Precious Metal Prices Held in Check On the FOMC News

27 September 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped more or less sideways until shortly before 2 p.m. China Standard Time on their Wednesday afternoon — and at that point, the price pressure appeared.  Most of the price decline that mattered was over with by 8:45 a.m. in New York — and it traded sideways until around 12:30 p.m. EDT.  The two rally attempts going into the 2:00 p.m. Fed news were summarily dealt with before they could get too far — and the gold price was sold down to its low tick of the day around 2:45 p.m. EDT.  Its subsequent rally was also capped — and after that the price didn’t do much.

The gold price was forced to trade in a ten dollar price range everywhere on Planet Earth on Wednesday, so the high and low ticks aren’t worth looking up.

Gold was closed in New York on Wednesday at $1,194.10 spot, down $6.70 on the day.  Net volume was very heavy at around 309,500 contracts — and there was a bit under 22,000 contracts worth of roll-over/switch volume on top of that.

The silver price chopped mostly sideways in a fairly tight range until the noon silver fix was done in London.  From there it was sold unsteadily lower — and its price activity around the Fed news was similar to gold’s, except much more muted.  Once that news was out of the way, it was sold down some more — and was closed on its low tick of the day.

The high and low ticks in this precious metal were recorded by the CME Group as $15.545 and $14.34 in the December contract.

Silver was closed on Wednesday at $16.29 spot, down 13.5 cent.  Net volume was pretty heavy once again at a hair over 85,000 contracts — and roll-over/switch volume was 2,116 contracts in that precious metal.

Platinum was up two or three dollars throughout most of Far East and Zurich trading during their respective Wednesday trading sessions.  Not surprisingly, that all changed the moment that trading on the COMEX began at 8:20 a.m. EDT in New York.  By 10:30 a.m., ‘da boyz’ had it bouncing off its low tick of the day — and that lasted until shortly before 1 p.m.  It rallied, with resistance, from there until the Fed news came down from on high — and from that juncture, was sold down until trading ended at 5:00 p.m. EDT.  Platinum was closed at $820 spot, down a dollar from its close on Tuesday.

Palladium was up five or six bucks until shortly after the 2:15 p.m. China Standard Time afternoon gold fix in Shanghai on their Wednesday afternoon.  It was sold quietly lower from there — and its low tick of the day was set around 10:20 a.m. in Zurich.  It rallied mostly steadily from that point — and that culminated in a price spike right at 12 o’clock noon in New York.  That was capped and hammered lower immediately — and from that juncture, the price was sold unevenly lower until the market closed at 5:00 p.m. EDT.  Palladium was closed at $1,061 spot, up 4 dollars on the day — and 13 bucks off its high tick.  As I keep saying, one could only image what palladium would be selling for these days if its short-covering rally wasn’t being actively managed.

The dollar index closed very late on Tuesday afternoon in New York at 94.15 — and then began to rally a bit once trading began at 6:00 p.m. EDT on Tuesday evening.  That lasted until a few minutes before 9 a.m. CST on their Wednesday morning — and from that point, it chopped generally lower until around 8:15 a.m. in London.  It headed higher from there — and that ‘rally’ topped out at the 9:30 a.m. open of the equity markets in New York.  It headed unevenly lower from that point — and proceeded to fall like a stone minutes before the Fed news was released — and the 93.95 low tick was set at precisely 2:00 p.m. EDT, as the usual ‘gentle hands’ appeared at that juncture.  It was blasted higher from there for the next forty minutes or so, before heading sharply lower once more.  It was ‘caught’ at 3 p.m. — and edged very unsteadily higher into the close.  The dollar index finished the day at 94.30…up 15 basis points from Tuesday.

It was yet another day where the free market was not allowed to exert itself for long in the dollar index…although it certainly gave hints as to what it might do if those ‘gentle hands’ decided not to show up.

And here’s the 6-month U.S. dollar index chart — and the delta between its close — and the close in the intraday chart above, was 53 basis points yesterday.

The gold stocks headed lower the moment that trading began at 9:30 a.m. EDT in New York on Wednesday morning.  After the initial sell-off, they chopped very quietly lower until the Fed news.  That shot the stocks higher, but once the gold price was capped and sold down, the shares followed — and the HUI closed down an rather ugly 2.95 percent.

The silver equities were sold down about two percent in the first fifteen minutes of trading in New York yesterday morning, but began to chop very unsteadily higher from that juncture — and even blasted into the green for a few minutes on the Fed news.  But from there, their price action followed the price action in the gold stocks, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down ‘only’ 1.69 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 4 gold and 18 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In gold, there were three short/issuers in total — and the only long/stopper worth mentioning was ADM with 3 contracts for their client account.  In silver, Goldman issued 15 out of its own account — and ADM issued 3 from its client account.  The two long/stoppers were JPMorgan and ADM with 13 and 5 contracts for their respective client accounts.  In palladium, JPMorgan issued 21 contracts from its in-house/proprietary trading account — and stopped 19 for its client account.  ADM picked up the other two.  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 fell by 12 contracts, leaving 4 still around, minus the 4 mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that 14 gold contracts were actually posted for delivery today, so that means that 14-12=2 more gold contracts were just added to the September delivery month.  Silver o.i. in September declined by 2 contracts, leaving 508 still open, minus the 18 contracts mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that 3 silver contracts were actually posted for delivery today, so that means that 3-2=1 more silver contract was added to September.


There were no reported changes in either GLD or SLV yesterday — and there was no sales report from the U.S. Mint, either.

It was another day of wall-to-wall zeros in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.

That certainly wasn’t the case in silver, as one truck load…599,937 troy ounces…was received — and all of that went into Canada’s Scotiabank.  There was 1,603,668 troy ounces shipped out — and that ‘out’ movement involved four different depositories.  The biggest chunk, two truck loads…1,193,878 troy ounces…came courtesy of JPMorgan.  Scotiabank shipped out 376,873 troy ounces — and 161,539 troy ounces left Brink’s, Inc.  The remaining 25,186 troy ounces came from CNT.  The link to all this is here.

And, for a rare change, there was no in/out activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.

Saxony, Christian I, 1586-1591, Reichsthaler 1591

Origin:  Roman German Empire     Mint:  Dresden     Material: Silver     Full weight: 29.02 grams

Price: €1,495.00…which includes VAT [value added tax] and shipping

I only have three news items for you today — and none of them precious metal-related.


CRITICAL READS

How Executive Order 6102 Doomed America — Bill Bonner

Today, we woke up in Buenos Aires with a disagreeable headache… and a depressing hypothesis:

First, it doesn’t matter whether Brett Kavanaugh is on the Supreme Court or not; one more Deep State toad won’t make any difference.

Second, the Supreme Court has been derelict in its duty for the last 80 years.

For years, the Court has looked the other way as the feds robbed one class of citizen (ordinary, working people) and rewarded another (the elite).

Third, as a result, the American empire faces a catastrophic money crisis… probably accompanied by internal schisms, social breakdowns, and dangerous political scuffles.

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


Member of Economic Elite Comes Clean — Jim Rickards

The mainstream analysts at university faculties or Wall Street banks are almost unanimous in saying, “All is well.” Most predict years of strong growth ahead, higher stock prices and higher interest rates.

Of course, these are the same people who told you Brexit would never happen and Hillary would be president and who never saw the 2008 panic coming when it was staring them in the face.

That’s why it’s a big deal when a member of the economic elite breaks ranks and tells it like it is.
Harvard Professor Kenneth Rogoff is a former chief economist at the IMF and best-selling author of several books on systemic risk and market crashes.

Rogoff has reviewed several new books on the history of the 2008 financial panic and warns that such a panic could happen again, possibly very soon. When the elites warn of market crashes, the warning is often aimed not at everyday investors but at other elites so they can begin preparing for a crash before others have a chance to get out of the market.

You might want to take heed.

This commentary by Jim appeared on the dailyreckoning.com Internet site on Wednesday — and I thank Brad Robertson for sending it our way.  Another link to it is here.


Argentina Gets Record $57 Billion As IMF Boosts Bailout, Creates “No Intervention” Zone For The Peso

Just a few months after the IMF announced in June what was a record-setting $50 billion, 36-month bailout agreement with Argentina, the International Monetary Fund said it would expand the credit line to $57 billion in an attempt to halt the economic and financial crisis that has sent the country’s currency plunging over 50% this year, and pummeled the third-largest Latin American economy. In exchange, Argentina will set a “no intervention” zone for the peso from 34 to 44, meaning the exchange rate will be flexible but not floating.

The revised standby agreement is “aimed at bolstering confidence and stabilizing the economy,” IMF chief Christine Lagarde said Wednesday in a joint statement with Argentine Economy Minister Nicolas Dujovne.

The agreement, which is subject to IMF Executive Board approval, “front loads IMF financing, increasing available resources by US$19 billion through the end of 2019, and brings the total amount available under the program to US$57.1 billion through 2021,” according to statement.

Argentina had started renegotiating the terms of the bailout deal last month when it became obvious that the original funds would be insufficient, and when President Mauricio Macri asked to speed up payments in the original agreement. Meanwhile, as part of the deal, Argentina would be required to fulfill certain stipulations under the agreement, which would need congressional approval by way of the 2019 budget. In exchange, the IMF would cover a significant portion of Argentina’s financing through next year, according to Moody’s.

This Zero Hedge news item appeared on their Internet site at 5:36 p.m. EDT on Wednesday afternoon — and another link to it is here.


And there was the usual drivel in the way of precious metal stories again yesterday — and certainly nothing I thought worth posting in this space.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is a real denizen of the deep… the coelacanth, of which they are now two known species.  They were thought to have become extinct in the Late Cretaceous, around 66 million years ago, but were rediscovered in 1938 off the coast of South Africa.  Coelacanths are a part of the clade Sarcopterygii, or the lobe-finned fishes.  They has no real commercial value apart from being coveted by museums and private collectors. As a food fish it is almost worthless.  Click to enlarge for photos 1 and 3 only.

 

 


The WRAP

The world needs a new generation of policymakers who don’t hobnob with billionaire speculators — and who understand worker’s concerns. Unfortunately, the change will not come smoothly.” — Andy Xie


It was another day where precious metal prices were kept in the iron grip of JPMorgan et al.  The only notable exception was palladium once again.  But, as I’ve already pointed out on numerous occasions during this latest short-covering rally, if the palladium price was allowed to rise at the rate it really wanted to, we’d be looking at a price many hundreds of dollars higher than it is right now — and in just a few hours or days, not strung out over the last two weeks or so.  That event, if it had been allowed to occur, would have raised a lot of inconvenient questions.

Both gold and silver are safely tucked under their respective 50-day moving averages at the moment — and gold is also conveniently located under the $1,200 spot mark.  Although only a number, it’s an important psychological number.  It will be interesting to see how long this current situation can be maintained, particularly in gold as, like in silver, its 50-day moving average continues to sink inexorably lower every day.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and the 50-day moving averages in gold and silver, versus their December price closes on Wednesday, should be noted.  The ‘click to enlarge‘ feature helps a bit with the precious metal charts only.

And as I type this paragraph, the London open is less than ten minutes away — and I see that all four precious metals began to rally as soon as trading began at 6:00 p.m. EDT on Wednesday evening in New York.  That lasted until around 11 a.m. China Standard Time on their Thursday morning — and then they didn’t do much until 1 p.m. CST.  At that juncture the dollar index blasted higher — and the sell-off in all four began.  Gold was up about 4 bucks at one point, but is now up only 60 cents.  Silver was up 13 cents — and is now up 6 cents.  Platinum and palladium have managed to buck the dollar index rally by a bit, as platinum is still up 4 bucks — and palladium is back to its current high — and up 7 dollars as Zurich opens.

The CME Group is obviously having some data feed issues at the moment, as there are no volume numbers on their website.  All the fields show zero.  They were OK earlier on Wednesday evening, but that’s not the case now less than five minutes before the London open.

The dollar index chopped unsteadily sideways once trading began in New York on Wednesday evening, but as I stated just above, it began to ‘rally’ hard starting at precisely 1:00 p.m. CST on their Thursday afternoon.  That lasted until shortly before 2 p.m. over there — and it has been chopping quietly sideways since.  It’s currently up 27 basis points twenty minutes before the London/Zurich opens.

With the FOMC meeting out of the way — and the expected interest rate increase now confirmed, it will certainly be interesting to see how the precious metals are allowed to perform going forward from here.  As I just pointed out above, the current situation in gold and silver vs. their respective unbroken 50 and 200-day moving averages, can’t last forever.  And never to be forgotten are the obscene and grotesque short positions held in these two metals by the Managed Money traders.  How that unfolds — and whether JPMorgan shows up as short seller of last resort or not, is pretty much all I’m thinking about now.  Ted has made it abundantly clear over the last few months that this is all that matters — and it is.

And as I post today’s column on the website at 4:02 a.m. EDT, I note that not much happened during the first hour of trading in both London and Zurich, although gold is now up $2.10 — and silver is now up 6 cents. Platinum and palladium haven’t done much — but the former is now up 6 dollars — and the latter is still up 7.

And there are still no volume numbers from the CME’s website.

The dollar index began to creep higher a few minutes before the London open — and its current 94.64 high tick came around 8:15 a.m. BST. It has dropped a bit since then — and is up 25 basis points at 8:30 a.m. BST.

That’s it for yet another day — and I’ll see you here on Friday.

Ed