13 March 2019 — Wednesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price hit its low tick of the day, such as it was, a few minute before 8 a.m. China Standard Time on their Tuesday morning — and from there, edged higher until 2 p.m. CST. It was sold a bit lower until 8 a.m. in London — and then began to chop quietly higher until the 1:30 p.m. COMEX close in New York. The rally became somewhat more substantial at that point, passing through the $1,300 spot mark with no issues…but was stopped a dollar or so short of its 50-day moving average around 3 p.m. EDT in the thinly-traded after-hours market. From that point, it chopped quietly sideways until trading ended at 5:00 p.m. EDT.
The gold price traded in a ten dollar price range on Tuesday, so the low and high ticks aren’t worth looking up.
Gold finished the day at $1,301.40 spot, up $8.50 on the day. Net volume was very quiet once again at a bit under 158,000 contracts — and there was around 48,500 contracts worth of roll-over/switch volume in this precious metal.
The silver price traded pretty flat for the first three hours after trading began at 6:00 p.m. EST in New York on Monday evening, but began to head higher around 9 a.m. CST on their Tuesday morning. That lasted until shortly after 11 a.m. over there — and the price crawled quietly sideways until 8:30 a.m. in New York. Then, like for gold at that juncture, the price jumped higher, but was immediately capped the moment it stuck its nose above $15.45 spot. About fifteen minutes after that, the price was sold lower until around 1 p.m. EDT — and from there, crawled higher until shortly after 3 p.m. in after-hours trading. It was sold a few pennies lower into the 5:00 p.m. close from there.
The low and high ticks in silver were reported by the CME Group as $15.31 and $15.49 in the May contract.
Silver was closed in New York yesterday at $15.41 spot, up 13 cents on the day. Net volume was also pretty quiet at just under 49,000 contracts — and there was a bit under 6,000 contracts worth of roll-over/switch volume on top of that.
The platinum price headed very unevenly higher starting at 6:00 p.m. EST in New York on Monday evening — and obviously ran into ‘something’ at 9 a.m. in New York, as it wasn’t allowed above the $835 spot. Once the afternoon gold fix was in, it was sold down a bit until a few minutes after 12 o’clock noon in New York trading. It crept higher until a few minutes after 3 p.m. in the thinly-traded after-hours market — and then traded flat into the close from there. Platinum finished the Tuesday session at $833 spot, up 17 dollars on the day.
The palladium price rose and fell a few dollars during most of the Far East trading session yesterday — and its low of the day, such as it was, came shortly before 2:30 p.m. China Standard Time on their Tuesday afternoon. It then rallied 20 bucks by shortly before 11 a.m. in Zurich. From there it faded a bit, before retesting its high of the day around 9 a.m. in New York. It was sold back to the unchanged mark by 1 p.m. EDT — and it rallied a small handful of dollars into the close from there. Palladium was closed at $1,519 spot, up 5 dollars on the day.
The dollar index closed very late on Monday afternoon in New York at 97.22 — and opened down 17 basis points the moment that trading began around 7:45 p.m. EDT on Monday evening in New York. It crept a few basis points higher until 1 p.m. CST on their Tuesday afternoon — and then headed lower until a few minutes before 9 a.m. in London. It rallied a bit from there, making it back into positive territory by a bit between 11 and 12 o’clock noon GMT — and then began to head lower once again, with the 96.86 low tick being set around 3:25 p.m. EDT in New York. It appeared to get ‘rescued’ at that point — and made it back above the 97.00 mark by a whisker by shortly before 5 p.m…but then sank into the close, finishing the Tuesday session at 96.94…down 28 basis points on the day.
Here’s the DXY chart for Tuesday, courtesy of Bloomberg. Click to enlarge.
And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site. The delta between its close…96.90…and the close on the DXY chart above, was 4 basis points on Tuesday. Click to enlarge.
The gold stocks opened up a bit — and then wandered aimlessly higher-to-sideways until around 2 p.m. EDT in New York trading. Then the rally got a bit more serious — and the HUI closed higher by 2.36 percent — and almost on its high of the day.
The silver equities rallied to their respective highs by around 11:45 a.m. EDT on Tuesday morning. They dipped a bit until 2 p.m. — and then made it back to their previous high by 3 p.m. EDT. From that juncture they edged a bit lower into the close. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 2.92 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, updated with yesterday’s trading doji. Click to enlarge as well.
The CME Daily Delivery Report showed that 1 gold and 292 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.
The lone gold contract was issued by Advantage — and stopped by JPMorgan. Both transactions involved their respective client accounts.
In silver, the four short/issuers were ADM, International F.C. Stone, ABN Amro and Advantage…with 157, 62, 58 and 15 contracts out of their respective client accounts. The largest long/stopper by far was JPMorgan as usual, with 139 contracts in total…47 for its own account, plus 92 for its client account. In second and third place came the CME Group and Advantage, with 71 and 56 contracts…the former for its own account — and the latter for its client account.
The 71 contracts stopped by the CME Group were immediately reissued as 71×5=355 one-thousand ounce silver mini contracts. ADM and Advantage were the sole long/stoppers, picking up 274 and 81 contracts for their respective client accounts.
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 March declined by 8 contracts, leaving 38 still open, minus the 1 contract mentioned a few paragraphs ago. Monday’s Daily Delivery Report showed that 8 gold contracts were actually posted for delivery today, so the deliveries and change in open interest matched for once. Silver o.i. in March rose by 3 contracts, leaving 417 still around, minus the 292 mentioned a few paragraphs ago. Monday’s Daily Delivery Report showed that 14 silver contracts were posted for delivery today, so that means that 14+3=17 more silver contracts just got added to the March delivery month.
It was another day where gold open interest blew out by a bunch, this time by 14,631 contracts. That will be whittled down somewhat when the Final Report for Tuesday is posted on the CME’s website later this morning EDT. The reason I’m pointing it as an anomaly, is because total open interest in silver actually fell by 820 contracts yesterday.
Ted and I spent some time discussing this on the phone yesterday — and he can’t image it being anything other than spread trades based on the current price action. Neither can I — and Friday’s COT Report will tell all…hopefully, as yesterday’s data will be in it.
There was another addition to GLD yesterday, as an authorized participant deposited 94,460 troy ounces…which is within 2 troy ounces of the deposit that was made into GLD on Monday. There were no reported changes in SLV.
After “Showing Signs of Life” on Monday, 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, as 147,228 troy ounces was shipped out of HSBC USA…but every troy ounce of that ended up in JPMorgan’s vault. The link to that is here.
There was decent activity in silver, as 1,180,058 troy ounces was received — and 394,983 troy ounce was shipped out. In the ‘in’ category, there was a smallish truckload…544,651 troy ounces…dropped off at Canada’s Scotiabank — and another truckload…600,586 troy ounces was picked up by CNT. The remaining 34,819 troy ounces found a home over at JPMorgan. In the ‘out’ category, there was 310,545 troy ounces withdrawn from Brink’s, Inc. — and lesser amounts were shipped out of HSBC USA and CNT…54,988 troy ounces and 29,449 troy ounces, respectively. There was also a smallish transfer of 14,383 troy ounces from the Eligible category — and into Registered — and that occurred at CNT. The link to this activity is here.
I haven’t made mention of JPMorgan COMEX silver stash lately. Here’s the chart from Nick showing their current inventory level…147.8 million troy ounces…vs. everybody else. Brink’s, Inc. is in very distant second place with 54.4 million troy ounces. Click to enlarge.
It was also pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday. They received 6,500 of them — but shipped out only 207. All this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here’s two of the usual charts that Nick passes around for free to a select group on the weekend. They show the total gold and silver holdings in all known [and published] Depositories, Mutual Funds and ETFs, as of the close of business on Friday, March 8. The gold depositories continue their short-term decline, shedding 428,000 troy ounces during the reporting week — and in silver, there was 504,000 troy ounces added during the the same one-week period. Click to enlarge for both.
It was another quiet news day — and I don’t have much for you.
Today [Tuesday] at 4:15pm EDT, DoubleLine founder Jeff Gundlach is holding his latest live webcast open to investors and casual listeners, titled enticingly ‘Highway to Hell‘, and which we assume will discuss either Brexit, the U.S.-China trade deal, the long-term US debt picture or how this, latest asset bubble finally ends.
Gundlach, as usual, starts with one of his favorite charts, the one showing the global central bank balance sheet level juxtaposed to the global market, as the background for the Fed’s “180 degree turn” in the stock market’s recent rebound, which is understandable since the “S&P was and is in a bear market.”
If that wasn’t bad enough, Gundlach also said that stocks will take out the December low during the course of 2019 and markets will roll over earlier than they did last year.
Shifting from the market to the economy, Gundlach shows that global economic momentum is getting worse across the globe…
Going back to one of his favorite topics, the relentless growth of U.S. debt, Gundlach shows the following chart of debt by sector. Needless to say, it is troubling…
And tied to that, the following new warning on the U.S. interest expense: “The U.S. interest expense is projected by the CBO to explode higher starting yesterday.”
And speaking of the next president, Gundlach suggests that if the economy falls into recession and Trump gets thrown out, we might get the chance to see how MMT, i.e. helicopter money, really works with the next, socialist, president.
Perhaps this is also why to Gundlach “the next big move for the dollar is lower.”
This longish chart-filled article showed up on the Zero Hedge website at 4:44 p.m. on Tuesday afternoon EDT — and I thank Brad Robertson for this one. Another link to it is here. There was also a 9:52 minute video interview with Gundlach on thesoundingline.com Internet site yesterday. It’s headlined “The Biggest Fed Reversal in Memory” — and the link to that is here. It’s from Brad as well.
Donald Trump produced his budget proposal yesterday. As expected, it includes a big increase for the military; more money than even the bamboozlers at the Pentagon know what to do with.
The New York Times:
President Trump sent Congress on Monday a record $4.75 trillion budget request that proposes an increase in military spending and sharp cuts to domestic programs like education and environmental protection for the 2020 fiscal year.
Mr. Trump’s budget, the largest in federal history, includes a nearly 5 percent increase in military spending – which is more than the Pentagon had asked for – and an additional $8.6 billion for construction of a border wall with Mexico.
So, what do you think, Dear Reader? What is the biggest threat that the U.S. faces? Terrorists? Russia? China? Or, its own lack of financial self-control?
This commentary from Bill put in an appearance on the bonnerandpartners.com Internet site early on Tuesday morning EDT — and another link to it is here.
Theresa May’s E.U. withdrawal deal has been rejected by MPs by an overwhelming majority for a second time, with just 17 days to go to Brexit.
MPs voted down the prime minister’s deal by 149 — a smaller margin than when they rejected it in January.
Mrs May said MPs will now get a vote on whether the U.K. should leave the E.U. without a deal and, if that fails, on whether Brexit should be delayed.
She said Tory MPs will get a free vote on a no-deal Brexit.
That means they can vote with their conscience rather than following the orders of party managers — an unusual move for a vote on a major policy, with Labour saying it showed she had “given up any pretence of leading the country“.
This news item was posted on the bbc.com Internet site yesterday sometime — and I thank Swedish reader Patrik Ekdahl for sending along. Another link to it is here. There was a follow-up Reuters story on this development headlined “No more talks planned with E.U. on Brexit for now – May’s spokesman” — and it’s linked here. I found it on Doug Noland’s website.
Deutsche Bank shares are down this morning after a critical supervisory-board member has signaled strong internal resistance to the planned rescue (sorry, merger) with Commerzbank.
Bloomberg reports that Jan Duscheck, an official with the Ver.di union and a key labor representative on Deutsche Bank’s supervisory board, opposes the merger, saying it would threaten thousands of jobs and fail to shore up Germany’s finance sector. The stance is hardening as talks behind the scenes gradually advance.
“We reject a merger,” Duscheck — who has served on Deutsche Bank’s supervisory board since 2016 — said in an e-mailed statement. The deal would make the combined bank even more susceptible to a hostile takeover from abroad and “would not create a national champion,” he said, taking a rare public stand.
Employee representatives are powerful forces in German companies, generally making up half the seats on supervisory boards, which hire and fire senior executives and sign off on major strategy decisions.
“At least 10,000 further jobs would be directly threatened,” Duscheck said.
“That would be in addition to jobs that would probably have to go in the future because the merged bank, seen from today, would not achieve the growth expected of it.”
It is clear that the hurdles for completion of this deal are high and getting higher. So what happens next? Lehman here we come?
This Zero Hedge news item was posted on their Internet site at 11:16 a.m. EDT on Tuesday morning — and I thank Brad Robertson for this story as well. Another link to it is here.
What Iran is billing as President Hassan Rouhani’s first “historic” and landmark visit to Iraq, both the United States and Israel are seeing as a provocative move to solidify Iran’s influence over Baghdad.
Just prior to arriving in Iraq Monday, Rouhani said on state television that his country is determined to “strengthen its brotherly ties” with neighboring Iraq. It’s expected that the the three-day visit will result in a wide range of economic deals in fields such as energy, transport, and agriculture; however, as Israel’s Haaretz writes based on a Reuters report:
The visit is a strong message to the United States and its regional allies that Iran still dominates Baghdad, a key arena for rising tension between Washington and Tehran.
Reuters further noted that Shi’ite Iran will is using the official visit to gain all the trade and energy export deals it can as Tehran suffers amidst U.S.-led international sanctions, and as it continues to demand more concrete action from Europe in the wake of last year’s U.S. pullout of the JCPOA nuclear deal.
“We are very much interested to expand our ties with Iraq, particularly our transport cooperation,” Rohani said at Tehran’s Mehrabad airport. “We have important projects that will be discussed during this visit.”
Crucially, a senior Iranian official who is accompanying Rohani on the trip told Reuters:
“Iraq is another channel for Iran to bypass America’s unjust sanctions imposed on Iran. This trip will provide opportunities for Iran’s economy.”
But this is ultimately the lasting legacy of Bush and Cheney’s 2003 regime change war and toppling of Saddam Hussein: they overthrew a Sunni Baath secular dictator in exchange for entrenching pro-Iran influence in Baghdad, to the delight of the Ayatollahs.
Washington can now behold the fruits of its neocon interventionist labor as Iran’s president is granted a hero’s welcome in the heart of Baghdad (this after Iran and Iraq were very recently bitter enemies) — all the while U.S. officials in the same city will look on helplessly from the sidelines.
This is a classic case of “reaping what you sow“. This news story appeared on the Zero Hedge website at 4:15 a.m. on Tuesday morning EDT — and it’s the final contribution of the day from Brad Robertson. Another link to it is here.
When you exchange a $20 bill for two $10 bills, you don’t pay sales tax on the transaction, even though, theoretically, you are “buying” the tens. The notion is utterly preposterous. Yet if you purchase a gold coin that was created by the U.S. Mint and is legally usable for commercial transactions, in some states you have to pay sales tax on that coin. Uncle Sam also says people who buy and sell such coins are liable for capital gains taxes. Of course, you would never buy a silver dollar from the mint for, say, $35 and then use it to pay for a $1 candy bar, but the point is that such coins are legal tender.
That’s why the White House should follow the recommendation of the American Principles Project, an organization that, among other things, advocates sound money: “President Trump should direct the U.S. Treasury Department to issue a rule ending taxation on U.S.-minted gold coins.” While we’re at it, let’s add silver ones as well.
It’s only a matter of time before Washington undermines the value of the dollar again, and people should be able to hedge themselves against such depredation. And someday soon, Congress should allow Americans to use alternative currencies for domestic commercial transactions if they so wish.
The above three paragraphs are all there is to this very brief commentary by Steve that appeared in today’s issued of Forbes. I found this in a GATA dispatch the Chris Powell filed from Taipei, Taiwan very early on their Wednesday morning. Another link to the hard copy is here.
The PHOTOS and the FUNNIES
About a 30-minute drive north of Hope on the Trans-Canada Highway is the village/hamlet of Yale, B.C. The town has a spectacular natural landscape –and generally considered to be on the dividing line between the Coast and the Interior regions of the British Columbia Mainland. Immediately north of the town, the Fraser Canyon begins and the river is generally considered unnavigable past this point — and it is. The first photo is at the first tunnel, the Yale tunnel, just north of the town on the Trans-Canada Highway. The second photo was taken a few hundred feet from the first one, looking down the Fraser River…Yale, such as it is, is just out of sight around the bend in the river. The Trans-Canada Highway is on the right — and the CPR tracks on the left and below — and barely distinguishable between them and the river, is what’s left of the old ‘highway’ that was built in 1922. The click to enlarge feature only helps with the second photo.
This next photo was taken from that old highway — and it has been mostly bypassed and/or buried under the new Trans-Canada Highway just above it. Click to enlarge.
Another very quiet trading session, especially the volumes in silver and gold. There was a bit of a tick up in both starting at 8:30 a.m. in COMEX trading in New York, but both those attempted breakouts, such as they were, were quickly capped and turned lower — and both finished higher by a bit, with gold closed a hair below its 50-day moving average.
I’m not sure what, if anything, should be read into Tuesday’s price action…as it’s impossible to make any assumptions based on one day’s trading. However, I like the overall ‘feel’ of the market. But, having said that, ‘da boyz’ could still do some serious price damage without exerting themselves too much.
Here are the 6-month charts for the Big 6 commodities — and it should be noted that all four precious metal high price closes came after the COMEX close, so those data points don’t appear on their respective Tuesday dojis on the charts below. Click to enlarge for all.
And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price dipped a bit once trading began at 6:00 p.m. EDT in New York on Tuesday evening — and then began to edge unevenly higher. That lasted until around 10:40 a.m. China Standard Time on their Wednesday morning. The current high tick of the day was set at that point — and the gold price was sold down a dollar at that juncture — and has been trading quietly sideways since. Gold is currently up $2.80 the ounce. The silver price has been trading quietly and unevenly sideways in Far East trading as well — and is currently up a penny. Platinum traded a dollar or so either side of unchanged in Far East trading on their Wednesday– and that’s where it sits at the moment. Palladium was sold down five bucks or so in mid-morning trading in Shanghai — and has been trading sideways since — and is down 2 dollars as Zurich opens.
Gross gold volume is a hair over 42,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is bit over 39,000 contracts. Net HFT silver volume is 8,200 contracts — and there’s only 192 contracts worth of roll-over/switch volume in that precious metal.
The dollar index opened up 7 basis points once trading began around 7:45 a.m. in New York on Sunday evening, which was 8:45 a.m. CST in Shanghai. It dropped back below the 97.00 mark within an hour or so — and has been trading quietly sideways since — and is up 3 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.
Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report. I said yesterday that I wasn’t at all inclined to hazard a guess as to what that report might show. But now that I have all five trading days to look at on the above 6-month charts, I’ll speculate that we might see some increases in the commercial net short positions in both. This would be particularly true of silver, since it penetrated its 200-day moving average during the reporting week.
NOTE: Because of the switch over to Daylight Saving Time in North America this past Sunday, I’m not staying up the extra hour to record the first hour of London/Zurich trading. Britain and Europe don’t go on British Summer Time [BST] and Central European Summer Time [CEST] for another two weeks. Once they do the switch-over to BST and CEST, then I’ll resume the usual routine of commenting on the first hour of trading in both those markets.
That’s all I have for today — and I’ll see you here tomorrow.