Gold and Silver Rally as the Dollar Index Craters

23 November 2017 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price wandered around a dollar or so either side of unchanged until around 1 p.m. China Standard Time on their Wednesday afternoon — and then rallied about five bucks until 9 a.m. in London.  From there it didn’t do much of anything until just after 12:30 p.m. GMT — and at that juncture began to head higher with some authority.  The high tick of the day came at 2:40 p.m. EST in after-hours trading.  It was sold lower by a few dollars for the next thirty minutes or so — and then traded flat for the remainder of the day.

The low and high ticks were reported as $1,278.60 and $1,294.60 in the December contract.

Gold finished the Wednesday trading session in New York at $1,291.50 spot, up $11.50 from Tuesday’s close — and back above its 50-day moving average.  Gross volume was 482,836 contracts.  Net volume was pretty heavy once again, at something under 259,000 contracts — and roll-over/switch volume out of December and into future months was pretty chunky as well.

Here’s the 5-minute tick chart for gold, courtesy of Brad Robertson as usual — and as you can tell, volumes were pretty elevated everywhere yesterday, but particularly during the COMEX trading session where it really matters.  It’s obvious from these volume numbers that yesterday’s price rallies were met by the usual short and long sellers of last resort.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York – and 1 p.m. 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 silver price also chopped quietly sideways until minutes after 1 p.m. CST on their Wednesday afternoon.  It rallied to the $17 spot mark by 3 p.m. CST — and was held there until shortly after 9 a.m. GMT in London.  It was sold down a bit into the noon silver fix — and began to head higher the moment that the COMEX trading session opened in New York at 8:20 a.m. EST.  That rally was squashed by the time the afternoon gold fix in London was done for the day — and it chopped and flopped around, mostly sideways, after that.

The low and high tick in this precious metal was recorded by the CME Group as $16.925 and $17.15 in the December contract.

Silver was closed on Wednesday at $17.13 spot, up 19 cents on the day — and back above its 50-day moving average as well.  Gross volume was sky high at 117,995 contracts, but once all December switch/roll-over volume was netted out, volume cratered to just under 48,000 contracts, which is on the lighter side…relatively speaking, that is.

And here’s the 5-minute tick chart for silver, thanks to Brad R. — and as you can tell at a glance, volumes weren’t nearly as heavy for this precious metal as they were for gold.

Like for gold, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1 p.m. 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 as well.

Platinum was sold lower in morning trading in the Far East on their Wednesday.  Its low tick came at, or shortly after 11 a.m. CST.  It began to edge higher from there…in fits and starts…until the high tick was printed between 2 and 3 p.m. EST in after-hours trading in New York.  Then, like both silver and gold, it was sold lower until 4 p.m. — and from that point, traded flat into the close.  Platinum finished the Wednesday session at $937 spot — and up 5 bucks on the day.

Palladium didn’t do much of anything until minutes after 1 p.m. CST on their Wednesday afternoon — and like silver and gold, began to head higher.  A couple of attempts were made to rally the price up to, or over $1,000 spot during morning trading in Zurich, but both were turned aside.  It was sold lower from there until Zurich closed — and then it rallied anew, but was capped before it could make any more serious runs at the $1,000 spot mark.  From 11:15 a.m. EST, it was forced to chop sideways into the 5 p.m. close.  Palladium finished the Wednesday session at $997 spot, up 5 dollars from Tuesday.

The dollar index closed very late on Tuesday afternoon in New York at 94.06 — and began to head lower immediately.  It was down to around the 93.75 mark by precisely 9:00 a.m. GMT in London — and it rallied a bit from there until around 12:30 p.m. GMT.  From that point, the decline resumed in earnest, complete with a quick tick lower on the 2 p.m. Fed minutes.  The 93.21 low tick appeared to occur right at 4:30 p.m. in New York — and it rallied a small handful of basis points from there into the close.  The dollar index finished the day at 93.25 — and down 81 basis points from Tuesday.

And as has been the case all year, the precipitous decline in the dollar index was not being allowed to manifest itself to its maximum possible extent in the prices of the precious metals — and yesterday’s trading action was just another case in point…of which there are legion.

And here’s the 6-month U.S. dollar index…provided for its usual ‘entertainment value’ of course.

The gold shares gapped up a percent and change at the open — and then crawled quietly, but unenthusiastically higher until around 2:35 p.m. EST when the high tick for gold was set.  The stocks faded a hair into the close from there — and the HUI closed up only 1.42 percent.

The action of the silver equities was even less impressive.  They gapped up a percent at the open as well — and then gave back well over half those gains by minutes after 1 p.m. in New York trading.  They rallied a bit from there until the silver price was tapped lower a minute or so after 2:30 p.m. EST — and they chopped sideways into the close from that juncture.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index finished the Wednesday session up only 0.82 percent.  I was underwhelmed.  Click to enlarge if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index.  Click to enlarge.

The CME Daily Delivery Report showed that 11 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  ABN Amro was the largest of the three short/issuers, with 10 contracts out of its client account.  There were six long/stoppers in total, with the largest being Canada’s Scotiabank, with 4 contracts for their in-house/proprietary trading account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in November rose by 3 contracts, leaving 12 still open, minus the 11 mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery on Friday.  Silver o.i. in November decreased by 1 contract, leaving zero left — and since Tuesday’s Daily Delivery Report showed that 1 silver contract was posted for delivery on Friday…silver deliveries are now officially done for November.

With the November delivery month virtually done in gold, there won’t be much except dribs and drabs for deliveries for the remainder of the month.  And I just stated above, silver is already done.  First Day Notice for December deliveries is, according to Ted, one of the largest delivery months of the year — and that data from the CME Group is still a week away.  It could turn into quite an event.


Once again there were no reported changes in either GLD or SLV — and it was another day of no sales for the U.S. Mint as well.

It was also another day where there was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.

It was a different story entirely in silver, as 1,539,727 troy ounces were received — and 510,465 troy ounces were shipped out the door for parts unknown.  In the ‘in’ category, there was 334,653 troy ounces received at CNT — and one truck load…599,921 troy ounces…dropped off at HSBC USA.  The other truck load…605,153 troy ounces got left at Malca-Amit USA.  That’s their first receipt of silver since they opened their silver depository in New York several years ago.  In the ‘out’ category, there was 350,731 troy ounces that departed Canada’s Scotiabank — and another 159,734 troy ounces was shipped out of CNT.  Over at the Delaware depository, there was 127,890 troy ounces adjusted out of existence.  The link to all this action is here.

Over at the COMEX-approved gold kilobar depository in Hong Kong on their Tuesday, they reported receiving 405 of them — and shipped out 3,855.  As usual, all this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are three charts that Nick passed around on Tuesday, that I just didn’t have room for in Wednesday’s column.  The first one below shows Switzerland’s gold import and exports updated with October’s data.  During that month they imported 98.56 tonnes — and shipped out 139.92 tonnes.  Click to enlarge.

The next two charts shows the imports and exports broken down by country of origin in the first chart — and the destination of all gold exports in the second.  Lawrie Williams has commentary about this in the Critical Reads section just below — and if you don’t want to scroll down for it, it’s linked here as well.  Click to enlarge for both charts.

With Wednesday being the countdown for the big Thanksgiving holiday weekend in the U.S., there’s not a lot in the way of stories for you today, as yesterday was a huge travel day.  I do have the Cohen/Batchelor interview…sans the usual executive summary by Larry Galearis.  That will be forthcoming in my Saturday’s missive.


CRITICAL READS

Gold Jumps, Dollar Dumps After Dovish Fed Minutes

The dollar index had been falling in early trading – extending its free fall from the Nov 1st Fed statement – but legged down on the dovish minutes to the lowest in 5 weeks. Gold is extending its gains, above key technical levels and while the curve is steady, long-end bond yields are sliding modestly.

Today is the worst day for the dollar index since Sept 7th…And Gold has erased its plunge from Monday…Early weakness in bonds has been entirely reversed…

For now the machines have not figured out how to kick stocks higher…

This brief 4-chart Zero Hedge news item put in an appearance on their Internet site at 2:23 p.m. on Wednesday afternoon EST — and it comes to us courtesy of Brad Robertson.  Another link to it is here.


Core Capital Goods Orders Plunge Most in 13 Months

After rebounding from its July jolt, Durable Goods New Orders dramatically missed expectations in October (dropping 1.2% vs. expectations of a 0.3% rise). Perhaps even more concerning is the drop in Core Capital Goods Orders (-0.5% MoM vs expectations of a 0.5% rise) – the biggest drop in 13 months.

The June/July swing (Boeing orders) and storm bounce has gone and October’s preliminary print suggests a slowdown.

Aircraft orders tumbled:

  • Non-defense aircraft orders:  -18.6%
  • Defense aircraft orders:  -11.3%

Removing the impact of aircraft orders and defense spending, we have a problem in the real economy…

This is another brief 4-chart Zero Hedge article from yesterday morning.  It was posted on their website at 8:42 a.m. EST — and it’s also from Brad R.  Another link to it is here.


Hariri’s “Unresignation” as Seen in a Bizarre Photo With the Iranian Ambassador

During Wednesday’s independence day celebrations in Lebanon, Prime Minister Saad Hariri was bizarrely photographed in what appeared to be in a warm and enthusiastic handshake with Iran’s ambassador to Lebanon, Mohammad Fathali, while greeting dignitaries less than 24 hours after his plane touched down in Beirut following his bizarre two week detention in Saudi Arabia.

The photograph is receiving a lot of attention and circulation on Arab social media as ironically during his initial televised resignation speech from Riyadh he cited Iranian meddling and rising influence, even going so far as to suggest he could be assassinated in a nefarious Iranian plot. Yet now he appears surprisingly overjoyed standing in front of the Iranian ambassador.

But surely, based on the below photograph, the Saudi script is not unfolding exactly as planned. Not only did Hariri announce earlier on Wednesday that he will remain Lebanon’s prime minister, but he looks absolutely relieved to be back, and nothing close to being a man who actually fears possible assassination (as he previously declared in Saudi Arabia, likely under coercion).

Hariri addressed thousands of supporters during an independence day gathering and pledged to stay in Lebanon, while also declaring “Lebanon first“.

As we reported earlier, his initial shocking resignation, which President Michel Aoun had refused to formally accept, came amidst Saudi Crown Prince Mohammad bin Salman’s (MBS) aggressive crackdown within the royal family and against high officials, which resulted in the deaths of at least two princes, and the arrests of at least a dozen others.

In televised comments soon after arrival in Beirut, Hariri said that he “presented my resignation to President Aoun today and he urged me to wait” for more dialogue. “I showed responsiveness to this hope.” Hariri also denied reports that Riyadh forced him to step down. He says the claims that Saudi Arabia was keeping him against his will are merely “rumors.”

The situation in the Middle East is rapidly descending into farce, with MbS becoming the chief clown.  You couldn’t make this stuff up.  This story is also from Zero Hedge.  It showed up there at 5:24 p.m. EST on Wednesday evening — and another link to it is here.


The people have spoken,” says Zimbabwe’s new leader

Zimbabwe’s new leader Emmerson Mnangagwa told a cheering crowd in Harare on Wednesday that the country was entering a new stage of democracy following Robert Mugabe’s removal as president after nearly four decades in power.

Mnangagwa returned to the country earlier in the day, having fled for his safety when the 93-year-old former leader sacked him as vice president two weeks ago to smooth a path to the succession for his much younger wife Grace.

The people have spoken. The voice of the people is the voice of God,” Mnangagwa told thousands of supporters gathered outside the ruling ZANU-PF party’s offices in the capital.

“Today we are witnessing the beginning of a new and unfolding democracy.

Zimbabwe was once one of Africa’s most promising economies but suffered decades of decline as Mugabe pursued policies that included the violent seizure of white-owned commercial farms and money-printing that led to hyperinflation.

Call me skeptical, dear reader, but I’ll be very surprised if much changes once he’s sworn in.  This Reuters article, filed from Harare, was posted on their website at 10:46 p.m. EST on the Tuesday evening — and was updated around 2:30 p.m. EST yesterday afternoon.  It’s from Zero Hedge via Brad Robertson — and another link to it is here.


Tales of the New Cold War:  Five things more perilous to the U.S. than Russia — John Batchelor interviews Stephen F. Cohen

This week’s 2-part 40-minute audio interview was posted on the audioboom.com Internet site on Tuesday evening.

I don’t have the executive summary from Larry Galearis as of yet, but because it’s such a quiet news day, I thought that I’d include it in today’s column.  But if you don’t have time for them just now, they will return on Saturday.

The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.


NATO blunder ignites Turkish calls to leave alliance

A major blunder in NATO has brought bitter political rivals in Turkey into a rare demonstration of unity. Parties across the political spectrum are announcing their distrust of the international alliance.

President Recep Tayyip Erdogan spoke of the “major scandal,” as it is being referred to in Turkey, during an address to officials from his Justice and Development Party (AKP) in Ankara Nov. 17.

Erdogan said he had been informed by Chief of the General Staff Hulusi Akar and E.U. Affairs Minister Omer Celik that Mustafa Kemal Ataturk, the founder of the Turkish Republic, and Erdogan had been depicted as NATO’s enemies during a recent NATO military exercise in Norway.

He was referring to a military exercise held Nov. 8-17 in Stavanger, Norway, that, according to NATO, was “a Command Post/Computer Assisted Exercise without troops on the ground.

Once Erdogan heard of the insult, he ordered the withdrawal of the 40 Turkish officers who were to participate in the military exercise. Speaking to the AKP, he said, “You cannot have such an alliance or such an ally.”

This news story was posted on the al-monitor.com Internet site on Tuesday sometime — and I thank Roy Stephens for pointing it out.  Another link to it is here.


The irresistible rise of MBS…and his possible downfall — Pepe Escobar/Uwe Parpart

In a two-part analysis of the recent and ongoing revolutionary developments in Saudi Arabia instigated and executed by Crown Prince Mohammad bin Salman (MBS), Asia Times editor Uwe Parpart and roving correspondent Pepe Escobar recount the details and background of the recent MBS power grab and attempt to ascertain whether it will last. In a matter of days, MBS may ascend to the throne, leaving to his father, King Salman, the ceremonial role of Custodian of the Two Holy Mosques. The November 4/5 MBS power play was a prelude. What does it portend? Who masterminded it and drove it? Who will benefit? What does it mean for the world’s most volatile region? Below, part 1.

When the black limousines arrived in the dead of night on Saturday November 4, and into Sunday November 5, few of the Saudi princes, ministers, ex-ministers, military leaders, media moguls and top businessmen who had been asked to attend the posh Ritz Carlton hotel in Riyadh’s diplomatic district thought it wise to decline the invitation.
Conveyed by Saudi police, the invitations were issued by Crown Prince Mohammad bin Salman (MBS), chairman of a brand new Supreme Committee to investigate public corruption that was created by a series of royal decrees just hours before the arrests.

The Committee’s powers include:

“Investigation, issuance of arrest warrants, travel bans, disclosure and freezing of accounts and portfolios, tracking of funds and assets and preventing their remittance or transfer by persons and entities, whoever they might be.”

Further, “The Committee … may take whatever measures deemed necessary to deal with those involved in public corruption cases and take what it considers to be the right of persons, entities, funds, fixed and movable assets, at home and abroad, return funds to the state treasury and register property and assets in the name of state property.”

Part One of this commentary by Asia Times editor Uwe Parpart and roving correspondent Pepe Escobar, appeared on their Internet site at 1:38 p.m. Tuesday evening Hong Kong time, which was 12:38 a.m. on Tuesday morning in New York.  It’s worth your while if you have the interest.  I thank U.K. reader Tariq Khan for bringing it to our attention — and another link to it is here.


How Turkey, Iran, Russia and India are playing the New Silk Roads — Pepe Escobar

Vladimir Putin, Recep Tayyip Erdogan and Hassan Rouhani will hold a summit this Wednesday in Sochi to discuss Syria. Russia, Turkey and Iran are the three power players at the Astana negotiations – where multiple cease-fires, as hard to implement as they are, at least evolve, slowly but surely, towards the ultimate target – a political settlement.

A stable Syria is crucial to all parties involved in Eurasia integration. As the Asia Times reported, China has made it clear that a pacified Syria will eventually become a hub of the New Silk Roads, known as the Belt and Road Initiative (BRI) – building on the previous business bonanza of legions of small traders commuting between Yiwu and the Levant.

Away from intractable war and peace issues, it’s even more enlightening to observe how Turkey, Iran and Russia are playing their overlapping versions of Eurasia economic integration and/or BRI-related business.

Much has to do with the energy/transportation connectivity between railway networks – and, further on the down the road, high-speed rail – and what I have described, since the early 2000s, as Pipelineistan.

This rather involved commentary by Pepe would be less so if I knew the countries and cities in the Middle East/Central Asia as well as I knew those in North and South America.  It appeared on the Asia Times website at 5:19 a.m. Hong Kong Time on Tuesday morning, which was 4:19 p.m. EST on Monday afternoon in New York.  I thank Tariq Khan for this article as well — and another link to it is here.


The Cardinal Sin of International Finance — Nick Giambruno

As Doug Casey has correctly noted, the prime directive of any organism—whether it’s an amoeba or a person or a corporation or a government—is to survive.

That’s why the U.S. government protects the petrodollar so zealously. It needs the system to survive.

World leaders who have challenged the petrodollar recently have ended up dead…

Take Saddam Hussein and Muammar Gaddafi, for example. Each led a large oil-producing country—Iraq and Libya, respectively. And both tried to sell their oil for something other than U.S. dollars, before U.S. military interventions led to their deaths.

In October 2000, Saddam had started to sell Iraqi oil for euros only. Iraq said it would no longer accept dollars for oil because it did not want to deal “in the currency of the enemy.

A little over two years later, the U.S. invaded. Immediately after Baghdad fell to U.S. forces, all Iraqi oil sales were switched back to dollars.

That pretty much sums it up.  This absolute must read commentary by International Man senior editor Nick Giambruno put in an appearance on that website yesterday I believe — and it’s the final offering of the day from Brad Robertson.  Another link to it is here.


Gold mining firms set aside $360 million for South Africa silicosis law suit

Six gold mining firms, including Anglo American, have made a 5 billion rand ($361 million) provision to settle a class action law suit with thousands of miners who contracted fatal lung diseases while working in South African mines, an industry document said on Wednesday.

Earlier on Wednesday, lawyers acting for miners who contracted silicosis and TB said settlement talks with implicated gold companies for an out-of-court deal could be reached by December.

This tiny 2-paragraph Reuters news item, filed from Cape Town, appeared on their website at 8:37 a.m. EST on Wednesday morning — and was updated about two hour later.  I found it embedded in a GATA dispatch.


Big Surge in Swiss gold exports to India and China — Lawrie Williams

There has been much talk in the media of late of very slack gold demand from the world’s two leading importers of the metal. India and China.  But the latest export figures for the yellow metal out of Switzerland for October would seem to counter this as both have seen a strong recovery from the admittedly weak September figures.

In the latest figures released by the Swiss customs administration, India came out top of the list for October gold exports, taking 38 tonnes, closely followed by mainland China with 34.6 tonnes.  Hong Kong came in in third place with 19.5 tonnes, once again demonstrating that the former British Crown Colony is no longer the principal conduit for Chinese gold imports.  However if one adds the Hong Kong imports to those of mainland China the latest Swiss figures do show that gold exports to Greater China from the world’s largest re-refiner and exporter of gold were an impressive 54.1 tonnes.  These figures compare with the previous month’s of 17.2 tonnes to China, 11.6 tonnes to India and 11.1 tonnes to Hong Kong.  By the looks of things gold demand in China and India is alive and well as the mid-year anomalies fall out of the system.

Substantial flows of gold [are] from Switzerland to the Middle and Far East – 83.3% of the Swiss exports are to this region.  What is of particular significance in this percentage is that in Asia and the Middle East the gold tends to land in firmer hands and doesn’t tend to find its way back on to the markets on gold price fluctuations as it may do in the West.  This is perhaps the principal reason that the long term future for the gold price is, in our view, extremely positive.  When the tide turns for gold investment in the West, as it almost certainly will, there will be a shortage of physical metal and this will drive the price up beyond the capability of paper gold trades to suppress it.  There does seem to be a certain momentum building in the gold price, but those who would suppress it have been dumping large amounts of notional gold on the futures market.  This cannot go on indefinitely and sooner or later the physical price will have to take off upwards, but as to when this tipping point will occur still remains hugely uncertain.

The above three paragraphs are all there is to this 1-chart/3-paragraph gold-related news story that showed up on the Sharp Pixley Internet site on Wednesday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter is the Indian roller…a strange name for a bird species of such exquisite beauty.  They are found widely across tropical Asia from Iraq eastward across the Indian Subcontinent to Indochina and are best known for the aerobatic displays of the male during the breeding season.


The WRAP

The real world equivalent long and short positions in COMEX silver is so much larger than that of any other futures-traded commodity, that it necessarily exerts a force on price more profound than in any other commodity. The big dog always leads the pack and because the positioning in COMEX silver futures is larger than what’s going on in the real world of silver production and consumption, the paper market dictates price to the world of real metal; instead of the other way around. This shouldn’t be and, in fact, is contrary to U.S. commodity law, but the CFTC refuses to deal with what is nothing less than a clear market distortion; the very essence of price manipulation.

But you can’t stop there. Since there is a long for every short in every futures contract, I suppose that someone could claim the equally large COMEX paper long position is manipulating silver prices higher than they should be. This does hold some merit at first blush, until you recognize the fact that silver is priced lower than it ever has been relative to just about every other commodity. There has to be a reason why silver is priced so cheaply, not only in absolute terms, but in impossible to argue with relative terms.

The reason has to do with the composition and nature of the short side of COMEX silver futures. Simply put, the entire true COMEX net short silver position is held by just 8 traders, most of which are U.S. and foreign banks. This is the one glaring feature in silver that, to this point, has escaped notice, even by those that regularly follow and comment on the silver market. In my opinion, this is the central issue in silver – the one thing that has most determined and will determine price. This is the entire ball game in silver. Silver analyst Ted Butler: 22 November 2017  [Emphasis mine – Ed]


Although it was another day where precious metal prices rallied across the board, it’s equally as obvious that the rallies, particularly in gold and silver, were met by “all the usual suspects” as sellers of last resort.  However, I’m sure that some of Ted’s raptors, who are long both gold and silver in the COMEX futures market, were selling their long positions for huge profits as well.  If they hadn’t, those two precious metals would have closed appreciably higher yesterday.

The precious metal equities are in Rodney Dangerfield territory…they “just can’t get no respect” — and that’s been going on all this week.  Of course that will change at some point, but as to exactly when, still remains to be seen.

As I pointed out at the top of today’s missive, both gold and silver closed back above their respective 50-day moving average once again — and we’ll find out soon enough if JPMorgan et al will allow these rallies to develop further.

Here are the 6-month charts for all four precious metals, plus copper, once again — and the penetrations I just spoke of, are obvious.  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 was sold quietly lower — and was down a couple of buck by around 9:20 a.m. China Standard Time on their Thursday morning. It’s been chopping mostly sideways since — and is down $2.50 at the moment. Silver was sold down about 8 cents by 9:20 a.m. CST as well — and is currently down 6 cents. Ditto for platinum — and it’s down 4 dollars. Palladium chopped around a dollar or so either side of unchanged during Far East trading — and at the moment it’s down 3 bucks as the Zurich open looms.

Net HFT gold volume is nothing special at around 35,000 contracts — and roll-over/switch volume out of December is fairly decent. Net HFT silver volume is very light at 4,500 contracts — and roll-over/switch volume in that precious metal is pretty chunky already.

The dollar index has been chopping very quietly lower since trading began at 6:00 p.m. EST in New York on their Wednesday evening — and it’s down 3 basis points as London opens.

Including today, which is a holiday in the U.S. there are five business days left before First Notice for gold and silver deliveries for December are posted on the CME’s website.  All the large traders…those with more than 150 contract…that aren’t standing for delivery, have to roll or sell those positions before the end of COMEX trading on Tuesday — and all the rest of the traders that aren’t standing for delivery, have to be out of the December contract by the close of COMEX trading on Wednesday.  Gross trading volumes in both these precious metals are going to pretty enormous for the next few days [They already are. – Ed] as the remaining traders still holding December contracts, exit their positions.

Gold open interest in yesterday’s Preliminary Report showed that 165,772 gold contracts, plus 56,236 silver contracts, were still open at the close of trading yesterday…Wednesday — and it only remains to be seen how much of that is left by the time First Notice Day rolls around next Wednesday evening.  Based on past history, I would suspect that around 95 percent, or a bit more, of those amounts will be gone by the COMEX close a week from today.

And as I post today’s efforts on the website at 4:02 a.m. EST, I note that precious metals prices certainly haven’t been doing much during the first hour of London/Zurich trading. Gold is down $2.40 an ounce, silver is down 5 cents — and platinum and palladium are lower by 3 dollars and 2 dollars respectively.

Gross gold volume isn’t overly heavy at around 57,000 contracts — and net of roll-over/switch volume out of December, net HFT volume is about 41,000 contracts, which is pretty light. Net HFT silver volume is 5,800 contracts, which is exceedingly light.

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

With New York closed, I expect that trading activity will be pretty tepid for the remainder of the Thursday session.  New York will be open at least part of Friday, but I suspect that volumes will be light.

Is there a chance for some holiday price fireworks over the next couple of days?  I suppose, if some extraneous news event, like a break-out of hostilities in the Far East for example, might make a difference.  But since 95 percent of price activity is a paper trading game on the COMEX/GLOBEX between the commercial traders on one side — and the Managed Money traders on the other, I doubt if much will happen.  I say all this with the usual caveat that “I’d love to be proven spectacularly wrong about that.

Once again I wish all my American subscribers a safe and happy Thanksgiving long weekend — and I’ll see you here tomorrow.

Ed