Some Positive Price Activity For a Change

13 September 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold quietly lower until around 1 p.m. China Standard Time on their Wednesday afternoon — and then didn’t do much until shortly after the London open.  It crawled very quietly and unsteadily higher into the 10:30 a.m. morning gold fix — and from there it was sold equally quietly lower to its low tick of the day, which came right at the COMEX open in New York.  It began to head higher from there — and tacked on a quick 8 bucks or so in ten minutes between the 11 a.m. EDT London close — and 11:30 a.m.  It continued to tick quietly higher after that until a minute or so before 2:30 p.m. in after-hours trading — and was sold a bit lower until shortly before 4 p.m.  It traded ruler flat from there into the 5:00 p.m. close.

The low and high ticks were reported as $1,192.40 and $1,208.30 in the October contract — and $1,197.60 and $1,213.90 in December.

Gold finished the Wednesday session in New York at $1,206.10 spot, up an even $8.00 from Tuesday’s close.  Net volume was pretty heavy at just under 284,000 contracts — and roll-over/switch volume was  a bit under 9,200 contracts.

The price path for silver, as it normally is, was the same as it was for gold, except the price spike after the London close was much more violent — and obviously had to be restrained.  It was sold down a bit until noon in New York — and although it pretty much mirrored the gold price action after that, it wasn’t allowed to trade above its 11:25 a.m. EDT high tick.

The low and high in this precious metal was recorded as $14.105 and $14.315 in the December contract.

Silver was closed on Wednesday at $14.235 spot, up 11.5 cents on the day and, like gold would have closed at heaven only knows what if a short seller of last resort hadn’t appeared at 11:25 a.m. EDT.  Net gold volume was very decent as well at 76,500 contracts — and there was 6,900 contracts worth or roll-over/switch volume on top of that.

The platinum price was also sold lower in morning trading in the Far East as well — and was down five dollars or so by 10 a.m. CST.  It chopped around that price until shortly before 1 p.m. CEST in Zurich — and from that juncture was sold down to its low tick of the day by shortly before 8 a.m. in New York an hour and change later.  It began to head unsteadily higher from there — and that rally ran out of gas/got capped the moment it hit the $800 spot mark shortly after 2 p.m. EDT in the thinly-traded after-hours market.  It didn’t do much of anything after that.  Platinum finished the day at $799 spot, up 9 bucks from Tuesday’s close.

Palladium was forced to trade within five or six dollars either side of unchanged throughout all of the Wednesday trading session.  Its low tick on Wednesday matched its low tick on Tuesday — and although it rallied about six buck or so into positive territory during the New York session, it was sold back to unchanged after the COMEX close.  Palladium finished the day at $972 spot…unchanged on the day.

The dollar index closed very late on Tuesday afternoon in New York at 95.11 — and once trading began a few minutes later at 6:00 p.m. EDT in New York on Tuesday evening, it began to quietly head higher.  That ‘rally’ became more erratic in afternoon trading in the Far East — and the 95.28 high tick of the day was set a very few minutes before the 8 a.m. London open.  It sagged a bit in morning trading over there, but was almost back its high shortly after 12 o’clock noon BST.  It was all down hill from there — and it certainly looked like the usual ‘gentle hands’ showed up as the index plunged.  The 94.73 low tick appeared to come a few minutes before 2 p.m.  It rallied about ten basis points or so from there until 3:40 p.m. — and then edged lower into the close.  The dollar index finished the day at 94.83…down 28 basis points from its close on Tuesday.

Here’s the 6-month U.S. dollar index — and it should be noted that it closed below its 50-day moving average.  That means nothing in such a managed market, but the pure T.A. types may certainly read something into it.

The gold stocks opened unchanged — and after a brief and very tiny dip into negative territory, began to head higher.  Their respective highs came a minute before 3 p.m. in New York trading — and they crawled quietly lower into the close from there.  The HUI closed up a very respectable 3.65 percent.

It was virtually the same price path for the silver equities, including the time of their respective high ticks — and a sharp bump up about twenty minutes before the 4:00 p.m. close ensured that they finished very close to their highs.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 4.77 percent.  Click to enlarge if necessary.

 

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

The CME Daily Delivery Report showed that zero gold and 83 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In silver, the two short/issuers were Scotia Capital/Scotiabank with 80 contracts for its in-house/proprietary trading account — and Advantage with 3 contracts from their client account.  There were six long/stopper in total — and the largest was JPMorgan with 39 contracts in total…28 for its own account, plus 11 for clients.  HSBC USA came in second with 19 contracts for its own account — and Advantage stopped 15 for its client 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 September rose for the second day in a row, this time by 22 contracts, leaving 53 still around.  Tuesday’s Daily Delivery Report showed that 14 gold contracts were posted for delivery today, so that means that 14+22=36 more gold contracts were added to the September delivery month.  Silver o.i. in September declined by 7 contracts, leaving 455 still open, minus the 83 contracts mentioned in the previous paragraph.  Tuesday’s Daily Delivery report showed that 15 silver contracts were actually posted for delivery today, so that means that 15-7=8 more silver contracts were added to September.


There were no reported changes in either GLD or SLV yesterday.

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

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  Nothing was reported received, but 51,426 troy ounces in total were shipped out from four different depositories.  The largest withdrawal was from JPMorgan, as 28,066.950 troy ounces/873 kilobars [U.K./U.S. kilobar weight] was shipped out.  In second spot was the International Depository Services of Delaware, as they parted company with 10,416.600 troy ounces/324 kilobars [U.K./U.S. kilobar weight].  Lesser amounts, not in kilobar form, were shipped out of HSBC USA and Delaware.  All that activity is linked here.

There was also decent activity in silver.  Nothing was reported received, but 1,804,659 troy ounces were shipped out.  The largest amount by far was two truck loads…1,190,987 troy ounces…that departed JPMorgan.  There was also a small truck load…512,548 troy ounces withdrawn from HSBC USA — and in third spot was Delaware, as they parted company with 101,123 troy ounces.  There were also some transfers from the Registered category into Eligible — and vice versa…with the largest transaction being 303,900 troy ounces from Registered and back into the Eligible category at CNT.  The link to all this action, plus a bit more, is here.

There was some activity over at the COMEX-approved gold kilobar depository in Hong Kong on their Tuesday.  They didn’t receive any, but shipped out 2,804 of them.  This activity was at Brink’s, Inc., of course — and the link to that, in troy ounces, is here.

Saxe-Gotha-Altenburg, Ernest I, 1640-1675, Reichsthaler 1675

Origin: Roman German Empire     Mint: Gotha      Material: Silver     Weight: 28.82 grams

I don’t have all that many stories for you today.


CRITICAL READS

It Feels Like 2007 All Over Again… — Bill Bonner

In 2007, the Fed – making its classic Mistake #2 – raised its key lending rate to over 5%, which was enough to bring on the hurricane.

In just a few months, all the delightful news headlines passed into history. The Dow was cut in half… the U.S. economy was in its worst recession since the 1930s… and the Fed was on to Mistake #3 (cutting rates in a panic).

Which, in turn, brings us back to gold.

The other thing the news reports of 2007 told us was that the ratio of the Dow to gold was around 20. That is, it took 20 ounces of gold to buy the Dow.

That was about the same ratio as 1929. And about the same as the major top in the late 1960s. By 1980, the ratio hit its all-time low of 1.

The ratio actually brushed 40 at the end of the 1990s – an all-time record. By 2007, it was at 20 again.

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


$300 Billion Cash Repatriated in Q1, Goldman Sachs Expects Eventual $1 Trillion in Buybacks

In response to the Trump tax cuts, corporations are repatriating record levels of cash.

The Tax Cuts and Jobs Act encouraged the repatriation of profits, which had been subject to additional U.S. levies after it was brought home.

In response to the Trump tax cuts, there was a Dramatic Rise in Corporate Cash Brought Home in 2018.

In the first quarter alone, multinational enterprises brought home about $300 billion of the $1 trillion held abroad, according to a recent Federal Reserve study. A good chunk of that repatriated money went to share repurchases — for the top 15 cash holders, some $55 billion was used on buybacks, more than double the $23 billion in the fourth quarter of 2017.

Corporations apparently have nothing better to do with the cash. Executive stock options, not shareholder interests, are in play.

This brief commentary by Mish Shedlock, along with a very interesting chart, was posted on the moneymaven.io Internet site on Tuesday sometime — and I thank Richard Saler for sending our way.  Another link to it is here.


Dr. Dave Janda interviews your humble scribe

This 25-minute audio interview was broadcast live on Ann Arbor, Michigan’s all-talk radio WAAM 1600 on Sunday afternoon EDT — and appeared on the Good Doctor’s website on Sunday evening.

I posted this interview in Wednesday’s column, but neglected to hyperlink the headline — and wasn’t informed of that until I received an e-mail from Malcolm Roberts very early yesterday morning.  I was sound asleep at the time — and I didn’t get around to fixing the link until about nine hours after it had been posted, so I’m posting this interview one more time.


One million Catalans rally for independence in Barcelona

Around one million Catalans rallied in Barcelona on Tuesday, banging drums and blowing whistles in a show of support for independence nearly a year after a failed attempt to break away from Spain.

Wearing coral-red T-shirts and waving the red, yellow and blue Catalan separatist flag, a sea of protesters gathered for the rally on Catalonia’s “national day” which commemorates Barcelona’s fall to troops loyal to Spain’s King Philip V in 1714.

The annual “Diada” holiday has since 2012 been used to stage a massive rally calling for secession for the wealthy northeastern region with its own distinct language.

But this year’s event had particular significance as a test of strength after a referendum last October 1, and the Catalan parliament’s unilateral declaration of independence on October 27, all came to naught.

Demonstrators climbed on each others shoulders to form human towers, a Catalan tradition, while others carried yellow and black signs that read “Free Catalan political prisoners now“, a reference to Catalan separatist leaders in jail awaiting trial over last year’s independence bid.

This news item showed up on the france24.com Internet site on Tuesday sometime — and it comes to us courtesy of Roy Stephens.  Another link to it is here.


Juncker vows to turn euro into reserve currency to rival dollar

Jean-Claude Juncker has vowed to turn the euro into a global reserve currency that could rival the dollar as part of the European Union’s drive to reduce its financial dependence on the United States.

In his last “State of the Union” speech to members of the European Parliament in Strasbourg today, the president of the European Commission said it was an “aberration” that the E.U. paid for more than 80 percent of its energy imports in U.S. dollars despite only 2 percent of imports coming from the U.S.

Most of the dollar-denominated imports are from Russia and the Gulf states.

We will have to change that. The euro must become the active instrument of a new sovereign Europe,” said Mr. Juncker, whose five-year tenure as commission president is due to end next year.

The rest of this story is posted behind the Financial Times subscription wall — and I found this in a GATA dispatch yesterday.  Another link to it is here.


Head of Russian bank warns customers they may not get dollars back

Russians with bank accounts in dollars may find they can only make withdrawals in other currencies if new sanctions proposed by U.S. lawmakers take effect.

I am sure that all the clients of all banks should receive their money back. That’s the principal approach,” VTB Group Chief Executive Officer Andrey Kostin said today. “How, in which currency, is a different story.”

The U.S. Senate is considering punishing the Kremlin for alleged election meddling, including a fresh raft of measures dubbed the “bill from hell.” This could bar Americans from buying new issues of Russian sovereign debt and ban Russia’s largest state banks, such as VTB, from using dollars.

Kostin’s comments are an indication to markets that policy makers and businesses are bracing for the worst, and could focus investors’ attention on the possible fallout from sanctions, according to Liza Ermolenko, an economist at Barclays Capital in London.

This Bloomberg article put in an appearance on their website at 5:15 a.m. Denver time on Wednesday morning — and was updated about two hours later.  I found it on the gata.org Internet site — and another link to it is here.


The U.S.’s Choice: WWIII…or Saving Face in Syria

Sometimes when I step back from the overwhelming flow of geopolitical insanity I’m reminded of the old adage that coming close only counts in horseshoes and hand grenades.

To which, I always add, “And nuclear war.”

I’ve been watching the build up to the operation to liberate Idlib in Syria which includes the endless neocon and Israeli moral preening warning Assad against using chemical weapons with a sense of detachment.  And I keep thinking to myself, “Do they really think we’re that stupid?

Three times the chemical weapons canard has been used to justify further aggression against Syria and three times a full-blown U.S. invasion has been averted. First by Vladimir Putin’s deft diplomacy and General Dunford’s refusal to implement a ‘no-fly zone’ in 2013 and then during the Trump years with ineffectual air strikes on Syrian airbases.

How much of that ineffectuality of those airstrikes were designed by Defense Secretary James Mattis to avoid a wider conflagration and how much was Russian EW/missile defense is anyone’s guess.

The truth most likely lies somewhere in the middle.

That is why everyone who is worrying about the U.S.’s blustering over Syria’s Idlib campaign needs to take a big step back and think the scenario through.

This very interesting commentary/opinion piece by Tom Luongo showed up on the strategic-culture.org Internet site on Tuesday sometime — and I pulled it from a Zero Hedge story that appeared on their website late yesterday evening.  Another link to it is here.


Is a Major Attack on Syria Feasible? A Look at Russia’s Key Force Multiplying Assets and their Ability to Deter Western Military Action — Parts 1 and 2

With the United States, Britain and France all reportedly making preparations to launch a major offensive against Syria, and threatening use of force on a scale far larger than that of the attack carried out in April 2018, Russia has notably responded by moving naval assets to the Mediterranean and deploying its warships in defensive positions to deter a potential second Western attack. While Russia has previously tolerated Western interventions against Damascus on a small scale, namely token missile strikes initiated with prior warning which were further blunted by Syria’s own air defences, a larger strike which could have a significant impact on the outcome of the war – at a time when Damascus’ forces and those of its allies prepare for a major ground offensive against the Jihadist held province of Idlib – could well cross a red line which would lead to Russian intervention on the side of its Middle Eastern ally. To be able to deter a Western attack however, Russia will need to demonstrate that it has a credible chance of protecting Syria against the combined firepower of its adversaries despite the far smaller size of its forces in the country – which pale in comparison to the massive Western military forces deployed throughout the Middle East and the U.S. and possibly French carrier strike groups which are likely to participate in an attack.

For Russia’s naval contingent in Syria to have a chance of deterring the Western fleets, it will need to rely on two critical assets – support from ground based aircraft and missile systems operating from Syrian territory itself, in some cases from as far as Russia’s own territory, and extensive use of asymmetric weapons systems which will leave Western assets such as warships, fighters and bombers vulnerable despite their numerical advantage. While Russia’s sole aircraft carrier is poorly suited as an asset for long range power projection, and is nevertheless currently undergoing a refitting and unavailable for front-line service, the country has an arguably far more valuable asset – Khmeimim airbase in Syria’s Latakia province. While modern Western carriers lack high performance air superiority fighters, the last of these having been retired by the United States Navy shortly after the Soviet Union’s collapse in favour of lighter unspecialised multirole aircraft, Russia’s Air Force contingent relies heavily on specialised heavy combat jets such as the Su-35, Su-30SM and Su-27SM air superiority fighters and Su-34 strike fighters. The first three of these enjoy considerable advantages in speed, operational altitude, engagement range, range and manoeuvrability over their counterparts in the U.S. Navy allowing them to protect Russian warships and Syrian assets from air attack even against enemy air contingents many times their size. The Su-34 meanwhile, as an advanced long range ship hunter armed with missiles such as the Mach 3 Kh-41, the Mach 3.5 sea skimming Kh-31A and the 300km range Kh-35U and P-800, can pose a major threat to hostile warships at considerable distances from Syrian coast – with missiles designed to evade the latest and most capable air defence networks fielded by the U.S. Navy.

I suspect that we’ll find out soon enough how much of this is true or not.  This longish, but very interesting commentary was posted on the militarywatchmagazine.com Internet site last Friday — and it’s worth reading if you have the interest.  I thank reader M.A. for sending it along — and another link to it is here.


I didn’t see any precious metal-related news stories that I thought worth posting.


The PHOTOS and the FUNNIES

Here are two more photos of red-necked grebes for you.  As the time to migrate approaches, these birds…plus the ducks and geese at the pond…spend a lot of time bathing — and preening their new flight feathers in preparation for the trip south.  The bathing/splashing ritual for the grebes is rather entertaining to watch — and here’s an adult showing the ‘young-un’ how it’s done.  Click to enlarge.


The WRAP

I was certainly happy to see gold and silver prices higher during the New York trading session yesterday.  But it should be fairly obvious that ‘da boyz’ weren’t letting prices run too high at that moment, as the spikes higher in morning trading were rather harshly dealt with, particularly in silver.

But what I was really happy to see was the reaction of the precious metal equities, as they finished strongly higher — and that’s always an encouraging sign.

Here are the 6-month charts for the Big 6 commodities once again — and it should be noted that both copper and WTIC closed higher as well.  Gold is now within ten dollars of its 50-day moving average — and it will be interesting to see what is allowed to happen from a price perspective, once it breaks above it by any appreciable amount.  The ‘click to enlarge‘ feature 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 has been trading a bit lower, but not really doing much in Far East trading on their Thursday. At the moment it’s down $1.80 an ounce. It’s been the same for silver — and it’s down 3 cents currently. Platinum and palladium are up a bit…the former by 2 dollars — and the latter by 1.

Net HFT gold volume is a bit over 39,000 contracts — and there’s only 558 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is 8,400 contracts — and there’s only 32 contracts worth of roll-over/switch volume on top of that.

The dollar index crawled quietly lower until shortly after 12 o’clock noon in Shanghai on their Thursday afternoon — and it headed equally quietly higher from there — and is up 6 basis points as London opens.

It remains to be seen if yesterday’s positive price action in New York will continue into the Thursday trading session or not.  There certainly has been no follow-through in Far East trading. The precious metals are still very much in the price grip of JPMorgan — and they can toy with this market as much as they wish until whatever ‘event’ I’m expecting, manifests itself.

And as I post today’s missive on the website at 4:03 a.m. EDT, I note that the precious metal prices popped a bit higher during the last thirty minutes or so in London and Zurich trading. Gold is down only 40 cents — and silver is now up a penny. But platinum is now up 5 bucks — and palladium by 2.

Gross gold volume is around 50,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is a hair under 49,000 contracts. Net HFT silver volume is now 12,100 contracts — and there’s only 46 contracts worth of roll-over/switch volume in that precious metal.

The dollar index continues to crawl higher — and is up 11 basis points at the moment.

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

Ed