02 March 2019 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price traded quietly sideways in morning trading in the Far East on their Friday. But starting at 1 p.m. China Standard Time on their Friday afternoon, Ted’s “night moves” began in the very thinly-traded GLOBEX market. The tiny rally going into the afternoon London gold fix was capped at exactly 10:00 a.m. EST — and the price pressure began once again. The low tick was set at precisely 4:00 p.m. — and gold rallied a few dollars into the 5:00 p.m. close from there.
The high and low ticks were reported by the CME Group as $1,316.50 and $1,296.90 in the April contract.
Gold was closed at $1,293.00 spot, down an even $20.00 on the day. Not surprisingly, net volume was very heavy at just under 307,500 contracts, as gold was closed a hair below its 50-day moving average — and there was a bit under 38,000 contracts worth of roll-over/switch volume on top of that.
‘Da Boyz’ guided silver along the same engineered price path as gold, with all the same price inflection points…most likely to the minute — and second. The low in silver was also set at exactly 4:00 p.m. EST in after-hours trading — and it rallied a bit into the 5:00 p.m. close of trading from there.
The high and low ticks in silver were recorded as $15.665 and $15.235 in the May contract.
Silver was closed on Friday in New York at $15.185 spot, down 38.5 cents from Thursday — and back below not only its 50-day moving average, but its 200-day moving average as well. Net volume was very heavy at a hair under 98,500 contracts. Roll-over/switch volume in this precious metal amounted to 5,500 contracts.
No quarter was shown in platinum either. After getting hammered lower at the Zurich open, its rally attempt going into the afternoon gold fix in London met the same fate as both silver and gold — and it was sold lower until its $855 low tick was set shortly after 2 p.m. EST in the thinly-traded after-hours market. All attempts to break it below that price failed after that — and it ticked a few dollars higher into the 5:00 p.m. EST close. Platinum was closed at $857 spot, down 12 bucks from Thursday.
Palladium met the same fate as platinum at the Zurich open — and its rally into the 10 a.m. EST afternoon gold fix in London met the same fate as well…as did the brief rally that followed. From that point it was sold quietly lower until around 2:30 p.m. in after-hours trading — and it didn’t do much after that. Palladium was closed on Friday at $1,525 spot, up 3 dollars on the day — and off its high tick by at least 15.
The dollar index closed very late on Thursday afternoon in New York at 96.16 — and opened up 5 basis points once trading began around 7:45 p.m. EST on Thursday evening, which was 8:45 a.m. in Shanghai. It began to chop quietly, but unevenly higher from that juncture until about 8:40 a.m. in London. From there it began to head lower in a very wide trading range until precisely 10 a.m. in New York, which coincided exactly with the afternoon gold fix in London — and the price caps on all four precious metals in COMEX trading in New York. The low tick of the day…96.07…was set at that time — and the usual ‘gentle hands’ guided the dollar index out of the red — and up to its 96.55 high, which came around 3:15 p.m. EST. It sold off a bit from there into the close — and the dollar index finished the Friday session at 96.53…up 37 basis points from Thursday’s close.
Without doubt, the co-ordination between what happened between the low in the dollar index — and the capping, then sharp decline in precious metal prices at precisely 10:00 a.m. EST yesterday in New York was a very carefully co-ordinated move. It was a pretty skinny DXY rally to hang an engineered price decline of that size on. It was market rigging on a massive scale.
Here’s the DXY chart courtesy of Bloomberg once again. Click to enlarge.
And here’s the 6-month U.S. dollar index courtesy of the folks over at the stockcharts.com Internet site — and the delta between its close…96.45…and the close on the DXY chart above, was 8 basis points on Friday. Click to enlarge.
The gold stocks gapped down a bit over a percent at the open of the equity markets in New York on Friday morning, but were quickly back into the green. That state of affairs lasted until a few minutes before 10:30 a.m. EST — and the were quietly sold lower until around 3:25 p.m. They traded sideways into the 4:00 p.m. close from there. The HUI finished down 2.14 percent.
The silver equities followed the same price path as the gold shares, although their sojourn into positive territory lasted only a few seconds around 10:25 a.m. in New York. The rest is the same. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 3.98 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, updated with Friday’s data. Click to enlarge.
Here are the usual charts from Nick that show what’s been happening for the week, month-to-date — and year-to-date. The first one shows the changes in gold, silver, platinum and palladium for the past trading week, in both percent and dollar and cents terms, as of their Friday closes in New York — along with the changes in the HUI and the Silver 7 Index.
Here’s the weekly chart — and as you can see, it’s pretty ugly…with almost all the damage coming since the cut-off on Tuesday for next week’s COT Report, which we’ll get in the next COT Report on this coming Tuesday. There’s nothing happy about this chart — and you can thank JPMorgan et al for that. Click to enlarge.
I won’t bother with the month-to-date chart, as it’s only one day old — and that’s data that I’ve already covered above.
The year-to-date chart still shows green across the board, except for the silver price. The silver equities continue to outperform their golden brethren when you compare them to the gains/losses of their respective underlying precious metals. But that’s very cold comfort at a time like this. Click to enlarge.
Once again, it was the “same old, same old“…at least for the moment. It’s very hard to tell how far and hard the commercial traders will push their advantage — and ring the proverbial cash register on the Manged Money longs. But as Ted pointed out on the phone yesterday, it’s their world at the moment — and they can do whatever they want…the DoJ investigation over at JPMorgan be damned.
The CME Daily Delivery Report for Day 3 of March deliveries showed that 52 gold and 351 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.
In gold, the three largest short/issuers were ABN Amro, Advantage and Marex Spec. They issued 23, 14 and 14 contracts out of their respective client accounts. The only long/stopper that really mattered was JPMorgan, stopping 36 for its client account. In very distant second spot was Advantage, picking up 9 contracts for their client account as well.
In silver, of the eight short/issuers in total, the only three that mattered were International F.C. Stone, ADM and Advantage, with 112, 100 and 86 contracts out of their respective client accounts. There were six long stoppers in total and, as always, the biggest was JPMorgan, stopping 166 contracts…59 for its own account, plus another 107 for clients. In second and third place were Morgan Stanley and Advantage, picking up 92 and 48 contracts for their respective client accounts.
The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Friday trading session showed that gold open interest in March declined by 57 contracts, leaving 183 still open, minus the 52 contracts mentioned a few paragraphs ago. Thursday’s Daily Delivery Report showed that 66 gold contracts were actually posted for delivery today, so that means that 66-57=9 more gold contracts just got added to the March delivery month. Silver o.i. in March fell by 397 contracts, leaving 1,038 still around, minus the 351 contracts mentioned a few paragraphs ago. Thursday’s Daily Delivery Report showed that 530 silver contracts were actually posted for delivery on Monday, so that means that 530-397=133 more silver contracts were added to the March delivery month.
For the first three days of deliveries in March, there have been 244 gold contracts issued and stopped — and that number in silver is 4,220.
There was a big withdrawal from GLD yesterday, as an authorized participant took out 377,888 troy ounces. There were no reported changes in SLV.
There was no sales report from the U.S. Mint on Friday.
For the month of February, the mint sold 12,500 troy ounces of gold eagles — 6,000 one-ounce 24K gold buffaloes — 2,400 one-ounce platinum eagles — and 2,157,500 silver eagles. Here are Nick’s charts showing those sales. Note that the gold sales include both gold eagles and gold buffaloes. Click to enlarge for both.
There was no physical movement in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday. But there was a fairly hefty transfer of 147,288 troy ounces from the Registered category — and back into Eligible. That occurred at HSBC USA. I won’t bother linking this.
In silver, nothing was reported received — and 745,275 troy ounces was shipped out. Of the amount shipped out, the only movement really worth commenting on was the 700,983 troy ounces that was shipped out of Canada’s Scotiabank. There was also 38,384 troy ounces shipped out of the International Depository service of Delaware, plus 5,907 troy ounces out of Brink’s, Inc. The link to all that is here.
There was quite a bit of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday. They reported receiving 5,000 kilobars, but shipped out only 115 of them. All this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.
Yesterday I posted a chart in this space that showed the ‘London Bias’…the fact that since the COMEX futures market in gold came into being on January 1, 1975…that virtually without exception, over the last 49 years and 2 months, the London p.m. fix was always lower than the a.m. fix…a trading period of only 4.5 hours. A $100 investment on January 2, 1970 had been whittled down to the $9.52 by the end of trading on February 28, 2019 because of this ‘bias’.
As promised yesterday, here’s the chart that shows what your $100 investment would like after 49 years and 2 months if you’d bought your COMEX gold position at the afternoon gold fix in London, held it through the remainder of the New York trading session — and then all night long in Far East trading — and sold that position at the 10:30 a.m. GMT morning gold fix in London. Then waiting for 4.5 hours until the next afternoon gold fix in London — and reinvested the proceeds of the previous 19.5 hours of trading activity outside of the fixes.
What this chart shows is that your original $100 investment 49 years and 2 months ago would have morphed into $39,511.20 at the close of trading on February 28, 2019. Click to enlarge.
That’s the beauty of compounding over that length of time. That investment really began to sail when the now long-deceased Washington Agreement on Gold became a fact on 26 September 1999 — and that inflection point is very visible on this chart. That was twenty years ago, which was about the time that I got involved in the precious metals in a serious way.
The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, February 19 actually showed a small decrease in the Commercial net short position in silver, but a jaw-dropping increase in gold.
In silver, the Commercial net short position declined by 1,620 contracts, or 8.1 million troy ounces of paper silver.
They arrived at that number by increasing their long position by 1,280 contracts — and they also reduced their short position by 340 contracts — and it’s the sum of 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 whole lot more, as they reduced their long position by 1,857 contracts, plus they added 1,244 short contracts — and it’s the sum of those two numbers…3,101 contracts…that represents their change for the reporting week.
The difference, as it always is, was made up by the traders in the other two categories, as both went long on a net basis during the reporting week…the ‘Nonreportable’/small traders more so than the traders in the ‘Other Reportables’ category.
I won’t bother with the snip from the Disaggregated COT Report, as there’s not a lot to see.
The Commercial net short position in silver now stands at 73,874 COMEX contracts, or 369.4 million troy ounces of paper silver.
The Big 4 Commercial traders are net short 31.8 percent of the total open interest in COMEX silver — and the Big 8…which obviously includes the Big 4…are short 46.3 percent of the total open interest.
Ted mentioned on the phone yesterday that despite the small improvement in the Commercial net short position in silver in yesterday’s COT Report, the short position held by the Big COMEX traders is now at another new record high…102,240 COMEX contracts. That’s 510 million troy ounces, or 218 days/7-plus months of world silver production.
Ted pegs JPMorgan’s short position at around 25,000 contracts, but admits that it could be as much as 10,000 contracts higher than that. Next Friday’s Bank Participation Report, which will be based on current up-to-date market conditions, will certainly help him recalibrate that number.
Here’s the 3-year COT Report for silver, updated with yesterday’s tiny changes…which are basically immaterial. Click to enlarge.
The next COT Report on Tuesday is hard to call as to what may be in it, but it’s already yesterday’s news in every respect, as is the above COT Report, after what’s happened since the cut-off on Tuesday, February 26.
In gold, the commercial net short position blew out by an astounding 40,366 COMEX contracts, or 4.04 million troy ounces of paper gold.
They arrived at that number by reducing their long position by 13,515 contracts — and they also increased their short position by a whopping 26,851 contracts — and it’s the sum of those two numbers that represents their change for the reporting week.
Under the hood in the Disaggregated COT Report, the Managed Money traders were responsible for almost every contract of that change in the commercial net short position, as they increased their long position by 34,046 contracts — and also reduced their short position by 5,712 contracts — and it’s the sum of those two number…39,758 contracts…that represents their change for the reporting week.
The difference between that number — and the commercial net short position…40,366 minus 39,758 equals 608 contracts. That tiny amount, as it always is, was made up by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader categories. The former category increased their net long position by a bit — and the latter increased their short position by a small amount.
Here’s a snip from the Disaggregated COT Report, so you can see these changes for yourself. Click to enlarge.
The big banks in the Producer/Merchant category went short about 14,300 COMEX contracts on a net basis. But has been the case for a while now, the traders in the ‘Swap Dealer’ category did the real heavy lifting in the commercial category, as they increased their short position by around 26,100 contracts. The sum of those two numbers [rounded off] is the change in the commercial net short position in gold.
The commercial net short position in gold has now blow out to 16.65 million troy ounces, which is pretty close to market neutral.
The Big 4 traders/banks are net short 29.2 percent of the entire COMEX futures market in gold — and the Big 8 are net short 41.6 percent of the COMEX futures market…and not too far behind the silver numbers.
Here’s the 3-year COT chart for gold — and the weekly change is far more than stark. Click to enlarge.
Like for silver, what was in the COT Report is already ancient history — as will be the data in the next COT Report on Tuesday, which will be for positions held at the close of COMEX trading on Tuesday, February 26.
Next Friday’s COT Report and companion Bank Participation Report [for positions held at the close of COMEX trading on Tuesday, March 5] will show us the current status of the COMEX futures market…the first up-to-date reports since mid-December 2018.
I only have a tiny handful of stories for you, including two on Venezuela that I’ve been saving for today’s column because of content and length reasons. There’s no Doug Noland commentary, either.
Following government shutdown delays, data for December and January spending and income has just been released and its a bloodbath.
Confirming the collapse in retail sales that was called an outlier, December personal income fell 0.1% MoM (against expectations of a 0.3% rise) – the worst drop since Jan 2013; while personal spending plunged 0.5% MoM in January – the worst drop since Sept 2009! Click to enlarge.
Finally, the reason why the economy collapsed in December is that as a result of the plunge in the market and the government shutdown, U.S. consumers stopped spending and the savings rate soared…
Is terrible news on America’s consumer, great news for the market? We shall see.
This chart-filled news item appeared on the Zero Hedge website at 8:42 a.m. on Friday morning EST — and it’s the first of several offerings from Brad Robertson. Another link to it is here.
Another week of global bond yields, earnings expectations, and macro-economic data signaling sh*t is hitting the fan as stocks push higher and higher on surging central bank balance sheets and global money supply…
Chinese stocks saw the best week since 2015 (mainly thanks to Monday’s utter farce)…
Mixed picture in Europe with FTSE 100 the big laggard on endless Brexit headlines and Italy up most just because nothing terrible happened this week…
Mixed bag in the U.S. markets this week no matter how many dead cat bounces hit. NASDAQ outperformed dramatically, Trannies worst, Dow clung to unchanged and S&P was all about 2,800…
The Dow desperately tried to close above 26,032 (but failed), ending its weekly win streak at 9.
At what point does Jay Powell look himself in the mirror and realize what a farce his entire life’s work has become.
This chart-filled commentary showed up on the Zero Hedge website at 4:02 p.m. EST on Friday afternoon — and it’s another contribution from Brad Robertson. Another link to it is here.
Are Secretary of State Mike Pompeo, National Security Adviser John Bolton and (farcically titled) Special Envoy for Restoring Democracy to Venezuela, Elliott Abrams — agents of influence for Russia and China? The idea has a lot more going for it than most of the ridiculous paranoia sweeping Washington over the past years.
If Russia and China really wanted to subvert the national security of the United States, they would seek to plunge Washington into a completely new, open-ended war with no practical resolution in sight on another continent far away from either of them where the United States itself had absolutely no major strategic interests at all, apart from fantasies of domination and greed.
Such a war would also serve the purpose of burning up an increasing share of the defense budget that otherwise could be spent on modernizing the U.S. armed forces.
Repeated congressional testimony over the past two years by Service chiefs confirms that these forces remain woefully aging and out of date despite record size defense budgets. This is testimony to the incompetence, corruption and sheer wastefulness of the military-industrial-congressional-complex (MICC).
Most of all, such a war would weaken the U.S. armed forces and distract them from what is now supposed to be their primary strategic goal, as set out by the Trump administration itself of focusing on great power competition, primarily with Russia and China.
The sudden obsession with provoking a full-scale military confrontation with Venezuela does not fit this ambitious agenda: Instead it subverts it and guarantees U.S. failure and defeat.
[During his 24 years as a senior foreign correspondent for The Washington Times and United Press International, Martin Sieff reported from more than 70 nations and covered 12 wars. He has specialized in U.S. and global economic issues.]
This commentary/opinion piece put in an appearance on the strategic-culture.org Internet site last Sunday — and I though it best that I save it for my Saturday missive. I thank Roy Stephens for sending it along — and another link to it is here. I have another offering from Roy on this issue. It’s a bit on the longish side, but in-depth and worth reading if you have the interest. It was posted on the consortiumnews.com Internet site eight days ago — and is headlined “The War on Venezuela is Built on Lies — John Pilger“.
Update (10:50 am EST): The Pakistani foreign minister says Wing Commander Abhinandan Varthaman, the Indian pilot who was shot down and captured earlier this week during the first aerial scuffle between India in Pakistan in nearly half a century, has now been released. Local TV stations in both countries are running footage from the border.
The international community breathed a sigh of relief on Thursday after Pakistani Prime Minister Imran Khan said a captured Indian air force pilot would be released as a “goodwill gesture” to prevent the latest conflict between the two nuclear-armed neighbors from escalating.
But it’s beginning to look like that burst of optimism was premature.
Cross-border clashes erupted along “line of control” that separates Indian-controlled and Pakistani-controlled Kashmir. Exchanges of conventional weapons fire have been reported in in Bala Kote, Mendhar, Jammu and Kashmir, according to local media reports. The fire comes as Pakistan has reportedly delayed the return of Wing Commander Abhinandan Varthaman, who is being hailed as a hero in India after he was shot down Wednesday in the first bout of aerial combat between India and Pakistan in nearly fifty years.
This Zero Hedge story was posted on their website at 10:05 a.m. EST on Friday morning — and it’s the third and final contribution of the day from Brad Robertson. Another link to it is here.
Gold demand in India improved this week due to a fall in local prices, while some investors in other major Asian centres sold the metal back to make use of relatively higher prices while delaying purchases on expectations of a further correction.
“Jewellers are buying in a phased manner as prices have corrected. They are expecting an improvement in retail demand in coming weeks,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.
“Higher premiums may have something to do with the weak import volume in January,” said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS, adding that gold imports in China were weaker than expected in January despite higher demand.
This Reuters news story, co-filed from Mumbai and Bengaluru, appeared on their website at 2:34 a.m. on Friday morning EST — and it’s something I found on the Sharps Pixley website. Another link to it is here.
The PHOTOS and the FUNNIES
Here are three of the many photos I took while we were in Lillooet. It’s one of the most interesting towns I’ve ever been in anywhere, both from a geological and geographical perspective. My daughter and I were both amazed by this place. Part of the vineyards from the Fort Berens Estate Winery photo, appear on the extreme land hand side of photo No. 1, just over half way up. Needless to say, we bought a few bottles — and their Meritage was excellent. I’ll have a couple of more photos of this place in my Tuesday column — and their even more amazing than these ones. Click to enlarge.
Today’s pop ‘blast from the past’ was one that I was thinking about all week after hearing the last few bars of it on my car radio. This pop group is as equally famous in their country as their cars and a certain home furnishings company. The song is unique among pop songs of the period, opening with an unaccompanied classical keyboard in the key of D-minor — and it was the song that really rocketed them to international super-stardom. The link is here. And if you’re interested in the bass cover to this tune, the link to that is here.
While on the subject of the key of D-minor….in the classical repertoire, two of the most famous works in that key were composed by Mozart — and both were featured in the fictionalized biography about his life in the movie Amadeus. The first is the justly famous Queen of the Night Aria …a challenge to all but the most gifted sopranos — and his just as beloved Piano Concerto No. 20 K. 466…which I’ve featured before on several occasions — and will again today. The link to the aria is here — and the piano concerto is here.
Well it certainly looks like the usual wash, rinse, spin, repeat cycle at the moment…as the commercial traders rang the cash register on the Managed Money traders once again…for fun, profit — and price management purposes.
We’ve seen this movie before on many occasions, as it’s been going on for decades now. As reader Hugh Stout pointed out in an e-mail me to me yesterday…”I feel like Bill Murray in ‘Groundhog Day’“. He would be right about that.
The usual band of clowns that call themselves precious metal analysts will continue to deny it with their dying breaths, but anyone with an open mind and a rudimentary understanding of how the Commitment of Traders works, knows better.
Of course the miners, with the notable exception of Keith Neumeyer over at First Majestic Silver, could care less, as their industry, their respective companies…plus their associated shareholders…us…get keelhauled once again. And as I’ve said countless times over the last twenty years, where is their fiduciary responsibility to us, the stockholders, pray tell? Probably the same place they hide their gonads.
The commercial traders are masters at their craft — and going about it with particular zeal this time around. I don’t ever remember an instance when three of the four big moving average in both gold and silver got broken — and then closed below them on the same day. In silver, it was both the 50 and 200-day — and in gold it was the 50-day. Of course — and as I’ve already pointed out at the top of this column, volumes were huge in both.
But whatever the changes were in the commercial net short position…or with the Managed Money traders, we won’t know about it until next Friday’s COT Report, when we’re caught up to date after the government shut-down that started in December. And as I stated before, the COT Report we get next Tuesday, for positions held at the close of COMEX trading on Tuesday, February 26…is already “yesterday’s news” in every respect…as was the one we got yesterday.
Here are the 6-month charts for all four precious metals, plus copper and WTIC — and I should point out that the low ticks and closes for all four precious metals occurred after the COMEX close — and don’t appear on their respective Friday dojis on the charts below. Click to enlarge.
It was a Friday trading session where the power-that-be/PPT were at battle stations pretty much all day long. They started with Ted’s “night moves” in the precious metals at the London/Zurich opens, the usual ‘gentle hands’ rescued the dollar index at precisely 10:00 a.m. in New York, the afternoon gold fix in London — and renewed their attack on the precious metals at that precise moment as well. Then, a few minutes before 12 o’clock noon, they rescued the Dow as it was about to slide into negative territory on the day…a big no-no, especially after a strong open at 9:30 a.m. EST.
Chris Powell’s quote…”There are no markets anymore, only interventions“…was in full view for all to see yesterday.
Next Friday we get the latest job numbers and, like all the other stats from the BLS, they won’t be worth the paper they’re printed on…just like their statistics on consumer inflation…all pure bulls hit.
Without doubt the deep state is now up to their proverbial necks in market management on an hourly basis now — and also without doubt, the Fed…along with the other major central banks of the world are in a blind panic about keeping everything afloat.
As was stated in a Zero Hedge story by Tyler Durden in the Critical Reads section above…”At what point does Jay Powell look himself in the mirror and realize what a farce his entire life’s work has become.” That can be said of all central bankers in the world at the moment, as their only option left is to run the printing presses white hot in order to prolong the inevitable as long as possible. It’s boiled down to “print…inflate…or die”
Their doing to die anyway, as their attempts are doomed to fail at some point, as have all money printing schemes throughout all of recorded history. Their path is the road taken by Zimbabwe…plus many others much further in the past..
As I’ve pointed out on several occasions over the years, this experiment in fiat currency…which is now very long in the tooth at 48 years old…will now end worse than badly. And of course the longer they hold off the inevitable, the worse the absolutely guaranteed future denouement will be.
The powers-that-be know that too — and it’s still up in the air as to whether that event will come by circumstance…or by design.
I’m done for the day — and the week — and I await the 6:00 p.m. EST Sunday night open in New York with great interest.
See you here on Tuesday.