Palladium’s Attempted Break-Out Capped Yet Again

19 February 2019 — Tuesday


With the U.S. shut tight for President’s Day holiday, the equity markets in New York were closed yesterday.  But the currencies and precious metals were still trading, although the latter only traded until 1:00 p.m. EST.

The gold price opened flat in New York at 6:00 p.m. EST on Sunday evening in New York.  It stayed that way until 9 a.m. China Standard Time on their Monday morning — and began to edge higher from there.  It was up 3 bucks or so by around 11:30 a.m. CST — and then slid quietly lower — and was down about a dollar at the London open.  From that juncture, the price began to crawl quietly higher until about 8:45 a.m. EST, but was tapped a bit lower over the next thirty minutes — and then didn’t do much after that.

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

Gold finished the holiday-shortened trading session at $1,326.20 spot, up $4.80 from Friday’s close.  Not surprisingly, net volume was pretty quiet at 89,500 contracts — and there was 2,416 contracts worth of roll-over/switch volume on top of that.

Silver didn’t do much yesterday.  Its low tick, such as it was, came at 8:00 p.m. EST in New York on Sunday evening, which was 9 a.m. in Shanghai on their Monday morning.  Its little rally at the COMEX open  was dealt with in a similar fashion to gold’s brief rally at the same time — and after that it didn’t do a thing until the market closed at 1:00 p.m. EST.

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

Silver closed on Monday at $15.78 spot, up 2.5 cents on the day.  Net volume was ultra quiet at a tiny bit under 20,500 contracts, but roll-over/switch volume out of March and into future months was pretty decent at just under 9,300 contracts.

The platinum price wandered around a few dollars either side of unchanged everywhere it was trading on Planet Earth on Monday — and finished the day down a dollar at $804 spot.

Palladium traded flat until 9 a.m. China Standard Time on their Monday morning — and two hours later it was up by 15 bucks.  It crept lower from there until very shortly after Zurich open — and it began to head sharply higher about an hour later.  That rally got capped and turned lower starting at 11:00 a.m. Central European Time — and from that point, it didn’t do much of anything for the remainder of the Monday trading session.  Platinum was closed at $1,439 spot, up 24 dollars from Friday and, like most days, would have closed at heaven only knows what price, if allowed.

The dollar index closed very late on Friday afternoon in New York at 96.90 — and opened down ten basis points the moment that trading began around 8:08 p.m. EST in New York on Sunday evening, which was 9:08 a.m. China Standard Time on their Monday morning.  From that juncture, it traded sideways in a fairly wide range for all of Monday, until the market closed at 3:30 p.m. EST.  The 96.90 high tick was printed at 8:08 a.m. in London — and 96.65 low was set at 12:06 p.m. GMT — and it rallied a bit into the 11 a.m. EST London close — and chopped quietly sideways from there.  The dollar index finished the holiday-shortened Monday session at 96.80 down 10 basis points from Friday’s close.  Click to enlarge.

With the U.S. markets close on Monday, there are no 6-month dollar index, HUI, Silver 7, mint sales…or anything else.

But Europe was still open for business — and the folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, February 15 — and this is what they had to report.  There was 11,408 troy ounces added to their gold ETF — but there was 41,314 troy ounces removed from their silver ETF.

Nick Laird passed around a bunch of charts on the weekend — and here are two of them.  The first shows the monthly withdrawal from the Shanghai Gold Exchange for JanuaryThey took out 218.54 metric tonnes that month — and here’s Nick’s most excellent chart updated with that change.  Click to enlarge.

This second chart shows the monthly and cumulative withdrawals from the Shanghai Gold Exchange since they opened back in January of 2008.  Of course the withdrawals in January are the same as shown in the previous chart…218.54 metric tonnes.  But cumulatively over the last eleven years, there has been 17,332 tonnes withdrawn.  That’s a lot.  Click to enlarge.

I have a decent number of stories for you today, quite a few of which are precious metal-related.


4,823 U.S. Banks Have Disappeared Since 1999

At the end of 1999, the year that President Bill Clinton and his  Treasury Secretary Robert Rubin brokered the deal to repeal the Glass-Steagall Act of 1933 and allow the casino investment banks on Wall Street to gobble up deposit-taking banks, there were 10,220 federally insured banks and savings institutions in the United States. Today, that number stands at 5,397, a decline of 47 percent according to the Federal Deposit Insurance Corporation (FDIC). What exactly happened to those disappeared banks?

We examined FDIC data to see if the sharp falloff in bank numbers was from failures or mergers. We found that the vast majority of the decline resulted from banks being absorbed in mergers. By the end of 2005, six years after the repeal of Glass-Steagall, the U.S. still had 8,832 federally insured banking institutions. But in just that year alone, 315 banks were lost to mergers. By 2010, the number of U.S. banking institutions had dropped to 7,657 with 197 institutions absorbed that year through mergers. In years 2015, 2016 and 2017, there were a total of 786 federally insured banking institutions absorbed through mergers.

The loss of competition in banking services has unleashed an unprecedented concentration of the life savings of Americans being held as deposits at a handful of behemoth Wall Street banks which simultaneously engage in high risk securities and derivatives trading – the very combination that led to the epic Wall Street banking collapses in 2008 and the 1930s.

This commentary appeared on the Internet site on Monday sometime — and I thank Larry Galearis for sharing it with us.  Another link to it is here.

Hands Off Venezuela: Historic Stance at the United Nations against U.S. Imperialism

In a spectacular display of solidarity and strength, envoys from such distant capitals as Beijing and Havana, Moscow and Tehran, Pyongyang and Caracas, Damascus and Managua and numerous other states stood together, side by side, in front of the United Nations Security Council, declaring their determination to protect the U.N. Charter and International Law, and holding sacrosanct the sovereignty and inviolability of each member state.

All these present, and approximately 50 more aligned, are states whose combined populations comprise more than half the people of the world, and all have been victimized and pauperized by the predations of neoliberal capitalist states bleeding the wealth of their peoples.

As Venezuelan Foreign Minister Jorge Arreaza read out their new statement, declaring the illegality of unilateral coercive economic sanctions, and territorial invasions, it became obvious that the power of this new solidarity, which includes China, Russia, Cuba, DPRK, Syria, Iran, Palestine, Nicaragua, Venezuela, etc. constitutes a formidable force which Western capitalism will antagonize at its own peril. This is a long overdue counter-force to Western domination of the United Nations, a domination based on money, on the large payments enabling the U.S. and other capitalist powers to bribe, threaten and otherwise control the direction of the U.N., and distort and destroy the independence, impartiality and integrity which the U.N. requires in order to maintain its legitimacy, and implement the sustained global peace and justice for which Franklin Delano Roosevelt created it.

Since the collapse of the USSR it has become blatantly clear at the U.N. (and virtually everywhere else) that money talks – indeed money shrieks . It therefore now seems obvious that the combined U.N. dues of these newly affiliated nations probably exceeds the contributions of the United States to the United Nations, and, if skillfully managed, this new organization of hitherto ravaged states will now have the power to threaten to withhold their combined dues, threatening a strike would could paralyze the United Nations unless their own interests, and not solely the interest of the United States and Saudi Arabia, are respected, and their own voices honored. There is incessant talk of the need for reform of the United Nations. It is probable that this new organization within the U.N. is the reform that is necessary – indeed inevitable.

The above commentary is all there is to this very interesting news item that put in an appearance on the Internet site.  There’s an embedded photo in the story that speaks volumes as well.  I thank Tolling Jennings for sending it along — and another link to it is here.

U.S. elites remain incapable of understanding China — Pepe Escobar

A new report on U.S. policy toward China launched by the Asia Society in New York is another example of how supposedly bipartisan U.S. intellectual elites, instead of offering impartial advice, do little more than parrot Washington’s talking points, failing to admit they know nothing of substance about the existential “threats” posed by Russia and China.

The report ‘Course Correction: Toward an Effective and Sustainable China Policy‘ was written in collaboration with the 21st Century Chinese Center at the University of California, San Diego. Orville Schell, one of the chairs of the Task Force Report, should be seen as one of the least biased among an uneven basket of self-declared U.S. experts on China.

Still, he frames the report as trying to find a way between “confronting China” and “accommodating China.” That does not include “respecting” China – considering all the nation’s achievements 40 years after the reforms launched by Little Helmsman Deng Xiaoping.

Then Schell admits his experts are left “wondering what’s going on in the upper reaches of the leadership in China.” That’s even more serious, implying no intel on the ground.

So we’re left with China-bashing. We learn of devious attacks against the “rules-based global order” – which is always not so subtly equated with the “interests and values of the United States;” China’s “mercantilist zero-sum policies;”and the “lavishly funded state-led effort to build China into a high-tech superpower” – as if no country in the Global South should be allowed to go high-tech.

Well, dear reader, I’m sure that the U.S. deep state understands China all too well — and the only way that the U.S. can remain “the exceptional nation” is suppress or destroy the economies of any countries that get in the way of that.  They can be small countries, or large ones…but the end is the same, no country will be allowed to challenge the U.S. on any front.  This is just the Wolfowitz Doctrine in action.  This commentary from Pepe was posted on Internet site on Sunday sometime — and I thank Larry Galearis for pointing it out.  Another link to it is here.

Carmakers to Face More Pain as Sales in China Keep Sliding

Car sales in China continued to decline in January after their first full-year slump in more than two decades, adding to pressure on automakers who bet heavily on the market amid waning demand for cars from the U.S. to Europe.

Passenger vehicle wholesales fell 17.7 percent year-on-year, the biggest drop since the market began to contract in the middle of last year, while retail sales had their eighth consecutive monthly decline, industry groups reported Monday.

Downward pressure is still there,” Gu Yatao, a Beijing-based auto analyst with Roland Berger, said before the figures were released. “The government isn’t adopting stimulating policies to give the market a shot in the arm.”

The persisting slump leaves carmakers with few places to go for sales growth. The markets in Europe and North America are shrinking as the increasing availability of ride-hailing and car-sharing services makes it less necessary to own a car. Japan is sputtering too, while volumes in other smaller markets aren’t enough to offset the declines in the biggest sales regions.

Sales in China continue to be suppressed as the world’s second-largest economy slows and negotiations with the U.S. for a trade-war truce drag on. Consumers stayed away from showrooms even with discounting by dealerships ahead of the Chinese New Year Holiday.

This Bloomberg news item showed up on their Internet site at 7:53 p.m. Pacific Standard Time on Sunday evening — and was updated about three hours later.  Another link to it is here.

Hochschild Mining halts Peruvian mine on low silver prices

Precious metals miner Hochschild Mining has been forced to halt operations at its Arcata gold and silver mine in Peru, saying that low silver prices had left the company little choice aside from suspension.

Hochschild, which operates three mines in southern Peru and one in southern Argentina, said Arcata would be on “full care and maintenance” by the second quarter of 2019.

This decision has been expected but is still disappointing for the organization … but the continuing low silver price over some years and current geological conditions leaves us no option,” chief executive officer Ignacio Bustamante said in a statement.

Spot silver prices have gained as much as 15% since bottoming out in November. But while the metal is currently trading at around $15.70 per ounce, prices have been on a steady downward path since peaking above $20 per ounce in June 2016, partly due to slower industrial demand.

Another mining firm that won’t stand up to JPMorgan and the CME Group.  This silver-related news story showed up on the Internet site late last week — and I thank Mark Barooshian for sending it our way on Saturday.  Another link to it is here.

Russia and China’s Gold Age? — Paul Goncharoff

February in Moscow is like a sweet and sour dish, one day frigid and snowy and the next balmy and rainy, either way it is a treat that keeps surprising. One good thing about Russian winters is that you get a chance to sit down and talk with people in depth and at length in the toasty indoors. As an executive, this is invaluable as it can indicate trends and potential changes before they might occur. One rule of thumb to keep in mind is that if you hear a similar story from three of more people who don’t know each other, even if it sounds bizarre don’t discard it out of hand – chances are there is some truth to it and is worth a review.

What has been making the rounds these days inside the city is the likelihood that Russia’s Finance Ministry is seriously considering making physical gold more accessible for individuals and companies by eliminating the current 20% VAT charge on purchases. It looks likely that this is in the cards in real time.

This would also play a small role in further de-dollarizing the Russian economy and attracting some funds back into Russia for rouble priced physical gold accounts. It is viewed as strong stable insurance against the current and expected currency related trade volatility. One only has to look at the price of gold over time in the many sovereign currencies of the planet, especially the rouble, to appreciate how well it has served to secure value especially against the U.S. dollar.

There are quite a few Russians whom I have spoken with who can hardly wait until the VAT surcharge on gold buying is removed. It will not replace the “almighty” dollar or Euro, but it will afford a level of wealth security long sought after among individual Russians, and play a role in stemming the outflow of capital from the country.

My feelings exactly — and I’ve said so before on numerous occasions — and I couldn’t have said it better myself.  This very worthwhile commentary was posted on the Internet site very recently judging by the content, but there is no dateline on the article.  It’s certainly worth reading — and it’s something I found on the Sharps Pixley website yesterday.  Another link to it is here.

China gold demand off to decent 2019 start — Lawrie Williams

The first 2019 announcement for Shanghai Gold Exchange gold withdrawals for January, a little delayed because of the Chinese New Year holiday, was marginally below last year’s relatively high figure but is still at a high monthly level so could be considered a decent start to the year.  However January withdrawal figures do tend to be reasonably high due to good demand ahead of the Lunar New Year festivities and associated gift giving.

It is obviously too early yet to draw any conclusions re likely Chinese demand for 2019 – we will really need to wait for a couple more months’ withdrawal figure once data for the February short holiday month data is behind us, but the reasonably strong start will give the gold bulls at least a little comfort given how important Chinese demand is to the global picture.  China gold data, as represented by SGE gold withdrawals, had appeared to be slipping a little from the middle of 2018, but had appeared to be stabilising towards the year end and the January figure will have served to confirm that pattern.

We tend to equate Chinese total gold demand with cumulative SGE figures given they seem to provide a fair correlation with the sum of known Chinese gold imports from those countries which provide a country-by-country breakdown of their own gold exports, plus the nation’s own gold output, plus unreported imports (Russian figures may be important here) plus an allowance for scrap conversion.  These SGE figures seem to provide a closer reality  with total Chinese domestic annual gold accumulations than the published demand figure provided by the China Gold Association and the major analytical consultancies specialising in precious metals like GFMS and Metals Focus.

This commentary from Lawrie appeared on the Sharps Pixley website yesterday — and another link to it is here.

Australia’s gold also may have been ‘lost’ at the Bank of England

Venezuela’s gold isn’t the only monetary metal raising questions about the custodianship afforded by the Bank of England, Bullion Star gold researcher Ronan Manly writes today.

According to Manly, Australia’s gold reserves were largely packed off to London years ago and leased into the market and then sealed off from audits and freedom-of-information requests. Indeed, Manly writes, there’s no verifying the true location of the Australian reserves anymore.

Manly’s analysis comes in an interview with Russia Today, headlined “Hey, UK! It’s Not Just Venezuela — What Happened to Australia’s Gold?” — and it was posted on the Internet site at 12:43 p.m. Moscow time on their Monday afternoon, which was 4:43 a.m. in Washington — EST plus 8 hours.  I borrowed ‘all of the above’ plus the headline, from a GATA dispatch yesterday.  But the first person through the door with this article was ‘Moroccan’ reader George Whyte.  Another link to it is here.

The Perth Mint Has Recast This Gold Bar More Than 65,000 Times

Seven times a day, the Perth Mint hosts a public gold pour at its downtown location in the Western Australian city. A 14-pound gold bar is melted at 1,945F (1,063C) in a crucible made of clay and graphite. The liquid is then poured into a cast-iron mold, where it hardens into a bar in about 90 seconds. It needs an additional 15 seconds from the time it’s placed in a quenching tank filled with tap water until the bar is “cool to the touch,” Chief Executive Officer Richard Hayes says. [I think that would be more like 15 minutes! – Ed]

The same gold bar has been melted and cast more than 65,000 times since the mint opened its doors to visitors in 1993, Hayes says. In that time, it has been worth as little as $51,000—in 1999—to as much as $390,000—in 2011. At a price of $1,310 an ounce on Feb. 14 the bar was worth about $267,000. At the end of each day, it’s stored in one of the mint’s vaults.

Australia is the world’s second-largest producer of gold (after China), and the Perth Mint refines about 90 percent of the country’s production at a separate secured facility outside the city center. It mints coins and bars from both Australian gold and metal sourced from other countries, representing about 13 percent of global production, Hayes says.

The Perth Mint opened in 1899 after the discovery of rich mineral deposits caused a gold rush in the region. Owned by the government of Western Australia since 1970, the mint sold about A$18.9 billion ($13.3 billion) in pure gold, silver, and platinum bullion bars and coins in 2018.

Well, dear reader, Australia may now find itself in No. 3 in world gold production after Russia’s production numbers for 2018 were released last week.  This short, but very interesting 3-photo essay put in an appearance on the Bloomberg website last Friday — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.


I moved from Edmonton, Alberta to Merritt, B.C…which is right next door — about eleven hours by car.  I made the move in October — and I thought I’d take you on a tour of the inter-mountain country of the Thompson PlateauMerritt is situated in the Nicola Valley at the confluence of the Coldwater and Nicola rivers.  But calling them rivers is being kind.  Even calling them large streams would be a compliment at the height of summer.  But they’re big enough that salmon come up the Fraser and Thompson Rivers to spawn in them every year, so I guess they’re big enough.

The first photo is from a hill just outside of town looking roughly north east.  All the green fields are only that way because they’re irrigated, as the climate here is semi-arid.  The green field that touches the left side of the first photo is the one that appears in the foreground of the second shot.  The second photo is taken of the west side of the town, looking a bit north of east.  Click to enlarge for both.


With New York closed, it was a ‘nothing’ sort of day…except for palladium, of course.  It’s still attempting to seek its true supply/demand valuation, but isn’t being allowed.  Today was just another day of that sort of price activity in that precious metal.

There are no 6-month precious metal charts, either.

Since I’ve got nothing else, here are the list of precious metal companies…mostly junior silver producers/explorers…that I own shares in.  I get enough e-mails from subscribers asking for it, that I thought I I’d include it in today’s column.  I also own a couple of precious metal mutual funds as well.  So you can see that I’m still “all in”. The ‘click to enlarge‘ feature does not help with this chart.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price was sold quietly and unevenly lower starting almost as soon as trading began in New York at 6:00 p.m. EST on Monday evening.  The current low was set at exactly 3:00 p.m. China Standard Time on their Tuesday afternoon.  It has rallied a bit since, but is still down 80 cents the ounce.  Silver’s price path has been very similar — and it’s lower by a penny.  Platinum has been trading unsteadily a few dollars above unchanged in Far East trading on their Tuesday — and is up 3 bucks currently.  Palladium is doing its own thing…trying to seek its true market value — and as was up 31 dollars about twenty minutes before the Zurich open.  But it has been batted lower — and is now up only 26 as Zurich opens.

Net HFT gold volume is pretty light at just over 29,000 contracts — and there’s only 823 contracts worth of roll-over/switch volume in this precious metal.  Net HFT silver volume is light as well…just about 6,000 contracts — and there’s 1,862 contracts worth of roll-over/switch volume on top of that.  All of these numbers of net of Monday’s volume figures.

The dollar index opened up a couple of basis points once trading began at 7:45 p.m. EST in New York on Monday evening, which was 8:45 a.m. CST in Shanghai.  It crawled quietly higher from there — and its current high tick was set at 2:48 p.m. CST on their Tuesday afternoon.  It has dropped a bit from there — and is up 11 basis points from its close on Monday…as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.

On Wednesday we get the minutes from the U.S. Fed’s most recent meeting — and on the following day we get the same data from the ECB — and not only will it be of interest to see what they had to say…but also how the markets reacts to this data…or should I say, allowed to react to it.

And as I post today’s column on the website at 4:02 a.m. EST, I note that the gold price is up a bit more as the first hour of London trading draws to a close. It’s up $1.50 at the moment — and silver is now up 2 cents. Platinum is up 4 dollars — and palladium been struggling to regain lost ground since it was capped and turned lower just before the Zurich open — and it’s up 29 bucks currently.

Gross gold volume is coming up on 47,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is about 43,800 contracts. Net HFT silver volume is a bit over 8,500 contracts — and there’s 2,204 contracts worth of roll-over/switch volume in that precious metal.

The dollar index has continue to tick lower during the first hour of London/Zurich trading — and is up 2 basis points from Monday’s close…as of 8:45 a.m. GMT/9:45 a.m. CET.

Today, we get the next COT Report…this one for positions held at the close of COMEX trading on January 29 — and as I mentioned in my Friday missive, because of the rallies in both gold and silver towards the end of that reporting week, I’m certainly expecting some increase in the commercial net short positions in both those precious metals.

That’s all for today — and I’ll see you here tomorrow.