Gold Daily and Silver Weekly Charts - CFTC Sees Nothing and Moves Along

As you most likely have already heard, the CFTC announced today that they have closed their five year investigation into manipulation in the silver market without further comment except that they have seen nothing.

I was disappointed but not surprised, since the regulators and politicians in the US and the UK are deeply wound in a credibility trap. Intraday commentary on that here.

It appears that JP Morgan is embroiled in a settlement over mortgage debt antics that is now rumoured to be in the $11 billion range for this one investigation alone.

As you know, September is considered a non-active delivery month, even though there is the usual delivery schedule as I have posted it below.    Can anyone tell me exactly why it is that some months, like August, October, and December are active delivery months and September and November are not?  I am quite curious.  I doubt it is just custom, and must have some basis in the rules. 

I asked several old gold hands today who certainly know more about the gritty details and they could not say, other than that some months are active in the futures, and others are more active in delivery.  The exception is December which is active in both.  If you know of some specific reason I should like to hear it.

Note: Since no one responded I spent some time and found the answer on the CME site here:

"Trading is conducted for futures contracts with delivery in February, April, June, August, October and December, falling within a 24-month period."

So let's see this last week of September pass, and look forward to October, wherein the rather thin inventory at the COMEX may be in for another run through the gauntlet of real things.

Speaking of real activity in real things, there was little activity in the COMEX bullion warehouses yesterday, with just 30 bars of customer gold being received at the Scotia Mocatta warehouse. 

It appears that the five tonnes withdrawal from the day before has not shifted to another COMEX domain but has said sayonara, and gone to other climes, perhaps not to return for some time and higher prices.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Marking Time Before the Budget Showdown

Stocks were meandering around today, without much conviction, as the comedy of modern government played out in the US capitol.

I expect that the budget showdown will come to little or nothing, more symbolic than substantial, but it might not. And so like the markets I sit and wait, hoping for the best but prepared for the worst.

But the same can be said of so many more important things that the bloviated egos of pompous and distant men and women.

Have a pleasant evening.

CFTC Drops Probe of Silver Manipulation Takes No Action - Credibility Trap

I cannot say that I am surprised, since it was the safer thing to do, career-wise.  Pleading ignorance is the last refuge of the craven, be they bureaucrats or CEO's.

One might safely have little confidence in regulatory action in the US or the UK unless it is provoked by an unavoidable whistleblower or a noticeable financial crisis.   Or a divergence of interest among white collar crime families.

Although he made a show of action now and then, Gary Gensler is political, and fully a creature of the system.  The Republican members of the CFTC are 'free marketeers' who have generally impeded regulation of Big Money at almost every turn. 

Principles are not a career enhancing option in times of general cynicism and deceit.  

In fairness to the CFTC,  the credibility trap is far-reaching.  This is not a problem of a 'few bad eggs,' but a system that is largely given over to the corruption of the monied interests from what I have seen and read.  Mark Leibovich provides the colour commentary to the state of affairs in his recent book, This Town.

The manipulation of markets seems to be a fairly regular and long-standing occurrence.  But it is nice to at least have their decision on the record. 

Manipulation is no free lunch, and there are always consequences.  And they are usually not confined to one or two asset classes of wealth, but to a growing circle of abuse with much broader effects. I think Martin Niemöller had some insightful words on the subject.

Change will come, but apparently not yet.

Reuters
U.S. CFTC ends probe of silver markets, takes no action

(Reuters) - The U.S. Commodity Futures Trading Commission said on Wednesday it has closed its long-running investigation into complaints about manipulation in the silver markets, and is not recommending any charges.

The CFTC publicly confirmed the probe in September 2008. At the time, the agency had received complaints about whether the silver futures contracts traded on the Commodity Exchange Inc (COMEX) were being manipulated.

"Based upon the law and evidence as they exist at this time, there is not a viable basis to bring an enforcement action with respect to any firm or its employees related to our investigation of silver markets," the CFTC said in a statement on Wednesday.

Silver has featured prominently in modern commodity market scandals. In the most memorable case, the Hunt brothers of Texas hoarded the precious metal, aiming to corner the market and control global prices starting in the late 1970s...

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Read the entire article here.

NAV Premiums of Certain Precious Metal Trusts and Funds

The gold/silver price relationship is back to a rather high level by historical standards at a ratio of 60.