05 April 2017 — Wednesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price crawled mostly higher in Far East and morning trading in London on their Tuesdays. The high tick came minutes after 1 p.m. GMT in London, which was less than twenty minutes before the COMEX open. From that point it was sold down a bit until at, or just before, the afternoon p.m. gold fix. The price didn’t do much of anything after that.
The low and high ticks for the Tuesday trading session definitely aren’t worth looking up.
Silver was up about a nickel by shortly before the London open — and although the price began to rally some more from there, it was certainly on the ‘jumpy’ side. The high tick, such as it was, came around 11:15 a.m. GMT — and it chopped lower into the p.m. gold fix, just like gold itself. The price didn’t a lot after that.
And the low and high ticks in this precious metal certainly aren’t worth looking up, either.
There’s even less to talk about in platinum — and its rally attempt that began around 1:30 p.m. in Zurich was completely negated by shortly before the London p.m. gold fix. It rallied a few dollar into , or after, the fix — and then traded flat for the rest of the day. Platinum closed at $958 spot, up 3 dollars from Monday.
Palladium spent most of the Far East trading session on Tuesday trading a dollar or so above unchanged. The price activity became a bit more animated once Zurich opened. But it’s obvious from the Kitco chart below that the price was prevented from breaking above the $808 spot mark — and once Zurich closed at 11:00 a.m. EDT, it was sold quietly lower until shortly before the COMEX close. It didn’t do much after that. Palladium finished the Tuesday session in New York at $804 spot, up 3 dollars on the day.
The dollar index closed very late on Monday afternoon in New York at 100.50 — and when trading began at 6:00 p.m. EDT on Monday evening, it chopped unsteadily lower, with its 100.42 low tick being printed at precisely 1:00 p.m. in Shanghai on their Tuesday afternoon. It chopped somewhat unsteadily higher from there, with the 100.73 high tick coming around 11:40 a.m. in London. And except for a brief up/down spike centered thirty minutes either side of the 1:30 p.m. EDT COMEX close, the dollar index spent the rest of the day sinking quietly back towards unchanged on the day — and that’s where it closed, at 100.50.
It was interesting to note that gold and silver rallied when the dollar index was in ascendance on Tuesday — and then ‘fell’ once the dollar index began to head lower. Of course it’s a pretty safe bet that the declines in the precious metals were of the engineered variety whenever they occurred, because they all didn’t happen at the same time.
For the second day in a row the dollar index touched its 50-day moving average, but didn’t break above it. And as I said in yesterday’s column, we should find out soon enough if that has any longer-term significance. That comment applies again today as well.
The gold stocks gapped up a bit at the open, but then dipped back into negative territory by a hair just before the 11 a.m. EDT London close. Then, in fits and starts, they rallied quietly higher for the remainder of the Tuesday session, as the HUI closed up 1.30 percent.
The silver equities also gapped up at the open — and after a brief dip at the same time as the gold stocks, rallied back — and then chopped quietly sideways for the rest of the day. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 0.91 percent. Click to enlarge if necessary.
The CME Daily Delivery Report showed that 81 gold and 190 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday. In gold, there were nine short/issuers in total — and the two largest were Morgan Stanley with 38 contracts out of its own account, plus 28 from International F.C. Stone’s client account. There were eleven long/stoppers in total — and the three largest were JP Morgan, S.G. Americas and International F.C. Stone with 20, 19 and 18 contracts — and all for their respective client accounts. In silver, the sole short/issuer was JP Morgan out of its client account. Of the five long/stoppers, the two biggest ones were Canada’s Scotiabank with 137 — and Citigroup with 40 contracts for its client account. JP Morgan was a no-show for its own account in both silver and gold once again. The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Tuesday trading session showed that gold open interest in April dropped by 184 contracts, leaving 2,366 left, minus the 81 contracts mentioned in the previous paragraph. Monday’s Daily Delivery Report showed that 134 gold contracts were actually posted for delivery today, so that means that 184-134=50 gold contracts disappeared from April without either making or taking delivery. Silver o.i. in April declined by 67 contracts, leaving 405 still around, minus the 190 mentioned in the previous paragraph. Monday’s Daily Delivery Report showed that 62 silver contracts were actually posted for delivery today, so that means that 67-62=5 silver contracts disappeared from April without either making or taking delivery.
There were no reported changes in GLD yesterday, but an authorized participant removed 1,041,566 troy ounces from SLV. Based on recent price action, I’m not sure whether that was ‘plain vanilla’ liquidation or not…or maybe it was one of Ted’s “conversions of shares” for physical metal. But one thing is certain, regardless of which it was, JP Morgan most likely owns it now.
There was a tiny sales report from the U.S. Mint on Tuesday. They sold 1,000 troy ounces of gold eagles — and that was it.
There was a fair amount of gold movement over at the COMEX-approved depositories on the U.S. east coast on Monday. There was 128,460 troy ounces received — and another 97,063 troy ounces shipped out the door for parts unknown. In the ‘in’ category, there was 64,300.000 troy ounces/2,000 kilobars [U.K./U.S. kilobar weight] received at Scotiabank…along with 64,128 troy ounces shipped into HSBC USA…and one lonely kilobar weighing 32.151 troy ounces, which is the SGE kilobar gold weight, received at Brink’s, Inc. In the ‘out’ category, there was 89,026.119 troy ounces/2,769 kilobars [SGE kilobar weight] sent out of HSBC USA…plus 8,037.500 troy ounces/250 kilobars [U.K./U.S. kilobar weight] shipped out of Scotiabank.
The other thing that happened in two of these gold depositories on Monday, was that 84,932 troy ounces of gold were adjusted out of existence from the Eligible category…83,289 troy ounces vanished out of Brink’s, Inc…plus another 1,643 troy ounces out of Delaware. I didn’t know what to make of that — and neither did Ted. The link to all that activity is here.
It was reasonably busy in silver as well. There was 1,201,651 troy ounces received — and another 201,289 troy ounces shipped out. CNT and JP Morgan picked up a container load each — and all the ‘out’ activity was at Canada’s Scotiabank. There was 300,305 troy ounces switched from the Eligible to Registered category at CNT as well…along with 8,883 troy ounces in the Eligible category at Delaware that were adjusted out of existence. The link to all that activity is here.
It was pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday, as they reported receiving 2,122 of them, plus they shipped out another 3,718. All of this action was at Brink’s, Inc. — and a link to that, in troy ounces, is here.
I have a couple of stories about Turkey and gold in today’s Critical Reads section, so this chart from Nick posted below, showing Turkey’s gold imports, updated with February’s data, showed up in my in-box at precisely the right moment. Click to enlarge.
It was another quiet news day — and I don’t have a lot for you once again.
Helen Gardner, shopping on New York’s Fifth Avenue with her boyfriend on Tuesday, left the Polo store without buying anything.
“It’s quite old-fashioned,” said the 28-year-old visitor from London. “It’s not for the young crowd.” Then she lowered the boom. She’s bought Ralph Lauren clothing before, she said, “but just from outlets.”
Ralph Lauren, the retail avatar, has spent a half-century selling his Gatsbyesque fantasy of the American Dream.
But now, at 77, Lauren is confronting life after the dream fades: sometimes flagship stores get a little dull, the kids use their phones to search for discounts on your $245 jeans and iconic blue blazers move off the racks but just from outlets.
Beset by a decline in sales, Ralph Lauren Corp. announced Tuesday it would close the flagship store on Fifth Avenue in New York as part of a $370 million shakeup. The beleaguered company will refocus its e-commerce operation and cut an unspecified number of jobs.
I must admit that I was somewhat taken aback by this story. There are certain things that I though bulletproof, but that’s obviously not the case. This Bloomberg story was posted on their website at 11:44 a.m. Denver time on Tuesday morning — and was updated about four hours later. I thank Swedish reader Patrik Ekdahl for pointing it out — and another link to it is here.
Boeing has signed a $3.4 billion deal with Iran’s Aseman Airlines to supply 30 737 MAX aircraft to the carrier. It’s the first Boeing deal with Tehran since President Donald Trump took office pledging to take a harder stance with the country.
The 30 jets are to be delivered as part of a larger deal, which implies a possible delivery of another 30 planes to Aseman. Boeing described the deal as a “memorandum of agreement.”
At current prices, the 30 jets are worth $3.4 billion. However, carriers usually enjoy about 50 percent discount for such deals. The deliveries will start in 2022.
President Trump has said he opposes the cancellation of Iranian nuclear sanctions. However, he has not talked about the aircraft sales reached after the nuclear deal, which are saving thousands of American jobs.
“According to the U.S. Department of Commerce, an aerospace sale of this magnitude creates or sustains approximately 18,000 jobs in the United States,” Boeing said in a statement on Tuesday.
This news story appeared on the rt.com Internet site at 2:00 p.m. Moscow time on their Tuesday afternoon, which was 7:00 a.m. in Washington — EDT plus 7 hours. It comes to us courtesy of Roy Stephens — and another link to it is here.
We can now close the case on who leaked that confidential, market-moving data to Medley global back in 2012: it was Richmond Fed’s Jeffrey Lacker, who previously was expected to retire in October, and is resigning immediately.
In a statement, Lacker confirms he revealed confidential FOMC information to Medley Global and that he lied to the Fed’s general counsel on at least two occasions.
The Richmond Fed made the following announcement moments ago, which suggests that Lacker did not leave voluntarily:
The Federal Reserve places a high priority on safeguarding information. We expect every employee to comply with all relevant policies and procedures, as well as our standards of conduct. Employees must review and acknowledge our policies annually. Once our Bank’s Board of Directors learned of the outcome of the government investigations, they took appropriate actions.
We are focused on moving forward within our organization—and were already underway with our presidential search, following Jeffrey Lacker’s announcement in January to retire in 2017. This search process will continue as scheduled. In the interim, First Vice President Mark Mullinix is serving as the Bank’s acting president.
This shocking event comes just hours after Chairman of the House Financial Services Committee Jeb Hensarling demanded that “American Households Should Demand a More Reliable Governance Structure for the Fed.”
As CNBC‘s Steve Liesman adds, Lacker’s resignation was the result of negotiations with law enforcement officials.
And as Bill King of King Report fame so succinctly pointed out in his Wednesday column this morning: “Fed credibility takes another hit. Who at the Fed is leaking to Hilsenrath at the WSJ?” This amazing story, which was updated several times on Tuesday afternoon, showed up on the Zero Hedge website — and I thank Brad Robertson for this news item. Another link to it is here.
French economist Frédéric Bastiat was a man far ahead of his time. He was a “classical liberal,” which today would identify him as a libertarian. He expanded upon the free-market argument set forth by Adam Smith in 1776.
In 1845, the French government levied protective tariffs on scores of items, from sewing needles to locomotives. The intent was to protect French industries from companies outside France that could produce the goods more cheaply.
The reaction from Mister Bastiat was to publish “The Candlemakers’ Petition,” a satirical proposal to the government that was intended to help them see the nonsense of protective tariffs.
The petition was presented as having been sent by “the Manufacturers of Candles, Tapers, Lanterns, Sticks, Street Lamps, Snuffers, and Extinguishers, and from Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting.”
Their plea to the Chamber of Deputies was that the government pass a law “requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds—in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses.”
This worthwhile commentary by Jeff was posted on the internationalman.com Internet site on Monday — and I thank Doug Clark for sending it our way. Another link to it is here.
A surge in consumer lending means British banks are at risk of incurring losses, the Bank of England said on Tuesday, warning that some might be letting credit standards slide as they compete to offer debt to households.
Consumers ramped up their borrowing by more than 10 percent late last year, the fastest growth in a decade, which helped drive strong economic growth despite June’s vote to leave the European Union. Rates of saving fell to their lowest in more than 50 years.
But the economic outlook is now darkening as households face rising living costs in the wake of sterling’s tumble against the dollar and the euro, and wage growth is expected to remain below its long-run average.
Last week the BoE said it was taking a closer look at consumer borrowing, and on Tuesday it gave more details.
“An easing in credit supply conditions appeared to have contributed to the growth in consumer credit, with intense competition in some segments of the market,” the BoE said in a summary of the latest meeting of its Financial Policy Committee, which looks at financial stability risks.
This Reuters article, filed from London, put in an appearance on their Internet site at 2:26 p.m. BST on their Tuesday afternoon, which was 9:26 a.m. in New York — EDT plus 5 hours. It’s the second offering of the day from Patrik Ekdahl — and another link to it is here.
Despite an eleventh-hour wrangle over pensions last week, Greece’s creditors are soon likely to approve the latest payment due under its current 86 billion euro bailout programme. But this will only buy Athens time until mid-2018. After that, a new programme – the country’s fourth since the start of its financial crisis – will probably be required.
Alexis Tsipras needs his euro zone creditors to give him enough cash to pay about 7.5 billion euros of debt falling due by July. For that to happen, they must agree the current bailout is on track. The left-wing prime minister’s habit of dragging out negotiations rather than biting the bullet has already hurt the economy, which shrank in the final quarter of last year and probably contracted again in the first quarter of this year.
It seems Tsipras will ultimately be willing to drink the latest dose of bitter medicine, even though it includes unpopular pension cuts and income tax increases in 2019 and 2020 that will together tighten fiscal policy by 2 percent of GDP. This potion will be sweetened by a concession: if Greece continues outperforming its budget targets, as it did last year, it will be allowed to offset the new “bad” measures by cutting corporation tax, improving its social safety net and other “good” measures.
The euro zone has Athens over a barrel. Although Tsipras should be able to cobble together enough money to pay the debt due in July, were he not accept to the creditors’ deal he would have to run up arrears to local suppliers – something that would hammer the economy. Prolonging the agony would further dampen the private sector’s depressed animal spirits.
This Reuters story was posted on their Internet site at 9:51 a.m. EDT on Monday morning — and I thank Richard Saler for sharing it with us. Another link to it is here.
A search operation launched after a South Korean cargo vessel containing 260,000 tonnes of iron ore went missing over the weekend in the South Atlantic, continued Monday, with 22 out of the 24 crew members still unaccounted for.
The Stellar Daisy, which set out from a port in Brazil to China, last made contact on Friday, and its believed to have sunk when it was 2,500km (1,500 miles) from shore, east of Uruguay.
Two Filipino crew members were found floating in a life raft on Saturday, but other lifeboats and rafts spotted in the area were empty, South Korea’s Yonhap news agency reports.
The large bulk carrier, which is roughly the same size as 100 tennis courts, was set to sail past Uruguay and Argentina, around Cape Horn and then across the Pacific. It was being operated by a South Korean company, Polaris, but was flagged to the Marshall Islands, and had 16 Filipinos and eight South Koreans on board.
Brazilian and Uruguayan navy ships and aircraft are searching the area and ships passing by are also being asked to keep an eye out for survivors.
The above five paragraphs are all there is to this brief story that showed up on the mining.com Internet site on Monday — and it comes to us courtesy of Jim Akers. Another link to the hard copy is here.
Damage to rail lines in cyclone-hit northeast Australia is set to disrupt exports of the steel-making material from the world’s largest coking coal region, underpinning prices and raising the prospect of major producers declaring force majeure.
The extent of the damage, which will hit coal mines operated by BHP Billiton Ltd and Glencore PLC, was revealed in the wake of deadly Cyclone Debbie, which struck last week and left a disaster zone stretching 1,000 km (600 miles). Four people have died in floods in Queensland and New South Wales states, with another three missing.
Coal hauler Aurizon Holdings said on Monday it would take up to five weeks to repair parts of its network of rail lines that connects mines to ports in Queensland, with alternative routes being considered for coal transported on the worst-affected Goonyella line.
Queensland accounts for more than 50 percent of global seaborne coking coal supplies, with Goonyella alone transporting more than half of the state’s coal – mostly coking coal, used for steel making.
“The entire industry is facing a force majeure issue. I don’t see any way around it if it is going to impact that amount of shipments,” said a senior industry source.
This Reuters news story, filed from Sydney, was posted on their website at 4:43 a.m. EDT on Tuesday morning — and I thank Australian subscriber Garry Robinson for bringing it to our attention. Another link to it is here. Garry also sent a follow-up Bloomberg story on this, which is headlined “Coal Soars After Cyclone Debbie“. It was originally headlined “Coking coal soars after cyclone Debbie cut Australian supplies“.
A rare pink diamond dubbed the “Pink Star” has become the world’s most expensive gemstone to sell at auction, coming under the hammer in Hong Kong on Tuesday for $71.2m (£57.3m).
The oval-cut 59.6 carat jewel, discovered in a mine in Africa by De Beers in 1999, is the largest fancy vivid pink diamond, categorised as “flawless” or “internally flawless”, that the Gemological Institute of America (GIA) has ever graded.
It sold after a five-minute bidding war, that started at $56m, to Hong Kong jewellery retailer Chow Tai Fook at Sotheby’s.
Tuesday’s sale breaks the record previously held by the Oppenheimer Blue diamond, which sold for $57.5m at Christie’s in Geneva in May last year.
This very interesting news item, complete with a great photo, showed up on the independent.co.uk Internet site at 4:09 p.m. GMT on their Tuesday afternoon, which was 11:09 a.m. in New York — EDT plus 5 hours. I thank Patrik Ekdahl for this third and final contribution to today’s column — and another link to it is here.
There are lots of reasons to buy silver—it’s a real asset, the coins are beautiful, it will likely outperform gold, and it’s more affordable. But that affordability comes with a catch. Once you start to accumulate, you quickly realize that silver requires a lot more storage space than gold. It’s relatively easy to hide some gold coins in a sock drawer or cookie jar, but those hiding places are impractical for the same dollar amount of silver.
So how do we store our silver bullion both efficiently and safely? And should it be stored at home anyway? This article has some potential solutions for those investors that are stacking silver…
This 14:40 minute youtube.com video commentary from Mike appeared yesterday — and if you give it a listen, be prepared for the inevitable embedded infomercial. Another link to it is here.
Turkey’s deputy prime minister, Mehmet imek, announced that the government will add two new secure investment tools to the financial system — gold-denominated bonds (sovereign gold bonds) and lease certificates (sukuk) denominated in gold in order to bring under-the-mattress gold into the economy.
“With this important step that will further deepen the financial system, our citizens will get additional income from the idle gold they stockpile under their mattress, while the savings will increase and the economy will gain momentum,” imek told the Anadolu Agency, adding that gold is regarded as a “safe haven” in Turkey and is seen as a traditional investment tool.
imek pointed out that the Central Bank of the Republic of Turkey has paved the way for some of the required reserves of the banks deposited in the Turkish lira to be kept as gold, noting that a fair amount of gold kept by citizens “under the mattress” has been brought into the economy with the regulation, adding that while gold accounts are offered by banks, volume has not reached the desired level.
This gold-related news item, filed form Istanbul, was posted on the dailysabah.com Internet site on Sunday — and I found it over on the gata.org Internet site late last night Denver time. Another link to it is here.
Turkish gold imports rose 17-fold to 28.2 tonnes in March, as Turks looking to hedge currency risk ahead of a referendum in two weeks time followed President Tayyip Erdogan’s calls to buy gold instead of dollars.
After the sharpest falls in the Turkish lira since the 2008 financial crisis last November, Erdogan called on Turks to sell dollars and buy lira or gold to prop up the local currency. Gold imports have been rising year-on-year ever since.
“People have started opting for gold rather than foreign currencies,” said Mehmet Ali Yildirimturk, a gold specialist in Istanbul’s Grand Bazaar, adding that a moderate recovery in the lira had also made gold more affordable again.
Gold imports to Turkey rose almost eight-fold to 36.7 tonnes in December after Erdogan’s calls, their highest monthly level in just over two years, according to data from the Precious Mines and Metals Markets of the Istanbul bourse.
This brief Reuters article put in an appearance on their Internet site at 12:31 p.m. EDT on Tuesday afternoon — and I found it on the Sharps Pixley website. Another link to it is here.
Turkey is taking steps to give its central bank the right of first refusal on domestically produced gold, two sources said, allowing it to boost reserves of the precious metal without depleting foreign currency holdings.
Like other central banks, the Central Bank of the Republic of Turkey holds a mix of assets, including foreign currencies and gold, as official reserves. The International Monetary Fund has recommended that Turkey bolster its foreign reserves to shield itself from external volatility.
Buying more domestically produced gold, which is priced in lira, will allow the bank to avoid depleting foreign reserves at a time when the domestic currency has been hammered by political concerns.
“The central bank is being given first option” to buy locally mined gold, said an official from the domestic gold sector. “This means the central bank will become a primary gold buyer in lira.”
This is another Reuters article, this one filed from Ankara. It showed up on their website at 8:59 a.m. on Tuesday morning EDT — and I found it embedded in a GATA dispatch the Chris Powell filed from Hong Kong on their Wednesday morning. Another link to it is here.
It was another day where not too much happened, or should I say, was allowed to happen. ‘Da boyz’ were certainly there to make sure that gold didn’t break above its 200-day moving average — and nothing untoward happened in the other three precious metals as well. Everything seems to be in a “care and maintenance” mode at the moment…awaiting heaven only knows what.
Here are the 6-month charts for all four precious metals, plus copper, once again. Gold’s ‘failed’ attempt to break above its 200-day moving average should be noted, as should the continuing flat silver price. 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 traded a bit lower in the Far East on their Wednesday — and at the moment it’s down 50 cents an ounce. Silver was sold down a bit in morning trading in Shanghai, but in the last few minutes has rallied a bit — and is down only 5 cents the ounce. Platinum traded flat in Far East trading — and like gold and silver, began to rally starting around 2 p.m. China Standard Time — and is up 4 bucks. Palladium, like silver, was sold down as well — and began to head higher about the same time as the other three precious metals — and is back to unchanged as Zurich opens.
Net HFT gold volume is approaching 22,000 contracts, which is pretty light. That number in silver is coming up on 6,500 contracts — and there’s a very decent amount of roll-over/switch volume out of the May contract as well…mostly into the new front month, which will be July.
The dollar index traded flat until around noon CST in Shanghai — and began to edge higher from there — but is only up 3 basis points as London opens.
Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report. Just eye-balling the last five dojis in the silver and gold charts posted above, I’d be hard pressed to bet on any scenario other than mostly unchanged. But as Ted pointed out on the phone yesterday, there was a huge drop in gold open interest last week which, as he mentioned in his weekly review on Saturday, was probably spread trades being liquidated as the April contract went off the board. Of more concern was a large build-up in silver’s open interest during the reporting week — and I know he was somewhat concerned about that.
His mid-week commentary for his paying subscribers comes out this afternoon — and I’ll be interested in any comments he may have on what the upcoming COT Report may show for either gold or silver. I’ll ‘borrow’ what I think I can get away with for my Friday missive.
And as I post today’s column on the website at 4:02 a.m. EDT, I see that the gold price continued to inch higher in the first hour of London trading — and is up 70 cents an ounce. Silver is now down a penny after being up a couple. Platinum is now up 7 bucks — and palladium by 2.
Net HFT gold volume is just under 29,000 contracts — and that number in silver is around 8,700 contracts.
The dollar index began to head lower just minutes before he London/Zurich open — and is now down 3 basis points.
With gold a hair below its 200-day moving average — and silver above its by a bit — and the dollar index at its 50-day moving average, I’m still waiting for/expecting that sharp, short engineered price decline before we continue to rally. But, as Ted said, we could also blast higher from here.
It remains to be seen what JPMorgan et al have planned in the days and weeks ahead, as they’re still firmly in the driver’s seat.
That’s it for today — and I’ll see you here tomorrow.