Gold Stopped Below Its 200-Day Moving Average Again

06 April 2017 — Thursday


The gold price really didn’t do much of anything in Far East trading on their Wednesday — and the high tick of the day, such as it was, came a few minutes before 9 a.m. in London.  It began to chop quietly lower from there, until the 10:30 a.m. BST morning gold fix was done — and then it traded sideways into the COMEX open.  It appeared that the bids got pulled at that juncture — and gold’s low tick was placed at, or a few minutes before, the London p.m. gold fix.  By 10:30 a.m. EDT it had gained back about five dollars of the decline, but began to sell off once again until the Fed minutes were released at 2 p.m. EST.  The gold price took off like a scalded cat at that point, but volume was enormous — and it was only allowed to rally back to unchanged before the price was ultimately capped.  It chopped sideways for the last hour and twenty minutes into the close of after-hours trading from there.

The high and low ticks were reported by the CME Group as $1,245.40 and $1,259.30 in the June contract.

Gold was closed in New York on Wednesday afternoon at $1,255.40 spot, down 30 cents on the day.  Net volume was sky high at a bit over 216,000 contracts, so it’s obvious that the post-Fed news rally did not go unopposed.

Here’s the 5-minute gold tick chart courtesy of Brad Robertson.  I wasn’t going to post it all, because there wasn’t much intraday price movement, but changed my mind the instant I saw it.

I wrote all of the above information on gold [and the information below on silver] based on the Kitco chart, which was quite a few minutes before I even looked at their respective 5-minute tick charts…and they appeared to tell a different story entirely.

Volume was nonexistent in Far East trading, except at that brief price spike down early in the day around 19:00 Tuesday evening Denver time, which was 9:00 a.m. in Shanghai on their Wednesday morning.  There was a bit of volume in London but, as usual, the real volume began at the 6:30 a.m. MDT COMEX open.  The 11,000 contract volume spike is the standout feature on this chart, plus the big volume spikes on every other big price down tick, right up to and including the one that occurred a minute or so after the Fed minutes news.  The rally that followed did not have much volume at all.  It more or less petered out on its own, with no sign of a price capping.

There were engineered price declines in COMEX trading — and right up until the 12:10 p.m. Denver time/2:10 p.m. EDT on the chart below…but that was all.

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

The silver price was sold down a bit in morning trading in the Far East, but rallied back to unchanged by shortly before 9 a.m. in London.  It’s trading pattern was very similar to gold’s in most respects after that, until the COMEX close.  It began to rally from there and, also like gold, took off on the Fed news.  Its rally was also capped back at the unchanged mark — and it chopped sideways from there into the close.

The high and low ticks were recorded as $18.145 and $18.325 in the May contract — and it’s toss-up as to whether the high tick came in London trading or in the rally’s top in after-hours trading in New York.  You choose, but I doubt very much that it matters.

Silver was closed at $18.27 spot, exactly unchanged on the day — and if you believe that the closing price was based on free market supply and demand factors…I’m sorry but I’m fresh out bridges to sell…however, but I do have a nice piece of swamp land in Florida that you might be interested in.  Net volume was pretty heavy at just over 61,000 contracts, as JP Morgan et al were there as very aggressive short buyers and long sellers of last resort as required.

And here’s the 5-minute tick chart in silver — and it’s almost a carbon copy of what happened during the COMEX trading session — and right up until 12:10 p.m. MDT/2:10 p.m. EDT.  All the big volume was on the down price spikes — with no volume worthy of the name in the rally that followed the Fed minutes news.  I’ll have more on all this in The Wrap.

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

Platinum traded pretty flat until 2 p.m. China Standard Time on their Wednesday afternoon — and then away it went to the upside.  But, like silver and gold before it, its price was also capped a few minutes before 10 a.m. in Zurich/9:00 a.m. in London.  It followed the silver price almost like a shadow after that — and the low tick of the day came around 2:10 p.m. EDT in New York.  It rallied back to unchanged from there, but managed to close up a dollar on the day at $959 spot.

Palladium traded a few dollar lower through most of the Far East trading session but, like the other precious metals began to rally shortly after 2 p.m. CST.  It was up a buck by the Zurich open — and then chopped more or less sideways until 2 p.m. CEST [Central European Summer Time] which was twenty minutes before the COMEX open.  It rallied a decent amount from there, but was turned lower shortly after the London p.m. gold fix was in.  ‘Da boyz’ had it back to unchanged by 1 p.m. EDT, but it managed to rally a couple of dollars between then and the close of trading at 5:00 p.m.  Palladium finished the Wednesday session in New York at $806 spot, up two bucks.

The dollar index closed very late on Tuesday afternoon in New York at 100.50 — and traded pretty flat until noon in Shanghai.  It rallied a bit from there until shortly after 2 p.m. CST.  It fell to its 100.41 low tick within the first ninety minutes of London trading — and began to head unsteadily higher from there, cutting through its 50-day moving average in the process.  The 100.85 high tick was placed a minute or so after 2 p.m. in New York — and down it went on the Fed minutes news.  It made it back almost to its low tick of the day by shortly before 4 p.m. EDT — and most of the gains from the subsequent rally, vanished by the close.  The dollar index finished the Wednesday session at 100.52…up only 2 basis points on the day…and back below its 50-day moving average.

And here’s the 6-month U.S. dollar index chart, which you can read into whatever you wish.

The gold stocks gapped down a percent at the open.  They rallied close to unchanged by around 11:35 a.m. in New York, before rolling over to the their respective low ticks around 2:10 p.m. EDT.  They quickly rallied into the green on the Fed minutes news — and closed just off their respective highs.  The HUI finished the day up 0.25 percent.

The silver equities traded in a very similar pattern, except they couldn’t quite squeeze a positive close, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.43 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 126 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In gold, there were seven short/issuers in total, but the only two that mattered were International F.C. Stone and ABN Amro with 91 and 25 contracts out of their respective client accounts.  There were twelve long/stoppers in total.  JP Morgan, S.G. Americas and International F.C. Stone were three largest with 47, 26 and 20 contracts for their respective client accounts.  ABN Amro was in fourth spot with 13.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in April fell by 226 contracts, leaving 2,141 still open, minus the 126 contracts mentioned just above.  Tuesday’s Daily Delivery Report showed that only 81 gold contracts were actually posted for delivery today, so that means that 126-81=45 gold contracts disappeared from April without either making or taking delivery.  Silver o.i. in April declined by 159 contracts, leaving just 246 still around.  Tuesday’s Daily Delivery Report showed that 190 silver contracts were actually posted for delivery today, so that means that 190-159=31 silver contracts were added to the April delivery month, which I find amazing, considering that it’s not a traditional delivery month.  So why the urgency, I wonder?  The last grab for physical silver appears to be on in earnest.

There were no reported changes in GLD yesterday, but there was a withdrawal from SLV, as an authorized participant took out 136,228 troy ounces.  This amount certainly looks like a fee payment of some kind.

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

It was a pretty big day in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  They reported receiving 207,843 troy ounces, plus they shipped out another 123,415.  All of the ‘in’ activity was at JP Morgan — and of the ‘out’ activity, there was 89,026.119 troy ounces/2,769 kilobars [SGE kilobar weight] shipped out of HSBC USA.  The remaining 34,388 troy ounces shipped out, came courtesy of Canada’s Scotiabank.  The link to all that activity is here.

It was very quiet in silver, as nothing was received — and only one good delivery bar…which weighed in at 972 troy ounces…was shipped out of Delaware.  But there was another transfer from Registered into Eligible over at CNT, as a container load…621,153 troy ounces…was transferred.  Ted suspects that JP Morgan most likely owns that silver as well.  The link to that activity is here.

There was no in/out activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  The reason for the lack of activity was that China was closed for the Ching Ming Festival.

Once again it was a very slow news day — and I don’t have much for you.


Stocks Tumble: Fed Spooks Traders With Bubble Warning

It started off so well: the blistering ADP payrolls report, the highest in over two years (despite disappointing PMI and ISM reports), sent stocks soaring off the bat with the Dow jumping nearly 200 points higher, rising as high as 20,887, and the S&P knocking on the all time high 2,400 door again, and AMZN to new all time highs, and making some wonder if the reflation trade had returned.

It was not meant to be, because while it took the market some time to digest the Fed’s minutes, the FOMC delivered one of its loudest warnings to date that it was focusing not so much on inflation or employment, but was seeking to deflate what even “some members” of the FOMC agree is a stock bubble, warning that stock prices are “quite high“, and warning that its forecasts face “downside risks” if “financial markets were to experience a significant correction.

From the Minutes:

A few participants attributed the recent equity price appreciation to expectations for corporate tax cuts or to increased risk tolerance among investors rather than to expectations of stronger economic growth. Some participants viewed equity prices as quite high relative to standard valuation measures.

Then, more ominously, this:

… a number of participants remarked that recent and prospective changes in financial conditions posed upside risks to their economic projections, to the extent that financial developments provided greater stimulus to spending than currently anticipated, as well as downside risks to their economic projections if, for example, financial markets were to experience a significant correction.

It took algos a while to process what the Fed was really saying, which is why while the dollar briefly spiked to the day’s highs in knee-jerk reaction to the minutes, it then surrendered all gains and then some after the minutes showed most officials backed a policy change that would begin shrinking the central bank’s balance sheet, as well as warn explicitly about valuations.

This chart-filled commentary was posted on the Zero Hedge website at 4:09 p.m. on Wednesday afternoon — and I thank Brad Robertson for sharing it with us.  Another link to it is here.

50{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of Americans Live Payday-to-Payday; 33{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} Can’t Write a $500 Emergency Check

It’s been more than seven years since the ‘great recession’ officially ended, but while Fed policies have successfully generated massive asset bubbles which have accrued solely to the benefit of America’s wealthiest, the majority of American families remain as vulnerable to financial disaster as they were during the height of the crisis.

In fact, a recent study found that some 50{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of Americans are woefully unprepared for a financial emergency with nearly 1 in 5 (19{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}) having absolutely no savings set aside to cover an unexpected expense.  Meanwhile, nearly 1 in 3 (31{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}) Americans couldn’t write a $500 check to cover an unexpected household emergency expense if they had to, according to a survey released by HomeServe USA, a home repair service.

Moreover, a separate survey released Monday by insurance company MetLife found that 49{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of employees are “concerned, anxious or fearful about their current financial well-being” with less than 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} reporting that they’re “in control” of their finances.

Of course, the issue is that the overwhelming majority of Americans haven’t participated in the Fed’s latest asset bubbles and are instead still crippled under the same amount of debt as they had during the recession. In fact, the New York Federal Reserve on Monday predicted that total household debt will reach its previous peak of $12.7 trillion this year with lower mortgage balances being offset by much higher student and auto debt.

For evidence of ‘main street’ America’s struggles with soaring debt balances, one has to look no further than the shocking delinquencies of 2016 vintage subprime auto ABS structures which are underperforming even 2007/2008 vintage securitizations.

This Zero Hedge piece appeared on their Internet site at 8:05 p.m. EDT yesterday evening — and another link to it is here.

Toronto House Price Bubble Goes Nuts

Residential property sales in Greater Toronto soared 17.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} year-over-year to 12,077 homes, according to the Toronto Real Estate Board (TREB). New listings jumped 15.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 17,052. Prices for all types of homes, based on the MLS Home Price Index Composite “Benchmark,” soared 28.6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. The “average” selling price soared 33.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}!

That average selling price of C$916,567 is up from C$688,011 a year ago. Over the past five years, it has doubled!

The heavenly manna was spread across the spectrum. For condos, the average price in Greater Toronto soared 33.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to C$518,879; for townhouses it soared 32.9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to C$705,078; for semi-detached houses, 34.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to C$858,202; and for detached houses, 33.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to C$1,214,422.

Even the house price bubble in Beijing cannot compete with this sort of miracle; new house prices there increased only 22{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} year-over-year in February. And Sydney’s fabulous house price bubble just flat out pales compared to the spectacle transpiring in Toronto, with prices up only 19{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in March.

Another bubble awaiting its pin.  This news story showed up on the Internet site yesterday sometime — and I extracted it from a Zero Hedge article.  It comes to us courtesy of Brad Robertson as well — and another link to it is here.

Global debt explodes at ‘eye-watering’ pace to hit £170 trillion

Global debt has climbed at an “eye-watering” pace over the past decade, soaring to a fresh high of £170 trillion last year, according to the Institute of International Finance (IIF).

The IIF said total debt levels, including household, government and corporate debt, climbed by more than $70 trillion over the last 10 years to a record high of $215 trillion (£173 trillion) in 2016 – or the equivalent of 325pc of global gross domestic product (GDP).

It said emerging markets posed “a growing source of concern” to financial stability and the global economy as debt burdens in these countries climb at a rapid pace.

The IIF data showed the increase was partly driven by a “spectacular rise” in emerging markets, where total debt stood at $55 trillion at the end of 2016, or 215pc of total emerging market GDP.

The body, which represents the world’s top financial institutions, said a wave of maturing debt this year presented a “growing refinancing risk“.

It estimates that more than $1.1 trillion of emerging market bonds and loans will mature this year, with dollar-denominated debt accounting for a fifth of all redemptions.

This story put in an appearance on the Internet site at 6:20 p.m. BST on their Tuesday evening, which was 1:20 p.m. in New York…EDT plus 5 hours.  I thank Richard Saler for pointing it out — and another link to it is here.

Europe’s Addiction to Bailing Out Banks

Like repentant smokers, Europe’s politicians have promised to quit bailing out banks. They’re finding the habit hard to break.

The Italian government wants to rescue three banks which are struggling under the weight of non-performing loans. The trade-offs, as always, are complicated: financial stability now against financial stability later; shielding taxpayers from the costs of a rescue against protecting small investors from heavy losses. Yet the right balance can’t mean saving every struggling bank every time.

Last December, Monte dei Paschi di Siena, Italy’s fourth largest bank by assets, applied for an injection of public money — a so-called precautionary recapitalization — and the European Central Bank and the European Commission are examining its request. Two smaller regional lenders, Veneto Banca and Banca Popolare di Vicenza, have followed suit, as a first step towards a possible merger.

Note that Italy is playing by the rules. The E.U.’s directive governing bank failures allows governments to inject fresh capital into a bank so long as it is solvent under normal circumstances and support is needed to prevent wider economic and financial disturbances. Precautionary recapitalization requires junior bondholders to face losses but, unlike a full-blown resolution, spares investors holding senior debt.

This procedure, in other words, allows exceptions to the EU’s strictures against bail-outs. Regulators should be cautious in overseeing this loophole. Some governments will seek to exploit it to keep “zombie banks” alive. This temptation is particularly strong in Italy, where many retail investors were mis-sold bank bonds. The government is keen to rescue as many of them as possible to avoid a political backlash.

This very worthwhile opinion piece by Bloomberg View columnist Ferdinando Giugliano was posted on their Internet site at 2:00 a.m. EDT on Wednesday morning — and I thank Swedish reader Patrik Ekdahl for sending it our away.  Another link to it is here.

Putin at Huge Press Event: We are ready for never-ending sanctions

Though Monday’s terrorist attack on the metro in Russia’s second largest city St. Petersburg has understandably stolen most Russia-related headlines during the past few days, a couple events took place in the city concurrently which are worthy of some attention.

President Vladimir Putin paid a visit to Russia’s “northern capital” where he held a meeting with Belarusian President Alexander Lukashenko – Moscow’s on again, off again ally with whom relations have been strained in recent months. The meeting appears to have been cordial.

Putin also attended the 4th Media Forum of the All-Russian People’s Front, a government-sponsored civil society organization meant to unite people from across the political spectrum. About 500 journalists were in attendance from around Russia, and the event was held in “town hall” format – continuing Putin’s tradition of holding frequent town hall style Q&A sessions with both the media and members of the public.

Of particular note was a question on the continuation of sanctions against Russia. President Putin clarified that while he makes decisions based on the assumption that sanctions will one day end, Russia’s also prepared to go its own way should the West be determined to obstinately continue its pointless trade war:

I base my actions on the premise that these sanctions aren’t forever. But if they do [last forever], we’ll always limit the market flow of merchandise which we can produce ourselves…we’ve used these sanctions to fight back – not to harm ourselves, but to help ourselves.

This news story showed up on the Internet site late on Wednesday morning EDT — and there’s an embedded video clip that runs for 6:06 minutes as well.  I thank Roy Stephens for bringing it to our attention — and another link to it is here.

Assad Crossed Many, Many Lines“: Trump Signals Imminent Change in Syria Policy

Just one week after Rex Tillerson signaled of a historic U-Turn in U.S. policy regarding Syria, when he said that “the longer term status of President Assad will be decided by the Syrian people” suggesting the U.S. is no longer intent on removing the Syrian president, this afternoon Trump signaled that the White House is about to U-turn once again, likely emerging in the same place where the Obama administration was when it nearly invaded Syria in 2013.

Speaking at a press conference with Jordan’s King Abdullah, II, President Trump on Wednesday called the suspected chemical weapons attack on civilians in Syria “a terrible affront to humanity” and hinted briefly that a change in U.S. policy on Syria may be coming as a result. Trump said that he was moved by reports of a deadly gas attack in Syria, saying that the Syrian leader – who has denied being behind the attack – had “crossed a lot of lines.”

It crossed a lot of lines for me,” Trump said at a press conference with Jordanian King Abdullah II at the White House. “When you kill innocent children, innocent babies, little babies with a chemical gas that is so lethal that people were shocked to hear what gas it was, that crosses many lines beyond the red line. Many, many lines.”

While painfully reminiscent of a similar chemical attack conducted in 2013, which was subsequently revealed to be a false flag, U.S. officials said they believe the attack was carried out by the regime of Syrian President Bashar al-Assad. Which, again, does not make much sense since just days before the chemical attack, Trump administration officials said the U.S. would no longer prioritize regime change in Syria and that they expect Mr. Assad to remain in power. Perhaps the mere suggestion that someone – i.e., U.S.-backed Syrian rebels or ISIS jihadists in the area of Idlib – could engage in a false flag attack is considered too much “tin foil” conspiracy theory.

I would bet muchos pesos that this was a ‘false flag’ event of some kind, as Assad had absolutely nothing to gain and everything to lose by an event like this — and he would certainly know that.  Ron Paul, plus a lot of others are of that opinion as well.  This Zero Hedge piece appeared on their website at 3:03 p.m. on Wednesday afternoon EDT — and it’s the second offering of the day from Richard Saler.  Another link to it is here.

Day of flooding, landslips and blackouts as ex-Cyclone Debbie’s remnants batter New Zealand

The remnants of former Cyclone Debbie, which cause havoc in Northern Australia late last week, caused chaos across New Zealand on Wednesday, with floods, landslides, blackouts and more.

Areas were forced to evacuate and roads were closed as the deluge battered the country, and Kaikoura was even cut off overnight.

It’s set to continue, as well, with more heavy rain possible into early Thursday for parts of the North Island and South Island.  Christchurch is expected to be a big target of Thursday’s stormy weather.

Kaikoura is once again finding itself isolated from New Zealand, as heavy downfalls close all roads in and out of the quake-hit town from 10pm on Wednesday.

More than 100 millimetres of rain fell in the Kaikoura district over the 36 hours to Wednesday evening, causing a mudslide on State Highway 1, south of Kaikoura.

The area would remain closed until at least 7am on Thursday after rock-filled containers were pushed over the edge of the road.

This amazing news item, chock full of photos and short video clips, put in an appearance on the website at 6:11 p.m. NZST on their Wednesday evening — and I thank Australian reader “R.T.” for sending it our way.  Another link to it is here.

Weird reason missing cargo ship Stellar Daisy may have sunk

The giant freighter that mysteriously vanished in the South Atlantic may have capsized without warning because of a physical change in its cargo.

The 266,000 tonne South Korean bulk carrier Stellar Daisy disappeared off the coast of Uruguay en route from Brazil to China, hours after issuing a distress signal on Friday.

One theory being floated, published in the Shipwreck Log today, is that the ore shifted, causing the vessel to lose balance and capsize.

There have been several documented cases of ships suddenly sinking due to the liquefaction of iron ore and nickel ore during prolonged movement, such as bumping and shaking that occurs in bad weather.

In 2010, three ships loaded with nickel ore sunk in South East Asia, claiming the lives of 44 crewmen.  This deadly spate prompted internationally renowned maritime accident investigator Dr Ken Grant to issue a warning about the chemically volatile cargo.

Although a cargo may appear to be dry, its core structure may contain sufficient moisture to cause liquefaction,” Dr Grant told The Australian Journal of Mining at the Company of Masters Mariners forum in Melbourne in 2011…“It does not take much force to produce or induce liquefaction.

This very interesting news item was posted on the Australian Internet site at 1:40 p.m. local time on their Tuesday afternoon — and my thanks goes out to Australian reader Garry Robinson.  Another link to it is here.

Global Shipping Fleet Braces for Chaos of $60 Billion Fuel Shock

Little more than 2 1/2 years from now, the global fleet of merchant ships will have to reduce drastically how much sulfur their engines belch into the atmosphere. While that will do good things — like diminishing the threat of acid rain and helping asthma sufferers — there’s a $60 billion sting in the tail.

That’s how much more seaborne vessels may be forced to spend each year on higher-quality fuel to comply with new emission rules that start in 2020, consultant Wood Mackenzie Ltd. estimates. For an industry that hauls everything from oil to steel to coal, higher operating costs will compound the financial strain on cash-strapped ship owners, whose vessels earn an average of 70 percent less than they did just before the 2008-09 recession.

The consequences may reach beyond the 90,000-ship merchant fleet, which handles about 90 percent of global trade. Possible confusion over which carriers comply with the new rules could lead to some vessels being barred from making deliveries, which would disrupt shipments, according to BIMCO, a group representing ship owners and operators in about 130 countries. Oil refiners still don’t have enough capacity to supply all the fuel that would be needed, and few vessels have embarked on costly retrofits.

There will be an absolute chaos,” said Lars Robert Pedersen, the deputy secretary general of Denmark-based BIMCO. “We are talking about 2.5 million to 4 million barrels a day of fuel oil to basically shift into a different product.”

This Bloomberg story showed up on their website at 5:01 p.m. MDT on Tuesday afternoon — and was subsequently updated about eighteen hours later.  My thanks goes out to Brad Robertson for finding it for us — and another link to it is here.

Cocoa Set for Record Crop in Largest Grower, Threatening Prices

The scores of giant potholes that scar the roads from commercial capital Abidjan to Daloa in the heart of Ivory Coast’s cocoa belt have become deep, muddy puddles, filled by heavy tropical showers.

While drivers making the tortuous journey from the Atlantic coast into the hot interior have reason to curse the wet weather, for farmers in the world’s largest cocoa producer the rains mean the prospect of another record crop.

We’ve got beneficial rains this season,” said Abdoulaye Baro, head of the Coopago cocoa cooperative in the town of Goudougo. “There’s lots of cocoa. This year it’s really good.”

The West African country’s crop will reach 2 million metric tons for the first time ever, according to a Bloomberg survey of six traders and exporters, breaking the previous record of 1.8 million tons set in 2014-15. In addition to lots of rain, the damaging dry winds that blow in from the Sahara desert were relatively weak this year. And it’s not just the right weather — growers have responded to years of high prices by planting new trees that are now starting to produce beans.

Another very interesting Bloomberg article.  This one put in an appearance on their Internet site at 5:01 p.m. MDT on Monday afternoon — and was updated about thirteen hours later.  I thank Patrik Ekdahl for digging it up for us — and another link to it is here.

China’s Shandong in advanced talks to buy half of Barrick’s Veladero mine: sources

China’s Shandong Gold Mining Co Ltd is in advanced talks to buy a 50 percent stake in Barrick Gold Corp’s Veladero gold mine in Argentina, people familiar with the process told Reuters even as the Canadian miner grappled with a pipe rupture at the site.

Barrick is no longer in discussions with China’s Zijin Mining Group Co Ltd about the Veladero mine stake sale, the sources said. A sale could fetch more than $1 billion, they added.

As part of a purchase plan being discussed, Shandong would also acquire 50 percent of Barrick’s nearby undeveloped Pascua-Lama gold and silver project, one of the people said.

The Pascua-Lama project, which straddles the border of Argentina and Chile in the Andes, was put on hold in 2013 due to environmental issues, political opposition, labor unrest and development costs that ballooned to $8.5 billion.

This gold-related Reuters story, co-filed from Toronto and Vancouver, showed up on their Internet site at 12:51 p.m. EDT on Wednesday — and another link to it is here.  It’s the third and final contribution of the day from Richard Saler — and I thank him on your behalf.

Ed Steer’s Gold and Silver Digest:  The E-mail Edition

E-mail and Internet companies use blockers to stop spam. Sometimes these programs block e-mails you want to get.  More readers of my daily column than normal are being blocked by their ISP since April 1 — and I ask that you add me to your trusted list of senders, contacts or address book…a process known as “Whitelisting.”  This is a problem for all websites that send out large numbers of e-mails to their respective subscriber bases…mine included.

If you do not see an e-mail from me in your In Box, my e-mail may have mistakenly been sent to your spam folder.  Or in the worst case scenario, ‘bounced’ by your ISP altogether — and you never see it.

Please open your spam folder and if you find an e-mail from me, open it and mark it as “Not spam”…

Of course, every e-mail system is different. Below are more specific instructions for some of the more popular ones.

One thing you can do no matter what e-mail system you’re using, is add the address in the “From” line of your most recent subscription e-mail, to your address book.

The good folks over at The Daily Reckoning put out a guide to Whitelisting several years back — and if you’re not receiving my daily column by e-mail, there may be something in it that can help you.  Of course you should use my website address: in place of The Daily Reckoning.  Another link to it is here.


Here are two photos of a kea, which is a parrot that is indigenous to the South Island of New Zealand — and the world’s only alpine parrot.  Until they’re airborne, there’s no hint of the bright colours they have hidden away.  Now uncommon, the kea was once killed for bounty due to concerns by the sheep-farming community that it attacked livestock, especially sheep.  It received full protection in 1986.  The ‘click to enlarge‘ feature only works for the two photos.


Let me make it easy for those who refuse to acknowledge the silver manipulation. Simply explain why 8 traders, mostly domestic and foreign banks, would hold short the equivalent of 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the world’s annual production—and a third of all the silver bullion that exists—at prices below the average primary cost of production and nearly 70{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} below the price levels of four years ago.

How could such a concentrated short position be explained in legitimate terms — and what would be its purpose? What effect would such a large short position have on the price of any commodity — and how do you see it being resolved if it wasn’t permanent?

I don’t expect any serious answers to such questions, as it appears to be easier to malign the questioner as a conspiracy theorist instead, but I know these questions have never been addressed in a straightforward manner by anyone who denies the silver manipulation.  Silver analyst Ted Butler: 07 February 2015

It was another day where the gold price ‘failed’ to break above its 200-day moving average.  Of course it would have if the price had been allowed to trade freely.  Of course silver wasn’t allowed to advance either — and it’s price has been creeping sideways in a more or less straight line for seven trading days in a row.

Here are the 6-month charts for all four precious metals, plus copper…so you can see all this for yourself.  The ‘click to enlarge’ feature helps with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I see that gold’s rally in the first two hours of trading once New York opened at 6:00 p.m. yesterday evening, got turned lower shortly before 8 a.m. China Standard Time on their Thursday morning — and it has been meandering quietly lower since — and is down $2.30 an ounce at the moment.  It was mostly the same for silver — and it’s down 7 cents.  Platinum got the same 8 a.m. Shanghai treatment — and it’s down 4 dollars.  Palladium has bucked the trend — and is up a dollar at the moment.

Net HFT gold volume is already pretty healthy at 40,000 contracts — and that number in silver is pretty decent as well, at just under 8,500 contracts.

The dollar index made it down to the 100.37 mark by around 8:45 a.m. CST in Far East trading.  It has rallied a bit since, but is off its current high tick…such as it is…and is down 6 basis points as London opens.

Well, ‘da boyz’ were all over gold and silver like white on rice right from the COMEX open until about ten minutes after the Fed minutes news.  They certainly weren’t taking any prisoners — and I must admit that I was surprised by how light the volume was on the rallies that came after that event.  But as robust as those rallies were, gold wasn’t allowed above its 200-day moving average — and silver was closed unchanged.  This is hardly accidental — and it’s my opinion that whoever was doing the buying in that rally, were smart enough [or careful enough] to stop before their respective prices broke above Tuesday’s close.

Using the past as prologue, I’d guess that we’ve seen the tops of the current ‘rallies’ in gold — but as silver analyst Ted Butler pointed out in his mid-week review yesterday…”A wide variety of different factors appear to be converging in the silver market that promise a dramatic upward revaluation in price in the relative near future. Unfortunately, based upon some of those same factors, even the most powerful upward revaluation might first be temporarily subject to a sudden sell-off. But the important point is that regardless of whether we first see a deliberate jab to the downside in price, the factors dictating sharply silver prices ahead appear overwhelming. Moreover, there are other factors suggesting the timeline for a serious price liftoff has also been shortened.

So we wait some more.

And as I post today’s effort on the website at 4:03 a.m. EDT, I note that the gold price didn’t do much in the first hour of trading in London — and it’s down $2.20 the ounce.  Silver is up a few pennies — and down only 5 cents now.  Platinum has gained a dollar — and is only down 3 bucks at the moment.  Palladium has gone from up a buck, to down a buck.

Net HFT gold volume has risen to just over 47,000 contracts — and that number in silver is a tad under 10,000 contracts, with no roll-over/switch volume out of May worth mentioning.

The dollar index, which was down 6 basis points at the London open, blasted higher in minutes — and is now up 17.  So far this rally has had no impact on precious metal prices, but that may change as the Thursday session moves along.

I have no clue as to how the precious metals will fare today, but it’s a certainty that all the price/volume activity that matters will occur starting when JP Morgan et al begin trading at the 8:20 a.m. EST COMEX open.

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


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