Harvey Organ: Silver Market CHAOS After HUGE London Fix Manipulation

 

SilverUnfortunately, it is not [a mistake]… This could be the end of the fix. It took 14 minutes to find a fix – they obviously found a fix way off of the market.
Today we had a HUGE flash crash in silver and this caused the fix to settle at 13.58  even though the spot price of silver at the time was .84 higher at $14.42. 
This is totally unbelievable- will it mark the end of the fix?

 

Harvey Organ

Gold:  $1115.60 down $.50    (comex closing time)

Silver 14.22 down 22 cents

In the access market 5:15 pm

Gold $1125.00

Silver:  $14,49

At the gold comex today,  we had a good delivery day, registering 5 notices for 500 ounces. Silver saw 16 notices for 80,000 oz.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 199.70 tonnes for a loss of 103 tonnes over that period.

Today we had a huge flash crash in silver and this caused the fix to settle at 13.58  even though the price of silver at the time was slightly over $14.52.  This is totally unbelievable and it will cause huge losses to mining companies who use the fix to settle on silver delivered.  The regulators and bankers should all be put in jail for this most outrageous criminal behaviour.

Silver

Image courtesy ZH:

In silver, the open interest rose by 1549 contracts up to 156,283. In ounces, the OI is still represented by .782 billion oz or 112% of annual global silver production (ex Russia ex China).

In silver we had 16 notices served upon for 80,000 oz.

In gold, the total comex gold OI fell by a rather large 3354 contracts to 381,996 contracts as gold was down $5.60 with yesterday’s trading.

Today both the gold comex and the silver comex are in severe stress with gold in backwardation up to April.

We had no changes in gold inventory at the GLD,   / thus the inventory rests tonight at 669.23 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. Our 670 tonnes of rock bottom inventory in GLD gold has been broken. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold, after they deplete the GLD will be the FRBNY and the comex.   In silver,/we had no changes  in  inventory and thus/Inventory rests at 310.653 million oz.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver rise by 1549 contracts up to 156,283 despite the fact that silver was down 10 cents with respect to yesterday’s trading.   The total OI for gold fell by 3,354 contracts to 381,996 contracts as gold was down $5.60 in price from yesterday’s level.

(report Harvey)

2 a) Gold trading overnight, Goldcore

(Mark OByrne)

3. ASIAN AFFAIRS

i) Late  WEDNESDAY night,THURSDAY morning: Shanghai down badly by 2.85%   / Hang Sang up. The Nikkei and the rest of Asia closed badly in the red . Chinese yuan up a touch and yet they still desire further devaluation throughout this year.   Oil gained a dollar, rising to 32.25 dollars per barrel for WTI and 33.40 for Brent.  Stocks in Europe so far are all in the red. Offshore yuan trades at 6.6174 yuan to the dollar vs 6.5760 for onshore yuan. huge volatility is the Chinese markets screams of credit problems; a leaked document suggests that China will not use the lowering of the RRR reserves but instead provide direct yuan injections into the market/POBC injects another 50 billion of liquidity into the markets

ii)The architect of Abenomics resigns amid corruption and bribery allegations:

( zero hedge)

iii) Another outstanding commentary from Raul Meijer as he speculates that China will drop the big bomb shortly:  a huge 30 -50% yuan devaluation which will send massive deflation to the rest of the globe:
( Raul Meijer/Automatic Earth Blog)
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iv) A terrific commentary explaining how China’s paper economy will implode and take the globe with it:( David Stockman/ContraCorner)

v) China will now use public funds to cover losses on some failed venture capital

( zero hedge)

vi)Houston:  we have a problem!!  The delta in total Debt to GDP in one year is absolutely outstanding!!  Now the total rises to 346%  (Corporate,Sovereign/Personal.  With debt rising much faster than GDP, then must be a devaluation in the yuan shortly:

( zero hedge)
RUSSIAN AND MIDDLE EASTERN AFFAIRS
i)Another Swedish girl raped and then murdered.  Sweden is in total shock
(JEWNEWS)

ii)Sweden now set to deport 80,000 refugees amid huge security fears.  We wish Sweden the best of luck trying to find them!

“if European politicians do not find an effective way to get the situation under control, the public will remove them – either with the ballot or with the torches and pitchforks.”
(courtesy zero hedge)
iii)Danish girl charged for using pepper spray on rapist
(zero hedge)

iv) Last night,Saudi Arabia blew through 19.4 billion dollars worth of reserves leaving only 608 billion. It sure looks like their gamble to knock out USA shale has failed

( zero hedge)
GLOBAL ISSUES
i) The uSA is losing their power as the iMF shifts more to the east:
New changes from the IMF
(  IMF)

ii) We now have a new virus to be worried about:  the ZIKA virus spread through a mosquito which will cause defects in pregnant women as it causes huge birth defects.  It is spreading explosively in South and Central America:

( zero hedge)
OIL ISSUES

i) Oil soars to 3 weeks high on a supposed Saudi proposal for a 5% cut in production from all nations.  However Iran spoils the party suggesting that they want to recoup lost market share:( zero hedge)

ii) Then this happened:  “OPEC:  there is no plan for a meeting with Russia”

Brent and WTI still rising despite that news.

( zero hedge)

iii)So ends the trial balloon of a output oil cut. Saudi Arabia has no proposal for that

cut! Oil still rising???
( zero hedge)

iv)  Shell and Italian ENI corp may lose a huge 9 billion barrels of crude

as they have been caught bribing previous Nigerian officials so that they could obtain the exploration block.  The new government is also looking at fining the corporations along with the seizure of the block:
( Julianne Geiger/OilPrice.com)
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PHYSICAL STORIES

i) The big story of yesterday was the official gold repatriated by Germany at 210 tonnes.

Chris Powell asks the correct question:  “where was the source of these bars”

I will also give you my two cents worth on the matter  below

(courtesy Chris Powell/GATA)

ii)Ronan Manly explains how Germany received its 210 tonnes of gold back

(Ronan Manly/Harvey)

iii) Peter Boehringer discusses the slow pace of German gold repatriation!

( Peter Boehringer/GATA)

iv)Interesting:  Koos Jansen spoke to Scotiabank people on Chinese gold demand; and he gives us a commentary on this!

( Koos Jansen/GATA)

v) LBMA is trying to thwart the arrival of a allocated bullion exchange at the LBMA:

( TFMetals/Turd Ferguson)

vi) We had another silver flash crash this morning:  two commentaries

(zero hedge)

vii) Lawrie Williams discusses Chinese gold demand.  You will recall that China has now stopped giving SGE withdrawals on gold which to us was key in estimating demand.

Now it is going to be a little more difficult to find true demand as we must use export figures from all the various countries

(courtesy Lawrie Williams/Sharp’s Pixley)

USA STORIES WHICH WILL INFLUENCE THE PRICE OF GOLD/SILVER

i)Moody’s had downgraded Freeport McMoRan to junk.  Its credit default swaps (bets on the survival of the company) skyrocketed today.  This is important due to the huge derivative trading by Freeport and together with their compadres, Glencore, Trifigara and Nobel, they can bring the entire globe to its knees:

( zero hedge)

ii)Jobless trend continues to drive in a northernly direction:

( BLS/zero hedge)

iii) Next on tap is the total destruction in the capital goods arena: durable good orders crashed!!

( zero hedge)

iv) Another huge problem in the USA:  schools for profit are just not finding jobs for its graduates.  This saddles huge debt upon the student and they want their money back

( zerohedge)

v)Pending home sales disappoint:

( zero hedge)

vi)Biotechs continue to face a beating.  Only Facebook is advancing despite its 83 x P/E

( zero hedge)

vii)This should give you a clear picture as to why the S and P is not rising.  There is a direct correlation between a rise in the Fed’s balance sheet and the S and P.

Now the next question:  how much more pain will Yellen witness before she releases more QE!!
( zero hedge)

viii)This is going to do wonders for the USA housing markets as HSBC halts mortgages to Chinese nationals:( zero hedge)

Let us head over to the comex:

The total gold comex open interest fell to 381,996 for a loss of 3354 contracts as the price of gold was down $5.60 in price with respect to yesterday’s trading.   For the past two years, we have strangely witnessed two interesting developments with respect to the gold open interest:  1) total gold comex collapse in OI as we enter an active delivery month, and 2) a continual drop in the amount of gold standing in an active month.   Today, both scenarios again held in spades. We are now leaving the non active January contract which is now off the board.  The next big active delivery month is February and here the OI fell by a monstrous 47,488 contracts down to 25,686. First day notice is tomorrow Friday, Jan 29.2016. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was 234,453 which is poor considering the huge number of rollovers.. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was good at 309,860 contracts. The comex is deeply into backwardation up until April. 

Today we had 5 notices filed for 500 oz.
And now for the wild silver comex results. Silver OI rose by 1549 contracts from 154,734 up to 156,283 despite the fact the price of silver was down by 10 cents with respect to yesterday’s trading. We are now leaving  the non active month of January as it is now off the board.The next big active contract month is March and here the OI fell by 80 contracts down to 107,186. The volume on the comex today (just comex) came in at 48,440 , which is very good. The confirmed volume yesterday (comex + globex) was good at 43,102. Silver is not in backwardation at the comex but is in backwardation in London. 
We had 5 notices filed for 500 oz.

January contract month:

FINAL standings for January (probably)

Jan 28/2016

Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  nil nil
Deposits to the Dealer Inventory in oz  nil
Deposits to the Customer Inventory, in oz   1929.000 oz

60 kilobars

No of oz served (contracts) today 5 contracts

 500 oz

No of oz to be served (notices)  off the board
Total monthly oz gold served (contracts) so far this month 172 contracts (17,200 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil
Total accumulative withdrawal of gold from the Customer inventory this month 78,296.8 oz
Today, we had 0 dealer transactions
We had 0  customer withdrawals
total customer withdrawals; nil  oz
We had 1 customer deposits:

i) Into Scotia: another of those dubious 1929.000 oz

60 kilobars

Total customer deposits  1929.500  oz

we had 1 adjustments.

From the Delaware vault:

200.477 oz was removed from the dealer and this landed into the customer account of Delaware

Here are the number of oz held by JPMorgan:

 JPMorgan has a total of 7774.663 oz or 0.2418 tonnes in its dealer or registered account.
***JPMorgan now has 401,421.230 or 12.48 tonnes in its customer account.
Today, 0 notices was 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 5 contract of which 0 notice was stopped (received) by JPMorgan dealer and 0 notices were stopped (received)  by JPMorgan customer account.
 
To calculate the final total number of gold ounces standing for the Jan contract month, we take the total number of notices filed so far for the month (172) x 100 oz  or 17,200 oz , to which we  add the difference between the open interest for the front month of January (5 contracts) minus the number of notices served upon today (5) x 100 oz   x 100 oz per contract equals the number of ounces standing.
 
Thus the initial standings for gold for the January. contract month:
No of notices served so far (172) x 100 oz  or ounces + {OI for the front month ( 5) minus the number of  notices served upon today (5) x 100 oz which equals 16,600 oz standing in this active delivery month of January (0.5349 TONNES)
We thus have 0.5349 tonnes of gold standing and 2.762 tonnes of registered gold for sale, waiting to serve upon those standing
Last month, at the conclusion of the December contract month, we had 6.445 tonnes of gold standing and 8.57 tonnes of registered (dealer) gold for sale.
We now have evidence of movement out of the registered gold to settle upon those outstanding longs.
Total dealer inventor 88,802.254 or 2.762
Total gold inventory (dealer and customer) =6,420,646.093 or 199.70 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 199.70 tonnes for a loss of 103 tonnes over that period. 
JPMorgan has only 12.727 tonnes of gold total (both dealer and customer)
end
And now for silver

January FINAL standings/ (probably)

Jan 28/2016:

Silver
Ounces
Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 750,040.69 oz

Scotia,JPM,

Delaware

Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 996,770.29 oz,

Brinks,HSBC

No of oz served today (contracts) 16 contracts

80,000 oz

No of oz to be served (notices) off the board.
Total monthly oz silver served (contracts) 115 contracts (575,000 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 5,637,135.0 oz

Today, we had 0 deposits into the dealer account: 

total dealer deposit;nil  oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 2 customer deposits:

i) Into Brinks:  607,852.35 oz

ii) Into HSBC: 388,917.940 oz

total customer deposits: 996,770.29 oz

We had 3 customer withdrawal:
i) Out of Delaware: 1952.000 oz ???????????????????????????
ii)Out JPM:  607,862.400  oz
iii)Out of Scotia:  140,226.29 oz
 

total withdrawals from customer account 750,040.69   oz 

 we had 2 adjustments:

i) Out of the CNT vault:

we had an adjustment of 556,394.710 oz adjusted out of the dealer and this landed into the customer account of CNT

ii) Out of the Delaware vault:

we have 745,499.738 oz adjusted out of the customer account and this landed into the dealer account of Delaware:

 

The total number of notices filed today for the January contract month is represented by 16 contracts for 80,000 oz. To calculate the number of silver ounces that will stand for delivery in January., we take the total number of notices filed for the month so far at (115) x 5,000 oz  = 575,000 oz to which we add the difference between the open interest for the front month of January (16) and the number of notices served upon today (16) x 5000 oz equals the number of ounces standing
Thus the final standings for silver for the December. contract month:
115 (notices served so far)x 5000 oz +(16) { OI for front month of January ) -number of notices served upon today (16)x 5000 oz   equals 575,000  of silver standing for the January. contract month.
Somehow we lost 35,000 oz of silver standing  in this non active delivery month of January.
Total dealer silver:  36.322 million
Total number of dealer and customer silver:   157.123 million oz
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.There is now evidence that the GLD and SLV are paper settling on the comex.***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:i) demand from paper gold shareholders ii) demand from the bankers who then redeem for gold to send this gold onto China

And now the Gold inventory at the GLD:

jAN 28/no changes in gold inventory at the GLD/Inventory rests at 669.23

jan 27/another huge addition of 5.06 tonnes of gold to GLD/Inventory rests at 669.23 tonnes /most likely the addition is a paper deposit and not real physical,especially with gold in backwardation in both London and the comex.

Jan 26.no change in gold inventory at the GLD/Inventory rests at 664.17 tonnes

Jan 25./a huge deposit of 2.08 tonnes of gold into the GLD/inventory rests at 664.17 tonnes

most likely the addition is a paper deposit and not real physical

Jan 22/no change in gold inventory at the GLD/Inventory rests at 662.09 tonnes

Jan 21.2016: a huge deposit of 4.17 tonnes/Inventory rests at 662.09 tonnes

most likely the addition is a paper deposit and not real physical

jan 20/ no change in inventory at hte GLD/Inventory rests at 657.92 tonnes

Jan 28.2016:  inventory rests at 669.23 tonnes

Now the SLV:
JAN 28/no changes in silver inventory at the SLV/Inventory rests at 310.653 million oz
Jan 27.2017: no changes to inventory/rests at 310.653 million oz
Jan 26.2016: a huge withdrawal of 953,000 oz/silver inventory rests tonight at 310.653 million oz
Jan 25.no change in inventory at the SLV/inventory rests at 311.606 million oz
jan 22/we had a 2.0 million oz withdrawal at the SLV/Inventory rests at 311.606 million oz
Jan 21/2015: no change in silver inventory at the SLV/Inventory rests at 313.606 million oz
Jan 20/no change in silver inventory at the SLV/inventory rests at 313.606 million oz
Jan 28.2016: Inventory 310.653 million oz.
1. Central Fund of Canada: traded at Negative 9.0 percent to NAV usa funds and Negative 8.6% to NAV for Cdn funds!!!!
Percentage of fund in gold 63.1%
Percentage of fund in silver:36.9%
cash .0%( Jan 28.2016).
2. Sprott silver fund (PSLV): Premium to NAV rises to  -0.15%!!!! NAV (Jan 28.2016) 
3. Sprott gold fund (PHYS): premium to NAV falls  to- 0.84% to NAV Jan 28/2016)
Note: Sprott silver trust back  into negative territory at -.15%/Sprott physical gold trust is back into negative territory at -0.84%/Central fund of Canada’s is still in jail.