Silver Halted Pennies Below Its 50-Day Moving Average

31 May 2017 — Wednesday


The gold traded flat at the 6:00 p.m. EDT open in New York on Monday evening.  It rallied a few dollars between 9 and 11 a.m. CST on their Tuesday morning — and the price began to edge lower from there.  The low tick of the day came at 8:30 a.m. in New York.  It rallied a few bucks from there until the equity markets opened at 9:30 a.m. EDT — and didn’t do much for the rest of the Tuesday session after that.

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

Gold closed in New York yesterday at $1,262.80 spot, down $3.80 on the day, net of Monday’s 10 cent gain.  Net volume was around 140,000 contracts, although it’s really hard to calculate this number with any degree of accuracy during the last several day of the month when there’s big roll-over/switch volume.

The silver price didn’t do much in Far East trading up until  shortly before 2:30 p.m. China Standard Time on their Tuesday afternoon.  It spiked up a bit at that point — and shortly before London opened, the algos got spun — and the low tick of the day [in the spot month] was set shortly before 9:30 a.m. in New York.  It was allowed to rally [under opposition] for about an hour, but after that the price wasn’t allowed to do much, as it chopped sideways for the remainder of the Tuesday session.

The high and low ticks in this precious metal were reported as $17.205 and $17.465 in the July contract.

Silver finished the Tuesday trading session in New York at $17.38 spot, up a penny from Monday’s close — and pennies below its 50-day moving average.  Net volume was pretty hefty at around 66,000 contracts.

Platinum was up a few dollars by around 9:30 a.m. CST on their Tuesday morning, but from thereon in, it was non-stop price pressure right into the 5:00 p.m. EDT close in New York on their Tuesday afternoon.  Platinum finished the day at $937 spot, down 16 dollars from its Monday close.

The palladium price was sold down four bucks as soon as trading began at 6:00 p.m. EDT on Monday evening in New York.  From there it chopped more or less sideways until around 9 a.m. in New York.  Then away it went to the upside, with the high tick of the day coming minutes before 2 p.m. in the thinly-traded after-hours market.  Palladium closed at $804 spot — and up 6 bucks from it’s close on Monday — and back above the $800 spot mark again.

The dollar index closed very late on Monday afternoon in New York at  97.43 — and began to head sharply higher the moment that trading began at 6:00 p.m. EDT on Monday evening just a little while later.  It was up to the 97.70 mark within an hour — and it chopped sideways from there until it jumped up to its 97.78 high tick by around 2:20 p.m. China Standard Time on their Tuesday afternoon.  Then down it went, with the 97.22 low tick coming shortly after 4:30 p.m. in New York.  It rallied a bit into the close from there — and finished the day at 97.40…almost back to where it started from twenty-four hours prior.

And here’s the 6-month U.S. dollar index charts, which I post without comment.

The gold stocks gapped down a bit more than 2 percent at the open.  They rallied weakly from there until around 10:15 a.m. EDT — and then softened for most of the rest of the Tuesday session.  The low tick of the day came around 3:35 p.m. — and they ticked a bit higher from there into the close.  The HUI finished down another 1.63 percent.

It was mostly the same for the silver equities, except for the fact that they closed on their absolute lows of the day.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 2.08 percent.  Click to enlarge if necessary.

And here’s the 6-month Silver Sentiment/Silver 7 Index graph.  Click to enlarge for this chart as well.

As several subscribers have pointed out, the latest being Robert Kornblum while I was in Vancouver on the weekend — and this, in part, is what he had to say about the lousy price action in the precious metal equities in his e-mail to me on this issue…

“I think that we can lay much of the blame at the GDX / GDXJ rebalancing that will complete around mid June. 

“The GDXJ started off with about $1 billion in assets and over the past few years it grew to over $5B in assets.   This created a mess for them as putting that much money to work in junior miners caused the fund to hold up to 20{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of many miners.

“EFTs are great in up markets but very painful in down markets.   David Stockman has been warning about EFT redemptions accelerating flash crashes for some time now.

“I have shares in XXX Gold which had a large position in both GDX and GDXJ, so I have been tracking the rebalancing.  I don’t have all of the days’ data, but here is a summary of what I do have.  Over the past 6 weeks or so since the rebalancing was announced the market value of  GDXJ has declined from over $5B to $3.8B.   These redemptions have impacted the price of junior miners in a big way and that is one reason why they have been such underperformers.

I had a chat with Keith Neuymeyer of First Majestic Silver/First Mining Finance fame when he attended GATA’s reception at the Lion’s Gate Pub after the conference in Vancouver on Monday afternoon — and he also spelled it out chapter and verse.  Apparently the folks at GDXJ are supposed to be making an announcement of what’s left to sell sometime next week — and then they’ll be doing all these trades on June 19…or something to that effect, because I wasn’t writing this down.

But it appears a certainty that this underperformance issue may not be resolved until GDXJ has rebalanced its stock portfolio.

The CME Daily Delivery Report for First Day Notice in the June gold contract showed that 808 gold and 37 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  In gold, the three largest short/issuers were JP Morgan, ADM and Morgan Stanley with 675…73…and 58 contracts; all out of their respective client accounts.  There were eighteen long/stoppers in total, with the three largest being JP Morgan with 292 for its client account…HSBC USA with 150 contracts for its client account as well…and ABN Amro with 111 contracts for its client account.  JP Morgan was a ‘no show’ as an issuer or stopper in gold for its own in-house [proprietary] trading account yesterday.  In silver, the only two short/issuers were Morgan Stanley and Advantage…with 31 and 6 contracts out of their respective client accounts.  There were nine long/stoppers in total, with no real standouts in the group.  For all this action, which is worth a quick look if you have the interest, the link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in June cratered by 58,362 contracts, leaving 6,410 left, minus the 808 contracts mentioned just above.  Silver o.i. in June fell by 255 contracts, leaving 396 still around, minus the 37 contracts mentioned in the previous paragraph.

There were no reported changes in either GLD or SLV on Tuesday.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on insider their gold and silver ETFs as of the close of trading on Friday, May 26 — and this is what they had to report.  Their gold ETF shed a smallish 739 troy ounces — and their silver ETF fell by only 5,371 troy ounces.

There was a sales report from the U.S. Mint yesterday.  They sold 500 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — and 200,000 silver eagles.

There was very little activity in gold over at the COMEX-approved gold depositories on the U.S. east coast on Friday.  All the activity was 1,500 troy ounces received at Brink’s, Inc. — and I shan’t bother linking this amount.

It was very busy in silver, as 1,734,801 troy ounces were reported received, plus 573,060 troy ounces were shipped out the door.  In the ‘in’ category, there was one container load each dropped off at Brink’s, Inc…HSBC USA…and Canada’s Scotiabank.  In the ‘out’ department, there was 340,619 troy ounces shipped out of Scotiabank — plus another 216,323 troy ounces shipped out of Brink’s, Inc…and 16,117 out of Delaware.  The link to that action is here.

It was a decent day at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  All of the activity was at Brink’s, Inc. of course — and they received 21,38 of them, plus they shipped out 4,808 kilobars.  The link to that activity, in troy ounces, is here.

I don’t have all that many stories today — and since today was a travel day for me, I’m happy about it.


U.S. Durable orders down 0.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in April

Demand for long-lasting factory goods fell in April, hinting at potential speed bumps for the manufacturing sector.

Orders for durable goods–products designed to last at least three years, such as trucks and computers–decreased 0.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} from the prior month to a seasonally adjusted $231.17 billion in April, the U.S. Commerce Department said Friday.

Economists surveyed by The Wall Street Journal had expected a 1.8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} decline for orders last month. In March, orders rose a revised 2.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

New orders for civilian aircraft, a category that swings wildly from month to month, dragged down the headline figure. In April, such orders tumbled 9.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

Other sectors also retrenched, including primary and fabricated metals, machinery and electrical equipment. In one sign companies are investing, new orders for computers jumped 5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} from a month earlier.

This WSJ story from Friday morning was picked up by the Internet site — and it’s something I found in yesterday’s edition of the King Report.  Another link to it is here.

Paul Singer Warns “All Hell Will Break Loose

It took Paul Singer’s Elliott Management less than twenty-four hours to raise $5 billion earlier this month, however it is safe to say he won’t be using any of that cash to buy stocks at current prices, or even BTFD. Instead, as he writes in his Q1 letter to investors, the legendary hedge fund manager thinks “that it is a good time to build a significant amount of dry powder,

The reason for that is if, or rather when, Trump’s pro-growth agenda fails to be implemented, “all hell will break loose” and that a recession looms as the artificial crutches propping up risk assets are pulled out:

Given groupthink and the determination of policy makers to do ‘whatever it takes’ to prevent the next market ‘crash,’ we think that the low-volatility levitation magic act of stocks and bonds will exist until the disenchanting moment when it does not. And then all hell will break loose (don’t ask us what hell looks like…), a lamentable scenario that will nevertheless present opportunities that are likely to be both extraordinary and ephemeral. The only way to take advantage of those opportunities is to have ready access to capital.

Isolating the impact of the “Trump Put” as described recently by Deutsche Bank, Singer writes that “although the growth agenda of the Trump administration is slow to get off the ground, markets still anticipate that much of it will be enacted, sooner or later.” And yet, according to most metrics, the Trump trade has already been priced out of most markets with the notable exception of equities, which as Bank of America pointed out in a note last week, are now the “last one standing”.

This commentary was posted on the Zero Hedge website at 1:30 p.m. EDT on Tuesday afternoon — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

Lance Roberts: This Market Is Like a Tanker of Gasoline…and passive ETFs and margin debt will set it afire

Lance Roberts, chief investment strategist of Clarity Financial and chief editor of Real Investment Advice has authored a number of impressive recent reports identifying potential failure points in today’s financial markets.

In this week’s podcast, Lance explains how the massive flood of investment capital into passively-managed ETFs, along with record amounts of margin debt, has the potential to set the markets afire:

Fundamentally, there’s nothing different in today’s markets because, at the end of the day, they are about evaluations, earnings — those types of things. Technically, the market is very different today because of quantitative easing, computerized trading etc.

    What we see are two things happening, in particular, that people should be paying attention to. One is that investors are herding into passively-managed ETFs now, which is creating a dislocation between the underlying realities of individual stocks and their prices, because the piling into ETFs is requiring stocks like Facebook, Amazon, and Google to be bought in much greater volumes than they otherwise would. And people are making an assumption that there will always a buyer for every seller in the market.

    Now that’s absolutely true. But it’s often argued by the mainstream media that “For every buyer there’s a seller, so it doesn’t matter when the market turns. You’ll be okay.” But you won’t, because, yes, at some point there is a buyer for every seller, but it always begs the question: At what price? And because of all the piling into these ETFs, when the market eventually breaks, yes, there will be a buyer; but that buyer could be at many percentages lower than where prices were before. We could very well see a vacuum appear in prices, with a gap down so sharp and so fast that it not only paralyzes most investors who may be hoping to get a little bit of recovery to sell into, but then will start triggering margin calls.

This audio interview with Chris Martenson showed up on the Internet site on the weekend, but was recorded on May 26.  It runs for a longish 45:30 minutes, but is certainly worth your while if you have the time.  There’s an executive summary embedded in the link as well.  This story comes to us via Brad Robertson — and another link to it is here.

For Every Action, There Is an Equal and Opposite Reaction — Jeff Thomas

Newton’s third law of motion has proven the test of time, since he first stated it in 1686. If we were to apply the same concept to political history, we might say,

A nation that rises to a great height will fall to an equally great depth.

At first glance, that seems to be merely clever wordsmithing. However, historically, it does seem to play out exactly that way. Most countries tend to ebb and flow as to their prosperity, but those that rise to great heights, particularly those that rise to become empires, tend to crash with a weight equal to their strength at the height of their power.

If we consider that point when we observe the present dominant empire, the U.S., we would expect that, at the point that the empire is teetering on the edge of collapse, we would see signs of rot within the government, the economy, and even within many of the people. The closer we get to the tipping point, the more this would be borne out by lunacy in the media, the courts, even the hallowed halls of education.

So, let’s have a peek into present events – events that may not be the most crucial in the state of the union but are indicators that the system is self-destructing.

This very interesting commentary by Jeff was posted on the Internet site on Monday sometime — and another link to it is here.

Deutsche Bank Downgrades European Banks to Underweight

In what some may find an amusing change in outlook by the bank that less than a year ago was on insolvency’s door, its stock at record lows, this morning Deutsche Bank downgraded its peers, other (ostensibly more sound) European banks, to underweight from benchmark on expectations that fading euro-area growth momentum will weigh on the sector over coming months.

At the same time, DB strategist Andreas Bruckner also Upgraded energy to overweight from underweight as recent USD weakness points to near-term upside for oil. He also upgraded construction materials to overweight from underweight as the recent correction has gone too far given sector is already priced for severe slowdown in global growth and a sharp rise in U.S. credit spreads even as they have tightened.

The German bank also downgrades tech to benchmark from overweight given fair price after outperformance and USD weakness, DB notes however that within tech, Deutsche Bank prefers semiconductors.

It also downgraded airlines to benchmark from overweight, and downgrades consumer durables to underweight from benchmark on expected slowdown in global PMI momentum, fading U.S. consumer confidence and high valuation.  Finally, it reduced its underweight in mining as sector is below fair value estimate.

Wow!  If this isn’t a classic case of the pot calling the kettle black, I don’t know what is.  You have to wonder where D.B. got the gonads from to make a call like that on its peers — and keep a straight face about it at the same time.  This Zero Hedge article appeared on their website at 7:21 a.m. on  Tuesday morning EDT — and it’s the third contribution of the day from Brad Robertson.  Another link to it is here.

Summit deadlock as Putin meets Macron

First summit between Russian President Putin and new French President gives no indication of any meeting of minds on any major issue.

Russian President Putin’s unexpected trip to France, where he was received by the newly elected French President, Emmanuel Macron, must constitute one of the strangest meetings in international relations.

Prior to the meeting Macron admitted that it was impossible to solve international problems without Russia.  As is however usually the case with Western leaders who say this, Macron followed up this statement of the obvious not with any indication of any willingness to meet the Russians halfway, but with a long cascade of accusations and demands.

Apparently there were agreements on setting up some sort of anti terrorist liaison centre and something which will be called the Russian-French Trianon Dialogue civil forum.  These are the sort of things leaders agree when they have nothing substantive to talk about, and nothing else to show.

Macron’s threats are empty.  The question of whether sanctions against Russia are ever increased will be made in Washington and Berlin, not in Paris, and if the U.S. or the Germans ever decide to lift the sanctions France will have no option but to agree regardless of what happens in Ukraine.  The events of August 2013, when President Obama called off a military strike on Syria following the Ghouta chemical attack, leaving France’s then President Hollande high and dry, shows that France is in no position to set ‘red lines’ or make threats independently of the U.S. in Syria.

This commentary by Alex Mercouris put in an appearance on Internet site on Monday sometime — and I thank Roy Stephens for sharing it with us.  Another link to it is here.

Moldova at war with itself over expulsion of Russian diplomats

An internal crisis has erupted in Moldova with the country’s President openly disagreeing with a major decision made by Moldova’s Foreign Ministry.

The Foreign Ministry of Moldova recently expelled Russian diplomats in a move that the Russian Foreign Ministry said has nothing to do with Russia but everything to do with Moldova’s internal politics.

Moldova’s President is generally seen as taking a less negative view towards Russia than his predecessor.

This comes less than a week after Estonia expelled a set of Russian diplomats under equally unexplained circumstances.

More importantly though, this comes about a week after Ukraine closed its border with Transnistria, a self-governing entity sandwiched between south-west Ukraine and Moldova. Transnistria has been patrolled by peacekeepers including Russian peacekeepers since the end of a war  fought over control of the territory in 1992.

This very interesting news item was posted on Internet site on Monday sometime — and it’s another offering from Roy Stephens — and another link to it is here.

Not-so-Great Wall: Kiev to Turn Russian Border Into “Insurmountable Fortress

Oleksander Turchinov, the head of Ukraine’s National Security and Defense Council, a powerful advisory body to the Ukrainian president, has proposed building “an insurmountable fortress” on Ukraine’s border with Russia. Russian commentators laughed themselves to tears over Kiev’s latest maniacal proposal.

In a statement addressed to Ukraine’s Border Guard Troops on the occasion of their national holiday, Turchinov said that while the country’s border with the E.U. should be made into a convenient and reliable one, and equipped in accordance with Western standards, the eastern border with Russia must become “an insurmountable fortress.”

Today, it is important to equip the state border in the West according to European standards – [making it] a convenient and reliable one, and in the East –to create an insurmountable fortress. I am confident that our border guards will adequately fulfill all the tasks set by the country!” the official said.

Turchinov made the remarks during the celebration of Border Guard Day on Sunday, a holiday that is also celebrated in Russia, and has its origins in the Soviet period (a period in history that Ukraine’s post-Maidan leaders openly despise).

This isn’t the first time Ukrainian officials have voiced grand ambitions about building a ‘great barrier’ along the frontier with Russia.

This very interesting news item, with some very decent embedded photos, showed up on the Internet site at 1:31 p.m. on Monday afternoon Moscow times, which was 6:31 a.m. in Washington — EDT plus 7 hours.  I thank Larry Galearis for pointing this one out — and another link to it is here.

The Gold Chronicles: May 2017 Interview with Jim Rickards and Alex Stanczyk

Topics include…partial list:

* Forecast for June 13th, 14th FOMC Meetings
* Cryptocurrencies – bubble or bull market?
* Update on IMF SDR’s
* Fed’s plan to normalize the balance sheet
* Expecting confluence of rate hikes and tightening monetary conditions to create recession and force easing by end of 2017
* Why today’s portfolios are at risk in the same way as LTCM
* Gold price behavior during liquidity crisis
* Liquidity in the gold market

This 1:00 hour long audio interview showed up on the Internet site on May 30 — and I thank Harold Jacobsen for sending it our way.  There is no transcript.   Another link to it is here.

Gold miner Petropavlovsk steps up defence against boardroom coup

Chairman and co-founder Peter Hambro has warned that a shake-up demanded by Russian group Renova and institutional investors M&G and Sothic is not in the best interests of ordinary shareholders.

Renova, the industrial conglomerate led by billionaire Viktor Vekselberg, which has gold mining assets in the same eastern Russian region as Petropavlovsk, says the current board “does not endorse principles of good corporate governance”.

It is pushing for the removal of two-thirds of the board at the company’s annual general meeting on June 22.

Renova, M&G and Sophic hold around 30pc of the company’s shares.

Mr Hambro is stepping down as chairman after more than 20 years to be succeeded by non-independent director Andrew Vickerman, but intends to stay on the board.  Renova, M&G and Sothic have opposed the re-election of both.

This news item was posted on the Internet site at 1:06 p.m. BST on their Tuesday afternoon — and I thank Chris Powell for pointing it out.  Another link to it is here.

Hong Kong needs around-the-clock gold trading

The HKEX has presented proposals for two new gold futures products, to be launched as early as July, which would trade 16 hours a day. But brokers say that might prove too short.

The gold market trades around the clock. This is why our customers are trading at CME Group (Chicago Mercantile Exchange) in the United States, which trades 23 hours a day,” said Alfred Yeung Ping-kwan, founding chairman of Glory Sky Group, which trades gold and stocks for investors in Hong Kong.

HKEX this month said it would start offering two new gold futures contracts — one in U.S. dollars the other in yuan — with physical delivery.

This will be the third attempt by the local bourse to launch gold futures contracts.  The last was during the financial crisis in October 2008. But the contract was scrapped in March 2015 after drawing little interest and recording virtually no turnover in 2014.

I wish them well, but they’re so far behind everyone else on this issue, I doubt that this will meet with any greater success than its predecessors.  This gold-related news item appeared on the South China Morning Post website at 5:42 p.m. CST on their Tuesday afternoon, which was 5:42 a.m. in New  York — EDT plus 12 hours.  I found it embedded in a GATA dispatch — and another link to it is here.

Who are the biggest buyers of gold in India?

The latest report from the World Gold Council says that gold demand from India was what supported global gold demand in the first quarter of 2017. Indian purchases of gold jewellery in the first quarter of 2017 accounted for a little over a fifth of world jewellery demand. That is completely out of proportion to India’s share of world gross domestic product (GDP), which is around 3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} or so, in current U.S. dollars. During Q1, 2017, India’s demand for gold jewellery was 92.3 tonnes, compared to 22.9 tonnes for the U.S. Investment demand for gold in the form of bars and coins was 31.2 tonnes in Q1 2017, compared to 16.2 tonnes for the U.S.

India’s hunger for gold is not surprising—people have been complaining about the “drain of gold” into India for ages, starting with Pliny the Elder, the Roman writer of the 1st century A.D. But where in India does the gold go to? And who are the people who buy all this gold jewellery?

The short answer to the first question is, in one word: Kerala.  For a longer answer, turn to Chart 1, which shows the monthly per capita expenditure on gold ornaments among the Indian states. The data have been taken from the National Sample Survey Office (NSSO)’s survey on Household Consumption of Various Goods and Services in India, 2011-12. Only data from the states have been taken here and Union territories have not been included.

The first thing that catches the eye in the chart is how different Kerala is from the rest of India in terms of spending on gold ornaments. For instance, not only does rural Kerala top the rankings for spending on gold ornaments, its per capita spending is six times higher than the state that ranks number 2 — Goa. Indeed, rural Kerala’s per capita spending on gold ornaments is far ahead of the total per capita spending of all the other six top states by gold consumption shown in the chart.

This very interesting — and very worthwhile news item about gold consumption in India showed up on the Internet site at 14:02 p.m. IST on their Tuesday afternoon, which was 4:02 a.m. EDT in New York on their Tuesday morning — EDT plus 10 hours.  I found this story on the Sharps Pixley website — and another link to it is here.

Australia’s Q1 gold output down on Q4 2016…but… — Lawrie Williams

Australia is the world’s second largest gold producer after China and, according to specialist Melbourne-based consultancy, Surbiton Associates, its mines produced 298 tonnes of gold in 2016.  World No. 1, China, produced 463.7 tonnes according to figures from GFMS.  (The latter’s estimate of Australian production in 2016 was slightly lower than that from Surbiton Associates at 287.3  tonnes, but is at least in a similar range) – we might defer to Surbiton’s figure being a local consultancy which specialises in Australian statistics only.

Surbiton’s latest assessment of Australian production is for the March quarter of the current year which puts the production figure at 71.5 tonnes, around 8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} down on the December quarter last year of 77.5 tonnes but, as Surbiton indirectly points out this doesn’t necessarily mean that Australian production for the full year will be lower than last.  The March quarter is a couple of days shorter than other quarters containing the short February month and mine output was also affected by some particularly wet weather which impacted particularly on several of Australia’s largest gold mines.  Surbiton’s Dr Sandra Close notes in particular reduced output because of the wet weather at Newcrest’s Telfer operation, which was down by 35,000 ounces, Newmont’s Tanami mine, down 25,000 ounces, Anglogold/Indepence’s Tropicana mine, which saw a fall of 22,000 ounces and Newmont/Barrick’s Kalgoorlie Super Pit down by 16,000 ounces.

But despite this disruption the country’s total March quarter gold output was similar to that of the 2016 March quarter which came in at 71 tonnes according to Surbiton’s figures of a year ago, which suggests Australia’s total gold production is still on the rise.  With a mega producer like Australia still showing gold production strength, this confirms the assessment by the major consultancies that peak gold may well not be with us yet, particularly given Q1 tends to be the lowest quarter for gold production in the Australian year.  On this basis there has to be a good chance that Australia’s full year 2017 gold output could exceed 300 tonnes.

This worthwhile commentary by Lawrie put in an appearance on the Sharps Pixley website on Monday — and another link to it is here.


Now that I’m out of my own photos, I have to go back on the Internet for today’s critter, one of America’s most well-known birds…the northern mockingbird.  It was a suggestion by subscriber Tom Fiske while I was in Vancouver on the weekend.  Being from Canada, I’d never seen/heard one before until I was walking around in a residential area of New Orleans when I was at a gold conference there many moons ago.  I had to ask a passer-by what it was.   I saw them again when I was at GATA’s Washington Conference in April of 2008.  The ones I saw there were making Arlington National Cemetery their home.  Click to enlarge.


With Tuesday being the last trading day of the May contract, I would be very hesitant to read too much into yesterday’s price action, although it is tempting.

Silver did break above its 50-day moving average a couple of times for a few minutes, a few times during the Tuesday session, but in every instance it got hauled down — and silver was closed just pennies below it.  Just looking at the silver chart from Kitco for the Tuesday trading session, it certainly had the all the hallmarks of traders defending a short position…or perhaps as Ted pointed out in his Saturday column, JP Morgan was there to prevent the breakout from happening at that juncture.

Here are the 6-month charts for all four precious metals, plus copper, once again — and the click to enlarge feature helps a bit with the first four graphs.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price was sold down about 4 dollars going into the morning gold fix in Shanghai.  It rallied from there by a few dollars going into the afternoon gold fix over there — and is currently down $1.50 an ounce — and off its high at the fix by a bit.  It was the same general price path for silver, except it was sold down about 15 cents into the morning Shanghai gold fix.  It has rallied weakly into the p.m. fix, but once that was done, it was sold lower immediately — and is down 13 cents at the moment.  Platinum was up a few dollars the moment that trading began in New York at 6:00 p.m. EDT on Tuesday evening in New York.  It was up 5 bucks at the afternoon gold fix in Shanghai, but was spiked lower at that point — and it recovered most of those loses almost immediately, but it’s only up 2 dollars at the moment.  Palladium hasn’t been allowed to do much during Far East trading — and it has traded mostly around unchanged — and is up a buck as the Zurich open approaches.

Net HFT gold volume is around 27,500 contracts, with virtually all of that in the new front month for gold, which is August.  Net HFT silver volume is very decent already…approaching 11,000 contracts.

The dollar index has been chopping quietly sideways in a very tight range since trading began in New York yesterday evening — and it’s up 2 basis points as London opens.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and I would certainly suspect, based on the price action during this holiday-shortened week, that we’ll see further increases in the commercial net short positions in both silver and gold.  It only remains to be see how bad they are — and what the ‘Big 4’/JPM have been up to, particularly in silver.

And as I post today’s efforts on the website at 4:02 a.m. EDT, I note that the precious metals continue to edge higher, as the dollar index has now begun to fade a bit.  At the moment, gold is down only 20 cents, silver is down 9 cents currently.  Platinum is up 3 dollars — and palladium is up 2 bucks.

Net HFT gold volume is now approaching 33,000 contracts — and that number in silver is sneaking up on 12,500 contracts.

Now that a bit more time has passed, it’s easy to see that the dollar index began to head quietly lower starting around 1:50 p.m. China Standard Time on their Wednesday afternoon — and is now down 5 basis points after the first hour of London/Zurich trading, but is off its current low tick by about 6 basis points.

Today is the last trading day of the month and, as usual, I have no clue as to what will occur from a price perspective as the Wednesday trading session moves along…particularly in New York.

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