The Curse of Cash and the Allure of Gold — Ken Rogoff

13 February 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped quietly sideways in Far East trading until shortly before the 2:15 p.m. afternoon gold fix in Shanghai on their Tuesday afternoon.  It began to edge higher from there, but ran into ‘something’ about an hour and change later — and from there it chopped higher until the price was capped and turned lower about five minutes before trading on the COMEX commenced at 8:20 a.m. in New York.  The low tick of the day was set a minute or so after 10:30 a.m. EST — and the gold price edged quietly and unsteadily higher until shortly before the COMEX close.  It was sold a few dollars lower at that juncture — and traded flat from 2:00 p.m. EST onwards.

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

Gold was closed in New York on Tuesday at $1,310.40 spot, up $2.60 from Monday.  Net volume was ultra-quiet once again at just under 137,500 contracts — and roll-over/switch volume amounted to a bit over 9,500 contracts.

It was the same general price pattern for silver, except it began to edge a few pennies higher starting around 10 a.m. China Standard Time on their Tuesday morning.  Its rally was halted a few minutes before 11 a.m. GMT in London — and once the silver fix was in at noon over there, the price pressure began.  Most of the sell-off that mattered ended shortly after the afternoon gold fix in London — and it didn’t do much from there until it crept a few pennies higher between 12:30 p.m. EST and the COMEX close — and it didn’t do a thing after that.

The high and low ticks in this precious metal were reported by the CME Group as $15.65 and $15.82 in the March contract.

Silver was closed yesterday at $15.67 spot, down 0.5 cents on the day.  Net volume was super quiet at around 38,300 contracts — and there was a bit under 24,000 contracts worth of roll-over/switch volume in this precious metal.

Platinum was up 3 bucks or thereabouts by the Zurich open — and from there it traded pretty flat for the next three hours before heading quietly lower.  The low tick of the day, such as it was, came around 10:30 a.m. in New York, but within the next thirty minutes or so, it had jumped back into the green by a few bucks.  From that point it traded flat until 2 p.m. in the thinly-traded after-hours market — and it ticked a few dollars higher into the 5:00 p.m. EST close of trading.  Platinum finished the Tuesday session at $790 spot, up 5 dollars on the day.

Palladium had a brief down/up price spike the moment that trading began at 6:00 p.m. EST in New York on Monday evening, but was back at unchanged by around 11:30 a.m. CST on their Tuesday morning.  It rallied about 7 dollars from there — and was up about that amount by the Zurich open — and didn’t do much after that until 2 p.m. CET in Zurich, which was twenty minutes before the COMEX open in New York.  It began to edge quietly and rather unsteadily higher from there — and finished the Tuesday trading session at $1,386 spot, up 18 dollars from Monday’s close.

The dollar index closed very late in New York on Monday afternoon at 97.06 — and proceeded to creep quietly sideways, with a slightly negative bias, once trading began at 7:45 p.m. EST in New York/8:45 a.m. CST/China Standard Time on their Tuesday morning.  That gentle decline ended five minutes after the London open — and a ‘rally’ commenced at that point.  The 97.19 high tick of the day was set forty minutes later — and a long, slow and quietly choppy price decline took hold at that point.  The 96.65 low tick was set around 1:10 p.m. in New York– and it certainly looked like the usual ‘gentle hands’ appeared at that juncture.  The dollar index crept quietly higher into the close from there — and it finished the Tuesday session in New York at 96.71…down 35 basis points from Monday’s close.

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

And here’s the 6-month U.S. dollar index chart — and the delta between its close…96.50…and the close on the DXY chart above, was 21 basis points on Tuesday.  Click to enlarge.

The gold shares gapped up a bit at the open, but within ten minutes or so, they began to head lower, with their respective lows coming shortly after 11 a.m. in New York trading.  They crawled quietly higher from there until around 1:10 p.m. EST, which was the time of the low tick in the dollar index — and they sold quietly lower until 3:50 p.m., where they ticked higher into the 4:00 p.m. close from there.  The HUI finished down 0.86 percent on the day.

The silver equities traded in lock-step with their golden brethren on Tuesday, so I shall spare you the play-by-play.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.12 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 16 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  In gold, the sole short/issuer was Advantage.  JPMorgan stopped 9 contracts…7 for its own account, plus 2 more for its client account — and the only other long/stopper that mattered was Advantage, picking up 5 contracts for its client account.  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 February fell by 26 contracts, leaving 663 still around, minus the 16 contracts mentioned just above.  Monday’s Daily Delivery Report showed that 73 gold contracts were actually posted for delivery today, so that means that 73-26=47 more gold contracts just got added to the February delivery month.  Silver o.i. in February declined by 5 contracts, leaving just 3 left.  Monday’s Daily Delivery Report showed that 2 silver contracts were actually posted for delivery today, so that means that 5-2=3 silver contracts disappeared from the February delivery month.


There was another withdrawal from GLD yesterday, the seventh one this month so far.  This time an authorized participant took out 103,938 troy ounces.  There were no reported changes in SLV.

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

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.  Nothing was reported received, but 132,482 troy ounces were taken out.  By far the largest amount…132,321 troy ounces…departed HSBC USA.  The rest…3 kilobars and 2 kilobars [all five were U.K./U.S. kilobar weights] departed Brink’s, Inc. and Scotiabank respectively.  The link to this is here.

There was a fair amount of activity in silver, as 600,505 troy ounces was received — and 1,224,023 troy ounces were shipped out.  All of the ‘in’ activity…one truck load…ended up at CNT.  In the ‘out’ category, there were two truck loads…1,196,893 troy ounces…that departed JPMorgan.  The remaining amounts…20,036 troy ounces and 7,092 troy ounces…were shipped out of HSBC USA and Delaware respectively.  The link to all this is here.

There wasn’t much activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  Nothing was reported received — and only 325 were shipped out.  All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


The Commitment of Traders Report dated January 15, 2019 showed a slight increase in the Commercial net short position in silver — and another big improvement in the commercial net short position in gold.

In silver, the Commercial net short position increased by a further 2,899 COMEX contracts, which is 14.5 million troy ounces ounces of paper silver.

They arrived at that number by increasing their long position by 2,613 contracts, but they also increased their short position by 5,512 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bit more, as they reduced their long position by 2,261 contracts — and they also added 1,219 short contracts.  It’s the sum of those two numbers…3,480 contracts…that represents their change for the reporting week.

The difference between that number — and the Commercial net short position…3,480 minus 2,899 equals 581 contracts…was made up as it always is, by the traders in the other two categories, the ‘Other Reportables’ and the ‘Nonreportable’/small traders.  Both groups added to long positions — and they reduced their short positions as well.  Here’s the snip so you can see for yourself.  Click to enlarge.

There were slight increases in the net short positions in both the Producer/Merchant and Swap Dealers categories.  JPMorgan and Citigroup hide out in the former category — and Ted’s raptors, the small commercial traders other than the Big 8, are in the latter category.

The Commercial net short position in silver is now up to 71,690 COMEX contracts, which works out to 358.5 million troy ounces of silver held net short.  The gross short position held by these same Commercial traders is 135,154 COMEX contracts, or 676 million troy ounces.  Both numbers are obscene.

Here’s the latest COT chart for silver, updated with the January 15th numbers which, I’ll remind you, is still month-old data.  Click to enlarge.

I was a bit surprised that there was a further increase in the Commercial net short position in silver in this report.  But I expect the one we get on Friday will be much happier reading.


In gold, the commercial net short position fell by a further 13,074 COMEX contracts, which equates to 1.31 million troy ounces of paper gold.

They arrived at that number by adding a very chunky 41,454 long contracts, but they also increased their short position by 28,380 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report only part of the change can be chalked up to the Managed Money traders, as they added 2,961 long contracts, but they also increased their short position by 10,497 contracts — and it’s the difference between those two numbers…7,536 COMEX contracts…that represents their change for the reporting week.

The difference between that number — and the commercial net short position…13,074 minus 7,536 equals 5,538 COMEX contracts was made by the traders in those other two categories — as both categories went net short rather aggressively during the reporting week.  And here’s the snip that shows that.  Click to enlarge.

The commercial net short position in gold is now down to 10.81 million troy ounces, which is now more bullish than it is market neutral.

Here’s the 3-year COT chart for gold, updated with the this COT data, which dates from January 15, 2019.  Click to enlarge.

I would suspect that there will be further improvement in gold in the next COT Report this Friday, for the data as of January 22, 2019.


The Tara Brooch is a Celtic brooch of the pseudo-penannular type, made in 650 to 750 A.D. It was found in Ireland in 1850, but despite its name, not at Tara but likely near Bettystown. The name by which it became known was attached to the brooch by the jeweller who purchased it, as a marketing ploy for the copies they made. The brooch was exhibited internationally and was one of the artifacts that fuelled the Celtic Revival in the mid-19th century. It is now on display in the National Museum of Ireland in Dublin.

The National Museum of Ireland describes it as follows: “…[T]he Tara Brooch can be considered to represent the pinnacle of early medieval Irish metalworkers’ achievement. Each individual element of decoration is executed perfectly — and the range of technique represented on such a small object is astounding.”

The brooch has a diameter of 8.7 cm and the pin has a length of 32 cm. It is made of cast and gilt silver, decorated on both front and rear. On the front are fine gold filigree panels depicting animal and abstract motifs, separated by studs of glass, enamel and amber. The back is flatter than the front, and the decoration is cast. The motifs consist of scrolls and triple spirals. Attached to the brooch by a swivel attachment is a silver chain made from plaited wire. The swivel consists of animal heads framing two small cast glass human heads.  Click to enlarge.

I have an average number of stories for you today, with a decent number of them gold related.


CRITICAL READS

“Into the Valley of Death” — Jeff Thomas

In April of 2018, International Man published an essay in which I commented on the appointment by President Trump of John Bolton as U.S. National Security Advisor.

In that essay, I described the appointment as a warning that the U.S. government had reached a decision to pursue increased aggression toward Russia that could lead to direct warfare between the two countries.

On the surface of it, this would seem to be a somewhat rash conclusion to draw, as war has not been declared. And Mister Bolton would certainly not have the power to unilaterally declare war.
However, the reason for concern over such an appointment is that Mister Bolton is a one-trick pony who invariably characterizes Russia as evil and has, for years, fervently recommended major aggression against Russia. Since Mister Bolton never deviates from this zeal to aggress against Russia, he would not be appointed unless a path of significant aggression had already been decided.

Whenever any nation behaves this arrogantly with regard to aggression against another nation, it tends to end badly. And, historically, the outcome is almost always the defeat of the aggressor.
Arrogant leaders are vulnerable leaders, as they tend not to think things through.

[NOTE: This was posted in my Tuesday column, but the link was no good — and I didn’t get it fixed until early afternoon EST, so here it is again.  I thank reader Bruce Brantley for pointing it out. – Ed]  This very interesting commentary from Jeff appeared on the internationalman.com Internet site on Monday morning sometime — and another link to it is here.


Dangerous Idea“: Russia Slams Plans to Hold U.S.-Ukrainian Drills in the Black Sea

The Russian Foreign Ministry slammed upcoming joint US-Ukraine military exercises which will take place in the Black Sea dubbed operation Sea Breeze-2019, described as a multinational maritime exercise.

That’s a dangerous idea, and that’s the way we will view it. Prior to that, we will study the facts. They are viewed by us as a dangerous idea,” said Russian Deputy Foreign Minister Grigory Karasin on Tuesday.

Moscow has long denounced the now annual maritime exercise as a threat to stability in the region, as it appears but more evidence that the United States is now treating Ukraine as if it were a de facto member of NATO.

Last year’s exercises, co-hosted by Ukraine and the United States, were held in July 2018 near the Odessa and Nikolayev Regions and in the northwestern part of the Black Sea, and involved over 2,000 multi-national servicemen, about 30 warships and aircraft from 19 countries.

This story showed up on the Zero Hedge website at 1:46 p.m. EST on Tuesday afternoon — and I thank Brad Robertson for sending it our way.  Another link to it is here.


U.S., E.U. to Slap New Sanctions on Russia

It’s been at least a few months since the U.S. or western nations unveiled some new, broad sanctions targeting Russia, and with the Mueller “collusion” report due any minute, it’s time for Trump to once again remind the audience of the biggest ever soap opera, that he is not a BFF with Vladimir Putin. As such, the FT reports that the U.S. and E.U. are close to agreeing a raft of new sanctions against Russia, this time in a coordinated push aimed at punishing Moscow for its “aggression” towards Ukraine in the Kerch strait.

More than two months after the incident, and despite repeated appeals from the U.S. and E.U. states to release them, 24 Ukrainian sailors are still being detained by the Russian authorities, after Russian Navy ships rammed and fired on three Ukrainian vessels that Moscow said were “maneuvering dangerously” near the Kerch Strait. The Russian Coast Guard captured some two dozen sailors after commandeering the ships, which included to Ukrainian artillery ships and a tugboat. Russia has refused to release the ships and the sailors despite demands from European and U.S. officials.

The latest move to counter what has been described in western capitals as “a persistent campaign of malign behavior by Russia“, would be jointly applied by the U.S. and E.U.

The new measures will be discussed at a meeting of E.U. foreign ministers next Monday according to the FT, and could be levied in the next two months, according to diplomats briefed on the discussions.

According to a western government official quoted by the newspaper, the sanctions were expected to be directed at those individuals and companies involved in Russia’s seizure of three Ukrainian naval vessels in the Kerch Strait last November.

This news item showed up on the Zero Hedge website at 1:14 p.m. on Tuesday afternoon EST — and it’s the second offering in a row from Brad Robertson.  Another link to it is here.


U.S. Congressman Introduces Bill to Remove Income Taxation from Gold and Silver

The battle to end taxation of constitutional money has reached the federal level as U.S. Representative Alex Mooney (R-WV) today re-introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion.

The Monetary Metals Tax Neutrality Act (H.R. 1089) backed by the Sound Money Defense League and free-market activists – would clarify that the sale or exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation.

My view, which is backed up by language in the U.S. Constitution, is that gold and silver coins are money and are legal tender,” Rep. Mooney said.

If they’re indeed U.S. money, it seems there should be no taxes on them at all. So, why are we taxing these coins as collectibles?

This article showed up on the moneymetals.com Internet site on Monday sometime — and I found it in a GATA dispatch yesterday.  Another link to it is here.


Ask your mining companies what they’re doing about price suppression

Dear Friend of GATA and Gold [and silver! – Ed]:

GATA’s old friend B.L. has forwarded the text of an excellent letter he has e-mailed to a monetary metals mining company in which he long has been invested, asking whether the company will ever respond to the growing number of disclosures of manipulation of the gold and silver markets.

The letter easily could be adapted by any monetary metals mining company investor for e-mailing to company executives or the company’s investor relations officer. So an edited version of it is appended.

If you are invested in a gold or silver mining company, please consider prodding it to confront the price-suppression issue. The failure of the industry to defend itself is a decisive factor in favor of price suppression, along with the complicity of mainstream financial news organizations.

If you do send such a letter, please let your secretary/treasurer know [at CPowell@GATA.org] if you get a reply or don’t get one. Maybe together we can begin to hold this timid industry to account.

Well, dear reader, here’s something you can do if you wish.  This GATA dispatch came out yesterday morning — and the form letter, which you can modify if you so desire, is included in the link, which is here.


Maduro calls for return of Venezuela’s U.K.-deposited gold

Venezuela President Nicolas Maduro has called on Britain to return “more than 80 tonnes of gold” reserves deposited in London instead of sending humanitarian aid, in an interview with the BBC.

Venezuela is in the midst of an economic crisis as millions of people face shortages of basic necessities such as food and medicines.

But Maduro refuses to allow in aid sent by the United States to alleviate the crisis.

The socialist leader told the BBC, according to a transcript made public Tuesday, that his country may have gold reserves weighing 80 tons or more deposited at the Bank of England.

Maduro says the U.S. has frozen $10 billion in Venezuelan accounts through its sanctions.

Washington has said it will turn over control of those resources to Guaido once Maduro has been removed from power.

This AFP news item from Tuesday was picked up by the yahoo.com Internet site — and I found it posted on the gata.org Internet site late on Tuesday afternoon PST.  Another link to it is here.


Maduro ally Erdogan says Turkish town will process Venezuelan gold

President Recep Tayyip Erdoğan said Turkey will make a small Anatolian town the centre for processing Venezuelan gold in what appeared to be a further challenge to U.S. policy towards the government of President Nicolas Maduro.

We will take Çorum’s gold trade to the next level,” Erdoğan, a close political ally of the embattled maduro, told a large crowd of supporters in the town on Tuesday in televised comments. Çorum lies some 600 kilometres east of Istanbul.

By Tuesday evening the Erdoğan’s government appeared to have had second thoughts about the president’s own statement. The state-run Anadolu Agency‘s recording of his speech abruptly cuts out as he talks about Çorum’s gold trade.

However, a transcript of the speech remained on pro-government daily Milliyet’s website showing the section of the speech before Anadolu censored it.

What is more, uncut version of Erdogan’s speech shows his mentioning about Çorum and Venezuela, at 28th minute in this video, again posted by the head of AKP İstanbul youth branches via AKP’s own periscope broadcast.

The message isn’t in English, so unless you’re familiar with Turkish, there’s not much to see.  This news item appeared on the ahvalnews.com Internet site on Tuesday sometime — and I found it on the gata.org Internet site.  Another link to it is here.


As good as gold for some brides in India as election nears

An India state will give gold worth about $530 to every bride from a poor family, the latest budget giveaway ahead of a general election that must be held by May.

The northeastern state of Assam is run by Prime Minister Narendra Modi’s Hindu nationalist Bharatiya Janata Party (BJP), which is facing a battle for re-election because of low farm incomes and a lack of jobs that have turned off some of those who backed it in the last polls, in 2014.

The federal government announced cash handouts to farmers and tax cuts for the lower middle class last week.

But handing out gold to brides is new.

The tea-growing state’s finance minister, Himanta Biswa Sarma, allocated 3 billion rupees ($42 million) for the next fiscal year, from April 1, for the gold program.

That would buy 875 kg of gold, enough for about 80,000 brides.

This Reuters story, filed from New Delhi, put in an appearance on their Internet site back on February 7…and I found it in a GATA dispatch that Chris Powell posted very late last night EST.  Another link to it is here.


India’s gold imports jump 64% in January despite prices hitting 5-year high

Gold imports by India rose last month despite local prices trading near the highest in more than five years, as jewelers start to restock for the wedding season.

Inbound shipments grew 64 per cent to 46 tons in January from a year earlier, according to a person familiar with the data, who asked not to be identified as the figures aren’t public. However, higher prices kept a lid on supplies, which were lower than the 60 tons shipped in December. Finance Ministry spokesman DS Malik wasn’t immediately available for comment.

Indians consider buying gold auspicious for marriages as part of the bridal trousseau or to be given as a gift in the form of jewelry. The wedding season starts this month and purchases will jump during the second-biggest gold-buying day of Akshaya Tritiya in early May.

The World Gold Council, a London-based promotion body, expects a recovery in demand in India this year on increased spending with elections due by May. “Elections mean expenditure, which means redistribution of income,” Managing Director for India P R Somasundaram said last month.

This gold-related news item was posted on the business-standard.com Internet site at 10:29 a.m. IST on their Tuesday morning, which was 12:19 a.m. in New York on Tuesday morning — EDT plus 10 hours.  It’s one of several precious metal news items that I found on the Sharps Pixley website.  Another link to it is here.


China officially adds to gold reserves again — Lawrie Williams

While we still disbelieve the ‘official’ total figure for the size of China’s gold reserves, assuming them to be far, far higher than the figure it reports to the IMF, for whatever reason it has changed its reporting tack and now seems to be reporting monthly reserve increases.  In all probability this pattern is perhaps designed to make a point in that it is raising the non-U.S. dollar portion of its official foreign exchange reserves.

For the second month in a row now the Peoples Bank of China (the nation’s central bank) has announced a reasonably large purchase of gold for its reserves and, presumably, will be reporting the new level to the IMF.  It’s gold reserves, as officially reported, now stand at 59.94 million ounces (1,864.3 tonnes) up around 380,000 ounces (11.8 tonnes) on the end 2018 figure.  Somewhat contrary to expectations/predictions, the country’s total Forex reserves grew in January by U.S.$15.2 billion due to an increase in its non-dollar assets.

The ‘official’ increase in gold and non-dollar assets has been announced as the country goes into the next stage of negotiations on trade and tariffs with the U.S. The announced increases may be to make a point that it can grow its Forex reserves independent of any reliance on the U.S. dollar representing yet another diversification away from the global reliance on the dollar as the world’s principal reserve currency.  China has an awful long way to go in achieving a possible long-term replacement of the dollar with the yuan (or perhaps a basket of currencies under the control of the IMF which includes the yuan as a key element).  But the Chinese plan ultra-long term and this is indeed a start and we believe China, along with allies like Russia (which has been substantially raising its gold reserves over the past few years) see gold as a hugely important monetary asset in this respect.

This worthwhile commentary from Lawrie put in an appearance on the Sharps Pixley website on Tuesday morning GMT — and another link to it is here.


The curse of cash and the allure of gold — Ken Rogoff

Against this backdrop, the rationale for holding gold becomes even clearer. “The point is, Treasury bills are not a riskless asset. They may be for two to three years but not necessarily for the long term, so if you want to build a 40-year plan, you should have some diversification. Let’s face it – if you’re a hedge fund manager and there is a 3–4% chance you will get wiped out and a 96% chance you will get very rich, that’s a bet worth taking. If you’re a country, that’s not such a smart bet,” Rogoff explains.

He believes that institutional investors and wealthy individuals should also allocate a proportion of their portfolio to gold. “As a hedge, gold has enormous value. You never know what’s going to happen and when something really bad happens, gold is probably going to be worth a lot to you. So it makes sense for high net worth (HNW) individuals and perhaps even for some pension funds to hold a small percentage of their assets in gold,” he says.

Looking ahead, Rogoff suggests that gold is also likely to increase in value as its global role evolves. “I suspect gold’s value will go up in real terms. I think the trend towards digital currencies will strengthen the value of gold. As emerging markets expand and trust the U.S. less, that will also strengthen the value of gold. So, as part of a larger portfolio allocation, it seems very reasonable to me,” he concludes.

A very big straw in the wind, perhaps?  This very interesting and worthwhile article showed up on the World Gold Council‘s website on Tuesday — and it’s certainly worth reading.  I found it on the Sharps Pixley website — and another link to it is here.


The PHOTOS and the FUNNIES

Here are two more photos from the “Ocean Art” series that I thank Mike Easton for sending our way.

The photo credit for this first picture goes to Fabrice Dudenhofer — and the caption reads: “The Million Hope shipwreck in the Red Sea”.  Click to enlarge.

This second photo was taken by Eugene Kitsios — and is captioned “Swimming with a pod of spotted dolphins in Bimini, Bahamas“.  Click to enlarge.


The WRAP

Despite the fact that the dollar index was generally heading lower for about nine hours straight, starting at 9 a.m. in London on their Tuesday morning — and ending at 1 p.m. in New York…gold and silver prices were not allowed to reflect that fact.  There was certainly some rally activity in the Far East, but even before the London open, price resistance appeared — and silver was headed lower at the noon silver fix in London — and gold a bit over an hour later.  Platinum wasn’t spared, either.  All these engineered price declines began many, many hours before the dollar index got rescued by the usual ‘gentle hands’ around 1:05 p.m. EST.

So it’s obvious that ‘da boyz’ are still around — and we appear to be back in that familiar ‘care and maintenance’ mode once again.

But we’re still waiting for some sort of resolution to the very negative situation in silver [and in gold to a certain extent as well] in the COMEX futures market, because at the moment the short position is just about as high as it was back in late 2017 according to Ted — and as he also pointed out in his weekly review on Saturday…”even slightly exceeding the extreme readings of Feb, April and June of 2018 when silver exceeded $17.”  JPMorgan et al have barely let silver over the $16 spot mark in this current ‘rally’…if you wish to dignify it with that name.

It still remains to be seen whether or not this will be the “same old, same old“…or will things turn out differently this time…much differently.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and there’s nothing to see here once again.  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 rallied three bucks or so in Far East trading — and that lasted until shortly before 3 p.m. China Standard Time on their Wednesday afternoon. It has been sold lower since — and is only up 70 cents the ounce at the moment. Silver was up a nickel by 3 p.m. CST, but is now up only a penny. The platinum price has been chopping quietly sideways since trading began at 6:00 p.m. EST in New York on Tuesday evening, but was sold down a bit in the last hour as well — and is now down 2 dollars. Platinum was up 9 dollars by 1:30 p.m. CST, but was sold a bit lower after the 2:15 p.m. afternoon gold fix in Shanghai — and is only up 6 dollars as Zurich opens.

Net HFT gold volume is very light…a bit over 25,500 contracts — and there’s only 315 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is coming up on 7,600 contracts — and there’s 1,491 contracts worth of roll-over/switch volume in that precious metal.

The dollar index opened unchanged at 7:45 p.m. in New York yesterday evening, which was 8:45 a.m. China Standard Time on their Wednesday morning — and after dipping about 6 basis points by around 11:40 a.m. CST, has crept a bit higher — and is sitting at unchanged as of 7:45 a.m. GMT in London.


I received an e-mail from reader Milo Schield yesterday asking the following…”You mentioned: a decisive fall off in trading volume (directly a result of the sudden lack of spoofing)…in your Tuesday column.  Does spoofing generate trading volume?  I thought spoofing was done without actually making a trade?

Fortunately for me, Ted and I were discussing this very thing on the phone yesterday before Milo’s e-mail arrived in my in-box — and Ted already had the answer for me during our conversation — and this is my reply to Milo…”That’s true, but the drop in volume is caused by the lack of trading action in reaction to the spoofing.

According the folks over at thefreedictionary.com Internet site…”Spoofing is an illegal practice in which an investor with a long position on a security makes a buy order for that security and immediately cancels it without filling the order. Spoofing tends to increase the price of that security as other investors may then issue their own buy orders, which increases the appearance of demand. The first investor then closes his/her long position by selling the security at the new, higher price.  This can also be used to cause a decrease in price of a security by using sell orders instead.  Spoofing is a form of market manipulation.


So with spoofing apparently off the table starting a week or so ago, what method[s] were used to move prices lower yesterday, one might ask — and can ‘da boyz’ engineer a really big price decline without that illegal market manipulation tool at their disposal?  Will they resort to it again when push really becomes shove?  We’ll find out soon enough I would think.

And as I post today’s column on the website at 4:02 a.m. EST, I see that gold, silver and platinum prices have ticked a bit higher at the London/Zurich opens. Gold is now up $1.60…silver is up 2 cents. Platinum is now up 1 dollar — and palladium is up 5 bucks.

Gross gold volume is coming up on 32,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is about 31,300 contracts. Net HFT silver volume is about 8,500 contracts — and there’s already 2,780 contracts worth of roll-over/switch volume on top of that.

The dollar index continued to edge higher until 8:15 a.m. in London, but has slid a little since — and as of 8:45 a.m. GMT/9:45 a.m. CET, it’s up only 4 basis points.

That’s all I have for today, which is more than enough — and I’ll see you here tomorrow.

Ed