14 March 2018 — Wednesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price zoomed a bit higher in the first hour and change on Monday evening in New York — and ‘da boyz’ obviously had to step in at that point. It was sold quietly lower from that juncture — and the low tick was set shortly after 9 a.m. GMT in London. It inched higher from there until the CPI numbers were released at 8:30 a.m. in New York. The gold price blasted higher, but that was only allowed to last a few minutes — and it was blasted lower at, or just after, the afternoon gold fix in London, which was 10 a.m. EDT in New York — and obviously 2:00 p.m. GMT, so the LBMA is obviously operating as if it was on British Summer Time [BST] already, in order to be in sync with New York. The gold price rallied back to its high of the day from there, but was carefully kept below its 50-day moving average — and from shortly before noon EDT, the price chopped sideways into the 5:00 p.m. close.
Despite the activity on the Kitco chart below, the low and high ticks aren’t worth looking up.
Gold was closed in New York on Tuesday afternoon at $1,325.90 spot, up $3.30 on the day. Net volume was pretty heavy at a hair under 274,000 contracts — and roll-over/switch volume was decent as well, at just under 49,000 contracts.
JPMorgan et al kept the silver price on the same short leash as gold — and for the most part, their price paths were identical.
The low and high ticks were recorded by the CME Group as $16.465 and $16.69 in the May contract.
Silver finished the day at $16.555 spot, up 5.5 cents from Monday’s close. Net HFT volume was a bit over 66,000 contracts, plus another 3,300 contracts worth or roll-over/switch volume on top of that.
Platinum’s price was managed in the same fashion as gold’s, so I’ll spare you the play-by-play. It finished the Tuesday session in New York at $964 spot, up 2 bucks.
Palladium, was the outlier, as its rally on the CPI news at 8:30 a.m. EDT was only partially capped — and it continued to chop quietly higher until ‘da boyz’ put the kibosh on it at precisely 12:00 o’clock noon in New York trading. Then from 1 p.m. onwards, it was sold lower into the close, finishing the day at $985 spot — and up 12 dollars on the day. It was up 21 bucks at its high — and all set to blast through $1,000 spot until the powers-that-be showed up.
The dollar index closed very late on Monday afternoon in New York at 89.92 — and dipped down to the 89.84 mark at 8:30 a.m. China Standard Time on their Tuesday morning. It appeared to get saved by the usual ‘gentle hands’ at that juncture — and it ‘rallied’ without enthusiasm to its 90.11 high tick of the day which came right at the 8:00 a.m. GMT London open. It was back the 90.00 mark by time the CPI numbers hit the tape — and the ‘gentle hands’ appeared about ten minutes later. They appeared again at precisely 10:00 a.m. EDT at the afternoon gold fix in London — and as the dollar index got ramped higher, the precious metals were blasted lower. That flamed ‘rally’ flamed out about fifteen minutes later — and the dollar index began to fall like a stone once again, with the 89.59 low tick coming at exactly 1:00 p.m. EDT. It ‘rallied’ a bit from there, but rolled over again around 4:00 p.m. — and finished the Tuesday session at the 89.68 mark…down 24 basis points on the day.
Yesterday’s dollar price action should leave little doubt in your mind that those ‘gentle hands’ prevented an all out crash in the U.S. dollar index yesterday…and the day before…and last week…last month….etc.
And here’s the 6-month U.S. dollar index which, by now, you should know is pure bulls hit…as is the daily DXY chart…and the Dow…and the precious metals…and interest rates…etc.
The gold stocks rallied until shortly before the afternoon gold fix in London — and then were sold into negative territory as the dollar index ‘rallied’ and the gold price got smacked. They rallied back into positive territory about an hour later — and made every attempt to stay there, but finally gave up the ghost around 3 p.m. EDT. They then drifted back into negative territory by a bit going into the end of the trading day. The HUI finished lower by 0.17 percent.
Not so for the silver equities — and although they got sold lower after the London gold fix/dollar ramp job as well, they never got back below unchanged. They chopped unsteadily higher for the entire New York trading session after that. Nick Laird’s intraday Silver Sentiment/Silver 7 Index closed up 1.41 percent — and just about on its high tick of the day. Click to enlarge if necessary.
And here’s the 1-years Silver Sentiment/Silver 7 Index chart. Click to enlarge.
The CME Daily Delivery Report showed that 2 gold and 248 silver contracts were posted for delivery within the COMEX-approved warehouses on Thursday. In gold, the short/issuer was ADM from its client account — and the sole long/stopper was JPMorgan for its client account as well. But the surprise was in silver, as the two short/issuers that mattered were JPMorgan and Australia’s Macquarie Futures, with 200 and 40 contracts out of their respective in-house/proprietary trading accounts. There were ten long/stoppers in total — and of that number, there were six long/stoppers of interest…Goldman Sachs and HSBC USA with 65 and 47 contracts for their respective in-house/proprietary trading accounts…and the CME Group with 37 contracts for its own account as well…obviously to be broken down for the 1,000 ounce mini-silver contract, which I’ll get to momentarily. The last three long/stoppers of note were JPMorgan and Advantage, with 32 contracts each — and both for their respective client accounts. Lastly comes ADM with 28 contracts for its client account as well.
The 37 contracts stopped by the CME Group were immediately broken up and immediately re-issued as single good delivery bar contracts…1,000 troy ounces each. 37 contracts times 5 bars per contract equals 185 contracts. They were all stopped by ADM for its client account.
The thing I find surprising about this is that I don’t seem to remember the CME Group ever delivering into the silver mini contract at this time of the month before. Normally it’s the last, or second from last delivery day — and I’m wondering what the significance of that might be. Maybe it’s nothing, but I though I’d mention it, because it is out of the ordinary. The link to yesterday’s Issuers and Stoppers Report is here — and it’s certainly worth a look if you have the interest.
The CME Preliminary Report for the Tuesday trading session showed that gold open interest in March fell by 6 contracts, leaving 537 still open, minus the 2 mentioned just above. Monday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, so that means that 6 more gold contracts disappeared from the March delivery month by mutual consent between the short/issuers and long/stoppers involved. Silver o.i. in March rose by 3 contracts, leaving 402 still around, minus the 248 mentioned in the previous paragraph. Monday’s Daily Delivery Report showed that 6 silver contracts were actually posted for delivery today, so that means that 6+3=9 more silver contracts were just added to March deliveries.
There were no reported changes in either GLD or SLV yesterday.
There was a small sales report from the U.S. Mint yesterday. They sold 145,000 silver eagles — and that was it.
For the second day in a row, there was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.
There was a lot more activity in silver, as 1,227,412 troy ounces were received, but only 24,053 troy ounces were shipped out. One very large truck load…624,745 troy ounces…was left at Brink’s, Inc. — and the other truck load…602,667 troy ounces…ended up at JPMorgan. That brought their COMEX silver stash up to a new record of 136.2 million troy ounces. In the ‘out’ category, there was 20,022 troy ounces shipped out of HSBC USA — and the other 4,031 troy ounces departed CNT. The link to all this activity is here.
It was a huge day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday. They reported receiving 9,976 of them — and shipped out another 4,531. All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.
It was a fairly quiet news day — and I only have a handful of stories for you again today.
January’s Core CPI spiked rates over 12bps but since then they have fallen back to almost unchanged and rallied into today’s February print, suggesting a miss.
However, February CPI printed higher than January, rising 2.2% YoY as expected. However, Core CPI slowed from January to 1.8% (as expected). Drops in new and used vehicles, food, and fuel prices helped steady the consumer cost rise.
Under the hood, sub-components show a very mixed message…
The index for all items less food and energy increased 0.2 percent in February. The shelter index increased 0.2 percent, with the indexes for rent and owners’ equivalent rent both rising 0.2 percent and the index for lodging away from home unchanged.
The apparel index continued to rise, increasing 1.5 percent in February following a 1.7-percent rise in January. The index for motor vehicle insurance also continued to increase sharply, rising 1.7 percent in February.
This chart-filled Zero Hedge story appeared on their Internet site at 8:39 a.m. EDT on Tuesday morning — and I thank Brad Robertson for sending it our way. Another link to it is here. There was a Bloomberg item on this headlined “Guts of U.S. CPI Data Show Key Inflation Gauge Weakest in Years” — and I found that in this morning’s edition of the King Report.
“Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!” Trump tweeted.
Tillerson just finished a diplomatic trip to Africa and spoke to British Foreign Secretary Boris Johnson Monday, telling him the U.S. government is “outraged” about the poisoning of former Russian spy Sergei Skripal.
White House press secretary Sarah Sanders told reporters Trump had asked Tillerson to step aside.
Tillerson said his job would terminate at midnight March 31 and that he plans to effectively delegate duties to his deputy, John Sullivan, in the meantime.
“What is most important is … an orderly and smooth transition,” Tillerson said.
The U.S. ‘deep state’ makes yet another move to consolidate its power. This UPI article, courtesy of Roy Stephens, showed up on their website at 3:59 p.m. EDT yesterday afternoon — and another link to it is here. And here’s the spin on this story from the politically incorrect Paul Craig Roberts. It’s headlined “What Secretary of State Tillerson’s Firing Means” — and it’s certainly worth reading. It comes to us courtesy of Larry Galearis.
He died peacefully at his home in Cambridge in the early hours of Wednesday, his family said.
The Briton was known for his work with black holes and relativity, and wrote several popular science books including A Brief History of Time.
At the age of 22 Prof Hawking was given only a few years to live after being diagnosed with a rare form of motor neurone disease.
The illness left him in a wheelchair and largely unable to speak except through a voice synthesiser.
Apple’s co-founder Steve Wozniak said: “Stephen Hawking’s integrity and scientific dedication placed him above pure brilliance,”
Satya Nadella, Microsoft chief executive, said: “We lost a great one today. Stephen Hawking will be remembered for his incredible contributions to science – making complex theories and concepts more accessible to the masses.”
“He’ll also be remembered for his spirit and unbounded pursuit to gain a complete understanding of the universe, despite the obstacles he faced.”
This sad story was posted on the bbc.com Internet site early this morning GMT — and it comes courtesy of Swedish reader Patrik Ekdahl. Another link to it is here.
Russia has now publicly responded to the British government’s ultimatum – set out in Theresa May’s statement yesterday – that unless Russia provides a ‘credible response’ to the British inquiry about Russia’s custody of Novichok chemicals by close of business today, then the British government will treat the attack on Skripal as the action of the Russian state.
Russian Foreign Minister Sergey Lavrov has dismissed Britain’s claim of Russia’s involvement in Skripal’s poisoning as “nonsense”. He has also said that Britain has refused Russia’s offer of cooperation to solve the case, and has also refused what he called Russia’s “legal request” for samples of the chemical used to attack Skripal so that Russia can carry out its own tests.
Latest reports also say that the Russians have summoned the British ambassador to the Russian Foreign Ministry.
That the Russians have rejected yesterday’s British ultimatum will surprise no-one. I would however point out how completely bizarre this whole situation has become.
The Russians are being asked to provide proof of their innocence – already a bizarre request – whilst being denied the evidence which supposedly ‘proves’ their guilt.
As usual, not a shred of evidence to back up these accusations. You couldn’t make this stuff up. This story was posted on theduran.com Internet site at 3:22 p.m. EDT on Tuesday afternoon — and I thank Roy Stephens for pointing it out. Another link to it is here.
Russia has issued a thinly veiled threat after Britain gave it a deadline to answer accusations of involvement in a poisoning attack in Salisbury, but U.S. and E.U. allies have expressed support for Britain condemning the attack.
Prime Minister Theresa May had given Russia until midnight on Tuesday to explain how a Soviet-era nerve agent was used against a former Russian double agent.
Denying it had played any part in the attack, which left 66-year-old former spy Sergei Skripal and his 33-year-old daughter fighting for their lives, Russia said it would ignore the ultimatum until London handed over samples of the nerve agent used and complied with international obligations for joint investigations of such incidents.
“Any threats to take ‘sanctions’ against Russia will not be left without a response,” the Russian foreign ministry said in a statement. “The British side should understand that.”
Speaking in an interview on state television, foreign ministry spokeswoman Maria Zakharova warned the U.K. not to threaten Russia.
“Bearing in mind what the President [Vladimir Putin] said [in his State of the Nation Address], no-one can appear in his or her country’s parliament to say ‘I give Russia 24 hours,’” she told the Rossiya-1 television channel.
This news item was posted on the Australian website abc.net.au on Wednesday afternoon ‘down under’ time — and I thank Australian reader Garry Robinson for pointing it out. Another link to it is here. The Zero Hedge spin on this, which is definitely worth reading, is headlined “Russia Threatens U.K.: “One Does Not Give 24Hrs Notice to a Nuclear Power”” — and I thank Brad Robertson for his final contribution to today’s column.
The leadership of the Hungarian National Bank (MNB) has decided to bring back home Hungary’s gold reserves.
Up to now, 100,000 ounces (3 tonnes) of the precious metal were stored in London, which is in total worth some 33 billion forint ($130 million) at current gold prices.
The decision seems to be in line with international trends as storage of gold reserves out of the country is now considered risky by more and more central banks. Austrian, German, and Dutch central banks are among those who have recently decided to repatriate their gold reserves. According to MNB, this may also further strengthen market confidence towards Hungary.
The highest amount Hungary has ever had was around 65-70 tonnes at the beginning of the 70s. At the end of the 1980s, however, a decision was made to decrease gold reserves to the lowest possible level and rather to invest in sovereign debts, which as a consequence of the collapse of the Bretton Woods system are considered safer, more liquid and potentially of higher yields. At the beginning of 2010 this tendency changed again and central banks started to accumulate gold as a potential response to the financial crisis.
This gold-related news item…via Sharps Pixley…was in my Friday column, so it’s not new ‘news’ for you, dear reader…but it was the only precious metal-related story on Zero Hedge on Tuesday — and there was nothing worthwhile on Sharps Pixley, either. So in case you missed it, here it is again. I thank Richard Saler for sharing it with us — and another link to it is here.
The PHOTOS and the FUNNIES
Today’s ‘critter’ is the masked lapwing, also known as the masked plover and often called the spur-winged plover or just plover in its native range. It’s a large, common and conspicuous bird native to Australia, particularly the northern and eastern parts of the continent, New Zealand and New Guinea. Click to enlarge.
The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. — Ernest Hemingway
There should be little doubt in anyone’s mind that ‘da boyz’ were watching over the precious metal market with more than the usual care and attention yesterday because of the CPI numbers. That was also true of the currencies as well — and it should also come as no great shock that the ‘da boyz’ in the precious metals market — and the ‘gentle hands’ in the currency markets are either one in the same, or joined at the hip.
Here are the 6-month charts for all four precious metals, plus copper and WTIC as well. As I pointed out before, JPMorgan et al stopped the gold price from blasting through its 50-day moving average yesterday — and it’s not much of a stretch to think that they did the same for silver on Tuesday as well. The ‘click to enlarge‘ feature helps a bit with the first four charts.
And since the afternoon gold fix was at the same time as it usually was in New York…10:00 a.m. EDT…that means that the LBMA had the afternoon gold fix in London an hour earlier than normal…3:00 p.m. GMT, instead of 4:00 p.m. GMT. Based on that, I’ll make the assumption the they open in London an hour earlier this week…7:00 a.m. GMT, instead of 8:00 a.m. GMT — and it will stay that way until they go on British Summer Time this Sunday.
So, as I type this paragraph, the LBMA ‘open’ is less than ten minutes away…and the equity market in both London and Europe won’t open for another hour. I see that after getting sold off a couple of dollars by around 9 a.m. CST on their Wednesday morning, the gold price rallied unevenly higher, before running into obviously ferocious resistance just before 2 p.m. over there. Gold was up almost 4 bucks at that point, but is now down 20 cents the ounce. It was the same price pattern for silver — and after being up 9 cents, is up only 2. Ditto for platinum and palladium, with the former up 2 bucks — and the latter by 2 dollars as well.
Net HFT gold volume is coming up on 50,000 contracts, with just under 2,000 contracts worth of roll-over/switch volume as well. Net HFT silver volume is about 8,900 contracts, with light roll-over/switch volume…just under 700 contracts worth.
The dollar index didn’t do much until around 9:30 a.m. China Standard Time on their Wednesday morning — and then it took a bit of a dive until shortly before 11 a.m. over there. Then after a bit of an up/down move to its current 89.56 low tick, the index has begun to ‘rally’ anew — and is back at unchanged currently.
Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and although we had rallies yesterday in both silver and gold, they were summarily dealt with — and no damage to any moving average was done. So if there was deterioration in the commercial net short position in either of those two precious metals, it was minimal…hopefully.
Based on that — and eye-balling the last five days of price activity on the 6-month charts posted above, I’ll speculate that whatever increases in the commercial net short positions that manifested themselves in last Friday’s COT Report, should be fully negated and, hopefully, a bit more than that. However, I wasn’t overly happy with the preliminary open interest change in gold in last night’s Preliminary Report from the CME Group, so I might be off in that precious metal. Of course Ted is the real authority on all this — and I look forward to what he has to say on this matter in his mid-week commentary this afternoon.
And as I post today’s column on the website at 4:02 a.m. EST, the LBMA has, hopefully, been open for about an hour — and I note that the gold price is down a bit more…$1.00 the ounce. Silver is up a penny — and platinum and palladium are now up 3 dollars and 5 dollars respectively.
Gross gold volume is around 61,500 contracts — and net of roll-over/switch volume, net HFT gold volume is about 58,500 contracts. Net HFT silver volume is a hair over 10,000 contracts — and there’s about 680 contracts worth of roll-over/switch volume on top of that, which is unchanged from an hour ago.
The dollar index hasn’t done much in the last hour — and is up 2 basis point at the moment.
That’s all I have for today — and I’ll certainly be watching this U.K./Russia thingy with great interest…along with a sense of foreboding.
I’ll see you here tomorrow.