Back in ‘Care and Maintenance’ Mode on Friday

16 March 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crawled a few dollars lower starting about two hours after trading began at 6:00 p.m. EDT in New York on Thursday evening.  That ended a few minutes before 11 a.m. China Standard Time on their Friday morning — and from that juncture the price began to rise very unsteadily.  That lasted until shortly before 9 a.m. in London — and the gold price really didn’t do much after that for the remainder of the Friday session, although a smallish rally that began early in the morning in New York was summarily dealt with once the afternoon gold fix in London was put to bed.

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

Gold finished the Friday session in New York at $1,302.30 spot, up $6.50 from Thursday’s close — and back above $1,300 spot…but not above its 50-day moving average.  Net gold volume was pretty light once again at just over 187,000 contracts — and there was just under 48,000 contracts worth of roll-over/switch volume out of April and into future months.

Silver was forced to follow the same general price path as gold.  Selling pressure in that precious metal appeared right at the noon silver fix in London/8 a.m. EDT in New York — and except for the tiny morning rally in this precious metal that was subsequently capped, it was sold quietly lower into the 5:00 p.m. close of trading.

The low and high closes in silver were reported by the CME Group as $15.165 and $1.39 in the May contract.

Silver was closed at $15.26 spot, up 11 cents on the day.  Net volume was just under 57,000 contracts — and there was 2,679 contracts worth of roll-over/switch volume on top of that.

The platinum price began to rise around 8 a.m. CST on their Friday morning — and that continued rather quietly until 1 p.m. in Zurich/8 a.m. in New York.  Starting at that point, the price was sold down about 9 bucks by around 9:15 a.m. EDT.  Its subsequent rally was dealt with at 10 a.m. EDT — and it chopped mostly lower until around noon — and then didn’t do much after that.  Platinum was closed at $828 spot, up 6 dollars on the day.

The palladium price was up about ten dollars by shortly after 10:30 a.m. in Zurich trading — and held in there until the COMEX open.  It was unevenly down hill from there — and palladium was closed at $1,532 spot, unchanged on the day.

The dollar index closed very late on Thursday afternoon in New York at 96.79 — and then opened down 7 basis points once trading began at 7:45 p.m. EDT on Thursday evening.  It made two attempts to break above unchanged on the day…the first time at 9:18 a.m. in Shanghai on their Friday morning — and again at precisely 9:00 a.m. EDT in New York.  Both attempts failed — and after the second attempt, it quickly fell to its 96.49 low tick, which came at 10:15 a.m. EDT.  It bounced off that low a few times before rallying by a bit — and then the index didn’t do much of anything after that.  The dollar index finished the Friday session in New York at 96.60…down 19 basis points from Thursday’s close.

Here’s the DXY chart courtesy of BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart courtesy of the folks over at stockcharts.com — and the delta between its close…96.05…and the close on the DXY chart above, was 55 basis points on Friday.  Click to enlarge.

The gold stocks gapped up a hair at the open — and then climbed to their respective highs by around 10:20 a.m. EDT in New York trading on Friday.  It was all down hill from there — and back into negative territory.  Their respective lows were set around 2:40 p.m. — and they rallied a bit from there — and back into the green by a hair.  The HUI closed up a less than impressive 0.18 percent.

The silver equities rallied smartly at the open — and were up about 2.5 percent by 10:20 a.m. in New York.  They headed lower from there, but never sank into the red…with their respective lows coming at the same time as gold’s…around 2:40 p.m. EDT.  From that point they headed sharply higher — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 2.24 percent.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart as well, updated with Friday’s gain.  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 that the gold shares were down a bit — and the silver equities up a bit, despite the fact that they’re underlying precious metals did the opposite during this past reporting week.  Click to enlarge.

Here is the month-to-date chart — and except for platinum and palladium, everything else is in the red by a bit.  That’s because of the engineered price declines in everything that began starting before February ended — and spilled over into March.  Nothing has been allowed to recover enough so far this month to put everything back in the green.  Click to enlarge.

The year-to-date chart — and with the exception of gold, still shows green across the board.  All of the big gains we had earlier have been taken back during this latest engineered price decline.  Of course palladium is in a world of its own.  Click to enlarge.

Hopefully, although there’s no guarantee, these latest engineered price declines look pretty much done — and I expect these charts to be far more rosy looking than they are now going forward. I’ll reserve complete judgement on that until we get past this coming week’s FOMC meeting.  And there’s still that DoJ thingy hanging over JPMorgan.  But four months have now passed since the announcement — and Jamie and his merry band of price riggers are still walking free — and still doing their shtick in the COMEX futures market.


The CME Daily Delivery Report showed that 20 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

The two short/issuers in gold were ADM and Advantage, with 18 and 2 contracts out of their respective client accounts.  The three long/stoppers were Advantage, JPMorgan and Morgan Stanley, with 9, 8 and 3 contracts for their respective client accounts as well.

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 remained unchanged at 38 contracts still open, minus the 20 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 1 gold contract was posted for delivery on Monday, so that means that 1 more gold contract was added to March deliveries.  Silver o.i. in March fell by 10 contracts, leaving 65 still around.  Thursday’s Daily Delivery Report showed that 10 silver contracts were actually posted for delivery on Monday…so the change in open interest and the deliveries matched for once.

So far this month there have been 357 gold contracts issued/reissued and stopped — and in silver, that number is 5,302.


There was a withdrawal from GLD yesterday, as an authorized participant removed 45,771 troy ounces.  There were no reported changes in SLV.

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

Month-to-date the mint has sold 8,500 troy ounces of gold eagles — 4,000 one-ounce 24K gold buffaloes — 2,000 one-ounce platinum eagles — and 850,000 silver eagles.

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday was 2,000 troy ounces that was received at HSBC USA.  I won’t bother linking this amount.

It was much busier in silver, as 600,104 troy ounces…one truckload…was received — and all of that ended up at CNT.  There was 831,953 troy ounces shipped out.  The largest of the ‘out’ movement was 775,844 troy ounces that departed Canada’s Scotiabank.  There was 29,836 troy ounces shipped out of Brink’s, Inc. — and 26,271 troy ounces that left the International Depository Services of Delaware.  The link to all this is here.

The only activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, was 3,215.100 troy ounces/100 kilobars that was shipped out of Brink’s, Inc.  I won’t bother linking this activity, either.


The Missorium of Theodosius I is a large ceremonial silver dish preserved in the Real Academia de la Historia, in Madrid, Spain. It was probably made in Constantinople for the tenth anniversary (decennalia) in 388 of the reign of the Emperor Theodosius I, the last Emperor to rule both the Eastern and Western Empires. It is one of the best surviving examples of Late Antique Imperial imagery and one of the finest examples of late Roman goldsmith work. It is the largest and most elaborate, and the most famous, of the 19 surviving vessels believed to represent largitio (“largesse”) or a “ceremonial gift given by the emperor to a civil or military official“.

The missorium comes from a treasure of silver objects that also included two plain silver cups, now missing, discovered by a labourer in 1847 in Almendralejo, close to Mérida in the Spanish province of Badajoz. When found it was folded flat along the line of the diagonal cut that now divides it into two pieces, which was made as part of an attempt to restore it, though an attempt at a cut along the same line may also have been made in antiquity. It is in good condition apart from the areas affected by this, but that it was folded may suggest it was being treated as bullion when deposited.

Its size is exceptional compared to other contemporary silver dishes, measuring 74 cm in diameter with a thickness which varies between 4 and 8 mm. It rests on a ring, 3 cm thick with a diameter of 26 cm, which was welded to the base. This ring has a Greek inscription specifying the official weight of the object…16.13 kg of silver, whereas the dish actually weighs only 15.35 kg…the difference could be because the dish was weighed and marked before being decorated: a piece of the dish is also missing.  Click to enlarge.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, March 12 turned out to be a pleasant surprise in both silver and gold…despite my comments on it Friday’s column.  Both showed further decreases in the commercial net short positions in both precious metals.  Ted was delighted.

In silver, the Commercial net short position declined by 5,980 contracts, or 29.9 million troy ounces of paper silver.

They arrived at that number by reducing their long position by 1,144 contracts, but the also reduced their short position by 7,124 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Ted mentioned the Big 4 traders reduced their short position by only about 800 contracts during the reporting week, which wasn’t overly large…but at least it was a move in the right direction.  He also figures that one or two of the Managed Money traders now has a large enough short position to be included in the ‘5 through 8’ large trader category.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bunch more.  They reduced their long position by 3,654 contracts, plus they added 4,715 short contracts — and it’s the sum of those two numbers…8,369 contracts…that represents their change for the reporting week.

The difference between that number — and the Commercial net short position…8,369 minus 5,980 equals 2,389 contracts.  That difference, as it always is, was made up by the traders in other two categories.  In actual fact it was the ‘Other Reportables’ that made up for all of that change, plus more, as they increased their long position by a bit over 2,900 contracts, because the ‘Nonreportable’/small traders increased their net short position by around 550 contracts.

Here’s the clip from the Disaggregated COT Report so you can see these changes for yourself.  Click to enlarge.

The Commercial net short position is down to 46,261 COMEX contracts, or 231.3 million troy ounces of paper silver, which can hardly be described as bullish…at least using an historical perspective.

Ted pegs JPMorgan’s short position at around 10,000 contracts, which is down from the 11-12,000 contracts he figured they were short in last week’s COT Report.

Here is the 3-year COT chart for silver — and the weekly changed should be noted.  Click to enlarge.

Not only was the COT Report in silver an unexpected positive surprise, there’s most likely been further improvement since the Tuesday cut-off for next week’s COT Report.


In gold, the commercial net short position declined by 5,523 COMEX contracts, or 552,300 troy ounces of paper gold.

They arrived at that number by increasing their long position by 36,297 contracts, but they also increased their short position by 30,774 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Ted said that the Big 4 traders only reduced their collective short positions by around 500 contracts, which is mostly immaterial.

Under the hood in the Disaggregated COT Report it was all Managed Money traders once again — and by a huge amount.  They reduced their long position by 2,610 contracts — and they also added a chunky 11,230 short contracts — and it’s the sum of those two numbers…13,840 COMEX contracts…that represents their change for the reporting week.

And as always, it was the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader category that made up the difference during the reporting week, as both increased their net long positions by very decent amounts.  Here’s the snip from the Disaggregated Report for gold, so you can see these changes for yourself.  Click to enlarge.

The commercial net short position in gold is now down to 10.85 million troy ounces, which Ted would certainly describe as bullish, especially when one considers how big these numbers were almost ten years ago.

As for the big increase in the commercial open interest in gold during the reporting week…around 60,000 contracts according to Ted…that turned out to be all spread trade related — and it is obvious to see in the Disaggregated Report in the snip above.

Ted also expressed the opinion that JPMorgan might actually be long the COMEX futures market in gold by a bit now.

Here is the 3-year COT chart for gold — and this week’s change should be noted, although it’s not overly large.  But because like for silver, it turned out to be a positive surprise…we should be thankful.  Click to enlarge.

And also like for silver, I certainly suspect that there has been further, albeit small, improvement in the commercial net short position in gold since the Tuesday cut-off for next week’s report.

As per usual, there was very little volume in thinly-traded palladium market during the reporting week.  The Managed Money traders reduced their net long position by 874 contracts — and the amounts traded by the commercial traders, along with the traders in the other two categories, was even less.  Total open interest in palladium is 26,743 contracts.   in Platinum, the Managed Money traders reduced their net long position by 7,223 contracts — and are now market neutral with around 22,300 contracts held both long…and short.  Total open interest in this precious metal is 77,461 contracts.  In copper, the Managed Money traders reduced their net long position by 6,287 COMEX contracts.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading last Tuesday. It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX. Click to enlarge.

For the current reporting week, the Big 4 traders are short 119 days of world silver production, which is down 1 day from last week’s report — and the ‘5 through 8’ large traders are short an additional 66 days of world silver production, also down 1 day from last week’s report — or a total of 185 days that the Big 8 are short, which is a hair over 6 months of world silver production, or about 431.8 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 187 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 231.3 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 431.8 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 431.8 minus 231.3 equals 200.5 million troy ounces.

The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 34-odd small commercial traders other than the Big 8, are net long that amount.

As stated earlier, Ted estimates JPMorgan’s short position at around 10,000 contracts, down 1-2,000 contracts from last week’s report, or 50 million troy ounces of paper silver held short.  That translates into about 21 days of world silver production.  That number also represents 11 percent of the short position of the Big 8 traders — and about 32 percent of the short position held by the Big 4 traders.

The Big 4 traders are short 119 days of world silver production — and once you subtract out the 21 days that JPM is short, that leaves 98 days split up between the other three large traders…a bit under 32 days that each is short.  And as I pointed out in the COT Report, JPMorgan is no longer the Big short in silver — and these numbers prove that once again.

The four traders in the ‘5 through 8’ category are short 66 days of world silver production in total, which is around 16.5 days of world silver production each.  The smallest of the traders in this category holds something less than 16.5 days — and the largest, something more than that amount.

Based on these numbers, I would suspect that JPMorgan is not only the smallest of the Big 4 traders, but any further reduction in their short position will drop them into the Big ‘5 through 8’ large trader category.

The Big 8 commercial traders are short 45.4 percent of the entire open interest in silver in the COMEX futures market, down a hair from the 46.0 percent they were short in last week’s report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be a bit over 50 percent.  In gold, it’s now 33.4 percent of the total COMEX open interest that the Big 8 are short, down quite a bit from the 37.4 percent they were short in last week’s report — and something under 40 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 41 days of world gold production, down 1 day from the 42 days they were short in last week’s COT Report.  The ‘5 through 8’ are short another 20 days of world production, up 1 day from the 19 days of world production they were short last week…for a total of 61 days of world gold production held short by the Big 8…unchanged from last week’s COT Report.  Based on these numbers, the Big 4 in gold hold about 67 percent of the total short position held by the Big 8.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 64, 69 and 80 percent respectively of the short positions held by the Big 8.  Silver is unchanged from a week ago, platinum is down 4 percentage points from last week — and palladium is up 1 percentage point.

Another very quiet news day — and I don’t have all that many stories for you.


CRITICAL READS

Foreigners Dumped Most U.S. Investments in a Decade in December/January

U.S. total cross-border investment outflows rose to $143.7b in January, that is the biggest net monthly outflow since Sept 2016…Click to enlarge.

…and is the largest two-month Net TIC outflows since February 2009.  Click to enlarge.

So, January’s stock market surge was all domestic flow driven.

This multi-chart Zero Hedge article appeared on their website at 6:21 p.m. EDT on Friday afternoon — and I thank Brad Robertson for this one.  Another link to it is here.


No One Knows How Monetary Policy Works — Doug Noland

At least from the perspective of my analytical framework – things continue to follow the worst-case scenario. What started with Greenspan, expanded dramatically with Bernanke, spread globally through the entire central bank community, further escalated by Draghi’s “whatever it takes” and Kuroda’s “it takes everything”, to yet further emboldened by Powell’s U-Turn and the accompanying flock of dovish central banks worldwide.

The heart of the issue is that monetary policy has come to chiefly function through a massive global infrastructure of speculative finance. Over the past three decades, things evolved from monetary policy operating subtly to encourage/discourage bank lending at the margin – to central banks expressly working to ensure that Trillions of levered holdings and perhaps tens of Trillions of speculative positions don’t face risk aversion and liquidation.

Speculative finance became the marginal source of liquidity for markets and economies generally. This all appears almost magical when the markets are rising, but in reality this is a highly unstable situation. We’re at the stage of the cycle where there is an incredible excess of finance that is speculative in character, while speculative market psychology has become deeply emboldened. The upshot is a bipolar world: too much risk-embracing finance chasing inflating markets, ensuring excessively loose financial conditions; or, when risk aversion hits, intense de-risking/deleveraging quickly leading to illiquidity, faltering markets and an abrupt tightening of financial conditions. There’s little middle-ground.

The entire notion of some so-called “neutral rate” is delusion. With markets so highly speculative and market-based finance dictating financial conditions, what policy rate would today equate with stable markets and economic conditions? Good luck with that.

It’s similar to the issue faced in 2007, although today’s global backdrop has closer parallels to 1929. Speculative finance and asset Bubbles run amok, while economic prospects dim. And nowhere are such dynamics more at play than in China.

Doug’s latest Credit Bubble Bulletin showed up on his website in the wee hours of Saturday morning — and it’s always worth reading.  Another link to it is here.


Pompeo Tells Senators They Don’t “Truly Care About Yemeni Lives” After Vote

This week the Senate voted to cease and desist U.S. military cooperation with allies Saudi Arabia and UAE in waging the war in Yemen, which according to the United Nations has created one of the worst humanitarian disasters in recent history. The Wednesday vote was was 54 to 46, including seven Republicans voting with the Democrats.

The “war powers” legislation has been widely seen as a direct rebuke of Trump’s foreign policy amid broader push-back over his defense of Saudi Arabia in the wake of last year’s Jamal Khashoggi killing at the Saudi embassy in Istanbul. The invocation of the War Powers Act of 1973 expressly prohibits U.S. military action not previously approved by Congress.

A House vote is expected soon, which would require President Trump to immediately withdraw American military support from the Saudi-led coalition. Trump said in December he would veto the Senate resolution if it ever reached his desk, which now appears likely.

Meanwhile Secretary of State Mike Pompeo on Friday heaped criticism on Congress for seeking to end Washington support for military efforts in Yemen, saying that if U.S. lawmakers “truly care about Yemeni lives“, they would back Riyadh.

Predictably, Pompeo framed U.S. involvement in Yemen in terms of preventing Iranian expansion in the broader Middle East.

If you want to put a face to a sociopathic personality type…Mike’s a card-carrying member.  This story from the Zero Hedge website was posted there at 5:30 p.m. EDT on Friday afternoon — and another link to it is here.


Change your course!“: Pompeo threatens ICC over U.S. war crimes probe

In an effort to threaten everyone into not investigating U.S. or Israeli war crimes in the International Criminal Court, Secretary of State Mike Pompeo says anyone involved in such probes will lose their visa and may be sanctioned.

The Washington war hawk said that action had to be taken because any investigation into alleged war crimes and torture committed by the United States would be a threat to U.S. rule of law. Visas will be pulled or denied for anyone who has been involved in or even requested an ICC investigation of “any U.S. personnel.”

The ICC is currently mulling over a request to investigate possible war crimes committed by the U.S. in Afghanistan in the course of the nearly 20-year conflict which has left over 100,000 Afghans dead. The international court prosecutor’s office says it has “reasonable basis” to believe that “war crimes and crimes against humanity” were, and continue to be, committed by foreign government forces in Afghanistan.

Pompeo openly stated that the action was intended to get the court to drop the potential investigation, and that Washington was ready to further increase the pressure if they don’t do as he says.

We are prepared to take additional steps, including economic sanctions, if the ICC does not change course,” he said.

The court responded later in the day saying they would continue their work “undeterred” by Pompeo’s aggressive statement, and act in accordance with international law rather than Washington’s threats.

This news story showed up on the rt.com Internet site at 4:56 p.m. Moscow time on their Friday afternoon, which was 9:56 a.m. in Washington — EDT plus 7 hours.  I thank George Whyte for pointing it out — and another link to it is here.


Crimean people would gladly vote to join Russia again, polls show

On March 16, 2014, Crimea held a referendum election on the question of rejoining the Russian Federation and seceding from Ukraine. The vote passed by an enormous margin, nearly 97% of the voters saying they wished to rejoin Russia. That number was amplified by the 83.1% voter turnout. Clearly this was a very pressing matter for the Crimean people.

But now it is just about five years later. Do the Crimean feel that their rejoining Russia has turned out well for them? TASS reported on a poll that was taken on 10 March to address this question. The agency that took the poll was the Russian Public Opinion Research Center.

Many people in the West may laugh at this title, but this is only because they are themselves steeped in the narrative that Russia is somehow still the Soviet Union, with repressive laws against freedom of speech, expression, the right to gather and so on. The results of the poll would also seem to lend further credence to this idea because the answer was overwhelmingly positive about the transition to Russian sovereignty for the province. The TASS report follows (with emphases added):

Crimea remains positive about the peninsula’s reunification with Russia and if the referendum was held today, 89% of Crimeans would support joining Russia, the Russian Public Opinion Research Center announced the results of a poll on Thursday in Simferopol.

The attitude towards Crimea’s reunification with Russia remains decisively positive. Eighty-nine percent would cast their votes to reunite with Russia if a referendum were held next Sunday, and 93% view the reunification in a positive light. The level of negative attitudes and support for an Autonomous Republic of Crimea as part of Ukraine are minimal (3% each), the data says. The survey also noted that across Russia, 85% of respondents would support the reunification.

Why am I not surprised — and you shouldn’t be, either.  This longish article put in an appearance on theduran.com Internet site on Friday morning EDT — and I thank Roy Stephens for sharing it with us.  Another link to it is here.


The last great tree: a majestic relic of Canada’s vanishing rain forest

The tree dominated the forest – a monarch of its species. Its crown of dark green, glossy needles flitted in the breeze well above the canopy of the forest. Like many of the oldest Douglas firs he had come across in his career, the tree’s trunk was limbless until a great height. The species often loses the lower branches that grow in the shadow of the forest’s canopy. Many of these large and old Douglas firs have clear marks of disease, with trunks that are twisted and gnarled. This tree’s trunk sported few knots and a grain that appeared straight: it was a wonderful specimen of timber, Cronin thought.

With his hand-held hypsometer, a device to measure a standing tree’s height using a triangulation of measurements, Cronin took readings from the base and the top of the tree and estimated its stature at approximately 70 metres – around the height of a 20-storey apartment building. Using a tape, he measured the tree’s circumference at 11.91 metres, and calculated the diameter to be 3.79 metres; if felled and loaded on to a train, the log would be wider than an oil tank car. The tree appeared just shy of the Red Creek Fir, the largest Douglas fir in the world, located a couple of valleys away.

Cronin didn’t know it then, but he had not only stumbled upon one of the largest trees he had ever seen in his career – he had found one of the largest trees in the country. It was surely ancient as well, Cronin knew. A Douglas fir of such height and girth, growing in a wet valley bottom on Vancouver Island, could easily prove half a millennium in age. But to the experienced forester, this one looked much older. A thousand years? he wondered.

This very interesting story, along with some incredible photos, was posted on theguardian.com Internet site back on March 5 — and I thank Patricia Caulfield for sending it our way last Saturday.  It’s been sitting in my in-box since then, waiting for this Saturday’s column.  It’s certainly worth reading…if you have the interest, that is…and another link to it is here.


Update on coins, precious metals sales tax exemptions [in the U.S] — Patrick Heller

As of right now, 37 states have either no state sales taxes at all (Alaska, Delaware, Montana, New Hampshire, and Oregon) or have complete or partial sales tax exemptions on the in-state retail sales of coins and precious metals bullion. That may soon change.

All ten of the most populous states and 17 of the 20 most populous have such exemptions, so that well over 80% of the nation’s residents have such an exemption where they live.

Last Friday, the West Virginia legislature overwhelmingly passed a coins and precious metals sales tax exemption (33-0 in the Senate and 90-9 in the House). It now awaits the governor’s signature to take effect on July 1.

A legislative committee in Tennessee has already passed a similar exemption bill. On March 13, the first legislative committee in Arkansas considered such legislation. There have also been coins and precious metals exemption bills introduced in the legislatures in Kansas, Maine, and Wisconsin.

Because of my past career as a certified public accountant and in leading Michigan’s effort to gain a coin and precious metals sales tax exemption in 1999, I have been heavily involved in such exemption efforts. After Michigan adopted its exemption, I later documented that the Michigan Treasury actually experienced an increase in total sales tax collections and also in other tax collections. This research, in conjunction with the Industry Council for Tangible Assets, has been used to subsequently help gain similar sales tax exemptions in the states of Alabama, Indiana, Iowa, Minnesota, Nebraska, North Carolina, Oklahoma, Ohio, Pennsylvania, South Carolina, and Virginia and to expand an existing exemption in Texas and Louisiana (and to help reinstate Louisiana’s exemption after it was suspended in 2016).

This commentary from Patrick was posted on the numismaticnews.com Internet site on Thursday sometime — and I thank Tolling Jennings for sending it along.  Another link to it is here.


Fiat Recall Leaves Palladium Buyers Bracing for ‘Supply Shock’

Fiat Chrysler Automobiles NV’s recall of almost 862,520 gasoline-fueled vehicles could spur additional demand for the palladium market that’s already reeling from shortages.

Replacing the catalytic converters in these vehicles would require an additional 77,000 ounces of palladium, said Miguel Perez-Santalla, sales and marketing manager at refiner Heraeus Metals New York LLC. Prices of the metal that’s used to curb greenhouse gas emissions from vehicles have been climbing to records this year as producers struggle to keep up with demand.

This eventually will be a bit of a supply shock,” said Maxwell Gold, director of investment strategy at Aberdeen Standard Investments, which oversees $736 billion. “Overall, this does paint a very positive picture of just growing emission standards globally, particularly in the U.S. for palladium and gasoline engines.”

Production of the precious metal will trail consumption by 545,000 ounces this year, Citigroup Inc. said in December. Newer and stricter regulations to curb emissions in gasoline vehicles have been forcing automakers to boost their purchases of palladium, fueling the surge in demand even amid a slowdown in car sales in China, Europe and the U.S.

This news item appeared on the Bloomberg website at 11:35 a.m. PDT on Wednesday — and I picked it up off the Sharps Pixley website.  Another link to it is here.


South African court blocks mine union’s plan for industry-wide strike

South Africa’s labor court has rejected a request by the Association of Mineworkers and Construction Union (AMCU) to hold an industry-wide strike covering the platinum and gold sectors, Anglogold Ashanti, Anglo American Platinum and Lonmin said on Friday.

AMCU has been on strike at Sibanye-Stillwater’s gold operations since mid-November in a pay dispute. It wanted to extend the strike to at least 11 other mining firms including Anglo American’s gold and platinum operations, Harmony Gold and Lonmin.

The union said it was shocked and would appeal the decision, adding that “secondary strikes are an integral part of the constitutional right to strike”.

In a written judgment, labor court judge Connie Prinsloo said an extended strike would put the entire economy at risk.

This factor certainly outweighs the negligible effect the secondary strike may have on Sibanye and therefore renders it unreasonable,” the judge said.

South Africa’s labor court has rejected a request by the Association of Mineworkers and Construction Union (AMCU) to hold an industry-wide strike covering the platinum and gold sectors, Anglogold Ashanti, Anglo American Platinum and Lonmin said on Friday.

This Reuters story, filed from Rustenburg in South Africa, showed up on their website at 4:21 a.m. on Friday morning EDT — and I plucked it from a GATA dispatch the Chris Powell filled from Saigon in the wee hours of Saturday morning local time.  Another link to it is here.


The PHOTOS and the FUNNIES

I mentioned the Highland Valley Copper mine in yesterday’s selection of photos, so I thought I’d present these pictures in today’s column.  The first two were taken last Sunday — and at the altitude that the mine is located, spring and snow melt are still some distance away.  The first shot shows part of the mine tailings taken from B.C. Highway 97C.  The tailings are on both sides of the highway — and this photo gives no hint of that.  The scale of the operation borders on the gargantuan.  The top level would be around 300m/1,000 feet above the valley floor.  The second shot is of one of the three open pits in operation…taken from across the highway — and on top of the observation hill.  This is a very wide-angle shot.  Click to enlarge.

This last shot shows the ongoing work on the waste water dam/tailings pond at the mine.  I took this picture back in December after their first snow of the season — and just before driving off the Thompson Plateau — and down into Ashcroft.  The photos of the descent were in Friday’s column.  I’ve also included a bird’s-eye view of the mine from 82 miles up, courtesy of Google Earth — and that puts some of the places I’ve posted photographs from, in some sort of context vis-à-vis Merritt.  Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ is one that needs no introduction whatsoever.  I’ve only posted it once before, so it’s time for a revisit.  The link is here.

With the spring equinox only four days away…Wednesday, March 20 at 5:58 p.m. EDT…it’s time to bring out that old Vivaldi warhorse…his Concerto No. 1 in E major, Op. 8, RV 269, “La primavera” (Spring).   In this iteration, Julia Fischer does the honours on violin, accompanied by the Academy of St. Martin-in-the-Fields.  The performance is first rate, but the quality of the video sucks.  The link is here.


It was yet another day where ‘da boyz’ were carefully watching over the precious metal market.  They were there in the rally attempts in Far East trading — and again as they guided their respective prices lower.  That started at noon GMT in London for gold, silver and platinum — and shortly after the COMEX open for palladium.

This just seemed like another ‘care and maintenance’ sort of trading session.  But after Thursday’s big down-day, Ted was somewhat surprised that ‘da boyz’ didn’t press their advantage yesterday, as they still have the precious metal market in their iron fists.

Gold broke above its 50-day moving average intraday on Friday, but was closed below it — and silver closed well above its 200-day moving average once again.  Platinum closed above its 200-day moving average by a dollar or so as well.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  Click to enlarge for all.

It’s amazing to watch the amount of gaming going on in the Dow and the S&P500 these days, as the powers-that-be continue their attempts to break out of this bear market in stocks that has now been ongoing since September 21, 2018.  The break in both indexes really occurred back on January 26 last year, but the PPT have been ever vigilant every time that one of these major indices rolls over hard.  Here’s the 5-year S&P — and it was obviously hauled back from the nether reaches of the earth starting back on December 21 of last year — and in January of 2018 as well.  Click to enlarge.

Here we are as of Friday’s close — and they have yet to succeed.  Even if they do, it won’t be because of any underlying fundamentals, only intervention on a massive scale.

There’s no question in my mind, nor should there be in yours…dear reader, that if the Plunge Protection Team put their hands in their proverbial pockets, the worlds’ economic, financial and monetary systems would be that proverbial “smouldering ruin” within five business days.

Pardon the hyperbole dear reader, but what your watching is Kabuki theatre in the best looking Potemkin village that money can buy.  And that would also apply to the Chinese and Japanese equity markets as well.

After the Fed’s debacle in December, all the world’s central banks know it too — and the Bank of Japan, China and the ECB are already back to money printing once again — and it’s only a matter of when, not if, the Federal Reserves joins the “Print, or die” club.

Next Tuesday and Wednesday the Fed has their regularly scheduled FOMC meeting, with the smoke going up the chimney at the Eccles Building thirty minutes after the COMEX close in New York on Wednesday.  With the ‘Powell Put’ in full force, it will be interesting to see what crumbs he’ll be offering Wall Street this time around, as this trade deal with China is starting to look more shaky — and more distant, with each new tweet from the White House.

As far as the precious metals are concerned, the current bull run that began on or about September 7, is very much alive and well.  But as you are already more than aware, JPMorgan et al are not letting it run wild, as they still are very much in control of precious metal prices, until they’re not…either by choice, or by circumstance.

Here’s the 2-year HUI chart from stockcharts.com — and we’re not even close to being overbought — and the stock are up about 52 percent of their lows back then.  Click to enlarge.

However, the silver equities are only up about 22 percent, but the rally in them only started in very late November — and that’s because JPMorgan has been keeping the underlying precious metal on the shortest of leashes.  When the silver price is allowed to rise unfettered, the gains in the silver equities will blow the doors off the gains in the gold shares.

So not all is lost, although none of us…including this writer…is happy about the speed at which this is all unfolding.  But the current “trend is our friend” as the saying goes — and despite the engineered price declines that are throw in our path, this budding bull market is still very much intact.

That’s all I have for the day — and the week — and I’ll see you here on Tuesday.

Ed