The November Bank Participation Report

I had planned to release publicly this column from last week. Since we are already seeing an increase in volatility this morning, I figured there was no time like the present!

After a couple of days of delay, your friends at the CFTC have released the latest Bank Participation Report for November and there are some very interesting new trends.

First, a refresher. The Bank Participation Report comes out just once per month with data usually obtained from a survey taken on the first Tuesday of the month. The totals are then aggregated into categories as the last thing the CFTC and The Cartel wants is anything close to full disclosure and transparency.

There are summary positions reported for the four largest U.S. banks in each currency, index or commodity and obviously which bank is involved varies from issue to issue. There is also a summary issued for the twenty largest non-U.S. banks and you can find the entire report here: http://www.cftc.gov/marketreports/bankparticipationreports/index.htm

As it pertains to the metals, the "U.S bank" total will always include JP Morgan (likely 70-80% of the entire total) and will also include the positions of "banks" such as Goldman, Morgan Stanley, Citi, BofAML et al. The "non-U.S. banks" included in the report are likely Scotia, HSBC, Deutsche Bank, UBS and the rest of the usual suspects.

OK, below is the raw data over the past five surveys since the price bottom on June 28. Look it over and draw your own conclusions and I will provide my own thoughts next. Keep in mind that both the U.S. and non-U.S. banks have been NET SHORT since time immemorial. The U.S. banks only became NET LONG as of the BPR dated 6/4/13.

DATE        CATEGORY          GROSS LONG            GROSS SHORT         NET POSITION          RATIO

7/2/13         U.S. Bank                       69,656                               24,939                            44,717                    +2.79:1  

$1246         non-U.S. Bank                34,904                               58,656                            23,752                    -1.68:1

____________________________________________________________________________

8/6/13          U.S. Bank                      90,949                              31,476                             59,473                    +2.89:1

$1282          non-U.S. Bank               25,957                               47,996                             22,039                    -1.85:1

____________________________________________________________________________

9/3/13          U.S. Bank                       69,510                              24,604                            44,906                    +2.82:1

$1412           non-U.S. Bank                23,626                             60,350                             36,724                    -2.55:1

____________________________________________________________________________

10/1/13         U.S. Bank                      80,375                              22,368                             58,007                   +3.59:1

$1286          non-U.S. Bank                24,296                              57,665                              33,369                   -2.37:1

____________________________________________________________________________

11/5/13          U.S. Bank                      75,802                              26,068                            49,734                    +2.91:1

$1308          non-U.S. Bank                19,006                              58,486                            39,480                   -3.08:1

Jeezo-pete...where do we start? How about these four points?

  • Note that the NET U.S. Bank position is slightly more positive (long) than it was at the price bottom.
  • The non-U.S. Bank GROSS long position has been cut in half since the bottom in June. If you're wondering just whom has been selling to keep a lid on price...it's them.
  • As of last Tuesday, the size of JPM's NET LONG position is likely about the same as it was on each of the previous reports.
  • On a NET and ratio basis, the non-U.S. Banks have doubled their "shortedness" since the bottom in June. Of course, this is just "hedging for clients"....rrrrrriiiiggghhhttt....note that they've done this not by adding shorts but by dumping longs....after price had already fallen by 30%.

As I've often mentioned, we also need to look at the total Comex gold open interest and, as of 11/5/13, it was 386,796. Also on that day, the total open interest of the Dec13 contract alone was 198,626. So, of the total open interest, more than half (51.4%) was in the front-month Dec13. As stated repeatedly, I believe that JPM is the owner of almost the entire GROSS long U.S. Bank position, making their NET long something like 75,000 contracts. If they have spread that across the entire gold complex in a distribution that simply mirrors the overall open interest, JPM would be NET LONG about 40,000 Dec13 contracts, at least as of Tuesday the 5th.

THE ABSOLUTE NUMBER ONE MOST IMPORTANT THING FOR GOLD IS WHAT HAPPENS NEXT.

Does JPM stand for delivery in December? Do they stand for 10,000 or so but roll the rest into Feb14 and Apr14? Do they roll the entire 40,000-contract Dec13 position?

And why would I expect them to roll and not just simply close the position? Well...they've maintained this massive NET LONG position now for over five months...why would they change and switch now, at this moment? No, there is every reason to suspect that JPM is NET LONG, waiting for some major event in the gold market. Some have suggested that the Comex position is just a hedge of a NET SHORT position held elsewhere in the OTC market. Maybe. But why the obvious and visible switch of Comex positioning...NOW...at the end of the historic, contrived and counter-intuitive move down from $1800 to $1200?

No, I'm not buying it. JPM has something up their collective sleeve. Their intransigence regarding their position has shifted the capping burden entirely onto the non-U.S. bank category. Expect this battle to continue.

In the days since the survey was taken, Dec13 open interest has fallen 33,000+ contracts to 165,035 as contracts are closed ahead of expiration. Accordingly, open interest in the Feb14 has grown 43,000+ from 66,227 to 109,102. As we've been documenting and as last week's CoT confirms, this is primarily new Spec shorting as indicated by the falling price. So, we can conclude that, as of this moment, JPM is still NET LONG 70,000+ contracts and maybe still 35,000 or more in Dec13. Therefore, RIGHT NOW, you need to understand something very, very important:

First Notice Day for the Dec13 is Friday, November 29. That's just one week from Friday! Expect extreme volatility in the days ahead. Though JPM is NET LONG and may stand for delivery in December of a significant number of contracts, enough that they could break The Comex if they so desire, they might not. They may simply choose to stand pat and roll their position into 2014. If/when they do so, there is no easy way for them to accomplish this feat without "disrupting the market" AND, given their track record of price manipulation, we must expect them to "leg out". What does that mean? Instead of simultaneously selling a Dec13 and buying a Feb14 for minimal to zero price impact, JPM may choose to dump 5,000 or 10,000 at a time. This would set off an enormous waterfall cascade of follow-on Spec selling, into which JPM buys their 5,000 to 10,000 Febs and Aprs at an enormous discount to where price was just minutes earlier. <11/18 edit: Today's $8 dump early in Comex trading was likely JPM "testing the waters">

You must understand that ANYTHING is possible over these next few weeks. The price of gold could skyrocket as JPM stands for an enormous amount of December deliveries. The price could also plummet to a retest of the $1180 low as JPM legs out and rolls their position. Again, ANYTHING IS POSSIBLE!

The best strategy for you is preparation and situational awareness. Understand and comprehend what is happening when you see this volatility. Recognize it for what it is and do what JPM is doing, namely BTFD, and get ready for a wild and wooly 2014.

TF

94 Comments

tyberious's picture

Mondays

First! Got fiat ready to deploy! Let the games begin!

Mr. Fix's picture

2nd!

Happy Monday! wink

Klingon's picture

Third. Must be a slow day.

Third. Must be a slow day.

rl999's picture

big POMO today

two POMO today.

1.25-1.75 B

3-4B

that is the range of heroin/money the blood suckers will receive and spend. markets to the stratosphere.

ancientmoney's picture

Turd--good summary . . .

you pretty much covered the waterfront of may happen in the contrived, controlled comex gold (and silver) market.  You said:

"The non-U.S. Bank GROSS long position has been cut in half since the bottom in June. If you're wondering just whom has been selling to keep a lid on price...it's them."

Based on the report, your deduction would be correct.  However, who really knows?  JPM has a large London branch, and others across the world, as do other U.S. banks.  And even though U.S.-based, they can report pretty much anything they want to report, and nobody will ever question it--and they know it.

Anyway, I think JPM will "leg out" to drop gold down to previous recent lows, about $1180 or maybe even lower.  As Toby Connor opines, JPM and their ilk intend to flush out every weak hand in the universe, dropping prices hard, so that as they buy back the later months, they will be in position to ride the markets back up, past previous highs.

My only real question is, will the paper markets still exist during this heist, or will they pull the plug, and grab the phyzz wherever it may exist?

tyberious's picture

Israel is criminal state!!

Israel’s President Shimon Peres ADMITS that ISRAEL Ordered the Assassination of Yasser Arafat

by Jean Shaoul, Global Research:

arafat.jpeg Nine years after Yasser Arafat died in a French military hospital on November 11, 2004, a Swiss team of toxicologists has found traces of the radioactive isotope polonium-210 in his exhumed remains, as well as in his shroud and the soil of his shrine.

A Russian team also found traces of polonium in the body of the leader of Fatah and elected president of the Palestinian Authority (PA). The Swiss scientists said there was an 83 percent probability that the late Palestinian leader was poisoned. proving, and expanding the web site.

Their findings, part of the French authorities’ broader investigation into Arafat’s death, confirm that the Palestinian leader was assassinated.

Read More @ GlobalResearch.com

R man J's picture

As S&P and BitCoin soar

I am making plans to use my PMs to create a museum for the next generations, "here is what money used to be". At these low prices, it won't take me nearly as long to finish my museum purchases.

The museum will include a portrait of yours truly with the caption, "He was too old to understand why a BitCoin was worth more than an ounce of gold-- and to stubborn and ornery to accept it."

fraxinus's picture

As Spartacus Rex illustrated yesterday (See "Inner Game") ...

UK gold imports have tailed off drastically this year. The strong message, is that the miners are increasingly by-passing Western markets, and delivering directly to Asia. No surprise really, and that puts the Comex on the road to being an artifact or wound up. Can't say I'll miss it.

tmosley's picture

I made my very first BTC

I made my very first BTC purchase today.  A measly $100 worth, or a little over 0.17 BTC.

Wanted a little skin in the game.  I am hoping for a larger crash, at which point I will begin my silver cost average accumulation, with a target of 5% of my silver converted to BTC.

Chinese participation in BTC is too important to overlook.  I am taking my own advice from a few years ago on making money, that is, figure out what the Chinese are doing and do it first.  And the Chinese are starting to use BTC for real estate transactions, among other things, and opening exchanges.  This means more acceptance, and more capital inflows.  It remains ultra-high risk, which is why I won't be more aggressive than that.  Wouldn't be too surprised if it doubled the value of my portfolio within a few months, wouldn't be surprised if it crashed.  Wouldn't be surprised if it burned either.

opticsguy's picture

as I said in the last thread, a 20% down year for gold

validates Bernanke, the Fed, CNBC, etc.  Why lose 20% in gold when you can make 20% a year by buying the SPX?

ancientmoney's picture

Bitcoin . . .

Maybe I am an old fuddy-duddy, but how can bitcoin be a store of value?

I can see it as a way to do transactions, since most dollars today are nothing more than digitally created "money" similar to bitcoins.  But SOV?  Not for me.

But I'm just an old stick-in-the-mud, so pay no attention.

SS121's picture

 Monday morning Bitcoin

 

Monday morning Bitcoin hype, right on time...

.

U.S. Agencies to Say Bitcoins Offer Legitimate Benefits

http://www.bloomberg.com/news/2013-11-18/u-s-agencies-to-say-bitcoins-offer-legitimate-benefits.html

The Department of Justice and Securities and Exchange Commission are telling a U.S. Senate committee that Bitcoins are legitimate financial instruments, boosting prospects for wider acceptance of the virtual currency.

Representatives from the agencies told the U.S. Senate Committee on Homeland Security and Governmental Affairs ahead of a hearing today that the digital money offers benefits and carries risks

("digital money" -  See, according to the FED, gold is not money.  But according to these "agencies" Bitcoins are money. )

------

Bitcoin surges above $600 ahead of key week

Published: Monday, 18 Nov 2013 | 8:49 AM ET

...Federal Reserve Chairman Ben Bernanke stated that the bank had no plans to regulate bitcoin.

"Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market,"...

------

The MSM Bitcoin pump is on..  Bitcoin is money... Fed gives it a pass...   Agencies have meetings.... blah blah blah

what's next?  "The World Needs an Official Digital Currency"...   "New World Currency"... "NWC to be officially issued and monitorred by 'who?' United Nations?"(are they still in business?)...   "The World's Central Markets and exchanges to officially convert to, and trade in NWC"

All the London Bros. outlets started the hype bright and early this Monday a.m.  Will have to watch and see how far this epic failure ramps up before Silver destroys the whole thing.

Only Silver and Gold are Money,  Keep Stackin'

Bollocks's picture

bitcon

"Federal Reserve Chairman Ben Bernanke stated that the bank had no plans to regulate bitcoin."

There's the signal.

Who was it that said 'never believe anything until it's officially denied'?

 

SS121's picture

@Admin HELP!

No idea how the Bitcoin post got double-posted, or how all the white space got there.  It wouldn't let me edit/fix either. 

[Note: fixed both -- Moderator]

tyberious's picture

TPTB

Like digital money!! You have been warned!

InsAndArts's picture

Thank You Turd...Lurker since watchtower days...2nd post.

Thank you Turd for staying on top of the situation, as usual.

I also want to thank you and your fantastic contributors, who have greatly added to my personal knowledge base.  Thanks guys.  I won't be posting much but I do greatly appreciate the site, the people and the work.

***

Funny story...

In the mid 1960's I was a rabid kid coin collector. When silver started to disappear I KNEW something was up! My little pea brain shouted "Those $#&* uckers."

We rode our bikes from bank to bank always pleading for silver using our last bit of 'kiddie cutness' to get something of value. When we learned the local Savings and loans president skimmed the tellers tills for silver with a sorting machine that was illegal for coin collectors to own, I KNEW something was rotten in the system! ( He put the bags in the trunk of his sedan) My anger burned! (laugh) Yes, I kid you not,I knew we were being 'played for suckers' at 10 years old! 

But today we have this thing called "the Internet"  and now we know.

And we 'know that we know'. And that certainty, my friends, is a beautiful thing.

So in a way, the whole PM 'enlightenment' via the internet is for me a vindication

of sorts. And a vindication for the old crazy gold bugs, who at the time, would say to me:

"One of these days kid, you'll see, this paper dollar won't be worth a damn thing!" 

They've all passed away now. Rest in peace. Born around 1900 and already old men in the late 1960's, they were very kind mentors in coin collecting. After all these years, they've been proven right. They just never lived long enough to see it. 

It's a unique type of evil that can outlast the span of a mans lifetime.

****

BTW I spent my collection on weed, cigs and beer in the 70's  (smile)

Glad to be here. Thanks again everyone.

Peace 

(I've posted my intro in the "Introduce Yourself" forum)

ggnewmex's picture

t mosley

What firm or location did you use to purchase?

I saw MtGox out of San Fran.

thanks in advance

gg

Bollocks's picture

more bitcon

I now give it a zero chance that the banksters are not heavily involved in it, and are very likely the originators of the technology.

I say zero chance because tptb will absolutely have control wherever there's a currency. It's the life-blood of the vampire squid. They will never allow anything to threaten that.

 

tyberious's picture

hahahahah

“Dark Web” Exposes $75,000 Bitcoin-Based Bounty For Bernanke’s Assassination

zerohedge.com / by Tyler Durden on 11/18/2013 11:32 -0500

As Silk Road emerged from the “dark-web”, other sites have appeared offering services that are frowned upon by most. As Forbes reports, perhaps the most-disturbing is “The Assassination Market” run by a pseudnymous Kuwabatake Sanjuro. The site, remarkably, a crowdfunding service that lets anyone anonymously contribute bitcoins towards a bounty on the head of any government official–a kind of Kickstarter for political assassinations. As Forbes reports, NSA Director Alexander and President Obama have a BTC40 bounty (~$24,000) but the highest bounty – perhaps not entirely surprising – is BTC 124.14 (~$75,000) for none other than Ben Bernanke. Sanjuro’s raison d’etre is chilling, “as a few politicians gets offed and they realize they’ve lost the war on privacy, the killings can stop and we can transition to a phase of peace, privacy and laissez-faire.”

Via Forbes,

 As Bitcoin becomes an increasingly popular form of digital cash, the cryptocurrency is being accepted in exchange for everything from socks to sushi to heroin. If one anarchist has his way, it’ll soon be used to buy murder, too.

READ MORE

gadsden@hushmail.com's picture

US and Non-US banks working together

Turd, you made the point that Non US banks are keeping the lid on price.  After HSBC had been a net stopper for many months now they are shorting?!  That sounds very fishy to me.  What is stopping all the banks from working together to suppress price?  ie US banks short net short in the summer, non US banks net short in the winter... its not like we are dealing with a large amount of banks.  There are few of them enough to form an OPEC like cartel.

This action would keep the price suppressed I guess the question is who gets to stop it all in their account.  Main question remains, do you think all banks work together to suppress price?  Also if they are working together what's to stop them from keeping price suppressed indefinitely?  They already don't deliver on the Comex and they already don't deliver to nations (ie Germany) I don't see how it can't just continue in perpetuity...

long time listener first or second time posting

Gadsden

ancientmoney's picture

Silver and gold . . .

From what I've read, it is estimated that about 5-6 billion ounces of gold and 40-50 billion ounces of silver have been mined in human history. For the record, 6 billion ounces of gold is 187,500 metric tons.

Unless Hudes (and others who report huge, otherwise unreported stashes in Hawaii and elsewhere) is right, that is less than 1 ounce available for each person living on earth today, even though 90%+ of all gold ever mined is owned and stacked somewhere.

Since silver is used in many industrial processes, it is hard to come up with meaningful numbers of available silver.

Some turdites did some research a year or so ago, but I don't know if any numbers are close. Who knows how much silver is laying around, unnoticed or forgotten? Much has been thrown into landfills over the years.

Silver-plated items are next to worthless in terms of reclamation, so untold amounts of old plated items were likely used up and thrown away. Sterling silver tens to be heirloom quality, and kept with other valuables, unlikely to revert to bullion form.

Mirrors containing silver are pretty much gone now, having been broken or otherwise damaged and thrown away. Only well-kept antique mirrors are still around, and are worth much more than the silver in them.

Smart bombs and many other military explosives like torpedos, etc. contain several pounds each of silver. As they are used, that silver is scattered into oblivion.

Today, throw-away band-aids contain silver. Clothes are being made with silver imbedded. All electronic devices like smart phones, cell phones, I-pads, laptops, etc. contain silver. Someday, these devices will be reclaimed, most likely, but it's hardly worth the effort at today's prices.

Anyway, Ted Butler reported a few years ago that only about 1 billion ounces of tradeable silver bullion existed on the world's exchanges. I haven't heard any recent updates but SLV reportedly has 338 million oz. and Comex says it has 168 million. Sprott has 49 million. Those three entities report over half a billion among them; I don't know if comex figures are also included in SLV, or vice versa.

LBMA and the other exchanges around the world surely have some stocks, as do the mints, etc. But it sure looks as though there is less readily available silver to meet ongoing needs than there is gold.

We have seen GLD and comex gold stocks "drain" over the last year or two. However, all that gold simply changed ownership, and resides elsewhere. And, it all happened at prices lower than recent highs in September 2011.

Silver is different.

Silver stocks aren't great enough to do a similar "drain-down." JPM is still a big-time silver short (but a gold-long). Why is this?

I think JPM cannot lower the prices enough to extricate themselves from their silver short positions without drastically increasing silver buying demand. There is simply not enough available silver if prices are taken much below current prices. This is proven true by a new U.S. mint silver Eagles sales record in 2013, and a mint (silver Eagle production)closure for a month.

Anyway, as we know well, possession is 9/10ths of the law--and more like 100% when JPM has the possession. JPM is the custodian of SLV, which means they control physical ownership of the physical silver that backs the shares.

For SLV (and GLD), the prospectus states that if the custodian takes any silver out of the trust, it is simply required to pay for it! The custodian is not required to replace the physical it removes. And, the language prevents anyone from suing the custodian for fraud so long as the custodian pays for that silver, with fiat dollars, of course.

Silver is guarded heavily by the bankers, with JPM doing the heavy work. It is indeed the Achilles Heel of the fraudulent, fiat ponzi scheme known as the western financial/banking system.

Mr. Fix's picture

Really?!.....;(

[Most Recent Quotes from www.kitco.com]

gadsden@hushmail.com's picture

Arafat was the criminal

He became a billionaire from stealing all the humanitarian aid meant for the Palestinians.

http://en.wikipedia.org/wiki/Yasser_Arafat

"..(IMF) conducted an audit of the PNA and stated that Arafat diverted $900 million in public funds to a special bank account controlled by Arafat.."

"..virtually none of it was used for the Palestinian people"

Regardless he was still better then Hamas

gadsden@hushmail.com's picture

Arafat was the criminal

He became a billionaire from stealing all the humanitarian aid meant for the Palestinians.

http://en.wikipedia.org/wiki/Yasser_Arafat

"..(IMF) conducted an audit of the PNA and stated that Arafat diverted $900 million in public funds to a special bank account controlled by Arafat.."

"..virtually none of it was used for the Palestinian people"

Regardless he was still better then Hamas

ancientmoney's picture

@SS121 re: bitcoin death rattle . . .

You missed this:

"SEC Chairman Mary Jo White said in a letter yesterday that the coins “likely would be securities and therefore subject to our regulation.’"

------------------------------------------------------------------------------

That is how bitcoin dies.  Taken from the Bloomberg article.

ancientmoney's picture

@Mr. Fix re: really?!

Just JPM performing "guard duty."

tyberious's picture

Israel is criminal state!!

Well,  he didn't kill anyone with plutonium.

Teach's picture

All I have to do

is look at the stack of dead lap tops beside my desk..4 so far...and it is easy for me to not be tempted with virtual money.  I never ever feel that way looking at my stack of maples.  One emp...one Buxnet trojan and "POOF" your bitcoins are just bytes.  No thanks.

Bollocks's picture

gadsden@hushmail.com

Don't believe everything you read on Wikipedia.

Anyone can write anything they want there, and the western ptb's have a vested interest in tainting Arafat's name.

It's all about taking that whole area over wink.

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