Gold and Silver Prices Get Capped Again On Huge Volume

13 January 2017 — Friday


The gold price rallied unevenly higher right from the start of trading at 6:00 p.m. EST on Wednesday evening.  It popped a bit more at the London open, but that rally was quickly capped and turned lower shortly before 9 a.m. GMT.  Volume up to that point was exceptionally heavy.  Then, except for a brief dollar down/up move between the COMEX open and the London p.m. gold fix, the gold price traded pretty flat until shortly after 10 a.m. in New York.  ‘Da boyz’ and their algos showed up at that point — and guided the gold price lower until 3:30 p.m. EST in the thinly-traded after-hours market.  It didn’t do much after that.

The low and high ticks were reported by the CME Group as $1,190.70 and $1,207.20 in the February contract.

Gold was closed in New York yesterday at $1,195.00 spot, up $3.90 from Wednesday.  Net volume was monstrous once again at just over 215,000 contracts.

Here’s the 5-minute gold tick chart courtesy of Brad Robertson — and except for the odd spot, there wasn’t much in the way of background volume, as it was very heavy throughout the entire Thursday session.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York – and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai-and don’t forget to add two hours for EST.  Click to enlarge.

Silver was up a dime by 10 a.m. China Standard Time on their Thursday morning — and then traded pretty flat until the London open.  Its sharp rally was capped at the same time as gold’s…minutes before 9 a.m. GMT, just as it was about to slice through $17 spot the ounce — and after that the price pattern was very similar to what happened in gold, as JPMorgan et al worked the price lower until shortly before the COMEX close.

The low and high ticks in this precious metal were reported as $16.755 and $17.02 in the March contract.

Silver finished the Thursday session at $16.74 spot, up only a nickel from Wednesday.  Net volume was heavy as well at just over 56,000 contracts.

And here’s the 5-minute tick chart for silver, courtesy of Brad as well.  Most of the really heavy volume came after the London open — and by shortly after that 11:30 a.m. Denver time COMEX close, the volume dropped back to almost nothing.  Click to enlarge.

Like the 5-minute gold chart, the vertical gray line is 10:00 p.m. Denver time, midnight in New York – and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai-and don’t forget to add two hours for EST. 

The platinum price did exactly nothing until 9 a.m. China Standard Time on their Thursday morning.  It rallied smartly from there, but was capped shortly before 11 a.m. CST.  It rallied anew at the London/Zurich open, but was capped two hours later — and after the same COMEX open/London p.m. gold fix down/up move, it was sold sharply lower into the Zurich close once the ‘fix’ was done for the day.  It’s smallish rally into the COMEX close was mostly clawed back by 5:00 p.m. — and palladium finished the Thursday session up only 4 bucks at $974 spot.

The palladium price didn’t do much yesterday, but did spend most of Thursday in positive territory.  All rally attempts during the COMEX trading session were dealt with in the usual fashion –and it continued to crawl lower until 4 p.m. in the thinly-traded after-hours market.  Palladium was closed at $757 spot, up only 3 dollars on the day.

The dollar index closed very late on Wednesday afternoon in New York at 101.74 –and continued to head lower once trading began at 6:00 p.m. EST.  The sell-off was relentless, with the 100.72 low tick being set a few minutes before 1 p.m. in London, which was minutes before 8 a.m. in New York.  It chopped higher from there until 3 p.m. EST — and then traded sideways into the close.  The index finished the Thursday session at 101.45 — down only 29 basis points from Wednesday.  At its low, it was down a bit over 100 basis points — and it’s obvious that the powers-that-be did yeoman’s work to haul it back from the abyss.

‘Da boyz’ went heavily short in the precious metals as the dollar index cratered in Far East trading, as they would have soared if they hadn’t shown up as short buyers and long sellers of last resort.   The dollar index continued to sink even though the precious metals had been capped and turned lower hours earlier.

And here’s the 6-month U.S. dollar index, which you can read into whatever you wish.  But as you should have figured out by now, the currency markets are just as managed as everything else these days.

The gold stocks gapped up a bit over 2 percent at the open — and their respective high ticks came at the London p.m. gold fix.  They chopped quietly lower from there in sympathy with the engineered price decline — and then rolled over into negative territory shortly after 3 p.m. EST.  They recovered a bit in the last twenty-five minutes of trading — and just squeezed a positive close by a whisker, as the HUI finished up 0.29 percent.

The silver equities followed an identical price path for the same reason as the gold shares, but they didn’t make it back into the black by the time the markets closed in New York.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down by 0.25 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that, for the second day in a row, there were zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in January increased by 100 contracts, leaving 235 still open.  Wednesday’s Daily Delivery Report showed that zero gold contracts were actually posted for delivery today.  Silver o.i. in January dropped by 1 contract, leaving 229 still open.  Wednesday’s Daily Delivery Report showed that no silver contracts were posted for delivery today, either…so a short/issuer was let off the January delivery hook by the long/stopper holding the other side of his contract.

There were no reported changes in GLD yesterday — and as of 7:03 p.m. EST yesterday evening, there were no reported changes in SLV, either.

There was a smallish sales report from the U.S. Mint.  They sold 6,000 troy ounces of gold eagles — and 1,500 one-ounce 24K gold buffaloes — and zero silver eagles.

There was a very decent amount of gold shipped out of the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received, but a healthy 128,002 troy ounces were shipped out.  There was 65,308 troy ounces shipped out of HSBC USA — and another 62,597 troy ounces came out of Canada’s Scotiabank.  The link to that action is here.

It was another huge day in silver, as 1,287,675 troy ounces were received — and another 1,159,753 troy ounces were shipped out the door.  There was a container load out of CNT — and another one into JPMorgan…the latter one totalled 607,847 troy ounces.  There was also big in/out movement at Canada’s Scotiabank as well — and a link to all this activity is here.

JPMorgan’s COMEX silver inventory in New York stands at a whisker under 86 million troy ounces.

There was also more big movement over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.   Only 24 were received, but a very chunky 8,573 kilobars were shipped out.  All that action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

Nick sent this chart around very early on Thursday morning — and in enough time to make it into my Thursday column.  But I was so consumed with the fact that my website was down, that I though it best to wait another day — and make sure it didn’t go to waste — and I’m glad that I did.  It shows the holdings for GLD for the last six months — and Nick pointed out something that you already know — and that’s that there have no deposits…only withdrawals…in both GLD [and SLV] since the current price rallies in both began the day after Christmas.

Here’s what Nick had to say in his covering e-mail…”Why are investors not buying into this rally?  Here we can see GLD physical holdings still being sold off whilst the price is rising.

The blue line is the price — and the black line the inventory.  Click to enlarge.

Once again it’s been very quiet in the story department, so I hope there is the odd one in the list below that you’ll find of interest.


Marc Faber: Trump will soon be begging the Fed for QE4

President-elect Trump’s policies will help the U.S. economy, but they won’t be enough to save stocks long term, said widely followed perm bear Marc Faber.

Mr. Trump is pro-business, so it’s natural that the mood has improved among the small-businessman, corporations and investors,” Faber said Thursday on CNBC‘s “Futures Now.”

But even as Faber expects equities to keep rising, he noted that stocks are only climbing to a “higher diving board” and it will “not be very friendly” to investors if things start to turn.

I think Mr. Trump will have a better economy, but that doesn’t necessarily mean that asset prices will go up, because they are already grossly inflated,” he said. Still, Faber’s rhetoric was less alarming than in previous interviews, where he called for a collapse worse than in the late ’80s.

This 3-part video interview runs for about nine minutes in total — and Marc likes gold, silver — and their respective equities.  These video clips, plus a very brief transcript, showed up on the Internet site at 8:00 a.m. EST on Thursday morning — and they came to us via Ken Hurt.  Another link to them is here.

Can Americans Really Depend on Social Security? — Dennis Miller

In 1935 the government passed Social Security into law setting up a government managed retirement plan for the majority of US workers. To fund the plan, they passed the Federal Insurance Contribution Act (FICA). The law mandates that employers withhold a portion of the worker’s salary (contribution) and requires the employer to match the contribution.

It was sold to the public as a form of annuity, with each worker’s contributions and benefits based on their income. While Social Security has features similar to an annuity (paying lifetime benefits), in many ways it is different.

In 1960 the Supreme Court (Flemming v. Nestor) ruled, “that no one has an accrued property right to benefits from Social Security.” Contributions are now taxes with an indirect correlation to benefits.

An annuity with a private insurance company is a legally binding contract. The insurance company must honor the agreement or risk being sued for breach of contract.

With Social Security the government is the insurer holding all the power.

This interesting and worthwhile commentary by Dennis appeared on his website yesterday — and another link to it is here.

Why Are Wal-Mart, Boeing, and Lowe’s Laying Off Workers If the U.S. Economy is in Such Great Shape?

The stock market has been on quite a roll in recent weeks, but signs of trouble continue to plague the real economy.  Earlier this week, I talked about the “retail apocalypse” that is sweeping America.  Major retail chains such as Sears and Macy’s are closing stores and laying off workers, but I didn’t think that Wal-Mart would be feeling the pain as well.  Unfortunately, that is precisely what is happening.  USA Today is reporting that approximately 1,000 jobs will be cut at Wal-Mart’s corporate headquarters in Bentonville, Arkansas by the end of this month…

Walmart’s plan to lay off of hundreds of employees is the latest ripple in a wave of job cuts and store closures that are roiling the retail industry.

The world’s largest retailer is cutting roughly 1,000 jobs at its corporate headquarters in Bentonville, Ark., later this month, according to a person familiar with the matter who was not authorized to speak about it.

The company is saying that these cuts are necessary because Wal-Mart is always “looking for ways to operate more efficiently and effectively“.  But something doesn’t smell right here.  You don’t get rid of 1,000 employees at your corporate headquarters if everything is just fine.

Meanwhile, there are signs of trouble out on the west coast as well.  The Los Angeles Times is reporting that there is going to be a new round of engineering job cuts at Boeing…

This article, from The Economic Collapse blog, was picked up by the folks over at Zero Hedge at 7:25 p.m. on Thursday evening EST — and another link to it is here.

Morgan Stanley cuts bankers, bonuses as deals, IPOs stall – sources

Morgan Stanley laid off a number of senior investment bankers last week and cut bonuses by roughly 15 percent because of a decline in revenue from deal-making and capital raising across Wall Street, people with knowledge of the matter told Reuters.

While the bank typically lets go of the bottom 5 percent of its workforce at year-end to get rid of underperformers, the cuts to senior bankers were deeper than in years past, according to the sources.

Global investment banking fees across Wall Street declined 7 percent in 2016 to a three-year low, according to Thomson Reuters data. Those figures include advising companies on mergers and acquisitions as well as raising debt and equity.

Equity capital market fees, which declined 23 percent, showed the biggest drop of all banking activities as a result of a dearth of initial public offerings. IPOs occurred at the lowest levels since 2009.

Merger activity also slowed from record levels in 2015, with global deal volume falling 17 percent.

This Reuters article was something I plucked from a Zero Hedge article last night.  It was posted on the Reuters Internet site at 5:01 p.m. EST yesterday afternoon — and another link to it is here.

The Neocons’ Declaration of War Against Trump

After several rather lame false starts, the Neocons have now taken a step which can only be called a declaration of war against Donald Trump.

It all began with CNN published an article entitled “Intel chiefs presented Trump with claims of Russian efforts to compromise him”.

There is ample evidence that this is a crude fake produced by amateurs who have no idea of what they are talking about.

This does not make this document any less dangerous, however.

First, and this is the really crucial part, there is more than enough here to impeach Trump on numerous grounds both political and legal.  Let me repeat again – this is an attempt at removing Donald Trump from the White House. This is a political coup d’etat.

This commentary by The Saker was posted on the Internet site on Wednesday — and is certainly worth reading.  It’s the first contribution of the day from Roy Stephens — and another link to it is here.

Kremlin: U.S. military in Poland threatens Russia, destabilizes Europe

The Kremlin said the United States’ increased military presence in Poland as part of a larger NATO operation is a threat to Russian security that destabilizes Europe.

Dmitry Peskov, spokesman for Russian President Vladimir Putin, said the arrival of U.S. troops in Poland as part of the largest armed military brigade deployed in Europe since the end of the Cold War threatens Russia’s “interests and our security,” while Alexei Meshkov, Russia’s deputy foreign minister, said the NATO operation is a “factor destabilizing European security.

The U.S. troops reached Poland on Monday after a three-day journey through Germany. The show of force falls under NATO’s Operation Atlantic Resolve, designed to show the United States’ commitment to its European allies in the face of what NATO sees as Russian aggression.

More b.s. from the main stream media, as Russia is no threat to anyone on any front.  But NATO and the U.S. military/industrial complex needs someone to hate to justify their existence — and since ISIS is off the table now, only Russia, China and Iran stand in their way of taking over the entire world.  This UPI article, filed from Moscow, appeared on their Internet site at 9:40 a.m. EST on Thursday morning — and I thank Roy Stephens for sharing it with us.  Another link to it is here.

Stephen F. Cohen: Russia Dossier Is ‘Attempt to Destroy Trump’s Presidency‘ Before Inauguration

Russian Studies Professor Stephen Cohen said the publication of an unverified dossier of information regarding President-elect Donald Trump and Russia is the “endgame in the last chapter in an attempt to destroy Trump’s presidency” before he takes office.

Cohen dismissed the dossier as “essentially tabloid stuff” that he could easily purchase from so-called Russian “private intelligence agents out to make a buck“.

This 3:26 minute video interview put in an appearance on the Internet site at 10:16 p.m. EST on Wednesday evening — and I thank Peter Holland for finding it for us.  It’s certainly worth your time if you have the interest.

Gold swaps by BIS exploded in 2016…from nothing, to record level

Disclosures in the monthly statements of account published by the Bank for International Settlements since March 2016 indicate that in the last nine months of 2016 the bank increased substantially its use of gold swaps.

There is not enough information in the monthly reports to calculate the exact amount of swaps, but based on the information in the BIS’ December 2016 statement of account, the bank’s gold swaps likely stood in excess of 480 tonnes as of the end of the calendar year.

This is the BIS’ highest level of gold swaps recorded in recent times.

The BIS’ annual report for its financial year ended March 31, 2010, disclosed that 346 tonnes of gold were acquired through gold swaps from commercial bullion banks. A review of the previous use of gold derivatives by the BIS reveals that the transactions in 2009-10 were far more substantial than anything done by the bank in the years immediately leading up to that.

The BIS offers no explanation for its renewed use of gold swaps in its interim financial statements for the 2016-17 financial year, which were published on November 7, 2016. By contrast, back in 2010 the BIS discussed its gold swaps with the Financial Times in an article published on July 29 that year. BIS General Manager Jaime Caruana said the gold swaps were “regular commercial activities” for the bank.

This gold-related news item was posted on the Internet site yesterday — and it’s worth reading if you have the interest.  Another link to it is here.


With my website up and running smoothly again…touch wood…I thought I’d repost the two whale photos that I featured in the e-mail version of yesterday’s column.  The ‘click to enlarge‘ feature didn’t work in the e-mail version because of coding issues, but it certainly works in both the website and e-mail versions today — and they’re both worth a look at full-screen size, especially the second one of the right whale.

Here’s my description from yesterday…

While I’m on this whale kick, here are two more photos that I took off the Internet.  The first is the very familiar humpback whale — and from it’s head/mouth area, it certainly appears to have at least one run-in with a giant squid at some point in its life.  The second photo is of a right whale, which is much larger that the humpback — and so named by whalers who identified them as the “right” whale to kill on a hunt due to the plentiful oil and baleen they could provide.  Click to Enlarge for both.


Yesterday’s price/volume action should leave no doubt in your mind that the powers-that-be are not about to let precious metal price rise by meaningful amounts on this rally, as they were there as short buyers and long sellers of last resort all day long — and that was particularly true for gold.  They didn’t even allow gold to close above $1,200 spot.

Overall volumes have been enormous for that last week or so — and in some respect, as bad as today’s Commitment of Traders Report is going to be, it’s already ‘yesterday’s news’ in some ways — and not in good ways, either.

Gold closed above its 50-day moving average for the second day in a row…albeit with not much conviction allowed, as the Managed Money traders piled in on the long side in a big way — and JPMorgan et al were there to eagerly take the other side of the trade in order to cap the price.  Silver broke above, but was not allowed to close above, its 50-day moving average.

Here are the 6-month charts for all four precious metals, plus copper…which had a decent rally yesterday.

I would seriously doubt that these rallies in silver and gold will be allowed to get much further — and unless ‘da boyz’ get over run, this certainly isn’t the ‘big one’ we’ve all been hoping for.

As I said in Thursday’s column, the powers-that-be were at battle stations on Wednesday to protect everything paper from melting down — and everything physical from blasting skyward.  All in a soon-to-be-proven-futile attempt to save the Frankenstein monster that’s been created by the Fed and Wall Street since the U.S. yanked the world off the gold standard in August 1971.  We saw more of that on Thursday

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price was sold down a few dollars until minutes after 11 a.m. China Standard Time on their Friday morning — and then began to crawl higher at an equally quiet rate.  It’s up 90 cents the ounce at the moment.  The price pattern for silver was similar, except it’s currently down a penny.  Platinum followed the same price pattern as silver and gold — and it’s down 2 bucks as Zurich opens.  Palladium has been sold lower throughout all Far East trading — and it’s down 5 dollars.

Net HFT gold volume is just under 45,000 contracts, which is real chunky considering the price action.  Net HFT volume in silver is up there as well at 10,200 contracts.  Ted has commented on the high volume in both silver and gold during the last eight business days — and doesn’t know what to make of it, because it’s out of all proportion to the underlying price action.  Maybe today’s COT Report will give us a clue.

The dollar index rallied to its Far East high tick of around 101.57 at 11 a.m. CST, which was gold’s low.  It has been heading quietly lower since — and is down 16 basis points as London opens.

Today, at 3:30 p.m. EST, we get the latest COT Report.  Silver analyst Ted Butler had this to say about it in his mid-week column to his paying subscribers on Wednesday…

“I do have some trepidation for this Friday’s COT report, as it is easy for me to envision a significant increase in managed money buying and commercial selling through the cutoff yesterday. Both gold and silver rose in four of the five trading days of the just concluded reporting week, with gold finishing more than $22 higher and silver by 45 cents for the week. In addition, both gold and silver penetrated all the moving averages up though the 40 day moving average during the reporting week. This is the standard prescription for managed money buying and commercial selling. Further, trading volumes were very high, although so high as not to be strictly attributable to managed money/commercial positioning (there seems to have been inordinately large HFT and other computer day trading). Plus, I still have uneasy feelings about the prior week’s COT report understating the full deterioration in market structure due to holiday time delays.”

And as I post today’s column on the website at 4:03 a.m. EST this morning, I see that the gold price hasn’t done much in the first hour of trading since London opened.  It’s now up 50 cents the ounce at the moment.  Silver rose a few pennies above unchanged by shortly after the London open, but has been turned lower — and is down 3 cents currently.  Platinum is down 4 bucks — and palladium is now down only 3 dollars.  There’s not much going on.

Net HFT gold volume is a bit over 52,000 contracts — and that number in silver is a hair over 12,500 contracts.  Not big increases in the last hours, but very big volume overall.  The dollar index is down 14 basis points, but that’s off it’s post-London low of 101.20 when it was down 25 basis points.

Since today is Friday, nothing will surprise me during the New York trading session, so I’ll be prepared for any eventuality when I roll out of bed later this morning.

That’s it for today.  Have a good weekend — and I’ll see you here tomorrow.


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