Silver Closes Well Above Its 50-Day Moving Average

02 November 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crept quietly higher until around noon China Standard Time on their Thursday — and from there it traded sideways until the 2:15 p.m. afternoon gold fix in Shanghai. It began to stair-step its way higher in price from there — and was on the verge of going parabolic at the COMEX close in New York, but the price was capped and driven lower by a bit at that juncture.  That quiet sell-off lasted until around 4 p.m. EDT — and it didn’t do much after that.

The low and high tick were reported by the CME Group as $1,216.10 and $1,239.30 in the December contract.

Gold was closed in New York on Thursday at $1,232.90 spot, up $18.80 on the day — and off its high tick by at least five dollars.  Net HFT gold volume was high, but not that high at 281,000 contracts — and there was a hair over 34,000 contracts worth of roll-over/switch volume on top of that.

It was the same general price path for silver — and its price was capped a few minutes after the COMEX close as well — and was sold down a bit during the ensuing ten minutes.  From there it traded sideways until the market closed at 5:00 p.m. EDT.

Silver was closed yesterday at $14.72 spot, up 50.5 cents on the day.  The 50-day moving average got taken out with a vengeance, so net volume was enormous at a bit under 115,000 contracts — and there was 9,055 contracts worth of roll-over/switch volume in that precious metal.

Platinum also followed a similar price path to gold — and that trend lasted until shortly after 11 a.m. in New York.  From that point it didn’t do much for the rest of the Thursday session.  Platinum finished the day at $858 spot, up 23 dollars from Wednesday’s close.

Palladium rallied a bit in Far East trading as well, but was sold down a hair into the Zurich open.  It was sold down even more from there — and was down a dollar or so on the day by noon CET over there.  It edged higher into the COMEX open — and then went vertical.  The price was capped in an instant — and except for an two hour long up/down move in morning trading in New York, wasn’t allowed to do anything for the remainder of the Thursday session.  Palladium was closed at $1,082 spot, up 15 bucks on the day.

The dollar index closed very late on Wednesday afternoon at 97.11 — and that was pretty much its high of the day when it opened a few minutes later at 6:00 p.m. EDT on Wednesday evening.  An hour and change after that, it began to head lower with real authority — and it stair-stepped its way to its 96.20 low tick of the day, which came about five minutes before the COMEX close in New York.  It crawled quietly higher from there — and finished the Thursday session at the 96.30 mark…down 81 basis points on the day.

I’m also posting the 3-day dollar index chart today, so you can see the move down from when it began in New York on Wednesday evening.

And here’s the 6-month U.S. dollar index — and the delta between its close…96.08…and the close on the intraday charts above, was 22 basis points yesterday.

The gold stocks gapped up a bit over two percent at the open — and then continued to rally until a few minutes after the 1:30 p.m. EDT COMEX close.  From that point, they faded a hair as the trading day wound down.  The HUI finished higher by 4.76 percent.

It was mostly the same price path for the silver equities, but Nick Laird’s Intraday Silver Sentiment/Silver 7 Index only closed higher by 4.34 percent.  I must admit that I was expecting better than that.  Click to enlarge if necessary.

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

And even though they aren’t very happy looking, here are two charts from Nick Laird that I normally post in my Saturday column — and will again.  But these two charts below show the changes for October, as of Wednesday’s close — and the changes year-to-date as of the end of October as well.  They’ve certainly improved a great deal since yesterday — and those positive changes will show up in the charts in my column tomorrow.  Click to enlarge for both.

The CME Daily Delivery Report showed that 20 gold and 6 silver contracts were posted for delivery within the COMEX-approved depositories on Monday. In gold, the two short/issuers were ABN Amro — and Advantage, with 13 and 7 contracts out of their respective client accounts.  The two long/stoppers were JPMorgan and Advantage, with 12 and 8 contracts for their respective client accounts as well.  In silver, the sole short/issuer was Advantage — and there were three long/stoppers in total.  Morgan Stanley and HSBC USA picked up 2 contracts apiece for their respective in-house/proprietary trading accounts.  JPMorgan picked up the other 2 contracts for its client account.  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 November fell by 27 contracts, leaving 27 left, minus the 20 contracts mentioned just above.  Wednesday’s Daily Delivery Report showed that 32 gold contracts were actually posted for delivery today, so that means that 32-27=5 more gold contracts were added to the November delivery month.  Silver o.i. in November dropped by 456 contracts, leaving 407 left, minus the 6 contracts mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 467 silver contracts were actually posted for delivery today, so that means that 467-456=11 more silver contracts just got added to November.


There was a large deposit into GLD on Thursday, as an authorized participant added 217,569 troy ounces.  There was a small withdrawal from SLV, as an a.p. took out 33,296 troy ounces and, like the tiny withdrawal from GLD on Wednesday, this amount of silver withdrawn would represent a fee payment of some kind as well.

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

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

But it was another huge day in silver, as 2,510,574 troy ounces were received, but only 129,866 troy ounces were shipped out.  In the ‘in’ category, there were three truckloads…1,801,914 troy ounces…left at CNT. There was yet another truckload…603,593 troy ounces dropped off at JPMorgan — and the remaining 105,066 troy ounces found a home over at HSBC USA.  All of the ‘out’ activity…129,866 troy ounces…was from CNT. There was also a transfer of 541,983 troy ounces from the Eligible category — and into Registered over at CNT as well — and that’s certainly delivery related.  The link to all this action is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 1,000 of them — and shipped out 280.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

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


CRITICAL READS

A Memento Mori for the Bull Market — Bill Bonner

Trends tend to go on longer than you expect… and then fall harder and faster than you thought possible.

Who imagined in 1929 – at the peak of the Roaring Twenties – that a Great Depression was coming?

Who foresaw – at the height of the 1960s prosperity – that we would soon be waiting 33 years for stocks to recover?

What sage forecaster knew that the fabulous “Information Age” technology would be a bust?

And today… just in case…we leave you with a warning: What those crashes and depressions were, so will this bubble become.

Buy gold. Sell stocks.

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


Is the Fed Engineering a Market Crash? — Dennis Miller

Can the Fed cause a market crash?
In 2017 Fed Chair Janet Yellen reassured us:

Would I say there will never, ever be another financial crisis? …. That would be going too far but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be. The capital positions of the major banks are very much stronger….

Current Fed Chair, Jerome Powell continues to reassure us. Judy Woodruff asked whether the rosy current moment can last indefinitely.

Indefinitely is a long time. Not every business cycle is going to last forever, but no reason to believe this cycle can’t go on for quite some time, effectively indefinitely.

We don’t see the kind of buildup in risks in the financial markets, let alone the banking system.”

This longish commentary by Dennis appeared on his Internet site on Thursday morning — and another link to it is here.


Washington’s Silent Weapon for Not-so-quiet Wars. “A World Full of Dollars”, A 2019 Global Economic Crisis — F. William Engdahl

Today by far the deadliest weapon of mass destruction in Washington’s arsenal lies not with the Pentagon or its traditional killing machines. It’s de facto a silent weapon: the ability of Washington to control the global supply of money, of dollars, through actions of the privately-owned Federal Reserve in coordination with the US Treasury and select Wall Street financial groups. Developed over a period of decades since the decoupling of the dollar from gold by Nixon in August, 1971, today control of the dollar is a financial weapon that few if any rival nations are prepared to withstand, at least not yet.

Ten years ago, in September, 2008, U.S. Treasury Secretary, former Wall Street banker Henry Paulson, deliberately pulled the plug on the global dollar system by allowing the mid-sized Wall Street investment bank, Lehman Bros go under. At that point, with aid of the infinite money-creating resources of the Fed known as Quantitative Easing, the half-dozen top banks of Wall Street, including Paulson’s own Goldman Sachs, were rescued from a debacle their exotic securitized finance created. The Fed also acted to give unprecedented hundreds of billions of U.S. dollar credit lines to E.U. central banks to avert a dollar shortage that would clearly have brought the entire global financial architecture crashing down. At the time six Eurozone banks had dollar liabilities in excess of 100% of their country GDP.

Since that time a decade ago, the supply of cheap dollars to the global financial system has risen to unprecedented levels. The Institute for International Finance in Washington estimates the debt of households, governments, corporations and the financial sector in the 30 largest emerging markets rose to 211% of gross domestic product at the start of this year. It was 143% at the end of 2008.

This interesting commentary, which is certainly worth reading, was posted on the globalresearch.ca Internet site yesterday sometime — and I thank Larry Galearis for pointing it out.  Another link to it is here. 


Euro’s bid to challenge King Dollar collides with political risk

Europe’s dream of turning the euro into a global reserve currency that can rival the dollar is proving more elusive than ever.

A rally on Thursday notwithstanding, the euro is trading within striking distance of its low this year as a confluence of political risks looming large over Europe damp sentiment toward the common currency.

Angela Merkel said this week that she won’t contest to be Germany’s Chancellor again in 2021 after her party suffered electoral setbacks in regional elections, while Italy’s coalition government is embroiled in a stand-off with the European Union over a wider deficit in its planned budget.

The flare-up of political risk across a landscape that shares the euro as its common currency shows European Commission President Jean Claude Juncker has his work cut out before realizing his vision of upending the global dominance of the dollar. The euro has lost almost a fourth of its value since before the euro-area debt crisis erupted in 2011, suggesting that central banks aren’t quite embracing Juncker’s dream just yet.

This Bloomberg article showed up on their Internet site at 12.38 a.m. Pacific Daylight Time on Thursday morning — and was updated about eight hours later.  I found it in a GATA dispatch — and another link to it is here.


Russia ‘assessing’ military base in Cuba as U.S. leaves INF treaty

A senior Russian official and former military officer said on Tuesday that an “assessment” of establishing a military base in Cuba was under way in Moscow.

The comments from Vladimir Shamanov, who currently is head of the Russian parliament’s defense committee, were in response to the U.S. administration’s decision to leave the Intermediate-Range Nuclear Forces Treaty.

Now the active phase of impact assessment [of establishing a base in Cuba] is under way, and proposals will be prepared with estimates,” Shamanov was quoted by Interfax news agency as saying on Tuesday.

I do not exclude the possibility that this issue will be touched upon at the upcoming meeting with the Cuban leader in Moscow,” he added.

Cuba’s new president, Miguel Diaz-Canel, traveled to Moscow on Thursday to discuss the countries’ strategic relationship.

This brief article put in an appearance on the Asia Times website at 5:23 a.m. Hong Kong Time on their Thursday morning, which was 5:23 p.m. on Wednesday afternoon in Washington — EDT plus 12 hours.  I thank Tolling Jennings for bringing it to our attention — and another link to it is here.


1MDB: Ex-Goldman bankers and Jho Low face U.S. charges

Two former Goldman Sachs bankers and Malaysian financier Jho Low have been hit with U.S. criminal charges in connection with one of the world’s biggest financial scandals.The Department of Justice alleges the men participated in a scheme that stole billions of dollars from Malaysia’s development fund, 1MDB.

One former Goldman banker pleaded guilty, the department said.

The other banker has been arrested, while Mr. Low remains at large.

Mr. Low, who prosecutors say had ties to government officials and acted as an informal advisor to the 1MDB fund, maintains his innocence, according to a statement issued by his legal team.

This story was posted on the bbc.com Internet site very early on their Thursday morning — and it comes to us courtesy of Swedish reader Patrik Ekdahl.  Another link to this news item is here.  The Zero Hedge spin on this is headlined “Ex-Goldman Banker To Plead Guilty to 1MDB Criminal Charges, Forfeit $44 Million” — and I thank Brad Robertson for that one.


Trump Signs Executive Orders Targeting Venezuela Gold Exports

In the latest move to pressure Venezuela’s president Nicolas Maduro, Donald Trump signed an executive order enabling new sanctions on Venezuela’s gold sector, in a bid to disrupt trade with Turkey which U.S. officials believe is undermining efforts to cripple Venezuela’s economy and force Maduro and members of his government out of office.

I hereby report that I have issued an Executive Order with respect to Venezuela that takes additional steps with respect to the national emergency declared in Executive Order 13692 of March 8, 2015,” Trump wrote in his letter to the leaders of the House of Representatives and Senate.

According to Bloomberg, the order which was signed by Trump on Wednesday and will be announced at a speech Thursday by National Security Adviser John Bolton, targets those “operating corruptly within the gold sector” and will have a “fairly significant” effect on the country’s economy.

The new sanctions will target networks operating within corrupt Venezuelan economic sectors and deny them access to stolen wealth,” Bolton will say, according to an advanced copy of his speech seen by Bloomberg. “Most immediately, the new sanctions will prevent U.S. persons from engaging with actors and networks complicit in corrupt or deceptive transactions in the Venezuelan gold.

While it was not initially clear what form the sanctions will take, the Treasury Department is will announce details of how the latest sanctions will be implemented later on Thursday. And while the initial effort will focus on Venezuela’s gold sector, whose exports Venezuela allegedly uses to circumvent financial sanctions, Trump’s order gives the State and Treasury departments authority to target additional industries in the future.

This news item put in an appearance on the Zero Hedge website at 1:46 p.m. on Thursday afternoon EDT — and I thank Brad Robertson for sending it along.  Another link to it is here.


China’s monetary policy must change — Alasdair Macleod

The next credit crisis poses a major challenge to China’s manufacturing-based economy, because higher global and yuan interest rates are bound to have a devastating effect on Chinese business models and foreign consumer demand. Dealing with it is likely to be the biggest challenge faced by the Chinese Government since the ending of the Maoist era. However, China does have an escape route by stabilising both interest rates and the yuan by linking it to gold.

But will the Chinese have the gumption to take it? This article examines the challenges and the possible solution. It concludes there is a reasonable chance China will embrace sound money, because it is in a position to do so and the dangers of not doing so could destroy the State.

This very long, but very interesting commentary/opinion piece was posted on the goldmoney.com Internet site on Thursday sometime — and I found it on the gata.org website.  Another link to it is here.


The PHOTOS and the FUNNIES

For the next little while I’ll be feature some award-winning photos that Swedish reader Patrik Ekdahl sent my way the other day. The first is a pair of rare Quinling golden snub-nosed monkeys. They are restricted to the Qinling Mountains in China. Among the most striking primates in the world, these monkeys are in danger of disappearing. Their numbers have steadily declined over the decades and there are now fewer than 4,000 individuals left. Photo Credit: Marsel van Oosten, The Netherlands.  Click to enlarge.


The WRAP

Yesterday’s rallies in the precious metals were certainly related to the big decline in the dollar index, but even then it certainly looked like their respective prices were being actively managed.  That was particularly the case at the COMEX close, as both gold and silver certainly looked like they were about to head sharply higher at that juncture, but weren’t allowed.

Gold’s volume was not as high as one would normally expect, but then again, no moving averages of note were broken during the Thursday trading session.  That certainly wasn’t the case in silver, as it blew through its 50-day moving average with real authority — and the volume number indicates that the commercial traders were out and about in force, as the Managed Money traders covered short positions and went long. Of course none of this will show up in today’s new Commitment of Traders Report.

Here are the 6-month charts for all four precious metals, plus copper and West Texas Intermediate Crude Oil.  WTIC was closed a new low for this move down, but everything else was up.  The ‘click to enlarge‘ feature helps with all six charts.

And as I mentioned just above, we get the latest and greatest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, somewhere around 3:30 p.m. EDT today.  In almost all respects it’s “yesterday’s news” after the big rallies on Thursday.  But regardless of that, I’ll have it all for you in my Saturday column.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price edged quietly lower until around 10:30 a.m. China Standard Time on their Friday morning.  It chopped back to the unchanged mark by 2 p.m. CST over there — and  is currently up 50 cents an ounce.  Silver followed the same general price path — and is now up 2 cents.  Platinum has been crawling unsteadily higher throughout the entire Far East trading session — and is up 7 dollars at the moment.  Ditto for palladium — and it’s up 7 bucks as well as the Zurich open looms.

Gross gold volume is already up to around 61,000 contracts — and there’s only 546 contracts worth of roll-over/switch volume on top of that, so net HFT gold volume is around 60,000 contracts.  Net HFT silver volume is way up there at around 21,100 contracts — and there’s only 334 contracts worth of roll-over/switch volume in this precious metal.

The dollar index rallied a bit under 10 basis points by shortly before 10 a.m. CST — and it’s been heading lower ever since — and thirty minutes before the London open, it’s down 16 basis points.

Also today, at 8:30 a.m. EDT, we get the latest job numbers — and that might move the markets.  But which way precious metal prices will be allowed to go on that number, remains to be seen.

Have a good weekend — and I’ll see you here tomorrow.

Ed