Silver Closes Above Its 50-Day on Heavy Volume

04 December 2018 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price traded quietly sideways until 9 a.m. China Standard Time on their Monday morning — and began to edge unevenly higher until 3 p.m. CST on their Monday afternoon.  It jumped up five bucks going into the London open — and wasn’t allowed above about $1,232 spot going into the 10:30 a.m. GMT morning gold fix.  It was sold quietly lower from that point until around 1 p.m. GMT/8 a.m. EST — and then rallied a bit more into the afternoon gold fix.  It hung in there for a few hours before being turned quietly lower into the 5:00 p.m. close of trading in New York.

The low and high ticks were recorded as $1,226.60 and $1,240.40 in the February contract, which is the new front month for gold.

Gold finished the Monday session at $1,230.30 spot, up $8.20 on the day.  Net volume was slightly elevated at just over 229,500 contracts — and roll-over/switch volume was only 5,823 contracts on top of that.  But it should be noted that a fair chunk of that volume occurred on the price advance between the New York open on Sunday evening — and the London open on their Monday morning, so gold’s rally during that time period did not go unopposed.

The price action in silver yesterday was more or less that same as it was for gold, with the only major difference being the fact that silver was capped — and then turned lower around 9:10 a.m. in New York, versus gold, which was capped and turned lower at the afternoon London gold fix.

The low and high ticks in this precious metal were reported by the CME Group as $14.28 and $14.645 in the March contract, which is the new front month for silver.

Silver was closed at $14.355 spot, up 20.5 cents from Friday — and back above its 50-day moving average by a few pennies.  Net volume was very heavy at a bit under 91,000 contracts — and there was only 3,917 contracts worth of roll-over/switch volume in this precious metal.

The platinum price stair-stepped its way higher until minutes after the Zurich open on their Monday morning — and its high tick of the day…$813 spot…was set at that point.  From that juncture it was sold unsteadily lower until shortly after the afternoon gold fix in London.  It rallied a small handful of dollars into the COMEX close from there, but some of that was taken back in the thinly-traded after-hours market.  Platinum was closed at $806 spot, up 9 dollars on the day — and 7 bucks off its high.

Palladium jumped up 9 dollars at the 6:00 p.m. EST open in New York on Sunday evening — and then crawled quietly higher until shortly before the Zurich open.  Palladium was up 15 dollars at that juncture.  From there it was sold quietly lower — until 2 p.m. CET/8 a.m. EST — and then away it went.  That rally ran into ‘something’ shortly after 10 a.m. in New York — and the high tick of the day…$1,210 spot…came a few minutes after the Zurich close.  It was all down hill from there until about 2:45 p.m. in after-hours trading — and it traded flat from that point into the 5:00 p.m. close.  Palladium was closed at $1,192 spot, up 22 bucks on the day, but 18 dollars off its high.

The dollar index closed very late on Friday afternoon in New York at 97.20…and the DXY chart over at the ino.com Internet site has not budged since Friday’s close.  I haven’t been able to find a single DXY chart that shows the dollar index in such detail.  The index closed yesterday at the 96.95 mark from what I’ve seen…down 25 basis points from Friday…but that’s all I know for sure, as every DXY chart I’ve looked at on the Internet doesn’t show that kind of detail, or has already switched over to the Tuesday trading session.  I don’t even have a daily/3-day chart for you.  Maybe they’ll have things fixed by tomorrow.

Here’s the almost 1-year dollar index chart.  The delta between its close…96.97…and the intraday close yesterday was 2 basis points…approximately.

The gold shares gapped up a bit over two percent at the open, but began to fade immediately, with their respective low ticks coming a very few minutes before 12 o’clock noon in New York.  They rallied higher from there in a saw-tooth pattern until shortly before 3 p.m. – and didn’t do much of anything after that.  The HUI closed up 2.37 percent.

The silver equities rallied until the afternoon gold fix in London — and then chopped mostly sideways in a fairly wide price range for the remainder of the Monday session.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 2.25 percent.  Click to enlarge if necessary.

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


The Daily Delivery Report for Day 3 of December deliveries showed that 440 gold and 269 silver contracts were posted for delivery on Wednesday.

In gold, of the six short/issuers in total, the largest was HSBC USA with 320 contracts out of its house account — and in distant second and third place were Advantage and RCG with 43 and 36 contracts out of their respective client accounts.  There were nine long/stoppers in total — and by far the largest was Goldman Sachs with 262 for its own in-house/proprietary trading account.  In distant second place was JPMorgan with 90 contracts for its client account.  HSBC USA was an “also ran” with 28 for its client account.

In silver, there were six short/issuers in total.  International F.C. Stone was the biggest with 100 contracts from its client account — and in second and third spots were Advantage and ADM with 80 and 60 contracts from their respective client accounts as well.  There were six long/stoppers — and JPMorgan once again was head and shoulders above all others, stopping 199 contracts in total…149 for its client account, plus 50 for its own account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the FRIDAY trading session [which was M.I.A. in my Saturday column, but is there now…but I’m repeating it here] showed that gold open interest in December fell by 3,066 contracts, minus the 1,529 contracts contracts posted for delivery on Tuesday…today.  Thursday’s Daily Delivery Report showed that 2,083 gold contracts were actually posted for delivery on Monday, so that means that 3,066 minus 2,083 equals 983 gold contracts vanished from the December delivery month.  Silver o.i. in December fell by 1,268 contracts, leaving 2,239 still open, minus the 1,050 contracts posted for delivery on Tuesday…today.  Thursday’s Daily Delivery Report showed that 1,463 silver contracts were actually posted for delivery today, so that means that another 1,463-1,268=195 silver contracts just got added to the December delivery month.

The CME Preliminary Report for the MONDAY trading showed that gold open interest in December declined by 1,578 contracts, leaving 4,220 open, minus the 440 mentioned three paragraphs ago.  Friday’s Daily Delivery Report showed that 1,529 gold contracts were actually posted for delivery today, so that means that 1,578 minus 1,529 equals 49 gold contracts disappeared from the December delivery month.  Silver o.i. in December dropped by 1,015 contracts, leaving 1,224 still around, minus the 269 mentioned three paragraphs ago.  Friday’s Daily Delivery Report showed that 1,050 silver contracts were actually posted for delivery today, so that means that 1,050-1,015=35 more silver contracts were just added to December.


There was a decent withdrawal from GLD yesterday, as an authorized participant took out 113,474 troy ounces.  There were no reported changes in SLV.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, November 30th — and this is what they had to report.  Their gold ETF fell by a smallish 2,862 troy ounces, but their silver ETF added 43,082 troy ounces.

There was a bit of a surprise from the U.S. Mint, as they updated their sales for November yesterday.  That update indicates that they sold another 12,500 gold eagles — 2,500 one-ounce 24K gold buffaloes — and another 375,000 silver eagles.

Their revised sales totals for November are now 20,500 troy ounces of gold eagles — 5,500 one-ounce 24K gold buffaloes — and 1,645,000 silver eagles.


Here are the charts from Nick showing bullion sales from the U.S. Mint, updated with November’s dataIt should be noted that the gold bullion coin sales include both gold eagles and gold buffaloes — and that silver bullion coin sales include the 1 oz. silver eagle, plus the 5 oz. America the Beautiful bullion coins.  Click to enlarge for both.

The only physical activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday was 600 troy ounces that was shipped out of HSBC USA.  They also transferred 31,295 troy ounces from the Eligible category — and into Registered.  Without doubt, that’s destined for delivery this month.  The link to that is here.

There was a lot more activity in silver, as one truckload…599,942 troy ounces…was received at Canada’s Scotiabank — and 753,072 troy ounces in total was shipped out.  In the ‘out’ category, the biggest withdrawal was one big truckload…633,632 troy ounces…from Brink’s, Inc.  The rest was shipped out from three different depositories — and if you wish to check that out, the link is here.

There was a decent amount of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They received 1,135 of them — and shipped out 4,603.  All of this action was Brink’s, Inc. — and the link to that, in troy ounces, is here.


The Mitton Hoard is a hoard of silver coins found near Clitheroe in Lancashire, England, in 2006 or 2009. The hoard is now in Clitheroe Castle Museum. The documented treasure consisted of 11 silver coins or parts of coins.

The hoard can be dated from the date of the last coin that was included in the hoard and this came from the 1420s. Three of the coins were the oldest and they dated to the reign of Edward I or Edward II. The English silver is 97.5% pure whilst the French fragments are 80% pure silver. With the exception of the farthing these coins represent all the small value coins. It is thought that these coins could all be in circulation at the same time. The hoard was probably either accidentally lost, or deliberately hidden in the late 1420s.  Click to enlarge.

I don’t have an overly large number of stories for you today.


CRITICAL READS

Now the Trade War’s Fake, Too — Bill Bonner

The trade war never added up. Tariffs have been coming down for at least half a century, and are now only about 2% worldwide. That’s not enough to get excited about… and has approximately zero effect on U.S. jobs.

In America’s heartland, incomes have been stagnant for 40 years. Would salaries go up if the trade deficit were erased? Not likely.

The deficit results from the fact that the U.S. exports fake money, while China makes things better and cheaper (otherwise, Americans wouldn’t buy them, and there would be no trade imbalance).

Stifling China would mean raising prices to U.S. consumers. And that wouldn’t benefit U.S. producers; instead, Walmart would look to other low-wage countries, such as Vietnam and Mexico, to stock its shelves.

Bill’s commentary put in an appearance on the bonnerandpartners.com Internet site early on Monday morning EDT — and another link to it is here.


Trade truce? Trump & Xi put tariff war on hold for 90 days at G-20 dinner in Argentina

The two-and-a-half-hour dinner shared by Xi Jinping and Donald Trump in Argentina, where they repeatedly emphasized their great friendship, has ended with an apparent ‘trade truce’.
The leaders have reached a consensus that trade talks should continue and have agreed not to impose any additional tariffs, at least for now.

President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time,” the White House said in a statement.

For its part, Beijing has consented to purchase a “very substantial amount” of American agricultural, energy and industrial products, to reduce the trade imbalance between the two countries, which amounted to $375 billion last year. While the list of American items to be purchased by Beijing has yet to be finalized, China agreed to start purchasing “agricultural product from our farmers immediately,” the U.S. administration claimed.

This story on the G-20 meeting appeared on the rt.com Internet site at 12:59 a.m. Moscow time on their Sunday morning — and was updated about thirteen hours later.  I thank Larry Galearis for sending it along.  Another link to it is here.  There was a parallel and worthwhile commentary to this headlined “The Hypocrisy of the G-20, and the World Leaders Who Participated” — and that comes from the Zero Hedge website, courtesy of Brad Robertson.


National Self-Perception — Jeff Thomas

Much has been said about the American self-image, going back to its inception as an upstart nation that imagined it could succeed as a republic, as Athens had failed to do.

And, indeed, the U.S. encountered the same basic problem as Athens: having once created a republic – a nation in which the rights of the individual are foremost. Maintaining that condition is not only a constant battle, but extremely unlikely over time.

As a form of governance, a republic serves its people well; however, since it doesn’t provide its leaders with much in the way of aggrandizement or profit, its leaders are likely to do all they can to degrade the republic into a democracy. Once having accomplished that, they’re likely to do all they can to degrade it to tyranny.

As Thomas Jefferson said, “History hath shewn that, even under the best forms, those entrusted with power have, in time and by slow operations, perverted it into tyranny.”

This worthwhile commentary by Jeff was posted on the internationalman.com Internet site on Monday sometime — and another link to it is here.


There Is Suddenly a Far Bigger European Problem Than Brexit or Italy

Forget Brexit and Italian populists for a second. It’s worth paying attention to what’s going on in France.

For more than two weeks, the country has been disrupted by an unusual protest: the so-called “Gilets Jaunes” or “Yellow Vests.” France is used to labor unrest and chaos affecting transport of course, with strikes something of a national pastime.  But this time it’s different.

Some 100,000 people blocking toll roads, petrol stations and crossroads is creating major disruption to transport and retail. It’s also proving to be extremely tricky to defuse, as there’s no single protest leader to negotiate with.

For investors, the question is whether it could derail the outperformance of French equities in 2018. One thing is clear. These protests are a real threat to the country’s retailers, including Carrefour and Casino, which are already busy battling a price war and trying to fend off Amazon.com‘s efforts to penetrate their home market. Big-box retailers have been hurt by the demos and blockages throughout the country, with customers denied access to some hypermarkets and supermarkets for entire days at a time. They recorded an average fall in consumer-good sales of 35 percent on Nov. 17 and of 18 percent the following Saturday, according to Nielsen data.

All this is adding to the perception of shrinking purchasing power in France, in particular among people on lower incomes. And that “doesn’t bode well” for the year-end holiday retail season, which needs a boost after the unseasonably hot weather of the previous months, according to Invest Securities. In fact, consumer confidence has been depressed since the summer, and this might be the final straw.

This news story showed up on the Zero Hedge website at 2:55 p.m. on Monday afternoon EST — and I thank Brad Robertson for sending it along.  Another link to it is here.  There was a parallel story to this from the ZH website as well.  It’s headlined “Is This Macron’s “Let Them Eat Cake” Moment?” — and that’s from Brad too.


Revolution in Ukraine? Yes, please! Revolution in France? Rule of law!

When violent protests shook Kiev in 2013, Western analysts and leaders quickly threw their support behind the anti-government ‘revolution’ — but after weeks of Yellow Vest protests in France, the reaction has been very different.

While Western governments and commentators denounced the Ukrainian government of Viktor Yanukovych and urged that he give in to protesters’ demands five years ago, this time around, they are denouncing the French protesters and urging President Emmanuel Macron, whose popularity stands at about 25 percent, to stand firm against dissatisfied citizens.

Western media coverage has also differed drastically with reports describing French protesters as rioters, while Ukrainian protesters were described as revolutionaries. The contrasting reaction has prompted many to ask the question: If a so-called revolution is allowed to happen (and even applauded) in Ukraine, why not in France?

This interesting and right on the money commentary appeared on the rt.com Internet site at 4:36 p.m. Moscow time on their Monday afternoon, which was 9:36 a.m. in Washington — EDT plus 8 hours — and I thank George Whyte for pointing it out. Another link to it is here.


Ukrainian Troops Sent to Russian Border

Ukraine has started calling up reservists and sent troops to its border with Russia as tensions continue to simmer between the two nations.

Petro Poroshenko, Ukraine’s president, announced the decision on Monday, saying it was in response to a “sharp increase in Russian forces along our borders and in occupied Crimea,” British newspaper The Telegraph reported. On Sunday, the Ukrainian leader warned that Moscow had ambitions to capture the port city of Mariupol to create a corridor to the disputed Crimean peninsula.

Just over a week ago, Russia blocked three Ukrainian naval ships from passing from the Black Sea to the Sea of Azov, which both countries technically share under a 2003 treaty. Moscow’s forces seized Ukraine’s ships and detained 24 Ukrainian sailors. Poroshenko then declared martial law in 10 regions of his country that are either in proximity to the Russian border or regions where Russian-backed separatists rebels have taken control.

According to the Ukrainian president, the Kremlin’s forces have about 80,000 troops, 2,300 armored vehicles, 1,400 artillery and missile systems, 900 tanks, 500 airplanes and 300 helicopters stationed in occupied portions of Ukraine. But Russian presidential spokesman Dmitry Peskov has called Poroshenko’s claims “absolutely absurd” and blamed Ukraine for “provoking tensions,” Russian media reported. The Kremlin has repeatedly claimed that upcoming elections in Ukraine are the reason behind the Ukrainian president’s accusations, arguing that the leader wants to distract from his low polling numbers.

This Newsweek story was picked up by the msn.com Internet site on Monday evening EST — and another link to it is here.


Italy Backs Down: Yields Slide As Populists Cave On Deficit Target

Update: In a statement from the Italian economy ministry, Tria said he and the European Commission Vice Chairman Valdis Dombrovskis are looking to strike a deal on the Italian budget.

The upshot: Bullish budget talk is now coming from both sides.

… Italy has taken some serious strides toward calming fears about the “beginning of the end” of Europe by reportedly agreeing to work with the E.U. to lower its budget deficit target.

According to Bloomberg, Italian with a duration longer than 5 years climbed, sending yields to a two-month low, after the coalition government said it is ready to accept new budget deficit targets, according to Messaggero. Meanwhile, German bunds have pared losses which followed a trade truce between Presidents Donald Trump and Xi Jinping.

It was only weeks ago that Italian Deputy Prime Ministers Luigi Di Maio and Matteo Salvini, as well as the country’s ‘moderate’ economy minister, Giovanni Tria, had claimed that capitulating to the E.U. would be tantamount to “suicide” for the Italian people. However, that position softened a couple weeks later when Salvini, followed by the rest of the Italian populist establishment, told reporters that Italy would consider a lower deficit target, so long as the populists could still pay for all of the generous social programs promised in their platform. After consulting with Prime Minister Giuseppe Conte, the populists said they were ready “to accept new targets”, with Tria predicting that the E.U. will suggest a deficit of 2% rather than 2.4%. Such a number seems like a happy medium, that would allow the populists to save face (and preserve their popular mandate) while allowing the E.U. to crow about preserving fiscal discipline. Conte, who has emerged as the most moderate voice in the Italian government (even surpassing Tria in recent weeks), will lead negotiations with the E.U., instead of Tria.

Though the yield on the Italian 10-year has climbed off its lows, it remains down 4.5 basis points on the day.

This Zero Hedge news item put in an appearance on their Internet site at 6:44 a.m. EST on Monday morning — and it’s also courtesy of Brad Robertson.  Another link to it is here.


The Story of a Gold Coin

As I was shuffling papers in some old files, I came across a slip of paper on which I had written down the price I had paid for a Mexican $50 gold peso coin: $717 Mexican pesos.

Judging from the price, I figure that the purchase was made sometime in 1972, when the price of a Troy ounce of gold was $46 dollars. The Mexican $50 gold peso coin contains 37.5 grams of pure gold, and 37.5/31.1 grams per Troy ounce, is 1.206: so there is 1.206 times more gold in a Mexican $50 gold peso piece, that in a Troy ounce of gold.

Thus, $46 dollars per ounce x 1.206 = $55.48 dollars as the value of the gold in the $50 gold peso coin, in 1972.

The rate of exchange Dollar/Peso in 1972 was $12.50 Mexican pesos per dollar, so $55.48 US x $12.50 = $693.50 pesos. I paid $717 pesos, because gold coins are always sold for a small percentage more than the price of bullion gold; in this case, the surcharge was for 3.4%.

The international price of an ounce of gold, as of last Friday, November 30, closed at $1,222.10 dollars. The rate of exchange was at $20.40 Mexican pesos per dollar. So today’s price of the Mexican $50 gold peso coin should  be close to $1,222.10 x $20.40 x 1.206 = $30,067 pesos. The quote this morning is: $30,890 pesos.

So my investment of $717 pesos, made 46 years ago, has turned into an investment worth $30,890 pesos today. Looks like a good investment.  But there’s a lot more…

This short, but worthwhile commentary from Hugo was posted on the plata.com.mx Internet site yesterday — and I plucked it from a GATA dispatch.  Another link to it is here.


Ancient pot of gold found in Israel

There was no rainbow, but archaeologists in Israel have recovered a pot of gold.

The bronze pot filled with gold coins and an earring was excavated from a dig site in the ancient city of Caesarea. The pot and its contents date to the 11th century A.D.

Through the centuries, Caesarea was conquered several times. First built by Herod the Great between 20 and 11 BC, Caesarea proved an important port city to several conquerors, including the Roman and Byzantine empires. Archaeologists think the pot of gold was stashed as invaders ransacked the city, some 900 years ago.

The stash of coins — minted by the Christian Byzantine Empire and the Muslim Fatimid Caliphate — was found between two stones in the wall of a well. The well abutted a house that dates to the city’s Islamic period.

This very interesting story, complete with an 8-photo slide show, was posted on the UPI website at 11:34 a.m. EST on Monday morning — and I thank Roy Stephens for sending it our way.  Another link to it is here.


The PHOTOS and the FUNNIES

Here are the last two award-winning photos bestowed by the British Wildlife Photography Awards.  They came to us courtesy of Mike Easton.  Their awards concentrate on local U.K. photographers celebrating the beauty and diversity of Britain’s flora and fauna.  The first photo is the winner in the ‘Close to Nature’ category…entitled ‘Goose Barnacles’ – Sanna Bay, Highland (Credit: David Bennett / BWPA).  Click to enlarge.

This second and final photo is the winner in the ‘Botanical Britain’ category. ‘Kelp Bed at Dawn’ – Kingsgate Bay, Kent (Credit: Robert Canis / BWPA).  Click to enlarge as well.


The WRAP

The rallies that began in the precious metal at the 6:00 p.m. open in New York on Sunday evening certainly ran into opposition between that time and the London/Zurich opens on their respective Monday mornings.  That was particularly true in silver, as there was very chunky volume, as it broke above — and then closed above it’s 50-day moving average yesterday.  It remains to be seen how much damage was inflicted.  We’ll know more in this Friday’s Commitment of Traders Report.

Here are the almost 1-year charts for the Big 6 commodities — and the only chart that’s really worth looking at, is the graph for silver.  The ‘click to enlarge‘ feature works on all six once again.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price didn’t do much during the first two hours once trading began at 6:00 p.m. EST in New York on Monday evening. But at 9 a.m. China Standard Time on their Tuesday morning, a quiet rally got underway, which tapered off once the afternoon gold fix in Shanghai was put to bed at 2:15 p.m. CST — and at the moment gold is up $6.20 the ounce. Ditto for silver — and it’s up 11 cents. Platinum edged a few dollars lower in morning trading in the Far East — and has been moving sideways since — and is currently down 4 bucks. The palladium price crawled quietly higher until around 11:30 a.m. CST — and has been trading sideways since as well — and it’s currently up 8 dollars.

Net HFT gold volume is coming up 51,000 contracts — and there’s only 507 contracts worth of roll-over/switch volume in that precious metal. Net HFT silver volume is about 11,300 contracts — and there’s 569 contracts worth of roll-over/switch volume on top of that.

The dollar index has been sinking quietly and unsteadily lower throughout all of Far East trading — and as of 3:50 p.m. CST/7:50 a.m. GMT, the dollar index is down by 23 basis points.

Reader George Whyte sent me a UPI story that briefly mentioned Venezuela, Turkey and gold — and in it was a paragraph that stated “Figures from the Turkish Statistical Institute say that in the first nine months of the year, Turkey bought $900 million in gold mined in Venezuela — revenue that has helped replace the government’s crashing oil revenues.”  That’s something over 725,000 troy ounces.  The link to the whole story is here.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and I’ll wait until my Thursday missive to lay down a guess as to what it might show on that date.

And as I post today’s column on the website at 4:02 a.m. EST, I see that the dollar index dropped a bit shortly after the London/Zurich opens. Gold is now up $8.20 an ounce — and silver is up 17 cents. Platinum is down only a dollar at the moment — and palladium is now up 13.

Gross gold volume is pretty chunky already at around 64,000 contracts — and once you subtract out the roll-over/switch volume, net HFT gold volume is about 62,500 contracts. Net HFT silver volume is pretty beefy as well at 15,000 contracts — and there’s only 591 contracts worth of roll-over/switch volume in that precious metal.

The dollar index notched a bit lower shortly after 8 a.m. GMT in London — and is now down 30 basis points.

I saw on the CME Group’s website that they’re going to be closed on Wednesday for a national day of mourning for George H.W. Bush.  I’m unaware as to how wide-spread this closure is going to be vis-à-vis the equity and precious metal markets in the U.S on that day, so I’ll be making it up as I go along on whether or not I have a column on Thursday.  I hope to know more before the day is out.

That’s all I have this time — and I’ll see you here tomorrow.

Ed