Five Consecutive Days of Withdrawals From GLD

08 February 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much until shortly before 10 a.m. China Standard Time on their Thursday morning — and at that point was sold quietly lower until 1 p.m. CST.  It began to head rather unsteadily higher until shortly after 9 a.m. in New York — and then was sold lower until shortly before the London close.  It rallied a bit from there until noon EST — and didn’t do much of anything after that.

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

Gold finished the Thursday session in New York at $1,309.80 spot, up $3.60 on the day.  Net volume was very quiet once again at a hair under 153,000 contracts — and there was just under 14,000 contracts worth of roll-over/switch volume on top of that.

Silver was sold quietly lower until shortly before 1 p.m. CST on their Thursday morning — and then didn’t do much of anything until shortly after London opened.  It headed a bit higher from there, but was rolled over a few minutes before 11 a.m. GMT.  That tiny sell-off lasted for about ninety minutes — and from that juncture it crawled unsteadily higher for the remainder of the Thursday session.

The low and high ticks aren’t worth looking up in this precious metal, either.

Silver finished the day at $15.715 spot, up 7.5 cents from Wednesday’s close.  Net volume was super quiet at around 41,700 contracts — and there was fairly decent roll-over/switch volume out of March and into future months, totalling a bit over 20,000 contracts.

The platinum price didn’t do much in Far East trading on their Thursday — and was down a dollar at the Zurich open.  It crawled up to its high tick of the day two hours and change later — and then drifted quietly lower until shortly after 9 a.m. in COMEX trading in New York.  Then down it went, with the low tick coming around 12:30 p.m. EST.  It tacked on a couple of dollars going into the COMEX close — and didn’t do a thing after that.  Platinum closed at $796 spot, down 8 dollars from Wednesday.

The palladium price was up about seven dollars by 11 a.m. CST, but was back at unchanged by the Zurich open — and was sold down to its low of the day an hour after that.  It began to rally with some enthusiasm from that juncture, but ran into ‘something’ about 11:30 a.m. CET — and from there it didn’t do much until minutes before 9 a.m. in New York.  The price went ‘no ask’ at that point — and a willing short seller appeared immediately — and the price chopped quietly lower until the market closed at 5:00 p.m. EST.  Palladium was closed at $1,365 spot, up 12 bucks on the day — and at least that many dollars off its high tick of the day.

Like on Wednesday at 9 a.m. EST in COMEX trading in New York, it would have closed at some astronomically high price on Thursday as well, if free-market forces had been allowed to prevail.  According to Kitco, it’s high tick of the day was $1,402 spot.


The dollar index closed very late on Wednesday afternoon in New York at 96.39 — and it opened about unchanged at 7:45 p.m. EST/8:45 a.m. CST on their Thursday morning.  The index rose and fell about six basis points between then and minutes before 2 p.m. CST — and at that point, a ‘rally’ ensued that lasted until precisely 12:00 o’clock noon in London.  It began to chop quietly lower from there — and its low tick [1 basis point above unchanged] came at precisely 11 a.m. in New York, which was the London close.  I suspect that the usual ‘gentle hands’ appeared at that point — and it crawled quietly higher for the rest of the Thursday session, finishing the day at 96.51….up 12 basis points from Wednesday’s close.

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

And here’s the 6-month U.S. dollar index chart courtesy of the folks over at stockchart.com — and the delta between its close…96.29…and the close on the DXY chart above, was 22 basis points points on Thursday.  Click to enlarge.

The gold shares opened unchanged, then ticked a bit higher before starting to chop quietly lower.  That lasted until around 12:20 p.m. EST in New York trading — and they inched a bit higher into the close, starting around 1 p.m. EST.  The HUI closed down 0.84 percent.

The price pattern in the silver equities was very similar to the gold stocks — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.49 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 191 gold and 8 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

In gold, of the three short/issuers in total, the largest by far was Morgan Stanley with 166 contracts out of its in-house/proprietary trading account — and in distant second spot was ABN Amro with 20.  The largest long/stopper was JPMorgan, with 96 in total…77 for its own account, plus 19 for clients.  Citigroup was second with 41 for its own account — and Advantage was third with 33 for its client account.

In silver, the largest of the two short/issuers was JPMorgan with 7 contracts out of its client account — and the largest of the three long/stoppers was Morgan Stanley with 4 for its client account.  Advantage and ADM picked up 2 contracts each 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 February fell by 31 contracts, leaving 889 still open, minus the 191 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 28 gold contracts were actually posted for delivery today, so that means that 31-28=3 more gold contracts disappeared from the February delivery month.  Silver o.i. in February declined by 6 contracts, leaving 14 still around, minus the 8 mentions a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 11 silver contracts were actually posted for delivery today, so that means that 11-6=5 more silver contracts just got added to February.


For the fifth straight day, there was a withdrawal from GLD, as an authorized participant took out another 207,884 troy ounces.  Since January 31, there has been 453,582 troy ounces/14.1 metric tonnes, withdrawn from GLD.  There were no reported changes in SLV.

There was no sales report from the U.S. Mint.

The only physical movement in gold on Wednesday over at the COMEX-approved depositories on the U.S. east coast was 321.500 troy ounces/10 kilobars [U.K./U.S. kilobar weight] that was shipped out of Canada’s Scotiabank.  I won’t bother linking this.

There wasn’t much activity in silver, as nothing was reported received — and only 496,406 troy ounces were shipped out.  There was 472,505 troy ounces shipped out of CNT — and the remaining 23,901 troy ounces departed the International Depository Services of Delaware.  The link to that is here.

There was no report from the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.


The Sutri Treasure is an important Lombardic hoard found at Sutri, Italy in the late nineteenth century that is currently in the collections of the British Museum in London.

The rich grave group was found in 1878 near the town of Sutri in the province of Viterbo in central Italy. Dating to the 6th-7th centuries A.D., the treasure was buried at a time of conflict between the Kingdom of the Lombards and the Eastern Roman Empire. Nine years after its discovery, the hoard was purchased by the British Museum, where it resides to this day.

Given the large number of prestigious items in the treasure, it probably belonged to a noble lady of high rank from the Lombardic court. It includes a blue glass drinking horn, two greenish-blue small amphoras, a gilded fan-shaped silver brooch, a gold and garnet encrusted S-shaped brooch, a simple gold cross and a pair of earrings with triple pendants. A number of other items (including a pin, beads, coins, another drinking horn and a third brooch) were not purchased by the museum at the time; their current whereabouts is unknown.  Click to enlarge.

It was another very quiet news day on Thursday.


CRITICAL READS

Consumer Credit Hits $4 Trillion as Student, Auto Loans Hit All Time High

After a few months of wild swings, in December U.S. consumer credit normalized rising by $16.6 billion, just below the $17 billion expected, after November’s whopping $22.5 billion [increase]. The surge in borrowing in November brought the total to just above $4 trillion for the first time ever on the back of a America’s ongoing love affair with auto and student loans.

Revolving credit increased by $1.7 billion to $1.045 trillion, a modest slowdown since November’s $4.8 billion.

Perhaps more notably, the lowest increase in December credit card usage since 2012.

And while slowdown in December credit card use may prompt fresh questions about the strength of the U.S. consumer during the all-important holiday spending season, the recent dramatic upward revision to personal savings notwithstanding, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers hit fresh all time highs, with a record $1.593 trillion in student loans outstanding, an impressive increase of $10.3 billion in the quarter, while auto debt also hit a new all time high of $1.155 trillion, an increase of $9.5 billion in the quarter.

In short, whether they want to or not, Americans continue to drown even deeper in debt, and enjoying every minute of it.

This chart-filled article from the Zero Hedge website showed up there at 3:17 p.m. on Thursday afternoon EST — and I thank Brad Robertson for pointing it out.  Another link to it is here.


If Socialism Is So Good, Why Are People Moving Away? — Dennis Miller

The mainstream media is citing reports, with widely varying percentages, that many young Americans prefer socialism to capitalism – and are supporting socialist candidates. The media provides extended coverage to politicians touting socialist programs.

The New York Times trumpets, “Mayor de Blasio Says Wealth Is ‘in the Wrong Hands,’ Pledges to Redistribute It.

Here’s the truth, brothers and sisters, there’s plenty of money in the world. Plenty of money in this city,” the mayor said…. “It’s just in the wrong hands!

…. He cast himself as an aspiring Robin Hood – aiming to take from the rich and give to the poor….

Politicos robbing and redistributing wealth; what could possibly go wrong?

This interesting commentary by Dennis put in an appearance on his Internet site on Thursday sometime — and another link to it is here.


The Saker Interview with Michael Hudson on Venezuela

The Saker: Could you summarize the state of Venezuela’s economy when Chavez came to power?

Michael Hudson: Venezuela was an oil mono-culture. Its export revenue was spent largely on importing food and other necessities that it could have produced at home. Its trade was largely with the United States. So despite its oil wealth, it ran up foreign debt.

From the outset, U.S. oil companies have feared that Venezuela might someday use its oil revenues to benefit its overall population instead of letting the U.S. oil industry and its local comprador aristocracy siphon off its wealth. So the oil industry – backed by U.S. diplomacy – held Venezuela hostage in two ways.

First of all, oil refineries were not built in Venezuela, but in Trinidad and in the southern U.S. Gulf Coast states. This enabled U.S. oil companies – or the U.S. Government – to leave Venezuela without a means of “going it alone” and pursuing an independent policy with its oil, as it needed to have this oil refined. It doesn’t help to have oil reserves if you are unable to get this oil refined so as to be usable.

Second, Venezuela’s central bankers were persuaded to pledge their oil reserves and all assets of the state oil sector (including Citgo) as collateral for its foreign debt. This meant that if Venezuela defaulted (or was forced into default by U.S. banks refusing to make timely payment on its foreign debt), bondholders and U.S. oil majors would be in a legal position to take possession of Venezuelan oil assets.

These pro-U.S. policies made Venezuela a typically polarized Latin American oligarchy. Despite being nominally rich in oil revenue, its wealth was concentrated in the hands of a pro-U.S. oligarchy that let its domestic development be steered by the World Bank and IMF. The indigenous population, especially its rural racial minority as well as the urban underclass, was excluded from sharing in the country’s oil wealth. The oligarchy’s arrogant refusal to share the wealth, or even to make Venezuela self-sufficient in essentials, made the election of Hugo Chavez a natural outcome.

The fascinating and very worthwhile interview, which centers on oil and gold, showed up on the unz.com Internet site yesterday — and it’s definitely worth reading.  I thank Larry Galearis for bringing it to our attention — and another link to it is here.


France Recalls Ambassador From Italy After “Unprecedented” Verbal Attacks

The diplomatic row between France and Italy is escalating. More than half a year after Italy summoned the French ambassador over Europe’s migrant row, on Thursday France one-upped Italy when it announced it would recall its ambassador to Italy, citing “outrageous” verbal attacks, repeated “meddling” in its domestic affairs and “unacceptable” provocations.

The French foreign ministry said the decision was taken following a meeting between Italy’s deputy prime minister Luigi Di Maio and leaders of the French Yellow Vest protester movement, trumpeting his support for the grassroots protests in defiance of President Emmanuel Macron.

This is unprecedented since the war,” the foreign ministry said in an emailed statement on Thursday. “Having disagreements is one thing, but using the relationship for electoral purposes is quite another.

Luigi di Maio, Italy’s Deputy Prime Minister and leader of the anti-establishment 5-Star Movement hailed the “winds of change across the Alps” yesterday on Twitter after meeting with Yellow Vest activists Cristophe Chalencon and Ingrid Levavasseur.

A diplomatic feud has been growing between Paris and Rome over repeated expressions of support for the Yellow Vest protests coming from top Italian officials. Di Maio’s co-deputy PM Matteo Salvini said this week that French people “will be able to free themselves from a terrible president” in May after European parliamentary elections take place.

This Zero Hedge story appeared on their website at 8:03 a.m. EST yesterday morning — and it’s another contribution from Brad Robertson.  Another link to it is here.


Reserve Bank of India Bows to Political Pressure With Unexpected Rate Cut

Fed Chairman Jerome Powell isn’t the only leader of a major central bank to capitulate to political (and market) pressure so far this year. On Thursday, RBI Gov. Shaktikanta Das during his first meeting at the helm of the bank led a 4-2 vote to cut rates after raising them twice last year.

Das was widely seen bowing to pressures from Prime Minister Nahrendra Modi, who is desperately trying to boost economic growth ahead of a re-election fight later this year. As one analyst at Mizuho Bank pointed out, the move risks reviving inflationary pressures in India after they had largely eased last year. Das was hastily appointed to lead the central bank in December after his predecessor quit following a very public battle over the RBI’s autonomy.

The board also voted unanimously to switch the central bank’s policy stance to neutral from “calibrated tightening.”

Unsurprisingly, the Indian government cheered the cut, with Finance Minister Piyush Goyal tweeting that it would “give a boost to the economy, lead to affordable credit for small businesses, home buyers etc. and further boost employment opportunities,” said Indian Finance Minister Piyush Goyal in a post on Twitter.

This news story was posted on the Zero Hedge website at 5:56 a.m. on Thursday morning EST — and it’s the third and final offering from Brad Robertson.  Another link to it is here.


Russia’s new shield against U.S. sanctions: A Siberian gold mine

Beneath this plot of land in southeastern Siberia lie vast stores of gold, according to Russia’s biggest gold producer, Polyus PJSC , and tapping them could provide the Russian central bank with a huge and nearly sanction-proof backstop for its currency.

Tests commissioned by the company last year and undertaken by Australia-based AMC Consultants, along with a scoping study conducted in 2018, determined that there are 63 million ounces of gold at Sukhoi Log, Polyus has told investors. While independent mining analysts haven’t confirmed that estimate on their own, many of them refer to Sukhoi Log as one of the world’s largest untapped gold deposits.

And that may just be the beginning,” said Polyus geologist Svetlana Deys. “The gold could extend far beyond the reach of the Sukhoi Log license.” Polyus says the prospective mine holds approximately a quarter of all Russia’s known gold underground.

The news is good for both Polyus and the Russian government. Unlike other producers that move their bullion on world markets, Polyus sells its gold exclusively to large Russian state banks, which then resell it to the country’s central bank. Once mining begins, the bank can use the mine’s gold to support its ruble currency or sell it for extra foreign currency in times of crisis.

Gold has become a major holding in Russia’s central bank reserves, with its share nearly double what it was in 2014, when the bank started dumping its U.S. Treasury and dollar holdings amid increased tensions between Russia and the U.S.

Last year, the central bank’s deputy head, Dmitry Tulin, told lawmakers that while gold prices may fluctuate, “it’s a 100-percent guarantee against legal and political risks.”

The rest of this fascinating gold-related news item, filed from Sukhoi Log in Russia, is posted behind The Wall Street Journal‘s subscription wall — and you need to be a subscriber to see it.  I found this portion posted in the clear on the gata.org Internet site — and another link to it is here.


Indian Gold jewellery demand falls to 598 tonnes

Indian gold jewellery demand weakened marginally to 598 tons last year, from 601.9t in 2017, according to the World Gold Council.

Fourth quarter gold jewellery demand was also fractionally lower y-o-y (180.1t v. 182.4t), as consumers showed caution in the face of high and volatile local gold prices.

Demand was constrained in 2018 as there were relatively few auspicious wedding days in the Hindu calendar.  This had a particularly pronounced effect on Q4 demand, given that November and December are traditionally peak wedding season months.

The outlook is more positive for 2019, as there is a marked increase in the number of such auspicious days.

Buoyant inventory levels meant a good portion of retail demand in Q4 was met by de-stocking. Strong imports in Q3 led to a build-up of stock among manufacturers and wholesalers, which was drawn down during Q4 to meet demand – reflected in a 23% y-o-y drop in fourth quarter official gold imports.

This very interesting gold-related news story, filed from Mumbai, put in an appearance on the scrapregister.com Internet site yesterday sometime — and I found it on the Sharps Pixley website.  Another link to it is here.


Made-in-China diamonds ready to rock global market

China, a major consumer of mined diamonds, now has a realistic chance of becoming a supplier of man-made gems and shaping the industry, analysts say.

Unlike naturally occurring diamonds, which form over the course of billions of years, synthetic diamonds are made in a matter of weeks.

Chinese companies have mastered the technologies to manufacture them en masse within a short period of time. The products are practically indistinguishable from those mined from earth.

China has been producing well over 10 billion carats of diamonds annually for almost a decade, according to the country’s industry estimates. Most of the products have gone to industrial use such as in abrasives. They were provided for aeronautics, oil rigs and electronic chips.

As competition intensified and technology matured, Chinese companies have shifted from abrasives to jewelry.

Liu Yongqi, general manager of Sino-Crystal, told Xinhua News Agency the company now produces between 2 million and 3 million carats a year, over half of which are for jewelry.

Since I had so few stories today, I thought I’d throw this one in as well.  It appeared on the rt.com Internet site at 9:57 a.m. Moscow time on their Thursday morning, which was 1:57 a.m. in New York — EST plus 8 hours — and I thank Swedish reader Patrik Ekdahl for finding it for us.  Another link to it is here.


The PHOTOS and the FUNNIES

This next photo series is headlined “Ocean Art” — and I thank Mike Easton for sending them our way.

Today’s first photo taken by Duncan Murrell — and is captioned “A rarely observed courtship ritual between three devil/manta rays“.  Click to enlarge.

This second photo is by Francois Baelen — and it’s captioned “a mother humpback whale with her playful calf in the background“.  Click to enlarge.


The WRAP

Although both gold and silver closed a bit higher on the day yesterday, nothing much should be read into this price action, as volumes in both metals are still unbelievably light…which has been the case all week.

Their respective equities closed down on the day, but I suspect that had more to do with what was happening in the general equity markets in New York, rather than precious metal shares themselves.  I wouldn’t read anything into that, either.

Here are the 6-month charts for the Big 6 commodities once again — and the low closes on Wednesday that occurred in the precious metals after the COMEX close, show up on their respective Thursday dojis.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price began to edge quietly and unevenly lower about an hour after trading began at 6:00 p.m. EST on Thursday evening in New York. At the moment, it’s down $1.40 the ounce. Silver’s quiet downward journey began at 9 a.m. China Standard Time on their Friday morning — and it’s down 7 cents. The platinum price has been quietly stair-stepped lower in price — and it’s down 3 bucks currently. Palladium, of course, is bucking the trend — and is up 4 dollars as Zurich opens.

Net HFT gold volume is microscopic once again at around 17,800 contracts — and there’s only 201 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is also tiny, at about 6,300 contracts — and there’s only 70 contracts worth of roll-over/switch volume on top of that.

The dollar index opened up 10 basis points once trading began at 7:45 p.m. EST on Thursday evening in New York, which was 7:45 a.m. in Tokyo…8:45 a.m. in Shanghai. It has been chopping very quietly sideways since — and is up 9 basis points as of 7:45 a.m. GMT in London.

Today we get that latest Commitment of Traders Report for positions held at the close of COMEX trading on Friday, January 4, I believe — and I’m expecting some further increases in the short positions in both silver and gold.  But as I said earlier this week, I don’t expect these increases to be anywhere near the unhappy numbers we saw in the prior week’s COT Report, which came out on Tuesday.

We also get the January Bank Participation Report, which shows the COMEX futures market holdings for all the world’s bank in December — and both Ted and I are looking forward to seeing what’s in it, even though the data is a month out of date.

Whatever is in both these reports, will be in my Saturday missive.

And as post today’s efforts on the website at 4:02 a.m. EST, I see that the gold price has ticked higher by a bit during the first hour of London trading — and is currently down only 20 cents an ounce. Silver has rallied a bit as well — and is only down 2 cents. Platinum is now down 2 bucks, but the palladium price went vertical the moment that Zurich opened — and it’s currently up 13 dollars, but this rally is obviously being managed.

Gross gold volume has jumped a bit, but is still very light at only around 22,500 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is 22,000 contracts. Net HFT silver volume is very quiet as well…coming up on 8,200 contracts — and there’s still only 139 contracts worth of roll-over/switch volume in that precious metal.

The dollar index is a bit higher as well — and up 17 basis points as of 8:45 a.m. GMT in London/9:45 a.m. CET in Zurich.

That’s it for yet another day.  Have a good weekend — and I’ll see you here tomorrow.

Ed