The London Silver Spike Gets Stopped Dead In Its Tracks

17 February 2017 — Friday


It was pretty quiet yesterday as far as gold was concerned.  It rose and fell a few dollars in Far East trading on their Thursday — and was basically back to unchanged by the London open.  It chopped quietly higher until  around 11:20 a.m. in New York, which was the exact moment that the dollar index stopped falling — and it chopped quietly lower into the close from there.

Since gold traded within a ten dollar price range yesterday, it’s not worth my while to look up the low and high ticks.

Gold finished the Thursday session in New York at $1,238.60 spot, up $5.40 from Wednesday’s close.  Net volume was pretty high at 192,000 contracts.  But with all the high frequency/day trading going on, Ted’s of the opinion that these volume numbers are mostly meaningless now, as there’s never much change in either open interest or COMEX futures position when all this frantic volume is netted out.

It was mostly the same in silver, although it did manage to catch a bid at the London open — and the price spike around 9:20 a.m. GMT got hammered flat before the hour was out.  It began to chop quietly higher shortly after 11 a.m. GMT and, like the gold price, got turned lower around 11:15 a.m. in New York.  From 11:30 a.m. EST onward it traded mostly flat into the close.

The low and high ticks in this precious metal aren’t worth looking up, either.

Silver was closed on Thursday at $18.06 spot, up 11 cents on the day.  Net volume was pretty decent at 49,000 contracts — and roll-over/switch volume out of the March contract was pretty heavy…a bit under 20 percent of gross volume.

Here’s the 5-minute silver tick chart courtesy of Brad Robertson — and I’m only including it so you can see the price/volume action around that occurred shortly after 9 a.m. GMT in London, which is around 02:20 a.m. Denver time on this chart.

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

Platinum did even less yesterday.  It traded a few dollar either side of unchanged up until shortly before the COMEX open — and by shortly before 9 a.m. EST it hit its high tick, such as it was.  From there the price chopped quietly lower until 1 p.m. — and traded mostly sideways from there into the 5:00 p.m. close.  Platinum finished the day at $1,010 spot…up a buck.

Palladium spent most of the Thursday session in the plus column, with most of its gains coming by shortly after 10 a.m. in Zurich.  After that it didn’t do much — and this precious metal closed on Thursday at $791 spot, up 4 dollars.

The dollar index closed very late on Wednesday afternoon in New York at 101.09 — and continued its slide from its 8:30 a.m. EST high tick on Wednesday morning.  The 100.41 low tick was set around 11:20 a.m. EST in New York.  It’s subsequent ‘rally’ lasted until 1 p.m. — and then slid until 4 p.m. — and didn’t do much after that.  The dollar index finished the Thursday session at 100.51 — and down 58 basis points on the day.

Pardon me for thinking this, but the precious metal prices certainly didn’t, or weren’t allowed, to reflect the underlying weakness in the dollar index yesterday.  But maybe it’s just me looking for those black bears in dark rooms that aren’t there.

Here’s the 6-month U.S. dollar index chart — and it’s a bit too soon to say if this graph is showing a ‘failure’ at its 50-day moving average or not.  If it does, that means that the usual ‘gentle hands’ have decided to let the index fall for awhile.

The gold stocks  gapped up a bit at the open — and all the gains that mattered were in by a minute or so after the 10 a.m. EST London p.m. gold fix.  For the most part, they chopped sideways in a fairly tight range for the rest of the Thursday session.  The HUI closed higher by 2.09 percent.

It was identical rally scenario for the silver equities, at least until 10:02 a.m.  From there they chopped lower for the rest of the day, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up by only 0.54 percent.  For the second day in a row I was underwhelmed.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 20 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  Morgan Stanley was the sole short/issuer out of its client account — and in the long/stopper category, HSBC USA and JP Morgan picked up 12 and 8 contracts for their respective in-house [proprietary] trading accounts.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in February declined by another 27 contracts, leaving 903 still around…minus the 20 contracts mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that only 1 gold contract was actually posted for delivery today, so that means that 27-1=26 more February contract holders departed the scene.  Silver o.i. in February, dropped by 8 contracts, leaving 140 still around.  Wednesday’s Daily Delivery Report showed that 24 silver contracts were actually posted for delivery today, so that means that 24-8=16 more silver contracts were added to the February delivery month.

There were no reported changes in either GLD or SLV yesterday.

There was another tiny sales report from the U.S. Mint.  They sold 500 troy ounces of gold eagles — and 500 one-ounce 24K gold buffaloes — and zero silver eagles.

There was a bit of activity in gold over at the COMEX-approved gold depositories on the U.S. east coast on Wednesday.  There was 32,150.000 troy ounce/1,000 kilobars [U.K./U.S. kilobar weight] received at JP Morgan — and there was 96.453 troy ounces/3 kilobars [SGE kilobar weight] shipped out of Brink’s, Inc.  A link to that activity is here.

It wasn’t overly busy in silver.  Only 1,046 troy ounce/1 good delivery bar was reported received — and 241,602 troy ounces were shipped out.  Virtually all of the out activity was at HSBC USA…165,091 troy ounces…and Canada’s Scotiabank…75,464 troy ounces.  The link to that is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday, they reported receiving 105 of them — and shipped out 1,548.  With the exception of 2 kilobars shipped out of Loomis International, all of the rest of the in/out activity was at Brink’s, Inc. as per usual.  The link to all of this, in troy ounces, is here.

I have a decent number of stories for you today — and I hope you’ll find some in the list below that interest you.


U.S. household debts climbed in 2016 by most in a decade

Household debts rise by $226 billion to $12.6 trillion in fourth quarter

The total amount of debt held by American households climbed in 2016 by the most in a decade, driven by broad and steady increases in credit card debt, auto and student loans, and a fourth-quarter surge to the highest amount of mortgage originations since before the financial crisis.

Total household debt climbed by $226 billion in the final three months of 2016, according to a report Thursday from the Federal Reserve Bank of New York. Total household debts are now just $99 billion shy of the all-time peak of $12.7 trillion set in the third quarter of 2008 just as the banking system began crashing down. The New York Fed estimates that debt is highly likely to set a new record in 2017.

Debt held by Americans is approaching its previous peak, yet its composition today is vastly different as the growth in balances has been driven by non-housing debt,” said Wilbert van der Klaauw, an economist at the New York Fed.

This news item appeared on the Internet site at 12:45 p.m. EST on Thursday afternoon — and it comes to us courtesy of Richard Saler.  Another link to it is here.

Watch the entire Donald Trump press conference everyone is talking about

Well, here it is, the entire 1:17:17 minute press conference in living, breathing HD colour, with no breaks — and not a thing left out.

It was posted on Internet site yesterday — and I thank Roy Stephens for sharing it with us.

Wake Up America” Dennis Kucinich Defends Trump, Issues Dire Warning About “Deep State

Dennis Kucinich, Former U.S. Rep. and Democratic presidential candidate, defended Donald Trump on “Mornings with Maria” on Tuesday.

In regards to Michael Flynn’s resignation, Kucinich defended Trump and told America to “Wake Up

In the interview, Kucinich blamed factions of the US intelligence community for wanting to end any positive relationship between Russia and the US, hoping for a return of the cold war.

…the American people have to know that there’s a game going on inside the intelligence community… at the bottom of all this is the fact that there are those that seek to separate US from Russia to reignite the cold war… wake up America!!

Kucinich did not see this as an anti-Trump game, but rather an anti-Russia game:

It’s not just this administration. I want to remind the views and all those who are on the panel that in the closing months of the Obama administration, they put together a deal with Russia to create peace in Syria. A few days later, a military strike in Syria killed a hundred Syrian soldiers and that ended the agreement. What happened is inside the intelligence and the Pentagon there was a deliberate effort to sabotage an agreement the White House made.

This must watch 7:59 minute video clip was embedded in a story from Mish Shedlock, that was subsequently picked up by Zero Hedge at 1:12 p.m. on Thursday afternoon EST.  Brad Robertson was the first reader through the door with it.  Another link to this must watch video is here.

The Swamp Strikes Back — Pepe Escobar

The tawdry Michael Flynn soap opera boils down to the CIA hemorrhaging leaks to the company town newspaper, leading to the desired endgame: a resounding victory for hardcore neocon/neoliberalcon U.S. Deep State factions in one particular battle. But the war is not over; in fact it’s just beginning.

Even before Flynn’s fall, Russian analysts had been avidly discussing whether President Trump is the new Viktor Yanukovych — who failed to stop a color revolution at his doorstep. The Made in USA color revolution by the axis of Deep State neocons, Democratic neoliberalcons and corporate media will be pursued, relentlessly, 24/7. But more than Yanukovych, Trump might actually be remixing Little Helmsman Deng Xiaoping: “crossing the river while feeling the stones”. Rather, crossing the swamp while feeling the crocs.

Flynn out may be interpreted as a Trump tactical retreat. After all Flynn may be back — in the shade, much as Roger Stone. If current deputy national security advisor K T McFarland gets the top job – which is what powerful Trump backers are aiming at – the shadowplay Kissinger balance of power, in its 21st century remix, is even strengthened; after all McFarland is a Kissinger asset.

Flynn worked with Special Forces; was head of the Defense Intelligence Agency (DIA); handled highly classified top secret information 24/7. He obviously knew all his conversations on an open, unsecure line were monitored. So he had to have morphed into a compound incarnation of the Three Stooges had he positioned himself to be blackmailed by Moscow.

What Flynn and Russian ambassador Sergey Kislyak certainly discussed was cooperation in the fight against ISIS/ISIL/Daesh, and what Moscow might expect in return: the lifting of sanctions. U.S. corporate media didn’t even flinch when US intel admitted they have a transcript of the multiple phone calls between Flynn and Kislyak.  So why not release them? Imagine the inter-galactic scandal if these calls were about Russian intel monitoring the U.S. ambassador in Moscow.

This very worthwhile commentary by Pepe was posted on the Internet site at 11:56 a.m. Moscow time on their Wednesday morning, which was 3:56 a.m. in Washington — EST plus 8 hours.  It was updated three minutes after it was initially filed.  I thank Ellen Hoyt for pointing it out — and another link to it is here.

Purge: Trump Prepares Major Overhaul of Intelligence Apparatus

President Donald Trump is preparing a major overhaul of the current U.S. intelligence apparatus, following a string of leaks and reports that intelligence community officials are withholding information from the White House.

The person reported to be spearheading the effort is a New York hedge-fund billionaire and strong Trump ally Stephen A. Feinberg.

Feinberg is co-founder of Cerberus Capital Management, and a current member of Trump’s economic advisory council. He has not been officially announced for the job, but the New York Times has reported that private-equity manager has informed his company shareholders that he is in discussions to join the administration.

On Thursday, Trump vowed to punish those leaking classified information to the press, including the details about phone calls between former National Security Advisor Michael Flynn and the Russian ambassador.

We’re going to find the leakers and they’re going to pay a big price,” Trump told reporters.

This news story put in an appearance on the Internet site at 11:58 p.m. Moscow time on their Thursday evening, which was 3:58 p.m. in Washington — EST plus 8 hours.  I thank Roy Stephens for sharing it with us — and another link to it is here.

Canadian trash to $100,000 treasure: Cash found in old TV set

Wires and tubes and lots of glass and plastic, that’s what TV recyclers usually find inside old sets. But for one worker in Canada, the discovery of a secret box helped jar the memory of a forgotten inheritance.

More than $100,000 in cash was found inside a television that was being processed at an Ontario recycling plant in January, CNN partner CTV Network reported this week. The money was found inside a cash box, stashed into the TV console.

There was like, four stacks of $50 bills, and I knew it was a large amount of money,” Rick Deschamps, general manager of the plant told CTV. Deschamps praised his employee for being honest and turning the box over to authorities.

Hopefully he’s put it in a savings account now,” Barrie Police Constable Nicole Rodgers said.

I don’t know about you dear, but I certainly wouldn’t forget leaving that kind of money stashed away!  This tiny good CTV News story with a Canadian flavour was posted on the Internet site at 9:31 a.m. on Thursday morning EST.  There’s a 54 second video clip embedded as well.  I thank reader Dave Larsen for bringing it to our attention.  Another link to it is here.

ECB Willing to Bend Its QE Rules in Push to Keep Up Stimulus

European Central Bank officials indicated that they’ll relax the application of some rules on bond buying to help maintain their “substantial” expansionary policy, opening the door to more purchases of peripheral debt.

Italian and Spanish bonds rose after the ECB said in the account of last month’s policy meeting that “limited and temporary deviations” from the capital key “were possible and inevitable” to ensure quantitative easing can be implemented as announced. Members of the Governing Council “widely” shared the view at their Jan. 18-19 meeting that “it was imperative to maintain a very substantial degree of monetary accommodation.

Mention of capital-key flexibility is like a red rag to a periphery bond bull,” said Richard Barwell, an economist at BNP Paribas Investment Partners in London. “You can read this as good news for Italy — either Germany buys a lot below the deposit rate or the Eurosystem buys too much of Italy. It’s almost certainly misdirection though.”

After the ECB altered its QE rules in December to allow for purchases of bonds yielding below the deposit rate, currently at minus 0.4 percent, Executive Board member Benoit Coeure emphasized that “priority should be given to purchases of assets with yields above the deposit facility rate.” Flexibility in the application of the ECB’s capital key provides “some room for a trade-off” between both guidelines.

This Bloomberg item was posted on their Internet site at 5:37 a.m. Denver time on Thursday morning — and was subsequently updated a couple of hours later.  I thank Swedish reader Patrick Ekdahl for sending it along — and another link to it is here.

TRUMP: It’s in the U.S.’s interest to get along with Russia because “nuclear holocaust would be like no other

President Donald Trump defended his willingness to warm relations with Russia on Thursday by suggesting that the alternative might be nuclear holocaust.

During an hour-long press conference on Thursday, Trump discussed recent provocations from Russia and explained why he thinks it’s in America’s best interests to “get along” with the country.

We’re a very powerful nuclear country and so are they,” Trump said. “There’s no upside. … We’re very a very powerful nuclear country. And so are they. I’ve been briefed. And I can tell you one thing about a briefing that we’re allowed to say, because anybody that ever read the most basic book can say it, nuclear holocaust would be like no other.”

He continued: “If we have a good relationship with Russia, believe me, that’s a good thing. Not a bad thing.

This news story appeared on the Internet site yesterday — and it’s the second offering in a row from Patrik Ekdahl.  Another link to it is here.

Insanity of NATO 2.0 for the Middle East

As U.S. President Donald Trump hosts Israeli leader Benjamin Netanyahu in the White House this week on the agenda is the formation of a “NATO-style” alliance for the Middle East, according to reports.

As if one U.S.-led warmongering alliance in Europe and the North Atlantic were not enough. Now the world will see a clone of NATO let loose on the already conflict-torn Middle East region, if the reported discussions materialize.

Instead of combating alleged Russian aggression, the putative U.S.-led Middle East alliance – which one could designate as NATO 2.0 – is defining Iran as the top regional threat.

According to the Times of Israel, Trump and Netanyahu and their officials have been engaged for some time in planning the creation of the new military alliance that would also include Saudi Arabia and the United Arab Emirates. Other Arab countries involved in forming the proposed military bloc are said to be Egypt and Jordan.

Already the new Trump administration has riled Iran with renewed accusations that the Islamic Republic is “the number one state-sponsor of terrorism”. The Trump White House imposed fresh economic sanctions on Tehran last week following Iran’s testing of ballistic missiles at the end of January.

This opinion piece by Finian Cunningham was posted on the Internet site — and it’s definitely worth reading, especially if you’re a serious student of the New Great Game.  It showed up there at 2:00 p.m. Moscow time on their Thursday afternoon, which was 6:00 a.m. EST in New York — and another link to it is here.

BlackRock Backs Gold to Hedge Market Risk

Investors should probably be a little more nervous, according to one BlackRock Inc. money manager.

Stocks have rallied to records amid signs of stabilization in China’s economy and bets that President Donald Trump will boost U.S. infrastructure spending, roll back regulations and cut taxes. While the stock surge and below-average volatility show investors are more optimistic, markets are underpricing global political risks, said Russ Koesterich, who helps manage the $41 billion BlackRock Global Allocation Fund. He recommends gold as insurance.

Looming elections in Europe and political uncertainty in the U.S. are among developments that could shift investor sentiment, Koesterich said. Adding to the threat is the potential impact of Britain’s exit from the European Union and a debt crisis in Greece. Such concerns have helped boost haven demand for gold, which has climbed almost 8 percent this year after posting the worst quarter since 2013.

That hiding political risk is not reflected in markets,” Koesterich said in a telephone interview Thursday. “People are not that nervous, and there are things that could go wrong, particularly when you think about all of the political risks. That adds to the argument for having gold in a portfolio.”

This Bloomberg news item showed up on their website at 11:47 a.m. MST on Thursday morning — and was updated about three hours later.  It’s the third and final contribution of the day from Patrik Ekdahl — and another link to it is here.

This Country Wants Everyone to Have 100 Grams of Gold

A landlocked nation perched between China and Kazakhstan is embarking on an experiment with little parallel worldwide: shifting savings from cattle to gold.

One of the first post-Soviet republics to adopt a new currency and let it trade freely, Kyrgyzstan’s central bank wants every citizen to diversify into gold. Governor Tolkunbek Abdygulov says his “dream” is for every one of the 6 million citizens to own at least 100 grams (3.5 ounces) of the precious metal, the Central Asian country’s biggest export.

Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings,” he said in an interview. “I’ll try to turn the dream into reality faster.

In the two years that the central bank has offered bars directly to the population, about 140 kilograms of bullion have been sold, Abdygulov, 40, said by phone from the capital, Bishkek.

We are hopeful that our country’s population will learn to diversify its savings into assets that are more liquid and — more importantly — capable of retaining their value,” he said. In rural areas, cattle is still the asset of choice for investors and savers, according to Abdygulov.

This is another Bloomberg article.  This one was posted on their Internet site at 2:00 p.m. Denver time on Wednesday afternoon — and was updated twelve hours later.  Another link to it is here — and I thank Ellen Hoyt for pointing it out.

112 million digital red packets sent, but some chose gold

Around 112 million digital red packets valued 6.67 billion yuan (US$971.07 million) were sent out on Tuesday via WeChat by young Chinese wishing their partners a Happy Valentine’s Day, according to data released by the largest mobile social platform in China Wednesday.

Of the total, 9.6 million virtual red packets were stuffed with 520 yuan. The digital red packet has been considered a handy and explicit way of expressing love in recent years, since the number “five-two-zero” sounds similar to “I love you” in Putonghua.

WeChat users usually could not send red packets worth more than 200 yuan each, but the platform had removed the cap for Valentine’s Day.

Other users filled red packets with smaller amounts of money, like 52 yuan or 5.20 yuan, which did not prevent them from showing their affections as well. And the odd amount of 13.14 yuan is also preferred, for the special meaning it carries in Chinese  – one’s whole life.

Aside from digital red packets, WeChat offered a new feature called Tencent Microgold, which allows users to buy grams of virtual gold and send this as a gold packet to friends and lovers. The gold bought on the platform is offered by Industrial and Commercial Bank of China.

This very brief gold-related news item put in an appearance on the Asia Times website at 4:17 p.m. China Standard Time on their Wednesday afternoon — and I thank U.K. reader Tariq Khan for sharing it with us.  A link to the hard copy is here.


The click to enlarge feature is a must for the last photo.


Gold still represents the ultimate form of payment in the world. Fiat money, in extremis, is accepted by nobody. Gold is always accepted.” — Alan Greenspan…1999

It appeared to be a ‘nothing’ sort of day in the precious metals on Thursday.  There were a couple of things about yesterday’s price performance in the precious metals that I’ve already pointed out…the first being the ruthless price capping of silver’s price breakout above both $18 spot and its 200-day moving average that occurred shortly after 9 a.m. in London.  Without doubt, that would have been the start of Ted’s “big one” if the HFT short buyers/long sellers of last resort hadn’t taken a stand at that point.

Of course silver did eventually close above its 50-day moving average for the second day in a row — and above $18 spot as well, but it appeared to be under very tightly controlled circumstances.

The other thing, which I commented on was the fact that despite the decent decline in the U.S. dollar index, I thought the precious metals rally that accompanied that event to be rather anemic, particularly gold and silver.  And the moment that the dollar index stopped falling, there appeared to be someone at the ready to sell down both precious metals as the remainder of the Thursday session unfolded.  Just looking at the daily charts for both these precious metals, I don’t think I’m mistaken.

Here are the 6-month charts for all four precious metals, plus copper.  With gold now above its 100-day moving average — and silver above its 200-day moving average, the jury is still out on whether the Managed Money traders are going to pile in the long side en masse going forward or not.  So far there are no signs of them.  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 note that the gold price has done nothing in Far East trading on their Thursday — and is down $1.90 at the moment.  Silver was sold down a bit in the first two hours of trading once New York opened at 6:00 p.m. EST yesterday evening — and is down 7 cents — and back below $18 spot.  Both silver and gold have ticked lower starting about five minutes before the London open  Platinum has traded absolutely flat all night long — but ticked down a dollar in the last few minutes of trading as well.  Palladium was sold down 5 bucks by 1 p.m. China Standard Time on their Friday afternoon — and is down 4 dollars as the Zurich open approaches.

Net HFT gold volume is very light at just 21,500 contracts — and that number in silver is only 4,700 contracts, with not much in the way of roll-over/switch volume.  It’s very quiet out there.

The dollar index is almost comatose as well, trading mostly unchanged until a tiny rally began starting around 1 p.m. CST — and it’s up 9 basis points as London opens.

Just eye-balling the 6-month silver chart above, the RSI trace is a whisker away from being overbought.  It remains to be seen if ‘da boyz’ lay a beating on the precious metals in general — and silver in particular,  before we power higher from here.

As far as today’s Commitment of Traders Report is concerned, Ted refused to take a stand in his comments to his paying subscribers on Wednesday. I certainly can’t say I blame him after the reports we’ve been getting for the last several months.  His comment was…”I have no guesses for what the report may indicate this week.

But, whatever the numbers are, I’ll have them for you in Saturday’s column.

And as I post today’s column on the website at 4:04 a.m. EST, I see that gold is still down a dollar.  Silver has recovered a bit — and is only down 5 cents — and sitting right at the $18 spot mark.  Platinum is up a dollar now — and palladium now down only a buck.

Net HFT gold volume is up to 28,500 contracts, which is pretty light — and that number in silver is 6,400 contracts, which is very light as well.  It’s still very quiet out there.

The dollar index continues to inch higher — and it’s 14 basis points.

It’s Friday, so place your bets, as I don’t expect the day to end as quietly as it started.

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


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