Silver and Gold Prices Get Capped After the Fed News

02 February 2017 — Thursday


After rallying a few dollars in the first hour of trading after it began in New York at 6:00 p.m. EST on Tuesday evening, the gold price began to chop quietly lower — and continued on that path until the London open.  It rallied back to a dollar or so above unchanged in the first hour of trading over there — and then didn’t do much until five minutes before the COMEX open…then down it went.  It was sold off some more once the London p.m. gold fix was done — and the low tick of the day came around 10:25 a.m. EST.  It chopped higher from there until the Fed ‘news’ was released at 2 p.m. EST — and then spiked up a bit on the Fed news, but wasn’t allowed to rally above unchanged.  It was sold down a few dollars into the 5:00 p.m. close.

The high and low ticks in gold were recorded as $1,212.60 and $1,198.60 in the April contract.

Gold was closed in New York yesterday at $1,209.60 spot, down 70 cents on the day.  Net volume was enormous at just under 201,000 contracts.

Here’s the 5-minute gold tick chart from Brad Robertson — and the volume became somewhat elevated in late trading in the Far East and in early London trading, but quietly died off as the New York open approached.  Volume exploded the moment that ‘da boyz’ showed up at 6:15 a.m. Denver time when the price got nailed — and again when the gold price was engineered lower to its low tick of the day after the London p.m. gold fix.  There was another volume spike when the Fed minutes appeared — and it wasn’t until after 1 p.m. MST/3 p.m. EST that volume dropped off to anything resembling background levels.

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 ‘click to enlarge‘ feature is a must.

JPMorgan et al had silver following a very similar price path as gold during the Wednesday trading session.  But the rally on the Fed news was somewhat more vigorous — and I was surprised by the fact that it took very little COMEX paper to drive the price back below its Tuesday close.  Note that on the 5-minute tick chart.

The low and high ticks in this precious metal were recorded by the CME Group as $17.36 and $17.665 in the March contract.

Silver was closed yesterday at $17.51 spot, down 3.5 cents from Tuesday.  Net volume was very chunky at just under 55,000 contracts.  Roll-over/switch volume of out of the March was pretty decent.

And here’s the 5-minute silver tick chart courtesy of Brad as well — and in most respects the volume followed a similar pattern to gold’s.  And as I mentioned just above, it took very little volume to drive the silver price from its high tick, to close it for a loss on the day.

As in gold, 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 ‘click to enlarge‘ feature is a must as well.

Platinum really didn’t do much yesterday, or maybe it would be more correct to say that it wasn’t allowed to do too much.  There was a bit of down spike at 8:15 a.m. EST like in silver and gold — and an interesting up/down move at the London p.m. gold fix.  It rallied a bit at 2 p.m. EST on the Fed news, but as you can tell from the Kitco chart below, the price was firmly capped at $998 spot after that.  From there it was sold down a few dollars into the 5:00 p.m. close of trading in New York.  Platinum finished the Wednesday session at $996 spot, up 3 whole dollars on the day.  It’s obvious that, like the other two precious metals I’ve already spoken of, it would have closed materially higher than that, if allowed.

Palladium jumped up a few dollars at the 6 p.m. EST open in New York on Tuesday evening, but by 3 p.m. China Standard time it was down a dollar on the day.  But minutes before Zurich opened, it began to rally — and was up 8 bucks to $760 spot in just a few minutes.  It chopped mostly sideways from there for the rest of the day — and that’s where it closed, up 8 dollars.

The dollar index closed very late on Tuesday afternoon in New York at 99.56 — and began to crawl quietly higher as soon as trading began a few minute later at 6 p.m. EST on Tuesday evening.  That rally topped out around the 99.85 mark about five minutes or so before London opened — and it fell down to its 99.50 low tick at the 12 o’clock noon London silver fix.  The usual ‘gentle hands’ appeared — and the 100.04 high tick was placed at precisely 10:00 a.m. EST, which was the London p.m. gold fix.  It chopped mostly sideways until the Fed news at 2:00 p.m. — and the ‘gentle hands’ appeared once again to save it from disappearing in the abyss.  They did that with one hand, while simultaneously capping precious metal prices with the other.  They turned the dollar index around at the 2:35 p.m. EST mark — and it rallied a bit from there, finishing the Wednesday session at 99.76… up 20 basis points on the day.

You should note that although the dollar index was ramped higher at 7:30 a.m. New York time, it wasn’t until forty-five minutes later that the precious metals got kicked downstairs, as they weren’t about to fall on their own, despite what the dollar index was doing.

And here’s the 6-month U.S. dollar index, which you can read into whatever you wish…which shouldn’t be much, except for the fact that it’s headed lower despite those ‘gentle hands’.

The gold stocks gapped down a percent and change at the 9:30 a.m. EST open of the equity market in New York on Wednesday.  They rallied a hair into the London p.m. gold fix — and their respective lows around 10:15 a.m.  They chopped quietly sideways until the Fed news hit the wires at 2:00 p.m. — and were in positive territory for less than an hour.  Once the gold price was sold back below unchanged on the day, the shares followed — and the HUI closed lower by a tiny 0.07 percent.  Call it unchanged.

It was more or less the same for the silver equities, although their respective lows didn’t occur until around 12:35 p.m. in New York trading.  They rallied a bit from there before blasting into positive territory to stay minutes after the Fed news came out.  The share also sold off a bit once JPMorgan et al capped the price and drove it back below unchanged on the day.  Despite that, Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.32 percent — and you can call that basically unchanged as well.  However, a lot of the junior silver producers did much better than that.  Click to enlarge if necessary.

The CME Daily Delivery Report for Day 3 of the February delivery month didn’t show up on their website until after 2 a.m. EST this morning…more than four hours later than normal, so they were obviously having issues.  It showed that 263 gold and 1 silver were contract were posted for delivery within the COMEX-approved depositories on Friday.  In gold, the three largest short/issuers were Macquarie Futures, JPMorgan and ED&F Man Cap…with 84, 70 and 37 contracts out of their respective client accounts.  The three largest long/stoppers were HSBC USA with 134…JPMorgan with 51 contracts…and Canada’s Scotiabank with 38.  All were for their respective in-house [proprietary] trading accounts.  In silver, Scotiabank picked up the lone contract.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in February fell by 971 contracts, leaving 2,497 still open, minus the 263 contracts mentioned above.  Tuesday’s Daily Delivery Report showed that 1,159 gold contracts were actually posted for delivery today, so that means that another 1,159-971=188 gold contracts were added to the February delivery month.  Silver o.i. in February declined by 36 contracts, leaving 149 still around, minus the 1 contract mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that 50 silver contracts were actually posted for delivery today, so that means that another 50-36=14 silver contracts were added to February.

Thanks to Ted, I got things sorted out at the GLD website — and there were no reported changes on Monday or Tuesday.  But Wednesday was quite a bit different, as an authorized participant…or maybe more than one…added a very hefty 342,933 troy ounces of gold.  But over at SLV, an a.p. took out a net 947,652 troy ounces.

The reason that I say ‘net’ troy ounces, is the fact that since the rallies in both silver and gold began on or around December 27…the amount of silver held in SLV has declined by 6.5 million troy ounces.  Silver is up about $1.70 from its low on that day, so physical silver should be going into SLV on a net basis, not coming out.  The reason that it’s coming out is because of these conversions of shares that Ted Butler has been going on about for years now.  A ‘large entity with the initials JPM‘…who just happens to be the custodian for SLV…has been converting SLV shares into physical — and appears to be doing some of it on days when physical silver is being deposited.  And because their conversion of shares into physical metal is so much larger than the deposits coming in the door, the amount of silver in SLV continues to decline, which flies in the face of what should actually be happening.

And exactly the same thing has been occurring in GLD.  Since the December 27 low, the amount of gold in GLD has declined by 475,975 troy ounces [even though the gold price is up about $75 since that low] — and that’s for exactly the same reason…conversions of GLD shares into physical metal.  This would also may be occurring mostly on some days when physical gold was being deposited to hide the true size of the withdrawals.

Why are they/JPMorgan doing this, you may ask?  To cover some of their short positions, pus profit handsomely when gold and silver, plus all other commodities are sporting new prices.  And those new prices in the precious metals will be orders of magnitude higher than they are now…especially silver.

There was no sales report from the U.S. Mint yesterday.

It was another quiet day in gold over at the COMEX-approved depositories on Tuesday.  Nothing was reported received — and 13,953 troy ounces in total were shipped out of three different depositories.  All of it appeared to be kilobars of one kind or another.  I shan’t bother linking this.

As usual, it was another huge day for silver movement, as 601,689 troy ounces were received — and 1,769,178 troy ounces were shipped out.  All of the ‘in’ activity was at Canada’s Scotiabank.  The ‘out’ activity was more or less split up equally between Brink’s, Inc…CNT…and HSBC USA.  The link to that action is here.

And, as I expected, the COMEX-approved gold kilobar depositories in Hong Kong showed no activity on Tuesday because of their New Year’s celebrations.

Well, Swiss gold imports and exports for December certainly raised a few eyebrows.  Here are three charts.  The first shows the gold imports and exports for the last two years, updated with December’s data.  The net of imports and exports is shown in red.  Click to enlarge.

And here are two more Swiss Import/Export charts for December.  The first shows the countries where the gold came from — and the second chart, where it went.  Lawrie Williams has a story about this in the Critical Reads section below.  The click to enlarge feature helps with both charts.

It was a reasonably big news day yesterday — and even though I only have an average number of stories, there are a decent number of them that are must reads, or recommended reading in one form or another.  I hope you have the time to spend on the ones that interest you.


Unanimous Fed Holds Rates As Expected; Does Not Hint At Imminent March Rate Hike

With gold gaining, dollar declining, a flattening yield curve, and a market not buying The Fed’s 3-hikes plan, Janet and her band of merry-men (and women) had to do something to get investors’ confidence back to signal ‘March is live’, as Trumponomics dominates the conversation, but it appears they failed.


It may have failed, however, because the biggest highlight of the February statement (link) appears to be the line that “Market-based measures of inflation compensation remain low“, which has been revised from the December version to remove the “measures have moved up considerably” language in what may be a dovish revision, and as such it appears the Fed is converging with the market’s view of just 2 rate hikes in 2017.

On the other hand, the Fed changed its “inflation is expect to rise” to “inflation will rise to 2 percent over the medium term”, which appears to be a hawkish counterpoint.

The Fed also added this entirely new language: “Measures of consumer and business sentiment have improved of late“, suggesting the Fed is just as focused on “soft” data as it is on actual “hard” data.

This chart-filled commentary showed up on the Zero Hedge website at 2:06 p.m. on Wednesday afternoon EDT — and another link to it is here.

Trump Is Being Sabotaged by the Pentagon — Paul Craig Roberts

President Trump says he wants the U.S. to have better relations with Russia and to halt
military operations against Muslim countries. But he is being undermined by the Pentagon.

The commander of U.S. forces in Europe, General Ben Hodges, has lined up tanks on Poland’s border with Russia and fired salvos that the general says are a message to Russia, not a training exercise.

How is Trump going to normalize relations with Russia when the commander of U.S. forces in Europe is threatening Russia with words and deeds?

The Pentagon has also sent armored vehicles to “moderate rebels” in Syria, according to Pentagon spokesman Col. John Dorrian. Unable to prevent Russia and Syria from winning the war against ISIS, the Pentagon is busy at work derailing the peace negotiations.

The military/security complex is using its puppets-on-a-string in the House and Senate to generate renewed conflict with Iran and to continue threats against China.

This must read commentary by Paul was posted on his website yesterday — and I thank Brad Robertson for pointing it out.  Another link to it is here.

The First Firestorm — Pat Buchanan

That hysterical reaction to the travel ban announced Friday is a portent of what is to come if President Donald Trump carries out the mandate given to him by those who elected him.

The travel ban bars refugees for 120 days. From Syria, refugees are banned indefinitely. And a 90-day ban has been imposed on travel here from Iraq, Syria, Iran, Libya, Sudan, Somalia and Yemen.

Was that weekend-long primal scream really justified?  As of Monday, no one was being detained at a U.S. airport.

Yet the shrieking had not stopped. All five stories on page one of Monday’s Washington Post were about the abomination. The New York Times’ editorial, “Trashing American Ideals and Security,” called it bigoted, cowardly, xenophobic, Islamophobic, un-American, unrighteous.

This ban, went the weekend wail, is the “Muslim ban” of the Trump campaign. But how so, when not one of the six largest Muslim countries — Indonesia, India, Pakistan, Bangladesh, Egypt, Turkey — was on the list? Missing also were three-dozen other Muslim countries.

This commentary by Pat appeared on the Internet site on Tuesday — and it comes to us courtesy of Larry Galearis.  Another link to it is here — and it’s definitely worth reading.  Ann Colter had an opinion on Trumps’ immigration policy.  It was posted on the Internet site yesterday — and it’s headlined “Ann Coulter: Give Me Your Tired Arguments…” — and I thank ‘aurora’ for this one.

Will Donald Trump Reverse the War on Cash? — Nick Giambruno

I recently sat down with my friend Jason Burack from Wall St. for Main St.

Jason and I had an in-depth discussion on the decline of globalism, the War on Cash, and more.

I think you’ll enjoy our conversation.

And that you will, dear reader, as this interview easily falls into the must read category as well.  It was posted on the Internet site on Wednesday afternoon — and another link to it is here.

Trump devaluation claims raise fears of global currency war

The Trump administration’s willingness to break with tradition and comment about currency valuations has raised fears that the US might lead the world into a new round of currency wars, angering and unnerving allies.

Shinzo Abe, Japan’s prime minister, complained on Wednesday after Mr Trump attacked China and Japan for “play[ing] the devaluation market.”

In response, Mr Abe told the Japanese parliament: “The kind of criticism they are making of yen manipulation is incorrect.

The previous day Angela Merkel, Germany’s chancellor, denied that Berlin was seeking to influence the valuation of the euro — after a top Trump adviser in an interview with the Financial Times accused Berlin of exploiting a grossly undervalued euro.

The administration’s comments were the latest sign of a dramatic departure from past practice that began during last year’s campaign when Mr. Trump complained that a strong dollar was hurting U.S. companies.

The above five paragraphs are all of this Financial Times story that are posted in the clear in a GATA release from yesterday evening.  The rest is hidden behind their subscription wall.

Brexit vote: Boris Johnson says “history has been made” after MPs pass Bill to trigger Article 50

The Foreign Secretary called it a “momentous” night as MPs voted four to one in favour of triggering Article 50. Kenneth Clarke, a former chancellor, was the only Tory MP to oppose it.

Theresa May, the Prime Minister, will today publish a White Paper formally setting out the Government’s plans for Brexit in response to the concerns of pro-European Tory MPs.

However, there were further signs of division among the Conservatives as George Osborne, the former chancellor, accused Mrs May of putting Brexit ahead of the economy and warned he will join the “fight” over Britain’s future outside the EU.

Wednesday’s vote means the Government’s Brexit legislation has cleared its first hurdle and Mrs May is on course to trigger the process by her March deadline. There had been 14 and a half hours of debate and bitter clashes in Parliament over two days as nearly 100 MPs expressed their views about Brexit.

This news item showed up on the Internet site at 10:54 p.m. GMT on their Wednesday evening, which was 5:54 p.m. in Washington — EST plus 5 hours.  I found it in last night’s edition of the King Report.  Another link to it is here.

Trump is right: Germany is running an illegal currency racket — Ambrose Evans-Pritchard

As a matter of strict objective fact, Donald Trump’s trade guru is correct. Germany is the planet’s ultimate currency manipulator.

The implicit Deutsche Mark is indeed “grossly undervalued” The warped mechanism of monetary union allows Germany to lock in a permanent ‘beggar-thy-neighbour’ trade advantage over Southern Europe, inflicting mass unemployment on the victim countries and blighting their futures.

Whatever you think of Peter Navarro’s trade philosophy, he is right that Germany’s chronic, huge, and illegal current account surplus – 8.8pc of GDP – saps global demand and seriously distorts the world economy.

Let us concede that this super-surplus is an accident of history, rather than the result of a strategic conspiracy by Chancellor Helmut Kohl in the early 1990s. The German people never wanted the euro in any active sense.

The above four paragraphs of the AE-P commentary is all that’s posted in the clear.  The rest if behind The Telegraph‘s subscription wall.  It’s the second piece that I found in last night’s edition of the King Report.

U.S. Tanks Fire Salvos in Poland as ‘Message’ to Russia — NATO General Ben Hodges

When 62 ton American tanks fire off salvos into the night in Poland the commander of US forces in Europe, General Ben Hodges, wants you to know this is “not just a training exercise“. To the contrary, it’s a message to Russians:

We’re serious — this is not just a training exercise. We are here to convey a strategic message that you cannot violate the sovereignty of members of NATO … Moscow will get the message — I’m confident of it.

I don’t know where Hodges is from but in my neck of the woods when you transport a full armored brigade half way across the world to fire at the doorstep of a rival power the message you’re trying to send tends to get a little confused.

We need to ask, do the likes of Hodges actually believe their own nonsense, or are they just trying to stir things up to keep careers and budgets going?

This Russia Insider story, which was embedded in the Paul Craig Roberts commentary at the start of the Critical Reads section, is certainly worth reading as a stand-alone new item.  I didn’t want you to miss it in case you passed on the PCR article — and another link to it is here.

A sudden burst of fighting in Donbass, Ukraine leaves dozens dead

In the past few days tensions in eastern Ukraine suddenly and unexpectedly escalated, with Kiev and the Donetsk People’s Republic (DNR) accusing each other of starting the shelling on Jan. 29 and Jan. 30. Whatever the truth, dozens are dead and the outskirts of Donetsk have been left without electricity.

Ukrainian President Petro Poroshenko cut short his visit to Germany and urgently convened an emergency meeting of the Contact Group for the settlement of the Donbass conflict, as well as appealed to the United Nations.

Experts point out that the fighting began on the day following the telephone conversation between Russian President Vladimir Putin and newly-elected U.S. President Donald Trump, who has repeatedly stated his desire to distance himself from the Ukrainian conflict.

No one knows what really happened and who lit the match to the powder keg; the situation has been potentially explosive all this time as neither side is implementing the Minsk accords,” said Kost Bondarenko, director of the Ukrainian Politics foundation.

Escalation is a way to draw attention to oneself, Russian experts said. Anyway, the DNR reciprocated and can continue reciprocating for a long time to come. The result is that the frozen conflict remains while the Minsk accords are quickly melting away.

This story showed up on the Russia Beyond the Headlines website on Wednesday — and I found it embedded in the right sidebar of a story that was posted on the Internet site.  Another link to it is here.

Russia Nears End of Recession as GDP Shrinks Less Than Forecast

Russia edged closer to exiting its longest recession in almost two decades as mining, manufacturing and agriculture added to stabilizing oil prices to steady the economy of the world’s biggest energy exporter.

Gross domestic product contracted 0.2 percent last year after an upwardly revised decline of 2.8 percent in 2015, the Federal Statistics Service said on Wednesday. That result, the first reading for 2016, beat every forecast in a Bloomberg survey of 15 analysts, whose median estimate was for a 0.5 percent drop. The Economy Ministry had projected a decrease of 0.6 percent.

Rising exports and rebuilding of stocks were key drivers in 2016, said Nikolay Kondrashov, an analyst at the Development Center of the Higher School of Economics. “Both investment and consumption declined, but the impact of inventories was very strong,” he said.

Manufacturing grew 1.4 percent in 2016, according to the latest report, while production of oil, gas and other natural resources was up 0.2 percent. Agriculture, buoyed by restrictions on imports and the ruble devaluation, grew 3.5 percent. Consumers continued to struggle, with wholesale and retail trade down 3.6 percent. Construction was off 4.3 percent.

The data confirmed that industry has driven the recovery, while consumer-facing sectors remain weak,” Capital Economics said in an e-mailed note, adding that positive growth may have returned in the fourth quarter, although those data aren’t available yet.

This Bloomberg story was posted on their Internet site at 6:00 a.m. Denver time on Wednesday morning — and was updated less than two hours later.  I thank Swedish reader Patrik Ekdahl for sharing it with us — and another link to it is here.

Where are Russia’s vast gold reserves hidden?

The topic of gold reserves is increasingly discussed in the international media. Donald Trump, for example, suggested an audit of America’s gold reserves to ascertain just how much the country truly has. The question of Germany’s gold reserves, kept in the United States for decades, has begun to worry the German public, which begins to think it’s necessary to return those reserves home. So it’s no surprise that many Russians also wonder what’s up with their country’s gold reserves and where they’re hidden.

Russia ranks sixth in the world in gold reserves, and the Russian Central Bank said they total 1,614.27 tonnes, which is 15 percent more than last year.

The Russian Central Bank is one of the world’s leading gold buyers, and in February 2016 it purchased more than 10 tonnes of gold.

When prices are low, governments increase gold reserves, and this often owes to traditions and historical reasons,” said Anton Tabakh, an economist and professor at the Higher School of Economics. “In the reliability-liquidity-profitability triad, gold is marketable but prices greatly vary.”

This is the second story of the day from the Russia Beyond the Headlines website.  This one showed up in a GATA release yesterday — and I stole the Donbass story posted above out of the left sidebar of this article.  This longish, but very informative gold-related article is definitely worth reading — and another link to it is here.  There’s also an embedded photo that you might recognize.

India’s January gold imports down nearly 70{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}

The gold business is showing scant signs of revival after being severely hit by demonetisation. This is evident as gold imports have only marginally increased from last month. According to data provided by Ahmedabad Air Cargo Complex, gold imports in January were nearly 70{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} lower than in the same period last year. Imports stood at 2.8 metric tonnes (MT) till Jan 30 this year, against 9.42 MT in January 2016.

Estimates by city-based bullion traders and stockists indicate that cash crunch earlier in January and limited sales has led to a decline in imports. Normally , sales from November to February are buoyant due to the festive and wedding season. However, people are overly judicious in making gold purchases now.

People are prioritizing purchases because of limited cash supply . Moreover, the government action against frenzied gold buyers soon after demonetization has led to reluctance among consumers to make large invest ments in gold,” said Piyush Bhansali, president, Manek Chowk Bullion Traders Association.

While jewellery sales are good owing to the wedding season, the amount of purchases are limited to the bride. Moreover, old gold is being traded in against the jewellery and therefore, the effective sale of gold is relatively less,” said a city-based jeweller.

The above four paragraphs are all there is to this brief gold-related news item that was posted on the Times of India website at 6:34 a.m. IST on their Wednesday morning.  It’s the first of two stories that I found on the Sharps Pixley website last night — and another link to it is here.

Philippines to shut mines, suspend others as clampdown deepens

The Philippines will close down over 20 mines, mostly nickel producers that account for about half of output in the world’s biggest nickel ore supplier, as a government campaign to fight environmental degradation deepens.
Manila is also suspending operations at six other mines, including the country’s top gold miner.

Environment and Natural Resources Secretary Regina Lopez ordered the closure of 21 mines and the suspension of several others, including a gold mine operated by Australia’s Oceanagold Corp, for causing environmental destruction. Shares of Oceanagold fell more than 14 percent.

Why is mining more important than people’s lives?” Lopez told a media briefing.

Lopez, a staunch environmentalist, said several of the mining operations that were shut were in functional watersheds.  “My issue here is not about mining, my issue here is social justice,” she said, after showing footage of environmental damage caused by mining in the Southeast Asian nation.

This Reuters story appeared on their Internet site at 1:27 a.m. EST this morning — and my thanks go out to Garry Robinson for bringing it to our attention. Another link to it is here.

China 154, Hong Kong 39. Swiss December gold exports show remarkable gold flows — Lawrie Williams

For many years many gold analysts have blithely stated that Hong Kong’s gold exports to the Chinese mainland are a proxy for total Chinese imports – or at the very least that the Special Administrative Region remains the principal route for gold flows into the Middle Kingdom.  Indeed hugely respected analytical consultancy, GFMS. In its latest update to its 2016 gold supply/demand analysis released last weekend persists in this assumption calling Hong Kong the principal gateway for gold flows into mainland China.

But, the latest Swiss official gold export figures for December show that this just isn’t necessarily the case any more.  Swiss gold exports direct to the Chinese mainland in December were almost FOUR TIMES those into Hong Kong and were MORE THAN THREE TIMES the amount of gold shipped from Hong Kong into the mainland.  We have long stated here that the proportion of direct Chinese gold imports via Hong Kong has been diminishing in importance, but the latest Swiss figures, although perhaps anomalous in their actual numbers, demonstrate that the Hong Kong net trade is no longer indicative of the total levels of Chinese gold imports – indeed far from it.

We hear anecdotally that the four major Swiss gold refining companies, Heraeus, Metalor, PAMP and Valcambi have all been working round the clock to meet the Asian demand, although we assume there will be a substantial slowdown in late January now the Chinese New Year holiday is with us.  This is a traditional time of gift giving, of which gold plays an important part, and tends to account for usually high Chinese and Hong Kong import figures during December and January.  The Chinese Lunar New Year fell early this year – it’s normally in February – so we wouldn’t expect this year’s January import figure to be as high as that of a year ago.  This also tends to show up in  Shanghai Gold Exchange (SGE) withdrawal figures and in 2016 January was the peak month for these.  They were lacklustre during the year otherwise but did show a pick-up in the final months of the year as jewellers, gold dealers and fabricators restocked ahead of the New Year holiday.

This commentary by Lawrie put in an appearance on the Sharps Pixley website yesterday — and it’s definitely worth reading.  Another link to it is here.


Yesterday I featured the Guinea turaco, or green turaco as it’s also called.  Here’s the great blue turaco — and it’s much larger than its green cousin — and a sight to behold as well.  Click to enlarge.


As I mention in my discussion on the dollar index, it was forty-five minutes after the dollar index began to head higher that the precious metals got hit to the downside — and for gold and silver, their subsequent rallies after the London p.m. gold fix were both capped and closed for small losses on the day.  They would have obviously closed well into positive territory if they had been allowed to rally uninterrupted after the Fed news came out at 2 p.m. EST.

As Ted pointed out in his mid-week column yesterday, silver penetrated its 100-day moving average on Tuesday — and was closed right on it yesterday — and that may have been a price level that was being defended by some entity.

Here are the 6-month charts for all four precious metals, plus copper — and there’s not a lot to see.  Ted also pointed out in his commentary on Wednesday that there’s a monstrous short position in copper, most of which is not held by the banks, so it remains to be seen how its price fares going forward.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price wandered higher, with some resistance, during the Far East trading session on their Thursday.  The current high tick was set shortly before 2 p.m. China Standard Time — and it’s off that high by a bit now — and up $4.50 the ounce.  Silver’s tiny rally also ended about the same time — and it’s currently up 7 cents.  Platinum has been moving erratically higher — and as Zurich opens, it’s up 7 bucks.  Palladium’s price path has been similar to both silver and gold’s — and it’s up 6 dollars at the moment.

Net HFT gold volume is pretty impressive already at just over 39,500 contracts — and that number in silver is a hair under 6,000 with a fair amount of roll-over/switch volume associated with it.

The dollar index began to head south with some authority the moment that trading commenced at 6:00 p.m. EST in New York yesterday evening.  Its current 99.44 low tick was set around 1:50 p.m. CST on their Thursday afternoon.  It rallied a bunch until about fifty minutes before the London open, but has rolled over since.  At the moment it’s down 25 basis points.

Tomorrow we get the monthly job numbers.  January’s jobs report caused barely a blip in precious metal prices — and it remains to be seen if that turns out to be the case this month or not.

And as I post today’s column on the website at 4:02 a.m. EST, London and Zurich have been open for about an hour — and I see that the gold price is up to a new high as the dollar index continues to tick lower.  Gold is up $7.80 an ounce currently.  It’s been the same price path for silver — and it’s up 15 cents at the moment.  Platinum is up 8 dollars — and palladium is still up 6 bucks.

Net HFT gold volume is up to just over 46,000 contracts — and that number in silver is about 7,600 contracts.  The increases in volume in both these precious metals hasn’t been a lot during the last hour.

The dollar index has taken a bit of a header in the last ten minutes — and is now down 38 basis points.

I have no idea what will happen during the rest of the Thursday session, except it’s a given that all the price/volume action that matters will occur after the noon silver fix in London — and then again during the COMEX trading session in New York.

I’m done for the day — and I’ll see you here tomorrow.



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