The COMEX Silver Churn Continues Unabated

08 November 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Despite the fact that the dollar index cratered at the 6:00 p.m. EDT open on Tuesday evening, there was no reaction at all from the precious metal — and the smallish rally that did develop, got capped about 8:45 a.m. China Standard Time on their Wednesday morning.  It was sold two dollars below unchanged during the next couple of hours — and then proceeded to rally unevenly higher from there until the high tick of the day was set shortly before noon in London.  It was all down hill from that juncture until 4 p.m. in the thinly-traded after-hours market — and it crept a bit higher into the close from there.

The gold price traded within about a ten dollar price range everywhere on Planet Earth yesterday — and the low and high ticks really aren’t worth looking up.

Gold was closed in New York on Wednesday at $1,226.10 spot, down 40 cents on the day.  Net volume was nothing special at around 224,500 contracts, but a very decent chunk of that amount was transacted before noon in London to keep that rally under control.  Roll-over/switch volume in this precious metal was pretty impressive at a hair under 29,000 contracts.

Silver’s price path was virtually identical to gold’s, with the only significant difference being that the high tick of the day was set at 10 a.m. GMT in London yesterday morning, much earlier than the high for gold.

The low and high ticks in this precious metal were reported by the CME Group as $14.475 and $14.73 in the December contract.

Silver was closed in New York on Tuesday at $14.54 spot, up 4.5 cents on the day.  Net volume was  up a bit from Monday and Tuesday’s volume, at just under 63,500 contracts — and roll-over/switch volume was pretty heavy at a hair under 16,500 contracts.

The platinum price rallied unsteadily higher until shortly before 11 a.m. in Zurich — and then chopped generally sideways until shortly after the COMEX open.  It was then sold equally unsteadily lower until until trading ended at 5:00 p.m. EST.  Platinum finished the Tuesday session at $871 spot, up 4 dollars from Tuesday’s close.

The palladium price didn’t do much of anything until shortly after the Zurich open.  It rallied a bit from there for an hour or so, before trading flat into the COMEX open.  It began to fly from that point — and the high tick was set around 9:30 a.m. in New York.  From there it chopped quietly sideways until shortly before 1 p.m. EST.  The price was dropped 5 bucks at that juncture — and from that point it didn’t do much for the remainder of the Wednesday session.  Palladium closed at $1,121 spot, up 17 dollars on the day…gaining back almost all of Tuesday’s loses in the process.

The dollar index closed very late on Tuesday afternoon in New York at the 96.27 — and then fell like a stone the moment trading began at 6:00 p.m. EST a few minutes later — and its 95.90 low tick was set minutes later when the usual ‘gentle hands’ appeared — and drove it higher by 50+ basis points in less than an hour.  It began to head sharply lower once again starting around 10:20 a.m. CST on their Wednesday morning — and it revisited its low tick of the day at precisely noon CST.  For the second time in five hours, those ‘gentle hands’ appeared.  From that point it began to rally quietly higher — and that state of affairs lasted until 3 p.m. China Standard Time.  From that juncture in began to head lower — and the 96.68 low tick was set at the morning gold fix in London…10:30 a.m. GMT.  It began to crawl quietly but unevenly higher — and it certainly appeared that there was some sort of algorithm running in the background to keep it on such an neat and even path for the rest of the Wednesday session.  The dollar index finished the day at 96.16…down 11 basis points from Tuesday’s close.

And here’s the 6-month U.S. dollar index chart — and the delta between its close…96.12…and the close on the intraday chart above, was only 4 basis points.

The gold stocks opened about unchanged before dipping into negative territory by a bit.  At 10 a.m. EST they began to rally to their highs of the day…such as they were…and then proceeded to chop quietly lower and back into negative territory, finishing just off their lows of the day.  The HUI closed down 1.33 percent.

The silver equities opened a hair above unchanged — and were in negative territory for the rest of the day…following the gold share price path like the proverbial shadow.  And despite the fact that silver finished up a bit on the day, Nick Laird’s Silver Sentiment/Silver 7 Index closed down 2.83 percent.  Click to enlarge if necessary.

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

And as poorly as the precious metal equities performed on Wednesday, it should be remembered that there was a buyer for every share that was sold yesterday — and whoever the buyers were, they were certainly happy to pick them up at these bargain-basement prices.


The CME Daily Delivery Report showed that 1 gold and 275 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In gold, Advantage issued and stopped the lone contract.  In silver, of the three short/issuers in total, the only two that mattered were International F.C. Stone and ABN Amro with 169 and 101 contracts out of their respective client accounts.  There were six long/stoppers in total.  The biggest was Morgan Stanley with 95 contracts…69 for its own account, plus another 26 for its client account.  In number two spot was HSBC USA with 74 for its own in-house/proprietary trading account — and in third place was JPMorgan with 69 contracts for its client account.  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 November declined by 3 contracts, leaving 5 left, minus the 1 mentioned just above.  Tuesday’s Daily Delivery Report showed that 2 gold contracts were actually posted for delivery today, so that means that 3-2=1 more gold contract vanished from the November delivery month.  Silver o.i. in November rose by 1 contract, leaving 278 still open, minus the 275 mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that only 2 silver contracts were actually posted for delivery today, so that means that 2+1=3 more silver contracts were added to November.


There was another withdrawal from GLD yesterday, as an authorized participant took out 47,295 troy ounces.  There were no reported changes in SLV.

There was a sales report from the U.S. mint yesterday, the first one for November.  They sold 6,000 troy ounces of gold eagles — 2,000 one-ounce 24K gold buffaloes — and 405,000 silver eagles.

There was no in/out activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.

As always, it was a completely different story in silver, as 1,691,842 troy ounces were received — and another 646,197 troy ounces was shipped out.  In the ‘in’ category, one truckload…604,655 troy ounces…was received at Brink’s, Inc. — and another truckload…599,444 troy ounces…was deposited at Canada’s Scotiabank.  There was also a smallish truckload…487,742 troy ounces…dropped off at JPMorgan.  In the ‘out’ category, there was 595,877 troy ounces…one truckload…shipped out of Malca-Amit USA — and the remaining 50,319 troy ounces departed CNT.  The link to all that activity is here.

The addition of that small truckload to JPMorgan’s silver depository on Tuesday brings their total COMEX silver stash up to 152.07 troy ounces…yet another record.

It was an extremely busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 9,012 of them — and shipped out another 5,001.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The silver jug below was made in Italy — and dates from the mid-first century A.D.  It’s one item from the Berthouville treasure.  The Berthouville hoard was discovered when a ploughshare struck a Roman tile in March of 1830. Once dislodged, the tile uncovered the hastily buried temple treasure a mere 20 cm beneath the modern surface.   The 93-piece treasure consisted of silver and other metalwork, of varying type, quality and dates in the 1st to late 2nd centuries of the Common Era.  Click to enlarge.

Except for the mid-term election stories, there wasn’t much else going on — and I only have an average number of articles for you today.


CRITICAL READS

Voting: America’s Favorite Hollow Ritual — Bill Bonner

Yesterday, the voters spoke.

The media – eager to attract eyeballs for their paid advertisers – spun the story as if it were the most important thing to happen since Adam ate the apple.

But what really changed?

The House – now in Democrat hands – will begin a new set of annoying hearings, designed to distract the voters from the larceny going on behind the scenes and the disaster it foretells.

There, away from the headlines, Democrats and Republicans, lefties and Trumpistas, will divvy up the ill-gotten goods from the election.

This commentary by Bill put in an appearance on the bonnerandpartners.com Internet site early on Wednesday morning EST — and another link to it is here.


The United States is Going Broke — Jim Rickards

Those who focus on the U.S. national debt (and I’m one of them) keep wondering how long this debt levitation act can go on.

The U.S. debt-to-GDP ratio is at the highest level in history (106%), with the exception of the immediate aftermath of the Second World War. At least in 1945, the U.S. had won the war and our economy dominated world output and production. Today, we have the debt without the global dominance.

The U.S. has always been willing to increase debt to fight and win a war, but the debt was promptly scaled down and contained once the war was over. Today, there is no war comparable to the great wars of American history, and yet the debt keeps growing.

In a new Weekly Standard article, the celebrated James Grant of Grant’s Interest Rate Observer reviews not only the current debt and deficit situation but provides an overview of the U.S. national debt since George Washington and Alexander Hamilton.

Grant makes the point that the debt has been increased and decreased on a regular basis but never until today was there a view that the deficit didn’t matter and could be increased indefinitely.

This commentary by Jim showed up on the dailyreckoning.com Internet site on Wednesday sometime — and another link to it is here.


Mortgage Applications Plummet to 18-Year Lows as Rates Hit 2010 Highs

With purchase applications tumbling alongside the collapse in refinancings, the headline mortgage application data slumped to its lowest level since September 2000 last week.

This should not be a total surprise as Wells Fargo’s latest results shows the pipeline is collapsing – a forward-looking indicator on the state of the broader housing market and how it is impacted by rising rates, that was even more dire, slumping from $67BN in Q2 to $57BN in Q3, down 22% Y/Y and the the lowest since the financial crisis.

But in the month since those results, mortgage rates have gone higher still… (this is now the biggest 2Y rise in mortgage rates since 2000)…sparking further weakness in the housing market…

And absent Xmas weeks in 2000 and 2014, this is the weakest level of mortgage applications since September 2000.

This Zero Hedge article was posted on their website at 9:25 a.m. on Wednesday morning EDT — and I thank Brad Robertson for this one.  Another link to it is here.


Mike Maloney: One Hell of a Crisis Looms

Mike Maloney, monetary historian and founder of GoldSilver.com, has just released two new chapters of his excellent Hidden Secrets of Money video series.

In producing the series, Maloney has reviewed several thousand years of monetary history and has observed that government intervention and mismanagement — such as is now rampant across the world — has always resulted in the diminishment and eventual failure of currency systems.

As for the world’s current fiat currency regimes, Mike sees a reckoning approaching. One that will be preceded by massive losses rippling across nearly all asset classes, destroying the phantom wealth created during the latest central bank-induced Everything Bubble, and grinding the global economy to a halt…

This audio interview, with host Chris Martenson, was posted on the Zero Hedge website at 8:05 p.m. on Wednesday evening EDT — and it runs for 56:14 minutes.  And as I should point out, the two new Hidden Secrets of Money videos that are referred to here, have already appeared in my column — and if you didn’t watch them back then, it’s not too late to make amends.  Another link to the audio interview is here.


SWIFT Caves to U.S. Pressure, Defies E.U. By Cutting Off Iranian Banks

Shortly after Trump reimposed nuclear sanctions on Tehran on November 5, the international financial messaging system SWIFT announced the suspension of several Iranian banks from its service. “In keeping with our mission of supporting the resilience and integrity of the global financial system as a global and neutral service provider, SWIFT is suspending certain Iranian banks’ access to the messaging system,” SWIFT said.

The Belgium-based financial messaging service added: “This step, while regrettable, has been taken in the interest of the stability and integrity of the wider global financial system.”

SWIFT’s decision has further undermined E.U. efforts to maintain trade with Iran and save an international deal with Tehran to curtail its nuclear program, after President Donald Trump pulled the U.S. out in May. Being cut off from SWIFT makes it difficult for Iran to get paid for exports and to pay for imports, mostly of oil.

As a further note, the E.U. was one of the few entities not to receive a sanctions waiver from the U.S. earlier this week.

The European Commission was understandably displeased, and on Wednesday said it found the SWIFT decision “regrettable

As we reported over the weekend, last Friday Treasury Secretary Steven Mnuchin warned SWIFT it could be penalized if it doesn’t cut off financial services to entities and individuals doing business with Iran. However, by complying with Washington, SWIFT now faces the threat of punitive action from Brussels.

This story appeared on the Zero Hedge Internet site at 11:05 a.m. EST on Wednesday morning — and it’s the second offering of the day from Brad Robertson.  Another link to it is here.


U.S. Embassy in Moscow to Send Its Staffers to Afghan Talks in Russia — State Department

The Embassy of the United States in Moscow will dispatch a representative to monitor the peace talks between the Afghan government and the Taliban in the Russian capital on November 9, State Department Deputy Spokesperson Robert Palladino told reporters in a press briefing on Wednesday.

When asked whether Washington would send officials to attend the international talks, Palladino said, “The United States Embassy in Moscow will send a representative to the working level to observe the discussions.”

The spokesman added the U.S. government believes all countries should back direct dialogue between the government of Afghanistan and the Taliban to achieve the end to the conflict. He added that Washington remains ready to act on expediting the peace process in the region.

This brief news item was posted on the sputniknews.com Internet site at 12:50 a.m.. Moscow time on their Thursday morning, which was 4:50 p.m. in Washington — EST plus 8 hours.  I thank Larry Galearis for pointing it out — and another link to it is here.


Japanese Machine Orders Crash Most on Record as BoJ Member Admits “Can’t Solve Structural Problems”

Just two days ago we exposed the abject failure of Abenomics as even allowing for distortions from the natural disasters which hit Japan, the machinery orders data will only embolden the BOJ to stay the course.

September Japanese Core Machine Orders crashed 18.3% MoM (more than double the 9% drop expected and considerably worse than the impact of the tsunami). That is the greatest monthly collapse in orders ever and led to machine orders collapsing 7% YoY (when expectations were for a 7.7% rise YoY)…

Worse still, historically, core machine orders are an early indicator of future capital spending, and exclude volatile orders for ships and orders from electrical power companies’

It comes on the back of the negative print for real cash earnings and the slide in household spending earlier this week. And all this before the sales-tax hike planned for next year.

The utterly dismal data adds to signs that gross domestic product may have contracted slightly in the third quarter…

This news item, which certainly comes as no surprise to me, showed up on the Zero Hedge website at 7:20 p.m. EST on Wednesday evening — and another link to it is here.


Dumping the dollar: Iran and South Korea agree cross-currency trade

South Korea and Iran have agreed to switch to national currencies in trade exchanges as the sides aim to strengthen relations despite the US sanctions on Tehran.

The agreement is of great importance to both countries, Yonhap News Agency reported, explaining that the deal indicated Korea’s concerns about relations with Iran.

The countries also agreed to make payments and settle their financial and banking accounts using the South Korean national currency, the won. That will allow South Korean and Iranian companies to continue their extensive exchanges in various fields.

The volume of bilateral trade surpassed the $12-billion benchmark last year, according to Iran’s ambassador to Seoul Saeid Badamchi Shabestari, who told Press TV that the Iranian and Korean economies complement one another.

This story put in an appearance on the rt.com Internet site at 2:39 p.m. Moscow time on their Wednesday afternoon, which was 6:39 a.m. in Washington — EST plus 8 hours.  This is the second offering of the day from Larry Galearis — and another link to it is here.


Maduro scrambles to bring Venezuela’s gold back from the UK…[but is denied temporarily]

President Maduro of Venezuela is trying to repatriate at least 14 tonnes of gold held at the Bank of England, fearing that access could be frozen under U.S. sanctions against his regime.

The Bank has refused to release the gold bars, worth about £420 million, according to sources. British officials are understood to have insisted that standard measures to prevent money-laundering be taken — including clarification of the Venezuelan government’s intentions for the gold.

There are concerns that Mr. Maduro may seize the gold, which is owned by the state, and sell it for personal gain.

This very interesting news item was posted on thetimes.co.uk Internet site at 12:01 a.m. GMT on their Wednesday morning — and the above three paragraphs are all of this story that’s posted in the clear.  The rest is hidden behind their subscription wall.  I extracted this piece from an article posted on the silverdoctors.com Internet site that Brad Robertson sent my way — and another link to the hard copy is here.  A more comprehensive take on this story was posted on the sputniknews.com Internet site yesterday — and it’s headlined “Bank of England Refusing Venezuelan Request to Return $550 Mln in Gold – Report” — and I found it on the Sharps Pixley website.


Ray Dalio: Put 5-10% in Gold

Guru Ray Dalio, who has had tremendous success with his hedge fund Bridgewater Associates, appeared on an India-based TV station for a lengthy interview on Oct. 29.

Dalio doesn’t seem to like very many assets. He does not like equities. He does not like bonds. He does not like the U.S. dollar. He does not like the euro.

He suggests putting 5-10% of a portfolio in gold and weighting towards the higher range later in the cycle. He does not know where we are exactly, but we are pretty late in the cycle.

Dalio does not like any of the major asset classes except for gold. However, he later added that achieving a balanced portfolio is the most important thing. This is what Bridgewater accomplishes in its All-Weather portfolio.

Along with the story, there’s the 49-minute long video interview with Ray as well.  This article appeared on the gurufocus.com Internet site on Tuesday sometime — and it’s another story that I plucked from the Sharps Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES

Here is another award-winning photograph that was deemed so by the Natural History Museum in London this year.  It’s by Russian photographer Sergey Gorshkov.  It’s entitled ‘A Bear on the Edge

For Sergey, this photograph of a solitary polar bear walking steadily along a glacier is ‘a symbol of Franz Josef Land’. It speaks of the vulnerability of an iconic animal that depends entirely on this frozen wilderness. His powerful composition gives no hint of the biting wind and icy sea spray he had to endure while taking it.

The Russian Arctic National Park has recently been expanded to include the 191 uninhabited islands of Franz Josef Land. With a lack of data for this remote region, both polar bear numbers and rates of sea ice decline are unknown.  Click to enlarge.


The WRAP

It was certainly apparent that the powers-that-be where everywhere they had to be once trading commenced at 6:00 p.m. EST in New York on Tuesday evening — and nowhere was it more obvious than in their activities in the currencies and the precious metals.  Volumes in gold and silver were pretty heavy right up until they were turned lower in mid-morning trading in London.   By day’s end, there was nothing left to see.

For the second day in a row, silver touched its 50-day moving average, but did not penetrate it to the downside.  Platinum is now banging on its 200-day moving average door — and WTIC got sold down to a new intraday and closing low for the second trading session in a row.  It’s now even more oversold then it was on Tuesday.

You can see all this for yourself in the 6-month charts for the Big 6 commodities below.  The ‘click to enlarge‘ feature only helps with the four precious metal graphs.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price edged lower until around 1 p.m. China Standard Time on their Thursday afternoon.  It crawled a bit higher from there, before getting tapped down in price to its current low tick of the day.  It’s off that by a bit now, but still down $1.70 the ounce.  Silver’s price path has been guided in a very similar manner — and it’s down 4 cents currently.  On a smaller scale — and in somewhat more erratic fashion, the price path for platinum has been the same, but after its little afternoon sell-off in Far East trading, it’s up a buck.  Not so for palladium, as it’s been quietly ticking lower in price throughout all Far East trading — and it’s down 5 dollars at the moment.

Net HFT gold volume is a bit over 45,000 contracts — and there’s 2,022 contracts worth or roll-over/switch volume on top of that.  Net HFT silver volume is around 14,200 contracts — and there’s only 652 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has been creeping ever-so-quietly higher since trading began at 6:00 p.m. EDT in New York yesterday evening.  That lasted until 1 p.m. CST — and it’s a bit lower now — and back at unchanged on the day as the London/Zurich opens loom…but it appears to have been stuck at that value for quite some time now, so the ino.com Internet site may be having data-feed issues.

Silver analyst Ted Butler had some interesting comments about the DoJ case against that ex-JPMorgan trader — and here’s first paragraph from his mid-week commentary for his paying subscribers on Wednesday…

Yesterday’s announcement by the Department of Justice of a guilty plea by a former trader of JPMorgan for systemic “spoofing” and price manipulation of gold, silver, platinum and palladium traded on the COMEX and NYMEX futures exchanges (owned by the CME Group) sure seemed like a very big deal to me for a number of reasons. The infractions occurred from 2009 to 2015 and the trader admitted to engaging in a conspiracy to commit market manipulation on hundreds of occasions, with the knowledge and consent of his immediate supervisors. Please take the time to read this, as it is remarkably plainspoken.”  The link to the DoJ announcement is here.

I urged him to post all his thoughts on this case in the public domain, as they’re worth spreading far and wide.

And as I post today’s column on the website at 4:02 a.m. EST, I see that the gold price got sold lower by a bit more in the first hour of London trading — and is currently down $4.00 the ounce.  Silver’s price was managed lower in a similar fashion — and it’s now down 11 cents.  Platinum is now down a buck — and palladium is now 10 dollars lower.

Gross gold volume is around 63,500 contracts — and minus current roll-over/switch volume, net HFT gold volume is about 55,000 contracts.  Net HFT silver volume is now up to a bit under 18,000 contracts — and there’s 897 contracts worth of roll-over/switch volume on top of that.

And after a brief spike up at exactly 3:00 p.m. China Standard Time on their Thursday afternoon, the decent in the dollar index quietly continues — and as of 8:10 a.m. GMT in London, it’s down 2 basis points — and the ino.com feed is stuck at that time.

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

Ed