‘Da Boyz’ Slice the Precious Metal Salamis Again

08 March 2017 — Wednesday


The gold price didn’t do much of anything during Far East trading on their Tuesday.  It was down a dollar or so during morning trading in London — and at, or just after the noon London silver fix, it began to head lower.  That tiny sell-off lasted until minutes after the equity market opened in New York.  It then chopped sideways until shortly after 12 o’clock — and the tiny rally into the London close got sold off starting at 11:00 a.m. EST right on the dot.  Then the price pressure was on again — and the low tick was set around 3:10 p.m. in the thinly-traded after-hours market.  It rallied a few dollars from there into the close.

Once again the high and low ticks aren’t worth looking up — but ‘da boyz’ set a new low for gold yesterday.

Gold finished the Tuesday session in New York at $1,215.60 spot, down $9.50 from Monday’s close.  Net volume was very decent at around 169,000 contracts — and there was a fair amount of roll-over/switch volume out of the April contracts as well.

Brad had to leave the office earlier than usual yesterday — and the 5-minute tick charts for both gold and silver he did provide, didn’t have all of yesterday’s New York price action, so I’ve passed on posting them.

The silver price was down a nickel by 1 p.m. China Standard Time on their Tuesday afternoon.  From that juncture it traded pretty flat until at, or minutes after, the noon silver fix in London.  JPMorgan et al set the low tick right at the 10 a.m. EST London p.m. gold fix, which also happened to be at the top of a dollar index rally.  From there the price rallied sharply into the 11:00 a.m. EST London close — and ‘da boyz’ took almost all those gains back within an hour.  The price continued to sag a few pennies until 3 p.m. in the after-hours market — and it traded flat into the  5:00 p.m. EST close from there.

The high and low tick in silver yesterday was reported by the CME Group as $17.82 and $17.495 in the May contract — and at another new low for this move down.

Silver was closed on Tuesday at $17.475 spot, down 28 cents on the day.  Net volume was pretty chunky at a bit over 52,000 contracts.

Platinum inched lower through all of Far East and the first part of Zurich trading and, like silver and gold, the price decline picked up speed about thirty minutes after the noon silver fix in London.  Most of the price damaged was down by shortly after 1 p.m. EST in New York — and it traded pretty flat from there, with the down/up spike low tick of the day coming shortly before 4 p.m. in the thinly-traded after-hours market.  Platinum was closed in New York on Tuesday at $958 spot — and down another 18 dollars from Monday.

The palladium price chopped sideways a few dollars either side of unchanged — and was back to unchanged by thirty minutes after the noon London silver fix.  Then it got hammered down to its $762 low tick by shortly after the COMEX open — and it chopped erratically higher from there, with the $776 high tick coming about 12:45 p.m. EST.  It was smashed back to a buck below unchanged by the COMEX close — and managed to close unchanged at $771 spot.

The dollar index closed very late on Monday afternoon in New York at 101.70 — and after rallying a few basis points at the 6 p.m. EST open on Monday evening, began to head south at 9 a.m. CST in Shanghai trading.  The 101.53 low tick was set minutes after the London open.  ‘Gentle hands’ rallied it to its 101.91 high tick two hours later at 10 a.m. GMT.  It gave back about half those gains during the next sixty minutes before ‘rallying’ anew into the London p.m. gold fix…3 p.m. GMT/10 a.m. EST.  Two hours and change later it was twenty-five basis points lower, with the New York low coming around 12:15 p.m.  ‘Gentle hand’s reappeared and rallied it into the COMEX close — and it chopped mostly sideways from there, closing the Tuesday session at 101.78 — and up only 8 basis points on the day, but had a pretty wild intraday ride.

It was just another day where the dollar index would have crashed and burned if allowed to trade freely.

Here is the 6-month U.S. dollar index chart, which you can read into whatever you wish.

The gold shares gapped down a bit at the open — and began to chop higher from there — then really began to head higher [and into positive territory] as the gold price rose into the London close.  They began to sell off from there once it became obvious that ‘da boyz’ had capped the rally — and it was back into negative territory shortly before 1 p.m. EST.  They continued to drift lower until around 3 p.m.  Then they rallied a bit, as the HUI finished down only 0.50 percent.  I was certainly happy to see this price action, considering how ugly it could have been.

In most respects, the silver equities followed a very similar price path as their golden brethren.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by only 0.78 percent.  Someone was obviously bottom-fishing the precious metal equities yesterday.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 1 gold and 131 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  In silver, the sole short/issuer was International F.C. Stone out of its client account.  And it should come as no surprise that the principal long/stopper was JP Morgan with 127 of those contracts…96 for its own account, plus 31 for its clients. The link to yesterday’s Issuers and Stoppers Report is here.

So far this delivery month, JP Morgan has stopped 1,197 contracts for its own account, plus 420 contracts for its client account — and I would suspect that Ted will have something to say about this in his mid-week column today.

Ted is also very surprised by how slowly this delivery month in silver is unfolding.  Words like “sticky” and “tight” were the main part of his vocabulary on the phone yesterday — and in his weekly review on Saturday.  He mentioned that this is the tightest delivery month in silver he can recollect seeing.

The Preliminary Report for the Tuesday trading session showed that gold open interest in March rose for the second day in a row, this time by 15 contracts…minus the 1 contract mentioned three paragraphs ago.  Monday’s Daily Delivery Report showed that only 1 gold contract was posted for delivery today, so that means that 1+15=16 gold contracts were added to the March delivery month.  Silver o.i. in March fell by 12 contracts, leaving 2,253 still open, minus the 131 mentioned three paragraphs ago.  Tuesday’s Daily Delivery Report showed that 11 silver contracts were posted for delivery today, so that means that 12-11=1 silver contract holder in March covered their position and fled the delivery month.

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

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on insider their gold and silver ETFs as of the close of trading on Friday, March 3 — and this is what they had to report.  Their gold ETF added 7,402 troy ounces — and their silver ETF dropped by 50,155 troy ounces.

There was another small sales report from the U.S. Mint yesterday.  They sold 3,500 troy ounces of gold eagles — and 50,000 silver eagles.  There have be no one-ounce 24K gold buffaloes sold so far this month.

For the second day in a row there was no gold received over at the COMEX-approved depositories on the U.S. east coast on Monday — and only 2,025.450 troy ounces/63 kilobars [U.K./U.S. kilobar weight] were reported shipped out of Canada’s Scotiabank.  I shan’t bother linking this level of activity.

After a zero day on Friday, it was very busy in silver on Monday, as 1,445,929 troy ounces were received — and 1,490,057 troy ounces were shipped out.  There was so much activity everywhere, that I’m not going to attempt to itemize it.  You can click here to see this action if you’re interested.  But worth noting is the fact that JP Morgan took in another 241,634 troy ounces, bringing their COMEX warehouse stocks up to 91.75 million troy ounces…with more to come, I’m sure.

It was pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They received 8,286 kilobars — and shipped out 10,246 of them.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

Here are two charts that Nick sent out in the wee hours of Tuesday morning, but I’d already filed my column, so they had to wait for today.

The first shows the withdrawals from the Shanghai Gold Exchange, updated with February’s data, which was reported as 179.237 tonnes.  The chart continues to advance from “lower left, to upper right” at an unrelenting rate.  Click to enlarge.

This second chart is a derivative of the first.  It shows withdrawals from the Shanghai Gold Exchange for each individual month going back to the beginning of 2008.  It includes the February update of 179.237 tonnes and, for obvious reasons, the solid black line going from “lower left, to upper right” follows the exact same path as the cumulative withdrawals in the previous chart.  Click to enlarge.

I have an average number of stories for you today, so I’m hoping you’ll find the odd one that you’ll find worthy of your time.


Atlanta Fed Slashes Q1 GDP to Only 1.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} With Yellen Set to Hike

One week ago, we pointed out a curious bifurcation: the Fed was telegraphing an imminent rate hike – one which following Yellen’s Friday conference is now virtually assured – even though it appears the FOMC would be hiking in a quarter in which GDP comes in in the mid 1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}-range, or lower. The reason: while “soft data” – which is important to animal spirits if not actual economic output – continues to surge, the “hard data”, that which actually matters to the economy, is still disappointing.

Fast forward one week when according to the Atlanta Fed, Janet Yellen is about to dig an even deeper hole because should the Fed hike next Wednesday it will do so in a quarter in which GDP was just revised from 1.8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} as of last week to just 1.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. This forecast was more than double, or 2.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, as recently as one month ago.

From the Atlanta Fed:  The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 1.3 percent on March 7, down from 1.8 percent on March 1. The forecasts for first-quarter real personal consumption expenditures growth and real nonresidential equipment investment growth fell from 2.1 percent and 9.1 percent, respectively, to 1.8 percent and 7.3 percent, respectively, after Thursday’s motor vehicles sales release from the U.S. Bureau of Economic Analysis. The forecast of the contribution of inventory investment to first-quarter growth fell from -0.50 percentage points to -0.72 percentage points after yesterday’s manufacturing report from the U.S. Census.

What is curious is the dramatic divergence between the Atlanta Fed and the Dow Jones, one tracking the real economy, the other perhaps tracking euphoria and “soft” data…

This Zero Hedge article was posted on their website at 10:49 a.m. EST on Tuesday morning — and I thank Richard Saler for pointing it out.  Another link to it is here.

The Next Domino to Fall: Commercial Real Estate — Charles Hugh Smith

Unless the Federal Reserve intends to buy up every dead and dying mall in America, this is one crisis that the Fed can’t bail out with a few digital keystrokes.

Just as generals prepare to fight the last war, central banks prepare to battle the last financial crisis–which in the present context means a big-bank liquidity meltdown like the one that nearly toppled the global financial system in 2008-09.

Planning to win the next war by assuming it will be a copy of the last conflict is an excellent strategy for losing the next war. The same holds true for the next financial crisis: reckoning that it will be a repeat of 2008 is an excellent way to be caught completely off-guard.

Talk about an overvalued market set up for a fall. It isn’t just malls becoming empty retail wastelands–it’s Corporate America shifting to flex-work and work-at-home, slashing the need for floor after floor of costly business-park office space.

Commercial real estate is grossly overbuilt in retail and office space. Combine sky-high valuations with cratering demand and billions in short-term CRE loans that must be rolled over into new loans, and we don’t have a liquidity crisis, we have a collateral crisis– the assets supporting the debt are no longer worth the loan balance.

This rather brief, but very worthwhile commentary showed up on his website on Monday — and I extracted it from a Zero Hedge posting that Richard Saler passed along on Tuesday morning.  Another link to it is here.

America’s Desperate Mall Owners Turn to Grocers, Doctors and High Schools to Fill Empty Space

Once a shining beacon of American capitalism, malls around the U.S. are failing at an alarming rate due to a combination of shifting consumption patterns, years of underinvestment by mall owners and a spate of retailer bankruptcies over the past 12 months that have left large swaths of once prime real estate empty.

Now, as the vacant square footage grows larger, mall owners are being increasingly forced to turn to non-conventional tenants to fill empty space.  Per The Wall Street Journal, the latest target of mall owners is yet another struggling industry, grocers, with everyone from Whole Foods to Kroger looking to snap up square footage at discount prices.

Natick Mall in Natick, Mass., is leasing 194,000 square feet of space vacated by J.C. Penney Co. to upscale grocer Wegmans Food Markets Inc., which is planning to open a store in 2018 — and College Mall in Bloomington, Ind., plans to bring in 365 by Whole Foods Market in the fall.

Grocery giant Kroger Co., meanwhile, has purchased a former Macy’s Inc. location at Kingsdale Shopping Center in Upper Arlington, Ohio, and plans to build a new store in its place.

But grocers aren’t the only new tenants taking over cheap mall space.  As Market Watch points out, everything from doctors offices to high schools are moving into what used to be prime real estate.

We’re sure it will all work out just fine and wall street will go on buying those mall REITS with reckless abandon…you know, because dividend yields.

This Zero Hedge item appeared on their Internet site at 12:55 p.m. EST on Tuesday afternoon — and another link to it is here.

Where Are We Today? — Hugo Salinas Price

The U.S. has been regarded as the West’s leader since WW II. The U.S. led with the objective of international cooperation to achieve orderly growth and prosperity for the countries led by the U.S.

Now suppose you have a football team, and the quarterback comes out and says, “Quarterback is First!” and scolds members of his team, and insults one of his team-mates and sends him to the bench in disgrace. How long is that team going to hold together? Not very long, I would say.

The deeper fact is that the status of the U.S. as the world’s leader, since the end of WW II, has ended and is finished. Mr. Trump’s own plan to “Make America Great Again” is sending, by his own admission, a silent message: “America is no longer great.

If the U.S. does actually clamp down on imports, as Mr. Trump envisions, and begins to hide behind economic protectionism through taxes on imports in true “developing world” fashion, then the U.S. will be blocking the spring from which the rest of the world has been getting its dollars; there will be a scarcity of dollars in the rest of the world and that will mean world deflation with all its consequences: a rash of bankruptcies around the world for lack of dollars to service debt.

The U.S. simply cannot have it both ways: it cannot issue the world’s money, and indulge in economic protectionism. If the U.S. goes for economic protectionism, then U.S. dollar will, sooner or later, cease to be the world’s money as steps are taken to replace it.

This commentary by Hugo certainly falls into the must read category — and I found it embedded in a GATA dispatch on Tuesday.  Another link to it is here.

Mexico’s criminal and political worlds are shifting, and 2017 is off to the most violent start on record

Mexico’s Institutional Revolutionary Party, in one form or another, ran Mexico as a de facto one-party state from the 1930s until 2000, when Vicente Fox interrupted the PRI’s hold on the presidency.

The PRI returned to Los Pinos presidential palace in 2012, with the election of President Enrique Peña Nieto.

But that restoration of power appears to be on shaky ground, and the political shifts that the PRI and Mexico are seeing come as the country’s criminal underworld appears to be undergoing its own upheaval.

In many places, times of political and criminal instability have been accompanied by violence. That seems to be the case for Mexico: January 2017 was the most violent January in the last 20 years, and recent trends suggest the killing will not soon relent.

The first month of this year saw 1,938 homicide cases, according to official data from Mexico’s Executive Secretary for the National Public Security System.

This very disturbing, but not entirely surprising essay, put in an appearance on the nordic.businessinsider.com Internet site on Tuesday evening CET.  It’s on the longish side, but definitely worth reading if you have the interest.  Because I don’t have a lot for you today, I thought I’d include it, rather than sit on it until Saturday.  I thank Swedish reader Patrik Ekdahl for finding it for us — and another link to it is here.

Bank of England deputy governor with brother in senior Barclays role faces calls to resign

Charlotte Hogg is facing calls to resign as deputy governor of the Bank of England after she failed to notify its ruling body that her brother is director of group strategy at Barclays, which she monitors closely in her new job.

Ms. Hogg has been given a verbal warning by Governor Mark Carney in her first week in the job as his deputy, but members of Parliament are increasingly concerned about her failings, given her key role in charge of regulating banks and markets.

The error came to light a week after Ms. Hogg appeared before the House of Commons Treasury Select Committee, during which she said that she had told the bank of her brother’s job at the time she joined the central bank as chief operating officer in July 2013.

However, in a letter sent following the hearing to committee chairman Andrew Tyrie, which was published today, she admitted that she had not done so.

This news item appeared on the telegraph.co.uk Internet site at 8:08 p.m. GMT on their Tuesday evening, which was 3:08 p.m. in New York — EST plus 5 hours.  I found this story in a GATA dispatch last evening — and another link to it is here.

BIS Blames ECB for Rising Target2 Imbalances: Fear of Default

In the latest BIS Quarterly Review, the BIS points a finger at the ECB for rising Target2 imbalances.

That sounds highly accusatory, but the BIS also claims this is a “benign by-product of the decentralized implementation of the asset purchase program (APP) rather than as a sign of renewed capital flight.”

I strongly disagree that any of this is “benign” unless and until someone can tell me precisely how Italy, Spain, Greece, etc., are supposed to pay back the claims.

Zerohedge reported ‘BIS Admits TARGET2 Is a Stealth Bailout of Europe’s Periphery‘.

That headline isn’t accurate but the idea is sound. The ECB is bailing out peripheral countries via indirect means.

But whether or not capital flight is direct or indirect, the ECB’s mask does not change reality.

This longish…and somewhat involved commentary from Mish Shedlock, showed up on his Internet site at 8:30 a.m. EST on Tuesday morning — and I thank Roy Stephens for sending it along.  Another link to it is here.

China forex reserves break 8-month run of declines

China’s foreign exchange reserves rose in February, surprising analysts by breaking an eight-month string of declines and offering the latest evidence that a stable renminbi and tighter capital controls are succeeding in staunching capital outflows.

China’s currency weakened by a record 6.5 percent against the dollar in 2016 amid unprecedented capital outflows. In response, the central bank sold dollars from its reserves to relieve pressure on the currency. Foreign exchange reserves fell below $3 trillion for the first time in five years in January.

But they rose by $6.9 billion to reach $3.01 trillion at the end of February, the central bank said today. Analysts had expected a decline of $25 billion, according to a Reuters poll.

The above three paragraphs are all there is to this Financial Times story that was posted on their website on Tuesday sometime.  The rest of it is hidden behind their subscription wall — and the link to the FT website is here.  I found this news item on the gata.org Internet site.

Meet the Singapore Futures Trader Who Has Bought 3,000 Swimming Pools Worth of Sugar

There is a new powerhouse dominating the U.S. futures market for raw sugar contracts and it’s creating a bit of confusion among the the more established trading houses of the world’s most volatile commodity markets.  The firm is Wilmar International, a Singapore-based agribusiness whose major shareholders include the family of Malaysian billionaire Robert Kuok and Chicago-based Archer Daniels Midland.  Founded 26 years ago, Wilmar is one of the world’s largest palm-oil producers but was essentially non-existent in the sugar market until just a couple of years ago.

Now, in just two short years, Wilmar has scooped up more than 6 million tons of raw sugar, enough to fill roughly 3,000 Olympic-size swimming pools at a cost of some $2.3 billion, by physically settling tens of thousands of futures contracts and collecting the commodity from ports across South America and elsewhere.

The timing and size of the purchases have raised some concerns among other futures traders that Wilmar may be looking to manipulate global sugar prices.  As The Wall Street Journal points out, purchases made by Wilmar in 2015 were large enough soak up the entire global supply glut that pushed sugar prices to multi-year lows.

But perhaps even more rare than Wilmar’s quick rise to become one of the world’s largest sugar traders, is their propensity to take physical delivery of the sweet stuff and ship it to refineries in Asia and the Middle East, often at a loss.

And while their strategy may be confusing to other large trading houses, it certainly seems to be working as the company’s sugar division posted a 33{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} year-over-year increase in revenue in 2016 on the back of substantially higher sugar prices…which we’re sure has nothing to do with their massive trading volume but rather was just the result of a little bit of ‘luck’.

This very interesting Zero Hedge news item was posted on their Internet site at 7:50 p.m. on Tuesday evening EST — and another link to it is here.

One of the Rarest Precious Metals, Rhodium, Is on Best Run in a Decade

Rhodium’s on the best run in a decade on expectations of more demand for the material that’s used in cleaning toxic car emissions.

One of the rarest precious metals, it climbed the past seven months and is up 19 percent this year, outperforming most major commodities. Mostly used alongside palladium in gasoline autocatalysts, prices have rebounded from a 12-year low set in July.

The spectacular turnaround comes amid stronger demand from industrial users including automakers, which account for the bulk of rhodium consumption. China, which predominantly favors gasoline vehicles, in December raised a sales tax on small cars less than originally expected. In 2016, Chinese consumers bought vehicles at the fastest pace in three years.

China is a big part of this story,” said Jonathan Butler, a precious metals strategist at Mitsubishi Corp. in London. “The level of car ownership is still growing, and there are signs that it could get to western levels.”

The metal is trading at $920 an ounce, according to Johnson Matthey Plc, which makes about a third of all auto catalysts. This year’s advance compares with a 13 percent gain for palladium and a 7.8 percent increase for platinum, which is also used to curb car emissions. All three metals are mined together, mainly in South Africa.

This Bloomberg news item put in an appearance on their website at 5:01 p.m. Denver time on Monday afternoon and was updated about 12 hours later.  It’s an article that Brad Robertson found over on Zero Hedge — and another link to it is here.

A quarter of Mexico’s gold reserve is ‘unallocated’ at Bank of England — Guillermo Barba

Mexican financial journalist Guillermo Barba reports that Mexico’s central bank has finally provided him with a list of the bars of its gold reserve and has disclosed that nearly all its gold is held at the Bank of England and that about a quarter is held there on an “unallocated” basis. Presumably this gold has been leased into the market.

Barba urges the Bank of Mexico to recover the “unallocated” gold and repatriate at least half the reserves to Mexico.

Barba’s report is headlined “The Bank of Mexico Reveals Its Gold Bar List” and it’s posted at his internet site — and it’s certainly worth reading if you have the interest.  I found this in a GATA dispatch — and another link to it is here.

Ronan Manly reflects on odd withdrawal of Thomson Reuters, CME from silver pricing

Gold researcher Ronan Manly reports that the withdrawal of Thomson Reuters and CME Group from the London Bullion Market Association’s silver price benchmark now is being attributed to a European Commission financial regulation that is to take effect next January.

Manly does not find this persuasive and wonders if Thomson Reuters and CME Group anticipate some scandal involving the LBMA.

This opinion piece is another short novel — and if you’re pressed for time, you might consider scrolling directly to the  “Conclusions” at the bottom of the essay.  Manly’s report is headlined “More Bad News for the LBMA Silver Price, but an Opportunity for Overhaul” — and it was posted on the bullionstar.com Internet site yesterday.  I found this on the gata.org Internet site — and I thank Chris Powell for the above two paragraphs of introduction.  Another link to it is here.

Russia’s gold reserves could overtake China’s this year — Lawrie Williams

According to the official announcement from the People’s Bank of China, the country’s gold reserves  remained unchanged in February and at the current rate of gold reserve building, Russia could well overtake China as the world’s fifth largest national holder of gold by the third quarter of this year.  China seems to have entered a hiatus period of gold reserve building, while Russia has been reporting strong increases in its gold holdings month by month.

According to the IMF and Russia and China’s own statistics, Russian gold reserves are only around 200 tonnes lower than those currently officially reported by China.  For the latest month, as reported by its Central Bank, Russia added 31.1 tonnes to its gold reserves in January, bringing them to around 1,645 tonnes as against China’s figure of 1,842.6 tonnes, so if the latest purchase levels are repeated for the next 7 months, then Russian gold reserves could overhaul those of China by the start of the fourth quarter of the year.

Of course all this [pre]supposes that the reported gold reserve increases as announced by the two nations’ central banks are themselves accurate.  At the moment we have no reason to doubt the Russian figures – the reported reserve build-up tallies quite well with known Russian gold output and the proportion of this believed to be taken on by the state.  The country is the world’s third largest gold producer, after China and Australia, with annual new mined gold output of around 260 tonnes, and has been vying with the latter for the No. 2 position.

This very worthwhile commentary by Lawrie showed up on the Sharps Pixley website yesterday — and another link to it is here.


This photo is the last one I’m posting from the 2017 underwater photo contest winners.  I’ve been stealing them one by one from a sputniknews.com story that was posted on their Internet site back on February 16.  There are still quite a few that I didn’t post — and if you want to see all of them in one go, the link is here.

The caption on this one reads ““Imp of darkness” by British photographer Damien Mauric, one of the winners in the “Portrait” category of the Underwater Photographer of the Year 2017 contest.”  It’s a marine iguana — and they only exist in the Galápagos Islands, a fact that isn’t mentioned in the caption.  The name ‘imp of darkness‘ was given to them by Charles Darwin, who was revolted by the animals’ appearance.  Click to enlarge.


Why hasn’t the gold price reached $5,000 per ounce, you ask?  I’m not into conspiracy theories but I think gold is managed, and I think the West — specifically the United States — goes out of its way to downplay the value of gold from a historical perspective, and I think that they’ve done a very good job — Wall Street, the banking system, the government. Every government wants to own gold. They don’t want their citizens to own gold because that undermines the confidence in the real economy, and in a situation where you have such fragility in the system, the worst thing that any government would want to see is a spike in the price of gold.” — Frank Giustra…January 23, 2017

Well, JP Morgan et al were out with their K-tel Ginsu kitchen knives yesterday…slicing the precious metal prices to new lows with absolute precision.

Don’t ask me if they’re done yet, because I haven’t a clue…although I was rather intrigued by the fact that the precious metal equities performed as well as they did.  I must admit that I was expecting them to get slaughtered again — and the fact that the shares in both silver and gold actually spent a decent amount of time in positive territory as well, came as a big surprise.

I’m also rather intrigued by the fact that JPMorgan is stopping a lot of silver for its client account.  The fact that they’re the tallest hog at the silver trough for their own account is no surprise, as they’ve been doing that for years now…a fact that Ted has been on about for years as well.  As of yesterday’s Daily Delivery Report, they’ve stopped 85 percent of the 1,905 silver contracts issued for delivery this month — and there are about 2,100 contracts still open for delivery.  If these delivery trends continue, they will certainly end up taking far more than the allowed 1,500 contracts for both themselves and their clients.  This certainly bears watching going forward.

Here are the 6-month charts for all four precious metals once again…plus copper…all complete with their new closing lows, or intraday lows, for this move down — with the exception being palladium.  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 the gold price inched a dollar and change higher in Far East trading on their Wednesday.  It was turned lower around 2:30 p.m. China Standard Time — and is down $2.10 the ounce at the moment.  Silver traded mostly flat, except for another one of this vicious little down/up spikes that came shortly before 1 p.m. CST.  It was back above unchanged by a few pennies shortly after that but, like gold, was turned lower at 2:30 p.m. over there — and is now down 5 cents.  Platinum and palladium didn’t do much in Far East trading, either — with the former down a buck — and the latter down 3 as the Zurich open looms.

Net HFT gold volume is just under 30,000 contracts — and that number in silver is 7,200 contracts.

The dollar index has been chopping around a few basis points either side of unchanged all through the Far East trading session — and is up 3 basis point as London opens.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and companion Bank Participation Report.  I would guess that we’ll see some big internal changes in the futures market in both gold and silver — and I know that Ted is going to be watching with great interest to see what the Managed Money traders did during the reporting week.  Will it be the Managed Money traders that are Ted’s “bullion bank b*tches” again, or will the heavy lifting come from traders in other categories?  The reports come out at 3:30 p.m. EST on Friday.

And as I post today’s column on the website at 4:03 a.m. EST, I note that the price pressure on gold continued during the first hour of London trading — and it’s now down $3.00 an ounce.  Silver is down 8 cents currently — and platinum and palladium are lower by 5 and 6 dollars respectively.

Net HFT gold volume is now up to just under 41,000 contracts — and that number in silver is very decent at 11,200 contracts.  With ‘da boyz’ setting new lows for both gold and silver for this move down, these aren’t surprising volume numbers.

After trading mostly unchanged in the Far East, the dollar index began to ‘rally’ about forty minutes before the London open — and is now up 8 basis points.

It could prove to an interesting day when trading begins on the COMEX later this morning.

Looming next week is the Fed meeting — and that, plus the U.S. debt ceiling issue, come to a head on the same day…March 15…the Ides of March.  One has to wonder if that date might be some sort of turning point for us, as it certainly didn’t turn out all that well for Julius Caesar.

We’ll find out soon enough.

That’s all I have for today, which is more than enough — and I’ll see you here tomorrow.


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