Yet Another Monstrous Withdrawal From SLV

18 January 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much of anything anywhere on Planet Earth on Thursday, trading in a six-dollar price range throughout the entire Thursday session.

Of course the lows and highs aren’t worth mentioning.

Gold finished the day in New York at $1,291.30 spot, down $1.90 from Wednesday’s close.  Net volume was very light once again at 165,000 contracts — and there was just over 26,500 contracts worth of roll-over/switch volume in this precious metal.

Silver didn’t do much either — and one was down 3 cents by 1 p.m. GMT in London/8 a.m. EST in New York.  A bit of price pressure showed up at that point — and the low tick of the day, such as it was, came minutes after 9 a.m. in New York.  It inched quietly higher until a hour or so before the 5 p.m. EST close.

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

Silver was closed at $15.505 spot, down another 6.5 cents.  Net volume was pretty light as well at just under 53,000 contracts — and there was only 1,903 contracts worth of roll-over/switch volume on top of that.

The platinum price traded a dollar or so higher when it began at 6:00 p.m. EST in New York on Wednesday evening — and the downward price pressure started shortly before 9:30 a.m. China Standard Time on their Thursday morning.  That lasted until about 1 p.m. CST — and then it chopped quietly sideways until around 9:30 a.m. CET in Zurich.  It began to edge higher from there, culminating in an up/down price spike that started around 12:30 p.m. CET — and by around 9:30 a.m. in New York it was down a few dollars on the day.  It rallied very unevenly higher from there — and finished the Thursday session at $809 spot, up 4 dollars on the day.

The palladium price didn’t do much of anything until the Zurich open — and then the rally began, culminating in a NASA-type space launch in price starting shortly after 12 o’clock noon CET…blast through $1,400 the ounce in the process.  That was capped around the $1,415 spot price mark — and then was sold lower until minutes after 9 a.m. in New York — and well over half of its prior gains disappeared in the process.  It didn’t do much from there until the COMEX close — and at that juncture, crept very quietly higher until 4 p.m. EST in the thinly-traded after-hours market.  From that point it traded flat into the close.  Palladium finished the Thursday session at $1,377 spot, up another 34 bucks on the day, but off its high tick by a very chunky 38 dollars or so.

Palladium is now about 80 dollars per ounce more expensive than gold.  The supply/demand fundamentals are really kicking into high gear now.

The dollar index closed very late on Wednesday afternoon in New York at 96.06 — and fell a small handful of basis points once trading began at 7:45 p.m. on Wednesday evening.  Then the roller coaster ride began.  The 96.26 high tick was set around 10:50 a.m. in New York — and was back at the unchanged mark by around 1:05 p.m. EST.  It chopped quietly sideways from there until trading ended.  The dollar index finished the Thursday session virtually unchanged at 96.07…up 1 basis point on the day.

Here’s the DXY chart from Bloomberg once again.  Click to enlarge.

Here’s the 6-month U.S. dollar index chart — and the delta between its close…95.71…and the close on the DXY chart above, was 36 basis points on Thursday.  Click to enlarge.

The gold stocks dropped a bit at the 9:30 a.m. open in New York yesterday morning, but then bounced back to unchanged less than thirty minutes later — and they traded quietly but unsteadily sideways for the remainder of the Thursday session.  The HUI closed higher 0.03 percent.  Call it unchanged.

The silver equities dropped a bit over 2 percent at the open, but struggled unevenly higher for the rest of the day.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.79 percent.  Click to enlarge.

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

The CME Daily Delivery Report showed that 1 gold and 23 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, Advantage issued — and JPMorgan stopped.  Both transactions involved their respective client accounts.  In silver, the largest short/issuer was Advantage with 15 contracts.  JPMorgan stopped 9 contracts…5 for clients, plus 4 for its own account.  In second and third spots were Goldman and Advantage, with 6 and 5 contracts for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in January rose by 1 contract, leaving 52 left, minus the 1 contract mentioned just above.  Wednesday’s Daily Delivery Report showed that no gold contracts were posted for delivery today.  Silver o.i. in January declined by 104 contracts, leaving 377 still around, minus the 23 contracts mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 124 contracts were actually posted for delivery today, so that means that 124-104=20 more silver contracts were just added to the January delivery month.


There were no reported changes in GLD yesterday, but there was another whopping big chunk of silver taken out of SLV, as an authorized participant removed 3,894,319 troy ounces.  That’s makes 6.05 million troy ounces withdrawn in the last two business days…ten truckloads.

Since October 22, 2018…the total amount of silver taken out of SLV now totals 27.40 million troy ounces…almost 12 days of world silver production — and almost 46 truckloads.

There was another sales report from the U.S. Mint on Thursday.  They sold 4,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — 75,000 silver eagles — and 1,000 one-ounce platinum eagles.

There was very little movement in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received — and only 160.750 troy ounces/5 kilobars [U.K./U.S. kilobar weight] was shipped out — and that happened at Canada’s Scotiabank.  There was also a smallish 192 troy ounces transferred from the Eligible category — and into Registered.  I won’t bother linking this.

It was certainly a lot busier in silver, as 900,363 troy ounces was reported received — and another 1,332,764 troy ounces shipped out.  In the ‘in’ department, one smallish truckload…585,464 troy ounces…was dropped off at CNT — and the remaining 314,898 troy ounces landed at Brink’s, Inc.  In the ‘out’ category, one big truckload…640,964 troy ounces…left Scotiabank — and another truckload…600,171 troy ounces departed Brink’s, Inc.  The remaining 91,628 troy ounces was shipped out of CNT.  There were also some transfers from the Registered category — and back into Eligible…32,323 troy ounces at Scotiabank — and 19,523 troy ounces at CNT.  The link to all this action is here.

It was another fairly busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  There were 601 kilobars received — and 3,810 shipped out.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The Hoxne Hoard is the largest hoard of late Roman silver and gold discovered in Britain, and the largest collection of gold and silver coins of the fourth and fifth centuries found anywhere within the Roman Empire. It was found by Eric Lawes, a metal detectorist in the village of Hoxne in Suffolk, England on 16 November 1992. The hoard consists of 14,865 Roman gold, silver, and bronze coins and approximately 200 items of silver tableware and gold jewellery. The objects are now in the British Museum in London, where the most important pieces and a selection of the rest are on permanent display. In 1993, the Treasure Valuation Committee valued the hoard at £1.75 million (roughly equivalent to £3.27 million in 2016).

The hoard was buried in an oak box or small chest filled with items in precious metal, sorted mostly by type, with some in smaller wooden boxes and others in bags or wrapped in fabric. Remnants of the chest and fittings, such as hinges and locks, were recovered in the excavation. The coins of the hoard date it after A.D. 407, which coincides with the end of Britain as a Roman province. The owners and reasons for burial of the hoard are unknown, but it was carefully packed and the contents appear consistent with what a single very wealthy family might have owned. It is likely that the hoard represents only a part of the wealth of its owner, given the lack of large silver serving vessels and of some of the most common types of jewellery.  Click to enlarge.

I only have two stories for you today, as there’s no real ‘news’ out there.


CRITICAL READS

Trillion-Dollar Deficits From Here to Eternity — Bill Bonner

We count on the sun to rise in the morning. We trust our burgers to be edible. And we expect the markets and the feds to do predictable things. In the present context, for example, there is almost no chance that the Fed will normalize interest rates.

And there is almost no chance that Congress and the White House will reduce spending or raise taxes – even to prevent a death spiral of debt and inflation. Once underway, empires, love affairs, and financial calamities have to run all the way to the end.

In America today, it is almost impossible – politically – to cut government spending or to raise taxes. That leaves debt as the only way forward.

This year, the deficit is projected to be around $1 trillion. And now, with the economy sinking towards recession, markets ready to crash, and a Democratic majority in the House, hold your breath; it’s trillion-dollar deficits… and rising… from here to eternity.

This commentary from Bill was posted on the bonnerandpartners.com Internet site early on Thursday morning EST — and another link to it is here.


Billionaire Investor Sam Zell Says He’s Buying Gold “For The First Time In My Life

Amid a cresting wave of consolidation in the gold mining space as spending on new mines has dried up since 2011, billionaire investor Sam Zell is buying the shiny metal “for the first time in his life” because he sees opportunities stemming from an expected shortage in supply.

Gold notably didn’t perform as well as many might have expected during the eruption of market volatility during Q4, but some investors see scope for the shiny metal to embark on its strongest rally since the crisis after years of lackluster returns as global economic growth slows and investors look for somewhere to hide.

That, and the impending supply crunch that Zell envisions from the drop in new mining capacity – the capacity of unmined gold still buried in existing mines shrank by 40% in 2017 – are the two reasons why Zell has been buying.

For the first time in my life, I bought gold because it is a good hedge,” Sam Zell, the founder of Equity Group Investments, said in a Bloomberg TV interview. “Supply is shrinking and that is going to have a positive impact on the price.

The amount of capital being put into new gold mines is a most nonexistent,” Zell said. “All of the money is being used to buy up rivals.”

Of course it’s a given that he knows nothing about the ‘da boyz’ and the gold market — and is probably buying paper gold in lieu of the real thing.  This Zero Hedge article appeared on their website at 3:30 p.m. EST on Thursday afternoon — and comes to us courtesy of Brad Robertson.  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 “Under the snow” — and is by French photographer Audren Morel.  The caption reads “Unafraid of the snowy blizzard, this squirrel came to visit Audren as he was taking photographs of birds in the small Jura village of Les Fourgs, France. Impressed by the squirrel’s endurance, he made it the subject of the shoot.”  Click to enlarge.

This second shot entitled “Ice and Water” by Norwegian photographer Audun Lie Dahl.  It’s captioned “The Bråsvellbreen glacier moves southwards from one of the ice caps covering the Svalbard archipelago, Norway. Where it meets the sea, the glacier wall is so high that only the waterfalls are visible, so Lie Dahl used a drone to capture this unique perspective.”  Click to enlarge.


The WRAP

With the obvious exception of palladium, it was pretty much a nothing day in the precious metals again on Thursday.  But it is interesting to note that platinum echoed the advance in palladium, although by far less of an amount, so there is starting to be some spill-over from one precious metal to another.

And because volumes in both silver and gold have been so light lately, I would be careful to read too much into the current price action, but it’s obvious that ‘da boyz’ are there when they have to be. It remains to be seen what they will do when a rally of some substance develops…or is allowed to develop.

Here are the 6-month charts for the Big 6 commodities — and yesterday’s big gain by palladium should be noted.  It’s now more than obvious that supply/demand fundamentals are making an appreciable different to its price.  But as I’ve already pointed out countless times, it’s current price would be much higher if it were allowed to trade freely, which it obviously isn’t — and yesterday’s price action was yet another case in point.  Click to enlarge.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price has been chopping quietly sideways with a slightly negative bias since trading began in New York on Thursday evening. At the moment it’s down $1.70 an ounce. Silver has been doing even less — and it’s down a penny currently. The platinum price has been inching unsteadily higher throughout all of Far East trading — and it’s up 3 bucks. The palladium price began to crawl higher in early evening trading in New York yesterday evening — and then jumped up a bunch between 9 and 10 a.m. China Standard Time on their Friday morning. From that juncture it traded sideways until it poked its nose above the $1,400 spot mark at 3 p.m. CST on their Friday afternoon — and there was ‘someone’ there to sell it lower, but it’s still up 15 bucks as Zurich open…but was up $25 at its current high tick.

Net HFT gold volume is extremely light at a bit under 25,500 contracts — and there’s only 1,967 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is just over 7,900 contracts — and there’s only 285 contracts worth of roll-over/switch volume in that precious metal.

The dollar index has been chopping very quietly sideways in an extremely tight range since trading began at 7:45 p.m. EST in New York on Wednesday evening — and it’s up 1 basis point as of 7:45 a.m. GMT in London.

I’m off to Vancouver for the Cambridge House Investment Conference tomorrow — and if I see/learn anything while I’m there, I’ll report on it in my Tuesday column.  They say that they have 9,000 people signed up to attend it, so if those numbers are even close to being correct, it should be pretty busy on the floor when the doors open on Sunday morning.

And as I post today’s column on the website at 4:02 a.m. EST, I see that the gold price, which had begun to turn lower at exactly 3:00 p.m. CST on their Friday afternoon, continues to fall — and is down $3.30 an ounce as the first hour of London trading draws to a close.  Silver is now down 3 cents.  Platinum is up 2 bucks — and palladium has ticked a bit higher in the last fifteen minutes — and is now up 19 dollars…knocking on the $1,400 spot price door once again.

Gross gold volume is coming up on 45,000 contracts — and minus the current roll-over/switch volume, net HFT gold volume is around 39,300 contracts.  Net HFT silver volume is now around 9,500 contracts — and there’s only 302 contracts worth of roll-over/switch volume on top of that.

The dollar index continues to do not much of anything — and is up 6 basis points as of 8:45 a.m. BST in London/9:45 a.m. CET in Zurich.

And because there’s no Commitment of Traders Report, my Saturday column will be as brief as I can make it.

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

Ed