Gold Halted Dead in Its Tracks at Its 50-Day Moving Average

14 September 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped very quietly sideways throughout all of Far East and most of London trading on their respective Thursdays.  Then, at 8:30 a.m. EDT, the price began to head sharply higher, but ran into ‘something’ within a minute or so.  The price was capped and turned lower the moment it touched its 50-day moving average at the 9:30 a.m. EDT open of the equity markets in New York — and it was sold equally sharply lower until minutes before the 11 a.m. EDT London close.  It continued to crawl a bit lower until it touched the $1,200 spot mark shortly after 2 p.m. in the thinly-traded after-hours market — and didn’t do much after that.

The high and low ticks are barely worth looking up — and the CME Group reported them as $1,212.40 and $1,200.00 in the October contract.  For December, those numbers are $1,218.00 and $1,205.00.

Gold was closed in New York on Thursday at $1,200.90 spot, down $5.20 from Wednesday.  Net volume was pretty healthy at a bit over 285,000 contracts — and roll-over/switch volume was around 19,900 contracts.

The silver price didn’t do much in Far East trading on their Thursday, but was sold down a bit in late morning trading in London, but was back to just below unchanged by the COMEX open.  Its 8:30 a.m. EDT rally ran into the same price resistance as gold — and silver’s high tick came at 9:45 a.m. in New York.  From there, it was forced to follow the same price path as gold for the remainder of the Thursday trading session — and it was closed right on its low tick of the day.

The high and low in this precious metal was reported as $14.39 and $14.19 in the December contract.

Silver was closed in New York yesterday at $14.14 spot, down 9.5 cents on the day.  Net volume was pretty heavy at a bit under 76,500 contracts — and roll-over/switch volume in this precious metal was around 6,400 contracts on top of that.

The price pattern in platinum was very similar to that for gold, except the price began to rally around 1 p.m. CEST in Zurich…7 a.m. in New York…and it was subsequently capped and driven lower starting a few minutes before 9 a.m. EDT, which was the moment that it touched its 50-day moving average as well.  ‘Da boyz’ had it almost back to unchanged by around 10:20 a.m. — and it wasn’t allowed to do much after that.  Platinum was closed at $801 spot, up 2 dollars from Wednesday.

Ditto for palladium, except it managed to recover a few dollars off its New York low — and then traded sideways once the COMEX closed.  It finished the Thursday session at $978 spot, up 6 dollars from Wednesday’s close.

The dollar index closed very late on Wednesday afternoon in New York at 94.83 — and once trading began at 6:00 p.m. EDT a few minutes later, it edged a few basis points lower until shortly after 12 o’clock China Standard Time on their Thursday afternoon.  It crawled quietly higher until a minute or so after 2 p.m. CST — and then chopped quietly sideways until a few minutes before 8:30 a.m. in New York.  A waterfall decline ensued based on a CPI/PPI report — and the 94.43 low tick was set at, or minutes before, the afternoon gold fix in London.  It ‘rallied’ a bit from there until around noon EDT — and then edged lower until shortly after the 1:30 p.m. COMEX close — and chopped quietly sideways until trading ended.  The dollar index finished the Thursday session in New York at 94.54…down 29 basis points from its close on Wednesday.

It was yet another day where the powers-that-be didn’t allow the decline in the U.S. dollar index to be reflected in precious metal prices.

And here’s the 6-month U.S. dollar index — and for reasons that are becoming more obvious with each passing day like yesterday, you already know how I fell about it.  It’s bulls hit.

The gold shares jumped up a percent and small change at the open, but were sold down into negative territory — and to their respective low ticks by the 11 a.m. EDT London close.  They bounced back to just about unchanged by 11:30 a.m….and then chopped quietly sideways for the remainder of the Thursday session.  The HUI closed lower by 0.46 percent.

It was almost the same price path for the silver equities, except their respective lows came shortly after 2 p.m. EDT — and they recovered a bit into the close from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.09 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 56 gold and 146 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, of the three short/issuers in total, the only one that mattered was Morgan Stanley with 50 contracts out of its in-house/proprietary trading account.  Of the four long/stoppers, JPMorgan was the biggest, with 41 contracts for its client account.  In very distant second and third place came ADM and Advantage, with 7 and 6 contracts for their respective client accounts.  In silver, the largest of the three short/issuers was Goldman Sachs with 122 contracts out of its own account.  Of the six long/stoppers in total, JPMorgan was the biggest with 60 contracts…43 for itself — and 17 for its client account. Advantage came in second place with 36 contracts for its client account — and HSBC USA stopped 28 contracts for its own account.  The link to yesterday’s Issuers and Stoppers Report is here.

I know that Ted follows what Goldman Sachs does in silver very closely, as well.  They’ve already stopped 1,064 silver contracts for their own account in September so far — and these 122 contracts mentioned in the previous paragraph is the first time they’ve shown up a short/issuer this month.  It will be interesting to see how much more they issue as the September delivery month moves along.  Here’s a snip from the CME’s website showing their monthly activity in 2018 so far, plus December 2017.  Click to enlarge.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in September rose for the third day in a row, this time by 20 contracts, leaving total open interest at 73 contracts, minus the 56 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, so that means that 20 contracts [net] were added to the September delivery month.  Silver o.i. in September declined by 34 contracts, leaving 421 still open, minus the 146 silver contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 83 silver contracts were actually posted for delivery today, so that means that 83-34=49 more silver contracts just got added to September.


There was another withdrawal from GLD yesterday, as an authorized participant removed 85,181 troy ounces.  And there was yet more silver deposited in SLV, as an authorized participant…most likely JPMorgan…added 1,315,986 troy ounces.

Since its high back on 25 April, there has been 4,136,856 troy ounces of gold removed from GLD.  But since its June 15 low, there has been 20.9 million troy ounces of silver added to SLV.

The folks over at the shortsqueeze.com Internet site updated their short position data for both SLV and GLD for the two week period ending on August 31 — and this is what they had to report.  The short position in SLV increased from 6,672,600 shares/troy ounces, up to 7,320,000 shares/troy ounces, or an increase of 9.7 percent.  The short position in GLD increased as well…from 925,440 troy ounces, up to 1,138,670 troy ounces, which is an increase of 23.0 percent.

There was no sales report from the U.S. Mint for the second day in a row.

It was all zeros in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.

There was very little activity in silver.  Nothing was reported received — and only 60,892 troy ounces were shipped out.  That occurred over at Canada’s Scotiabank.  Also at Scotiabank there was 408,669 troy ounces transferred from the Eligible category — and into Registered.  Undoubtedly this is now out for delivery in September.  The link to this is here.

There wasn’t much happening over at the COMEX-approved gold kilobar depositories in Hong Kong on Wednesday.  They only received 30 of them — and shipped out 320.  This activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

Saxe-Zeitz, Maurice, 1656-1681, Thaler 1667

Origin: Roman German Empire     Material: Silver     Full Weight: 27.55 grams

It was a fairly quiet news day on Thursday — and I have very little for you.


CRITICAL READS

The Greatest Financial Crime of the 21st Century — Bill Bonner

[T]his week marks the tenth anniversary of the collapse of Lehman Brothers. The papers are full of remembrances and lies.

Ben Bernanke, for example, is still hailed as a hero. We wonder… Is it a mistake… or a fraud?
In a discussion last week, he admits to having made mistakes. From Bloomberg:

Former Federal Reserve Chairman Ben Bernanke acknowledged that policymakers made two critical errors fighting the financial crisis a decade ago: They failed to see it coming with such force, then underestimated how much economic damage it would cause later.

“Nobody saw how widespread and devastating the crisis itself would be,” he said in a short video discussing the results of a 90-page paper on the subject released on Thursday.

Nobody?

We – along with dozens of others – thought a crisis was inevitable. The Dow-to-Gold ratio was over 20. Debt had reached 325% of GDP. Houses were selling for crazy prices… with mortgages available even to welfare recipients and household pets.

We warned that surely some rough beast was slouching toward Wall Street. Then, using a technical term rarely employed by our fellow financial Cassandras, we predicted that the reckoning would be a “doozy.”

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


U.S. Government Spends a Record $433 Billion in One Month as Deficit Explodes

Two days ago we previewed the the U.S. budget deficit for the first 11 months of fiscal 2018, which according to CBO data, hit $895 billion, up $222 billion or 39% from the same period last year. Additionally, we noted that according to CBO calculations, the US would hit a $1 trillion deficit in calendar 2019, one year sooner than the previous forecast of 2020.

Today, the U.S. Treasury released the detailed budget deficit breakdown for the month of September and the first 11 months of the year, and the numbers are scary.

According to the latest Monthly Treasury Statement, in August, the US collected only $219BN in tax receipts – consisting of $106BN in individual income tax, $93BN in social security and payroll tax, a negative $3BN in corporate tax and $24BN in other taxes and duties- a drop of 3.2% from the $226BN collected last August…

… but more concerning was that in August, the 12 month trailing receipt total was barely higher compared to a year ago, up just 0.3% Y/Y after rising as much as 3.1% at the end of 2017, and on the verge of turning negative year over year.

The real highlight of the August budget report was that government outlays, or total spending, soared to $433.3 billion, not only 30% higher than a year ago, but the highest government monthly outlay of any month on record.

This resulted in a August budget deficit of $214 billion, which was not only one of the highest one-month deficits on record, but also the highest August deficit on record.

The August deficit brought the cumulative 2018F budget deficit to over $898BN during the first 11 month of the fiscal year, up a whopping 40% over the past year.

This longish, chart-filled commentary put in an appearance on the Zero Hedge website at 4:38 p.m. on Thursday afternoon EDT — and another link to it is here.


Wall Street Ignores Corporate Earnings Deception – Don’t Get Burned! — Dennis Miller

Diogenes would have a tough time finding an honest man announcing corporate earnings. In my article, Pepsi-Cola Hits The Spot?, I outlined how Pepsi trumpeted sales and profit increases, yet both actually declined.

Investors have a difficult challenge managing their life savings dealing with phony, deceptive data. Corporate America blares misleading headline numbers hoping to drive up their stock prices and bonuses. How does an average investor truly understand the real potential of investment opportunities?

Tony Daltorio has been writing about stocks for over 20 years. I’ve followed him since he started with Investor’s Alley, writing the Growth Stock Advisor. Although it’s only 3 years old, it’s returned some outstanding winners on companies most of us have never heard of like Sterling Construction (160%) and Neos Therapeutics (73%).

His recent educational e-mail, “Tariffs, the Market and Earnings” caught my attention. He emphasized, Be Careful of Earnings “Massages”. Uncovering the truth is getting tougher and the SEC is doing nothing to help:

This commentary by Dennis was posted on this Internet site on Thursday morning EDT — and another link to it is here.


U.S. to Impose “Very Severe” Sanctions on Russia Over Skripal Case

In the latest salvo meant to convince Mueller that Trump is not a pawn of the Kremlin, a State Dept official said on Thursday that the U.S. plans a second round of “very severe” sanctions on Russia over use of nerve agent. The stated reason: Russia has not allowed on-site chemical weapons inspections, nor has it provided reassurance that it won’t use nerve agents against its own people, says Manisha Singh, Asst. Sec. for bureau of economic and business affairs

We are looking at this November deadline” under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, Singh said, adding that “we plan to impose a very severe second round of sanctions.”

The sanctions will kick in some time in November, presumably just after the November midterms, if Moscow does not take steps in the wake of the poisoning of former Russian spy Sergei Skripal in the United Kingdom, Assistant Secretary of State Manisha Singh said on Thursday.

We have indicated to them that they can evade, they can make themselves not subject to these sanctions if they allow the onsite inspections, if they give us a verifiable assurance that they will not use these nerve agents against their own people again,” Singh said. “They have not done so so far, so to that extent, we are looking at this November deadline as absolutely, we plan to impose a very severe second round of sanctions under the CBW [Biological Weapons and Warfare Elimination Act].”

While U.S. sanctions on Russia are hardly new, what is surprising this time is that the new round will include not only defense procurement and aid, but also target the country’s increasingly unstable banking sector. Quote Sing: “It’s going to include banking sanctions, prohibition on procurement of defense articles, aid money — it’s a laundry list of items that will penalize the Russian government.

And Skripal case has already been proven to be an embarrassingly transparent “false flag” operation already…but still the U.S./U.K. deep state persists.  This new item was posted on the Zero Hedge website at 11:40 a.m. EDT…and it comes to us courtesy of Brad Robertson.  Another link to it is here.


Orban and Farage stand up to George Soros and his E.J. Parliament cronies

The E.U. Parliament has moved to trigger what is referred to as the ‘nuclear option’ Article 7 against Hungary.

During the parliament session in Strasbourg, France, 448 MEPs voted in favour of invoking Article 7 against Hungary, while 197 voted against the motion and 48 abstained.

According to RT, Article 7 of the 2007 Treaty of Lisbon, often dubbed ‘nuclear option’, is designed to be applied if there is “a clear risk of a serious breach” of the E.U. values by one of the member states.

Orban confronted a hostile E.U. Parliament, and gave a fiery speech, vowing to keep Hungary independent and free of E.U. neoliberal, globalist dogma, telling MEPs, “you condemn us because we are not a nation of migrants.”

UKIP’s Nigel Farage defended Orban, blasting Eurocrats for their condemnation of the Hungarian PM, who has put in place measures to restrict the influence of George Soros.

Nigel’s speech starts at the 2:25 minute mark — and it’s definitely worth your while…if you have the interest, that is.  This news item put in an appearance on theduran.com Internet site on Wednesday — and I thank Roy Stephens for pointing it out.  Another link to it is here.


It was yet another day where I found no precious metal stories that I thought worth posting.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is a mystery bird that not only haven’t I seen before, but I can’t identify, either.  With the shape and size of its bill, I would assume that it’s a member of the finch family, but I see nothing in my National Geographic bird book that even remotely resembles it.  It’s a bit larger than a sparrow — and it landed just below the same fork of the tree that I’ve photographed a cedar waxwing, the kingbird — and a downy woodpecker in the last month or so.  Any help in identifying this bird would be appreciated.  Click to enlarge for both.


The WRAP

There should be no real doubt in anyone’s mind that JPMorgan & Co. were right there to prevent gold from blasting above its 50-day moving average at the open of the equity markets in New York yesterday morning.

If you check the 6-month gold chart [December contract] posted below, you’ll note that the high tick there was recorded as $1,218.00 — and the 50-day moving average was computed at the close of Thursday trading as $1,218.26.  It can’t be cut any closer than that.

So, along with gold, the other precious metals had to get it in the neck too — and it should also be very carefully noted that ‘da boyz’ pulled the same stunt in platinum, as it was about to take out its 50-day moving average as well.

But palladium is already well above its 50-day moving average — and threatening to break above its 200-day moving average, but that act was stopped in its tracks.  The COMEX futures market for palladium is not only very tiny, but it’s also very illiquid as well, plus there’s a real supply/demand issue with this precious metal, so it’s march harder for JPMorgan et al to keep it corralled.  The STOP sign at the 200-day moving average was the best they could do under the circumstances.

Here are the 6-month charts for all four precious metals, plus copper and West Texas Intermediate — and it should also be noted that WTIC closed back below its 50-day moving average on Thursday.  The ‘click to enlarge‘ feature only helps with the first four graphs.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price began crawl quietly higher as soon as trading began at 6:00 p.m. EDT in New York on Thursday evening. That lasted until shortly before noon China Standard Time on their Friday morning — and the price has been trading sideways since. At the moment, it’s up $4.90 the ounce. The price pattern in silver has been identical — and it’s up 8 cents currently. Ditto for platinum and palladium — and there up 5 and 2 dollars respectively.

Net HFT gold volume is a bit over 38,000 contracts — and there’s only 390 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is about 7,300 contracts — and roll-over/switch volume in this precious metal is only 693 contracts.

The dollar index traded almost ruler flat once it began at 6:00 p.m. in New York yesterday evening, but began to inch lower around 10 a.m. CST on their Friday morning — and was down 5 basis points by shortly before noon in Shanghai — and traded quietly sideways until shortly after the 2:15 p.m. CST afternoon gold fix in Shanghai. It turned a bit lower at that point — and is down 10 basis points as London opens.

Today, around 3:30 p.m. EDT, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, September 11.  I’m not expecting much change in gold, but certainly a bit more improvement in silver based on the new intraday low that JPMorgan set during the Tuesday trading session.  There shouldn’t be any material changes in either platinum or palladium for the reporting week.  Ted noted the new low in silver on Thursday in his mid-week commentary on Wednesday, but concluded his COT comments with the following sentence…”I have no strong disposition as to what Friday’s report will indicate in gold or silver, other than we will still be in an extremely bullish market structure.”

Extremely bullish“, he says?  How about ‘Over the Moon’ bullish.

And as I post today’s column on the website at 4:02 a.m. EDT, I note that the gold price began to head higher shortly after trading began in London — and it’s up $7.00 at the moment. Silver is now up 10 cents — and platinum and palladium are up 9 and 3 dollars respectively.

Gross gold volume is around 54,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume in this precious metal is about 52,800 contracts. Net HFT silver volume is a bit over 10,200 contracts — and there’s 709 contracts worth of roll-over/switch volume in that precious metal.

The dollar index has been sinking quietly lower during the last hour — and is currently down 12 basis points.

We’re obviously still in ‘care and maintenance’ mode awaiting whatever the deep state has planned that will set off this short covering rally for the ages in the precious metals.  All we can do is [im]patiently wait for that day.  But it draws ever closer.

See you here tomorrow.

Ed