include other issues, such as gold manipulation. Besides, nothing would impact gold prices more than having the silver manipulation terminated. The best approach is in being as specific and factual as possible so as to pin the agency down. They may refuse to answer and one way of insuring maximum pressure is to write to them through your elected officials. Here’s the letter I wrote that you are free to copy. I’ll include pertinent emails address at the end.
April 10, 2017
Andrew B. Busch via Email
Chief Market Intelligence Officer
James McDonald
Director - Enforcement Division
Commodity Futures Trading Commission
1155 21st Street NW
Washington, DC 20581
Dear Sirs,
Congratulations and best wishes on your appointments to key positions at the Commission at this critical time in market history.
I’m writing concerning a matter that the Commission has considered on a number of past occasions – allegations of a silver price manipulation on the Commodity Exchange, Inc. (COMEX). The reason the Commission has considered the issue of a silver price manipulation several times in the past is because the agency’s own public data and guidelines point strongly to such a manipulation. Never have the data been more convincing than what was just published Friday, in the Commission’s release of its weekly Commitments of Traders (COT) Report, for positions held as of April 4, 2017.
That report indicates that the concentrated net short position held by the four largest traders in COMEX silver futures hit an all-time extreme in numbers of contracts of 78,021, the equivalent of 390 million oz. of silver. The concentrated net short position of the eight largest traders was indicated at 104,978 contracts or the equivalent of nearly 525 million oz., or more than 60% of world annual mine production. No other commodity comes close to COMEX silver futures in terms of a larger concentrated short position when compared to real world production. On its face, the large concentrated short position in COMEX silver futures would appear to be an artificial price depressant.
As you know, the Commission monitors and publishes concentration data in all regulated futures markets as the prime front line defense against price manipulation. After all, it would be nearly impossible to manipulate any market without a concentrated position. But not only do COMEX silver futures stand out as having the largest concentrated short position of any commodity, in terms relative to real world production, consumption and existing inventories, the concentrated short position in COMEX silver futures is notable for other reasons.
For one reason, the big short traders do not appear to be engaged in any sort of legitimate hedging, since there are no signs they represent actual producers or hedgers of physical holdings. Separate agency data, contained in the monthly Bank Participation Report, indicate that the largest shorts are mostly domestic and foreign banks essentially operating as speculators, in a pseudo-market making capacity against other speculators. Publicly-owned mining companies are required to disclose any hedge activity and few, if any have disclosed any hedging in silver. The big short sellers in COMEX silver futures are financial firms, mostly banks, speculating against other big speculators and have no legitimate economic or hedging purpose in dealing in COMEX silver in the first place. As I’m sure you know, Congress allows futures trading for the purpose of encouraging legitimate hedging, not to encourage excessive speculation.
The largest COMEX silver short seller for the past nine years is JPMorgan. That has been the case ever since it acquired the failing investment bank Bear Stearns, the former largest COMEX silver short seller, according to Commission data and its correspondence with lawmakers. The special manipulative twist here is that since 2011, JPMorgan has engaged in an epic accumulation of physical silver at prices much lower than would have existed if the bank had not also been the largest silver short seller on the COMEX. In the recently completed COMEX March silver futures delivery period, JPMorgan stopped (accepted) 2689 contracts in its own proprietary trading account, plus another 739 contracts on behalf of a client(s), considerably more than the 1500 contracts allowed according to exchange regulations. This while JPMorgan was the largest short holder in COMEX silver futures. It is not possible to imagine a more compelling motive or intent for manipulation than to acquire a massive amount of any commodity at depressed prices, where the acquirer is responsible for the depressed prices.
Almost without fail, on every past occasion where the concentrated short position in COMEX silver futures reached extreme levels, it was only a matter of time before the price of silver gets rigged lower by these big shorts to induce speculative selling from traders operating on technical price signals. In fact, COT report data indicate that JPMorgan has never taken a loss, only profits on every silver short position it has added over the past nine years. Such results would not be possible in a market that wasn’t manipulated in price. In essence, speculators have taken over the price discovery process in silver because there are so few real hedgers trading on the COMEX, only speculating banks betting against other speculative traders. Even assuming the current extreme concentrated short position leads yet again to a sharp selloff in silver, there is another issue that goes to the core of regulatory concern.
In addition to the clear agency data pointing to a silver price manipulation, the presence of such a large and non-economic short position necessarily enhances the likelihood of disorderly market conditions once it becomes clear to enough market participants that unbacked concentrated short positions on the COMEX have been the reason why silver prices are so depressed.
I have communicated all this to the Commission, JPMorgan and the CME Group (owner-operator of the COMEX) for many years, with hardly any acknowledgement or rebuttal. I am hoping you will consider this matter differently and act to finally end the manipulation. I’m sure how you handle this matter will define your tenure. If I can be of any further assistance, please do not hesitate to call on me.
Sincerely yours,
Ted Butler
Andrew B. Busch - abusch@cftc.gov
James McDonald – jmcdonald@cftc.gov
Acting Chairman J. Christopher Giancarlo – cgiancarlo@cftc.gov
Commissioner Sharon Y. Bowen – sbowen@cftc.gov
Let me close by telling you that I am very thankful for the unique opportunity created by the new senior appointments at the CFTC, along with the simultaneous publication of the most concentrated data in silver shorting in history. I assure you that I am not holding my breath waiting for the CFTC to finally step up to the plate and do the right thing; not after 30 years of denial and obfuscation. I know full well that the agency’s denials up through today have only hardened it to maintain the façade that nothing is wrong in COMEX silver, despite glaring and growing evidence to the contrary. Still, it would be a waste not take advantage of an unexpected opportunity.
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