gold & silver sold outIn this week’s Metals & Markets Wrap The Doc & Eric Dubin discuss:

  • Yellen & TPTB preparing to taper talk of taper as the market forces The Fed to d/c the propaganda, and admit MOAR QE is coming
  • As Comex Registered Inventories Continue To Plummet, Gold signaling a change in trend- higher lows a positive sign the market may be finally turning, and Asian investors are eager to buy the dips
  • JP Morgan Twits Tweet:  Epic marketing failure
  • Retail silver shortage developing once again- 1 month wholesale delays on Sunshine Mint products- the mint that supplies the US Mint with silver blanks

The SD Weekly Metals & Markets With The Doc & Eric Dubin in below:

sic semper tyrannis

 

American investors and financial media frequently suffer from an excessive focus on the goings on with the United States.  Evidence of this can be seen with the breathless reportage on the Dow Jones Industrial Average reaching another all time high, along with the Nasdaq setting up to retake the 4,000 level.  It’s been 13 years since the tech-heavy index was this high.  But the 1.3% rise in the Dow to 15,961.70 close is nothing compared to the veritable QE-driven fiesta taking place in Tokyo.  The Nikkei rose just under 2% today, and racked-up a 5.6% rise over last Friday’s close.

 

Nikkei-nov-15-2013

 

 

 

The Nikkei will probably take a breather for a few days.  But this week’s leap higher is the sort of move markets demonstrate when major shifts in sentiment strike like white lighting.  The fast money (sometimes “smart,” but always momentum-driven) sniffs-out these shifts in sentiment and given the massive amount of global liquidity sloshing around in the financial markets, the result is exactly the sort of trading we witnessed this week in Japan, and to a lesser extent during the latter part of the week in the US.

 

Meanwhile, the Japanese yen looks like it’s setting up for a renewed move to the downside.

 

Yen-dollar-nov-15-2013

 

 

The Japanese government is intent on weakening the yen to boost exports.  But a strong case can be made that both Japan and Euro zone economies are managing their currencies lower and loosening credit in a coordinated rotational move ahead of Janet Yellen taking the reigns of the Fed.  With the threat of taking out the 1.40 level on the Euro now a distant memory and with a bit more weakness introduced to the yen-dollar cross over the next 50 days, the stage will be set for the ECB and the Bank of Japan to take a breather when Yellen sets the policy agenda at the Fed.

 

Yellen will likely push back on taper talk, and the dollar will begin a new downward cycle during the first quarter.  The loss of purchasing power will be partially hidden by the debasement currently underway with the yen and the euro.  Central bankers are pulling the wool over the eyes of the general public.  But there’s no fooling the hot money gang piling into financial assets as a perceived inflation hedge sanctioned by central bankers.

 

As crazy as it might seem, we expect much higher general equities prices for a number of months.  But the bond market is going to have the last laugh.  Ironically enough, the fast money gang is already starting to price this in as well.

 

J.W. Jones at Futures Magazine took a look at the option probabilities built into the current trading of the Long-term Treasury Bond ETF “TLT.”  This ETF is a very liquid, widely followed proxy for the US Treasury Bond market and traders have priced in a two-to-one probability that TLT’s closing price on March 21, 2014 will be below today’s closing price of $104.5/share.   Click here to read the article.

 

Suffice it to say, Yellen is going to have her hands full trying to keep the bond market under wraps in 2014 — all the more reason talk of taper will prove less frequent next year.

In sum, the big story this week was the way global liquidity sloshed around the world.  It looks like the fast money is starting to position more aggressively for a step up in quantitative easing and rotational currency debasement.

Parting shot:  Don’t miss Dave Kranzler’s article on COMEX gold trading and the registered stock of gold depositories.  The astounding draw-down continues.  Click here for the details.

Thanks for listening to this week’s show.  Have a great weekend — Eric Dubin

 

SDBullion’s Lowest Price Ever on Silver Maples!
As Low As $1.89 Over Spot!

Silver Maple

http://www.dnapreciousmetals.com/

 

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  1. Stopping the minting of ASE’s over Christmes MEANS … TPTB are getting ready for some more severe Silver and Gold futures contract dumping over Christmas. All designed to help the retail services and Dollar performance over Christmas IMO. The Mint will not want to sell at the price TPTB have indicated to them that they are going to drop it to, the only sellers will be Moron Weak Hands from the general public and coin shops stupid enough to sell their inventory without a high premium.
     
    I see Silver going under $20 maybe even to below $18, and they’ll keep it there for about a month as more of an attempt to bolster Dollar confidence, it will magically rebound when the mint opens.
     
    In other news, Peter Schiff had an awesome argument with a Keynesian Retard called Josh Barro on his 14th November show. 2nd half of the first hour is when the fun starts … because Josh’s father is a Harvard Econ Professor he cannot pull the Keynesian indoctrination out of his brain … the US Economy is doing fine in his opinion, and there is no major inflation whatsoever.
    Play: http://www.schiffradio.com/programhighlights?date=20131114
    Download: http://www.schiffradio.com/site/rd?satype=2&said=1&url=http%3A%2F%2Fwww.schiffradio.com%2Fdownloadsecurity%3Furl%3DaHR0cDovL2ZldGNoLm5veHNvbHV0aW9ucy5jb20vc2NoaWZmL2F1ZGlvL3BhXzIwMTMxMTE0amdkaF9sb3cubXAzKip8MTM4NDYwMzMwNjc3MioqfA%3D%3D.mp3

    • I share your concerns on mining shares. I went heavy into miners back in February which was exactly the wrong time. Having said that I think now is a good time to be scaling into the more stable miners. A lot of them appear to have bottomed out as they don’t fall nearly as much as they used to when the metals get whacked. 
      David Morgan is calling for $14 silver and $1080 gold in December. Hopefully he is wrong on this call like he usually is.

    • If you guys are really concerned on the mining shares there are some things you can do to protect short term.  Buying puts costs money but gives you the right to sell at a price you decide.  You can also sell calls which puts money in your pocket but obligates you to sell at a defined price and gives you no downside protection other than the initial money you put in your pocket.
       
      Be careful as one contract of options represents 100 shares of stock (sell one option and you may be obligated to sell 100 shares).  

  2. Eric, I like your comments about GOFOs! They have been confusing me for months. Sometimes it looks like when the PMs go down, GOFOs go down/negative, thus signaling stress in the market. Then again, it doesn’t look like that. However, could it be the case that this is just happening with a little bit of delay? If that’s true, GOFOs should be going down strongly in the next couple of days.
     
    Your thoughts?

    BTW, where did your article on the JP Morgan Twitter thing go to?

    • I’m not sure what article you’re talking about.  The one published on SD and linked above is still there.  If you’re looking for overall coverage, click on the following link and you can see a huge pile of articles on the JP Morgan twitter disaster — no one had any nice words for them:  https://startpage.com/do/search?q=jp+morgan+twitter
      GOFO a few weeks back showed a really nice correlation to what was going on with gold prices and cartel footprints.  Click here for that discussion.  A delayed reaction is certainly possible.  It could also be that during periods of any given month when we are far away from dates for contract delivery, the paper trading can “get away with” even more impact to LBMA pricing.  I’m really not sure.  But for whatever reason, the confirmation signal value we could see back in mid October isn’t working right now.
      – Eric Dubin, Managing Editor, The News Doctors

    • Eric
      I saw from the link you provided on GOFO the prediction about the October expiration date.   December is considered a “delivery month” which I believe is defined by the COMEX but it is not clear what that means exactly.  Is everyday a potential expiration day?
      There is still a very large open interest for Dec.   In an article posted here by T. Ferguson, he predicts the following (any thoughts?):
      Either way, as we’ve clearly established over the past few months, price is only raided during delivery months where JPM is issuing deliveries. In August, when JPM was taking delivery (stopping), price rallied. Since JPM is clearly NOT going to be issuing in December, should we expect a rally? ABSOLUTELY! This is why I’ve been telling you for weeks that price would bottom again in mid-October and then rally through the end of the year. This latest BPR, though dated and stale, nonetheless confirms this forecast.

    •  Every month is a delivery month (yes defined by CME) some months are heavier than others.  A contract only truly ‘expires’ at the very end of the month, so twelve every year.  
       
      When you see big players buying deliveries it tells you that cme price is the cheapest around and that is an indication prices are too low.  Reverse is true as well.
       
      I would really love to know more about who is using the contract and who they clear with… that would allow better reading of reports… i.e. you see JpM customer stopping it tells you that jp is stopping on behalf of a customer, but who is that customer and what is their play?  Just investment or could it be a major jewelry manufacturer, etc.

      I agree with TF on his conclusions should his analysis be correct, however i am not so sure i agree with analysis on jpm’s position.

    • It is a “Trading at Settlement” TF seems to call them delivery months.  
      From te CME site.  
       

      Trading at Settlement is allowed in the active contract month. The active contract months will be February, April, June, August and December. On any given date, TAS transactions will be allowed only in a single contract month. TAS transactions may be executed at the current day’s settlement price or at any valid price increment ten ticks higher or lower than the settlement price.

    • @FlyingWombat: Thank you, I had overlooked that JPM article, my fault – some of the tweets are hillarious! I think it’s pretty big that people are waking up a bit (although I only saw PM manipulation mentioned in two tweets).
       
      “for whatever reason, the confirmation signal value we could see back in mid October isn’t working right now”
       
      Exactly my thoughts – and the signal was working so well a while ago. Will be interesting to see what happens next week. 

    • @JerseyJoe
       
      Trading at settlement is different that delivery.  Trading at Settlement means i can give an order to buy or sell order and know that i will be filled within ten ‘ticks’ on either side of the settlement price.  This is useful for someone in the physical trade who may have contracts to supply or buy metal based on an average of the settlement prices… the Trade at Settlement option allows them a very good way to hedge themselves. As you mention, this occurs only in certain months and this feature is why the open interest in those months tends to be higher.
       
      Delivery is the settlement of a contract by transferring ownership of physical metal in satisfaction of a short futures position.  This happens every month and you can see the ytd reporting on cme website below:

      http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf

    • Thx Mickey
      I still cannot figure out TF’s repeated use of “delivery month” because I get that each and every month is a delivery month.  (I have written him some weeks back but haven’t heard back.)    
      December has a huge number of contracts coming due.  And his call on December intrigues me (saw posted here on Silverdocs first).   The CME’s eligible ounces are declining rapidly…and many say (like Sinclair and Roberts) claim that we will only see a real market price for PM’s once are freed up from the COMEX’s paper scam.   
      Listening to Mike Maloney here: 

      [audio src="http://radio.goldseek.com/shows/2013/11.15.2013/GSR-11.15.13-c.mp3" /]

      I will post an interesting timeline. 

    • I posted this to my Metalmoney yahoo board.   I set it up to try and figure out this madness.  Silverdocs, KWN, ZH, and other boards are my favorite haunts.
       
      Insane times – here is the timeline:
       
       
      Sprott has been moving into mining shares on the belief that gold and silver prices are going to drive much higher in the coming months.
      With the world printing money and the COMEX, LBMA and GLD inventory depletion, it remains a very plausible, almost guaranteed outcome at some point.  Soon?   Sprott thinks within the next 12 months or so. 
       
      http://www.silverseek.com/commentary/eric-sprott-silver-silver-stocks-will-go-much-higher-silverseekcom-exclusive-1113
       
      Also recall the recent prima facia evidence…

      Since January 1, 2013, the US Federal Reserve printed an additional ~$910,000,000,000 out of thin air (as reported by Bloomberg, the Fed is taking their interest payments and buying T Bills thus kicking the monthly print to $91B.) 
      Starting at least back to 2011Germany demands to see their gold held by the NY Fed and are refused.
      October 2012German court orders an audit of German gold held at NY Fed.   They are refused. 
      January 2013Germany was told by the US Fed that it would take seven years to return a 300 tonne portion of their gold from NYC.
      March 25, 2013, ABN AMRO, Holland’s largest bank, defaults on their gold customers and shutdown gold deliveries to their gold clients.  Accounts settled in cash. ABN AMRO is also a settlement bank for the London bullion market.  (They can’t get gold in a “bear gold market?”  In a real bear market, there would be plenty of gold to go around – wouldn’t there be?  Instead they defaulted on their customers?) 
      April 9, 2013, this report came out one week before the naked short on gold in April 15th: http://bullmarketthinking.com/comex-gold-inventories-collapse-by-largest-amount-on-record/  A strong argument can be made that the Banksters needed the gold out of GLD.   Apparently, none of this disgorged GLD gold every showed up in bank inventories leading people to concluded it was shipped East.
      April 12th and 15th, 2013, the $200 price smash on gold in April was reported by traders as a $20B leveraged naked short on gold – the Banksters used it to fleece COMEX call options and get the gold out of the GLD EFT to make deliveries.  
      May 21, 2013Wealthy families reported pulling gold from western bullion banks for fear of rehypothecation and unauthorized leasing were being told various lies about why they can’t have their allocated gold!  (It’s theirs – serial numbered and certified!  In one report, it took weeks to get the family gold and none of the serial numbers match their inventory!!!   This is theft!)
       July 25th 2013, RABO Bank of Holland also defaults on their gold customers.  But gold is cheap right?  Everyone is selling right?  What are they selling?  Paper?  
      2012 and 2013: Massive gold purchases by China, India, Russia, and Turkey.  
      October/November 2013China buys largest vault in the world in NYC and opens a 2000 tonne private vault in Shanghai Free Trade zone announced open yesterday
      Sinclair claims five precious metal exchanges opening up with no paper trading.   
      Paper trading on COMEX has led to there being over 55 claimants per ounce of gold due naked shorting and rehypothecation. 
      Last point:   Gold analyst and trader T Ferguson reported the following about December’s massive open interest on gold in the COMEX.  Is he right?   We will soon see.  

       
      Either way, as we’ve clearly established over the past few months, price is only raided during delivery months where JPM is issuing deliveries. In August, when JPM was taking delivery (stopping), price rallied. Since JPM is clearly NOT going to be issuing in December, should we expect a rally? ABSOLUTELY! This is why I’ve been telling you for weeks that price would bottom again in mid-October and then rally through the end of the year. This latest BPR, though dated and stale, nonetheless confirms this forecast.

       

    • @JerseyJoe:  Mickey did the heavy lifting on the subject, but I can explain what TF is doing.  It’s become a form of short-hand to speak of the traditional months where much bigger volume of physical moves as a “delivery month.”  It’s a bit like slang, and the analyst community has for whatever reason taken to using the term in that context.  So, for example, December is the most active month in any given year, and it’s therefore called a delivery month — even though all months have some deliveries going on.
       
      As for JPM’s position book, the predictive value of JPM being net long gold and getting even more so is worth paying attention to because that bias on a 6+ month basis and further out in time does show where they think the market will be heading.  The numbers don’t lie.  But they’re not the full picture.  The over-the-counter global precious metals market is bigger than the LBMA and COMEX combined and we simply have no idea what is going on for non-reported market transactions … other than to see the footprints those trades can leave, such as a massive hike in a monthly import tonnage landing in Honk Kong that seemingly blows away available supply and is filled seemingly out of nowhere, etc.  There’s also the aspect of the book balancing JPM might be doing during any given month.  Just because they’re not long IN PAPER gold doesn’t mean that they will not have a problem in an active delivery month coming up with gold to meet the demand of customers wanting to off-take physical.  That’s an entirely different, shorter-term dynamic that can manifest and motivate JPM to blast PAPER gold on a short-term basis, so as to (in their mind) hopefully lower PAPER prices to the point of lowering or killing incentive of contract holders to stand for delivery of physical (when JPM’s eligible warehouse supply of physical has been plummeting all year). 
      So, bottom-line, TF is correct to point to these trends, but recognize that there’s a couple of different stories going on here at the same time.  I only scanned the article you were referencing (click here for others).  But I know TF understands the differences I’m talking about even if he didn’t make them crystal clear in that write-up.

    • Many, many thanks Eric – you and the Doc are doing god’s work.   People will be run over and backed-up on with what is coming.  I have to say I really seethe with what is going on in this country and with the criminals running it. (I live in NJ and I can’t believe Corzine is not behind bars!!!!) 

    • @Flying-Wombat
       
      “That’s an entirely different, shorter-term dynamic that can manifest and motivate JPM to blast PAPER gold on a short-term basis, so as to (in their mind) hopefully lower PAPER prices to the point of lowering or killing incentive of contract holders to stand for delivery of physical (when JPM’s eligible warehouse supply of physical has been plummeting all year).”

      Eric, can you walk me through the mechanics on this one? If I am JP and I am trying to convince people not to take delivery that implies firstly that I have ownership of the metal in my or another comex approved warehouse (we do not know whether or not this is true, but I assume they own at least some since they were long and taking delivery over the summer). Secondly, it would imply that they have a short futures position in the front month futures contract (otherwise nobody would be able to take delivery of their metal since no short in the front month means no need to make your warehouse stocks available).

      So now with a short position in the front month they blast the metals lower (here is where i start reading between the lines and making assumptions, please correct me where wrong) and they do so to hopefully drive the futures markets so low that the long has a better, more price competitive option than taking delivery of JPMs gold… but if they blast metals lower with an onslaught of selling, now they have even more shorts in the front month that must be covered by either delivery or by buying back the contract before expiration… this i see as being a problem for JPM. Also, there is no guarantee of what the physical market may be pricing at, if the physical market is tracking the front month (you are closer to this than I am, but it seems this is often the case) then blasting the front month might not make an impact big enough to matter unless sellers in the cash markets drop their premiums big time… but in almost every market I’ve seen a blast lower does not usually mean lower premiums.

      Alternatively you could blast the back side of the market, but if your longs are strong there is no guarantee that the front side will fall (contangos are capped by market forces, backwardations can be infinite). So that doesn’t really work, and now you have yet another short position that needs to be dealt with.

      Wouldn’t a better solution be to buy back your short in the front month (at risk in delivery) and sell a deferred short position well before the front month expires? During a large portion of this year you could do this and make a profit due to carries showing in the futures markets if you went more than a month or two out.
       
       

    • Just wave the Flag, Check on your two cars in the garage, stir the chicken in your pot, slip another apple pie into the oven and don’t forget to kiss Mom. but whatever…don’t wake the Sheep!!

  3. Higher lows, lower highs, how ’bout hanging out at the bar down the street from the NY JPM offices to know for sure.  Hey @Marchas45 I got hold of one of those 100 dollar monopoly money bills.  Not that impressed.  The blue plastic strip has unclean cuts between the blank areas.  Looks like someone took an exacto knife and cut those parts of the strip by hand.  I’m sure they’ve already figured out how to counterfeit them.
    Yeah, I said a long time ago those mortgages the FED has been “buying” will go to the biggest bond holders in the final days.  The Chinese will continue to hold the dollar hostage until other countries start dumping in mass.  The Dollar is turning Japanese, I think it’s turning Japanese, I really think so. 
    I think the way the dollar is tanking overnight, and being pushed up by the FED during NY hours, sez the bond dumping is getting serious.  We’re close to hearing the FED say they’ve upped it to $100 B a month.  Maybe 115 by the end of next week.
    Silver up next week.  Big time.  (It’s in my DNA)

    • Volume offered on eBay is a near worthless statistic as far as indicators go.  People can list for free, ask any high price and hope some fool will buy.  It has no consequence to the seller to toss up a listing, unlike many years ago when eBay charged for each and every listing.  So, naturally, it’s no surprise to see the volume of Morgans on offer today higher than last year.  It’s also no surprise to see the average price and premium higher because there’s no economic consequence to the people listing the things to use inflated prices (other than their personal time it takes to post — but people play the lottery for similar inflated expectations too).
      One can get some valuable market intel by looking and closed eBay listings — actual sales.  But even that is a little tricky because the eBay market has been distorted by the dynamic I note in the above paragraph, which has a bleed-over impact into the thinking of non-expert buyers surfing around eBay, seeing high prices, and being suckered, thus pulling up the average price/premium.
      During the first five years of the 2000s, eBay was a wonderful place to buy silver and gold.  Now, it’s much harder to get good deals without spending a huge amount of time.  The number of fakes has also risen.

    • “The fakes are easy to spot” – you mean before date of purchase coins via Ebay, or after receiving the package with the purchase?
      I’d really like to be able to identify a fake coins only from photographs at auction. Please teach me to do it, I’ll go with this trick in the circus and on teleshows.

       

    • Before. We have catalogued several thousand Morgan varieties, all genuine at http://www.VAMWorld.com. We even document the counterfeits, so people know. For most Chinese counterfeits, they used the wrong reverse for that year. For example they used the reverse of 1921 on non-1921 Morgan dollars. Or the C3/C4 neck gap is incorrect on the reverse (mostly counterfeits found from 1896-1904 have this mistake). C3 and C4 reverses were used on Morgans from 1879 to 1900 and 1900 to 1904 respectively. For example the Chinese used a C4 reverse on an 1889 coin. Impossible. Or the date font is hysterically wrong (all years). Or the Chinese copied a rare coin from a Heritage auction with it’s PCGS slab and tried to resell it on eBay. Easily caught, as all high end stuff is checked. And the collectors at the level are experts on their own.

      There is an ebay link to report counterfeits and a team that examines and removes them from sale.  http://www.ebay.com/ccw

      So the comment made about 1/3 Morgans on eBay being fakes is absurd. More like 1 in 10,000 is accurate. And every week, they get cleaned up, removed, and the sellers punished by ebay.

    • @ JLee2027 
      Typically, fraudsters use a photo of genuine coins. Therefore, the buyer can detect the fraud only after he paid and received my order. In addition, most people are not even aware that they have bought a fake and continue to cherish this fake coins as a real coins value.

    • Are you talking about Craigslist? Or ebay? 

      Sellers like that don’t last on ebay. Trashed in feedback or complaints to ebay. And even beginner collectors realize the coin they bought does not equal the coin they received. They are covered under ebay’s buyer protection, and will receive their money back if the seller won’t refund.

      Avoid craigslist. There is no protection there.

  4. ===Volume offered on eBay is a near worthless statistic as far as indicators go.===
    So is saying one company is short on silver blanks. There’s no real evidence – yet- of a shortage, I just gave one example. Do you get the point I made now?

    • @JLee2027:  No, I don’t get the point you’re making.  They’re not related and therefore, I don’t understand your analogy.  The supply of “offerings” of silver for sale on Ebay is inflated because a huge percentage of the people making the offerings face no direct economic cost in generating the offering.  Thus, it’s no surprise to see the number of offerings growing ever since eBay stopped charging sellers for basic listing fees.  The Sunshine Mint operates it’s sale of blanks to the mint in the real world, with real constraints.  There is no constraint against me to go over to eBay right now and list a silver eagle for $60, boosting eBay supply volume without having any relationship to anything in the real world.
       
      And for the record and as important context to this discussion, the Sunshine Mint has served as the largest supplier of silver blanks to the US Mint for a long time.  So, it’s certainly relevant to take notice of the fact that just as the Mint has shut down early, there seems to be some stress at Sunshine Mint on the silver front as well.  It’s something to keep an eye on.
       
      If I have missed the point of your analogy, feel free to correct me.  But I hope you understand what I was getting at as far as eBay supply numbers being next to worthless as an indicator (and that you didn’t take my pointing that out personally, either).
       
      Thanks,
       
      Eric
       

    • Agree, while i don’t think ebay offerings are worthless, too much noise to be really useful.  Now if you told me the number of silver eagles sold in last 10 days and average sale price, that would be useful.  Of course you would need to exclude any rare dates, proofs, graded, etc…

  5. This discussion touched on ebay sales of Morgans as a way of checking the Phyzz market’s pulse.
    I have been running and re-running some Silver coins on the local Craigslist (at MY prices, which are above spot) and getting very poor results.  Most of the buyers are looking for a ‘too-good-to-be-true’ deal, which I will not give since I am not desperate to sell.
     
    It is really no skin off my nose whatsoever to turn down an offer, nor is it a big deal for me to run and re-post the ads after they expore without a sale.
    Always remember the tale of the Turtle and the Hare.

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