Silver Hammered Back Below Its 50-Day Moving Average

30 October 2018 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped quietly sideways until 2 p.m. China Standard Time on their Monday afternoon — and then sank equally quietly until the morning gold fix in London.  It edged higher from there until the plug got pulled a few minutes before 12:30 p.m. in New York — and it was sold sharply lower from there, with the low tick of the day coming a very few minutes after 1 p.m. EDT.  It rallied quietly from that juncture until it was capped around 3:45 p.m. in the thinly-traded after-hours market — and it didn’t do anything after that.

The gold price traded in a one percent range on Monday, so the high and low ticks really aren’t worth looking up.

Gold was closed in New York yesterday at $1,228.60 spot, down $4.80 from Friday.  Net volume was just under 228,000 contracts — and there was only 7,057 contracts worth of roll-over/switch volume on top of that.

The price path for silver was virtually identical as gold’s, at least until the morning gold fix in London — and from there it stair-stepped its way to its high tick of the day, which came minutes after 8:30 a.m. in New York yesterday morning.  It was all down hill from that point, with the worst price damage coming during the noon lunch hour EDT.  The low tick, like in gold, also came a few minutes after 1 p.m.  It was bounced off its $14.39 low tick of the day multiple times over the next hour and change — and it gained back a few pennies in after-hours trading.

The high and low in this precious metal was reported by the CME Group as $14.78 and $14.405 in the December contract…and intraday move of 2.53 percent.

Silver finished the Monday session at $14.41 spot, down 25 cents from Friday’s close.  Net volume was pretty heavy at a bit over 88,000 contracts, as a lot of those newly minted long positions put on by the Managed Money traders recently, got stopped out, as silver broke through — and was closed below, its 50-day moving average yesterday.  Nothing free-market about this, or in gold, either — and if you’re suspecting that JPMorgan was involved in all this, you would probably be right about that.  Roll-over/switch volume was another 6,231 contracts on top of that.

The platinum price didn’t do much of anything until the morning gold fix in London yesterday, either.  It began to rally from there but, like silver and gold was capped a very few minutes after 8:30 a.m. EDT — and wasn’t allowed a penny above $840 spot [its high of the day] until the afternoon gold fix in London was put to bed.  Then, like gold and silver, it was sold lower as well until a few minutes after 1 p.m. EDT in New York — and it didn’t do a lot after that.  Platinum finished the day at  $830 spot, down a dollar from Friday’s close.

Palladium was down a couple of bucks by the Zurich open on Monday morning — and then didn’t do much for the next couple of hours.  It began to head higher from there — and that lasted until shortly after 9 a.m. in New York.  The selling began in earnest at that juncture — and the low tick of the day was set a few minutes before 4 p.m. in the thinly-traded after-hours market.  It didn’t do much after that.  Palladium was closed on Monday at $1,079 spot, down 19 bucks on the day — and 35 dollars off its high tick.

As I said a few days ago, it’s obvious that palladium would have rallied to the moon and stars by now, if it wasn’t for interference almost on a daily basis.  The same could be said of gold and silver, of course, but they’re not being allowed to rally by any meaningful amounts.  Palladium, on the other hand, is up around $300 off its mid-August low…just under 40 percent.

The dollar index closed very late on Friday afternoon in New York at 96.41 — and was up about ten basis points or so within the first couple of hours after trading began at 6:00 p.m. EDT in New York on Sunday evening.  From there it sank back to a bit below unchanged by the 8 a.m. GMT open in London on their Monday morning.  It had a really wild ride from there.  The 96.35 low tick was set shortly after 11 a.m. GMT — and the 96.70 high tick came somewhere on one of three spike in New York trading…you choose.  The dollar index closed at the 96.68 mark…up 27 basis points — and very close to its high of the day.  Here’s the intraday chart.

It was another day where what was happening in the currency market had almost no bearing on what was going on in the precious metals.

And here’s the 3-day dollar index chart, so you can see the activity from the 96.41 open on Sunday evening in New York.  Friday’s action is a bonus.

And here’s the 1-year U.S. dollar index — and you can read into the graph whatever you wish.  The delta between its close…96.35…and the intraday chart above, was 33 basis points on Monday.  Click to enlarge.

The gold stocks dropped a percent in the first ten minutes of trading — and then rallied to their highs of the day around 11:15 a.m. in New York trading. At that point, they were up a bit over 2 percent on the day. They sold mostly quietly lower from there — and back into the red by a bit by the close of trading at 4:00 p.m. EDT.  The HUI finished the day down 0.44 percent.

The silver equities were down 2 percent by minutes after 10 a.m. in New York…which may or may not have coincided with the afternoon gold fix in London.  They rallied back into positive territory by a bit by around 11:15 a.m. and, like the gold shares, that was the high water mark for them as well — and they sold off for the remainder of the Monday session, closing on their respective low ticks of the day.  Nick Laird’s Intraday Silver Sentiment Index closed yesterday down another 1.71 percent.  All things considered, it could have been far worse. Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that zero gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In silver, the short/issuers were ABN Amro and Advantage, with 1 contract apiece out of their respective client accounts.  The two long/stoppers were Morgan Stanley for its own account — and the CME Group picked up 1 contract as well, which it immediately re-issued as five 1,000 troy ounce COMEX mini silver contracts.  ADM stopped them all.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in October fell by 14 contracts, leaving zero left.  Friday’s Daily Delivery Report showed that 14 gold contracts were actually posted for delivery today, so those numbers match — and with total open interest at zero, gold deliveries for October are done.  Silver o.i. in October remained unchanged at 2 contracts — and none are out for delivery today.  Those 2 remaining contracts are out for delivery tomorrow as per the Daily Delivery Report just above.  October deliveries in silver are done as well.

For the month of October, there were 1,838 gold contracts issued and stopped — and that number in silver was 504.

November is not a traditional delivery month for either gold or silver.  And as of the above Preliminary Report, there are only 106 gold contracts still open in November, but there are a surprising 1,262 silver contracts still around for November delivery.  It remains to be see who the short/issuers and long/stoppers are on those contracts. 

First Day Notice for November deliveries will be up on the CME’s website around midnight EDT tonight — and I’ll have that data in my Wednesday column.


There was another decent-sized deposit in GLD yesterday, as an authorized participant added 170,277 troy ounces of gold.  But there was another big withdrawal from SLV yesterday, as an authorized participant took out 1,878,868 troy ounces.  That would most likely have been JPMorgan converting SLV shares for physical metal yet again.

That brings the total amount of silver withdrawn from SLV over the last week up to the 6.01 million troy ounce mark.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on insider their gold and silver ETFs, as of the close of trading on Friday.  They reported small withdrawals from both ETFs…4,437 troy ounces of gold — and 9,195 troy ounces of silver.

There was no sales report from the U.S. Mint on Monday.

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday, was 100 troy ounces that was withdrawn from Brink’s, Inc. — and I won’t bother linking that amount.

It was yet another monster day in silver, as 1,735,013 troy ounces was reported received — and another 2,470,191 troy ounces were shipped out…three truck loads in — and 6 out.  In the ‘in’ category, once truck load…606,537 troy ounces…ended up at JPMorgan.  The second truck load…604,135 troy ounces…landed at Brink’s, Inc. — and the last [smallish] truck load…524,340 troy ounces…was dropped off at Canada’s Scotiabank.  In the ‘out’ category…all six trucks departed Brink’s Inc.  The link to this action is here — and it’s worth a look if you have the interest.

Of course this truck load into JPMorgan puts their COMEX silver stash at another record high…149.1 million troy ounces.

There wasn’t much activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  The only received 60 of them — and shipped out 21 — and I won’t bother linking this, either.


Here are the usual two charts from Nick that show the weekly changes in all know gold and silver and gold depositories, ETFs and mutual funds…as of the close of business last Friday, October 26These entities added 67,000 troy ounces of gold on a net basis during the reporting week — and withdrew 2,289,000 troy ounces of silver on a net basis as well.  Of course the big decline in silver was because of the many million of ounces that JPMorgan took out of SLV on those conversions of shares for physical metal last week…over 4 million troy ounces.  Click to enlarge for both.

I have an average number of stories for you today.


CRITICAL READS

The Fed Will Panic… — Bill Bonner

A wonderfully fraudulent confrontation is setting up…

On one side is Donald J. Trump, pretending that he has “already made America great again” and blaming the Fed for ruining his beautiful work. He wants the Fed to lower interest rates, not raise them.

On the other is the Fed, pretending that it is the architect and creator of such an amazing economy, and that it’s now guiding it to perfection. It believes it is “normalizing” the economy by gradually raising rates.

So who’s right?

Oh, Dear Reader… You guessed it, didn’t you? They’re both wrong.

First, because the U.S. economy is not “beautiful”… It’s a nasty, dishonest, and dangerous mess.

Second, because both Trump and the Fed are to blame for making it that way — and third, because there’s no need for The Donald to get on the Fed’s case anyway. They’re both on the same team – actively manipulating the economy for their own benefit and making an even bigger mess of things.

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


Be Prepared for a Cheaper Dollar — Jim Rickards

When will the strong dollar weaken? Ultimately, the answer is whenever the Treasury wants.

When the Treasury is not overly concerned with the dollar, market forces can prevail to raise or lower the exchange rate compared with euros, Swiss francs, yen or any other currency.

Sometimes, other central banks intervene to raise or lower their currencies relative to the dollar and the U.S. does not seem to care. China is notorious for this. Japan and Switzerland are other practiced currency manipulators.

Except in extraordinary circumstances, the U.S. Treasury does not directly intervene in currency markets to target U.S. dollar exchange rates. If such targeting is needed, the Treasury will work with the Fed to raise interest rates or take a pause in rate hikes to affect the dollar’s value.

All of this may be about to change.

This worthwhile commentary by Jim put in an appearance on the dailyreckoning.com Internet site yesterday — and another link to it is here.


America’s True Deficit: U.S. to Borrow Over $1.3 Trillion In 2018

Confirming recently reduced estimates of U.S. debt borrowing needs – mostly as a result of new funds brought in via Trump’s trade tariffs – the Treasury Department today lowered its estimates of fourth-quarter borrowings to $425 billion from the $440 billion forecast it made in July, while assuming an end-of-December cash balance of $410 billion, up from $390 billion 4 months ago.

The revised Treasury numbers bring the total net borrowing needs for calendar 2018 at $1.338 trillion, while borrowings for fiscal year 2018 (which ended on Sept. 30) amounted to just under $1.2 trillion.

The Treasury also released its first estimate of borrowing needs for the January – March 2019 quarter, which it expects to hit $356 billion, well below the $488 billion borrowed in the same quarter of 2018, while assuming an end-of-March cash balance of $320 billion.

Meanwhile, during the July – September 2018 quarter, the last of fiscal 2018, the Treasury borrowed $353 billion in net debt, up from the $329 billion it had estimated in July and ended the quarter with a cash balance of $385 billion, which was also higher than the $350 billion forecast previously. The increase in borrowing resulted from the higher end-of-quarter cash balance partially offset by higher net cash flows.

So why did the U.S. borrow $1.2 trillion in Fiscal 2018 even though the official budget deficit was reported to be $779 billion for the same period? That is mostly due to “off budget” items that Congress thinks shouldn’t be part of the normal budgetary process. It includes things like Social Security and Medicare, which vary from year to year, and can be anywhere from $200 billion to almost $500 billion.

Of course, since the U.S. Treasury ultimately ends up borrowing those dollars as the table above shows, the true deficit that adds to the debt is actually about 50% higher than the number discussed by the media.

This news item appeared on the Zero Hedge website at 3:42 p.m. EDT on Monday afternoon — and another link to it is here.


Nomura: Beware Hallowe’en’s Massive Fed Liquidity Withdrawal

When surveying the carnage in capital markets, Nomura’s cross-asset chief Charlie McElligott observed that “Next Week Is Make Or Break For Stocks” and so far it’s been so good, with European and U.S. stocks defying yet another swoon in China, which was driven by the latest drop in Industrial Profits suggesting more “slowdown” pressure, as well as the PBoC skipping reverse repo operations Monday, draining 120B Yuan net—the largest liquidity withdrawal since August and reversing some of the large 460B Yuan injection last week, while the Onshore Yuan is heading towards its weakest level in more than a decade, while offshore too sees speculative flows again pressing near 6.97.

Meanwhile, as noted earlier, European stocks lept higher on 1) news that Merkel looks to remain “on” as German Chancellor despite stepping-down as CDU leadership after disastrous election result, while specifically within the Cyclical / High Beta Equities universe, 2) tax-cut headlines from Chinese regulators (this time a 50% cut on new car purchase tax) shows they are continuing to tinker with stimulus, driving the massively China-levered and very-cyclical European Autos sector +5.0% at peak delirium/illiquidity.

However, as McElligott notes, the most relevant drivers for this week’s performance will be in the liquidity space, where “bullish flows” will need to override the risk-negative “QT” liquidity impulse of this week’s largest Fed SOMA run-off YTD (with another coming Nov 21st).

Offsetting the favorable flows from corporate buybacks will be the Fed itself, even as rates move back to the cross-asset forefront into a critical week of month-end Macro, which includes the largest Fed balance-sheet reduction-to-date ($-33.2B) on Hallowe’en, as well as the payrolls report this Friday.

As McElligott reminds readers, the “Quantitative Tightening” via the Fed’s SOMA unwind going “max” in the month of October— along with ECB’s ‘halving’ of bond purchases and the BoJ’s ongoing “stealth taper” escalation — were the key inputs when he made his original call to expect a “financial conditions tightening tantrum” towards the end of October… “and here we are.”

This news item appeared on the Zero Hedge website at 9:28 a.m. EDT on Monday morning — and I thank Brad Robertson for sharing it with us.  Another link to it is here. 


Merkel will not seek re-election as CDU chair after Hesse election debacle

Angela Merkel will not seek re-election as party chair of CDU, which she has headed for 18 years. The information comes a day after her party suffered another major setback in a local election.

The German chancellor, who has chaired the ruling Christian Democratic Union since 2000, was expected to compete again at the party congress in Hamburg in early December.

On Sunday, her party suffered another major setback in local elections, this time in the state of Hesse. The CDU managed to get 28 percent of the vote, which marks a massive drop from the 38.3 percent won during Hesse’s last election in 2013.

The 64-year-old Merkel has decided not to stand for re-election as well as to give up the chancellorship. She said on Monday that she wants to serve her full term as German chancellor until 2021. Merkel also ruled out running for any senior positions in the European Union.

Germany’s Der Spiegel magazine suggested that possible candidates to replace Merkel could include CDU General Secretary Annegret Kramp-Karrenbauer, Federal Health Minister Jens Spahn, or North Rhine-Westphalia’s Minister President Armin Laschet. Friedrich Merz, a former leader of the CDU/CSU coalition in the Bundestag, was reportedly also named as a possible successor.

This story showed up on the rt.com Internet site at 9:26 a.m. Moscow time on their Monday morning, which was 2:26 a.m. in Washington — EDT plus 7 hours — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.


This landmark Liquid Natural Gas deal will change energy geopolitics forever

China’s LNG [liquid natural gas] demand grew by a record 8 million tonnes in 2017 and is set to expand by another record 12 mt this year, making up 50 percent of all global LNG demand growth, energy consultancy Wood Mackenzie said in a new report last week.

The country’s spike in LNG usage comes as Beijing pushes forward with its plan to offset coal usage of both industrial and residential end users in an effort to curb rampant air pollution, particularly in its major urban centers. Beijing has mandated that natural gas make up at least 10 percent of its power generation energy mix by 2020, with further earmarks set for 2030.

China’s increased LNG usage is already transforming global markets for the super-cooled fuel and will likely shorten the LNG supply glut by several years from a previously projected time frame of around 2023. The country’s LNG demand is also prompting companies to rethink LNG export project proposals long idled amid the downturn in both global oil and LNG markets from 2015 to 2017.

The growing trade war between Washington and Beijing will also see Chinese companies continue to make a pivot away from US sourced LNG deals, both long-term and spot purchases, to more LNG deals with Russia. Not only will Sino-Russian energy cooperation increase amid President Donald Trump’s hard line over U.S.-China trade differences and his more muscular approach with Beijing over South China Sea differences and increased U.S. support for Taiwan, but these differences will solidify an already growing alliance between Chinese President Xi Jinping and his Russia counterpart Vladimir Putin.

This interesting article…which I decided to post in today’s column, rather than wait for Saturday…put in an appearance on the rt.com Internet site on Sunday — and reader George Whyte was the first person through the door with it yesterday.  Another link to it is here.


China’s Debt Bomb Ready to Explode — Jim Rickards

The great Chinese growth slowdown has been proceeding in stages for the past two years. The reason is simple. Much of China’s “growth” (about 25% of the total) has consisted of wasted infrastructure investment in ghost cities and white elephant transportation infrastructure.

That investment was financed with debt that now cannot be repaid. This was fine for creating short-term jobs and providing business to cement, glass and steel vendors, but it was not a sustainable model since the infrastructure either was not used at all or did not generate sufficient revenue.

China’s future success depends on high-value-added technology and increased consumption. But shifting to intellectual property and the consumer means slowing down on infrastructure, which will slow the economy.

In turn, that means exposing the bad debt for what it is, which risks a financial and liquidity crisis. China started to do this last year but quickly turned tail when the economy slowed. Now the economy has slowed so much that markets are collapsing.

But doesn’t China have over $1 trillion of reserves to prop up its financial system?

On paper, that’s true. But in reality, China is “short” U.S. dollars. The Chinese may have $1.4 trillion of U.S. Treasury securities in its reserve position, but they need those assets possibly to bail out their banking system or defend the yuan.

This interesting commentary from Jim was posted on the dailyreckoning.com Internet site on Monday as well — and I thank Brad Robertson for sending it along.  Another link to it is here. 


The Abolition of Nuclear Abolitionism? — Stephen F. Cohen

Stephen Cohen elaborates on the following points regarding Trump’s decision to withdraw from the Intermediate-Range Nuclear Forces Treaty, signed by the US and (Soviet) Russia in 1987.

– For whatever reasons, both leaders at the time, President Ronald Reagan and Soviet General Secretary Mikhail Gorbachev, had developed a deep personal fear of nuclear weapons. After agreeing in principle, though informally, in February 1986 that all nuclear weapons should be eliminated, the following year they abolished an entire category of those instruments of mass destruction: nuclear-warhead–bearing missiles with a range of some 500–5,500 kilometres.

– The INF Treaty was focused on Europe, which was targeted by Soviet missiles and which was where US counter-missiles were based. It was a major step in a diplomatic process of grand détente that both Reagan and Gorbachev thought would end the Cold War and nuclear arms races forever. The treaty’s larger significance is that it was the first, and still only, act of nuclear abolitionism – until now, a historic 31-year tangible symbol of what more could, and should, be possible.

– If carried out, however, Trump’s decision relegates the historic INF Treaty to the status of just another failed or discarded international agreement.

This commentary by Stephen was posted on the rt.com Internet site at 3:43 p.m. Moscow time on their Sunday afternoon, which was 8:43 a.m. in Washington — EDT plus 7 hours.  I thank Jack Watts for this one — and another link to it is here.


Jim Goddard of Howestreet.com interviews your humble scribe

This audio interview with Jim was conducted last Friday morning — and begins at the 50:45 minute mark.  Our discussion is centered around the current state of the precious metals market…silver and gold in particular.  It runs for about 18 minutes.


LBMA to reveal size of London’s gold market on November 20

The London Bullion Market Association (LBMA) will begin publishing data on November 20 that will provide the most accurate picture yet of the size of London’s gold trade, its chief executive said on Monday.

London is the world’s largest gold market but because most transactions are done bilaterally between banks, brokers and traders reluctant to reveal their activity, its true size remains a mystery.

The closest approximation is clearing data which suggest gold worth around $25 billion changes hands each day, but this data contains only transactions which reach settlement in London.

The new LBMA figures will show the total trading activity of LBMA members which make up the bulk of the London market and are expected to be much larger than the clearing statistics.

Let’s see how much ‘transparency’ we get this time.  This very interesting Reuters story, filed from London, appeared on their Internet site at 7:21 a.m. EDT on Monday morning — and I found it embedded in a GATA dispatch.  Another link to it is here.


Gold in almost any other currency… — Lawrie Williams

My colleague (boss) Ross Norman has published an article on this site looking at the precious metal’s performance in many other currencies than the U.S. dollar in which the gold price is almost universally quoted. Ross points to a couple of examples in major currencies – the U.K. pound and the Euro. Since 2014 the gold price in U.S. dollars is pretty much unchanged but in the British pound it has risen from £748 to £955 – a 30% rise. In the Euro it has similarly risen from €888 to €1,080 a gain of around 27%.

Ross also notes that in Chinese Yuan gold is up 15% in the same period; in the Russian ruble it is up a massive 94%; in the Indian rupee up 18% and in the Turkish Lira up an enormous 156%. Even in Swiss Francs, Ross notes, gold is up13% since 2014.

As can be seen from the Russian and Turkish examples where sanctions and geopolitical issues have affected the domestic currencies adversely I don’t think Ross has gone far enough in making his point. In Argentina for example the gold price has advanced around 467% in the domestic currency and in Venezuela, where hyperinflation is still raging, the rise has been astronomical.- up almost 3.6 million% in the local currency.

Interesting, but cold comfort considering what the gains would be in all world currencies, including the U.S. dollar, if precious metals were allowed to trade freely.  This commentary by Lawrie appeared on the Sharps Pixley website last Thursday — and another link to it is here.


Gold Demand Up 42% in Expectation of Geopolitical Shift

Central banks around the world are turning to gold as an alternative to the U.S. dollar, which they see as being undermined by America’s aggressive trade policy and geopolitical uncertainty.

Demand for gold was up 42 percent year on year in the first quarter of 2018 among central banks, the World Gold Council (WGC) statistics say. Russia and Turkey are the largest net buyers.

Central banks added a net total of 193.3 tons of bullion in the half of 2018, an 8 percent increase from the 178.6 tons bought in the same period last year. This marks the strongest six months for central bank gold buying since 2015, the WGC notes.

As of the first half of 2018 central banks increased their gold holdings to $1.36 trillion, around 10 percent of global foreign exchange reserves, the WGC said. An analyst has told RT that the reason behind the move is a wish to diversify from the greenback.

The United States has long used the dollar to put pressure on competitors. This has always caused anger in the world community. And now the fight against the dollar has reached Europe,” said Eldiyar Muratov, President at Singapore Castle Family Office.

This gold-related news item, which may be a rehash of an rt.com story that I posted before, put in an appearance on the eurasiareview.com Internet site on Monday sometime — and I found it on the Sharps Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES 

Today’s ‘critter’ is the mountain goat. It’s a large hoofed mammal endemic to North America. A sub-alpine to alpine species, it is a sure-footed climber commonly seen on cliffs and ice.  Despite its vernacular name, it is not a member of the genus that includes all other goats, such as the wild goat, from which the domestic goat is derived.  A billy stands about 1 m (3.3 ft) at the shoulder to the waist and can weigh considerably more than the nanny (around 30% more in some cases). Male goats also have longer horns and longer beards than females.  Click to enlarge. 


The WRAP

 A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves among those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself.” — Cicero…56 B.C.


The only surprise about yesterday’s engineered price declines in the precious metals is why JPMorgan let gold off so easily.  They were obviously after silver, as they closed it below its 50-day moving average on Monday, but that still doesn’t explain why they were so soft on the gold price.  Ted has mentioned on several occasions that a sell-off back below gold and silver’s 50-day moving averages was certainly a possibility to load up the Managed Money traders back on the short side.  That was certainly the case in silver yesterday, but whether or not there’s more to come, remains to be seen. 

Despite the trading activity — and all the unhappiness it brought us precious metal investors, I’d consider Tuesday’s price action to be just an extension of the ‘care and maintenance’ scenario I’ve been speaking of for more than a month now. 

Here are the 6-month charts for the Big 6 commodities — and JPMorgan’s handiwork is pretty obvious, although it’s certainly a possibility that Ted’s raptors, the commercial traders other than the Big 8, were partially responsible for yesterday’s price action as well.  This is all illegal as hell, of course, but the CFTC and the mining companies don’t care — and won’t do anything even if they do.  The ‘click to enlarge‘ feature helps a bit 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 was up a tad until shortly after 8 a.m. China Standard Time in Far East trading on their Tuesday morning.  It has since been sold unsteadily lower — and is currently down $2.10 an ounce.  It was the same for silver, except its rally was cut short just before 11 a.m. CST — and it traded sideways for an hour before being quietly sold lower as well — and it’s up only 4 cents at the moment.  The price pattern in platinum and palladium was about the same as it was for silver — and both are off their current high ticks of the day as well, with palladium up 2 bucks — and palladium by 4.

Net  HFT gold volume is slowly coming up on 30,000 contracts — and there’s only 218 contracts worth of roll-over/switch volume in that precious metal.  Net HFT silver volume is a bit over 10,200 contracts — and there’s only 253 contracts worth of roll-over/switch volume on top of that.

The dollar index edged unevenly lower by a handful of basis points until shortly before noon in Shanghai — and has been chopping very quietly higher since — and is now up 3 whole basis points about thirty minutes before the London open.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report, I’ll wait to comment on what may or may not be in it in my Wednesday missive.

And as I post today’s column on the website at 4:03 a.m. EDT, I note that the gold price ticked higher by a dollar and change going into the London open — and shortly after that, it got smacked down to its current low tick of the day — and is down $5.40 the ounce at the moment — and also at a new low for this move down.  Silver continues to edge lower — and is now down a penny on the day, after being up 8 cents earlier.  It was the same for platinum and palladium — and the former is only up a dollar — and the latter is back at unchanged.

Gross gold volume is coming on 49,000 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is just over 48,000 contracts.  Net HFT silver volume is around 13,800 contracts — and there’s still only 364 contracts worth of roll-over/switch volume in that precious metal.

The dollar index, which had been up a small handful of basis points going into the London open, dropped like a rock a few minutes before that event.  But those ‘gentle hands’ showed up at the 8:00 a.m. BST London open right on the button — and it’s been heading higher since — and is up 8 basis points as of 8:30 a.m. BST.

Things are getting a little wild out there, but JPMorgan is obviously still running the precious metals show, despite that fact — and it remains to be seen what they have in store for us as the rest of the Tuesday session unfolds.

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

Ed