New Intraday Lows Set in Both Gold and Platinum Yesterday

22 May 2018 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped quietly lower, as the dollar index ‘rallied’ during Far East trading on their Monday.  Once the 2:15 p.m. CST afternoon gold fix was put to bed in Shanghai, ‘da boyz’ took gold down to its low tick of the day, which came minutes after the London open.  It chopped quietly higher from there — and any rally attempt that looked remotely serious, was dealt with in the usual manner.  It even gained a bit in the thinly-traded after-hours market — and was allowed to close up a few dimes on the day.

The low and high ticks really aren’t worth looking up, but here they are anyway…$1,281.20 and $1,292.00 in the June contract.

Gold was closed in New York on Monday at $1,292.20 spot, up 30 cents from Friday.  Net volume at the London open on their Monday morning, which was almost it’s low price tick of the day, was pretty hefty at 85,000 contract — and net volume for the entire Monday session was a bit under 258,500 contracts, plus a bit over 56,000 contracts worth of roll-over/switch volume on top of that.  It should be carefully noted that JPMorgan et al set a new intraday low in gold for this move down.

Silver was down about 7 cents by 11 a.m. China Standard Time yesterday morning — and it proceeded to trade virtually ruler flat from there until just before 1:30 p.m. CST.  Then it was sold lower as well — and ‘da boyz’ set the low tick of the day in silver the same time as they did for gold…minutes after the London open.  Like gold, silver began to rally from that juncture — and really took off shortly after the COMEX open in New York.  But ‘da boyz’ where there to ensure it didn’t get far – and by the afternoon gold fix in London, had the price back in line.  It inched quietly higher until late in the after-hours trading session — and then didn’t do much after that.

The low and high ticks in silver were recorded by the CME Group as $16.28 and $16.535 in the July contract.

Silver finished the Monday session at $16.49 spot, up 6.5 cents from Friday’s close.  Net silver volume at the London open, silver’s low tick, was 11,800 contracts — and for the complete Monday session, it was a tiny bit under 58,000 contracts, plus a hair over 5,000 contracts worth or roll-over/switch volume as well.

It should come as no shock that ‘da boyz’ set platinum’s low price tick at the same time as they did for silver and gold.  It only recovered a few dollars after that, but once the COMEX opened…away it went.  At 1 p.m. in New York, the platinum market appeared to go ‘no ask’ — and the short sellers of last resort had to step in to provide the necessary “liquidity” the moment the price touched $900 spot…or heaven only knows what platinum would have closed at if they hadn’t.  The price wasn’t allowed to do much after that, but did rally almost back to its high of the day in the very thinly-traded after-hours market.  Platinum was closed at $899 spot, up $14 on the day.  JPMorgan et al set a new intraday low in platinum for this move down at the Zurich open yesterday.

And ditto for palladium’s low tick.  But from that low, it chopped very quietly higher until minutes after the Zurich close.  Then the price activity got far more lively and, once again, JPMorgan et al had to show up as short sellers of last resort, or palladium would have blasted back through $1,000 spot like a hot knife through soft butter.  It was sold down a bunch of dollars into the COMEX close, then, like platinum, it rallied a small handful of dollars into the 5:00 p.m. EDT close of trading.  Palladium finished the Monday session at $988 spot, up 26 bucks on the day.  Palladium rallied above — and closed above, both its 50 and 200-day moving averages yesterday.

The dollar index closed very late on Friday afternoon in New York at 93.67 — and when trading began shortly before 6 p.m. EDT on Sunday afternoon in New York, it continued to rally quietly but unsteadily higher from its London open low on Friday morning.  The 94.06 high tick of the day came at precisely 9:00 a.m. BST in London trading on their Monday morning, which was about forty-five minutes after the low ticks in all four precious metals were set by ‘da boyz’ — and all four were headed higher by then.  The index began to chop lower from there, but at exactly 10:00 a.m. EDT…the afternoon gold fix in London…someone goosed the dollar index.  The respite in the dollar index decline ended shortly before London closed — and it chopped steadily lower until the 93.51 low tick of the day was set around 4:30 p.m. in New York.  It traded flat from there into the close.  The dollar index finished the Monday session at 93.52 — and down 15 basis points from Friday.

The ‘rally’ in the dollar index looked just as manufactured as the low ticks in the precious metals.

Here’s the intraday dollar index for Monday, so you can see the precision of those turning points for yourself.

And here’s the 3-day dollar index, so you can see the trading on Sunday evening in New York — and Monday morning in the Far East.

And here’s the 6-month U.S. dollar index.  After yesterday’s currency action, this dollar index rally is looking rather shaky — and very overbought.  So it remains to be seen how much more support those ‘gentle hands’ are going to provide going forward.

The gold shares opened about unchanged — and then for no reason that made sense to me, sank to their respective lows by 11 a.m. EDT in New York trading.  They rallied from there — and back to unchanged by a few minutes before 2 p.m. — and then didn’t do a thing after that.  The HUI closed lower by 0.03 percent, so call it unchanged.

It was mostly the same for the silver equities, although their rallies lasted until 2:30 p.m. — and were in positive territory by a reasonable amount.  They chopped sideways from there until some kind soul dumped a fairly large position into the market around 3:25 p.m. EDT — and dropped the stocks back to barely above unchanged on the day.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.34 percent.  Click to enlarge if necessary.

Here’s the 1-year Silver Sentiment/Silver 7 Index from Nick.  Click to enlarge as well.

The CME Daily Delivery Report showed that 35 gold and 13 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, ADM issued 32 — and Advantage the other 3…both from their respective client accounts.  There were six long/stoppers in total.  JPMorgan was in first spot with 19 contracts — and R.J. O’Brien and Advantage were tied in second spot with 6 contacts each.  All contracts stopped involved everyone’s client account.  In silver, the two short/issuers were ABN Amro and Advantage with 11 and 2 contracts.  The largest long/stopper was HSBC USA with 8 — and JPMorgan and Advantage were tied in second spot with 2 contracts each.  All issued and stopped contracts involved everyone’s respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in May rose by 5 contracts, leaving 92 still around, minus the 35 mentioned just above.  Friday’s Daily Delivery Report showed that 1 gold contract was actually posted for delivery today, so that means that 1+5=6 more gold contracts were added to the May delivery month.  Silver o.i. in May declined by 14 contracts, leaving 172 still open, minus the 13 contracts mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 27 silver contracts were actually posted for delivery today, so that means that another 27-13=14 silver contracts were added to May.


There was a decent sized withdrawal from GLD yesterday, as an authorized participant took out 104,243 troy ounces.  There were no reported changes in SLV.

There was a decent-sized sales report from the U.S. Mint for a change.  They sold 4,500 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — and 230,000 silver eagles.  Considering the current price action, I would suspect that purchases of this size weren’t made by John Q. Public.

Once again, there was no in/out activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.

There wasn’t must activity in silver, although JPMorgan picked up another 150,483 troy ounces, which was all the ‘in’ activity there was.  That’s the third 150,000 troy ounce deposit into JPMorgan in the last week — and Ted was wondering why such strange amounts.  So was I.  There was 135,289 troy ounces shipped out…80,092 troy ounces from Canada’s Scotiabank — and 55,197 troy ounces from Malca-Amit USA.  The link to that activity is here.

It was pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They reported receiving 5,791 of them — and shipped out only 116.  All of this action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are the usual two charts that Nick Laird passes around on the weekend.  They show the transparent gold and silver holdings of all known depositories, ETFs and mutual funds, updated as of the close of business last Friday.  Gold is up a tiny bit from last week — and the reason for the big decline in silver is because of a 3.6 million ounce withdrawal from SIVR, the worlds’ second-largest silver ETF, during the reporting week…something that Ted Butler pointed out in his weekly commentary on Saturday.  Click to enlarge for both.

I have quite a few stories for you today.


CRITICAL READS

Are Americans The “Bad Guys”?  — Bill Bonner

After the fall of the Berlin Wall, the U.S. stood alone. It was the “end of history,” as one public intellectual proposed.

America was #1 – the ne plus ultra of the 20th century. By comparison, the whole rest of the world was just one big “sh*thole.” And the U.S. could blast any part of it back to the Stone Age.

Power was unbalanced and disproportionate. It was take… with no give. It was live… but not letting the other guy live.

We could invade Iraq, but the Iraqis couldn’t invade us. We could target extremists for drone assassination while we slept in peace.

And why not?

Paraphrasing former Secretary of State, Madeleine Albright: “What good was it to have so much power if we didn’t use it?

Therein lay the fatal temptation…

This very worthwhile commentary by Bill was posted on the bonnerandpartners.com Internet site early on Monday morning EDT — and another link to it is here.


Credit Card Delinquencies Spike Past Financial-Crisis Peak at the 4,788 Smaller U.S. Banks

In the first quarter, the delinquency rate on credit-card loan balances at commercial banks other than the largest 100 – so at the 4,788 smaller banks in the US – spiked in to 5.9%. This exceeds the peak during the Financial Crisis. The credit-card charge-off rate at these banks spiked to 8%. This is approaching the peak during the Financial Crisis.

A sobering set of numbers the Federal Reserve Board of Governors released this afternoon.

But overall, across all commercial banks, including the largest banks with the largest credit-card loan balances outstanding, the delinquency rate was 2.54% (not seasonally adjusted). This overall rate was pushed down by the largest 100 banks, whose combined delinquency rate in Q1 was 2.48%.

These large banks have been offering appealing incentives to consumers for years, and they’ve been going after consumers with the higher credit ratings, and they’ve been following good underwriting practices – having not yet forgotten the lesson from the last debacle – and this conservative approach is now helping to keep losses down.

This commentary by Wolf Richter put in an appearance on the wolfstreet.com Internet site last Friday sometime — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Maduro wins another term as Venezuela’s president

Nicholas Maduro has won reelection in an election process that the U.S. and its allies refuse to acknowledge as legitimate, together with the Venezuelan opposition candidate, Henri Falcon. Maduro won with over 68% of the popular vote, while Falcon received considerably less.

Falcon, perhaps taking a cue from Hillary Clinton, seems as if he just won’t concede the fact that the people of Venezuela just didn’t want him to govern them.

This election was something like a battle between Washington and the people of Venezuela. Washington has long considered that no election in Venezuela can be considered legitimate unless the outcome is for a pro-Washington candidate.

In this case, Falcon appears to be Washington’s man, and reports of the U.S. State Department and other politicians slamming the outcome of this election installing a patriotic candidate, saying that the elections were somehow rigged or illegitimate will be hitting the headlines of mainstream media outlets right and left. Despite the fact that the elections process entertained many international observers…

This news item showed up on theduran.com Internet site at 10:24 a.m. EDT on Monday morning — and it comes to us courtesy of Roy Stephens.  Another link to it is here.  There was a companion story about Venezuela that I picked up on Zero Hedge.  It’s headlined “Trump Bars Purchases of Debt, Receivables Owed to Venezuela, PDVSA“.


Investing in Collapse — Jeff Thomas

For years, I’ve been writing about Venezuela, describing it as the “movie” by which we can view the future of other jurisdictions that are presently in decline.

The reason is that declining nations follow the same pattern, time and time again, over the centuries. This is not coincidence. The pattern exists because human nature never changes, regardless of the era or the locale. Political leaders make the same mistakes as their forebears, and the people of a nation react in kind.

For this reason, countries have a sort of “shelf life.” They rise in prominence, due to work ethic and productivity. They then go through a period of abundance, which eventually deteriorates, due to complacency and apathy. Finally, they collapse into a period of bondage.

If we recognize that this pattern has played out countless times over the millennia, we can track any given country and assess where it is at present, in the pattern. For example, Europe and North America are presently in the last stages prior to collapse, Venezuela is in the process of collapse and Cuba is in the post-collapse recovery.

This very interesting commentary by Jeff showed up on the internationalman.com Internet site early on Monday morning EDT — and another link to it is here.


Germany will ‘fight’ for its interests in face of Trump’s ‘America First’ policy, says Economic Minister

It’s no secret that Germany has many deep ties with America that seem to be completely unbreachable. But in the face of Trump’s ‘America first’ policy, those ties are feeling some strain. America first, by definition, means that America’s interests, across all sectors, get the top priority above those of all others, and even in spite of them, with heavy emphasis on the ‘spite’ part.

The manner in which Trump’s foreign policy has progressed during his tenure so far indubitably shows forth his loyalty to this program, which perceives that whatever America wants, it will get, regardless of how it impacts others, and everybody else is expected to just grin and bear it.

But that’s not how you treat your friends, and not how a partnership really works. America has a strong social and cultural policy with equality at its base in just about every human perspective and interaction, at least, insofar as the words go, but in action, it’s an ideal that is quickly losing ground on the value of actions, even at a time when equality is taking on a new emphasis in America’s cultural capital of Hollywood.

America’s foreign policy is enacting an approach that sees the world as a global chess game, and every other player is viewed as an opponent to be bested, a game where America wins at the loss of everyone else, the ‘better end of the deal’. It’s completely different from the party line that Washington has put forward for decades, where fairness, equality, and respect were put forward as motivating factors for international activities and agreements, even if, oftentimes, America still acted like it was purely out to advance its own interests. America still put on a nice face with nice words as a costume for their self interested global influence.

Today, American actions haven’t really changed all that much, in a way, but what has changed is the philosophy that it overtly advances. Now, under President Donald Trump, it brazenly tells the world that America will do and get what it wants, and everyone else must be good little boys and girls and play along, even if it means that they will lose. In Trump’s mind, it’s called ‘winning’, and in order to win, someone must lose.

Even America’s strongest allies have been reluctant to acknowledge America’s self interested global policies, because as long as they got something for it, they were okay with it. But lately, they’re not getting as much for it, if anything at all.

This longish, but worthwhile commentary was posted on theduran.com Internet site at 6:52 a.m. EDT on Saturday morning — and I thank Larry Galearis for pointing it out.  Another link to it is here.


European national sovereignty under threat over Iran — Eric Zuesse

They need to decide whether they seek a world of nations that each is sovereign over its own territory but over no other (and this would not be a world at war); or whether they seek instead a world in which they are part of the American empire, a world based on conquests — NATO, IMF, World Bank, and the other US-controlled international institutions — and in which their own nation’s citizens are subject to the dictatorship by America’s aristocracy: the same super-rich individuals who effectively control the U.S. Government itself (see this and this — and that’s dictatorship by the richest, in the United States).

Iran has become this fateful fork-in-the-road, and the immediate issue here is America’s cancellation of the Iran nuclear deal that America had signed along with 6 other countries, and America’s consequent restoration of economic sanctions against Iran — sanctions against companies anywhere that continue trading with Iran. First, however, some essential historical background on that entire issue:

The U.S. aristocracy overthrew Iran’s democratically elected Government in 1953 and imposed there a barbaric dictatorship which did the bidding of the U.S. and allied aristocracies, by installing the Pahlavi Shah there, just as they had earlier, in 1932, installed the Saud King in Saudi Arabia — which land never ever had known democracy.

As Wikipedia says of Ibn Saud, who became King in 1932, “After World War I, he received further support from the British, including a glut of surplus munitions. He launched his campaign against the Al Rashidi in 1920; by 1922 they had been all but destroyed,” with Britain’s help. Similarly, the U.S. and its British Imperial partner installed Pahlavi as Iran’s Shah in 1953. This was done by U.S. President Dwight David Eisenhower.

This is another longish but worthwhile commentary from theduran.com Internet site.  This one was posted there at 12:20 a.m. on Monday morning EDT — and I thank Roy Stephens for this one as well.  Another link to it is here.


Hilarity in NIRP Zone: Italian 2-Year Yield Still Near 0%, as New Government Proposes Haircut for Creditors and Alternate Currency, Markets on “Knife Edge” — Wolf Richter

The ECB’s Negative Interest Rate Policy has been the funniest monetary joke ever.

The distortions in the European bond markets are actually quite hilarious, when you think about them, and it’s hard to keep a straight face.

Italian assets were pummeled again on mounting concern over the populist coalition’s fiscal plans, with the moves rippling across European debt markets,” Bloomberg wrote this morning, also trying hard to keep a straight face. As Italian bonds took a hit, “bond yields climbed to the highest levels in almost three years, while the premium to cover a default in the nation’s debt was the stiffest since October,” it said. “Investors fret the anti-establishment parties’ proposal to issue short-term credit notes – so-called ‘mini-BOTs’ – will lead to increased borrowing in what is already one of Europe’s most indebted economies.

This comes on top of a proposal by the new coalition last week that the ECB should forgive and forget €250 billion in Italian bonds that it had foolishly bought.

The proposals by a government for a debt write-off, and the issuance of short-term credit notes as a sort of alternate currency are hallmarks of a looming default and should cause Italian yields to spike into the stratosphere, or at least into the double digits.

And so Italian government bonds fell, and the yield spiked today, adding to the prior four days of spiking. But wait…!!!

This amazing article by Wolf Richter appeared on the wolfstreet.com Internet site on Monday sometime — and falls firmly into the “you can’t make this stuff up” category.  It’s certainly worth reading if you have the interest — and I thank Richard Saler for bringing it to our attention — and another link to it is hereZero Hedge had a parallel news item on this headlined “Italian bonds, banks bloodbath as ‘Mini-BoT’ massacre continues“.


God Help Turkey“: FX Confiscation Rumors Launch Lira Meltdown as Yields Explode

While Turkey may have repatriated all of its gold held at the New York Fed, or at least moved it from New York to the BIS tower in Basel as we reported overnight, what markets are far more concerned about is the ongoing inactivity by the central bank to arrest the record collapse in the Turkish Lira and the just as record surge in Turkish 10Y yields, which in light of Erdogan’s threats on the “independent” central bank, which is now terrified to hike rates, is perhaps understandable.

It is therefore also understandable why, as Bloomberg reports this morning, one brokerage is looking for help from a higher power: “God help Turkey” Istanbul-based broker Alnus Yatirim said in the sign-off to its morning note to clients on Monday. “We’re faced with a central bank that is watching the market when it needs to lead and direct it.”

Yatirim has a point: on today’s Bloomberg EM Bloodbath chart, the TRY is once again the worst performing currency against the USD…

The brokerage predicted that the TRY could fall to 4.58 per dollar by the end of this week – or rather the start as it is already there now, give or take – and 4.75 next week.

The market is testing whether the central bank’s verbal interventions are a bluff or not, Alnus said. Without policy action, the damage is likely to spiral, it said, citing the $222 billion of net debt held by Turkish non-financial companies in overseas currencies. Each 1 cent depreciation in the currency adds about 5 billion liras to the cost of Turkey’s foreign borrowings, it said.”

Adding to an already dire picture, overnight rumors emerged that the government will seize foreign currency deposits although Turkey’s banking regulator chief Mehmet Ali Akben said such speculation is “absurd,” Sabah newspaper reported. “Such a decision is neither discussed or a work has been done on it” he said noting that banks’ rollover ratio is around 110%, and adding that they have no problem in foreign borrowing (“for now” he forgot to add).

This Zero Hedge news story was posted on their website at 10:22 a.m. yesterday morning EDT — and it’s the second contribution in a row from Richard Saler.  Another link to it is here.  A brief parallel piece showed up on the Bloomberg website very late yesterday morning Denver Time — and it’s headlined “Greece Moves Closer to Bailout Exit After Deal With Creditors“.  I thank Swedish reader Patrik Ekdahl for that one.


Tehran eyes path ahead after U.S. withdrawal from nuclear pact — Pepe Escobar

The Trump administration’s withdrawal from the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), has monopolized the highest levels of government in Tehran around the clock since the decision was announced on May 9.

Prime Minister Mohammad Javad Zarif, who met yesterday with the European Union’s energy chief Miguel Arias Canete, reiterated that mere words of support from the Europeans are not enough. The JCPOA joint commission meets in Vienna this coming Friday to analyze all options ahead.

EU diplomats in Brussels told Asia Times that, contrary to rumors, the European Union is not considering offering financial aid to Tehran in exchange for concessions towards a possible new nuclear deal.

What Brussels is desperate to achieve before the first U.S. sanctions kick in from August is to devise a mechanism to contest the dominance of extraterritorial American law – and reassure President Hassan Rouhani, who allegedly has “limited” trust that France, Britain and Germany will affirm an independent foreign policy.

Tehran, meanwhile, is considering conducting all its trade and commercial transactions in euro and yuan.

This commentary by Pepe put in an appearance on the Asia Times Internet site at 4:59 p.m. Hong Kong time on their Monday afternoon, which was 4:59 a.m. EDT in Washington on the same day — EDT plus 12 hours.  I thank Tolling Jennings for sharing it with us — and another link to it is here.


Strongest sanctions in history’: Pompeo issues 12 demands to Iran, vows ‘unprecedented pressure

Tehran will struggle to “keep its economy alive” if it does not comply with a list of 12 U.S. demands, including Iranian withdrawal from Syria, Secretary of State Mike Pompeo vowed on Monday.

Speaking at the Heritage Foundation, a right-wing Washington think tank, Pompeo laid out a list of 12 “basic requirements” for Iran. The demands call on Iran to withdraw from Syria, “release all U.S. citizens,” end support for Houthi rebels in Yemen, stop “enrichment” of uranium, and promise never to process plutonium. Iran must also allow “unqualified access to all nuclear sites throughout the country,” Pompeo said.

He promised that the U.S. would impose the “strongest sanctions in history” if Iran failed to comply with these demands.

Pompeo said that “the sting of sanctions will be painful” and Iran will struggle to “keep its economy alive” if Tehran “does not change its course from the unacceptable and unproductive path it has chosen.”

Thanks to our colleagues at the Department of Treasury, sanctions are going back in full effect and new ones are coming … These will indeed end up being the strongest sanctions in history,” Pompeo said.

The secretary of state also pledged that the U.S. “will track down Iranian operatives and their Hezbollah proxies operating around the world, and we will crush them. Iran will never again have carte blanche to dominate the Middle East.”

Speaking directly to the Iranian people, Pompeo claimed that “President [Hassan] Rouhani and Foreign Minister [Javad] Zarif… are your elected leaders. Are they not the most responsible for your economic struggles?” He added: “The United States believes you deserve better.”

Pompeo also said he’s sure that over time, Washington’s allies will warm to the Trump administration’s now unpopular stance on Iran.

Spoken like the true sociopathic/psychopathic deep state personality type the he is. This news story appeared on the rt.com Internet site at 1:31 p.m. Moscow time on their Monday afternoon, which was 6:31 a.m. in Washington — EDT plus 7 hours.  I thank Patrik Ekdahl for bringing it to our attention — and another link to it is here.  There was a UPI article about this headlined “Mike Pompeo vows to place ‘strongest sanctions in history’ on Iran”  — and I thank Roy Stephens for pointing it out.


U.S. and China agree to abandon trade war

The announcement came after high-level talks in the U.S. capital and followed months of tensions over what President Donald Trump has blasted as an unfair commercial relationship between the two economic giants.

Vice-Premier Liu He, who led Chinese negotiators in Washington said: “The two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other,” state-run news agency Xinhua reported Sunday.

Liu called the agreement a “necessity”, but added: “At the same time it must be realised that unfreezing the ice cannot be done in a day, solving the structural problems of the economic and trade relations between the two countries will take time.”

An earlier joint statement issued in Washington said Beijing would “significantly” increase its purchases of American goods, but offered few details.

This was the surprise story of the weekend.  This news item put in an appearance on the france24.com Internet site on Sunday sometime — and I thank Roy Stephens for sending it our way.  Another link to it is here.  Patrik Ekdahl sent along a companion piece to this from the BBC — and it’s headlined “U.S. and China halt imposing import tariffs“.


Russia continuing to increase gold reserves…adds 18.66 tonnes in April — Lawrie Williams

Despite U.S. sanctions impacting on some elements of Russia’s foreign trade, the country’s central bank is continuing with its seemingly inexorable increase in its gold reserves.  Indeed recent reports suggest that, in part because of the strong oil price the country is currently running a balance of payments surplus regardless which it may well turn into gold – particularly as the nation’s annual gold production level is seen as increasing as well – even if global gold output is flat or falling!  There may also be a political element involved in turning to gold, and reducing reliance on U.S. dollars in its forex reserves.

In April, therefore, the country’s central bank reports adding the rounded figure of 600,000 ounces (or 18.66 tonnes) to its gold reserve total bringing the overall figure as will be reported to the IMF (Russia is one of the few countries reporting its gold reserve changes on a month by month basis) to around 1,909.5 tonnes – the world’s fifth largest reported national holding and now some 67 tonnes higher than China’s reported holding.  However we remain extremely sceptical about the Chinese figure as stated given that the Asian dragon has reported zero increases in its reserves for fully 18 successive months (See: China’s official gold reserves unchanged – again).  We think the Chinese position, as reported, extremely unlikely – indeed the country has a strong past track record of only reporting its reserve increases at multi-year intervals.

This gold-related story by Lawrie was posted on the Sharps Pixley website on Saturday sometime — and another link to it is here.


Gold frequently disappoints Jim Grant, but does he understand why?

Interviewed this week by the TF Metals Report‘s Craig Hemke for the “Ask the Expert” segment at Sprott Money News, James Grant of Grant’s Interest Rate Observer, an advocate of gold, said he doubts that central banks intervene against the price of the monetary metal. Grant’s comments on gold in the interview begin at the 13:20 mark here.

Grant’s comments were disappointing…first for their inconsistency — and second for indicating ignorance of basic details.

The gold price, Grant said in the interview, is the reciprocal of faith in central banking, and he recalled that former Federal Reserve Chairman Paul Volcker once remarked to him that, for this very reason, he was always rooting for the gold price to go down.

But Grant added that he doesn’t think central banks even care about gold anymore, and that the risk central banks would assume in intervening against gold would be much worse than any benefit they would get from it. He said that as an investor in gold he is always expecting a higher price and is frequently disappointed.

Grant is generally acknowledged to be a brilliant guy, so might there be powerful reasons for the gold price not to be performing up to his expectations?

Grant knows perfectly well that that the gold price is being managed, but would never say a word about it when he’s being interviews by the main stream media, as he knows what would happen if he did.  He’d never be invited back.  This worthwhile commentary by GATA secretary/treasurer Chris Powell showed up on their Internet site on Saturday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

I’m always surprised at how quickly waterfowl include me as part of the scenery once I’ve sat quietly for a few minutes — and it’s amazing what will swim by, or come on shore in front of me.  Of course I had to sneak up on the pair or redhead ducks in the first shot, but the male blue-winged teal acted like I wasn’t even there.  Click to enlarge for both.


The WRAP

I commented in my Saturday missive that I was somewhat disappointed that JPMorgan et al didn’t take gold down to a new intraday low during Friday’s trading day, because they were within dimes of doing so.  But they waited until Monday in Far East trading to do it instead.  Now that it’s “mission accomplished”…it remains to be seen if they will push the price even lower to get more Managed Money long selling — and short buying.  They may, but if I had to bet the usual hypothetical ten bucks on that, I’d say that they’re done, although I certainly reserve the right to be wrong about that.  But the fact that they allowed the gold price to close in positive territory means that my theoretical bet appears pretty safe.  And as I’ve already pointed out, ‘da boyz’ set a new intraday low in platinum as well, so they’ve got the Managed Money traders even deeper on the short side in that precious metal as well.

The other thing worth mentioning is that JPMorgan et al halted silver’s rally right at its 50-day moving average — and I was also very encouraged by the share price action in both precious metals yesterday.

Here are the 6-month charts for all four, plus copper and WTIC — and you can review yesterday’s price action for yourself.  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 off a few dollars in Tuesday morning trading in the Far East — and is down $3.60 the ounce at the moment.  Silver has followed a similar price path, of course — and it’s down 5 cents.  Ditto for platinum…it’s down 4 bucks, but palladium has rebounded from down a few dollars — and is now sitting at unchanged as Zurich opens.

Net HFT gold volume is a bit over 54,000 contracts — and there’s about 4,100 contracts worth of roll-over/switch volume as well.  Net HFT silver volume is 8,100 contracts — and there’s about 425 contracts worth of roll-over switch volume in that precious metal.

The dollar index declined a bit in early morning trading in the Far East — and its current 93.48 low tick was set around 8:40 a.m. CST on their Tuesday morning — and then didn’t do much until precisely 2:00 p.m. China Standard Time on their Tuesday afternoon.  It has jumped higher since then — and it’s now up 17 basis points as London opens.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report.  Based on the first four days of the reporting week that ended yesterday, there certainly will be improvements in the commercial net short positions in both gold and silver…plus platinum.  Let’s hope it remains that way for the remainder of the Tuesday session.

And as I post today’s column on the website at 4:02 a.m. EDT, I note that the gold price has rallied a bit since London opened — and is only down 30 cents currently. It’s the same for silver — and it’s now up 4 cents. Platinum is now up a dollar — and palladium is up 5 bucks, but obviously running into ‘resistance’.

Gross gold volume is a bit over 85,000 contracts now — and net of roll-over/switch volume, net HFT gold volume is a bit over 74,000 contracts. Net HFT silver volume is a bit over 11,000 contracts — and there’s 430 contracts worth of roll-over switch volume in that precious metal.

The dollar index’s meteoric rise that started at 2 p.m. CST, crashed and burned starting the moment that London opened — and the dollar index is now down 10 basis points as the first hour of trading over there draws to a close.

As wildly bullish as the COT Report was on Friday, it’s even more wildly bullish now, particularly in silver — and all that we have to do is wait until ‘da boyz’ allow precious metal prices to rally.  At that juncture, we’ll find out pretty quick if JPMorgan turns into the short seller of last resort once again.

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

Ed