Will Silver ‘Stall’ At Its 200-Day Moving Average?

14 February 2017 — Tuesday


The gold price was sold down about three dollars or so during the first hour of trading when it began at 6:00 p.m. EST on Sunday evening.  Then it didn’t do much until the London open.  At that juncture it began to drift ever-so-quietly lower — and was down five bucks by the COMEX open.  The HFT traders appeared at that point, spun their algos — and the low tick of the day was in at 10:30 a.m. in New York.  Five minutes later, as the dollar index began to retreat from its high tick of the day, the gold price rallied sharply until London closed, which was 11:00 a.m. EST.  Then it chopped quietly higher until around 2:35 p.m. EST in the thinly-traded after-hours market — and was then sold off equally as quietly into the 5:00 p.m. close.

The high and low ticks were recorded by the CME Group as $1,234.40 and $1,220.30 in the April contract.

Gold finished the Monday session in New York at $1,224.70 spot, down $8.20 from Friday’s close.  Net volume was reasonably quiet, whatever that means these days, at around 161,000 contracts.

I shan’t bother with the 5-minute gold tick chart today.

The silver price was also sold down a bit in the first seventy-five minutes of trading on Sunday evening in New York, but its rally after that, got capped, then sold off at its $18 spot high, which also happens to be its 200-day moving average…something I failed to mention in Saturday’s column.  From that point it was sold back to unchanged — and didn’t do a lot until ‘da boyz’ showed up at the COMEX open.  Not surprisingly, its low tick was also set at 10:30 a.m. in New York — and it then also rallied until the London close — and chopped quietly sideways for the rest of the day.

The high and low tick in this precious metal was reported as $18.015 and $17.755 in the March contract.

Silver finished the day at $17.795 spot, down 14 cents from Friday.  Net volume was a bit over 44,000 contracts — and roll-over/switch volume out of March was fairly decent.

Here’s the 5-minute tick chart for silver courtesy of Brad Robertson.  There was some volume surrounding the price spike in early evening trading in New York on Sunday but, as usual, all the volume that mattered occurred during the COMEX trading session — and volume dropped off to almost nothing after that.

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.

For the most part, the powers-that-be had platinum following the same price path as gold.  The only difference between it and gold [and silver] was that they set the low tick of the day at the London p.m. gold fix.  Its nice rally after that was capped at the London/Zurich close — and that was it for the day.  ‘Da boyz’ closed platinum at $996 spot, down 13 dollars from Friday.

The high price print for palladium, such as it was, came shortly after 11 a.m. China Standard Time on their Monday morning — and except for a smallish rally between 10:30 a.m. in Zurich…and the COMEX open — the price chopped lower until 3 p.m. EST.  It recovered a few dollars into the 5:00 p.m. close from there.  Palladium finished the Monday session at $774 spot, down 9 bucks on the day.

The dollar index closed very late on Friday afternoon in New York at 100.75 — and began to head higher almost as soon as trading began around 5 p.m. EST on Sunday afternoon.  It hit its 101.02 interim day high around 8:25 a.m. in Tokyo — and drifted quietly down to the 100.90 mark.  It began to head south with a vengeance shortly before 2 p.m. CST — and its 100.58 low was set at 8:30 a.m. in London.  It rallied back to around unchanged on the day within the next hour — and drifted quietly lower into the noon silver fix.  Then it really took off to the upside from there — and its 101.11 high tick was set at 10:35 a.m. in New York.  It was back below the 100.00 mark by a bit at the London close twenty-five minutes later — and chopped mostly sideways for the rest of the Monday session…finishing the day at exactly 101.00 — and up 25 basis points from Friday.

You should note that precious metal prices were mostly unaffected by the dollar index moves yesterday…either down or up…and they only headed lower once JPMorgan et al showed up for work at the COMEX open.

Here’s the 3-day dollar index charts so you can put all of Sunday and Monday’s action in some perspective.

And here’s the 6-month U.S. dollar index for your entertainment — and the manufactured rally in the dollar index continues, at least for the moment.

The gold shares gapped down a percent and change at the open — and they hit their respective low ticks shortly before 11 a.m. in New York.  They began to crawl higher about an hour later, but turned lower when the gold price got turned lower in after-hours trading.  The HUI finished down 1.21 percent.

The silver equities opened down a percent as well, but were back in positive territory for a bit at the p.m. gold fix.  After that they followed the exact same path as the gold stocks — and for the same reasons.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 1.20 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 1 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  Nothing to see here.

The CME Preliminary Report for the Monday trading session showed that gold open interested for February dropped by 284 contracts, leaving 1,077 left, minus the 1 contract mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that zero gold contracts are posted for delivery today, so that means that 284 February contract holders in gold, fled the scene.  Silver o.i. in February declined by 115 contracts.  Friday’s Daily Delivery Report showed that 113 silver contracts were actually posted for delivery today.  So that means that 115-113=2 silver contract holder exited the February delivery month.

There was another very decent-sized deposit in GLD on Monday, as an authorized participant added 133,346 troy ounces.  And as of 7:03 p.m. yesterday evening, there were no reported changes in SLV.

The good folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of trading on Friday, February 10 — and this is what they had to report:  There was 24,551 troy ounces added to their gold ETF, plus 88,640 troy ounces added to their silver ETF.

There was a smallish sales report from the U.S. Mint on Monday.  They sold 2,000 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — and 75,000 silver eagles.

There was no gold received at the COMEX-approved depositories on the U.S. east coast on Friday.  But 72,339.500/2,250 kilobars were shipped out.   Of that amount, there was 64,302.000/2,000 kilobars [SGE gold kilobar weight] shipped out of HSBC USA — and 8,037.500 troy ounces/250 kilobars [U.K./U.S. kilobar weight] shipped out of Canada’s Scotiabank.  The link to that activity is here.

For a change, there was no in/out movement at the U.S. silver depositories on Friday.

There was fairly decent movement over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  There were 5,360 received — and only 525 shipped out.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

I don’t have many stories today.  I just hope you’ll find a couple in here feel that are worthy of your time.


Apple Stock Soars Above Record Closing High

Despite declining earnings expectations, AAPL’s share price just broke above its record closing high (from February 2015).

As the WSJ notes, the tech giant’s shares–among the most widely held and actively traded in the world–hit $133.42 moments ago, trading above their record close of $133 from February 2015. And they’re inches away from their all-time intraday high of $134.54, set in April 2015.

Shares of the $700 billion company are up about 41{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in the past 12 months, and more than 9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} since Apple pulled back the curtain on its latest earnings report on Jan. 31 to reveal an end to a three-quarter streak of declining revenue.

Monday’s trading is the capstone of a recovery in the shares after a prolonged downturn from July 2015 to May 2016, when the stock fell 30{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} as investor concern mounted over the pace of iPhone sales, soft demand from China, and speculation about whether the company will ever again come up with a product with even a fraction of the impact of the iPhone. In that span, the Apple Watch failed to catch on as quickly as some had hoped, and sales of the company’s iPad tablet swooned.

But earnings expectations have done anything but rise…but don’t let that worry you…

Nothing matters anymore…except momentum.  This 2-chart Zero Hedge article put in an appearance on their Internet site at 10:26 a.m. on Monday morning EST — and I thank Brad Robertson for sending it along.  Another link to it is here.

McClellan Warns of “Important Price Top” as Volume Collapses

Plunging volume and narrowing breadth among the most popular exchange-traded funds indicates U.S. stocks are peaking, according to Tom McClellan, editor of the McClellan Market Report.

As NASDAQ 100 ETF QQQ has soared post-election, volume has cratered…

And Tom McClellan warns that when investors get complacent, they do certain things.  They show up as bullish in the various surveys.  They bid tiny premiums on options, driving down the VIX.  They put all of their cash to work, letting money market fund levels get down really low.  And they trade tiny volumes on QQQ.

This week’s chart looks at a 10-day simple moving average in the daily trading volume of QQQ, the largest of the ETFs which tracks the NASDAQ 100 Index.  Low readings like this are associated with investor complacency, and thus with important price tops.

This not surprising, but rather alarming 2-chart article was posted on the Zero Hedge website at 7:45 p.m. on Monday evening EST — and another link to it is here.  It certainly worth reading.

Jim Rickards: Are You Prepared for “Unencumbered” Interest Rate Policy?

In September Janet Yellen gave a speech in Jackson Hole, Wyoming titled “Designing Resilient Monetary Policy Frameworks for the Future.” That title at least suggested that some new thinking and new policies might be on display. They weren’t.

Yellen basically said that interest rate cuts, quantitative easing, interest on excess reserves and forward guidance were sufficient to pull the U.S. economy out of a future recession if needed.

In short, Yellen said the Fed’s existing toolkit is adequate, and is unwilling to consider more radical tools or remedies. The real lesson was that if you like weak growth, money printing and market manipulation, get ready for more of the same.

She dismissed the idea of negative rates. She also agreed that “helicopter money” (really fiscal policy supported by Fed bond purchases to finance deficits) could be useful, but made it clear that it was up to Congress to implement that and the Fed would not lead the charge.

Investors should ignore Fed noise. But that doesn’t stop markets from overreacting to every syllable of Fedspeak. Gold investors just have to live with day-to-day volatility until the world finally realizes that central banks are impotent and can safely be ignored in favor of global macroeconomic fundamentals.

This commentary by Jim, which focuses on a topic he’s written about before in the public domain, showed up on the dailyreckoning.com Internet site last Friday — and I thank Harold Jacobsen for pointing it out on Saturday.  Another link to it is here.

Duesenberg in a Barn — Jeff Thomas

In 1929, Ford sold 1,507,132 cars. Chevrolet sold 1,328,605. Then came the stock market crash. Sales dropped dramatically each year until 1932, when sales bottomed at 210,824 for Ford and 313,404 for Chevrolet.

But, during that time, a small new market came on stream for the two foremost budget brands—the rich.

Although literally millions of people were hit very hard by the crash, those who had invested wisely retained their wealth. Those who steered clear of the stock market bubble and/or invested in assets that would survive the crash, such as precious metals, were able to continue to live well.

However, they did find that when they drove down the street in their luxury cars, they stood out and became the objects of anger and scorn.

This is an important trait in human nature to recognize—that those who have been reckless with their money and have ended up losing it tend to hate those who were not reckless and have retained their wealth. Perhaps, observing someone who behaved responsibly is a regular reminder that they behaved stupidly.

Whatever the psychology involved, in 1930, those who had fared well soon learned that it was unwise to be conspicuous in their continued wealth. At that point, an interesting but little-remembered development occurred. Such people put their mink coats in the closet, put their jewellery in a safe place and, most importantly, found barns in the countryside into which they could park their Duesenbergs, Cords, and Auburns.

This very interesting and very worthwhile commentary by Jeff was posted on the internationalman.com Internet site on Monday — and another link to it is here.

A possible shift in the Russian position on Novorussia — The Saker

Something interesting is happening in Russia.  The recent murder of Givi is attracting A LOT of attention from the main media outlets, much more than any of the other murders of Novorussian commanders.  Furthermore, a majority of the key people invited to express their opinion generally seem to agree on a number of conclusions:

1.    Poroshenko is pretty much gone and finished.
2.    The Ukronazis have all but officially declared Minsk-2 dead.
3.    The Urkonazis have all but officially declared that they are at war with Russia
4.    The Urkonazis don’t want any negotiated solution
5.    The Urkonazis have now decided that an military attack on Novorussia is the only solution

Interestingly, the actual amount of Ukronazi artillery shelling has actually gone down, very significantly, during the last 48 hours, and yet by all reports the Novorussians remain in a state of pre-war.  If the purpose of the murder of “Givi” was to demoralize the Novorussians then it achieved the exact opposite effect: the Novorussians are seething with anger.

Interestingly, the Novorussians also seem supremely confident.  This is rather surprising considering that the Ukronazi forces vastly outnumber them (from 2:1 up to 4:1 depending on how you count).  In interviews Novorussian commanders and frontline combatants all say that while the Ukronazis did use the past months to reequip and retrain, this will not be enough to make a difference.

Members of the Russian Duma have publicly declared that they are fed up with Kiev and that if the Ukronazis attack the Voentorg and Northern Wind spigot will be fully opened.  At least one source reported that a large number of Cossacks had already crossed the border and were deployed inside the DNR/LNR.

This commentary/opinion piece was posted on thesaker.is Internet site on Saturday — and the first person through the door with it was ‘aurora’…for which I thank him.  Another link to it is here.

U.S. Soldiers Pose For Regrettable Photograph — This Time on Russia’s Border

American soldiers love to flaunt their stuff. Whether they’re posing next to a pyramid made of naked detainees, or just hanging out with their favorite Waffen SS flag, everyone knows that wherever U.S. soldiers go, embarrassing photographs are sure to follow.

And now that U.S. soldiers are congregating on Russia’s borders, it was just a matter of time before they took a picture of themselves doing something regrettable. Well, here they are, enjoying Estonia’s border with Russia, just like the brainwashed meatheads that came before them:

The Russian fortress they’re standing behind is Ivangorod. The medieval castle was used by the Nazis during World War II as a POW camp. It’s still Russian territory. Even after all these years and bloody wars.

What can one say about this photograph?  On the one hand, these American soldiers are probably too stupid to know why taking this photograph was such a bad idea. There’s no “on the other hand“.

They never learn, do they?

The above paragraphs are all there is to this brief 2-photo news item that appeared on the russia-insider.com Internet site on Saturday.  The photos are chilling, so please take the time to check them out.  This is another article courtesy of ‘aurora’ — and another link to it is here.

Assad tells Belgian reporter Belgium and E.U. merely obey “U.S. master” on Syria

Syrian President Bashar al-Assad recently told Belgian media that their country and the E.U. merely obey ‘the American master’ when it comes to Syria and political decision-making in general.

Assad answered a range of other questions.

You’d certainly never see a video interview like this one anywhere in the Western main stream media, that’s for sure.  This brief 3:47 minute video clip [with English subtitles] appeared on the youtube.com Internet site on Saturday — and there’s a link to a transcript as well.  It’s certainly worth your while if you have the interest.  It’s the third and finally offering of the day from ‘aurora’ — and another link to it is here.

Zimbabwe 2.0: South Africa’s President Vows to Redistribute White-Owned Land and Businesses

In a stark flashback to the events that led to Zimbabwe’s terminal collapse into banana republic status, as well as unleashing hyperinflation and economic devastation, on Thursday South African President Jacob Zuma pledged to break up white ownership of business and land to reduce inequality, in a State of the Nation address which as the WSJ reports was disrupted by a fistfight, walkouts and a release of pepper spray in the parliamentary chamber. It appears South Africa is not fond of implementing “Rule 19.”

Scenes of verbal and physical clashes inside the parliament, some 27 years to the day after Nelson Mandela was released from prison, as well as Zuma’s contentious speech, highlight the precarious future course facing Africa’s most developed economy.

As the WSJ reports, on Thursday, lawmakers from the far-left Economic Freedom Fighters “shouted over an initial attempt by Mr. Zuma to start his speech, after complaining about what they said was a threatening increase of security inside and outside Parliament. Previously the president had for the first time deployed several hundred troops to help lock down Cape Town’s parliamentary precinct in anticipation of potential clashes between ANC and opposition supporters.”

Things then quickly got out of control…

I would guess that it’s only a matter of time before $100 Trillion Rand bank note is available for sale on e-bay.  This incredible news story appeared on the Zero Hedge website at 6:30 p.m. on Monday evening EST — and I thank Brad Robertson for bringing it to our attention.  Another link to it is here.

BOJ now holds 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of Japanese government bonds

The Bank of Japan’s holdings of Japanese government bonds has topped 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the outstanding balance for the first time, the central bank said Wednesday.

The BOJ has been snapping up JGBs in large quantities since it implemented drastic monetary easing measures in April 2013.

Statistics released by the bank show that its JGB holdings stood at about 358 trillion yen ($3.19 trillion) as of the end of January, or about 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the outstanding total of some 894 trillion yen.

Last September, the BOJ switched its policy focus from quantity to interest rates, aiming to keep long-term rates at around 0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to achieve its inflation target. Nevertheless, its JGB holdings continue to rise, with the bank sticking to its annual target of 80 trillion yen for JGB purchases.

This news item, filed from Tokyo, was posted on the asia.nikkei.com Internet site last Wednesday — and I thank Richard Saler for finding it for us.  It’s worth reading if you have the time — and another link to it is here.

Fukushima nuclear reactor radiation at highest level since 2011 meltdown

Extremely high radiation levels have been recorded inside a damaged reactor at the Fukushima Daiichi nuclear power station, almost six years after the plant suffered a triple meltdown.

The facility’s operator, Tokyo Electric Power (Tepco), said atmospheric readings as high as 530 sieverts an hour had been recorded inside the containment vessel of reactor No 2, one of three reactors that experienced a meltdown when the plant was crippled by a huge tsunami that struck the north-east coast of Japan in March 2011.

The extraordinary radiation readings highlight the scale of the task confronting thousands of workers, as pressure builds on Tepco to begin decommissioning the plant – a process that is expected to take about four decades.

Even if a 30-percent margin of error is taken into account, the recent reading, described by some experts as “unimaginable”, is far higher than the previous record of 73 sieverts an hour detected by sensors in 2012.

The presence of dangerously high radiation will complicate efforts to safely dismantle the plant.  Tepco and its network of partner companies at Fukushima Daiichi have yet to identify the location and condition of melted fuel in the three most seriously damaged reactors. Removing it safely represents a challenge unprecedented in the history of nuclear power.

Complicate…unprecedented challenge…”  They’re being kind to themselves.  This story showed up on The Guardian website back on February 3 — and I thank Patricia Caulfield for sharing it with us.  It’s a must read in my opinion — and another link to it is here.

Fake receipts at Glencore warehouse unit triggered sector credit freeze, Qingdao shivers: sources

Some global banks briefly froze credit lines for Singapore metal traders last month after a unit of commodities giant Glencore uncovered fake warehousing receipts, people familiar with the matter said, reviving the specter of a $3 billion scandal that rocked the trading world three years ago.

Though the impact has proved limited so far, the “forged” receipts for nickel stocks that Glencore’s Access World unit said it found still set alarm bells ringing – even though regulation and scrutiny have been tightened across the business since the 2014 Qingdao port scandal in China.

Two people who have metal storage dealings with Access World said the company told them the receipts were from a third party, not issued internally. At Qingdao, a firm allegedly duplicated notes pledging metal as collateral for multiple bank loans.

We checked with (Access World) and all our stock was in good order,” said one of the people, an official at a Singapore trading house. But the firm did have its credit lines temporarily frozen by several banks while they investigated, the person said, speaking on condition of anonymity.

This Reuters article, filed from Melbourne, put in an appearance on their website at 4:30 a.m. EST on Monday morning — and I thank Ellen Hoyt for pointing it out.  Another link to this news item is here.

Russia notes that German gold in U.S. was just a mirage

Saturday’s report from Sputnik News, a division of the Russian government’s international information agency, shows just how closely that government is watching not just the gold market but also, it seems, GATA’s work. That is, the report addresses suspicions raised by GATA’s friends in Germany’s “Repatriate Our Gold” movement and reported almost exclusively by GATA that Germany’s gold reserves vaulted with the United States were never more than gold credits until the Bundesbank sought to repatriate the gold in recent years.

Russia’s special interest in gold and GATA’s work appears to date from June 2004, when the deputy chairman of Russia’s central bank, Oleg Mozhaiskov, spoke to the summer meeting of the London Bullion Market Association at the Baltschug Kempinsky Hotel in Moscow and used only four English words in his address: “Gold Anti-Trust Action Committee“.

While surreptitious intervention in the gold market remains a prohibited subject in the government-controlled Western financial news media, it is a subject of great interest in the government-controlled Russian news media, and GATA will continue its efforts to make the issue of interest everywhere.

This must read gold-related news item, unless you’ve read on another Internet site already, put in an appearance on the sputniknews.com Internet site on Saturday.  The actual headline reads “Germany Gets the ‘Wrong Suitcase’ While Repatriating Its Gold Reserves from U.S.”  I ‘borrowed’ Chris Powell’s paragraphs of introduction from a GATA release, but the first person to send it my way was Nasser El debs.  Another link to this must read article is here.

Indian jewellers stock up gold for weddings; rising prices cap demand elsewhere

Asian gold demand was mixed this week with Indian jewellers stocking up for the wedding season while rising prices kept buyers on the sidelines elsewhere.

After delaying purchases last month in anticipation of an import duty cut in the federal budget, jewellers in India have started rebuilding inventories on the back of an uptick in retail demand due to the wedding season.

The uncertainty over the duty cut is over.  Jewellers are building inventory,” said Chanda Venkatesh, managing director with CapsGold, a bullion merchant in Hyderabad.

Retail demand has been improving due to the wedding season. Prices in the world market have jumped in the last few weeks, but comparatively, Indian prices rose less due to an appreciation in the rupee,” Venkatesh said.

Demand for coins and bars is still weak. Investors are more interested in equities,” said a Mumbai-based dealer with a private bank.

This Reuters story, co-filed from Mumbai and Bengaluru, was posted on their Internet site at 2:35 p.m. IST on their Friday afternoon — and it’s a gold-related article I found on the Sharps Pixley website last night.  Another link to it is here.

Year of the Rooster also Year of Gold, says China bullion expert

This year, the Year of the Rooster in the Chinese lunar calendar, will also be the year of gold, said Haywood Cheung, president of the Chinese Gold & Silver Exchange Society-an umbrella organization of gold trading firms in Hong Kong which are participants of the Chinese Gold and Silver Exchange.

In an interview with the China Daily, Cheung said he drew his confidence from the turbulent global economic environment, which he said would create a bull market for bullion.

Cheung forecast that the international gold price could potentially climb to $1,600 per ounce in the year. Investors are advised to allocate 20 to 30 percent of their assets to the gold market to hedge risks including the depreciation of major currencies, the uncertainty over U.S. President Donald Trump’s China policy and the sluggish economic situation in Europe.

This brief story was posted on the chinadaily.com Internet site on Saturday CST — and even if you don’t read the rest of the article, the embedded photo ain’t hard on the eyes.  Another link to it is here — and I thank Richard Saler for sending it along.


After a period of very cold weather, it warmed up enough on the weekend that I could get out to the ravine for an hour — and I got these shots of this red squirrel eating shelled sunflower seeds on a bridge railing.  It was only 4 or 5 meters away at the most — and even with a high f-stop, depth of field was less than 3 cm/1 inch.  So I just cropped them ‘head and shoulder’s style, as the rest of this critter was miles out of focus.  The glint in its eye is from the fill flash I was using, as the shot was taken in the shade.  Click/double-click to enlarge works very well for both photos.


In COMEX gold futures, the commercials increased their total net short position by a minuscule 2,300 contracts to 134,100 contracts. Yes, this is the largest total commercial net short position in gold in seven weeks (since Dec 20), but gold has risen by more than $100 since then and the increase in the total commercial short position has amounted to…drum roll…100 measly contracts. The raw data are clear – on December 20 and a hundred dollars lower in price than the current price, the total commercial net short position in gold was 134,000 contracts. Here we are three months later, $100 higher, and with moving average upside penetrations up the wazoo and the commercials have sold only an additional 100 gold contracts? Huh?

I remember writing over the past few months (I can’t remember exactly when), about the possibility that the commercials, having sold too early and too aggressively into gold’s rally last year (and racking up $4 billion in open losses at the price highs), might refrain from selling too aggressively this time around and that would mean gold would jump more sharply in price as a result. I think we may have seen a variation of this possibility in that we are $100 higher in gold and the commercials haven’t sold squat yet; but it has unfolded differently than I expected. The commercials haven’t sold aggressively, to be sure, but the main reason for the lack of commercial selling in gold looks to be due to the lack of managed money buying, which I never anticipated. Same net result, but different nevertheless.Silver analyst Ted Butler: 11 February 2017

For the second day in a row, silver was prevented from breaking above the $18 spot mark, which just so happens [as I mentioned at the top of today’s column] to be its 200-day moving average as well.

Ted said that silver, from a COMEX structure, is market neutral at the moment…neither bullish nor bearish.  A price rally from here would certainly not surprise him, but JP Morgan et al could also use the opportunity to ring the cash register by engineering a ‘failure’ at its 200-day moving average.

As to which way it’s going to go from here, I have no idea — and I refuse to speculate.

Here are the 6-month charts for all four precious metals, plus copper, once again.  Except to note copper’s new high close — and silver’s price vis-à-vis its 200-day moving average, nothing much should be read into them at the moment.  The click to enlarge feature helps a bit here.

And as I type this paragraph, the London open is less than ten minutes away — and I note that gold had a slight positive price bias when it opened in New York at 6:00 p.m. on Monday evening.  Then, starting shortly after 10 a.m. China Standard Time on their Tuesday morning, it began to rally more aggressively — and made it up to the $1,230 spot mark shortly before 2 p.m. over there.  An hour later it was sold down a bit, but is ticking higher going into the London open — and is up only $2.70 an ounce now.  The price pattern for silver has been pretty much identical — and it’s up 4 cents currently.  Platinum and palladium have been trading mostly sideways during Far East trading — and as the Zurich open approaches, the former is up 2 dollars and the latter by 3.

Net HFT gold volume is just over 31,000 contracts — and compared to past days and weeks, that’s pretty light.  Silver’s net HFT volume is approaching 6,500 contracts, with decent roll-over/switch volume out of March already.

The dollar index  was down about 20 basis points in the first thirty minutes of trading yesterday evening in New York.  It recovered all of that and a titch more by around 9:30 a.m. CST on their Tuesday morning, but began to head lower about an hour later, with the current 100.74 low tick being set around 2:50 p.m. in Shanghai.  It began to rally from there, but is still down 21 basis points as London opens.  I would assume that gold and silver prices were turned lower at the same time as the dollar index was turned higher.

It’s Tuesday again already — and today at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report.  I may throw a guess at what the numbers might show in my Wednesday missive, but even Ted’s guesses have been off by the proverbial country mile just about every week for the last month or so.  If I do hazard a guess, it will…like the 6-month U.S. dollar index…only be provided for entertainment purposes only.

And as I post today’s column on the website at 4:02 a.m. EST…I see that the gold price has rallied off its low at the London open — and is up $3.30 an ounce.  Silver is now up 6 cents.  Platinum is up only a dollar now — and palladium is still up the same 3 bucks it was at the Zurich open.

Net HFT gold volume has risen to 36,500 contracts — and that number in silver is just over 7,900 contracts.  There certainly hasn’t been much happening since the London open from a volume perspective.

The tiny rally in the dollar index that began a bit over an hour before the London open, topped out at the 100.87 mark minutes before the open — and has been trending lower ever since — and is now down 29 basis points.

I have no clue as to what awaits us regarding precious metal price action for the remainder of the Tuesday session.  But it wouldn’t surprise me [nor should it you] in the slightest if the price/volume action that matters starts when ‘da boyz’ show up at the COMEX open.

That’s it for today — and I’ll see you here tomorrow.


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