28 February 2019 — Thursday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price drifted quietly lower in Far East trading on their Wednesday — and that lasted until around 3 p.m. China Standard Time. From there it traded sideways until 11:00 a.m. GMT in London/8:00 a.m. in New York. There was a tiny spike higher that took it back to the unchanged mark on the day, but minutes later the selling pressure began — and the low tick of the day was set around 12:40 p.m. EST. The gold price recovered a few dollars before 1 p.m. — and then drifted quietly sideways until the market closed at 5:00 p.m. EST.
The high and low ticks were recorded by the CME Group as $1,332.00 and $1,318.40 in the April contract.
Gold was closed in New York on Wednesday at $1,319.40 spot, down $9.00 on the day. Net volume was pretty light once again at a bit under 176,000 contracts — and there was 23,000 contracts worth of roll-over/switch volume on top of that.
Except for a couple of price inflection point times, the price activity in silver was almost the same as it was in gold. It edged quietly lower until around 9:30 a.m. in London — and after that it was the same as it was for gold, except the low tick of the day was set minutes after 11:30 a.m. in New York — and the price really didn’t do much after that, although it was bounced off that low price a couple of more times between then and when the market closed at 5:00 p.m. EST.
The high and low ticks in this precious metal were reported by the CME Group as $15.92 and $15.645 in the March contract.
Silver was closed at $15.70 spot, down 18 cents from Tuesday. Net volume, which is now in the new front month of May, was nothing special at just under 48,000 contracts — and roll-over/switch volume was around 22,000 contracts.
The platinum price chopped quietly but unevenly sideways until around 10:30 a.m. in Zurich trading on their Wednesday morning — and then began to head higher. That rally culminated in a price spike that occurred minutes after the open of the equity markets in New York yesterday morning — and then it was smacked back to down a dollar on the day by minutes before noon in New York. From that point, it crept quietly higher going into the 5:00 p.m. EST close. Platinum finished the Wednesday session at $867 spot, up 8 bucks on the day, but would have obviously closed much higher, if allowed.
The palladium price was sold lower until 3:00 p.m. China Standard Time on their Wednesday afternoon — and then didn’t do much until 10 a.m. in Zurich trading. From that point it crept quietly higher until the COMEX open in New York — and minutes after the open of the equity markets in New York, the price was slammed lower, just like it was for platinum at that same moment. Palladium’s low tick took it back below $1,500 spot briefly. After that, it traded in a very similar fashion as platinum — and palladium was closed at $1,509 spot, down 35 dollars on the day.
The dollar index closed very late on Tuesday afternoon in New York at 96.00 — and opened up 6 basis points once trading began around 7:45 p.m. EST on Tuesday evening. It crawled quietly higher until around 2:40 p.m. China Standard Time on their Wednesday afternoon — and then began a quiet decline that ended around 11:30 a.m. in London at its 95.88 low tick. It crawled unsteadily higher for the next five hours — and all the rally gains that mattered occurred by around 11:30 a.m. in New York — and from that point, it crept quietly lower into the close. The dollar index finished the Wednesday session at 96.15, up 15 basis points on the day.
Here’s the usual DXY chart from Bloomberg. Click to enlarge.
Here’s the 6-month U.S. dollar index chart, courtesy of stockcharts.com — and the delta between its close…96.04…and the close on the DXY chart above, was 11 basis points on Wednesday. Click to enlarge.
The gold shares began to head unevenly lower as soon as the trading day started at 9:30 a.m. EST in New York on Wednesday morning — and their respective lows came at exactly 12:30 p.m. They crept quietly and unevenly higher from there until trading ended at 4:00 p.m. EST. The HUI finished down 1.93 percent.
The silver equities followed the same general price path as their golden brethren, except once their lows were in around 12:30 p.m. in New York trading, the chopped unevenly sideways until the 4:00 p.m. EST close. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 3.31 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart as well. Click to enlarge.
The CME Daily Delivery Report for first day deliveries in March showed that 126 gold and 3,339 silver contracts were posted for delivery on Friday.
In gold, the three short/issuers were Morgan Stanley, Advantage and ADM, with 67, 33 and 26 contracts out of their respective client accounts. There were seven long/stoppers in total. The three largest were JPMorgan, Marex Spec and ABN Amro, with 41, 33 and 22 contracts for their respective client accounts.
In silver, there were six long/stoppers in total — and by far the largest was Goldman Sachs with 1,998 contracts…1,683 from their in-house/proprietary trading account, plus 315 from their client account. In second and third place came International F.C. Stone and ABN Amro, with 466 and 461 contracts out of their respective client accounts. ADM came in fourth with 249 contracts from their client account. There were fifteen long/stoppers in total — and by far the largest was JPMorgan, picking up 1,552 of them…1,323 for its client account, plus another 229 for its own account. Morgan Stanley came in second, with 754 contracts…600 for clients — and 154 contracts for its own account. HSBC USA was in third spot with 424 contracts…321 for its client account, plus 103 for its own account.
The link to yesterday’s Issuers and Stoppers Report is here — and it’s worth a look, if you have the interest.
The Preliminary Report for the Wednesday trading session showed that gold open interest in March dropped by 202 contracts, leaving 335 still around, minus the 126 contracts mentioned a few paragraphs ago. Silver o.i. in March cratered by 10,654 contracts, leaving 4,663 still open, minus the 3,339 mentioned a few paragraphs ago.
The remainder of February deliveries will all be completed by the close of business today.
There were no reported changes in GLD for the second day in a row, but an authorized participant removed 609,619 troy ounces from SLV.
There was a tiny sales report from the U.S. Mint yesterday. They sold 1,000 troy ounces of gold eagles — and 600 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 Tuesday.
There was no silver reported received yesterday — and only 296,041 troy ounces was shipped out. Four different depositories were involved — and the two largest were HSBC USA with 205,292 troy ounces — and CNT, with 60,101 troy ounces. There was a big paper transfer from the Eligible category — and into Registered…1,135,046 troy ounces. That happened over at Brink’s, Inc. — and is undoubtedly slated for delivery in March. The link to this activity is here.
There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday. They received 1,000 of them — and shipped out 270. All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here are three charts that Nick Laird passed around very late on Wednesday afternoon PST. The first shows the gold imports and exports into and out of Switzerland…updated with January’s data. For that month, they imported 78.41 tonnes — and shipped out 63.95 tonnes. Click to enlarge.
These next two charts shows the countries from which the gold was imported in January — and the countries to which they exported gold that month. Click to enlarge for both.
I don’t have all that many stories for you today.
U.S. core factory orders (ex transports) fell for the second month in a row in December. This is the worst sequential drop since Feb 2016.
New orders ex-trans fell 0.6% in Dec. after falling 1.3% the prior month. Click to enlarge.
The headline factory orders rose 0.1% MoM (well below the 0.6% MoM gain expected).
Capital goods non-defense ex aircraft new orders for Dec. fall 1% after falling 1.1% in Nov.
Non-durables shipments for Dec. fall 1% after falling 2% in Nov.
Not a pretty picture, but it was an 8.0% drop in Defense spending that triggered the weakness – so we’re gonna need more war.
This very brief 1-chart Zero Hedge news item put in an appearance on their Internet site at 10:18 a.m. EST on Tuesday morning — and I thank Brad Robertson for this one. Another link to it is here.
After plunging further in December, January Pending Home Sales rebounded more than expected (+4.6% MoM vs +1.0% MoM exp) but remains lower YoY for the 13th straight month.
“A change in Federal Reserve policy and the reopening of the government were very beneficial to the market,” NAR Chief Economist Lawrence Yun said in a statement.
“Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”
On a Year-over-year basis, the rebound left Pending Home Sales down just 2.27% YoY, but that is still the 13th annual drop in a row…Click to enlarge.
The improvement signals buyers are returning to the market to take advantage of borrowing costs that have declined from an eight-year high in November, while the end of the partial government shutdown in late January may be encouraging buyers who were otherwise hesitant.
Bloomberg notes that the data also are in line with a jump in mortgage applications in January, and the Federal Reserve’s decision to be patient on interest-rate hikes may help sustain demand. U.S. employers in January also added jobs at the fastest rate in almost a year, supporting demand for major purchases such as homes.
This brief 2-chart news item showed up on the Zero Hedge website at 10:08 a.m. on Wednesday morning EST — and it’s the second contribution in a row from Brad Robertson. Another link to it is here.
The U.S. trade deficit of goods widened to $79.5b in December from $70.5b in November as exports fell 2.8% and imports rose 2.4%.
That compared with the median estimate of economists for $73.6 billion.
Exports of Industrial Supplies and Capital Goods plunged in December and imports of food and beverage surged.
This is the widest goods trade deficit in U.S. history. Click to enlarge.
Trump is not winning on this one!
This tiny Zero Hedge new item appeared on their Internet site at 8:36 a.m. EST on Wednesday morning — and it comes courtesy of Brad as well. Another link to it is here.
Yesterday, Fed Chair Jerome Powell made a starling admission,
“The U.S. federal government is on an unsustainable fiscal path,”Powell told the Senate Banking Committee, noting that “debt as a percentage of GDP is growing, and now growing sharply… And that is unsustainable by definition.” [Source: Yahoo! Finance]
What Powell said has been obvious to anyone with a functioning brain for years. However, we have to remember one key item…
This is the FED CHAIR talking… the person in charge of maintaining STABILITY for the financial system and who controls the printing the of the US currency… not just some talking head on TV.
So just how bad are the U.S.’s finances that the Fed Chair would be willing to admit this PUBLICLY?
Total US debt has just hit $22 trillion. The U.S. now has a Debt to GDP ratio of 105%. This is roughly where Greece was when it entered a debt crisis in 2010 (though there are certain key differences between the U.S.’s and Greece’s abilities to deal with their debt issues).
This commentary from the Phoenix Capital website was posted on the Zero Hedge Internet site at 9:22 a.m. on Wednesday morning EST — and I thank Larry Galearis for pointing it out. Another link to it is here.
“This Is Unprecedented Territory” – Pakistan Shoots Down 2 Indian Fighter Jets In Dramatic Border Conflict Escalation
One day after Indian fighter jets crossed into Pakistani territory to destroy a training camp purportedly belonging to the militant group that carried out one of the deadliest terror attacks in the 30-year history of the Kashmiri insurgency (Pakistan offered a different version of events), two Indian fighter jets have been shot down over Pakistani territory in what analysts described as the biggest escalation in tensions between the feuding neighbors since the end of the 1971 Indo-Pakistani war (which resulted in the creation of Bangladesh).
One Indian aircraft landed inside Pakistan-controlled Kashmir, and the other crashed on India’s side of the Line of Control, the border that runs across Kashmir, according to military spokesman Asif Ghafoor. Pakistan said one of the Indian pilots was injured and had received medical treatment, while the other had been taken into custody. “Both are under arrest and we are treating them with dignity,” he said during a press conference in Islamabad. India offered a contradictory version of events, saying it lost one MiG 21 fighter jet, and that one of its pilots was missing in action. It also said it shot down one Pakistani plane, though Pakistani has said no such plane was in service.
India’s ANI news agency is reporting that a Pakistan F-16 which violated Indian air space was shot down three kilometers within Pakistan territory in Lam Valley. Ghafoor said Pakistan didn’t use F-16 planes in the operation.
Meanwhile, Indian paramilitary forces clashed with Kashmir militants in India-controlled Kashmir on Wednesday. Two militants were killed. One analyst told Bloomberg that we are now in “unprecedented territory.”
This Zero Hedge story was posted on their Internet site at 9:23 a.m. EST on Wednesday morning — and it’s courtesy of Roy Stephens. Another link to it is here. There was a follow-up ZH story to this posted on their website at 6:00 p.m. EST yesterday evening. It’s headlined “Enraged India Amassing Tanks, 14,000 Bunkers Along Pakistan Border“.
At least 8 tonnes of gold were removed from the Venezuelan central bank’s vaults last week, an opposition legislator and three government sources told Reuters, in the latest sign of President Nicolas Maduro’s desperation to raise hard currency amid tightening sanctions.
The gold was removed in government vehicles between Wednesday and Friday last week when there were no regular security guards present at the bank, Legislator Angel Alvarado and the three government sources said.
“They plan to sell it abroad illegally,” Alvarado said in an interview.
The central bank did not respond to requests for comment.
This Reuters story, filed from Caracas, appeared on their Internet site at 12:09 p.m. EST on Wednesday afternoon — and was updated a few hours after that. I found it embedded in a GATA dispatch — and another link to it is here.
There’s no way to guess precisely where gold and silver prices may go – however, we do have historical examples that can be extrapolated for today’s economic climate. Join Mike Maloney as he updates the prices required for gold to account for the massive amount of base currency that is literally being printed as though it is going out of fashion.
Of course Mike conveniently forgets to mention the fact that the U.S. banks are sitting on the prices of gold and silver. I’m not disagreeing what Mike has to say, but it should be seen through the lens of the precious metals price management scheme that currently exists…courtesy of JPMorgan et al. This 11:37 minute video clip showed up on the goldsilver.com Internet site yesterday morning sometime — and I thank Jim Gullo for sending it our way. Another link to it is here.
Norilsk Nickel, the world’s largest palladium producer, said on Tuesday tighter emissions regulations in all major markets and flattish primary supply would widen a palladium deficit in 2019.
Prices for palladium, chiefly used in emission-curbing auto catalysts, hit a record high in London on Tuesday as a threatened strike by South African mine workers added to supply concerns in an already tight market.
Nornickel produces 40 percent of the world’s palladium from its Russian assets. The company estimated that gross palladium demand reached a record high of 10.7 million troy ounces in 2018, mostly driven by consumption in the automotive industry amid flat gross supply.
“(The) spot palladium market practically dried out” in 2018, Nornickel said. The company said the supply tightness was partly eased by the release of stocks from palladium ETFs (exchange-traded funds), which fell below 1 million ounces for the first time since 2009, and from Nornickel’s Global Palladium Fund.
Nornickel said in 2019 the global palladium market deficit is forecast at 800,000 ounces compared with 600,000 ounces in 2018, with consumption up by 500,000 ounces to 11.2 million ounces due to strong demand from autocatalyst producers.
This interesting Reuters article, filed from Moscow, was posted on their Internet site very early on Monday morning EST — and I plucked it from the Sharps Pixley website. Another link to it is here.
The PHOTOS and the FUNNIES
Today’s first photo was taken about 15 miles/24 kilometres south of Spence’s Bridge — and very close to Lytton. It’s another long CNR train crawling along the Thompson River. The Thompson river empties into the Fraser River at Lytton. Click to enlarge.
These next two photos were taken on the highway between Lytton and Lillooet in B.C. It’s a spectacular piece of winding road that commands your full attention at all times. The first photo is looking north up the Fraser River — and the second shot is taken looking over top of the trees and across the river at a very tiny homestead. It would be at least an hour’s drive from Lillooet via dirt/gravel road to get there, as there is no bridge over the river at Lytton. This is pure wilderness living. Click to enlarge.
It was another day where JPMorgan et al showed up to ensure that the precious metals were no safe harbour. First of all there’s this India/Pakistan dust-up over Kashmir that could get really out of hand, if the leaders of these countries don’t show some constraint. Add to that the China trade deal woes, a jittery bond market — and a weak stock market, it was most likely all the reason they needed to step in when they did.
But yesterday was also the last day for traders in the COMEX silver futures to exit their positions by the close of COMEX trading — and this price decline may have been an incentive for these traders to sell their positions, rather than roll them over.
Here are the 6-month charts for all four precious metals, plus copper and WTIC. Click to enlarge.
And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price edged a bit lower until the 2:15 p.m. afternoon gold fix in Shanghai on their Thursday afternoon. It has been moving higher since — and is currently up $2.10 an ounce. It was the same for silver — and it’s up 4 cents at the moment. Ditto for platinum — and it’s now back at unchanged. Palladium chopped around rather aimlessly in Far East trading — and it’s up 3 bucks as Zurich opens.
Net HFT gold volume is coming up on 36,500 contracts — and roll-over/switch volume is 1,111 contracts on top of that. Net HFT silver volume in May is pretty hefty already at around 11,500 contracts — and there’s only 308 contracts worth of roll-over/switch volume in this precious metal.
The dollar index opened down 6 basis points once trading commenced at around 7:45 p.m. EST in New York on Wednesday evening, which was 8:45 a.m. CST in Shanghai. It has been chopping quietly sideways ever since — and is down 4 basis points as of 7:45 a.m. GMT in London…8:45 a.m. CET in Zurich.
So, was yesterday’s price action in the precious metals a precursor for a really big engineered price decline in all of them…or just silver and gold? I don’t know, nor does anyone else.
As Ted Butler pointed out in his mid-week commentary to his paying subscribers yesterday, the concentration of the Big 8 traders on the short side in silver, is now more extreme than ever. And as I mentioned in my Bank Participation Report commentary in my Tuesday missive…the short position in COMEX silver futures by the world’s banks is at a record high.
So the table is set if they want to do the dirty. But can they or will they — and if so, when?
Like I said, I don’t know…so we wait some more.
And as I post today’s column on the website at 4:02 a.m. EST, I note that gold is now up $3.60 the ounce — and silver is up 5 cents. Platinum is now up 2 bucks, but palladium has just jumped higher — and is up 11 dollars as the first hour of Zurich trading draws to a close.
Gross gold volume is right around 51,000 contracts — and minus the tiny amount of roll-over/switch volume, net HFT gold volume is a bit under 48,500 contracts. Net HFT silver volume is now up to around 13,300 contracts — and roll-over/switch volume in that precious metal is a tiny 383 contracts.
The dollar index has dropped a bit in the last thirty or so minutes of trading — and is now down 12 basis points as of 8:45 a.m. GMT/9:45 a.m. CET.
That’s it for another day — and I’ll see you here on Friday.