Another Day of Quiet Price Management

16 January 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Gold traded in a seven dollar price range on Tuesday — and after being sold lower at the London open, it ticked higher until the afternoon gold fix in London, which was its high of the day.  Once that event was done, it was sold down to its low of the day…around 1 p.m. EST in New York.  It rallied a few dollars after that until trading ended at 5:00 p.m.

The high and low ticks certainly aren’t worth looking up.

Gold was closed in New York on Tuesday at $1,289.10 spot, down $2.10 from Monday.  Net volume was nothing special at just under 193,500 contracts — and there was a bit over 36,500 contracts worth of roll-over/switch volume in this precious metal.

The silver price edged unevenly sideways in Far East trading on their Tuesday — and the high of the day came at 2 p.m. China Standard Time on their Tuesday afternoon.  It was all down hill from there until the spike low tick, which came shortly before 11 a.m. GMT in London.  It began to crawl quietly higher until shortly after the COMEX open — and then a rally of some substance developed at that point.  It ran into price ‘resistance’ at the time the equity markets opened in New York — and then was driven lower once the afternoon gold fix in London was put to bed.  It began to edge higher once again starting shortly after 1 p.m. EST, but that attempt wasn’t allowed to get far — and it was sold down once again in the thinly-traded after-hours market.

The low and high ticks in this precious metal were recorded by the CME Group as $15.575 and $15.735 in the March contract.

Silver was closed at $15.55 spot, down 6.5 cents on the day.  Net volume was nothing out of the ordinary at a bit under 55,500 contracts — and there was just under 4,900 contracts worth of roll-over/switch volume in this precious metal.

The platinum price stair-stepped its way higher in price until shortly before the Zurich open — and at that juncture it suffered the same fate as gold and silver.  The down/up low tick price spike came very shortly after the COMEX open — and it rallied until the afternoon gold fix in London.  It was sold back to its earlier low of the day by shortly before 1 p.m. EST — and crawled a few dollars higher into the 5:00 p.m. close from there.  Platinum was closed at $798 spot, down a dollar on the day.  [Note: If that up/down price spike around 12:15 p.m. EST is real, it only occurred in the spot month. – Ed]

The palladium price edge quietly higher until around 11:30 a.m. CET in Zurich — and then was sold lower into the COMEX open.  Like for platinum, if that big down/up price spike is actually for real, it only occurred in the spot month.  It ticked higher into the afternoon gold fix in London — and then didn’t do much of anything until shortly before 1 p.m. EST.  Then the price got smacked back below $1,300 spot in very short order.  It managed to recover a bit from there, but was sold lower in the last hour of after-hours trading.  Palladium was closed at $1,302 spot, down 6 bucks on the day.

The dollar index closed very late on Monday afternoon in New York at 95.61 — and opened down a handful of basis points once trading began at 7:45 p.m. EST in New York on Monday evening, which was 8:45 a.m. China Standard Time on their Tuesday morning.  It was sold quietly lower from there — and the 97.47 low tick was set around 9:40 a.m. CST.  It began to crawl very quietly higher from there, before jumping up a bit starting around 9:10 a.m. in London. It took another leap higher starting a couple of minutes before 11 a.m. in New York — and the 96.26 high tick was set shortly after 1 p.m. EST.  It gave a bunch of that back by 3:18 p.m. — and then flat-lined into the close from there. The dollar index closed at 96.04…up 43 basis points on the day.

With the Brexit vote going on in the U.K….I would suspect that the usual ‘gentle hands’ were present in the currency market yesterday.

Here’s the DXY chart chart, courtesy of Bloomberg once again.  Click to enlarge.

And here’s the 6-month U.S. dollar index — and the delta between its close…95.68…and the close on the DXY chart above, was 36 basis points yesterday.

The gold stocks opened flat — and traded that way until precisely 10:00 a.m. EST, which certainly coincided with the afternoon gold fix in London.  They were sold lower from there until minutes before 1 p.m. in New York trading.  From that juncture they crept higher until around 2:30 p.m. — and crept  equally quietly lower into the 4:00 p.m. EST close from there.  The HUI finished down 2.82 percent on the day.

The silver equities gapped down about 1.5 percent at the open — and then kept on going until a few minutes before 1 p.m. EST…just like the gold equities.  They traded sideways from there — and closed virtually on their low ticks of the day, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index got slammed by 5.04 percent.  All of January’s nice gains have disappeared in the process.  Click to enlarge if necessary.

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

Both First Majestic Silver and Coeur got hit pretty hard yesterday — and I would suspect that there was some serious institutional selling for whatever reason.  I sent an e-mail off to Todd Anthony at First Majestic asking about the ten percent drop in their stock price, but haven’t heard back as of yet.


The CME Daily Delivery Report showed that only 3 gold and 7 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  In gold, Advantage issued all 3 — and JPMorgan stopped 2 of them for its client account.  In silver, Advantage issued all 7.  Goldman picked up 3 for its client account — and JPMorgan picked up 3 contracts as well…2 for clients and one for itself.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in January fell by 2 contracts, leaving 54 left, minus the 3 contracts mentioned above.  Monday’s Daily Delivery Report showed that 5 gold contracts were actually posted for delivery today, so that means that 5-3=2 more gold contracts were added to January.  Silver o.i. in January dropped by 14 contracts, leaving 484 still open, minus the 7 contracts mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 22 silver contracts were actually posted for delivery today, so that means that 22-14=8 more silver contracts were added to the January delivery month.


There were no reported changes in GLD yesterday, but another 469,209 troy ounces of silver was withdrawn from SLV.  Regardless of the reason for the withdrawal, it’s a reasonable assumption that JPMorgan owns it now.

There was a sales report from the U.S. Mint yesterday.  They sold 1,500 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — and 100,000 silver eagles.

There was a bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.  There was no ‘in’ activity, but 9,804 troy ounces were shipped out.  There was 1,217 troy ounces shipped out of Delaware — and 8,587 troy ounces departed HSBC USA.  The link to this is here.

It was busier in silver, as one large truckload…636,063 troy ounces…was received at Brink’s, Inc.  In the ‘out’ category, there was 33,707 troy ounces that departed CNT — and the remaining 978 troy ounces was shipped out of Delaware.  There was also some paper transfers as well.  There was 725,459 troy ounces transferred from the Registered category — and back into Eligible over at CNT, plus 112,564 troy ounces transferred in similar fashion at Brink’s, Inc.  The link to all this is here.

It was a pretty big day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They reported receiving 3,138 of them — and shipped out 5,162.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


Here are the two usual charts that Nick Laird passes around on the weekend.  They show the total amount of gold and silver inventories in all the known depositories, ETFs and mutual funds as of the close of business on Friday, January 11.  For gold, there was only 22,000 troy ounces added on a net basis during the reporting week.  For silver, there was another 3,794,000 troy ounces withdrawn during the reporting week.  This decline…which began before October 1, 2018…is mostly as a result of the 20 million troy ounces that has been taken out of the SLV ETF during that time period. Click to enlarge for both charts.

I have only a tiny handful of stories for you once again.


CRITICAL READS

Mr. Market Will Have the Last Laugh — Bill Bonner

The mega-myth of the Bubble Epoch is that we can go anywhere we want – thanks to the genius of quasi-federal employees.

It must be true, people say, because it is so implausible. You can’t make stuff like that up.

The idea is that Congress and the White House skillfully adjust fiscal policy (deficits or surpluses) to offset the bipolar tendencies of capitalism. Free markets always go up and down. The feds want to make them go in one direction only – up.

So as soon as a shadow falls on the financial world, the feds rush in with mood-stabilizers… in the familiar form of more money and credit.

The Fed, meanwhile, has a more ancient approach. Its Federal Open Market Committee (FOMC) members put on their black, hooded vestments and gather in the temple on the corner of 20th and Constitution Avenue. There, they turn to Jupiter: “Just give me some kind of sign.”

In Rome, the augurs were priests tasked with interpreting the will of the gods based on birds, dogs, thunder, or “ominous events.” Today, prophecies are based on fake “data” – compiled by the feds themselves.

This commentary from Bill appeared on the bonnerandpartners.com Internet site on Tuesday morning EST — and another link to it is here.


JPM Reports Huge Trading Miss As FICC Revenue Plunges To Lowest Since Financial Crisis

To anyone who carefully read yesterday’s dismal Citi earnings report, which was a major disappointment in virtually every way and especially in the bank’s FICC group, with the exception of Citi’s core lending business which traders decided to focus on and push Citi’s stock price 4% higher, today’s disappointing JPMorgan results should not come as a surprise.

Actually, JPMorgan Q4 results were even worse than Citi’s as they were a disappointment across the board, with both reported revenue of $26.1BN and “managed” revenue of $26.8BN missing consensus expectations of $26.9BN, while EPS of $1.98 was not only well below the $2.20 consensus, but was also the first JPM earnings miss in 15 quarters.

JPM’s FICC was so bad it was even worst than Citi’s (for the 2nd straight quarter)…

The bank blamed “challenging market conditions“for the revenue decline in FICC, while highlighting emerging markets as the one bright spot in Q4.

Of course, dear reader, JPMorgan’s stock closed higher on the day.  This longish chart-filled Zero Hedge article was posted on their Internet site at 7:27 a.m. on Tuesday morning EST — and I thank Brad Robertson for sending it along.  Another link to it is here.


In Humiliating Defeat For May, Brexit Deal Rejected By Overwhelming 230-Vote Margin

Update 10: After trending steadily lower ahead of the vote, the pound roared into the green as the Commons adjourned for the day, as traders realized that analysts who had warned about a spectacular defeat of May’s deal being good for the pound may have been on to something.

With hundreds of Labour MPs preparing to pivot toward a second referendum this week, it appears more of Jeremy Corbyn’s positions are being foisted upon May as she scrambles to figure out what’s next for her deal.

And in a potential threat to the pound and May’s government, Labour has indicated that it will try again if it loses the no confidence vote against May tomorrow.

If May loses the vote, Labour has made clear that all options – including a second referendum – are on the table.

And even if she wins, May and the E.U. have now gotten the message loud and clear: May’s deal is unworkable. If the E.U. refuses to compromise, a no deal Brexit is also clearly not going to work, since Parliament last week adopted an amendment to make sure such an outcome would require its explicit authorization.

At this point, a delay of Article 50 is looking extremely likely, unless May can win some serious concessions from the E.U. But all the bloc needs to do now is dig in its heels and refuse to budge on the deal, and there will suddenly be a strong possibility that Brexit will be killed.

This news item showed up on the Zero Hedge website at 1:56 p.m. EST on Tuesday afternoon — and it’s another contribution from Brad Robertson.  Another link to it is here.  Swedish reader Patrik Ekdahl sent along the BBC story on this issue headlined “Brexit: Theresa May’s deal is voted down in historic Commons defeat


German economy posts weakest growth in five years

Germany’s economy witnessed lackluster growth in 2018, according to flash data released Tuesday, in line with expectations.

German gross domestic product (GDP) grew 1.5 percent in 2018, compared with 2.2 percent in 2017, the latest data from the Federal Statistics Office (Destatis) showed. The figures point to the weakest rate of growth in five years.

Destatis noted that the German economy had grown for the ninth year in a row, “although growth has lost momentum.”

In the previous two years, the price adjusted GDP had increased by 2.2 percent each. A longer-term view shows that German economic growth in 2018 exceeded the average growth rate of the last ten years (+1.2 percent).”

An official estimate of fourth-quarter growth will only be available in February but the statistics office said it was likely that the economy had grown slightly in the period, meaning that a technical recession could have been avoided.

This new story showed up on the cnbc.com Internet site early on Tuesday morning EST — and I found it in this morning’s edition of the King Report.  Another link to it is here.


Why China and Russia are struggling to abandon the U.S. dollar and forge a yuan-rouble deal

Russia and China plan to ditch the U.S. dollar and switch to local currencies in international trade but yet another delay to a new system for yuan-rouble settlements shows just how complex it is to develop an alternative to the greenback.

Russia, China and a number of other countries are aiming to cut their dependence on the US dollar, as Washington uses access to the dollar payment system as a weapon to punish nations and individuals for breaking U.S. laws, even outside the United States.

In November, Russian Finance Minister Anton Siluanov said that Moscow and Beijing were finalising a memorandum to settle more bilateral trade in the rouble and yuan.

The two countries were also reportedly in talks to launch a new cross-border system to improve direct payments of trade invoices, and for the use of China’s UnionPay credit card in Russia and Russia’s Mir card in China.

But late last month, Russian media quoted Siluanov as saying that Moscow had decided to step away from Beijing’s proposed plan.

This article put in an appearance on the South China Morning Post website at 7:33 p.m. CST on their Tuesday evening, which was 6:33 a.m. EST in Washington on Tuesday morning.  It was updated about ten hours later.  I thank Bill Moomau for sharing it with us — and another link to it is here.


Amcu gears up for secondary strike at Sibanye’s platinum operations in South Africa

The Association of Mineworkers and Construction Union (Amcu) on Monday, gave notice of its intention to embark on secondary strike action at Sibanye-Stillwater’s platinum operations around Rustenburg in support of the current strike at the mine’s gold operations on the West Rand and in the Free State.

About 15,000 Amcu members have been on strike at Sibanye’s gold operations Kloof, Beatrix and Driefontein mines since November 22, 2018, refusing a three-year wage agreement signed by the mine and three other unions and demanding a R1 000 annual wage increase for the next three years.

On Monday, Amcu sent an official notice to Sibanye-Stillwater indicating that it will be embarking on secondary strike action from next week Tuesday, 22 January 2019.

This secondary strike will mean that about 12,500 Amcu members employed at Sibanye’s platinum operations will join their estimated 15,000 comrades from the same company’s gold operations.

This news item, filed from Johannesburg on Monday, put in an appearance on the iol.co.za Internet site on that date.  I plucked it from a silverdoctors.com item that Brad Robertson sent my way yesterday evening PST — and another link to it is here.


Gold hits an all time high in 72 currencies — Ross Norman

Take gold. Popular belief has it that gold prices have not performed especially well despite some egregious geopolitical and economic factors. Well measured in 72 currencies, gold is at … or within a few percentage points … of being at an all time high for people in those countries. Not on the list are the British Pound, the Swiss Franc, the Euro and Chinese Yuan – but we are not far off in all of those currencies too. Only in USD does gold lag – and not all of us live in the U.S.

Using the dollar gold price, as most of us do, has disguised what is actually quite a powerful bull market. If my memory serves me right, we saw the same phenomenon – a stealth rally in minor currencies – ahead of the last major gold bull run (in dollars) in the late 1990’s. Arguably this may be a very good leading indicator.

Faulty yardsticks also takes us onto wealth management. Measuring our net worth in local currencies, we might be rather pleased with ourselves – smug even. However we chose to ignore the fact that the yardstick is not a constant … it is shrinking and sometimes really quite fast. It’s the natural corrosive effect of inflation. Knowing this, governments give us a gauge for yardstick shrinkage to use such as RPI or CPI, to reassure you that the shrinkage is minimal… and then lie about it.

There are alternatives.

This commentary by Ross was posted on the Sharps Pixley website on Tuesday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Here are two more photos in the series titled “Wildlife photographer of the year people’s choice award” that appeared on The Guardian‘s website back on December 26 — and they’re courtesy of Patricia Caulfield.

The first one is entitled “Family Portrait” by Canadian photographer Connor Stefanison.  The caption reads “A great grey owl and her chicks sit in their nest in the broken top of a Douglas fir tree in Kamloops, B.C.…Canada. They looked towards Connor only twice as he watched them during the nesting season from a tree hide 50 feet (15 metres) up.”  Click to enlarge.

The second photo, by Matthew Maran, is entitled “Fox Meets Fox” — and the caption for this one reads: “Matthew has been photographing foxes close to his home in north London for over a year and ever since spotting this street art had dreamed of capturing this image. After countless hours and many failed attempts his persistence paid off.”  Click to enlarge.


The WRAP

Despite the low volumes in both gold and silver on Tuesday, it was more than obvious that the powers-that-be had their fingers in the price performance in all four precious metals.  I would also suspect that they were busy closing Citigroup and JPMorgan up on the day, despite their incredible bad earnings reports.  That went for Wells Fargo as well.  They finished down on the day, but well off its low.  Then there was the Brexit vote on top of that.  It certainly appears that nothing was left to chance…or the free markets.

And as Bill King said in his column this morning “Neither disappointing big-bank earnings nor the latest batch of weak economic data nor Brexit concern could deter the usual suspects from ‘shooting’ for 2,600 on the S&P 500 Index — and engineering the standard expiry week upward manipulation and squeeze.

Here are the 6-month charts for the Big 6 commodities once again — and it should again be noted how carefully the gold price is being managed.  It is now more than obvious, even to a casual observer.  Click to enlarge for all six.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price chopped quietly sideways until around 1 p.m. China Standard Time on their Wednesday afternoon — and then rose three bucks into the 2:15 p.m. CST afternoon gold fix in Shanghai. It has been sold lower since then — and is currently up only 20 cents the ounce. It was the same general price pattern for silver, except much more subdued — and it’s down a penny at the moment. The platinum price edged quietly sideways until around 1:30 p.m. CST — and has ticked higher by a bit — and is up a dollar currently. Palladium has been crawling unevenly higher every since trading began in New York at 6:00 p.m. EST on Tuesday evening — and it’s up 6 dollars as Zurich opens.

Net HFT gold volume is just under 38,000 contracts — and there’s 1,751 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is a bit under 8,000 contracts — and there’s only 211 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened down 11 basis points once trading began at 7:45 p.m. EST in New York yesterday evening — and has been chopping quietly sideways since — and is down 2 basis points as 7:45 a.m. GMT in London.

The Chris Powell comment back in 2008 that “there are no markets anymore…only interventions” needs to be cast in stone and on display in front of all the New York Stock Exchanges, JPMorgan — and the CME Group in Chicago.  I, amongst others, have called this a “Frankenstein market“…but it’s now way beyond that, as a free market no longer exists in anything.

But with no COT/Bank Participation Reports in the last month, there’s no way of telling just how involved JPMorgan is in selling these precious metal rallies short.  I certainly suspect it, but really won’t know for sure until Ted reports on it when the next COT Report comes out…whenever that is.

But whatever those numbers show, it’s a certainty that the commercial traders, whoever they may be, are short up the ying-yang against the Managed Money traders, who are now net long the four precious metals in a big way.  And as Ted and I have also mentioned, a cash register-ringing engineered price decline by the commercials, certainly cannot be ruled out.  It hasn’t happened yet — and may not, but don’t be surprised if it does.

And as I post today’s effort on the website at 4:02 a.m. EST, I note that the gold price continues to trade unevenly sideways in a very tight range — and it’s up $1.00 as the first hour of trading in London draws to a close. It’s been mostly the same for silver, but it has now jumped up a bit in the last thirty minutes — and is up 3 cents currently. Platinum still isn’t doing much, but it is up 3 bucks at the moment. Palladium continues to crawl unevenly higher — and it’s up 10 dollars.

Gross gold volume is around 50,500 contracts — and net of current roll-over/switch volume, net HFT gold volume is just under 46,000 contracts. Net HFT silver volume is coming up on 9,400 contracts — and there’s still only 219 contracts worth of roll-over/switch volume on top of that.

The dollar index continues to chop very quietly sideways — and it’s down 11 basis points as of 8:45 a.m. GMT/9:45 a.m. CET.

That’s all I have for this time. Let’s see what ‘da boyz’ have in store for us for the remainder of the Wednesday trading session.

Ed