19 March 2019 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price didn’t do anything for the first hour after trading began at 6:00 p.m. EST in New York on Sunday evening. Then it was sold quietly lower until 9 a.m. China Standard Time on their Monday morning. The price then traded quietly sideways until shortly before 3 p.m. CST — and then it shot a few dollars higher before unsteadily crawling a few more dollars higher until shortly before 1 p.m. GMT in London/8 a.m. in New York. It was sold quietly lower once more — and back below unchanged by about a dollar. Then it edged a few dollars higher until trading ended at 5:00 p.m. EDT.
The low and high ticks certainly aren’t worth looking up.
The gold price ended the Monday session at $1,303.30 spot, up $1.00 from Friday’s close. Net volume was extremely quiet at just over 147,000 contracts — and there was a hair under 30,000 contracts worth of roll-over/switch volume out of April and into future months on top of that.
Up until the COMEX open in New York on Tuesday morning, the silver price followed gold’s price path very closely. Then it began to head higher, but ran into ‘resistance’ almost right away — and the high tick was set at, or just after, the afternoon gold fix in London. It was sold lower until shortly after the 1:30 p.m. COMEX close in New York — and picked up a few more pennies going into the 5:00 p.m. close of trading.
The low and high ticks in this precious metal were reported by the CME Group as $15.22 and $15.425 in the May contract.
Silver was closed on Tuesday at $15.32 spot, up 6 cents on the day. Net volume was only a bit more than fumes and vapours at a hair under 44,000 contracts — and there was only 1,084 contracts worth of roll-over/switch volume in this precious metal.
Platinum was sold down to its low of the day by 9 a.m. China Standard Time on their Monday morning — and then rallied a bit, before trading sideways starting at 11 a.m. CST. Then at 1 p.m. over there it began to headed quietly higher — and the high tick came just before 9 a.m. in New York, where the price was obviously capped. Less that fifteen minutes later, the price was headed lower — and that lasted until shortly before 10:30 a.m. EDT. It crept unevenly higher from there until trading ended at 5:00 p.m. EDT. Platinum finished the Monday session at $833 spot, up 5 dollars from Friday’s close.
It was the same start on Monday for palladium as it was for platinum — and its rally that began shortly before 2 p.m. CST obviously ran into ‘resistance’ as the trading day wore on. But it still managed to finish almost on its $1,560 high tick of the day — and closed at $1,559 spot, up $27 bucks from Friday.
But it was yet another day where palladium would have closed significantly higher, if allowed. However, having said that, it closed at a new high for this move up on Monday.
The dollar index closed very late on Friday afternoon in New York at 96.60 — and opened down 3 basis points once trading commenced at 6:30 p.m. EDT in New York on Sunday evening. It hung in there until a few minutes after 9 a.m. China Standard Time on their Monday morning — and began to slide unevenly lower from there, with the 96.38 low tick coming at 12:34 p.m. GMT in London. It rallied from that point — managed to poke its nose into positive territory by a few basis points at 11:36 a.m. in New York — and the 96.63 high tick was set at that juncture. The index made a valiant attempt to stay in positive territory, but finally gave up the ghost for the last time at 2:16 p.m. EDT. It was sold back into the red by a bit from there — and then didn’t do much of anything for the remainder of the Monday session. The dollar index finished the day at 96.53…down 7 basis points from Friday.
Here’s the DXY chart courtesy of Bloomberg. Click to enlarge.
And here’s the 6-month U.S. dollar index chart courtesy of the folks over at stockcharts.com. The delta between its close…95.98…and the DXY chart above, was 55 basis points on Monday. Click to enlarge as well.
The gold shares opened up a hair, but were immediately sold lower — and that sell-off lasted until the 1:30 p.m. COMEX close. Then, despite the fact that the gold price began to edge higher from there, the gold stocks traded quietly sideways until the markets closed at 4:00 p.m. EDT in New York. The HUI closed down 1.29 percent.
It was the same for the silver equities…sort of. Their respective lows came shortly before noon, despite the fact that the silver price bottomed out shortly after the COMEX close. They then edged very unevenly and very quietly higher for the rest of the day. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.71 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart updated with Monday’s data. Click to enlarge.
The CME Daily Delivery Report showed that 5 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Wednesday.
In gold, Advantage and ADM issued 4 and 1 contracts out of their respective client accounts. Advantage also stopped 3 — and JPMorgan picked up the other 2…all were for their respective client accounts as well.
In silver, the long contract was issued by Advantage out of its client account — and the CME Group stopped it for its own account. It immediately reissued it as 1×5=5 one thousand ounce COMEX silver mini contracts — and all were stopped by ADM.
The link to yesterday’s Issuers and Stoppers Report is here.
The Preliminary Report for the Monday trading session showed that gold open interest in March fell by 17 contracts, leaving 21 still open, minus the 5 contracts mentioned a few short paragraphs ago. Friday’s Daily Delivery Report showed that 20 gold contracts were actually posted for delivery today, so that means that 20-17=3 more gold contracts were just added to the March delivery month. Silver o.i. in March remained unchanged at 65 contracts, minus the 1 contract mentioned a few paragraphs ago. Friday’s Daily Delivery Report showed that zero silver contracts were posted for delivery today.
There was a fairly hefty deposit into GLD on Monday, as an authorized participant added 264,472 troy ounces. There were no reported changes in SLV.
The good folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of trading on Friday, March 15 — and this is what they had to report. Their gold ETF added 13,714 troy ounces — and their SLV took in 26,910 troy ounces.
There was a tiny sales report from the U.S. Mint on Monday. They sold 500 troy ounces of gold eagles — and 500 one-ounce 24K gold buffaloes. That was it.
The only activity in gold over at the COMEX-approved gold depositories on the U.S. east coast on Friday was 160.755 troy ounces/5 kilobars [SGE kilobar weight] that were shipped out of Brink’s, Inc. I won’t bother linking this amount.
There was no activity in silver worthy of the name, either…as the only activity there was, was 10,026 troy ounces that was shipped out of Brink’s, Inc. as well. I won’t bother linking this amount, either.
The only activity worthy of the name came from the COMEX-approved gold kilobar depositories in Hong Kong on their Friday. They reported receiving 3,150 of them — and shipped out only 55. All of this occurred at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.
Here are the usual two charts that you see every week. They show the total gold and silver holdings in all know depositories, mutual funds and ETFs as of the close of business on Friday, March 15. During that week, there was 193,000 troy ounces of gold added, plus 2,856,000 troy ounces of silver. Click to enlarge for both.
Just out of curiosity, I thought I’d take a quick peek at the same charts for platinum and palladium — and how different they are. In platinum the amount in all known depositories, ETFs and mutual funds didn’t change much in 2017…but that all changed starting in early February of 2018 — and total inventories began to decline. Then, at the end of January, the amount of platinum in these depositories began to scream higher — and in the space of seven weeks, about 490,000 troy ounces of platinum was deposited. That’s a lot! During the last week, there was 4,000 troy ounces added, after about 40,000 troy ounces was withdrawn the week before. I’ll be watching this a bit more closely from now on. Click to enlarge.
Here’s the chart for palladium — and the physical shortage in this precious metal is obvious, as the draw-down has been almost relentless over the last couple of years…up until the fourth quarter of 2018. Not much has happened since. Last week there was 3,000 troy ounces deposited. Click to enlarge.
I have an average number of stories for you today.
In 1903, the desperado in the image above appeared in an early film about a robbery. He was the classic guy in a black hat and, of course, he was eventually foiled by the guys in the white hats.
That was a simpler time.
Today, law enforcement is assisted so much by modern technology that the guys in the black hats rarely try to rob a bank, as they’ll almost surely be caught.
So, does that mean the end of bank robberies? Well, unfortunately, no. In the future, we’re likely to witness bank robberies on a scale such as we’ve never before witnessed.
The difference is that they’ll be robbed by the guys in the white hats. And, the kicker is that the laws of the land will be entirely in their favour. It will be legalized robbery.
This worthwhile commentary from Jeff appeared on the internationalman.com Internet site on Monday morning sometime — and another link to it is here.
Most Parisians had barely any idea there was smashing and looting going on downtown.
And here in Salta Province, Argentina, even with 50% inflation, life goes on. Our steak was juicy good last night. (A dinner for six… two bottles of wine, included, was only $120.) Our hotel room is clean. The traffic still flows. Fifty percent inflation is not the end of the world. It’s a challenge; but it creates opportunities, as well as disasters.
Second, we suggest a visit to both locales.
In Paris, you can learn how to dodge angry, violent mobs. And in Argentina, you can learn how to dodge rising prices.
Our prediction is that both skills may one day prove as useful on the banks of the Hudson or the Mississippi, as they are now on the Quai du Louvre or in Puerto Madera.
The reasons for the violence in Paris are obscure and largely unfathomable – even to Parisians. So, let’s turn to Argentina.
Bill starts off in Paris, then moves on to Argentina…but ends up in the good old U.S.A. — and it’s worth reading. I found it on the bonnerandpartners.com Internet site on Monday — and another link to it is here.
The Nordstream 2 pipeline represents the last stand of U.S. influence over the internal affairs of Europe.
Once finished it will stand as a testament to the fundamental split between the European Union and the United States.
Europe will see this as its first successful defense of its newly-declared independence. And the U.S. will have to come to terms with no longer having control overseas.
This is a theme repeating itself all around the world right now.
Your view of Nordstream 2 depends on who you are.
This interesting and worthwhile commentary from Tom was posted on the tomlunongo.me Internet site on Saturday sometime. I plucked it from a Zero Hedge article that showed up on their website at 5:00 a.m. EDT on Monday morning — and I thank Brad Robertson for sending it along. Another link to it is here.
Deutsche Bank and Commerzbank confirmed on Sunday they were in talks about a merger, prompting labor union concerns about possible job losses and questions from analysts about the merits of a combination.
Germany’s two largest banks issued short statements following separate meetings of their management boards, a person with knowledge of the matter said, indicating a quickening of pace in the merger process, although both also warned that a deal was far from certain.
“In light of arising opportunities, the management board of Deutsche Bank has decided to review strategic options,” Deutsche said in its statement.
Christian Sewing, Deutsche Bank’s chief executive, told employees that Deutsche still aimed “to remain a global bank with a strong capital markets business… with a global network”.
Sewing said many factors could still prevent a merger and a Deutsche spokesman said the talks were expected to last some time. Commerzbank described the outcome as open.
This Reuters news item, filed from Frankfurt, showed up on their Internet site at 2:32 a.m. EDT on Monday morning — and the first person through the door with it was George Whyte. Another link to it is here.
The slowdown in Europe’s largest economy is unlikely to have enjoyed a long-awaited turnaround at the start of 2019 as German industry continued to stumble.
“The basic cyclical trend of the German economy remained subdued after the turn of the year. This was mainly due to the continuing slowdown in industrial momentum,” the Bundesbank said in its monthly report published Monday. Greater catch-up effects in the country’s auto industry “are no longer expected for the current quarter.”
The assessment comes after a series of temporary factors — such as new emissions-testing procedures that stalled production at carmakers — led to an unexpectedly pronounced weakening of key economic metrics. Policy makers are trying to assess how much of the slowdown in Germany and the euro area is related to one-offs, or whether it marks a more protracted shift in the economy.
In the three months through March, hopes for a rebound were challenged by new hurdles, such as a strike at a motor factory in Hungary, according to the Bundesbank. Still, it expects the effect on auto output to wear off, and sees construction and private consumption supporting growth amid a strong labor market, pay gains, and expansive fiscal measures.
This 4-paragraph Bloomberg story put in an appearance on their Internet site at 4:00 a.m. PDT [Pacific Daylight Time] on Monday morning — and it’s an article I found on Doug Noland’s website. Another link to it is here.
Next week’s visit to Italy by Chinese Premier Xi Jinping has nearly everyone jittery. The recent announcement by Five Star Movement Leader Luigi Di Maio that his country is prepared to sign a Memorandum of Understanding with China to be a part of China’s ambitious Belt and Road Initiative has set off a firestorm of response from Donald Trump to Angela Merkel to Di Maio’s own coalition partner, Lega leader Matteo Salvini.
But, don’t let the wrapper fool you on this. Di Maio’s announcement I don’t think it ‘blindsided’ Salvini as this Reuters article suggests, as much as Merkel and Trump.
Even though Geraci is a member of the League, the group appeared blindsided when news of an imminent deal emerged last week, with party chief Matteo Salvini warning against the “colonialization” of Italy by China.
“We are reviewing it,” Salvini, who serves as joint deputy prime minister with Di Maio, said on Thursday. “Before allowing someone to invest in the ports of Trieste or Genoa, I would think about it not once but a hundred times.”
If anything, this announcement is a smart move by Di Maio. It puts Salvini a bit on the defensive who has been setting the tempo for the coalition recently. Salvini needs Trump on his good side to assist him in taking on Merkel and the European Union.
Merkel is trying to play hardball with Trump over energy issues, as I discussed in a recent article, by defending the Nordstream 2 pipeline from U.S. aggression to change the board state of geopolitics.
This interesting article showed up on Tom’s website last Friday — and it comes to us courtesy of Roy Stephens. Another link to it is here.
“Santa Claus territory.” That is how Charles Gave of Gavekal Research views renewed debate about how a concept known as “Modern Monetary Theory” can save capitalism.
There’s nothing modern, of course, about the idea that a government can borrow with abandon in its own currency, unconstrained by deficits. It’s not just that its origins can be traced back 100 years – some argue 1,000. It’s that Japan has been toying with MMT for two decades now.
In 1999, the Bank of Japan became the first major authority in modern history to drive interest rates down to zero. A couple of years later, it pioneered the quantitative-easing that peers from Washington to Frankfurt would eventually adopt.
What’s truly astounding is the docility of bond yields. Try as they may, punters haven’t been able to set Japanese government bond prices in nearly 20 years. That’s because the central bank dominated the bond market.
Japan proves that so long as a government borrows at home, and does so skillfully, the laws of financial gravity lose relevance. Yet it also stands as a cautionary tale for other developed economies scurrying down the MMT rabbit hole.
This story showed up on the asiatimes.com Internet site on Sunday sometime — and it’s the first of two stories that I found on the Sharps Pixley website yesterday evening. Another link to it is here.
[Excepted from Jay Taylor’s latest newsletter]
In 2018, central banks added nearly 23 million ounces of gold, up 74% from 2017. This is the highest annual purchase rate increase since 1971, and the second-highest rate in history. Russia was the biggest buyer. And not surprisingly, the lion’s share of gold is flowing into central banks of countries that are in the sights of America’s killing machine—the Military Industrial Complex that Eisenhower warned us about in 1958.
The Bank for International Settlements (BIS), located in Basal, Switzerland, is often referred to as the central bankers’ bank. Related to this issue of central bank hoarding of gold is the fact that on March 29 the BIS will permit central banks to count the physical gold it holds (marked to market) as a reserve asset just the same as it allows cash and sovereign debt instruments to be counted.
There has been a long-term view that China and other nations dishoarding dollars in favor of gold have been quite happy about western banks trashing the gold price through the synthetic paper markets. But one has to wonder if that might not change, once physical gold is marked to market for the sake of enlarging bank balance sheets.
This also raises the question with regard to how much gold the U.S. actually holds as opposed to what it claims to hold. James Sinclair has always argued that the only way the world can overcome the debt that is strangling the global economy is to remonetize gold on the balance sheets of central banks at a price in many thousands of dollars higher. This would mean a major change in the global monetary system away from the dollar, as China has been pushing for the last decade or so.
If banks own and possess gold bullion, they can use that asset as equity and thus this will enable them to print more money. It may be no coincidence that as March 29th has been approaching banks around the world have been buying huge amounts of physical gold and taking delivery. For the first time in 50 years, central banks bought over 640 tonnes of gold bars last year, almost twice as much as in 2017 and the highest level raised since 1971, when President Nixon closed the gold window and forced the world onto a floating rate currency system.
But as Chris Powell of GATA noted, that in itself is not news. The move toward making gold equal to cash and bonds was anticipated several years ago. However, what is news is the realization by a major Italian Newspaper, II Sole/24 Ore, that “synthetic gold,” or “paper gold,” has been used to suppress the price of gold, thus enabling countries and their central banks to continue to buy gold and build up their reserves at lower and lower prices as massive amounts of artificially-created “synthetic gold” triggers layer upon layer of artificially lower priced gold as unaware private investors panic out of their positions.
This worthwhile commentary from Jay, which I’ve read in its entirety, was posted on the Zero Hedge website in abridged form at 11:29 a.m. EDT on Sunday morning — and the first reader that dropped it in my in-box was Judy Sturgis. Another link to it is here.
An Italian paper gets it: Central banks push gold futures down so they can get more metal to remonetize
Financial analysis published two weeks ago by a major Italian newspaper, Il Sole / 24 Ore (The Sun / 24 Hours), asserted frankly that central banks have been using gold futures and derivatives to suppress the monetary metal’s price so they can obtain more of the metal less expensively in advance of its remonetization under new rules promulgated by the Bank for International Settlements to take effect March 29.
Of course the new BIS rules, the “Basel 3” standards, declaring gold in the vault to be a superior asset, equivalent to cash and government bonds, are not news. What’s news here is that a mainstream financial news organization has nailed the deception and intrigue of central banks and accused them of rigging the international gold market.
Il Sole/24 Ore may be the first mainstream financial news organization to suggest that central banks are rigging the market so they might obtain more gold in anticipation of remonetizing it and pushing its price up, but the newspaper isn’t the first to reach this conclusion. The U.S. economists and fund managers Paul Brodsky and Lee Quaintance hypothesized as much in a study published in 2012 and called to your attention by GATA
Will the gold world really change when the “Basel 3” standards take effect on March 29? GATA always sees possibilities but makes no such prediction. (Given the cowardice and obliviousness of most mainstream financial journalism, your secretary/treasurer is more inclined to the vision of the future expressed in George Orwell’s “1984”: “a boot stamping on a human face, forever.”)
But the report by Il Sole/24 Ore may give reason for advocates of limited and accountable government, free and transparent markets, and fair dealing among the nations some reason to stick around for another three weeks.
A not entirely ham-handed English translation of the Il Sole/24 Ore analysis, drawn from Google Translator and your secretary/treasurer’s guesses about Italian idiom, is appended.
This is the story in the Italian newspaper that Jay Taylor referred to in the previous ZH article. It’s headlined “Banks and the Return of the Gold Standard: Gold in Financial Statements Becomes Money” — and is on the longish side, but certainly worth reading. It appeared on the gata.org Internet site back on March 8 — and I can’t figure out why I didn’t bring it to your attention then. So here its is now — and another link to it is here.
The import statistics published by the Gem and Jewellery Export Promotion Council (GJEPC) indicates that the country’s gold bar imports surged higher significantly during the initial eleven months (April ’18-February ‘19) this fiscal. The monthly imports declined marginally in Feb ‘19, when compared with the previous year.
According to GJEPC, the monthly gold bar imports totaled $583.18 million in February this year, down by nearly 6% when compared with the February 2018 imports. India’s gold imports in February last year had totaled $617.50 million. In rupee terms, the imports amounted to 4,153.40 crores, up marginally by 4.49% year-on-year.
The combined gold bar imports during the initial eleven-month period of the current fiscal year totaled $7,183.02 million. The imports surged higher significantly by 41.80%, upon comparison with the imports that had totaled only $5,065.71 million during the corresponding eleven-month period of the previous fiscal year. The imports surged higher from Rs. 32,630.20 crores to Rs. 50,019.39 crores, in rupee terms, GJEPC data said.
This brief gold-related news item, filed from Seattle, was posted on the scrapmonster.com Internet site on Monday I would suspect, although there’s no dateline. I found it on the Sharps Pixley website — and another link to it is here.
Ukraine and Russia are locked in another heated battle over Crimea.
But this dispute is playing out in court, with the two neighbors locked in a legal fight over a precious collection of gold artifacts from the disputed peninsula.
The collection includes ancient jewelry, gems, helmets and scabbards from four museums in Crimea. It was on loan to a museum in the Dutch capital of Amsterdam in 2014 — around the same time Russia annexed Crimea from Ukraine.
Five years later, the rare archaeological finds are still caught in the middle as both the Ukrainian government and Crimean museums claim ownership.
The collection highlights the rich history of Crimea as a staging post at the crossroads between Europe and Asia.
The exhibition included items originating from four museums in Crimea and one museum in Kiev, Ukraine’s capital.
In August 2014, the museum returned the artifacts it borrowed from the National Museum of History of Ukraine. However, after facing “conflicting claims” of ownership from both sides, it is still in possession of 572 disputed items.
This interesting story, along with some really neat photos, was posted on the nbcnews.com Internet site. It was filed from Amsterdam in the wee hours of Saturday morning PDT — and I thank Jim Gullo for digging it up for us. Another link to it is here.
The PHOTOS and the FUNNIES
Only one photo today. This pileated woodpecker was nosing around in a tree close to the ground — and only steps from where I live. But by the time I had camera in hand, he’d flown off to this power poll — and this was the best image I could get with the ‘walk-around’ lens that I had attached. He flew off just seconds after I got this shot. It’s the only photo of this bird that I have, so I’m keeping it until another such opportunity presents itself. The ‘click to enlarge‘ feature does not help with this shot.
“We can easily forgive a child who is afraid of the dark. The real tragedy of life is when men are afraid of the light.” — Author unknown
For the second Monday in a row, we’ve had a very quiet start to the week as far as silver and gold are concerned. Volumes were minuscule in both, so ‘da boyz’…or whoever, had no difficulty managing their respective prices…which is what they did. Palladium, as it almost always is these days, was the outlier…closing at a new high price for this move up.
Here are the 6-month charts for all four precious metals, plus copper and WTIC — and there isn’t a lot to see…except for palladium, that is. And the tiny post-COMEX high close in gold, doesn’t show up on its Monday doji below. Click to enlarge for all.
And as I post today’s column on the website at 4:02 a.m. EDT, I note that the London open is less than ten minutes away — and I see that the gold price began to crawl higher about two hours after trading began at 6:00 p.m. EDT on Monday evening in New York — and was up 5 dollars by a few minutes before 1 p.m. China Standard Time on their Tuesday morning. It has been sold lower since then — and is up only 30 cents an ounce currently. Silver’s rally in the Far East wasn’t allowed to get far either — and its currently down 3 cents. Platinum has been chopping very unevenly sideways in Far East trading — and is up a buck at the moment. Like for gold, the palladium price was turned a bit lower during the first two hours of Monday evening trading in New York, but rallied from there until around noon CST — and his been trading unevenly sideways since, but is up 5 dollars as Zurich opens.
Gross gold volume is a bit over 45,500 contracts — and minus roll-over/switch volume out of April and into futures months, net HFT gold volume is a hair over 34,000 contracts. Net HFT silver volume is coming up on 8,000 contracts — and there’s only 302 contracts worth of roll-over/switch volume in that precious metal. Both net volume numbers are very much on the light side.
The dollar index opened about unchanged once trading commenced around 7:45 p.m. EDT on Monday evening in New York — and was down 12 basis points [its current low tick] by around 12:15 p.m. China Standard Time on their Tuesday morning — and is now chopping quietly sideways. And as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is down 11 basis points.
The Fed soirée at the Eccles Building begins today — and the smoke goes up the proverbial chimney tomorrow at 2:00 p.m. EDT. In the long term, it really doesn’t matter what they say…however I’m already wondering what bone will be thrown to the crooks and bankers on Wall Street.
Also today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report. I may venture a guess as to what the report might say in my Wednesday missive, but after my embarrassing miss on last week’s COT numbers, I might just hold my tongue.
And in case you didn’t read the story in the Critical Reads section headlined “Russia and Ukraine are locked in a legal dispute over ancient gold” — here’s the lead photo in that article…”A spiraling torque from the second century A.D.” I thought it worth sharing. Click to enlarge.
That’s all I have for today, which is more than enough — and I’ll see you here tomorrow.