‘Da Boyz’ Show Up at ‘The Fix’

10 February 2017 — Friday


The gold price chopped around a few dollars either side of unchanged until shortly after 11 a.m. GMT in London on their Thursday morning.  It was sold down a bit from there until at, or just before, the noon silver fix — and at that juncture the price began to creep higher.  It rallied a bit more aggressively in the last forty-five minutes of trading before the London p.m. gold fix — and once that was done, ‘da boyz’ peeled ten bucks off the price in the next thirty minutes.  It crawled unsteadily higher until shortly after the 1:30 p.m. EST COMEX close — and the HFT boyz and their algos showed up again, with the spike low price tick of the day coming a few minutes before the 5:00 p.m. EST close.

The high and low ticks in gold on Thursday were recorded by the CME Group as $1,246.20 and $1,226.10 in the April contract.

Gold was closed in New York yesterday at $1,227.80 spot, down $13.20 on the day.  Not surprisingly, net volume was extremely heavy at around 224,000 contracts.

Here’s the 5-minute tick chart for gold, courtesy of Brad Robertson as usual.  There was a bit of volume associated with the 11 a.m. GMT sell-off in London — and that shows up after the 04:00 mark on the chart below.  Volume began to pick up a noticeable amount as the gold price began to rally starting around 07:15 a.m. Denver time/09:15 EST — and the two huge 10,000+ volume spikes came at, and just after, the the London p.m. gold fix.  Volume didn’t fall off to anything resembling background levels until sometime after 13:00 MST, which was sometime after 3 p.m. in New York.  And because the chart cuts off about thirty minutes before the close of trading, it’s not possible to tell how much volume was associated with the spike low tick that came minutes before that.  My guess would be…not a lot.

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.

The silver price traded about a dime either side of unchanged and, like gold, had its rally starting at, or just before, the noon silver fix in London.  And also like gold, really jumped up in the last forty-five minutes of trading going into the London p.m. gold fix.  JPMorgan et al appeared and peeled 40 cents off the price within thirty minutes of so.  The subsequent rally ended at the 1:30 p.m. EST COMEX close — and it was sold lower from there right into the 5:00 p.m. close.  Unlike gold, silver’s low tick yesterday did not come at the COMEX close.

The high and low tick in this precious metal was reported as $17.845 and $17.615 in the March contract.

Silver finished the Thursday session at $17.61 spot, down 14 cents on the day.  Net volume wasn’t overly heavy at 45,000 contracts.  I was expecting a much bigger number than that.  But roll-over/switch volume out of March was pretty decent.

And here’s the 5-minute tick chart for silver.  In most respects it looks similar to the 5-minute gold chart, except that very shorty after the COMEX close…11:30 a.m. Denver time…volume evaporated back to background levels — and as you can tell, the sell-off in the thinly-traded after-hours market had very little volume associated with it.

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.

After chopping and flopping a few dollars either side of unchanged, platinum opened down a buck in Zurich on Thursday morning — and was up 5 bucks a couple of hours later.  From there it traded sideways until 9:15 a.m. EST in New York.  Then, like silver and gold, blasted higher to its high tick at the London p.m. gold fix.  You know the rest.  ‘Da boyz’ closed platinum at $1,013 spot, down 2 dollars on the day — and 14 bucks off its high.

It was mostly the same for palladium, although its rally in New York got capped at 9 a.m. EST as the price went vertical.  But after that, it was handled in the same manner as silver and gold.  Palladium was closed unchanged at $768 spot.

The dollar index was closed very late on Wednesday afternoon in New York at 100.17 and — except for a 15 basis point drop between 10:30 and 11:45 a.m. in Shanghai — traded steadily higher until that rally topped out around the 100.42 mark very shortly before the London open.  It wanted to crash from there, but from the saw-tooth price pattern during the fall, it was obvious that the usual ‘gentle hands’ were present.  They finally reversed it around 9:35 a.m. GMT, but that save only lasted for a couple of hours, before it began to chop lower once again.  The real ramp job in the dollar index began at the London p.m. gold fix — and most of the gains that mattered were in by minutes before noon in New York.  From that point it chopped quietly higher into the close.  The dollar index finished the Thursday session at 100.66 — and up 49 basis points on the day.

It was obviously another moment where JPMorgan et al pulled the rug out from under the precious metals the moment that they ran up the dollar index.

And here’s the 6-month U.S. dollar index chart — and looking at it you have to wonder if the powers-that-be are going to run the dollar index higher from here, or is this just a head-fake before it turns lower once more.

The gold stocks opened unchanged, but headed south with a vengeance when ‘da boyz’ pulled the plug on the gold price at the ‘fix’.  The morning low came a few minutes after 10:30 a.m. EST when the initial sell-down ended.  Then they chopped quietly higher until the 1:30 p.m. COMEX close.  Then the moment the HFT boyz showed up in the thinly-traded after-hours market, the gold stocks followed.  The HUI closed very close to its early morning low tick…down 2.48 percent.

The silver equities were down about 4 percent even before the London p.m. gold fix, because the earnings report from CDE after the markets closed on Wednesday, was not what the market wanted to see.  CDE finished the Thursday session down 22 percent!  This dragged the entire silver equities complex with it.  It was a bloodbath — and lot of babies got thrown out with the proverbial bathwater yesterday.  For the most part, once the 10:35 a.m. low tick was in, the silver stocks followed the same price path as the gold shares.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 6.15 percent — and all of this week’s gains, plus more, vanished in the process.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 3 gold and 100 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, all three contracts came from ADM — and HSBC USA and JPMorgan picked them up for their in-house [proprietary] trading accounts.  In silver, it was MacQuarie Futures as the sole short/issuer.  Canada’s Scotiabank picked up 76 contracts…with Citigroup and Merrill taking 14 and 6 contracts for their respective client accounts.  A link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that February open interest in gold declined by 35 contracts, leaving 1,352 still open.  Wednesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, so that means that 35 gold contract holders exited the February delivery month.  Silver o.i. in February jumped another 106 contracts leaving 285 still around.  Wednesday’s Daily Delivery Report showed that zero silver contracts were posted for delivery today, so that means the obvious…106 net silver contracts were added to the February delivery month.  I would suspect that a hundred of those were related to what showed up in Monday’s Daily Delivery Report in the previous paragraph.

For the first time this month, there was no deposit in GLD.  And as of 7:13 p.m. EST yesterday evening, there were no reported changes in SLV once again.

The folks over at the shortsqueeze.com Internet site updated their short position data for both SLV and GLD as of January 31 — and this is what they had to report.  The short position in SLV declined from 12.55 million shares/troy ounces, down to 9.90 million troy ounces, a drop of 21.1 percent.  Ted will certainly be happy about that.  And as big as the decline was in the short position in SLV, the drop in the short position in GLD was amazing.  It went from 964,850 troy ounces held short, all the way down to 563,510 troy ounces held short, which is a decline of 41.6 percent.  Ted will be happy about that as well — and will certainly have something to say about it in his weekly review tomorrow afternoon.

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

Over at the COMEX/approved gold depositories on the U.S. east coast on Wednesday, they reported receiving 48,225.000 troy ounces/1,500 kilobars [U.K./U.S. kilobar weight]  Of that amount 1,000 kilobars were deposited in JP Morgan’s vault — and the other 500 went into Canada’s Scotiabank.  There was 200 troy ounces shipped out of Delaware — and 160.750 troy ounces/5 kilobars [U.K./U.S. kilobar weight] shipped out of Manfra, Tordella & Brookes, Inc.  A link to this activity is here.

It was much busier in silver, as 1,189,997 troy ounces were received — and nothing was reported shipped out.  Of the amount received, there was one container/611,716 troy ounces received at HSBC USA — and another container at Canada’s Scotiabank…577,292 troy ounces.  The link to that action is here.

It was also very busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They received 6,900 kilobars — and shipped out 1,780 of them.  All of this action was at Brink’s, Inc. — and a link to that, in troy ounces, is here.

Here are two more nifty charts courtesy of Nick Laird.  It shows monthly gold demand of just four countries on the ‘new’ Silk Road.  This chart goes back to 2008.  The ‘click to enlarge‘ feature is really helpful here.

The second chart shows the yearly demand for these same four ‘New’ Silk Road countries.  This one goes back all the way to 1995 — and the click to enlarge feature helps a lot here as well.

I don’t have all that many stories for you today — and I hope there are a few in here that you’ll find worthy of your time.


Jim Rickards and Max Keiser: Donald Trump’s political shock and awe – are we on the road to ruin?

This 13-minute video interview was posted on the marketsanity.com Internet site on Thursday sometime — and it’s definitely worth your while if you have the time.  I thank Roy Stephens for bringing it to our attention.

Stockman to Trump: It’s the Economy, Stupid

In a recent appearance on CNN, David Stockman suggested that Trump might best spend some time actually addressing economic issues instead of the administration’s travel ban for immigrants from Middle Eastern countries, which Stockman called “a giant misfire.”

Pointing out that Americans are far, far more likely to be struck by lightning than killed by a terrorist, Stockman asserted that it was really Trump’s opposition to Obamacare and other government regulation that got him elected. Employing the 1992 Clinton Campaign motto of “it’s the economy, stupid,” Stockman noted “Trump was elected because flyover America is hurting economically. The voters of Racine, Wisconsin and Johnstown, Pennsylvania are imperiled not because of some refugees, they’re imperiled because their jobs have all been disappearing for decades. The problem is far more the Federal Reserve, Janet Yellen, the bubbles they’re creating on Wall Street…

Stockman went on suggest that the Trump Administration is showing decreased interest in “draining the swamp” employing a phrase Trump used when he claimed he would greatly cut federal power in Washington. Instead of doing that, Stockman contends, Trump is merely filling the swamp with “other creatures that will build up homeland security, border control, more money for defense, more money for spying and national security.”

This commentary [with an embedded 5:46 minute CNN video clip] by Ryan McMaken at The Mises Institute found a home over at the Zero Hedge website at 1:09 p.m. EST on Thursday afternoon — an another link to it is here.

Record Number of Americans Renounce U.S. Citizenship in 2016; 2,200{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} Surge During Obama Reign

Obama warned everyone back in 2009 that “elections have consequences.”  Now, eight years later, we learn that apparently the “consequences” of running around the country for nearly a decade threatening to raise taxes, “spread the wealth around” and pursue any number of other socialist policies are a record number of people renouncing their U.S. citizenship.

Per a post from the International Tax Blog, the U.S. Treasury recently published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) during the fourth quarter of 2016 and it shattered all previous records.

The number of published expatriates for 4Q 2016 was 2,365, bringing the total number for 2016 to 5,411, setting a new all-time quarterly and annual record.  By comparison, the number of expatriates for 2016 reflects a 26{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} increase over 2015 and a 58{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} increase over 2014 (3,415).

Taking a more granular look at the past 20 years illustrates the staggering surge in the number of published expatriates that “coincidentally” corresponds with Obama’s election in 2008.  In fact, the 2016 list is over 22x larger than 2008, the year just before Obama moved into the White House.

This 2-chart/1 cartoon Zero Hedge article showed up on their Internet site at 9:00 p.m. EST last night — and another link to it is here.

Germany posts record trade surplus: is it exploiting the euro?

Germany posted a record trade surplus in 2016, just weeks after Donald Trump’s top trade adviser accused the country of exploiting a “grossly undervalued” euro.

The country’s €253bn (£215bn) trade surplus was the result of a 1.2pc rise in exports to €1.2 trillion, while imports only rose 0.6pc to €954.6bn, according to the federal statistics office.

The 2016 surplus surpasses the previous high of €244.3bn set in 2015.

This increase in net exports is a very encouraging sign for Germany,” said Benno Bunse, head of Germany’s economic development agency.

The overall picture is of an economy developing healthily towards being a place of manufacture and robust consumer-led development.

Germany’s 2016 current account surplus, which measures the total money flowing in and out of a country, of €266bn, surpassed China’s last year, making it the world’s largest.

The above six paragraphs are all of this story from The Telegraph that was posted in the clear on their website at 3:09 p.m. GMT on their Thursday afternoon, which was 10:09 a.m. in New York — EST plus 5 hours.  The rest is hidden behind their subscription wall.  I found it in this morning’s edition of the King Report — and a link to the hard copy is here.

Deutsche Bank Is Said to Close U.S. Swaps-Clearing Business

Deutsche Bank AG is shutting down its U.S. swaps-clearing business as part of an overhaul of its investment bank to improve profitability, according to a person briefed on the decision.

The move, effective immediately, is part of the company’s broad restructuring aimed at simplifying operations and pulling back from some that are too costly under stiffer capital rules, the person said, asking not to be identified because the decision hasn’t been announced publicly. The Financial Times reported the plan earlier on Wednesday.

The Frankfurt-based firm had slid to 13th place among banks in that clearing business, according to data compiled by the U.S. Commodity Futures Trading Commission. Deutsche Bank plans to continue clearing exchange-traded derivatives such as futures in the U.S., another person familiar with the matter said.

Chief Executive Officer John Cryan is eliminating 9,000 jobs across the company to raise profitability and capital levels eroded by fines and other legal costs. The move will reduce headcount in the fixed-income division by as much as 6 percent and in the equities unit by as much as 17 percent, a person familiar with the matter said last week.

This Bloomberg article put in an appearance on their Internet site at 6:01 p.m. Denver time on Wednesday evening — and was updated about sixteen hours later.  I thank Swedish reader Patrik Ekdahl for bringing it to our attention — and another link to it is here.

Merkel says euro zone must remain one bloc

The euro zone must remain as one bloc, German Chancellor Angela Merkel said on Thursday, urging members of the single currency bloc to deliver on their common commitments.

For me it is not a matter of two speeds within the euro zone,” Merkel said. “The euro zone must remain together. And what we agreed on should be delivered together by all the euro member states.”

Finance Minister Wolfgang Schaeuble said on Wednesday that Greece would have to leave the euro zone if it failed to meet its bailout commitments.

The pressure on the Greeks to undertake reform must be maintained so that they become competitive, otherwise they can’t remain in the currency area,” Schaeuble told public broadcaster ARD.

This is the classic case of someone whistling past the proverbial graveyard, as she knows the E.U. is doomed.  The above four paragraphs are all there is to this brief Reuters article that was posted on their website at 2:48 p.m. on Thursday afternoon EST — and I thank Patricia Caulfield for pointing it out.  Another link to the hard copy is here.

New Silk Road: ‘Most Important Economic Project of First Half of 21st Century’

Russian President Vladimir Putin will take part in the Silk Road summit in Beijing, Russian Ambassador to China Andrei Denisov told journalists at a press conference on February 9. The forum will be held on May 14-15. Earlier, the Chinese foreign ministry said that leaders from over 20 countries have confirmed their participation in the summit.

The prime ministers of the U.K., Sri Lanka and the president of the Philippines are scheduled to take part in the summit as well.

According to the Russian ambassador to China, Vladimir Putin accepted the invitation from President Xi Jinping and plans to combine participation in the discussions on the Silk Route together with a bilateral official visit and talks with the Chinese leader.

The diplomat also said that the position of the two countries regarding issues of world politics is quite similar and often identical. This is due to the fact that there are similar interests between Russia and China in terms of international politics.

The forum on International Cooperation in the framework of the Chinese strategy of the Silk Road was announced by the Chinese president during the World Economic Forum in Davos.

This news story showed up on the sputniknews.com Internet site at 8:37 p.m. Moscow time on their Thursday evening — and it was updated about two hours later.  It’s the second offering of the day from Roy Stephens — and another link to it is here.

Bitcoin Plunges After Chinese Exchanges Suspend Bitcoin Withdrawals

Yesterday’s ominous closed-door meetings between the PBOC and bitcoin exchanges, appears to have had a dramatic effect, and as at least two Chinese bitcoin exchanges, Huobi and OKCoin, reported moments ago, all bitcoin withdrawals are now effectively suspended.

The result on bitcoin price was immediate and dramatic with bitcoin traded in China tumbling 7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

Here is the statement issued by Huobi, which we assume will be cross-posted by all other Chinese bitcoin marketplaces, in what appears to be the final crackdown phase by the Chinese central bank on local bitcoin traders.

This article appeared on the Zero Hedge website at 8:53 a.m. EST yesterday morning — and it comes courtesy of Richard Saler.  Another link to it is here.

The Commonwealth Bank of Australia puts a stop to refinancing investment home loans

The nation’s largest lender, Commonwealth Bank, has made a drastic move to put the brakes on investment lending.

In a decision that is set to see many other lenders industry wide follow, the bank announced today it would be stopping the acceptance of any new refinance applications for investor loans from Monday February 13.

It comes just a day after the lender’s subsidiary bank, Bankwest, announced it would no longer accept applications from would-be customers who planned to refinance investment property loans from other lenders.

In a notice sent to mortgage brokers, CommBank said they are “committed to consistently delivering the best customer experience for home buyers, upholding the highest level of professional standards, and meeting our responsible lending and regulatory obligations”.

To ensure we continue to meet our commitments, from Monday 13th February we will be suspending the acceptance of new refinance applications for Investment Home Loans, until further notice,” it said.

This story was posted on the news.com.au Internet site at 6:13 p.m. AEDT on their Wednesday evening.  I thank Philip Muller for sending it our way — and another link to it is here.

More gold flows into GLD — Lawrie Williams

What a turnaround.  After the world’s largest gold ETF, SPDR Gold Shares had been seeing mostly outflows since July 6 last year – indeed, since that date,  up until the end of January 2017 the amount of gold held by the ETF had fallen by a massive 183.65 tonnes.  But, since the end of January this year, GLD’s gold holdings have turned around and increased every day, with the ETF having added 33.51 tonnes of gold so far this month.  The latest day’s rise in the holding was 5.63 tonnes.

GLD’s current total gold holding, though, is still some 150 tonnes short of last year’s peak and a massive 520.8 tonnes below its all-time high of 1,353.35 tonnes achieved back in 2012.  Whether it can reach that kind of level again is open to doubt as the peak liquidations out of GLD were largely countered by flows of gold into China, and virtually all that goes into China doesn’t come out again – at least not under current Chinese legislation.

But there is still scope for further increases at the kinds of levels we have been seeing of late.  The latest figures out of GFMS suggest a supply surplus of around 1,176 tonnes in 2016 given a fall-off in Chinese and Indian retail demand during the year, but GFMS tends to ignore some demand elements – notably demand by the Chinese financial sector which could be as much as several hundred tonnes.

Net central bank purchases were also lower last year, in part due to a sharp reduction in announced Chinese central bank purchases, but also due to gold liquidations by Venezuela to provide funding to mitigate some of its foreign debt problems.  Turkey was also a substantial net seller according to IMF statistics, but this could be seen as misleading as Turkey includes holdings of gold by its commercial banks in its official reserve figures and these are subject to some considerable fluctuation.  Kazakhstan remained a consistent buyer with its central bank adding 32.9 tonnes over the year while the Russian central bank was the largest buyer again taking a little over 200 tonnes of gold into is reserves.

This very worthwhile commentary by Lawrie put in an appearance on the Sharps Pixley website yesterday — and another link to it is here.

Germany brings its gold stash home sooner than planned

Germany’s central bank is bringing home gold reserves stored in places like New York and Paris faster than planned, it said today, as confidence in the euro ebbs even in the heart of the currency bloc after a decade of a sluggish economy.

Stashed away at the height of the Cold War in safe havens well out of Moscow’s reach, the 3,378-tonne, €120 billion (£102 billion) gold stockpile has become a symbol of Germany’s economic ascent and a guardian of its stability.

But with Europe stumbling from crisis to crisis, the German public has grown uneasy about keeping the gold abroad. Some even argue the world’s second biggest bullion reserve may be needed to back a new deutschmark should the euro zone break up.

Having already moved 583 tonnes of gold out of New York and Paris, the Bundesbank plans to have half its gold in Frankfurt by the end of 2017, years ahead of its 2020 schedule, with the rest split between the Federal Reserve Bank of New York and the Bank of England.

We have a lot of discussions about (U.S. President Donald) Trump, regarding implications on monetary policy, macroeconomics, etc., but we trust the central bank of the U.S.,” Bundesbank board member Carl-Ludwig Thiele told a news conference.

This story, filed from Frankfurt, appeared on the uk.reuters.com Internet site yesterday.  It’s currently datelined 8:52 p.m. GMT, so it’s obviously been updated since it was originally filed.  I found it on the gata.org Internet site — and another link to it is here.  Here’s the Zero Hedge spin on this headlined “Bundesbank Has Completed Gold Repatriation From New York Fed, Three Years Ahead of Schedule” — and it’s courtesy of Richard Saler.

Grant Williams sees oil pricing transitioning to the yuan and gold

Market analyst Grant Williams’ presentation at the Mines and Money conference in London in November, was posted in the clear on Zero Hedge last night, sees the end of the petrodollar system and its gradual replacement, already underway, with a Chinese yuan convertible into gold, transferring the gold pricing system to Asia.

Williams, publisher of the “Things That Make You Go Hmmm….” letter, writes:

“If you are an oil producing country, do you:

“– Minimize your production in order to maximize your holdings of one of the most abundant and easily-produced commodities in the world — U.S. treasuries — as has been the case for the last 40 years, knowing full well that, with the level of entitlements due in the next decade, more will need to be printed like crazy? Or do you…

“– Maximize your production to gain the largest possible market share in the biggest oil market in the world and, through the ability to buy gold for yuan, thereby maximize your reserves of a scarce, physical commodity that is impossible to produce from thin air and that happens to be not only the most undervalued asset on the planet, but is trading at its most undervalued relative to U.S. treasuries in living memory?”

The problem with Williams’ conclusion is that gold is not really “impossible to produce from thin air.” Rather, central banks lease, swap, and sell gold nearly every day, causing it to be hypothecated and rehypothecated, creating vast imaginary supply, just as vast imaginary supply is created every day on futures exchanges.

The 32:32 minute video presentation is definitely worth watching — and the rest of what Chris Powell has to say in this GATA release is worth reading as well.  But the first person through the door with this video interview was, in actual fact, Richard Saler.  Another link to this is here.


The click to enlarge feature helps on these two photos.


Well, so much for it feeling “somewhat different this time“…as ‘da boyz’ showed up at the London p.m. gold fix and laid a bit of a beating on all four precious metals in general, but silver and gold in particular.

A lot of the losses in both gold and silver don’t show up on the 6-month charts below, because they occurred after the 1:30 p.m. COMEX close, which is the cut-off time for these graphs.  They’ll show up in Saturday’s dojis, unless we continue lower in price again today.  The click to enlarge feature helps a bit with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I see that ‘da boyz’ still have gold under some selling pressure — and at the moment it’s down $5.90 an ounce.  They really laid into silver just over an hour after trading began in New York on Thursday evening, blasting it well below its 100-day moving average in the process.  It recovered a decent portion of that loss — and is down 6 cents.  They didn’t spare the horses in platinum, taking it down 16 bucks by shortly after 12 o’clock noon in Shanghai trading.  It’s recovered only a bit — and down 15 dollars as the Zurich open approaches.  Palladium got sold down 5 dollars by early in the Far East trading day on their Friday, but has recovered most of that — and is down a buck currently.

Net HFT gold volume is pretty heavy already at just over 51,000 contracts — and that number in silver is just over 10,000 contracts, with pretty decent roll-over/switch volume out of March and into May, which will be the new front month once March goes off the board.

The dollar index hasn’t been doing a lot…mostly chopping around unchanged — and is up 4 basis points as London opens.

The precious metal price action has had zero to do with what has been going on in the currencies — and it is, as Ted always says…”strictly a COMEX affair.”  He would be 100 percent correct about that.

Today we get both the latest Commitment of Traders Report, plus the companion Bank Participation Report as well.  Here are silver analyst Ted Butler‘s thoughts from Wednesday on what today’s COT numbers may show:

I would expect that there has been an increase in managed money buying and commercial selling in both gold and silver in the Commitments of Traders (COT) Report to be issued Friday, although I would love to be wrong. Price action and increases in total open interest through yesterday’s cutoff suggest a larger increase in gold than seen since early November and another increase in silver on a par with last week. But almost regardless of how large the increase of the total net commercial short position in gold (say around 25,000 contracts) may be, the standout feature remains how relatively small this position is at this point.

The rally in gold and silver since Dec 20 has resulted in an upside penetration of every significant moving average, save for the 200 day moving average in each. I would have thought much more managed money buying, particularly in gold, would have occurred at this point on this rally. That it hasn’t, I still consider bullish.

Playing the devil’s advocate, I suppose the set up wouldn’t be as potentially bullish as I see it if it was known that the managed money technical funds were never going to buy big in COMEX gold or silver again.  I fully concede that without significant buying ahead from the managed money technical funds, a large part of my bullish outlook disappears.

And as I post today’s efforts on the website at 4:05 a.m. EST this morning, I see that the gold price set a new low briefly before the London open — and has rallied off that low by a bit — and is currently down $2.90 an ounce.  The silver price has been creeping higher as well — and is down only 2 cents.  Platinum was taken down to a new low price right at the Zurich open — and is off that low by four dollars and ‘only’ down 12 bucks currently.  Platinum is the only precious metal in rally mode — and it’s up 4 dollars.

Net HFT gold volume is now up to just under 60,000 contracts — and that number in silver is just over 11,500 contracts, which isn’t a big increase in volume from an hour ago.

The dollar index has rallied a bit more — and is up 13 basis points at the moment.

After yesterday’s price activity following the London p.m. gold fix — and then the price pressure after trading began at 6:00 p.m. EST on Thursday evening in New York — I’ll be prepared for any eventuality when I check the charts after I crawl out of bed later this morning.

Enjoy your weekend — and I’ll see you here tomorrow.


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