first_imgEver present is the record Commercial net short position in silver…and an almost equally large short position in goldGold traded quietly higher during the early portion of Far East trading on Friday…but by 2:00 p.m. Hong Kong time, the price flat-lined until 1:00 p.m. GMT in London…about twenty minutes before the 8:20 a.m. Eastern time Comex open.At the point, the selling pressure began…and by the time the absolute low of the day [$1,707.50 spot] was in about five minutes before the Comex close…about $23 had been carved off the gold price from its London high.  The subsequent rally pared those losses.Gold closed at $1,715.20 spot…down $10.60 from Thursday’s close.  Net volume was decent at around 146,000 contracts.Silver got sold off during early morning trading in Hong Kong, but by 1:00 p.m. in London…8:00 a.m. in New York…the price was back to unchanged from Thursday’s close.There was a minor sell off during the next two hours of trading…and the real decline began at 10:00 a.m. Eastern time.  Silver’s low…$33.07 spot…like gold’s came at 1:25 p.m…about five minutes before the Comex trading session ended.  The silver price then drifted sideways for the first part of the electronic trading session, but rallied a bit going into the close.  Silver had an intraday price move of well over 3 percent on Friday…the same intraday percentage move it had on Wednesday.Silver finished the Friday session at $33.44 spot…down 83 cents.  Net volume was also pretty decent…around 57,000 contracts.Platinum got sold off as well, but not as much…and it made a decent recovery.  There was almost no sign of price interference in palladium.  But as I pointed out the other day, there is no monstrous Commercial net short position in that metal.  It’s market neutral at this particular moment…and finished up on the day. Being a weekend column…I have a lot of stories for you today.  I hope you can find the time over the weekend to pick through the ones that interest you.In saving the Union, I have destroyed the republic. Before me I have the Confederacy which I loath. But behind me I have bankers which I fear. – Abraham Lincoln comment on the National Bank Act, February 1863I have a couple of ‘blasts from the past’.  The pop one is from 1974…and I’d forgotten that I even knew this song until I stumbled across it last weekend…and I’m more than happy to share it with you today.  The link is here.The Brandenburg concerti by Johann Sebastian Bach…original title: Six Concerts à plusieurs instruments…are a collection of six instrumental works presented by Bach to Christian Ludwig, margrave of Brandenburg-Schwedt, in 1721…though probably composed earlier. They are widely regarded as among the finest musical compositions of the Baroque era. Here’s No. 5 [BWV1050] in its entirety.  It’s played a little faster than I’m used to, but it’s very wonderful nonetheless. I note that Claudio Abbado is ‘conducting’ this…but he really looks out of place in front of such a small ensemble.  The link is here.As I said in ‘The Wrap’ yesterday…”since it’s a Friday…and the last day of the month as well…we should prepare ourselves for any eventuality.”  It was “da boyz” doing their thing with no adult supervision.  Ted Butler thought it might have been the work of the raptors, but there’s no way of knowing that for sure…and the only hope is that more will be revealed to us in next Friday’s Commitment of Traders Report.One thing I am happy about is the performance of the mining stocks through all this.  Yesterday one would have thought the stocks would have been slaughtered…but that wasn’t the case at all.  It was very similar to what happened on Wednesday’s big engineered price decline.I’d like to think that it’s strong hands buying all the shares that are falling off the table as weak-kneed day traders hit the ‘sell’ button…but I’m always concerned that “da boyz” are buying up all these shares in order to dump them later when they need to suppress the share prices as well.  I know that John Embry would be in total agreement with this scenario.  But maybe I’m looking for a black bear in a dark room that’s not there.Anyway, with November in the history books, all eyes are on what’s going on in the U.S. regarding the “fiscal cliff”.  As I’ve said many times, I have no idea what will happen from here.  As we’ve seen twice this week, JPMorgan Chase et al are still running this show with the backing of the CME Group and the CFTC…and ever present is the record Commercial net short position in silver…and an almost equally large short position in gold as well.  With all these elements in play, it’s a mug’s game to try and make a prediction here.We all know what the precious metal should be doing price-wise…but will they…and how soon and how high?  Soon…and very high…are the answers that we would all like.Before closing, I’d like to take this opportunity to mention the fact that Doug Casey has a new book coming out very soon…and it would be my guess that it’s a must read.  It bears the title “Totally Incorrect“…which pretty much sums up Doug’s persona in two words.  The cost of his new tome is US$14.95…46% off the retail price…and a pittance in the grand scheme of things.  If you have any interest at all, you can find out more by clicking here.Enjoy what’s left of your weekend…and I’ll see you here on Tuesday. It was another ‘nothing’ day in the dollar index yesterday, as it chopped around just above the 80.00 mark, closing the Friday session at 80.24…up 3 basis points from Thursday.  Of course there was no co-relation between the index and the precious metals once again.The gold shares rallied a bit at the open, but then gold sold a bit over 2 percent…with the low of the day coming around 3:30 p.m.  From there, they recovered sharply going into the close…and the HUI only finished down 0.94%.  It could have been worse.The website is obviously having some serious issues with its HUI data…so here is the Kitco HUI chart once again.Despite the absolute shellacking that the silver price took, the shares themselves turned in an impressive performance, as there were a lot of green arrows on my list of companies that I track…and Nick Laird’s Silver Sentiment Index closed down only 0.74%.  Amazing!(Click on image to enlarge)There was no CME Daily Delivery Report posted on their website until just before midnight last night Eastern time…which is about five hours later than normal.  What it showed was that only 31 gold contracts were posted for delivery on Tuesday.  Only 102 gold contracts have been posted for delivery during the first two days of the December delivery cycle…which I find amazing.It was a different story in silver, as 545 contracts were posted for delivery on Tuesday.  The two big short/issuers were JPMorgan in its proprietary [in house] trading account with 343 contracts…and Jefferies with 169 contracts issued.  The two biggest long/stoppers were JPMorgan in its client account with 255…and Barclays with 168 contracts stopped.  In the first two delivery days for silver…1,116 silver contracts have been posted for delivery.  This sounds normal.This link to yesterday’s Issuers and Stoppers Report is here…and it’s worth the trip.Despite the two sell offs in the paper market on Wednesday and Friday, the GLD ETF continued to add metal yesterday.  This time an authorized participant added 58,124 troy ounces of gold.  And, for a change, there were no reported changes in SLV.They had another decent sales report to close out the month over at the U.S. Mint yesterday.  They sold 5,500 ounces of gold eagles…1,500 one-ounce 24K gold buffaloes…and 25,000 silver eagles.  Unless more are added to these totals on Monday, the November sales figures are as follows: 136,500 ounces of gold eagles…16,500 one-ounce 24K gold buffaloes…and 3,159,500 silver eagles.  Because of the huge number of ounces of gold sold by the mint in November…especially during this past week…the silver/gold sales ratio dropped all the way down to just over 20:1.  I have a must read Reuters story about this in the ‘Critical Reads’ section further down.By the way, I wouldn’t be at all surprised if the mint held back some November silver eagles sales for the December month.  If they did, we’ll find out about it on Monday.It was a really busy Thursday over at the Comex-approved depositories.  They reported receiving 1,552,896 troy ounces of silver…and shipped 311,368 ounces of the stuff out the door.  JPMorgan Chase’s depository was on the receiving end of 625,441 troy ounces of that amount.  The link to that activity, which is worth a peek, is here.As expected, the Commitment of Traders Report for positions held at the close of Comex trading on Tuesday did not make for happy reading.In silver, the Commercial net short position only increased by a rather small 1,606 contracts, or 8.0 million ounces.  I was expecting much worse.The total Commercial net short position now sits at 56,792 contracts, or 284.0 million ounces.  The ‘big 4’ hold 278.1 million ounces of silver short…almost the entire Commercial net short position on their own.  On a ‘net’ basis, the ‘big 4’ are short over 45% of the entire Comex futures market in silver…and I’d bet serious money that virtually that entire amount [95% plus] is held by JPMorgan Chase and Scotiabank.The ‘5 through 8’ traders are short an additional 51.2 million ounces of silver…and on a ‘net’ basis are short an additional 8.3 percentage points.  Adding them up, the ‘Big 8’ are short over 53% of the entire Comex futures market in silver.But it’s only the ‘Big 2’ that matter…as the other six traders hold only about 2 percentage points of the total Commercial net short position each…and are immaterial in the grand scheme of things.There are 41 Commercial traders registered on the short side of the Comex silver market…and two of them are short 45% plus of that market.  A lot of the other 39 traders…Ted Butler’s raptors…all work together in collusion as well.  You couldn’t make this stuff up!These are precisely the same numbers that CFTC Chairman Gary Gensler and Commissioner Bart Chilton are looking at as well…and have been ‘investigating’ for more than four years.  When I talk about ‘obscene and grotesque’ short positions in the silver market, this is of what I speak.Reader E.W.F…who sends me the weekly COT charts…made the comment that the ‘Big 4’ in silver are holding their largest short position since January 2010.  No doubt that short position has declined since the Tuesday cut-off…but we won’t know by how much until next Friday…December 7th…the “day which will live in infamy“.In gold, the Commercial net short position increased by a chunky 15,983 contracts, or 1.6 million ounces of silver.  The total Commercial net short position now sits at 25.20 million ounces.The ‘big 4’ traders are short 15.63 million ounces of that amount…and on a ‘net’ basis are short 34.8% of the entire Comex futures market in gold.  The ‘5 through 8’ traders are short an additional 5.94 million ounces, or 13.2% of the entire Comex futures in gold.  Add them up…and the ‘Big 8’ are short 48% of the entire Comex futures market in gold…and that’s a minimum number.There are 48 traders registered as short holders in the Commercial category in gold…and 4 of them are short 34.8% of the Comex futures market in gold.  As you can see, the short positions in gold are not as concentrated as they are in silver…but it matters not when most of the ‘Big 8’…and a lot of the smaller ‘raptor’s are all working together.The CME Group does nothing…the CFTC does nothing…and the precious metals companies that we all own shares in, do nothing as well.  It’s obvious to me that in order to work for, or at, any of these organizations…you have to agree to wrap your testicles in a piece of paper on which is written the full and complete meaning of the words “Fiduciary Responsibility“…and keep them out of sight while you are so employed.Here’s Nick Laird’s “Days of World Production to Cover Short Positions” chart.  This week’s Commercial short position data is a high water mark for silver that goes all the way back to January of 2010…a fact that the CFTC should be ashamed of.(Click on image to enlarge)Here’s a chart that Washington state reader S.A. sent my way yesterday…and it’s pretty self explanatory.  The banks do quite well in all this.  Up to a point, they don’t care about the principal…as it was created out of thin air anyway…what they’re really concerned about is regaining the revenue stream from the interest they charge on the money they create out of thin air.Here are three pet photos that were sent to me by readers by John Sanders and David Caron a few weeks back…and this is the first time I’ve had the space to post them. Great Panther Silver Limited, (TSX: GPR NYSE.A: GPL)headquartered in Vancouver, Canada, is a profitable primary silver producer operating two 100% owned mines in Mexico.  Over 94% of revenues are derived from unhedged precious metals production with approximately 74% generated from silver sales and 20% from gold.  Since entering production in the first quarter of 2006, the Company has seen five consecutive annual increases in revenues and provides strong leverage to future rises in precious metals prices. The Company has also been growing its resource and reserve base at both 100% owned operations. A new resource/reserve estimate is expected for the Guanajuato Mine Complex and the San Ignacio Project in the second quarter of 2012 and a new resource/reserve estimate for the Topia Mines during the third quarter of 2012. Great Panther continues to replace mined ounces, grow resources and reserves at both operations, and is targeting a 10 year mine live at each.For more information, please visit the website or contact Rhonda Bennetto, VP Corporate Communications, toll free at 1-888-355-1766 or by email at [email protected] Sponsor Advertisementlast_img

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