Gold Rises By 55 Cents But Silver Is Clobbered By 17 Cents As Options Expiry Ends On Thursday

by Harvey Organ, Harvey Organ Blog:

NORTH KOREA LAUNCHES A BALLISTIC MISSILE/JAPAN HAS ANOTHER FAKE DATA SCANDAL WITH MATERIALS GIANT TARAY INDUSTRIES ADMITTING TO FALSIFYING REPORTS/A USA GOVERNMENT SHUTDOWN ON DEC 8 LOOKS INCREASINGLY POSSIBLE/OUR GOOD FRIENDS OVER AT WELLS FARGO ARE BEING INVESTIGATED AGAIN

GOLD: $1295.40  UP $0.55

Silver: $16.88 DOWN 17 cents

Closing access prices:

Gold $1293.65

silver: $16.85

SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)

SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1299.89 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1293.15

PREMIUM FIRST FIX: $6.19

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SECOND SHANGHAI GOLD FIX: $1299.89

NY GOLD PRICE AT THE EXACT SAME TIME: $1293.15

Premium of Shanghai 2nd fix/NY:$6.19

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LONDON FIRST GOLD FIX: 5:30 am est $1293.90

NY PRICING AT THE EXACT SAME TIME: $1293.90

LONDON SECOND GOLD FIX 10 AM: $1291.85

NY PRICING AT THE EXACT SAME TIME. 1291.85

For comex gold:

NOVEMBER/

 NUMBER OF NOTICES FILED TODAY FOR NOVEMBER CONTRACT:  0 NOTICE(S) FOR nil OZ.

TOTAL NOTICES SO FAR: 1053 FOR 105,300 OZ (3.375 TONNES)

For silver:

NOVEMBER

0 NOTICE(S) FILED TODAY FORNIL OZ/

Total number of notices filed so far this month: 886 for 4,430,000 oz

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Bitcoin: BID $9893/OFFER $9933 up $168 (morning) BITCOIN : BID $9882 OFFER: $9922 // UP $160 (CLOSING)

end

For the past eight years or so I have had a very good relationship with the U.S. Commodity Futures Trading Commission. My desire was always to keep the channels of communication open though I knew that the Comex was manipulated on a daily basis.

Always the CFTC, through Mathew Hunter (Bart Chilton’s hand-picked protege), communicated with me on all issues. My deal was not to repeat anything said. I honored that. After learning about the exchange-for-physicals mechanism on the Comex, I raised with the CFTC some important issues about them and initially Hunter responded. However, my last two letters to him have not been acknowledged.

I would like to point out the huge difference in deliveries between New York and London. November is a non-active delivery month in gold and we generally witness around 1.5 tonnes delivered upon. However, when you note the amount of contracts transferred it is a whole different story:  Last month we had approximately 8,000 contracts of gold open interest transferred to London per day or 180,000 contracts or 1.8 million ounces  (560 tonnes). This month it looks like we will have around 9,500 contracts transferred per day or 2 million ounces transferred (620 tonnes). It certainly shows that Comex has a lack of physical metal.

Here are my two letters to the CFTC:

Dear Mathew:

As you are aware, we have been conversing for the past few years on the subject of gold (and to a lesser extent silver) open interest contraction once we approached an active delivery month.  You originally offered no apparent reason for this phenomena citing confidentiality to which you were not allowed to divulge to me. You never brought up the use of EFP’s to me as I had no idea that they existed.

When I brought up the “newly discovered”  Exchange for Physical” vehicle, you stated that you were well versed in them and not only that but you monitor the private contracts.  You stated that it was quite legal to offer an EFP to a long in a private deal for cash and a deliverable verifiable physical product  and I have since discovered that almost all of our precious metal EFP’s get transferred over for a London Forward.

I was speaking to James Turk who told me that almost all of these EFP’s remain in London seeking whatever physical they can get a hold of.  He informs me that gold and silver are in deep backwardation in price in London and further to that, it is taking 6 weeks- 10 weeks for actual delivery.  He suggests that it is most likely that further payments are issued due to the length of time it takes to deliver the physical gold to our longs.

It would be quite easy for a long to sell in London and buy back a new comex gold position in NY and start the same operation again.  However this is not happening:.

The average EFP on a daily basis or gold is around 8,000 contracts or so PER DAY. So in one month. one would see 180,000 EFP contracts issued .  Over two years,  the transferred comex OI volume would be enormous.  If these were to come back to NY then the comex OI would be enormous and this is not happening

Thus almost all of these gold EFP longs are staying in London trying to obtain whatever gold/silver is available.

However, while this is going on, the bankers continue to supply massive amounts of paper gold/silver knowing with 100% certainty that there is not any physical to supply.

Obviously we have a huge conflict here coupled with zero transparency.  Why are the bankers knowingly supplying huge amounts of paper shorts, influencing the price southbound, knowing full well that they could never deliver upon longs standing.

Why has the CFTC allowed JPMorgan the right to acquire over 600 million oz of physical silver, knowing full well that they are the biggest short at the comex.

The CFTC has stated that the comex is a price discovery mechanism.  Do you still believe that you are reporting on transparency in the gold/silver market?

Gold and silver have higher prices in Shanghai vs NY at the fixes.  With the fact that bullion bank payments pay our comex longs a fiat bonus, one can suggest that the price of spot comex gold/silver is higher that future prices.  The offering of extra cash in London to delay delivery is also indicative of further backwardation and thus scarcity of metal.

I would like the CFTC to address this major issue:

if EFP’s are being used for emergency use (and that emergency use has morphed in a daily occurrence) how do they explain the massive increase in short supply by the bankers knowing full well that they have no metal to supply longs.  It is also obvious that the traditional mantra of the banker hedging is out the window

can you please address this for us

Sincerely

Harvey Organ BScPhm MBA

end

Here is my second letter to the CFTC where I am reporting late entries:

Dear Mathew:

Following my email to you a few days ago, I have noticed strange readings at the Comex.

For example, on November 22 [????] Comex gold reported a loss of 18,949 contracts with a corresponding gain in price of $10.70.

There was also a CME report of 8,101 contracts for exchange for physicals, which give Comex longs a deliverable product that is no doubt a London-based forward. I have been stressing to you that I have witnessed long delays in the reporting of data. It seems that we are having either:

1) Late reporting of open interest even after an exchange-for-physicals has been issued.

Or 2) late reporting of EFPs after final open interest reporting.

You will see what I mean: Here are the last three confirmed comex/CME data reports:

Nov 22:     Comex loss of OI front Month (Gold)    Nov 22: EFP issued       Price gain(loss)

                   -18,949                                               +8101                             $10.70 gain

Nov 21        -9227                                                   +21,428                         $5.10 gain

Nov 20        +28,707                                               +12,711                       _ $19.70 loss 

average:      481 gain                                             42,240 transfer                 net loss $4.20                                     

Now Silver:

Nov 22:       +1919                                                 +1231                             13 cent gain

Nov 21       -7611                                                    +2998                             7 cent gain

Nov 20       +5,388                                                  + 1078                            45 cent loss

average:     309 gain                                                5307                             25 cent net loss 

If we take an average of the three days, it makes sense. This would be why they are slow in their reporting

The issuance of EFPs does not exactly correspond to a loss in open interest in the front month as the CME is lazy in  reporting.

But eventually the reporting of each side of the transaction is done.

This is a big issue and that is why I asked if the CFTC would consider writing an article on this so that transparency can rule. You stated that you would take that under advisement.

As of yet there have been no CFTC comments on the EFP issue.

all the best

Harvey B Organ BScPhm MBA

end

We have concluded with the Comex options expiry.  We now have the bigger OTC/London’s LBMA options expiry to deal with and they generally expire at around 11 am Thursday Nov 30/2017 which is also First Day Notice.

Let us have a look at the data for today

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In silver, the total open interest FELL BY  A CONSIDERABLE 4033 contracts from 195,118 DOWN TO 191,085 WITH RESPECT TO YESTERDAY’S TRADING  WHICH SAW SILVER REMAIN FLAT AND STILL WELL BELOW THE HUGE $17.25 SILVER RESISTANCE.   WE HAD CONSIDERABLE LONG COMEX LIQUIDATION.   HOWEVER WE WERE ALSO NOTIFIED THAT WE HAD ANOTHER LARGE NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE : 618 DECEMBER EFP’S WERE ISSUED ALONG WITH 209 EFP’S FOR MARCH FOR A TOTAL ISSUANCE OF 827 CONTRACTS.   I GUESS WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. FRIDAY WITNESSED  1670 EFP’S FOR SILVER ISSUED.

RESULT: A SMALL SIZED FALL IN OI COMEX WITH THE FLAT  PRICE.   WE HAD SOME COMEX LONGS  EXITED OUT OF THE SILVER COMEX BUT MOST OF THEM TRANSFERRED THEIR OI TO LONDON THROUGH THE EFP ROUTE:  FROM THE CME DATA 820 EFP’S  WERE ISSUED FOR TUESDAY FOR A DELIVERABLE CONTRACT OVER IN LONDON WITH A FIAT BONUS. IN ESSENCE THE  DEMAND FOR SILVER PHYSICAL INTENSIFIES GREATLY. WE REALLY ONLY LOST  3213 OI CONTRACTS i.e.  820 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 4033 OI COMEX CONTRACTS.

In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.955 BILLION TO BE EXACT or 136% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 0 NOTICE(S) FOR NIL OZ OF SILVER

In gold, the open interest ROSE BY  4425 CONTRACTS WITH THE FAIR SIZED RISE IN PRICE OF GOLD ($6.45) WITH RESPECT TO YESTERDAY’S TRADING.  HOWEVER  THE TOTAL NUMBER OF GOLD EFP’S ISSUED MONDAY FOR TUESDAY  TOTALED ANOTHER 10,304 CONTRACTS OF WHICH THE MONTH OF DECEMBER SAW 9,579 CONTRACTS AND FEB SAW THE ISSUANCE OF 725 CONTRACTS. ??? (EMERGENCY??)   The new OI for the gold complex rests at 538,796. DEMAND FOR GOLD INTENSIFIES GREATLY. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK  TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD.  THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX  HAVE JUST STATED THAT THEY HAVE NO METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NOT BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER AND ON TOP OF THAT IT IS TAKING A FURTHER 6 TO 10 WEEKS TO OBTAIN PHYSICAL FROM THE POINT WHEN FORWARDS BECOME DUE. IN ESSENCE WE HAD A NET GAIN OF 14,729 OI CONTRACTS: 4425 OI CONTRACTS GAINED AT THE  COMEX OI  AND 10,304 OI CONTRACTS NAVIGATED OVER TO LONDON.

YESTERDAY, WE HAD 9547 EFP’S ISSUED.

Result: A HUGE SIZED INCREASE IN OI  WITH THE FAIR SIZED RISE IN PRICE IN GOLD YESTERDAY ($6.45). WE  HAD AN LARGE  NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 10,304. THERE OBVIOUSLY DOES NOT SEEM TO BE ANY PHYSICAL GOLD AT THE COMEX AND YET WE ARE APPROACHING THE HUGE DELIVERY MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS NO GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES.  IF YOU TAKE INTO ACCOUNT THE 10,304 EFP CONTRACTS ISSUED, WE HAD A NET GAIN OPEN INTEREST OF 14,729 contracts:  10,304 CONTRACTS MOVE TO LONDON AND  4425 CONTRACTS ADDED AT  THE COMEX.

we had:  0  notice(s) filed upon for NIL oz of gold.

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With respect to our two criminal funds, the GLD and the SLV:

GLD:

Today, no change in gold inventory at the GLD

Inventory rests tonight: 842.21 tonnes.

SLV

TODAY WE HAD NO CHANGES IN SILVER INVENTORY AT THE SLV:

INVENTORY RESTS AT 317.130 MILLION OZ

end

.

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

1. Today, we had the open interest in silver FELL BY 4033 contracts from 195,118 DOWN  TO 191,085 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE NO GAIN IN PRICE OF SILVER PRICE (A LOSS OF 0 CENTS ). HOWEVER, OUR BANKERS  USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER HUGE  618  PRIVATE EFP’S FOR DECEMBER (WE DO NOT GET A LOOK AT THESE CONTRACTS)  AND 209 EFP’S FOR MARCH FOR A TOTAL OF 827 EFP CONTRACTS.  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  WE ARE NOW GETTING CLOSE TO FIRST DAY NOTICE AND THIS IS THE SCENE WHERE IN THE PAST WE DID SEE MASSIVE COMEX OI CONTRACTION ALTHOUGH IT WAS MORE PRONOUNCED IN GOLD THAN WITH SILVER. IT STILL CONTINUES UNABATED AND WE NOW KNOW THE REAL REASON FOR THE CONTRACTION:  THE TRANSFER OF OI TO LONDON. TODAY WE HAD CONSIDERABLE COMEX SILVER COMEX LIQUIDATION. IF WE ADD THE OI LOSS AT THE COMEX (4033 CONTRACTS)   TO THE 827 OI TRANSFERRED TO LONDON THROUGH EFP’S  WE OBTAIN A NET LOSS OF  3213  OPEN INTEREST CONTRACTS,

RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE 0 CENT FALL IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). NOT ONLY THAT BUT  WE ALSO  HAD ANOTHER 827 EFP’S ISSUED.. TRANSFERRING OUR COMEX LONGS OVER TO LONDON .  YESTERDAY WE EXPERIENCED 1670 EFP’S ISSUED FOR TRANSFER TO LONDON.

(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 MONDAY night/TUESDAY morning: Shanghai closed UP 11.43 points or .34% /Hang Sang CLOSED DOWN 5.34 pts or 0.02% / The Nikkei closed DOWN 9.75 POINTS OR 0.04%/Australia’s all ordinaires CLOSED DOWN 0.06%/Chinese yuan (ONSHORE) closed UP at 6.5987/Oil DOWN to 57.86 dollars per barrel for WTI and 63.23 for Brent. Stocks in Europe OPENED GREEN.    ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5987. OFFSHORE YUAN CLOSED DOWN AGAINST  THE ONSHORE YUAN AT 6.5994 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.(MARKETS  WEAK)

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