Another Quiet Volume Day in Silver and Gold

23 January 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price began to tick lower as soon as trading began at 6:00 p.m. EST in New York on Monday evening — and the low of the day was set at 1 p.m. China Standard Time on their Tuesday afternoon.  It began to head higher from there — and ran into ‘resistance’ the moment that London opened. The London high was set at the morning gold fix…10:30 a.m. GMT…and it was sold unevenly lower until minutes after 10:30 a.m. in New York.  From that point it edged just as unevenly higher until trading ended at 5:00 p.m. EST.

One again, the low and high ticks aren’t worth looking up.

Gold finished the Tuesday session in New York at $1,284.70 spot, up $5.10 on the day.  Net volume was very light at around 150,000 contracts — and roll-over/switch volume was very heavy at around 68,000 contracts.  Both those figures are net of Monday’s volume.

The silver price was forced to follow the same general price path as gold’s, except its low tick in the spot market came at 1:30 p.m. CST.  It also rallied — and then was sold a bit lower once the morning gold fix was done in London.  The New York low came at the same moment as gold’s — and it also edged unsteadily higher into the 5:00 p.m. EST close from there.

The low and high ticks in this precious metal were reported as $15.195 and $15.385 in the March contract.

Silver was closed at $15.305 spot, up 7 cents from Monday.  Net volume was about 50,000 contracts — and there was around 3,300 contracts worth of roll-over/switch volume in this precious metal.  These are net of Monday’s numbers as well

Platinum ticked up a few dollars at 6 p.m. on Monday evening in New York, but that wasn’t allowed to last — and the low tick for this precious metal, like for silver, came around 1 p.m. in Shanghai as well.  It began to chop quietly higher from there — and its New York high came right at the COMEX open.  It was sold quietly lower from that point and, like silver and gold before it, its low was also set a few minutes after 10:30 a.m. EST.  It didn’t do much from that juncture until the COMEX close at 1:30 p.m. in New York — and then it crept quietly higher into the 5 p.m. EST close from there.  Platinum was closed at $789 spot, down 5 dollars from Monday.

The palladium price traded sideways until a few minutes after 3 p.m. China Standard Time on their Tuesday afternoon — and then jumped up about six bucks — and was up about that amount by the Zurich open.  Shortly after that, the bids got pulled — and it was down 17 bucks in just a few minutes.  By 10:25 a.m. CET in Zurich, it was down about 26 dollars.  From that juncture it rallied quietly but very unevenly higher until shortly before the COMEX close — and didn’t do a lot after that.  Palladium finished the Tuesday session in New York at $1,327 spot, down 8 dollars from its close on Monday.

The dollar index closed very late on Friday afternoon in New York at 96.34 — and opened flat once trading began at 7:45 p.m. EST in New York on Monday evening.  From there, it wandered around without much direction…15 or so basis points either side of unchanged for the entire Tuesday session everywhere on Planet Earth — and finished the day almost back at unchanged…96.30…down 4 basis points on the day.

Here’s the DXY chart courtesy of BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart from the folks over at stockcharts.com — and the delta between its close…95.96…and the close on the DXY chart above, was 34 basis points on Tuesday.  Click to enlarge.

The gold stocks opened up a hair, but quietly sold into negative territory shortly after — and their respective low ticks came the same time as gold’s low tick of the day…minutes after 10:30 a.m. in New York trading.  From there they rallied unevenly higher for the remainder of the Tuesday session.  The HUI finished up 0.82 percent.

The silver equities opened a bit lower — and then kept right on going down.  Like for the gold shares, their respective lows came at the same time as silver and gold’s New York lows…minutes after 10:30 a.m. EST.  They edged unevenly higher from there until shortly before 2:30 p.m. EST — and didn’t do much of anything after that.  Nick Laird’s Silver Sentiment/Silver 7 Index closed down 1.77 percent.  Click to enlarge if necessary.

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

What really dragged the Silver 7 Index down yesterday was Pan American Silver.  It was down 7 percent, as their 2018 silver output was a bit under what they were forecasting — and they got punished out of all proportion for that sin.  It’s similar to the senseless beating that First Majestic Silver took last week at this time — and the news from F.M.S. was positive across the board.


The CME Daily Delivery Report showed that only 7 gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  In gold, Morgan Stanley issued all 7 contracts from its in-house/proprietary trading account — and the biggest long/stopper, JPMorgan, picked up 4 of them for its client account.  In silver, Advantage issued all three from its client account — and Advantage, JPMorgan and Goldman picked up 1 contract each for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session, which includes Monday’s trading data as well, showed that gold open interest in January rose by 5 contracts, leaving 55 still open, minus the 7 mentioned just above.  Friday’s Daily Delivery Report showed that 2 gold contracts were actually posted for delivery today, so that means that 5+2=7 more gold contracts just got added the January delivery month.  Silver o.i. in January declined by 10 contracts, leaving 357 still around, minus the 3 mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 13 silver contracts were actually posted for delivery today, so that means that 13-10-3 more silver contracts were added to January.


There were no reported changes in GLD yesterday but, for a change, there was finally a deposit into SLV, as an authorized participant added 1,079,119 troy ounces.

There was a fairly decent sales report from the U.S. Mint on Tuesday.  They reported selling 4,500 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — 490,000 silver eagles — plus another 1,800 one-ounce platinum eagles.

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

It was far different in silver, of course, as 1,217,997 troy ounces was reported received — and 519,909 troy ounces shipped out.  In the ‘in’ category, there was one truckload…619,094 troy ounces…dropped off at Brink’s, Inc. — and the other truckload…598,902 troy ounces…found a home over at Canada’s Scotiabank.  In the ‘out’ category, there were four depositories involved — and I’m just going to mention the two largest:  Scotiabank shipped out 288,627 troy ounces — and 200,025 troy ounces departed Brink’s, Inc.  Much smaller amounts left CNT and Delaware.  The link to all this is here.

It was quite busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They received 530 of them — and shipped out 5,671.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The Seuso Treasure or Sevso Treasure, is a hoard of silver objects (14 items) from the late Roman Empire. The first pieces appeared on the market in London in 1980, and the treasure was acquired by a consortium headed by Spencer Compton, 7th Marquess of Northampton. Documentation was provided in which it was stated that it had been found in the Tyre and Sidon regions of Lebanon. It was put up for sale in New York City in 1990 by Sotheby’s, but was halted when the documentation was found to be false, and the governments of Hungary, Yugoslavia (now Croatia) and Lebanon made claims of ownership. The claims of ownership by these countries were rejected by a U.S. court, and the treasure remained in the possession of the Marquess of Northampton. Scotland Yard still has an open case on the matter.

The origin and provenance of the treasure are likely known, but not publicly acknowledged. There is much scientific evidence to indicate that the hoard was first acquired in the 1970s after the murder of a Hungarian soldier, who discovered the treasure during illicit digging at an established archaeological site in Hungary. On 26 March 2014 Prime Minister of Hungary Viktor Orbán announced that half of the Seuso Treasure (seven items) had been bought by Hungary. The Prime Minister described it as “Hungary’s family silverware“. In June 2017 the remaining seven artifacts also got back to Hungary, for a sum of €28 million.

The treasure trove consists of 14 large decorated silver vessels and the copper cauldron which contained them, and has been dated to the late 4th or early 5th century A.D. Most notable is a large dish, 70 cm in diameter and weighing nearly 9 kilograms.  Click to enlarge.

I have very few stories for you today.


CRITICAL READS

Seeing Eye Human — Bill Bonner

And now, the lame brains from the other side of the aisle are getting in the act. Like new varieties of the flu, bad ideas are spreading fast.

We mentioned last week that MMT (Modern Monetary Theory) was achieving broad acceptance in some intellectual circles. Broadly, MMT states that debt and deficits really don’t matter. A government able to print the money that is owed can never willingly go broke.

Forgiving student debt is probably the first item on the agenda, followed by free tuition, free medical care, and a guaranteed income.

Along with these budget-busters is coming a new attitude towards the rich, too. In a word, rich people will no longer be seen as role models and inspirations… they’ll soon be pariahs.

In this space, we – and practically we alone – have complained about the rich, too. And we explained why: They got their money unfairly, about $30 trillion of it… thanks to the fake money system.

And now, without understanding the crime… the mob is getting ready to hand down a verdict. And carry out the sentence. It’s heating up the tar and collecting feathers; soon, it will pick up its torches and march to the best zip codes.

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


The Silence on Wall Street’s Dark Pools Is Deafening

It is destined to go down as one of the greatest journalistic and regulatory failures of our time – the lack of serious attention by investigative business reporters and the U.S. Department of Justice to the glaring fact that the largest Wall Street banks continue to trade their own and each other’s bank stocks in their own Dark Pools.

Dark Pools function as unregulated stock exchanges inside the bowels of the largest Wall Street banks. Making the situation even more dicey, some of the big banks own more than one Dark Pool, raising the possibility that there could be cross-trading between those pools to artificially inflate or depress stock prices.

JPMorgan Chase owns two Dark Pools; Citigroup currently owns at least two although it owned a lot more in the past; Morgan Stanley owns three; and then there is the Dark Pool that a consortium of Wall Street banks quietly own together. That one is called Level ATS. According to Wall Street’s self-regulator, FINRA, Level ATS is owned by Citigroup, Credit Suisse, LB I Group, Merrill Lynch LP Holdings, and Fidelity Global Brokerage Group.

After being repeatedly charged with collusion, should global banks be allowed to team up on the darkest of trading markets, i.e., Dark Pools? Should felon banks like Citigroup and JPMorgan Chase be allowed to trade the stocks of their own bank? Should any Wall Street bank be allowed to trade its own stock in darkness?

This very interesting commentary was posted on the wallstreetonparade.com Internet site on Monday — and I found it on the gata.org Internet site.  Another link to it is here.


Russia cuts foreign debt to decade low, while boosting national reserves

Russia’s external debt has fallen by $64.4 billion or 12.4 percent from the beginning of last year, amounting to $453.7 billion as of January 1, 2019 – the lowest level since April 2009, according to Central Bank of Russia data.

All institutional sectors dropped their debts last year, the Central Bank of Russia announced on Monday, adding that other sectors contributed “the most to the country’s external debt contraction,” reducing their indebtedness by $32.3 billion.

The foreign debt has been dropping since mid-2014, when it reached its peak of around $733 billion in the wake U.S. and E.U. sanctions. Since then, Russia managed to reduce debt by nearly $280 billion to reach the ten year minimum. In the fourth quarter of 2018 alone, the external debt was reportedly reduced by more than $16 billion or some 3.5 percent.

Earlier this year, the Central Bank reported that foreign exchange reserves surged for the third consecutive year, boosted by 8.3 percent over the 12 months as of the beginning of 2019. Reserves saw growth of over $468 billion from $432 billion at the beginning of last January.

Moscow has been consistently eliminating its reliance on the greenback. The Central Bank’s latest quarterly report shows Russia has significantly cut the share of the U.S. currency in foreign reserves to a historic low after it converted nearly $100 billion to euros, the Japanese yen and the Chinese yuan.

This news item showed up on the rt.com Internet site at 10:11 a.m. Moscow time on their Tuesday morning, which was 2:11 a.m. in Washington — EDT plus 8 hours.  Roy Stephens was the first reader through the door with this story yesterday — and another link to it is here.


Iran obsession: Netanyahu’s reckless gambit in Syria will only cause more chaos for the region — John Wight

The Netanyahu government has embarked on a policy of aggression in Syria that threatens rather than protects the security of Israel and the wider region.

In analyzing Israel’s treatment of the Palestinians close to home and repeated acts of military aggression in Syria, the words of ancient Greek general and historian Thucydides ring true: “The strong do what they can and the poor suffer what they must.”

The aforementioned quote comes from the Melian Dialogue within the Athenian’s classic work, ‘History of the Peloponnesian War’, covering the war between Athens and Sparta in 431–404 BC. It poses one of the most enduring moral questions humanity has confronted throughout its history. It is one that retains relevance today.

When it comes to Israel, more than relevant the assertion of ‘might is right’ implicit in Thucydides’ words can no longer be ignored by Western governments responsible for giving Tel Aviv license to treat international law and fundamental norms of restraint with contempt.

Earlier this month in a New York Times interview, Lieutenant General Gadi Eisenkot of the IDF boasted that Israel had “struck thousands of targets [in Syria] without claiming responsibility or asking for credit.” The Lieutenant General was in effect openly acknowledging that Israel is now waging war against Iran and regards Syria as the front-line in this war.

This commentary/opinion piece was posted on the rt.com Internet site at 4:30 p.m. Moscow time on their Tuesday afternoon, which was 8:30 a.m. in Washington — EDT plus 8 hours.  I thank George Whyte for this one — and another link to it is here.  George also sent a parallel rt.com story headlined “Syria threatens to ‘strike Tel Aviv airport’ unless UNSC acts against Israel’s impunity


China’s Xi Warns Party of ‘Serious Dangers’ as Risks Mount

President Xi Jinping stressed the need to maintain political stability in an unusual meeting of China’s top leaders — a fresh sign the ruling party is growing concerned about the social implications of the slowing economy.

Xi told a “seminar” of top provincial leaders and ministers in Beijing on Monday that the Communist Party needed greater efforts “to prevent and resolve major risks,” the official Xinhua News Agency said. He said areas of concern facing the leadership ranged from politics and ideology to the economy, environment and external situation.

The party is facing long-term and complex tests in terms of maintaining long-term rule, reform and opening-up, a market-driven economy, and within the external environment,” Xi said, according to Xinhua. “The party is facing sharp and serious dangers of a slackness in spirit, lack of ability, distance from the people, and being passive and corrupt. This is an overall judgment based on the actual situation.”

Xi is seeing more and more red flashes on his monitor as things on many fronts go wrong,” said Ether Yin, partner at Beijing based consultancy Trivium China. “He wanted to draw the whole system’s attention to that.”

This Bloomberg news story appeared on their website at 2:30 a.m. Pacific Standard Time on Monday morning — and I found it on the Zero Hedge website.  Another link to it is here.  The Zero Hedge spin on this is headlined “In Unprecedented Speech, President Xi Warns of “Serious Dangers” to Communist Party Rule” — and I thank Brad Robertson for that one.


Arizona Legislator Proposes Securing State Reserves with Gold and Silver

An Arizona legislator has put forward a bill to de-risk the state’s financial holdings with a modest allocation to physical gold and silver in the state’s reserve fund.

Introduced by Representative Mark Finchem (R-Tucson), the Arizona Sound Money Stabilization Act (HB 2500) requires that at least 10% of Arizona’s Budget Stabilization Fund be held in the monetary metals in a secure depository.

Arizona’s Budget Stabilization Fund has almost $500 million in assets but is currently invested in debt instruments and the stock market. The state owns no gold or silver.

Finchem’s past sound money initiatives have been successful. In 2017, Rep. Finchem passed the ground-breaking House Bill 2014, a measure which removed all income taxation of gold and silver at the state level.

Gold and silver do not have the default or inflation risks that bonds and other “fixed income” investments carry. Most importantly, physical gold and silver held in a depository carry no counterparty risk – or risk of failure or default – unlike stocks, bonds, and other financial assets.

In support of the measure, Rep. Finchem said, “it’s high time to safeguard the state’s assets and taxpayers against the volatile dollar.”

This precious metal-related news item was posted on the moneymetals.com Internet site on Tuesday sometime — and it’s something I plucked from the Sharps Pixley website yesterday evening.  Another link to it is here.


Let’s replace U.S. dollar with Russian gold, Moscow exchange chief suggests

Russian gold could become the perfect alternative to conservative investments in the greenback, the CEO of Russia’s key trading floor, Moscow Exchange (MOEX), believes.

Let’s offer an alternative to the U.S. dollar in the form of Russian gold, which we produce… investment gold,” CEO Alexander Afanasiev suggested, speaking in the Lower House of Russia’s parliament on Monday.

He added that some “super-conservative investors” purchase dollars and keep them “under the pillow,” which is not very safe, he believes.

The MOEX chief also noted that Russians have increased their investment activity and act “surprisingly rational.”

This very interesting gold-related news story put in an appearance on the rt.com Internet site at 2:40 p.m. Moscow time on their Tuesday afternoon, which was 6:40 a.m. in Washington — EDT plus 8 hours.  I thank George Whyte for pointing it out — and another link to it is here.


Why I’m Buying THE Safe Haven Assets Right Now — Mike Maloney

What an insanely confusing time for investors – central banks are carrying out unprecedented interventions, governments have crushed any semblance of free markets, and entire countries have become “zombified” as a result. We have bubbles in stocks, real estate and bonds – with massive levels of corporate debt waiting like a time bomb. In this 86-minute presentation, Mike Maloney explains why he is steering a course well clear of this monetary madness and buying the safe-haven assets: gold and silver.

This long video commentary from Mike was posted on the goldsilver.com Internet site on Tuesday — and the first person to drop it into my in-box was Phil Manuel.


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.

This first photo is entitled: “Gliding” by Mexican photographer Christian Vizl.  The caption reads: “With conditions of perfect visibility and beautiful sunlight, Christian took this portrait of a nurse shark gliding through the ocean off the coast of Bimini in the Bahamas. Typically these sharks are found near sandy bottoms where they rest, so it’s rare to see them swimming.”  Click to enlarge.

The second photo is entitled: “Sound Asleep” by U.S. photographer Tony Wu.  It’s captioned: “This adult humpback whale balanced in mid-water, head on and sound asleep was photographed in Vava’u, Kingdom of Tonga. The faint stream of bubbles, visible at the top, is coming from the whale’s two blowholes and was, in this instance, indicative of an extremely relaxed state.”


The WRAP

For the second trading day in a row, the net volume numbers in both silver and gold were of the very light variety — and because of that, I’m not prepared to read too much into yesterday’s price action in those two precious metals, even though both finished up on the day.  There’s just not much going on right now in either of them.

Here are the charts for all four precious metals, plus copper and WTIC — and Tuesday’s doji also contains the price activity from Monday as well. Until a clear price pattern is established, I wouldn’t read too much into these charts.  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 doing precisely nothing in Far East trading on their Wednesday — and it’s down 70 cents at the moment.  The silver price traded flat until 9 a.m. China Standard Time on their Wednesday morning — and shortly after that it rose a few pennies and then proceeded to trade quietly sideways until around 1:30 p.m. CST.  It’s been ticking higher since — and is up 6 cents currently.  Platinum hasn’t been doing much, either — and is up a dollar.  Palladium traded very unevenly sideways in the Far East, but has shot higher in the last few minutes — and as Zurich opens, it’s now up 13 bucks.

Net HFT gold volume is VERY quiet at just under 23,500 contracts — but there’s already 7,000 contracts worth of roll-over/switch volume in this precious metal.  Net HFT silver volume is already pretty decent at a bit over 9,200 contracts — but there’s only 149 contracts worth of roll-over/switch volume on top of that.  It appears that this tiny ‘rally’ in silver is not going unopposed.

The dollar index has been doing next to nothing in Far East trading today as well…up a few basis points — and then below unchanged by a few basis points.  It’s sitting at unchanged as of 7:45 a.m. in London/8:45 a.m. in Zurich.

The silver price has been acting poorly lately, certainly with respect to the gold price — and it’s obvious that the powers-that-be don’t want it to get too far. How long that situation will last is hard to tell. Ted mentioned in his Saturday column that we’re market neutral at the moment — and prices could go either way. That applies to gold as well.

And as I post today’s column on the website at 4:02 a.m. EST, I see that gold is now up 80 cents an ounce — and silver is still being capped and still up only 8 cents. Platinum is still up a dollar, but palladium is now up only 9.

Gross gold volume is coming up on 50,000 contracts — and net of roll-over/switch volume, net HFT gold volume is still very light at a bit over 31,000 contracts. Net HFT silver contracts is now up to 10,400 contracts — and there’s still only 153 contracts worth of roll-over/switch volume in this precious metal.

The dollar index had an up/down move in the first hour of London/Zurich trading — and is back to unchanged once again as of 8:45 a.m. GMT/9:45 a.m. CET.

I have no idea as to what might happen during the Wednesday trading session. It’s been very quiet for the last few days, almost too quiet — and somehow I doubt that will last much longer.

See you here tomorrow.

Ed