World Silver Production Declines in 2016

12 May 2017 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Gold was sold down to its low tick of the day two hours after trading began at 6:00 p.m. EDT on Wednesday evening in New York, which was 8 a.m. in Shanghai.  From there it chopped quietly higher for the rest of the Thursday session, but it was obvious that any rallies, no matter how tiny, weren’t going to be allowed to get far.

And, for the second day in a row, the low and high ticks aren’t worth looking up.

Gold finished the Thursday session in New York a $1,224.80 spot, up $6.00 on the day.   Net volume was pretty heavy, all things considered, at just under 166,000 contracts — and roll-over/switch volume out of June and into future months was very decent.

Silver’s low tick of the Thursday session was set at the same time as gold’s — and it rallied quietly until around 1 p.m. CST on their Thursday afternoon.  At that juncture, the rally developed more legs, but the moment that the price went vertical around 11:20 a.m. BST in London, it was obvious that the short buyers and long sellers were in wait.  Once trading began on the COMEX, ‘da boyz’ took care of business — and the New York low was set around 9:15 a.m. EDT.  It chopped quietly higher from there until around 3:20 p.m. in the thinly-traded after-hours market — and didn’t do a thing after that.

The low and high ticks were recorded by the CME Group as $16.165 and $16.39 in the July contract.

Silver was closed in New York yesterday at $16.305 spot, up 13.5 cents from Wednesday’s close.  Net volume was pretty heavy once again at just over 56,000 contracts.  Ted mentioned this heavier volume on the phone yesterday, and was wondering out loud if there were new players dabbling in the futures market all of a sudden.

And here’s the 5-minute silver tick chart courtesy of Brad Robertson.  You can see the volume begin to pick up at 23:30 p.m. Denver time — and that was the start of the rally at 1:30 p.m. China Standard Time on their Thursday afternoon.  Volume picked up substantially once JPMorgan et al began to lean on the price around 6:00 a.m. MDT, which was 8:00 a.m. in New York.  Once the COMEX closed at 11:30 a.m. MDT/1:30 p.m. EDT, the volume fell back to background levels.

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 didn’t look like it did a lot yesterday, but if you look closely, it was a mini version of what happened in silver, complete with the sell-off at the COMEX open.  Also like in silver and gold, the low tick was set at 8 a.m. in Shanghai.  But in New York, once their low was in, the price chopped quietly higher until shortly after 1 p.m. EST — and it traded sideways after that.  Platinum closed at $916 spot, up 6 bucks on the day.

But palladium was a carbon copy of what happened in silver.  The only major difference was that the rally after the London p.m. gold fix had to get dealt with in the usual manner — and it was.  It rallied a bit from there into the COMEX close, before also trading flat for the rest of the New York session.  Palladium was closed yesterday at $801 spot, up 6 dollars on the day.  It finished the day off its high tick by 8 bucks.

The dollar index closed very late on Wednesday afternoon in New York at 99.63 — and didn’t do much until 1 p.m. China Standard Time on their Thursday afternoon.  It headed south from there, with its 99.49 low tick coming shortly before 9 a.m. in London.  Then away it went to the upside, topping out at the 99.89 mark a minute or so after 8:30 a.m. in New York.  It was sold down into the 10 a.m. EDT London p.m. gold fix — and edged unevenly higher from there into the close.  The dollar index finished the Thursday session at 99.65…up 2 whole basis points.

And here’s the 6-month U.S. dollar index chart for your entertainment.

The gold shares began to rally right from the get-go on Thursday morning, with their collective highs coming about 10:40 a.m. EDT.  They edged lower by a bit until about 12:50 p.m. — and then edged quietly higher from there into the close.  The HUI finished up 2.54 percent.

The silver equities did even better, as Nick Laird’s Silver Sentiment/Silver 7 Index closed higher by 3.64 percent.  Here’s the 6-month Silver Sentiment/Silver 7 Index chart showing the move.  Click to enlarge.

The CME Daily Delivery Report showed that 8 gold and 131 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, there were no issuers or stoppers worth mentioning on that small volume.  In silver, there were three short/issuers…International F.C. Stone, ABN Amro and ADM…with 89, 39 and 3 contracts…all out of their respective client accounts.  The only two long/stoppers worth mentioning were ABN Amro once again with 57 contracts, plus ADM with 62 contracts.  JP Morgan picked up 2 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in May declined by 3 contracts, leaving 39 still open, minus the 8 mentioned just above.  Wednesday’s Daily Delivery Report showed that 10 gold contracts were actually posted for delivery today, so that means that another 10-3=7 gold contracts were added to May.  Silver o.i. in May dropped by 26 contracts, leaving 204 still open, minus the 131 mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 55 silver contracts were actually posted for delivery today, so that means that another 55-26=29 silver contracts were added to the May delivery month.

Silver contracts issued and stopped so far in May: 4,417….Number of additional silver contracts added to the May delivery month so far: 1,045….remaining silver open interest in May: 73 contracts.

There were no reported changes in GLD again yesterday — and as of 6:30 p.m. EDT yesterday evening, there were no changes in SLV, either.

After a big sales report on Wednesday, there was no sales report from the U.S. Mint on Thursday.

There was almost no gold movement over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received — and only 2,411.250 troy ounces/75 kilobars [U.K./U.S. kilobar weight] were shipped out of Scotiabank.

It was equally quiet as far as silver was concerned.  Nothing was reported received — and only 43,370 troy ounces were shipped out the door.  All of that activity was at Brink’s, Inc. — and I shan’t bother linking it.

That wasn’t the case over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They took in 3,125 of them — and they shipped out another 4,553.  All of this action was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Here are two charts that Nick Laird passed around yesterday evening.  I haven’t posted these monthly charts for a while, because there hasn’t been much to see, but there certainly is in the April charts.  These are the Intraday Average Price movements for both gold and silver during April, calculated for every 2-minute time segment during each trading day of the month.  If there was no price management scheme going on, there would be nothing to look at in either metal.  But the fact that there are huge swings above and below unchanged during certainly times of the day…on average every day…it’s all the evidence you need to prove manipulation.

In gold, for April,  there was always price pressure between 1 a.m. in Shanghai — and the London p.m. gold fix.  Once the ‘fix’ was in…and they don’t call it a ‘fix’ for no reason…the price was allowed to rally until a minute or so after London closed.  Then it was sold quietly lower until shortly after the COMEX close.  Then it rallied into the 5:00 p.m. close of New York trading.  After that, the price chopped…on average every day…more or less sideways into the morning gold fix in Shanghai.  Then it gets sold down from there, as the process is repeated, on average, every day of the month.  This trend is only visible the odd time during any particular trading day, but when you average the trading days out with 2- minute slices — and then chart these changes — then it’s laid bare for all to see…or who wish to see it.  Click to enlarge.

In silver, for April, the price management scheme is even more stark — and on a different timetable than gold.  You don’t need me or anyone else to tell you that JP Morgan et al went to work minutes after the noon silver fix in London.  The silver price was engineered lower until minutes after London closed…which also happened to be the top of the rally in gold in the chart above.  Then silver had an up/down move between the London close and the COMEX close — and that was its low tick of the day.  From there it crawled higher until minutes before the 5:00 p.m. close of trading in New York, where it was hammered lower once again.

Wash, rinse, spin…repeat.  Click to enlarge.

I have very few stories for you today, so your final edit won’t take much time.


CRITICAL READS

David Stockman: Trump’s Tax Plan Never Had a Chance

David Stockman joined Fox Business and Maria Bartiromo on Mornings with Maria to discuss President Trump’s tax plan efforts and what he viewed as a massive calamity unfolding in Washington.

The Fox Business host began the conversation by asking what he thought on the Trump tax plan proposal. Stockman pressed, “I think it is a one page, $7.5 trillion wish list that has no chance of being enacted and is pretty irresponsible this late in the game.” The host then fired back by asking how the former Reagan budget director placed a price tag on the plan without a score from the Congressional Budget Office.

The author fired back, “The corporate is at 15{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, the pass through rate on all unincorporated business is at 15{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} and that will cost roughly $4 trillion. Doubling the standard deduction will cost over $1 trillion. Getting rid of the alternative minimum will cost nearly $1 trillion.”

This commentary by David, along with the embedded video interview, showed up on the dailyreckoning.com Internet site yesterday — and I extracted it from a Zero Hedge article that was posted on their Internet site at 9:50 p.m. EDT last night.  Another link to it is here.


Retail Bloodbath: Macy’s Crashes After Woeful Results, Drags All Department Stores Lower

Retailer woes continued this morning when Macy’s reported another round of pitiful quarterly earnings, which saw comp store sales at owned plus licensed stores tumble -4.6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, below the already depressed estimate of -3.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. On an “owned” basis, the miss was even worse, with Q1 comps sliding -5.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e},, almost twice as bad as the consensus estimate of -3.0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

Earnings were just as bad with the company reported Q1 adjusted EPS 24c on sales of $5.34 billion, missing estimates of $5.45 billion, barely making the lowest estimate; the profit margin also disappointed with gross profit printing at 38.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, below the 38.84{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} estimate. Meanwhile, with Q1 inventory of $5.63 billion rising from $5.4 billion at year end, more margin eroding liquidation sales are likely on deck.

The only good news was that Macy’s maintained its fiscal 2017 sales and earnings guidance, which however was not nearly enough for the market, which has dragged Macy’s stock lower by 12{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, to the lowest since October 2011.

Macy’s (and Kohl’s which also reported and missed) numbers were so bad, they have dragged down the entire department store sector, with stocks sliding in the premarket as follows: Nordstrom -3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, J. C. Penney -4.6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. Earlier Dillard’s also reported 1Q net sales shortfall, with comps. down 4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} y/y.

Macy’s is just the first of many retailers set to report what are likely to be very disappointing results. According to FactSet just over a third of the companies that have yet to report actual results for the first quarter are retailers. This is how the retail sub-industry earnings are poised to look as they come out: needless to say General merchandise and food retail stores, as well as Department Stores are poised for a bloodbath.

This is the first of several Zero Hedge stories that come our way courtesy of Brad Robertson.  This one put in an appearance on their website at 8:54 a.m. EDT yesterday morning — and another link to it is here.


Sears is Dying – It’s Sad – and bad! :: Dennis Miller

Once a mighty giant retailer, Sears is now on life support and dying. Many investors are also going to suffer.

My affinity for Sears began when my first son was born. He needed special shoes – a new pair every three months. My wife was in tears; the shoes cost over half my weekly earnings; we didn’t have the money. They were not covered by insurance, and Visa or Master Charge didn’t exist.

Sears was the only major retailer that carried the shoes. I went to their credit department and applied for a credit card. I told the lady I just took a second job and she could see we were desperate. I was surprised, she asked questions about my family, not just employment information. She approved our first credit card with a credit limit well beyond anything we deserved. I have been forever grateful.

Sears began as a mail order business. Families anxiously awaited receiving their Sears catalog in the mail. As kids we joked about how many of us picked out the same school clothes from the catalog.

With the evolution of shopping malls, Sears was the most sought after “anchor” tenant. Developers would go to Sears early on. Once they committed, lenders gave them more favorable terms and a mall was built. Other retailers would quickly sign on, vying for the best locations to take advantage of the shopper traffic.

Today Sears’ management is closing stores, desperately trying to restructure and convince investors, suppliers and shoppers they will survive. Business Insider reports, “Sears suppliers fear the company is going bankrupt”.

This very worthwhile commentary by Dennis was posted on his website on Thursday morning — and another link to it is here.


Another Poor Auction: 30-Year Paper Received Badly With Big Tail, Sliding Bid-to-Cover and Indirects

One day after the ugliest 10Y auction in a long time, the US sold $15 billion in 30Y paper in what was yet another “deplorable” bond auction.

The refunding stopped with a sizable tail, with the high yield printing at 3.05{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, 1.3bps wide of the 3.037{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} When Issued, with a light bid/cover, and small buy-side take-down. Indirect bidders took down 59.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the auction today, and Direct bidders took down 5.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the auction.

The high yield of 3.05{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} was above last month’s 2.938{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in April but below the 3.17{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in March. It also tailed the When issued at 1pm.

The details: the bid to cover of 2.191 was the lowest since November, and below both April’s 2.226 the 2.31 6 month average. Total bids of $37.8b for $20.0b in bonds sold vs $26.8b in bids for $12.1b in bonds sold at the previous.

Indirect bidders took down 59.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, which also was the lowest since November, down from 64.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in April and below the 6 month average of 62.8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. Directs took down 5.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, also a drop from April and below the 8.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} 6 month average.  This left Dealers with 35.6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the final allocation, the highest going back all the way to September.

This brief 2-chart Zero Hedge news item appeared on their Internet site on Thursday afternoon at 1:17 p.m. EDT — and I thank Brad Robertson for finding it for us.  Another link to it is here.


Why James Comey had to go

A curious belief in some circles of journalism holds that if both sides are equally unhappy with your story, you’ve done a good job. I never subscribed to that approach, and thankfully, President Trump didn’t when it came to the performance of James Comey.

The suddenly former FBI boss was long cavalier about making enemies among both Democrats and Republicans, as if going rogue repeatedly proved his rectitude. On occasion it did, but Comey increasingly wore his self-righteousness on his sleeve, confident he was too big to fire.

That was his fatal mistake. And it’s why Trump made the right decision to show him the door.

Comey’s power-grabbing arrogance is why I called him “J. Edgar Comey” two months ago. His willingness to play politics, while insisting he was above it all, smacked of Washington at its worst. He was the keeper of secrets, until they served his purpose.

As such, the president did to Comey what no president had the courage to do to J. Edgar Hoover. Five presidents wanted to fire Hoover, with Harry Truman accusing him of running a police state and of blackmail. But all were afraid of Hoover, so he died in office.

This very interesting and very worthwhile news item appeared on The New York Post website at 10:16 p.m. EDT on Tuesday night.  I found it in today’s edition of the King Report — and another link to it is here.


Water, Water Everywhere — U.S. Drought Conditions Hit Record Low

After reaching record drought conditions just a few short years ago (with over 60{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the nation more than abnormally dry), the USDA’s Drought Monitor site shows that the second-wettest April on record has shrunk the area of the U.S. suffering from drought to a new low of less than 5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

As Bloomberg reports, the milestone was mentioned in the U.S. Department of Agriculture’s monthly report Wednesday on American farm production and may bode well for crop yields.

According to the gauge, there’s an “extreme drought” in south-central Florida and it’s “abnormally dry” in parts of the Southwest.

The map also shows the grain and soybean belt from Iowa to Ohio looks to have plenty of soil moisture — maybe even too much in flooded areas — as the growing season moves into full swing.

This brief Zero Hedge article, with an excellent chart embedded, showed up on their website at 9:25 p.m. on Thursday night EDT — and another link to it is here.


You Look Remarkably Calm For Someone Who Issues €2.5 Trillion Out of Thin Air” — Dutch Politician to Draghi

Used to a fawning press corps and clueless politicians, perhaps Mario Draghi was expecting a warm greeting, a series of softball questions from Dutch lawmakers, and some late night entertainment on Wednesday when the ECB president made a rare visit to the Hague. Instead, what followed, was an “unenviable grilling” from Dutch MPs for nearly two hours in the country’s parliament today which, as the FT said, left the usually implacable Italian confrontational and riled up as tempers flared and Dutch politicians probed Draghi on the ECB’s record of transparency, and attacked policies they said subsidized southern European countries and harmed Dutch pensioners.

The reason Draghi occasionally travels to national capital cities is to defend the bank’s actions: most recently to Berlin, in late September. That trip helped to soothe German lawmakers as the ECB prepared to extend its stimulus again. Draghi was hoping to do the same with Dutch lawmakers who have been far less critical of the ECB’s actions compared to their German peers, in the past.

He was in for a surprise.

You still believe this [QE program] is fully within [the ECB’s] framework and you have not been doing any government financing, even though you [will have] bought €2.5 trillion of debt by the end of the year?” asked Pieter Omtzigt, a member of the center-right Christian Democratic Appeal, a sarcastic look spreading on his face.

Naturally, Draghi strongly defended the ECB’s decisions, which he said had helped support households throughout the region, including in the Netherlands. He also brushed off calls for a swift exit from QE.

This Zero Hedge commentary from 2:48 p.m. EDT on Thursday afternoon is certainly worth your while if you have the interest — and there’s a rather amazing chart in there which is worth a look as well.  I thank Brad Robertson for pointing it out — and another link to it is here.


Arizona legislature votes to scrap gains tax on gold and silver coins

Want a way to avoid taxes on your capital gains?

State lawmakers gave final approval to legislation today providing a way to do just that. But it remains unclear whether Governor Doug Ducey is willing to go along.

Arizona law says if someone invests in something, whether art, collectible cars, or commercial real estate, and then sells it for more than the cost, that difference is subject to state income taxes.

What HB2014 seeks to do is carve out an exception when people invest in gold and silver coins produced by the U.S. Mint.

But Rep. Mark Finchem, R-Oro Valley, said this isn’t some tax scam.

He said it reflects his belief that the purchase of gold and silver coins with federal reserve notes — those dollar bills now printed by the government — is simply an exchange of one form of currency for another. Finchem said that would be like taxing someone for exchanging two dimes and a nickel for a quarter.

But it remains to be seen if the governor will approve it, dear reader.  This precious metals-related story put in an appearance on the azcapitoltimes.com Internet site at 11:55 a.m. MDT on Wednesday morning — and I found it embedded in a GATA dispatch.  Another link to it is here.


Palladium set to overtake platinum – GFMS

The palladium price is poised to exceed the platinum price for the first time since 2001, Thomson Reuters said on Tuesday with the publication of its GFMS Platinum Group Metals Survey 2017.

The price gap between platinum and palladium – which averaged just over $1 000/oz between 2007 and 2012 – is now at about $100/oz.

In our view, it’s more a case of when, not if“, Thomson Reuters precious metals demand manager Ross Strachan said of the prospect of palladium overtaking platinum.

Describing platinum as the worst performing precious metal in the year to date, Strachan said palladium’s persistent large deficit would see it above $850/oz well before year-end.

Last week saw platinum plunge precipitously to $893/oz, its lowest price ratio to gold since 1987, and at the time of going to press, its price was still in the doldrums at $910/oz.

Like gold and silver, dear reader, the reason that platinum and palladium are at these prices, is because of ‘da boyz’.  This story, filed from Johannesburg, was posted on the engineeringnews.co.za Internet site on Tuesday — and is mostly bulls hit — and I’m posting this story only because of the embedded photo.  I thank ‘aurora’ for sharing it with us — and another link to it is here.


Astounding increase in trading on Shanghai Gold Exchange in just 3 years — Ronan Manly

Gold researcher Ronan Manly reports on the astounding increase in trading on the Shanghai Gold Exchange in its first three years, more astounding because the People’s Bank of China does not buy gold there but in markets where the purchases can be more easily concealed. Manly’s report is headlined “SGE Trading Volumes Surged by 43{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in 2016 Led by OTC and Deferred Trading“.

This longish commentary by Ronan was posted on the Singapore-based Internet site bullionstar.com — and I found it on the gata.org Internet site.  Another link to it is here.


World 2016 silver mine output sees first drop in 14 years: GFMS

Global silver mine production dropped in 2016, falling for the first time in 14 years while demand for the precious metal in the solar sector surged to a record, said Johann Wiebe, senior metals analyst for Thomson Reuters GFMS on Thursday.

Silver mine production fell 0.6 percent to 885.8 million ounces, the lowest since 2002, largely due to lower by-product output the from lead, zinc and gold sectors as well as lower silver scrap supply, said Wiebe.

Wiebe highlighted results of the World Silver Survey 2017, which was released by the Silver Institute and produced by GFMS.

Total silver supply in 2016 fell by 32.6 million ounces to 1.007 billion ounces, the survey showed.

On the demand side, solar panel and ethylene oxide sectors, growing industrial applications for silver, rose to records at 76.6 million ounces and 10.2 million ounces, respectively.

This Reuters new story was posted on their Internet site at 9:10 a.m. EDT on Thursday morning EDT — and it’s something I found on the Sharps Pixley website.  Another link to it is here — and there’s a terrific photo embedded as well.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is a brown pelican — and these photos are courtesy of Mark O’Brien.  It’s impossible not to spot these birds at some point if you live on any of the coasts of North America, as they are just about everywhere.  Click to enlarge.


The WRAP

As for [today’s COT Report, Tuesday’s] cut-off capped a reporting week in silver that featured another five consecutive days of new price lows, the same as the prior two reporting weeks and the longest continuous decline on record. In gold, new price lows were made every day of the reporting week, as well. As such, it should be expected that Friday’s report will feature continued managed money selling and commercial buying, as this is the sole reason prices have declined[Emphasis mine – Ed]

In gold, total open interest through yesterdays close is down by nearly 30,000 contracts for the reporting week and, accordingly, I would up my estimate for commercial buying/managed money selling in gold from the 30,000 to 40,000 contract estimate on Saturday to 40,000 contracts or more (hopefully a lot more). I am also expecting a significant reduction in the total commercial short position in silver but it’s hard to come up with a precise number.

It’s a little different in silver this week as total open interest, unlike the case in gold, rose almost 7,000 contracts through yesterday’s cutoff. Since we can be fairly certain that the commercials weren’t selling or adding to short positions, the most logical candidates for increased short selling would be the managed money shorts and other speculative short selling, or an increase in spread open interest. I’m starting to think there may have been another increase in managed money shorting based upon the increase in total open interest — and a giant increase in managed money short selling in platinum in last week’s COT report.Silver analyst Ted Butler: 10 May 2017


With gold and silver prices miles below their respective moving averages, it’s a certainty…as Ted said on the phone yesterday…that the price activity didn’t involve the Managed Money traders or any other technical-type funds, as no moving averages that the technical funds either buy or sell at, were violated yesterday.  There were also no new intraday or closing low prices in any of the precious metals, either.

Of course it’s always better when prices are rising, regardless of what’s driving them, as it makes us feel better about our stock portfolios.  I know that it certainly improves my frame of mind.

Here are the 6-month charts for all four precious metals, plus copper — and there’s not a lot to see.  But you should check out how far below the moving averages that matter…the 50 and 200-day…we really are, especially in silver.  The click to enlarge feature helps a bit with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price didn’t do much for the first three hours after New York opened at 6:00 p.m. EDT on Thursday evening.  Then it rallied a bit into the morning gold fix in Shanghai, which is 10:15 a.m. CST, I believe.  It then chopped sideways until the 2:15 p.m. afternoon gold fix in Shanghai — and then it jumped up a bit more.  Currently gold is up $2.50 an ounce.  Silver traded flat until 10 a.m. China Standard Time — and then rallied sharply into the Shanghai morning gold fix as well — and then followed the same price path as gold, right up to and including the afternoon gold fix over there, when it jumped up a bit more as well.  At the moment, silver is up 9 cents the ounce.  Both silver and gold are off their highs by a bit as London opens.  Platinum began crawling slowly higher starting around 9 a.m. in Shanghai — and then jumped up about five bucks shortly after 1 p.m. CST.  It has been chopping quietly sideways since — and is 7 bucks at the moment.  Palladium was up 4 bucks by the Shanghai gold fix, but has given up half that amount — and is up 2 dollars as the Zurich open approaches.

Net HFT gold volume is around 26,500 contracts — and that number in silver is around 8,800 contracts.

The dollar index didn’t do much until around 8:40 a.m. China Standard Time on their Friday morning — and at that juncture began to head lower.  It’s 99.55 current low tick came minutes after 10 a.m. in Shanghai, which was pretty close to the time of their morning gold fix over there.  It has been inching quietly higher since — and is down 6 basis points as London opens.

Today is Commitment of Traders Report day — and I must admit that I’m looking forward to seeing what’s in it like a kid waiting to open the big present on Christmas Day.  I’ve already commented on what I’ll be looking for…especially commercial short covering amounts — and what the Managed Money traders are doing, both on the long and short side.  Of course what’s going on in the Other Reportable and Nonreportable/small trader categories will also be worth looking at.

Whatever the numbers show, I’ll have them for you in tomorrow’s column — and whatever Ted has to say about them will, of course, be definitive.

And as I post today’s efforts on the website at 4:03 a.m. EDT, I note that after selling off a hair going into the London open, gold is a bit higher now — and up $3.50 an ounce.  It’s the same for silver — and it’s back to up 9 cents.  Ditto for platinum and palladium — and the latter is up by 6 bucks …and the former by 5.

Net HFT gold volume is now up to a bit over 33,000 contracts — and that number in silver is up to 11,200 contracts.

The dollar index, which had been down 6 basis points at the London open, has rallied a bit more — and is up 1 basis point.

Today is Friday…the last trading day of the week.  I have no clue as to what might happen during the remainder of the Friday session, but with the COMEX futures market set up the way it is, particularly in silver, absolute nothing will shock me when I roll out of bed later this morning.

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

Ed