05 October 2018 — Friday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price sank quietly lower in morning trading in the Far East on their Thursday. But starting around 1 p.m. China Standard Time, it began to edge higher. Once it touched the $1,200 spot mark minutes after 9 a.m. in London, it was turned lower until the noon silver fix was done for the day. It began to rally with more intensity at that point, but obviously ran into ‘something’ in early morning trading in New York. That lasted until 10:25 a.m. when ‘gentle hands’ appeared and turned the dollar index higher — and by 1 p.m. EDT, they had the gold price back at unchanged on the day. It rallied a few dollars in after-hours trading, before moving sideways into the 5:00 p.m. EDT close.
Gold was forced to trade within a ten dollar price range on Thursday, so the low and high ticks aren’t worth looking up.
Gold finished the Thursday session in New York at $1,199.70 spot, up $2.60 from Wednesday’s close. With gold trading above its 50-day moving average for a bit in morning trading in New York, net volume was fairly elevated at around 265,500 contracts — and roll-over/switch volume was just under 15,200 contracts on top of that.
The price path for silver was virtually the same as it was for gold, except once the price began to rally after the noon silver fix in London, it was also capped and held steady starting about ten minutes before the COMEX open — and wasn’t allowed a sniff of the $14.75 spot mark. Once the dollar index began to ‘rally’ at 10:25 a.m. in New York, silver was hammered back below unchanged — and to its low tick of the day by around 12:35 p.m. It recovered a few pennies after that, but mostly traded sideways for the rest of the day.
The high and low ticks in this precious metal were reported by the CME Group as $14.805 and $14.56 in the December contract.
Silver was closed on Thursday at $14.57 spot, down 4.5 cents on the day. Silver also traded above its 50-day moving average by a few pennies in morning trading in New York, so net volume was pretty healthy at about 69,500 contracts — and roll-over/switch volume was 5,353 contracts in this precious metal.
I thought I’d toss in the New York Spot Silver [Bid] chart so you can see the price capping in morning trading up close and personal. With the dollar index circling the drain throughout this time period — and long before that…JPMorgan et al were selling whatever silver paper contracts necessary to cap the price — and then drive it back below its 50-day moving average.
Except for some rather erratic price action in Far East and morning trading in Zurich, the price path for platinum was almost the same as it was for silver and gold…starting right at the noon silver fix in London…7 a.m. EDT. The saw-tooth price capping pattern between 8:05 a.m. EDT and the dollar index low at 10:35 a.m. was also identical. And once the dollar index got turned, they drove the price lower until minutes after 1 p.m. in New York — and it crawled a few dollars higher into the 5:00 p.m. EDT close from there. Platinum was closed at $822 spot, down 2 dollars on the day.
Palladium didn’t do much in Far East trading on their Thursday — and once Zurich opened, it was sold down to its low of the day by around 11:40 a.m. CEST. Its rally from there got stopped in its tracks the same time as the other three precious metals…minutes after 8 a.m. EDT. It was sold back below unchanged by 12:20 p.m. in New York trading — and it managed to crawl a few dollars higher by 2 p.m. EDT — and it then traded sideways from there into the close. Palladium finished the Thursday session at $1,052 spot — and down 4 bucks from Wednesday.
The dollar index closed very late on Wednesday afternoon in New York at 95.99 — and jumped up a handful of basis points once trading began a few minutes later at 6:00 p.m. EDT on Wednesday evening. It chopped quietly sideways from that juncture until a few minutes before 1 p.m. China Standard Time in Far East trading on their Thursday morning. The 96.12 high tick was set at that time. A slow, but very steady decline began at that point, which began to accelerate starting at 8:30 a.m. in New York. The usual ‘gentle hands’ appeared at 10:25 a.m. EDT at the 95.55 low — and lifted the index higher until 1 p.m. From that juncture it drifted quietly lower until minutes before 3 p.m. EDT — and it traded sideways from there into the close. The dollar index finished the day at 95.76…down 23 basis points from its close on Wednesday.
It took a fair amount of price management by the powers-that-be to keep precious metal prices from blowing sky high yesterday during this rather significant dollar index decline. That was true in Far East and London trading, but was most obvious between 8:05 a.m. and 10:25 a.m. in New York.
And here’s the 6-month U.S. dollar index chart — and the delta between the closing value in the intraday chart above — and this one on Thursday, was 35 basis points.
The gold stocks rallied unsteadily until the price was turned lower around 10:25 a.m. EDT in New York York trading. They sold off quietly from there — and down to their respective low ticks by about 12:30 p.m. EDT. They edged quietly but unsteadily higher from there, but couldn’t quite squeeze a positive close. The HUI finished down 0.09 percent. Call it unchanged.
In almost all respects, the silver equities traded in a similar manner to their golden brethren. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up a paltry 0.04 percent…so call that unchanged as well. 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 showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday. 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 October fell by 489 contracts, leaving 2,163 still open. Wednesday’s Daily Delivery Report showed that only 2 gold contracts were actually posted for delivery today, so that means that another 489-2=487 gold contracts vanished from the October delivery month. Silver o.i. in October dropped by 19 contracts, leaving just 4 left. Wednesday’s Daily Delivery Report showed that 19 silver contracts were actually posted for delivery today, so the change in open interest and the deliveries match.
There were no reported changes in GLD yesterday…but an authorized participant withdrew 1,315,612 troy ounces of silver from SLV on Thursday.
There was another sales report from the U.S. Mint. They sold 2,000 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — and 125,000 silver eagles.
The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday was 9,837.900 troy ounces/306 kilobars [U.K./U.S. kilobar weight] shipped out of the International Depository Services of Delaware. I won’t bother linking that amount.
It was considerably busier in silver, as 309,990 troy ounces was received — and all of that amount went into JPMorgan. There was 1,591,202 troy ounces shipped out. There was 662,777 troy ounces out of Canada’s Scotiabank — and one truck load…618,435 troy ounces…shipped out of CNT. The remaining 309,990 troy ounces departed HSBC USA — and that’s the silver that ended up at JPMorgan. There was also 1,098,155 troy ounces transferred from the Registered category — and back into Eligible,which involved three different depositories. Most of that…896,918 troy ounces…was at CNT — and in second spot was Canada’s Bank of Nova Scotia with 146,528 troy ounces. The link to all of this — and a bit more, is here.
There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday. They received 2,476 of them — and shipped out 96. All this movement was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here are two more charts from Nick — and you’ve seen them both before. They show the total weekly transparent gold and silver holdings in all known depositories, ETFs and mutual funds, as of the close of business on Friday, September 28.
For the second week in a row there was a smallish increase in gold holdings, but a big decline in silver…the biggest once since June. Click to enlarge for both.
It’s another day where I don’t have a lot of stories for you. But I do have a Cohen/Batchelor interview.
The big winner from the new North American Free Trade Agreement (NAFTA) deal, now called the U.S.-Mexico-Canada Agreement (USMCA), is the Swamp.
The best trade deal is no trade deal at all. Get the feds out of the way; let people make whatever deals they want.
This is especially easy and obvious in countries such as the U.S. and Canada, where living standards, wages, language, environmental regulations, and other related rules are very similar.
Canada and the U.S. could trade as freely as New York and Alabama.
But that would cut out the swamp critters. They make their money by interfering in free trade, not by facilitating it.
And now, with the new NAFTA, dripping with greasy swamp water, they have a lot more room to maneuver. The Trump team gave them a crony trade deal where what you get depends largely on how much you pay your lobbyists.
This worthwhile commentary by Bill was posted on the bonnerandpartners.com Internet site early on Thursday morning EDT — and another link to it is here.
The world economy is at risk of another financial meltdown, following the failure of governments and regulators to push through all the reforms needed to protect the system from reckless behaviour, the International Monetary Fund has warned.
With global debt levels well above those at the time of the last crash in 2008, the risk remains that unregulated parts of the financial system could trigger a global panic, the Washington-based lender of last resort said.
Much has been done to shore up the reserves of banks in the last 10 years and to put in place more rigorous oversight of the financial sector, but “risks tend to rise during good times, such as the current period of low interest rates and subdued volatility, and those risks can always migrate to new areas”, the IMF said, adding, “supervisors must remain vigilant to these unfolding events”.
A dramatic rise in lending by the so-called shadow banks in China and the failure to impose tough restrictions on insurance companies and asset managers, which handle trillions of dollars of funds, are highlighted by the IMF as causes for concern.
The growth of global banks such as JP Morgan and the Industrial and Commercial Bank of China to a scale beyond that seen in 2008, leading to fears that they remain “too big fail”, also registers on the IMF’s radar.
The warning from the IMF Global Financial Stability report echoes similar concerns that complacency among regulators and a backlash against international agreements, especially from Donald Trump’s U.S. administration, has undermined efforts to prepare for another downturn.
This news item put in an appearance on theguardian.com Internet site at 3 p.m. BST on their Wednesday afternoon, which was 10 a.m. EDT in Washington. I pulled it from a Zero Hedge story yesterday evening. Another link to it is here.
“Fixed income is the center of the financial world, and it’s hard to have a conversation without talking about the monster moves we saw in yesterday’s U.S. trade,” said Chris Weston head of research at Pepperstone Group. “It’s a very rare occurrence to see U.S. Treasuries undergo such a huge move.”
The selloff in 10Y Treasuries, which caught traders by surprise with both its velocity and magnitude, continued overnight on Thursday sending the yield on 10Y TSYs as high as 3.2325%, the steepest daily increase since the shock outcome of the U.S. presidential election in November 2016, before fading to catch its breath amid massive trading volumes.
“The trigger was Powell’s remarks on interest rates,” said Lee of Daishin Securities. “This spurred the view the Fed could turn more aggressive when it comes to the extent of hikes or the pace of tightening. Another issue is the possibility of the conflict between the U.S. and China developing into something beyond tariffs, involving the military.”
The sharp steepening in the Treasury curve, and the continued climb in yields spread like wildfire across the globe, pushing European and Asian yields higher while shares in emerging markets slipped.
As noted last night, 10-year Japanese bond yields climbed past 0.15%, toward the upper end of the Bank of Japan’s tolerance zone of plus or minus 0.2 percent, rising above the 0.145% level which prompted intervention by the BOJ back on August 2. That said, MNI reported that the BOJ still stand ready to curb higher yields through bond buying ops if the rise is deemed too rapid. For now, however, Kuroda appears happy with the steepening in the curve which will boost local bank profitability.
This news item showed up on the Zero Hedge website at 6:46 a.m. EDT on Thursday morning — and it’s the second offering in a row from Brad Robertson. Another link to it is here.
Global Research: We’re joined by Dmitry Orlov. He is a Russian-American writer, blogger, and geopolitical analyst. His work has centered around the political, economic, and ecological and political decline and collapse in the United States, and he’s also the author of numerous articles. His books include Reinventing Collapse: The Soviet Experience and American Prospects and Shrinking the Technosphere: Getting a Grip On the Technologies That Limit Our Autonomy Self-Sufficiency, and Freedom. He joins us here from Moscow. Thanks so much for coming back to the show Dmitry.
GR: Now I think the first thing I wanted to bring up is some of the recent news. There was the… Recently the shooting down of a Russian Il-20 reconnaissance plane by Syrian forces, but it was, the Russian military has argued that this is actually a result of Israeli actions, just, sort of, I guess you say shadowing that plane, and it was in response to that incident that a number of S-300 missile systems were moved into Syria.
I know that there’s been commentary by…The Saker, for one, said that this is a de facto no-fly zone over Syria. Now we know that things have not been going so well up to now for US imperial aims in the country. I’m wondering what, how significant this latest event is in the overall context of what we’ve been seeing?
DO: Well it’s a bit of a wake-up call for the Israelis because Russia has been extremely accommodating when it comes to Israel’s security concerns. There is the realization that the rhetoric coming from Tehran has been quite virulent. Iran is still telling itself that it has the goal of destroying Israel. There’s no way that Israel can avoid responding to such a provocation, and the fact that there are now Iranian troops close to the Israeli border, and that there is weapons manufacturing going on on Syrian territory is something that is a concern to them that the Russians have to allow Israel to take care of its own security concerns.
But the Israelis have acted most irresponsibly because they gave less than a minute warning that this attack was coming. They misnamed the targets, and they misbehaved in the airspace in the sense that they couldn’t have not seen this big lumbering propeller plane that was absolutely no threat to anyone, and they knew that there would be some anti-aircraft fire and drew it not on themselves but on this plane. There are some other unfortunate mishaps that occurred, which are all coming out as a result of the investigation, so it’s still early to say.
This 59:01 minute video interview, complete with a full transcript, appeared on the cluborlov.blogspot.com Internet site on Monday — and it’s definitely worth your time if you have the interest. Another link to it is here — and I thank Larry Galearis for pointing it out.
Tales of the New Cold War: Escalations in Europe, Syria, U.K., Ukraine and the USA — John Batchelor Interviews Stephen F. Cohen
Part 1: After ten days of leave, John Batchelor has a long list of serious news events to discuss with Stephen F. Cohen about the New Cold War. These include alarming statements by Kay Bailey Hutchison, U.S. Representative to NATO, about “taking out” Russia’s 9M729 cruise missile (which is still under development) as this missile breaks the 1987 Intermediate-Range Nuclear Forces Treaty; another U.S. bureaucrat, Sec. Interior, Ryan Zinke, suggested the U.S. navy could blockade Russia to stop LNG sales to other nations; the U.S. also gave Ukraine two U.S. coastguard patrol craft to police the Sea of Azov; Sergei Skripal of recent poisoning fame made a statement that he thinks Russia did not try to poison him and his daughter, and finally the very serious shoot down incident with the IL Russian plane near Syria. And now the S-300 anti-air system is in Syria.
Cohen succinctly debunks (again) and dismisses the Skripal poisoning event, but is alarmed at “the extremism” shown by the Hutchison and Zinke statements, and also mentions further distress with the irresponsible statements by U.S. senators threatening “crippling economic sanctions against Russia“. These are war threats! He again mentions Professor McFaul, former ambassador to Russia and leading Russia expert, supporting this policy by promoting the idea of “permanent escalating sanctions against Russia for anything the U.S. does not like” –which is also extremism and reflects that kind of escalation as a new norm. This situation also encompasses Russiagate as well – and the accusations are now treated as reality by (perhaps) fifty percent of the people (and virtually all of government).
Part 2: The second segment opens with the discussion of the IL plane shoot down involving Israel and Syria. Putin was initially conciliatory towards Israel, but his own military openly stated that Israel was responsible for the tragedy (this was a pilot initiated tactical ploy using the Russian plane as cover against the S-200 missile attack), but a stronger response was required. Cohen goes on to explain that both Iran and Syrian governments had pushed for the S-300 to be deployed in Syria and now this incident was to be the means. The presence of these units would mean that Putin could declare a no fly zone – and Cohen states that this changes everything for both the U.S. presence in Syria and Israeli ability to attack. Batchelor points out that this change makes Syria a Russian protectorate. Politically this is huge, Cohen continues, as Russia now declares itself to be a very big player in geopolitics, and he also sees the Russian/Israeli relationship drawing closer with Russia’s increasing military and diplomatic stature in the M.E. Also Russia and Israel have common family connections historically. Many Israelis also speak Russian.
The final quarter segment brings us to Ukraine and the Sea of Azov – where Kiev’s navy calls home base. It is also Russian waters and Russian navy patrol crafts have been increasingly stopping and checking shipping moving in and out of this part of the Black Sea. The area is gaining importance as a potential flash point in the civil war, and will probably involve Russia directly. The interesting question remains for Cohen: Who is in charge in Washington of the events unfolding around Russia?
Cohen states that he sees Israel and Russia drawing closer together in the years ahead given Russia’s growing stature as a world power. This infers that the U.S. will continue to decline – as it is indeed doing. In the end Israel will likely end its Zionist policies as incompatible with declining support from the U.S. and the rise of Russian influence in the M.E. That is my prediction too. But again I find myself in disagreement with the professor’s present “soft” view on the machinations of Israel against Syria. He mentions that Obama sent then Sec. State, Kerry to negotiate a deal that the U.S. would essentially not attack Syria. That failed with an attack by U.S. forces against the SAA, and the deal was nullified. And yet in just over a year Israel has attacked Syria over 200 times with no reaction from Putin. This confirms a double standard was present, but politics and forced Putin to this complete reversal of relationship with Israel with the loss of fifteen Russians in the IL shoot down event. There have been other signs. For example, Cohen maintains that Putin responds to pressure from his Israeli lobby, but Cohen does not mention that the Jewish lobby is a factor in Washington’s foreign policy in Syria. Nevertheless, the S-300 is present in Syria now. But it remains to be seen if they will be used against Israel, as we are not informed about the rules of engagement for using them. Israel will surely test Putin on this and probably soon.
This 2-part audio interview, with each segment being about 20-minute long, was posted on the audioboom.com Internet site on Tuesday and, as always, I thank Larry Galearis for his excellent executive summary, plus his own personal comments. I will certainly try to remember to post this in my Saturday column, if you don’t have time for this just now. The link to Part 1 is in the headline — and here. The link to Part 2 is here.
Cambodia imported about $15 billion worth of gold during five years from Singapore, according to government statistics compiled by nongovernmental organization Mother Nature Cambodia — a figure so large, corruption monitor groups say it raises alarms about potential financial crimes, particularly smuggling.
Cambodian officials dismiss the accusation, saying much of the gold is simply transiting the country on its way elsewhere.
The amount of imported gold — 407 tonnes — eclipses corresponding Singaporean export figures for the same commodity to all other countries during the same period, including several with larger economies than Cambodia, such as China, the data shows.
Cambodia’s draft budget for 2018 allocates $6 billion in spending.
“Singapore has a totally free market with gold. In fact, you can buy gold bullion there for pretty much the spot market price and then export it unlimited, you can export a billion dollars of gold from Singapore without even questions asked.”
Gold has been imported into Cambodia essentially tax free other than small transaction fees required by the national bank, McLeod added.
From there, McLeod said, it was often smuggled over land to Vietnam where the importation of gold is restricted to a central authority and subject to tax — resulting in profit margins of at least seven or eight percent, he said.
This very interesting gold-related news item was posted on the voanews.com Internet site on their Thursday — and I found it embedded in a GATA dispatch. Another link to it is here.
The PHOTOS and the FUNNIES
Today’s ‘critter is known as the mahi-mahi in the Polynesian tongue, dorado in Spanish — and the lampuka on the Mediterranean island of Malta. Mahi-mahi have compressed bodies and a single long-based dorsal fin extending from the head almost to the tail. Mature males have prominent foreheads protruding well above the body proper. Females have a rounded head. They are distinguished by dazzling colors – golden on the sides, and bright blues and greens on the sides and back. The pectoral fins of the mahi-mahi are iridescent blue. The flank is broad and golden. Out of the water, the fish often change color (giving rise to their Spanish name, dorado, “golden”), going through several hues before finally fading to a muted yellow-grey upon death…which is a process I’ve seen myself on more than one occasion. Click to enlarge.
Monday’s announcement by the CFTC of an $800,000 fine and settlement with Bank of Nova Scotia for “spoofing” in the COMEX gold and silver markets received wide notice, despite being only the latest in a series of similar findings by the agency for improprieties in these markets. Enforcement Director James McDonald seemed to gush over the cooperation given by Scotiabank, as well as the CME Group for uncovering the illegal actions that occurred from 2013 to 2016. I couldn’t help but think of that scene from “Casablanca” where shock was feigned that gambling was taking place and the order was given to round up the “usual suspects”. As usual, the farcical announcement made no mention of efforts to recover damages to the victims of the spoofing.
You’ll forgive my cynicism, but I hardly believe this is an occasion for self-congratulations by the agency for a job well-done. I understand such cases take time to investigate and present, but it seems to me that the agency is only now belatedly catching up to a circumstance that has been widely known to have existed for a long time. In fact, “spoofing” has been discussed for so long, on these pages and elsewhere — and had become so obvious a manipulative market device, that it had become a permanent fixture in gold and silver. And as far as I can tell, spoofing still exists.
For those not familiar with the practice, spoofing is the rapid entry and just as rapid cancellation of large buy and sell orders designed not for actual execution but to spook or bluff other traders into selling or buying. As such, spoofing has no legitimate economic purpose and could and should have been completely eliminated years ago. Instead, the CFTC has settled into the role of Johnnie-come-lately — and devotes attention to it now with cases that should have been brought years ago.
But it’s not just a matter of justice being delayed being justice denied in the now common occurrence of the CFTC bringing a series of spoofing cases that happened years ago; it is more the case that the agency is missing completely the really important issue here. That issue is that spoofing is an illegal market device used to further the much bigger crime of market manipulation. Clearly, JPMorgan and the other commercials deploy a number of market dirty tricks in order to hoodwink and snooker the technical funds into buying and selling — and spoofing is a leading dirty trick. The CFTC is focusing on spoofing as if the story stops there, instead of seeing it for what it really is, namely, a device to foster the manipulation. — Silver analyst Ted Butler: 03 October 2018
It was yet another day where, despite a plunging dollar index, that fact was not allowed to manifest itself in precious metal prices. ‘Da boyz’ pulled out all the stops to close gold and silver back below their respective 50-day moving averages. But it took a manufactured dollar index rally in order to help pull that stunt off, along with vigorous price capping before that.
Here are the 6-month charts for all of the Big 6 commodities — and I note that WTIC got hauled down in price yesterday. But one day of trading does not a trend make, so we’ll see how things shake out over the next few days. The ‘click to enlarge‘ feature only helps with the four precious metal charts.
And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price sagged a bit once trading began in New York yesterday evening. It was down two bucks and change by minutes before 2 p.m. China Standard Time in Far East trading on their Friday afternoon. It has recovered a bit from there — and is down $1.10 at the moment. Silver is down 4 cents. Platinum has been trading a dollar or two higher in Far East trading — and is up 2 bucks currently. Palladium has been trading unsteadily sideways, but ticked higher around 2 p.m. CST as well — and is up 4 dollars as Zurich opens.
It’s noteworthy that platinum and palladium have been allowed to rally into positive territory during this dollar decline that started an hour ago, but that’s not been allowed in either silver or gold.
Net HFT gold volume is very quiet at about 25,500 contracts — and roll-over/switch volume is 2,125 contracts in this precious metal. Net HFT silver volume is pretty light as well at around 7,800 contracts — and there’s 509 contracts worth of roll-over/switch volume on top of that.
The dollar index began to creep quietly higher as soon as trading began at 6:00 p.m. EDT in New York on Thursday evening. That continued until a few minutes before 2 p.m. CST — and it has dropped a bit since — and is down 2 basis point thirty minutes before the London/Zurich opens.
Today, around 3:30 p.m. EDT, we get the latest Commitment of Traders Report, plus the monthly Bank Participation Report. I know that Ted will be face down in both as soon as they’re posted on the CFTC’s and CME Group’s website. I’ll be looking at them closely as well, but Ted’s the real authority on these reports — and whatever I can glean from him, I’ll have for you in my Saturday column.
And as I post today’s effort on the website at 4:02 a.m. EDT, I note that both gold and silver had a down/up move starting minutes before the London open. Gold is currently lower by $1.00 an ounce — and silver is down 3 cents. To a lesser extent, it was the same for platinum and palladium — and both are up a buck at the moment.
Gross gold volume is coming up on 41,500 contracts — and net of roll-over/switch volume, net HFT gold volume is a bit under under 36,500 contracts. Net HFT silver volume is 11,000 contracts — and there’s 576 contracts worth of roll-over/switch volume in that precious metal.
The smallish decline in the dollar index ended about fifteen minutes before the London open — and it edged a bit higher until around 8:15 a.m. BST. It has rolled over a bit in the last few minutes — and is back at unchanged as of 8:30 a.m. BST.
Today, at 8:30 a.m. EDT, we get the latest and greatest job numbers — and the rumours are that it will be a big one. But the BLS have zero credibility with most people — and if a number of some size does appear, nobody will believe it. Once again it will be interesting to see how the gold price reacts, or is allowed to react on the news.
That’s all I have for today. Have a good weekend — and I’ll see you her tomorrow.