JP Morgan et al Continue the Price Pressure on Silver

28 April 2017 — Friday


The gold price was sold quietly and unevenly lower during the Thursday trading session, with the low tick of the day coming at the London p.m. gold fix.  From there, it was allowed to rally until minutes before the 11 a.m. EDT London closed — and it crawled quietly lower from that point until trading ended at 5:00 p.m. in New York.

The high and low ticks definitely aren’t worth looking up.

Gold finished the Thursday session at $1,263.50 spot, down $5.50 an ounce, but gold’s 200-day moving average remains untouched.  However, a $15 dollar move lower would take out it — and the 50-day m.a. all in one go.  I expect that to happen soon, but the price move will certainly exceed that amount.  Despite the lack of any serious price action, net gold volume was way up there once again, at 207,000 contracts.

Ted commented on the phone yesterday that the possibility exists that this above event may not occur at all, because they’re two different precious metals — and have vastly different structures in the COMEX futures market.

We’ll see how it turns out, but in case you’re wondering, I’ve never been right yet when I’ve put my marker down in a different spot than Ted does.  His track record over the last thirty or so years is pretty much unblemished.

The silver price was sold lower the moment that trading began at 6:00 p.m. EDT in New York on Wednesday evening.  The selling pressure became more noticeable shortly after the noon silver fix in London — and again starting shortly after 9 a.m. EDT in COMEX trading.  The low tick of the day was set at precisely 4:30 p.m. in the thinly-traded after-hours market.

The high and low in this precious metal was recorded by the CME Group as $17.54 and $17.29 in the new front month, which is July.

When I was checking out yesterday’s high and low prices on the CME’s website, I noticed something that Ted points out from time to time — and that’s the spread between the current month and the new front month, July.  At the moment it’s 7 cents, which is enormous.  Ted says that it’s deliberately set by ‘da boyz’ to punish the long holders as they roll into the new, or future delivery months.  Of course the short holders earn that spread, which is another way of ripping the faces of the Managed Money traders — and an encouragement for them, or any other long, to sell their positions vs. rolling them over.

Silver was closed on Thursday at $17.23 spot, down two bits from Wednesday.  Net volume is hard to calculate during the last three trading days of any month, but my reckoning is that it was around the 54,000 contract mark, which was pretty hefty.  However, I would guess that about 6,000 contracts of that amount were new spread trades being put on.

And here’s the 5-minute silver tick chart courtesy of Brad Robertson — and the absolute low tick of the day that came in after-hours trading, didn’t make it on today’s chart, as it occurred at exactly 2:30 p.m. Denver time — and about five or ten minutes after Brad sent it.  Like on Wednesday, their were pockets of higher volume during Far East and London trading but, as is always the case, the volume that really mattered occurred while New York was open, starting at 8:20 a.m. EDT, which is 6:20 a.m. Denver time on the chart below.

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 EDT.  The ‘click to enlarge‘ feature is a must.

The platinum price traded flat in the Far East up until around 2 p.m. CST on their Thursday afternoon.  The price pressure began at that point — and the $940 spot low tick was printed shortly after the London p.m. gold fix was done for the day.  It rallied a bit into the COMEX close but, like the other two precious metals, was sold a bit lower in after-hours trading.  Platinum finished the day at $942 spot, down another 7 bucks — and at a new low for this move down.

The palladium priced traded in lock-step with platinum right up until the noon silver fix in London, which was 1 p.m. in Zurich.  Then, like on Wednesday, away it went to the upside.  The price got stepped on briefly shortly after 9 a.m. in New York, but rallied anew starting just before Zurich closed,  It’s high tick came at the COMEX close and, like platinum, was sold down a dollar or two in the thinly-traded after-hours market.  Palladium finished the Thursday session at $815 spot, up 6 dollars on the day.

The dollar index closed very late on Wednesday afternoon in New York at 98.99 — and chopped mostly lower until it was rescued at the 8:00 a.m. BST London open.  It began to rally a bit from there, with a big down/up spike that started at 8:30 a.m. in New York — and the 99.81 low tick was set at that point…rescued by the usual ‘gentle hands’.  [I would suspect that the cause of that activity was the release of economic news of some type.] The index topped out at the 99.33 mark around the 10 a.m. EDT London p.m. gold fix — and it chopped quietly lower from there until around 3:25 p.m.  It crawled higher into the close from there, finishing the Thursday session at 99.15 — and up 16 basis points on the day.

And here’s the 6-month U.S. dollar index, which is provided for entertainment purposes only.

The gold shares sold off right from the get-go in New York yesterday morning, with their respective low ticks coming around 10:45 a.m. EDT.  The crawled slowly and unevenly higher from there for the rest of the Thursday session, as the HUI closed down another 2.43 percent.

The silver equities gapped down at the open — and then followed their golden brethren around like the proverbial shadow for the rest of the day.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 2.88 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that zero gold and 1 lonely silver contracts were posted for delivery within the COMEX-approved depositories today.  ADM issued it — and International F.C. Stone stopped it.

First Day Notice Day for May on Day 1 showed that 15 gold and 1,421 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, the sole short/issuer was ABN Amro — and the none of the six long/stoppers are worth mentioning.  In silver, there were four short/issuers in total — and all contracts were issued out of their respective client accounts:  JP Morgan 816…International F.C. Stone 467…ABN Amro 100…and ADM with 38 contracts.  There were 20 long/stoppers in total — and the three largest were ABN Amro, picking up 434 for its client account…Macquarie Futures is back, stopping 418 contracts for their own account — and International F.C. Stone stopped 150 for their client account.  The link to yesterday’s Issuers and Stoppers Report, which is definitely worth a look, is here.

I’m sure that Ted will immediately note the fact that JP Morgan, as a stopper for its own account, was a no-show.  If they weren’t a stopper yesterday, I doubt very much that they’ll show up during the remainder of the May delivery month.  And if they weren’t around for the second month in a row, I would hazard a guess that their days of accumulating physical silver may be drawing to a close.  We’ll find out in the fullness of time.

I look forward to hearing what Ted has to say about all of this in his weekly review tomorrow.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in April dropped from 113 contract to zero — as did the open interest for silver in April…from 8 contracts to zero.  Open interest in gold for May declined by 62 contracts, leaving 498 still open, minus the 15 mentioned just above. Silver o.i. in May took another big hit, falling all the way down to the 3,409 contract mark, minus the 1,421 contracts mentioned in the previous paragraph.

There was a smallish withdrawal from GLD yesterday, as an authorized participant took out 28,551 troy ounces.  And after two days of huge deposits in SLV on Tuesday and Wednesday, there were no reported changes in SLV on Thursday.

Once again there was no sales report from the U.S. Mint.

It was all zeros in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday, as nothing was reported received, or shipped out.

But the activity in silver just doesn’t stop, as 601,615 troy ounces were received — and another 1,881,425 troy ounces were sent out the door for parts unknown.  All of the ‘in’ activity, one container load, ended up at JP Morgan.  Two containers…1,263,331 troy ounces…ended up at Canada’s Scotiabank.  There was another container dropped off at CNT totalling 604,920 troy ounces — and 13,174 troy ounces were shipped out of Delaware.  There was also a small category change at Delaware as well…as they transferred 55,837 troy ounces from the Registered category — and back into Eligible.  The link to all of the above silver action is here.

JP Morgan’s total COMEX silver stash is now up to 106.2 million troy ounces.

It was a fairly decent day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They received 5,051 of them, plus they shipped out 2,677.  As usual, all of this activity was at Brink’s, Inc., and the link to that, in troy ounces, is here.

I only have a tiny handful of stories today, so even if you read all of them, it won’t take too long.


Atlanta Fed Throws in the Towel: Cuts Final Q1 GDP Forecast to Just 0.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}

Well that was fast: literally seconds ago we posted JPM’s Q1 GDP forecast revision, saying “while we wait to see if the Atlanta Fed will cut its final Q1 GDP estimate ahead of tomorrow’s official print to 0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} or negative.” At precisely the same time as we hit the publish button, the Atlanta Fed came out with its revised forecast and it’s a doozy: after starting its Q1 GDPNowcast at 2.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, rising as high as 3.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, and plunging recently as low as 0.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, the Atlanta Fed has “thrown in the towel” on the quarter in which the Fed hiked rates, and while not negative – or 0.0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} – it was about as close as it could go without the Fed losing all credibility for having hiked in a contraction quarter.

From the Atlanta Fed:

Latest forecast: 0.2 percent — April 27, 2017

    The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.2 percent on April 27, down from 0.5 percent on April 18.

    The forecast of first-quarter real consumer spending growth fell from 0.3 percent to 0.1 percent after yesterday’s annual retail trade revision by the U.S. Census Bureau. The forecast of the contribution of inventory investment to first-quarter growth declined from -0.76 percentage points to -1.11 percentage points after this morning’s advance reports on durable manufacturing and wholesale and retail inventories from the Census Bureau.

This Zero Hedge article was posted on their website at 9:59 a.m. on Thursday morning EDT — and it comes courtesy or Richard Saler.  Another link to it is here.

U.S. trade deficit widens in March

An early look at U.S. trade patterns in March shows a 1.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} widening in the nation’s trade deficit.

The trade gap in goods—services are excluded—widened to $64.8 billion in March from $63.9 billion in February, the government said Thursday in its advanced report. This widening of the deficit only partially reversed a sharp narrowing in February. The goods deficit totaled $68.6 billion in January.

The U.S. trade deficit often gyrates in the first quarter depending on the date of the Chinese lunar new year, a long but annually shifting holiday during which most of the country’s business shuts down. The U.S. has a bigger trade deficit with China than any other country, by far. The full trade report, which includes services, will be released next week.

Wholesale inventories, meanwhile, slipped 0.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in March and retail inventories rose 0.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, according to advanced data. The government issues the advanced data to make it easier to estimate gross domestic product.

The widening in the trade deficit may subtract a bit from gross domestic product in the first quarter. The government will release that report on Friday. Economists surveyed by MarketWatch suspect that the economy decelerated to a 1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} annual growth rate in the first quarter from a 2.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} rate in the prior three-month period.

This article appeared on the Internet site at 9:39 a.m. EDT on Thursday morning — and I found it in yesterday’s edition of the King Report.  Another link to it is here.

Pending Home Sales Drop In March — Stagnant For 2 Years

Contracts to buy previously owned U.S. homes declined in March after rising a month earlier by the most since 2010, as perhaps the seasonal exuberance gives way to affordability constraints. Despite NAR’s comments that “home shoppers are coming out in droves this spring,” it is evident from the chart below that pending home sales have been stagnant for almost two years.

Regionally, only The South saw a sales increase:

  •  The PHSI in the Northeast decreased 2.9 percent to 99.1 in March, but is still 1.8 percent above a year ago.
  •  In the Midwest the index declined 1.2 percent to 109.6 in March, and is now 2.4 percent lower than March 2016.
  •  Pending home sales in the South rose 1.2 percent to an index of 129.4 in March and are now 3.9 percent above last March.
  • The index in the West fell 2.9 percent in March to 94.5, and is now 2.7 percent below a year ago.

This brief 2-chart Zero Hedge article showed up on their website at 10:11 a.m. EDT yesterday morning — and I thank Brad Robertson for sending it along.  Another link to it is here.

Robots, Retirees and Reality — Dennis Miller

Are robots a threat to our society? Can they take away our jobs, or manage our retirement nest egg safely? How will people earn money to buy goods?

In the early 1960’s I had the privilege of working for Leighton Wilkie, a lesser-known captain of industry. He and his brother invented the band saw and built a good size empire.

I was the youngest kid in the office when his secretary asked if I would “mind” driving Mr. Wilkie downtown. He had an important appointment and needed to review his notes.

On the way home he asked me dozens of questions. I must have done OK because I ended up doing many “special projects” for him. I cherished the time I spent with him.

This commentary by Dennis was posted on his Internet site on Thursday — and another link to it is here.

Trump Says NAFTA Pullout Still Possible If Renegotiation Fails

President Donald Trump said Thursday he’s still ready to pull out of the North American Free Trade Agreement if he can’t renegotiate better terms for the U.S. but that he decided to hold off on a decision after appeals from the leaders of Canada and Mexico.

I was going to terminate NAFTA as of two or three days from now,” Trump told reporters in the Oval Office. But he said he reconsidered after Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau both phoned him Wednesday asking him to renegotiate the deal instead. Those talks will start as soon as today, he said.

Trump also said a quick U.S. withdrawal “would be a pretty big shock to the system.

But Trump, who spoke as he met with visiting Argentinian President Mauricio Macri, added that “If I’m unable to make a fair deal for the United States–meaning a fair deal for our workers and our companies, I will terminate NAFTA.

This Bloomberg story appeared on their website at 5:47 p.m. Denver time on Wednesday afternoon — and was updated about seventeen hours later.  It’s the second contribution of the day from Roy Stephens — and another link to it is here.

There Will Be No Russophobia Reset — Pepe Escobar

In the end, there was hardly a reset; rather a sort of tentative pause on Cold War 2.0. Interminable days of sound and fury were trudging along when President Trump finally decided NATO is “no longer obsolete“; still, he wants to “get along” with Russia.

Just ahead of meeting U.S. Secretary of State Rex Tillerson in Moscow, President Vladimir Putin had stressed on Russian TV that trust (between Russia and the U.S.) is “at a workable level, especially in the military dimension, but it hasn’t improved.  On the contrary, it has degraded.” Emphasis on a pedestrian “workable,” but most of all “degraded” – as in the National Security Council releasing a report essentially accusing Moscow of spreading fake news.

At the apex of the Russia-gate hysteria, even before the extremely the controversial chemical incident in Syria and the subsequent Tomahawk show – arguably a cinematographic show-off — a Trump-conducted reset on Russia was already D.O.A., tomahawked by the Pentagon, Capitol Hill and media-misguided public opinion.

Yet only armchair Dr. Strangeloves would argue it’s in the U.S. national interest to risk a direct hot war against Russia — and Iran — in Syria.  Russia has all but won the war in Syria on its own terms; preventing the emergence of an Emirate of Takfiristan.

This commentary by Pepe put in an appearance on the Internet site at 8:08 p.m. Moscow time on their Thursday evening, which was 1:08 p.m. in Washington — EDT plus 7 hours.  I thank U.K. reader Tariq Khan for pointing it out — and another link to it is here.

Trump Warns of `Major Conflict’ If North Korea Diplomacy Fails

President Donald Trump said a “major conflict” with North Korea was possible if diplomatic solutions fail, although Senator John McCain said the U.S. leader understood that military action was a last resort.

There is a chance that we could end up having a major, major conflict with North Korea. Absolutely,” Trump said in an interview with Reuters. “We’d love to solve things diplomatically, but it’s very difficult.” He praised President Xi Jinping for pressing North Korea — China’s neighbor and ally — saying the Chinese leader was “trying very hard.

Trump spoke after U.S. national security leaders this week emphasized economic sanctions and diplomacy to persuade North Korea to dismantle its nuclear weapons and ballistic missile programs. At the same time, the U.S. is boosting its military presence in the area with an aircraft carrier battle group and submarine as it leaves open the option of striking first against Kim Jong Un’s regime.

For the time being, the U.S. government is bluffing,” said Andrei Lankov, a history professor at Kookmin University in Seoul. “They are essentially doing what the North Koreans have been doing for decades — saber-rattling and chest beating. The major target is not North Korea but China.

This Bloomberg article appeared on their website at 7:23 p.m. MDT yesterday evening — and was updated about two hours later.  I thank Swedish reader Patrik Ekdahl for sliding it into my inbox just before midnight Denver time last night.  Another link to it is here.

End of empire — Alasdair Macleod

Already, China dominates world trade. Her own economy is already significantly larger than that of the U.S. on the PPP estimates. While being the largest consumer of raw materials, China also exports more finished goods by value than any other country.”… Major-General Qiao Liang

In last week’s Insight article, America’s Financial War Strategy, I described how the Chinese government viewed the geopolitical scene. It is clear from earlier remarks by the Peoples Liberation Army’s senior strategist, Major-General Qiao Liang, that the view in Beijing is that America perpetuates her empire through the financial benefits to America from America’s actions against other nations, friend or foe. These actions can be either military or financial, or even both. This week, similar views were expressed in Moscow by Sergey Glazyev, a senior advisor to President Putin.

There are many questions that arise from last week’s analysis that I chose not to address, in the interest of focusing on the main theme. It concentrated on geopolitics and economics as the Chinese see them, financial and currency issues mentioned in passing. This article addresses perhaps the most important subsidiary issue, and that is how China visualises the future, in terms of monetary policy.

This is the second absolute must read in as many days from Alasdair — and he spends a lot of time talking about gold in this essay as well.  His last one, from a week ago, appeared in yesterday’s column — and this one showed up on the Internet site sometime on Thursday.  I thank Ellen Hoyt for bringing it to our attention — and another link to it is here.

China’s gold consumption up in Q1/2017

China’s actual gold consumption rose 14.73 percent to 304.14 tonnes in the first quarter of 2017 due to steady gold ornament sales and strong sales of gold bars, new data showed Thursday.

Thanks to strong demand around Chinese New Year, gold ornament sales rose 1.4 percent to 170.93 tonnes and gold bar sales surged 60.18 percent to 101.19 tonnes, the China Gold Association said.

The surge in gold bar sales came on the back of more people using them to hedge against risk as the public became more aware of its attributes, according to analysts.

Gold output in the first three months stood at 101.2 tonnes, down 9.29 percent from a year earlier, the association said.

The above four paragraphs are all there is to this short gold-related news item that I found on the Sharps Pixley website late yesterday afternoon.  It was posted on the Internet site on Thursday CST — and another link to the hard copy is here.


Today’s ‘critter’ is  North America’s little brown bat — and I’m featuring it because it’s the only bat we have in this area.  They’re fairly common — and I’ve found them roosting in our garden shed on many occasions during the summer months.  Many years ago, one of our cats…may he R.I.P…brought home a ‘dead’ bat instead of the usual mouse.  When he dropped this ‘gift’ at the top of the stairs, the creature suddenly revived — and began to fly all over the house.  The wife wasn’t at all amused.  I captured it with a towel after it landed on the living room drapes — and released it outside, unharmed, at least physically.  Click to enlarge.


Why then, is gold the unmentionable, four-letter word of economics? … The answer is threefold: A misunderstanding of the role of money; a misreading of history; and finally, visceral revulsion to the notion that a metal can do a better job of guiding monetary policy than a gaggle of finance ministers, central bankers and well-degreed economists.”  ~  Malcolm Forbes

Gold continued to drift sideways — and barely above its 200 and 50-day moving averages again on Thursday — and didn’t set either a new intraday or closing low price, either.  Why ‘da boyz’ aren’t active in the COMEX futures in gold to the downside is a mystery to me, as those moving averages are now so close you could reach out and touch them.  Of course that wasn’t the case for silver, as they closed it lower by 25 cents — and the intraday low was a few cents below that.  Another slice was taken out of the platinum salami as well — and palladium closed higher for the third day in a row.  Except for what’s happening in silver, the precious metal price action so far this week, is a mystery to me.

Here are the 6-month charts for all four precious metals, plus copper, once again — and it should be pointed out that silver’s low tick on Thursday came well after the COMEX close — and doesn’t appear on the Thursday doji on the chart below.  It will show up as part of Friday’s doji — and that chart will be in my Saturday column.  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 note that the gold price has been creeping unsteadily higher — and is up $1.60 the ounce at the moment.  It’s been the same for silver — and it’s up 7 cents.  Platinum is up 4 dollars — and palladium is up a buck as well, as Zurich opens.

Net HFT gold volume is just over 25,000 contracts, which is pretty light — and that number in silver is approaching 8,500 contracts — and virtually all this volume is in the new front month for silver, which is July.

The dollar index hasn’t done a lot since trading began yesterday evening in New York — and it’s been trading a handful of basis points either side of unchanged all day long in the Far East on their Friday.  It’s down 2 whole basis point as London opens.

Today, at 3:30 p.m. EDT, the latest and greatest Commitment of Traders Report shows up on the CFTC’s website.  It may be OK for gold, but it’s already out of date as far as silver is concerned, as it has been closed lower on both days since the cut-off at the close of COMEX trading on Tuesday.  But the report will certainly give an indication of what the commercial traders have been up to and, even more important, what the Managed Money longs have done during the reporting week.  I’ll have all this info for you tomorrow, along with Ted’s most valued comments as well.

And as I post today’s efforts on the website at 4:02 a .m. EDT, I see that the gold price hasn’t done much in the first hour of London trading — and at the moment it’s up $1.40 an ounce.  Silver is up 9 cents — and platinum and palladium haven’t done much in the first hour of Zurich trading — and are still up the same 4 dollars and 1 dollar per ounce that they were an hour ago.

Net HFT gold volume is around 28,500 contracts, which is only up a few thousand contracts in the last hour — and that number in silver is about 10,300 contracts.

The dollar index continues to crawl lower — and is currently down 10 basis points.

After the price action of the week so far, you’re guess is as good as mine as to what may or may not happen today.  It’s Friday — and the last trading day in April — so place your bets.

Enjoy your weekend, or what’s left of it if you live just west of the International Date Line — and I’ll see you here tomorrow.


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