CME Data Reveals that Big Bullion Banks Have Clawed Back Considerable Physical Gold and Silver Losses in Recent Months

JP Morgan, Goldman Sachs clawback massive physical gold losses in recent months

The latest data reveals that bullion banks have clawed back considerable physical gold an silver losses in recent months using their own artificially engineered price drops to do so. It’s been a couple of months since I’ve dug into the CME gold and silver Stops and Issues Report. Just a couple of months ago, since the end of last year, I noted that the bullion banks had lost 967,800 physical AuOzs from their house accounts. I also told my patrons in late September that they could book it, guaranteed-in-full, that the latest reports would reveal that the bullion bankers had used the very dip in gold and silver spot and futures prices that they artificially manufactured to purchase considerable amounts of physical gold and physical silver. And sure enough, we can see in the skwealthacademy ytd charts I compiled below, that the bullion bankers very significantly reduced the net losses in their house accounts from a couple of months ago from 967,800 AuOzs to just 578,000 AuOzs as of 6 October 2020.  However, a huge obstacle that bullion bankers have been unable to completely resolve in the past couple of months remains the increasing number and increasing frequency of their clients to demand physical settlement for their precious metals futures contracts this year, unlike in years past. Presumably, this shift in behavior of settlement means is a consequence of better understanding of how bankers suppress gold and silver prices since so many of them have been arrested and indicted this year for doing so. Still, the bankers were able to gain decent ground in their client accounts as well,  reducing the net cumulative loss of their combined house and client accounts since the end of last year from 1,938,500 AuOzs as of a couple of months ago to a net loss of just 1,154,500 AuOzs as of 6 October 2020, representing a cumulative clawback of 784,000 physical AuOzs in their combined house and client accounts. (DO NOT republish this article or any of the charts in this article without the expressed written consent of skwealthacademy as doing so is a violation of our copyright. Refer to the republishing rights here should you wish to link this article on your site.)

CME Issues and Stops Report, Gold 100 Oz Futures, October 2020

Unsurprisingly, the major reason for this significant improvement was the bank that has been at the center of the US DOJ investigations into gold and silver spoofing, JP Morgan. Of the improvement in their reduction of net cumulative loss of physical gold ounces, JP Morgan bankers alone were responsible for reducing this amount by 716,900 AuOzs, or more than 67% of the total clawback of 784,000 AuOzs. If I factored in the role of Goldman Sachs in this equation, JP Morgan and Goldman Sachs bankers were responsible for the cumulative position of gold improving by a net positive 1,266,100 AuOzs of the net 784,000 improvement for all bullion bank positions. In other words, other bullion banks contributed a net negative effect to this number, and it is safe to say that only two players, JP Morgan and Goldman Sachs were responsible for all the net positive improvement. This fact alone merits CEO Jamie Dimon and former Head of Commodity Trading for JP Morgan, Blythe Masters, being brought in by the DOJ for questioning in the massive roles that JP Morgan bankers played (and allegedly continue to play) in manipulating gold futures prices.

In addition, though Goldman Sachs bankers have somehow escaped the heat of the spotlight of gold spoofing, it is clear that Goldman Sachs CEO David Solomon and former and current Goldman Sachs heads of commodities Greg Agran, Guy Saidenberg and Jeffrey Currie should all, at a minimum, be questioned about their potential role in ongoing gold spoofing practices happening at Goldman Sachs. However, because clear signs of continued gold and silver spoofing in futures markets have continued this month even as US DOJ officials levied charges against and arrested Deutsche Bank bankers for this very scam the previous month, we all know that hell will freeze over before this will ever happen.

Regarding, silver, the bullion banks also very significantly scaled back their net losses in their house accounts from a couple of months ago from a net loss of 17,215,000 physical AgOzs to just 9,785,000 AgOzs. As was the case with gold, bullion bankers were able to gain decent ground in their client accounts as well, reducing the net cumulative loss of their combined house and client accounts year from 27,255,000 AgOzs as of a couple of months ago to a net loss of just 20,890,000 AgOzs as of 6 October 2020. However, the net cumulative improvement in the bullion banker position in physical silver as of the past couple of months was not primarily due to the behavior of JP Morgan bankers as was the case with gold. In physical silver markets, this net improvement was a group effort, with Bank of America, Stonex Financial and Macquarie bankers all playing significant roles in the overall improvement in the bullion bankers’ physical silver positions.

CME Issues and Stops Report, Ag 5000 Oz Futures, October 2020

Though the data above does not look particularly positive in either the house and client accounts for the bullion banks whose data I’ve highlighted at first glance, the key takeaway from the above data is not the net loss of physical silver represented by the above data, but the fact that the current data above indicates a massive net clawback in physical silver (i.e. net reduction of physical silver losses) from just a couple of months ago (you may reference that data here to get the proper perspective for the above data).

Of course, even with their success in clawing back physical gold and silver losses due to their artificially manufactured price declines in futures markets, bankers always retain at their disposal their tool of raising initial margins in precious metals futures markets, a tool that always results in forced selling of gold and silver futures contracts. Recently, with the most heavily traded 100 ounce gold futures contracts, the CME raised initial margins a considerable 12.9% in the last month. With silver, they raised initial margins on the most heavily traded 5000-ounce contract by 13.2% (respectively raising initial margins on gold and silver futures contracts from $10,230 to $11,550 per contract and $14,575 to $16,500 per contract). Again this has been a steady tool deployed by bullion banks throughout 2020 to keep paper prices of gold and silver far below what they otherwise would be, and the CME has raised initial margins on the most heavily traded futures contracts respectively by more than 133% and 188% within just the past ten months.

As the CME raised margins on silver futures a ridiculous five times by a massive 68% in just nine trading days between April 26th and May 9th in 2011 to collapse silver prices during a raging silver bull that carried silver prices to $50 an ounce, despite the already meteoric rises in the initial margins of US gold and silver futures contracts, we will always have to remain vigilant for another 2011 style blitzkrieg in the future as long as gold and silver spoofing bankers remain free and none serve lengthy prison sentences for their behavior (as indicted bankers for illegal gold and silver spoofing behavior have yet to be sentenced). Ultimately, should we be even a smidge surprised that bullion banks have clawed back considerable physical gold an silver losses in recent months during times when gold and silver prices in futures markets were plummeting? Of course not. Should we expect bullion banks to continue clawing back physical gold and silver losses suffered earlier this year every time they engineer artificial price declines in futures markets moving forward? Of course, yes.

Finally, since bullion banks have clawed back considerable losses of physical gold and silver from earlier in the year, likely using illegitimate means (i.e. spoofing) to do so despite ongoing investigations being conducted by the US Department of Justice into this illegal behavior, their clawbacks, an endeavor that has required a significant output of energy and resources to accomplish, are bullish for continuing upward gold and silver price trends, despite a lot of chatter to the contrary that exists right now. Bankers simply would not be expending so much time and energy to clawback physical gold and silver if they thought prices would plummet in the future.

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J. Kim

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