The ‘Fix Was In’ Everywhere on Wednesday

27 December 2018 — Thursday


After ticking higher at the open on Tuesday evening in New York, the price was sold lower until 9 a.m. China Standard Time on their Wednesday morning.  It jumped up about eight dollars or so at that point — and then didn’t do much of anything until 1 p.m. GMT in London/8 a.m. in New York.

It jumped up a few more dollars from there, before trading flat going into the afternoon gold fix in London — and then rallied some more…under obvious resistance.  The high tick of the day came shortly after the 11 a.m. EST London close — and it was sold quietly lower until the dollar index ‘rally’ began a few minutes after 12 o’clock noon in New York.  Then down it went, with its low tick of the day coming around 3:10 p.m. in the thinly-traded after-hours market.  It crawled a bit higher into the 5:00 p.m. close from there.

The high and low ticks were reported by the CME Group as $1,282.30 and $1,267.40 in the February contract.

Gold was closed in New York yesterday at $1,266.30 spot, up $10.70 from Friday’ close.  Net volume was pretty decent for a holiday trading session — a bit over 202,000 contracts — and there was about 6,800 contracts worth of roll-over/switch volume on top of that.

The price path for silver on Wednesday was almost the same as it was for gold…right up until a few minutes after 12:30 p.m. GMT in London.  It began to head higher from there — and its high tick of the day was set a few shortly after 11:30 a.m. in New York.  It was sold quietly lower from there until a minute or so before 3:00 p.m. EST in after-hours trading — and it tacked on a nickel or so from there in the next hour, before trading sideways until trading ended at 5:00 p.m. in New York.

The low and high ticks in this precious metal were recorded as $14.78 and $15.25 in the March contract.

Silver was closed yesterday at $15.00 spot, up 40.5 cents from its close on Friday.  Net volume was very decent at about 73,900 contracts — and there was 3,370 contracts worth of roll-over/switch volume in this precious metal.

Platinum wasn’t allowed to trade more than a dollar above the unchanged mark for about the first two hours of trading in New York on Tuesday evening — and then it rallied a few dollars by 9 a.m. China Standard Time on their Wednesday morning.  It traded flat from there until minutes before 2 p.m. CST — and then rallied some more until 11 a.m. CET in Zurich.  It then traded flat once again until shortly before 9 a.m. in New York — and began to head higher from there.  It ran into ‘resistance’ right at the Zurich close — and wasn’t allowed above $802 spot.  Then, a minute or so before noon in New York, it was sold lower until a bit after 3:30 p.m. in after-hours trading — and traded pretty much ruler flat until the Wednesday session finished at 5:00 p.m. EST.  Platinum was closed at $796 spot, up 9 bucks from Friday’s close.

The palladium price was up 9 dollars or so by 9 a.m. in Shanghai — and then chopped unevenly sideways until 2 p.m. in the thinly-traded after-hours market in New York.  It crept a bit higher from there — and finished the Wednesday session at $1,242 spot, up 27 dollars on the day.

The dollar index closed very late on Friday afternoon in New York at 96.96 — and closed down about 38 basis at 96.58 points during the holiday-shortened trading session on Monday.  It traded unsteadily sideways on Wednesday in in the Far East  — and the 96.53 low tick was set at 10:32 a.m. China Standard Time on their Wednesday morning.  It began to head unsteadily higher from there until minutes before 12:30 p.m. GMT in London — and then proceeded to head unsteadily lower from that juncture.  It did a bit of a face plant starting at, or a few minutes before, the afternoon gold fix in London — and continued to drift quietly lower from there until 11:40 a.m. in New York.  It certainly appeared that ramp job/short-covering rally of some size was generated at that point — and the 97.11 high tick was set around 3:12 p.m. EST.  It edged quietly lower into the close from there — and finished the Wednesday session at 97.05…up 47 basis points on the day.

Here’s the DXY chart from Bloomberg once again, as the folks over at the Internet site are still having major problems with their intraday dollar index chart.  Click to enlarge.

And here’s the 6-month U.S. dollar index chart — and the delta between its close…96.57…and the close on the intraday chart above, according to Bloomberg, was 48 basis points on Wednesday.  Click to enlarge.

The gold stocks jumped up a percent and change at the 9:30 a.m. EST open in New York on Wednesday morning, but were immediately sold back into negative territory.  They rallied back to a bit above unchanged going into the London close, but the selling resumed around 11:15 a.m. EST — and that lasted until around 2 p.m.  The gold shares traded sideways until around 3:15 p.m. — and then quietly rallied into the close from there.  The HUI closed down 1.25 percent.

The silver equities followed the same general price path as their golden brethren — and closed down ‘only’ 0.96 percent, which was a big surprise considering how well the silver price performed yesterday.  I was not amused.  Click to enlarge if necessary.

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

The CME Daily Delivery Report that was generated on Monday showed that 17 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  The sole short/issuer in gold was Advantage — and they stopped 11 contracts as well.  JPMorgan picked up 5 — and HSBC USA got the last one.  All contracts, issued and stopped, involved their respective client accounts.  This data has already been overwritten by the Daily Delivery Report data for Wednesday, which is posted below.

The CME Preliminary/Final Report for the Monday trading session showed that gold open interest in December dropped by 31 contracts, leaving 100 open, minus the 17 mentioned just above.  Friday’s Daily Delivery Report showed that 34 gold contracts were actually posted for delivery today, so that means that 34-31=3 more gold contracts were added to the December delivery month.  Silver o.i. in December fell by 30 contracts, leaving just 12 left.  Friday’s Daily Delivery Report showed that 30 silver contracts were actually posted for delivery today, so the change in open interest — and the deliveries match for a change.

The CME Daily Delivery Report for Wednesday showed that 47 gold and 63 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, the three short/issuers were Morgan Stanley, Advantage and ADM, with 21, 15 and 11 contracts out of their respective client accounts.  The only two long/stoppers that really mattered were the CME Group and Advantage, with 28 and 12 contracts respectively.  The 28 contracts stopped by the CME Group were immediately converted into 28×10=280 ten-ounce COMEX mini-gold contracts.  Advantage stopped 189 of them — and ADM picked up 88.  International F.C. Stone got the other three.

In silver, the two short/issuers were ADM and ABN Amro, with 43 and 20 contracts out of their respective client accounts.  JPMorgan picked up 51 for its client account — and the CME Group picked up the other 12 for its own account.  It immediately re-issued them as 12×5=60 one-thousand-ounce COMEX mini silver contracts.  ADM stopped 59 — and Advantage picked up the other one…both amounts for their respective client accounts.

The link to Wednesday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in December fell by 22 contracts, leaving 78 still around…minus the 47 mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 17 gold contracts were actually posted for delivery today, so that means that 22-17=5 gold contracts disappeared from the December delivery month.  Silver o.i. in December actually rose by a rather impressive 52 contracts, leaving 64 left…minus the 63 contracts mentioned a few paragraphs ago. Monday’s Daily Delivery Report showed that zero silver contract were posted for delivery today, so that means the obvious…that a net 52 silver contracts just got added to December.

On Monday, there was 47,271 troy ounces of gold added to GLD — and on Wednesday, there was a very hefty 510,508 troy ounces to GLD as well.  That’s a lot of gold!  In SLV, an authorize participant added a rather smallish 93,871 troy ounces on Monday — and there were no reported changes in SLV on Wednesday.

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, December 21 — and this is what they had to report.  A smallish 5,298 troy ounce of gold was added, along with 33,726 troy ounces of silver.

Not surprisingly, there was no sales report from the U.S. Mint yesterday…or on Monday.

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

In silver, there was 1,890 troy ounces shipped out of Delaware — and that was all the activity there was…which I won’t bother linking.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday, they received 500 kilobars — and shipped out 500 as well.  I won’t bother linking this, either.

U.S. gold bars at the Banque de FranceClick to enlarge.

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


Panic Grips the Markets and the Trump Administration

It looks like the Trump administration is in full panic mode. Steven Mnuchin is trying to calm the markets, but his efforts are actually making things worse.

On Sunday, Trump’s Treasury Secretary called top US bankers: “Today I convened individual calls with the CEOs of the nation’s six largest banks,” Steven Mnuchin said on Twitter.

The reason for the calls was to calm down the top players of the American financial sector amid an ongoing rout on Wall Street. Judging by the reactions seen on social networks, the plan backfired spectacularly.

The Secretary of Treasury calling the nation’s top bankers on a Sunday to confirm they have cash to lend. Not exactly confidence inspiring,” wrote Ian Bremer, the President of the influential think-tank Eurasia Group.

Just in case any major bank CEOs were not worried about the prospects of another financial crisis, Mnuchin’s Sunday afternoon calls to assure everyone there is nothing to worry about may have the opposite effect.  Instead of putting out a fire he may have just lit one,” said Peter Schiff, a hedge fund manager and a vocal critic of the Trump administration.

This news item put in an appearance on the Internet site on Monday at 12:24 p.m. Moscow time, which was 4:24 a.m. in Washington — EST plus 8 hours.  I thank Roy Stephens for sending it along.  Another link to it is here.

Top Trump official calls bankers, will convene ‘Plunge Protection Team’

U.S. stocks have fallen sharply in recent weeks on concerns over slowing economic growth, with the S&P 500 index .SPX on pace for its biggest percentage decline in December since the Great Depression.

Today I convened individual calls with the CEOs of the nation’s six largest banks,” Treasury Secretary Steven Mnuchin said on Twitter shortly before financial markets were due to open in Asia.

U.S. equity index futures dropped late on Sunday as electronic trading resumed to kick off a holiday-shortened week. In early trading, the benchmark S&P 500’s e-mini futures contract was off by about a quarter of a percent.

The CEOs confirmed that they have ample liquidity available for lending,” the Treasury said.

Mnuchin “also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly,” the Treasury said.

This news item was posted on the Reuters website on Sunday afternoon at 2:10 p.m. EST — and I plucked it from a GATA dispatch.  Another link to it is here.

Trump Urges Americans to Buy the Dip; Voices Confidence in Mnuchin, Powell

Stocks may have finally found the catalyst they need, if only for a brief relief rally.

Almost ten years after president Obama marked the bottom of the financial crisis, when on the day the S&P hit 666, the president gave the green light to buy stocks on March 3, 2009, saying – rather bizarrely – that “what you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it“, president Trump also urged Americans to buy the dip when on Tuesday he suggested that the recent swoon in the stock market is a buying opportunity for investors.

We have companies, the greatest in the world, and they’re doing really well,” Trump told reporters at the White House on Christmas Day. “They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.”

Trump’s invocation to BTFD came one day after the most violent Christmas Eve selloff on record, and the day when the S&P fell not only to its lowest level in 20 months, but also slumped into a bear market. For Trump, the stock market has served as a barometer on his administration, and while he was pointing out virtually every major uptick for the past two years, the recent plunge has infuriated him, leaving him mute on any market-related topic.

This Zero Hedge article, appeared on their Internet site at 5:22 a.m. EST on Wednesday morning — and I thank Brad Robertson for this one.  Another link to it is here.

Pension Panic Sparks Dow’s Greatest Point Rise In History

Where is Cooperman: “It’s all the algos’ fault the Dow is up 1,000 points“?

Investors welcomed Kevin Hassett’s assurance that Jerome Powell’s job is “100 percent” safe.

But the biggest driver of today’s exuberance appears to be actual pension re-balancing or front-running the pension panic.

And today’s explosion comes just as CTAs turned short and hedge funds have the lowest net exposure to the market in 3 years…

And just like that a short-squeeze was enabled…the biggest short squeeze since the day after Brexit

That pretty much sums it up, dear reader.  This Zero Hedge article showed up on their Internet site at 4:00 p.m. EST yesterday afternoon, but was repackaged and updated two hours later.  Another link to it is here.

Russia Slams Israel For “Gross Violation Of Sovereignty” During Latest Syria Air Strike

Following reports that Israel is plotting a full-scale offensive in Syria (after years of carrying out airstrikes on Iranian or Iranian-affiliated targets south of Damascus), Russia on Wednesday accused the Jewish state of endangering the lives of civilians during a Christmas Day bombing raid carried out by Israeli F-16s flying out of Lebanon.

According to Al Jazeera, Russia accused the Israelis of violating Israeli sovereignty and threatening two civilian flights landing at a nearby airport in Damascus during attacks on targets allegedly affiliated with the Iranian Revolutionary Guard in the Damascus countryside.

We are very concerned by the attacks and how they were made. This is a gross violation of the sovereignty of Syria,” the Russian Ministry of Foreign Affairs said in a statement on Wednesday.

The provocative actions of the Israeli air force…directly threatened two airliners,” Russian defence ministry spokesman Igor Konashenkov said in a statement.

Syrian state media claimed it intercepted most of the Israeli missiles. Israeli, for what it’s worth, has denied that it planned an attack, saying that its fighter jets were merely protecting themselves from anti-aircraft gun fire.

A spokesman for the Russian military said the attack was launched from Lebanese territory as “two airliners, not from Russia, were preparing to land at the airports of Beirut and Damascus.” And “to prevent a tragedy” one of the commercial planes was redirected to a Russian airbase.

This story put in an appearance on the Zero Hedge website at 6:05 p.m. on Wednesday evening EST — and another link to it is here.

December 2018: The Gold Chronicles with Jim Rickards and Alex Stanczyk

Topics Include:

* History of gold – Nixon tariffs, and closing the gold window
* Investment case for gold
* Why U.S. debt to GDP ratio and increasing debt load creates a systemic problem with specific outcomes, all of which indicate an allocation to gold may be prudent
* How low gold sentiment in western markets may indicate a key buying opportunity
* Physics properties of gold, and why gold is a truly non-correlated means of storing wealth that is indestructible

This 53-minute video interview, which I haven’t watched/listened to yet, was posted on the Internet site back on December 20 — and I thank Harold Jacobsen for bringing it to our attention.  Another link to it is here.

Russian companies get green light to mine gold in Venezuela

Venezuelan authorities have offered Russian companies to take part in gold exploration and gold mining in the country, according to Russian Ambassador to Venezuela Vladimir Zaemsky.

As for Russia’s participation in gold-mining or other mining projects, Venezuela has made a wide range of interesting proposals that are currently under consideration by interested Russian operators,” the ambassador said.

The official added that Caracas is deeply interested in cooperating with Russia in the sector of exploration of the country’s solid extractable resources, including gold, diamonds and coltan, which is used for the extraction of elements such as niobium and tantalum.

Apart from proven oil deposits, considered the richest in the world, Venezuela is considerably rich in natural resources such as diamonds, gold, iron ore, aluminum, bauxite, natural gas, and petroleum. According to a report by the World Gold Council published in June, the country has 150 metric tons of gold reserves, which makes it the 25th largest gold reserve in the world.

However, the current economic crisis and U.S. sanctions have forced Venezuela to rely on help from other nations. Earlier this year, Washington banned American businesses and individuals from dealing with entities and people involved in gold sales from the country.

Let’s hope that any mine they develop doesn’t get expropriated, like other mining companies ore bodies have.  This gold-related news item showed up on the Internet site at 1:34 p.m. Moscow time on their Wednesday afternoon, which was 5:34 a.m. in Washington — EDT plus 8 hours.  The first person through the door with this was Larry Galearis — and another link to it is here.

Russia’s VTB Capital cuts gold exports due to higher demand from central bank

Russia’s VTB Capital, one of the country’s biggest gold traders, reduced gold exports in 2018 due to higher demand from Russia’s Central Bank and lower demand in China, its commodities head, Atanas Djumaliev said.

The Russian central bank, one of the world’s largest holders of bullion, has increased purchases for its gold and foreign exchange reserves this year amid geopolitical risks.

Some market players consider gold as a safe-haven asset in times of high economic and geopolitical risk.

“(Our) gold sales were lower in 2018 compared with the previous year. To a greater extent it was caused by the activities of Russia’s Central bank, which was our most active client this year and which was significantly increasing its gold reserves,” Djumaliev said in an interview with Reuters.

It also coincided with lower demand for gold in China – (our) sales there totalled about 11 tonnes in 2018,” he said.

This brief Reuters news item, filed from Moscow, appeared on their Internet site on Christmas Day sometime — and I stole it from the Sharps Pixley website.  Another link to it is here.



It was yet another day where the free markets were short-circuited by massive interventions on all fronts…equities, currencies and, of course, the precious metals.  Nothing was left to chance.

I was out of town on Monday and Tuesday — and my laptop packed it up shortly after I logged on at my hotel on Monday evening, so I didn’t have much Monday data — and all my precious metal closing prices were compared to Friday’s close.  But I did note that despite the big gains in silver on both Monday and Wednesday’s, their associated equities closed lower on a net basis over those two days.

Now that I’m back on my home computer, I see that gold was closed down $2.70 an ounce from Monday’s close — and silver closed higher by 26.5 cents from Monday’s close.  I also wasn’t able to pick up the close for the HUI or Silver 7 Index.

I was disappointed with the performance of the precious metal shares [particularly the silver equities] at the open of the New York equity markets in New York yesterday.  It almost seemed like their was a over-eager seller there — and it’s possible that there was some very late year-end book squaring going on.  But it doesn’t make me feel any better…or you either, I’m sure.

Here are the 6-month charts for all of the Big 6 commodities — and yesterday’s changes should be noted.  Click to enlarge.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price stair-stepped higher until a few minutes after 9 a.m. China Standard Time on their Thursday morning — and it has been chopping quietly lower since — and back into negative territory. As London opens, the gold price is down 60 cents an ounce. The silver price chopped unevenly sideways until around 1:20 p.m. CST on their Thursday afternoon — and has been edging quietly lower since — and is currently down 9 cents the ounce. Platinum made it back to the $800 spot mark by shortly before noon in Shanghai — and it has been heading unsteadily lower since — and is back at unchanged. Palladium was up 9 bucks by a few minutes after 11 a.m. CST — and then didn’t do much until the 2:15 p.m. afternoon gold fix over there — and it’s been sold down hard since — and is down 4 dollars the ounce as Zurich opens.

Net HFT volume is about 38,000 contracts — and there’s only 400 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is already up to about 12,400 contracts — and there’s 538 contracts worth of roll-over/switch volume on top of that.

The dollar index gapped down 12 basis points as soon as trading began in New York on Wednesday evening — and the current 96.77 low tick was set at 12:30 p.m. China Standard Time on their Thursday afternoon. It jumped up a bit from there until shortly before 1:30 p.m. CST — and has been chopping quietly, but erratically sideways since — and is currently down 20 basis points as London opens.

With the Christmas Day holiday falling on Tuesday of this week, Friday’s COT Report cut-off day was at the end of COMEX trading on Monday. So whatever happened on Wednesday, won’t be in it. Too bad.

And as I post today’s column on the website at 4:03 a.m. EST, I note that the gold price jumped up at the London open — and is currently higher by $4.50 an ounce. Ditto for silver — and it’s now up 1 cent. Platinum is now down 1 dollar — and palladium is down by 2.

Gross gold volume is around 48,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is a bit over 47,000 contracts. Net HFT silver volume is a bit over 14,500 contracts — and there’s only 538 contracts worth of roll-over/switch volume on top of that.

The dollar index is now at a new low for today — and down 29 basis points as of about 8:45 a.m. GMT in London.

That’s all for today — and I’m on my holiday schedule, so I may or may not have a column tomorrow.