Precious Metal Prices: On a Short Leash

07 September 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price rose and fell a few dollars during Far East trading on their Thursday — and was down a bit by 2 p.m. China Standard Time.  The price began to crawl higher from there — and back above $1,200 spot — and that lasted until the noon silver fix in London — and then it chopped quietly sideways.  Then minutes before the 11 a.m. EDT London close, the dollar index was blasted higher — and the gold price was blasted lower…back below $1,200 spot.  That event was all over in less than fifteen minutes.  From there the price traded mostly sideways, with a slightly positive bias after the COMEX close.

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

Gold was closed in New York on Thursday at $1,199.50 spot, up $3.20 on the day.  Net volume was pretty decent at a bit over 260,000 contracts — and roll-over/switch volume was 19,000 contracts.

With some minor variations, the price pattern in silver was about the same — and it was obvious, at least to me, that its price was being carefully micro-managed as well.

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

Silver was closed at $14.13 spot, down 3.5 cents on the day.  Net volume, like for gold, was surprisingly heavy at a bit over 70,600 contracts — and roll-over/switch volume in this precious metal was 2,545 contracts.

Like for gold and silver, platinum’s Far East low tick came at 2 p.m. CST as well.  It began to rally rather smartly starting about thirty minutes after Zurich open — and that lasted until about the 10:30 a.m. morning gold fix in London.  It was sold lower for about an hour, before rallying anew — and its high tick came at the afternoon gold fix.  It was down hill from there…helped along by that big up-tick in the dollars index…until about 11:30 a.m. in New York.  The price crawled higher from that point until 2 p.m. in the thinly-traded after-hours market — and it traded flat for the rest of the day.  Platinum finished the Thursday session at $791 spot, up 7 dollars from Wednesday’s close…but would have closed significantly higher if allowed.

The palladium price didn’t do much of anything in Far East trading on their Thursday, but began to edge higher starting a few minutes before 10 a.m. CEST in Zurich.  That was capped around the morning gold fix in London as well — and the price didn’t do much until shortly before 9 a.m. in New York.  It was sold unevenly lower from there into the COMEX close — and edged unevenly sideways until trading ended at 5:00 p.m. EDT.  Palladium was closed at $971 spot, up a buck from Wednesday and, like platinum, would have obviously closed higher if allowed, as well.

The dollar index closed very late on Wednesday afternoon in New York at 95.11 — and shortly after trading began at 6:00 p.m. EDT on Wednesday evening, quickly fell below the 95.00 mark.  From that juncture, it traded sideways until around 10:45 a.m. China Standard Time on their Thursday morning.  It began to edge higher from there until exactly 2 p.m. CST –  and then proceeded to chop quietly, but very unsteadily lower from there until a few minutes before 11 a.m. EDT…the London close.  The 94.93 low tick of the day was set at that point — and it then blasted up to the 95.18 mark during the next fifteen minutes.  From that point, it resumed its unsteady price decline — and the index closed at the 95.03 mark, down 8 basis points from Wednesday.

It’s obvious from the intraday dollar index chart below, that it was saved by the usual ‘gentle hands’ on five separate occasions yesterday.  The first time, shortly after trading began at 6 p.m. EDT in New York on Wednesday evening — and four times during the Thursday trading session in New York.

It’s also equally obvious that the sharp spike up in the dollar index minutes before the London close was used to full advantage by ‘da boyz’ in repricing gold, silver and platinum by a bit each.

And here’s the 6-month U.S. dollar index — and it’s purely fiction, as the dollar index would crash and burn if allowed — and yesterday’s price action in New York was proof positive of that.

The gold stocks were up almost 2 percent by the 10 a.m. EDT afternoon gold fix in London, but by 10:25 a.m. had given back almost all of those gains.  They then rallied sharply until the big price spike in the dollar index occurred starting a few minutes before the 11 a.m. EDT London close.  From that juncture the gold shares chopped quietly lower until their respective low ticks were set around 3:40 p.m.  They rallied a bit into the close from there.  The HUI finished down 0.62 percent.

It was the same general price path for the silver equities…at least in the early going.  They bottomed out around 1:10 p.m. in New York trading — and then chopped quietly higher until a minute or so after 3 p.m. EDT — and didn’t do much after that.  Nick Laird’s Intraday Silver Sentiment Index finished down 0.09 percent.  Call it unchanged.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart.  Click to enlarge as well.

The CME Daily Delivery Report for Day 4 of September deliveries showed that 63 gold and 295 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, the only short/issuer that mattered was HSBC USA with 57 contracts out of its in-house/proprietary trading account.  The three long/stoppers were…Advantage with 32 for its client account…Morgan Stanley with 18 contracts, 15 for its own account, plus 3 for its clients — and 13 contracts for JPMorgan’s client account.  In silver, there were six short/issuers.  The two largest were International F.C. Stone and S.G. Americas, with 160 and 102 contracts out of their respective client accounts.  In very distant third spot was Citigroup with 21 contracts from its client account as well.  There were eight long/stoppers, the largest of which was JPMorgan with 154…111 for its own account, plus 43 for its clients.  In second spot was HSBC USA picking up 75 contracts…74 for its own account, plus 1 contract for clients.  Advantage and Goldman came in third and fourth with 25 and 21 contracts…Advantage for its client account — and Goldman Sachs for its own account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in September fell by 3 contracts, leaving 89 still around, minus the 63 mentioned just above.  Wednesday’s Daily Delivery Report showed that 5 gold contracts were actually posted for delivery today, so that means that 5-3=2 more gold contracts just got added to September.  Silver o.i. in September dropped by 332 contracts, leaving, 1,110 still open, minus the 295 mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 291 silver contracts were actually posted for delivery today, so that means that 332-291=41 silver contracts vanished from the September delivery month.


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

There was no sales report from the U.S. Mint yesterday.

When the mint finally get caught up on silver eagles production to match the orders they have on their books, it will be interesting to see how a big a number it is.  As I’ve said numerous times, this ain’t John Q. Public buying them…certainly not these quantities when investor sentiment is in the toilet.

There wasn’t much activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received — and only 8,646 troy ounces were shipped out.  That amount came from three separate depositories.  There was also a transfer of 14,031 troy ounces out of the Registered category — and back into Eligible.  That involved two different warehouse.  And because they amounts are not significant, I’m not going to itemize everything.  If you wish to see the break-downs for yourself, the link to it all is here.

In silver, there wasn’t much physical activity.  Nothing was reported received — and only 61,579 troy ounces were shipped out — and all of that amount was at CNT.  There were two rather significant transfers…the largest being 783,856 troy ounces from the Eligible category — and into Registered over at CNT as well.  There was 597,499 troy ounces transferred in the other direction over at Canada’s Scotiabank…from Registered back into Eligible.  The link to this is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 3,700 of them — and shipped out 179.  All of this action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here’s another chart that I dug up on Nick Laird’s website just now.  It shows the monthly gold withdrawals from the Shanghai Gold Exchange starting in January of 2008…so there’s 10+ years of data in the chart below.  According to this chart, there was 137.41 tonnes withdrawn in July, the latest month for which data is available.  But in a Sharps Pixley story in today’s Critical Reads section below, Lawrie Williams states that August gold withdrawals from the SGE totalled 190.59 tonnesClick to enlarge.

And not including the 190 tonnes withdrawn in August, there has been 16,234 tonnes of gold withdrawn from the Shanghai gold exchange over the last ten-plus years.  Where did all that gold come from?

I have a decent number of stories for you today.


CRITICAL READS

How to Punish the White House “Traitor” — Bill Bonner

Treason,” says Trump, demanding that The New York Times hand over the traitor on national security grounds.

Here at the Diary, we hope The New York Times reveals its source.

If not, we have a suggestion: decimation.

It worked for the Roman army. And military historian Antony Beevor claims the Soviets used it, too, to stiffen the resistance at Stalingrad.

The idea for the Romans was simple: When punishing entire cohorts (military units), they’d line up all the soldiers… and every tenth man would get the sword.

Here’s how the Trump team could use it now: Simply line up the entire White House staff – the head of the National Security Agency… the guards at the front gate… secretaries… top officials… everyone. If no one confesses to having told the truth to The New York Times, shoot every tenth person.

We don’t know if that would solve Mr. Trump’s morale issue, but it would be good for the morale of the rest of the nation.

This commentary by Bill showed up on the bonnerandpartners.com Internet site very early on Thursday morning EDT — and another link to it is here.


These “Gradual” Rate Hikes Start to Add Up: U.S. Treasury Yields up to Three Years Hit 10-Year Highs — Wolf Richter

The one-month treasury yield rose to 2.0% yesterday at the close and is at about the same level today, the highest since June 10, 2008. It is starting to price in a rate-hike at the Fed’s September 25-26 meeting. This rate hike, the Fed’s third this year, would bring its target to a range between 2.0% and 2.25%.

The three-month yield, currently at 2.14%, has reached the highest level since February 26, 2008. Back then, as the Financial Crisis was taking its toll, yields were going through enormous volatility, as the chart below shows. During that volatile period in mid-2008, the three-month yield spiked for a day to 2.07% on June 16, but never got back to the 2.14% in February that year:

It hasn’t been exactly a whirlwind rate-hike cycle with one-percentage-point rate hikes per meeting, à la Paul Volcker in the early 1980s, but in their “gradual” – as the Fed never tires to point out – easy-to-digest, no-surprises manner, the rate hikes are starting to add up. There is an entire generation working in the finance industry and on Wall Street who has never seen Treasury yields this high. They’re in for a learning experience.

This chart-filled commentary put in an appearance on the wolfstreet.com Internet site on Wednesday sometime — and it comes to us courtesy of Richard Saler.  Another link to it is here.


A Nice Little House With a White Picket Fence — Dennis Miller

I was a senior, Sally was a freshman. We would hold hands and walk to the small lake on the other side of her family’s farm. The bank was angled, and we would lean back and stare at the distant sky and cloud formations. Sally (Name is changed but the story is real) was my high school sweetheart who I still hold fondly in my heart.

I was about to graduate from high school and leave home. We discussed, “What’s life really all about?” It was the first time I remember peering over the horizon, actually wondering about adulthood. I emphatically declared I want “A nice little house with a white picket fence”.
That was 60 years ago. Ten days after graduation I headed off to the Marine Corps. There was no money for college, might as well fulfill my military obligation.

I’m forever grateful to Sally. Every day in boot camp, over that long, hot summer, I got her letter with a return address HOLLAND. (Hope our love lasts and never dies) Like most young romances, about six months later we went our separate ways.

I didn’t see Sally again until I was 60 years old at a high school reunion. She is still the same wonderful person, married to another classmate who is a cool guy. They raised a nice family and are happy. As we hugged I thanked her for her wonderful letters to a young man who had just left home. I’m happy for her, she is a good person who deserves a good life.

Now the 80-year-old milestone is in front of me. I’m probably a silly romantic daydreaming about my childhood memories – and then sharing my thoughts.

This interesting commentary by Dennis was posted on his Internet site yesterday sometime — and another link to it is here.


Choosing Your Immigrants — Jeff Thomas

In the 18th century, America was made up primarily of people who, of necessity, had had to work hard. Had they not taken full responsibility for their own welfare, there was no one else to do it for them and they would have starved. As this was the case, anyone who did arrive on American shores who was unwilling to work and wanted others to provide for him, could expect to find no sympathy and might well starve.

In the 19th century, the former colonies had become the United States. Expansion was underway and the young people of the 18th century became the entrepreneurs of the 19th century. In order to continue to get the menial tasks accomplished, millions of immigrants were needed. Those who were welcomed were those who were prepared to start at the bottom, often live in poor conditions, receive no entitlements and compete for even menial jobs. If they accepted these terms, they received the opportunity to immigrate and work.

Also, in the 19th century, the U.S. expanded to the West coast, covered the nation with railroads and created the industrial revolution – the greatest period of expansion in U.S. history.

In the 20th century, income tax was implemented, the Federal Reserve took over the dollar and the “New Deal” Introduced the concept of entitlement. It was a mixed century of wealth generated by the industrial revolution, fighting against the new concept of entitlement.

In the 21st century, immigrants in large numbers were again encouraged to come in. However, unlike in the 19th century, they were not encouraged on the basis of starting at the bottom, often living in poor conditions, receiving no entitlements and competing for even menial jobs.

Quite the contrary. They not only were guaranteed welfare, schooling and housing, they would not be required to work at all and, if they committed crimes, they were likely to be released without prosecution. They, in fact, were afforded privileges above that of American citizens.

This interesting — and very worthwhile commentary by Jeff appeared on the internationalman.com Internet site yesterday sometime — and another link to it is here.


Ruble Tumbles on Medvedev Comments, U.K. Allegations as Russian Yields Surge

The Russian ruble tumbled as much as 2%, sliding to 69.63, the lowest level against the dollar since March 2016 and its biggest drop since August 8 after Russia’s prime minister Dmitry Medvedev effectively admitted that U.S. sanctions are starting to bite, and said that he is hopeful that the Bank of Russia becomes “active” as rates are high.

It’s necessary to move from neutral to stimulating oversight of the credit sphere to create conditions for more confident economic growth,” Medvedev said at conference in Moscow, adding that “Interest rates remain quite high despite the successes in holding back inflation.” The prime minister also urged the central bank to take an “active position” to address the issue of elevated rates.

According to Rabobank’s Piotr Matys, “market participants are especially sensitive to any comments on monetary policy from prominent officials in current environment” adding that the USDRUB could approach 71.40 in coming weeks.

It seems that the market has interpreted comments from PM Medvedev as political interference in the monetary policy. Such remarks may undermine credibility of the central bank and Governor Nabiullina, who is well respected by investors for acting decisively during the ruble crisis only a few years ago.”

From the perspective of technical analysis comments from PM Medvedev may provide USD/RUB with sufficient momentum to break higher from the consolidation pattern that formed over the past few weeks. This bullish breakout would allow USD/RUB to extend gains towards the next important level at around 71.40 in the coming weeks

This story showed up on the Zero Hedge Internet site at 11:58 a.m. EDT on Thursday morning — and I thank Brad Robertson for sending it along.  Another link to it is here.


Iraq is Facing a Major Internal Crisis

Despite the fact that production and export figures presented by Iraqi sources are showing a significant improvement, optimism should be tempered.

Iraq continues to head towards a major showdown between the two main political rival blocks, led by Prime Minister Al Abadi and former PM Al Maliki. Both are currently in a race to lead the country, while being confronted by internal and external threats.

Iraqi oil production and export figures are showing very positive developments, even though internally, the country is teetering on the brink. The latest data from the Iraqi ministry of oil shows that it has boosted its southern crude oil exports to 3.583 million b/d in August, 40,000 bpd higher than in July. Since the OPEC meeting in Vienna, Baghdad has been pushing to increase its total production to a three-month average of 3.549 million b/d, an increase of 109,000 b/d from the first five months of 2018.

It is surprising to see that even with continuing unrest in the Basra region, exports from its southern terminals are up. Loadings from the Khor al-Amaya terminal have been suspended since the start of 2018. Iraq’s State Oil Marketing Organization (SOMO) reported that 2.727 million b/d of Basrah Light have been shipped from the terminals, along with 856,000 b/d of Basrah Heavy crude. At present another seven tankers have berthed, while four are waiting for their turn, with a total of around 7 million barrels.

Northern Iraqi oil figures are also promising, as exports from the semi-autonomous Kurdistan Regional Government to the Turkish Mediterranean port of Ceyhan have been growing. Kurdish sources indicate that the KRG is currently exporting 445,000 bpd to Ceyhan, which is a 40 percent increase in comparison to July. Government oil production in the north however is still blocked, as there is no agreement between Baghdad and the KRG. A potential 200,000 bpd is currently not being exported due to this issue.

The future could, however, be less bright than the above data suggests. The country is facing a total shutdown if the competing political blocks are not able to reach a deal in the parliament soon. Several days ago the Iraqi parliament met for the first time since the May elections. At present, current Prime Minister Haider al-Abadi is still trying to reach a majority coalition, but has, until now, been blocked by his rivals, led by former Prime Minister Nouri al-Maliki. After several heated discussions, no solution has been reached.

This very interesting background story put in an appearance on the oilprice.com Internet site at 5:00 p.m. Central Daylight Time on Wednesday afternoon — and I found it embedded in a Zero Hedge article from 3:26 p.m. EDT on Thursday afternoon.  Another link to it is here.  A companion story to this from ZH was posted on their Internet site at 8:18 p.m. on Thursday evening.  It’s headlined “U.S. Embassy In Baghdad’s Green Zone Under Attack“.


Balance Sheet of the Forever War — Pat Buchanan

It is time for this war in Afghanistan to end,” said Gen. John Nicholson in Kabul on his retirement Sunday after a fourth tour of duty and 31 months as commander of U.S. and NATO forces.

Labor Day brought news that another U.S. serviceman had been killed in an insider attack by an Afghan soldier.

Why do we continue to fight in Afghanistan?

We continue to fight simply because we are there,” said retired Gen. Karl Eikenberry who preceded Gen. Nicholson.

Absent political guidance and a diplomatic strategy,” Eikenberry told The New York Times, “military commanders have filled the vacuum by waging a war all agree cannot be won militarily.”

This longest war in U.S. history has become another no-win war.

This worthwhile commentary by Pat appeared on his Internet site on Tuesday sometime — and my thanks go out to Roy Stephens for sharing it with us.  Another link to it is here.


USD/JPY Tumbles After Trump Hints At Japan Trade War Next

USD/JPY dived after hours (following a day of weakness) after reports from The Wall Street Journal  that President Trump told a columnist that he will take his trade fights to Japan next.

Yen strengthened as safe haven carry flows reverted home on the Trump headlines…

WSJ‘s James Freeman wrote  about a phone call he received from the president, in which Trump “described his good relations with the Japanese leadership but then added:

“Of course that will end as soon as I tell them how much they have to pay.'”

Freeman said the phone call came after he appeared on Fox News Channel giving the president credit for the results of his tax and regulatory reforms. During the phone call, Freeman wrote, the president sounded “still very focused on eliminating trade deficits with America’s trading partners.”

This tiny 1-chart Zero Hedge news item was posted on their website at 4:25 p.m. EDT on Thursday afternoon — and another link to it is here.


Look out for Emerging-Market Contagion Effects — Nomi Prins

Even though summer technically lasts until Sept. 21, the reality is that after Labor Day, markets often snap into a hectic fall mode.

A recent Reuters article notes that, “President Donald Trump’s relentless “America First” trade push is hurting confidence in many countries, rising U.S. interest rates are putting strains on emerging economies and currency problems have hit crisis levels in Argentina and Turkey.”

When considering the markets over the last few weeks and seeing how the Turkish lira in particular has fallen 40% against the dollar since the start of the year, I started thinking back to my first job on Wall Street.

At the time, I was earning my degree in mathematics. And my senior thesis was on chaos theory.
Chaos theory aims to find “hidden order” in a seemingly chaotic environment. This hidden order is often reflected in symmetry and in repetitive events.

This very interesting commentary by Nomi appeared on the dailyreckoning.com Internet site on Wednesday sometime — and another link to it is here.


After 10 Years of “Recovery,” What Are Central Banks So Afraid Of? — Charles Hugh Smith

If the economy were truly recovering, wouldn’t central banks have tapered their stimulus and intervention long ago? Instead, central bank stimulus skyrocketed to new highs in 2015-2017 as global markets took a slight wobble. That little slide triggered a massive central bank response, as if the patient had just suffered a cardiac arrest.

As for China’s economy being so healthy–then why are Chinese authorities expanding credit in such manic desperation? Healthy economies growing organically don’t need authorities pumping trillions of yen, yuan, euros and dollars into credit and asset markets.

So what are central banks so afraid of? Why are they still tiptoeing around in fear after 10 years of unprecedented stimulus? The answer is as obvious as the emperor’s buck-naked body: central banks know the global economy is so brittle, so fragile and so dependent on cheap credit for its survival that the slightest contraction in credit will collapse the entire system.

If the world’s economies still need central bank life support to survive, they aren’t healthy–they’re barely clinging to life. The idea that central banks can wean a sick-unto-death global economy off life support is magical thinking, and central banks know it.

If the patient isn’t getting well after 10 years on life support, he isn’t going to get well.

This must read commentary by Charles was posted on the Zero Hedge website at 8:15 p.m. EDT yesterday evening — and another link to it is here.


Apocalypse, Or Not? — Alasdair MacLeod

Uncertainty and change are with us all the time. In a truly free market economy we embrace it because they are driven by our personal economic interests, and it is a continual process. But the desire for change is driven by us only in our role as consumers; as workers or businessmen facing competition for our existing labour and skills we tend to resist it. It is that side of us that a government taps into.

Modern governments, except where they are overtly mercantilist, don’t do change. Their support, indeed their reason for being, is based on anti-progressive lobbying from both establishment businesses and socialistic pressure groups. Government economists do not recognise progress, living in a stagnant world of historical statistics. Progressive change interferes with their certainties and is therefore never properly considered.

This is what the welfare states in the West have become, societies managed by anti-progressive governments, nominally responsible to their electorates, but in fact with a life of their own. The interests of governments have long since departed from those of consumers and increasingly conflict with their needs and wants. It is a process that has evolved to the current position over the last hundred years, when governments had understood their role should be strictly limited to identifiable national interests, when government employees deferred to the general public as their civil servants, and importantly, when the national currency was based on money chosen collectively by individuals.

It is therefore a much larger issue than just money. It is about the direction of political travel. For individuals it has become a prolonged road to serfdom, where power and personal freedom have been sequestered by the government from the consumer. The consumer has lost the right to keep his own income, and his preferences are now regarded by the state as subject to its control, to plan and dispose of as it sees fit.

This opinion piece/commentary should be read with an open mind.  There are some things I agree with — and some, not so much.  It was posted on the goldmoney.com Internet site yesterday sometime — and I found it embedded in a GATA dispatch.  Another link to it is here.


Chinese gold demand on the rise — Lawrie Williams

Contrary to media reports suggesting weak Chinese gold demand based primarily on a big fall in gold imports from Hong Kong, the latest gold withdrawal figures out of the Shanghai Gold Exchange paint a very different picture. August gold withdrawals came to just short of 191 tonnes compared with 161 tonnes for the same month a year earlier and 144 tonnes in August 2016. Year to date SGE gold withdrawals at 1,366 tonnes are around 6% up on the first 8 months of 2017 and over 10% up on the corresponding 2016 figure. If this advantage is maintained for the remainder of the year the full year figure could well be in excess of 2,150 tonnes – and bring the full year total close to the second best year for SGE gold withdrawals ever.

The media made great play of the fact that July gold exports from Hong Kong to Mainland China were substantially down on the previous month – China’s July net gold imports via Hong Kong plunge 45 pct m/m was the Reuters headline – and the article went on to make the very out-of-date comment that the Hong Kong figures serve as a proxy for total Chinese gold imports, which they have not done for some years now. Judging by known gold export figures from countries which report these it is doubtful whether even half mainland China’s gold imports are routed through Hong Kong nowadays. The greater part now comes in via Beijing and Shanghai and perhaps other ports of entry.

[And] with the low gold price also seen as boosting demand in India, the world’s second largest gold consumer which, according to GFMS, has just recorded particularly strong gold imports in August — apparently a 15-month high — gold is perhaps performing more strongly than its COMEX-manipulated price might suggest. Hang in there. There should be better times ahead.

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


The PHOTOS and the FUNNIES

Here are a couple of photos of red-necked grebes over at the pond.  I’ve posted many photos of these birds over the years, as they nest here every year in exactly the same spot.  The first shows one adult and two juveniles…the only two that survived from the four eggs they laid.  Two of the three are having cat naps.  The second shot is of an adult bird, complete with hapless minnow, looking for one of the above juveniles to feed it to.  I would have been a lot happier if they had been a little closer than they actually were, as these shots were taken at the outer limits of the resolving power of my telephoto lens.  The red reflection in the water is from a building in the distant background.  Click to enlarge for both.


The WRAP

Except for the new low in WTIC yesterday, there’s not much to look at it in any of the 6-month charts posted below.  But as I mentioned at the top of this column, I was rather taken aback by the high volume levels in both gold and silver, but particularly in silver.  The price action in both didn’t seem to justify those volumes, although it’s certainly possible that ‘da boyz’ had to show up to prevent precious metal prices from really blasting higher.  Like I said in yesterday’s column, it certainly appears that the powers-that-be have them on a short leash — and will keep them there until they’re ready to release them.

Here are the charts for the Big 6 commodities — and the ‘click to enlarge‘ feature only helps with the first four.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price crawled a few dollars higher until shortly after 11 a.m. China Standard Time on their Friday morning — and at that point it was tapped back to the $1,200 spot mark — and has been chopping quietly sideways since. At the moment, it’s up only 90 cents an ounce. Silver was up a nickel or so in early morning trading in the Far East but began to fade starting shortly before 10 a.m. CST. It then got smacked down more than a dime starting the same time as gold got tapped lower. It’s off it current low by a bit, but still down 3 cents an ounce. Platinum traded flat until it was sold lower as well, also starting shortly after 11 a.m. over there. It has been chopping unsteadily higher since — and is currently up a dollar. Palladium has been trading sideways throughout the entire Far East trading session — and is down a dollar as Zurich opens.

Gross gold volume is a bit over 56,000 contracts already — and net of current roll-over/switch volume, net HFT gold volume is around 51,700 contracts. Net HFT silver volume is also pretty heavy already at around 18,200 contracts — and there’s only 454 contracts worth of roll-over/switch volume in that precious metal.

The dollar index chopped quietly sideways slightly above the 95.00 mark until shortly before noon in Shanghai, but then began to fade unsteadily from there — and is currently down 9 basis points as London opens.

Today, at around 3:30 p.m. EDT, we get the weekly COT Report — and the companion Bank Participation Report.  Both will be sights to behold — and I will have all of it in my Saturday missive.

Also today, at 8:30 a.m. EDT, we get the latest jobs report and, as always, it will be interesting to see how precious metal prices react, or will be allowed to react.  So brace yourself.

I’m filing Friday’s column an hour earlier than usual, because I have to be up far earlier than I’d like to be this morning.

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

Ed