27 March 2019 — Wednesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
Ted’s “midnight move” in gold started at 8 p.m. EDT on Monday evening in New York, which was 8 a.m. China Standard Time on their Tuesday morning. At that point, the price was engineered lower, with the low tick of the day coming a few minutes before the equity markets opened in New York yesterday morning. It was sold lower from there until shortly before 12:30 p.m. EDT — and it recovered a few dollars from there before trading ended at 5:00 p.m. EDT.
The high and low ticks aren’t worth looking up.
Gold was closed in New York on Tuesday at $1,315.20 spot, down $6.20 on the day. Net volume was exceedingly light at 133,500 contracts but, not surprisingly, roll-over switch volume was ginormous at 134,000 contracts.
The silver price traded relatively flat until shortly after 12 o’clock noon in Shanghai on their Tuesday afternoon — and then the price pressure commenced. That lasted until shortly before 1 p.m. BST in London/8 a.m. in New York — and from that point it rallied until a few minutes before the equity markets opened in New York. Then, like gold, it was sold lower — and its low tick was printed a few minutes after 10:30 a.m. EDT. It rallied a nickel or so from that juncture — and then traded sideways for the remainder of the Tuesday session.
The high and low ticks in this precious metal aren’t worth looking up, either.
Silver was closed yesterday at $15.40 spot, down 11.5 cents on the day. Net volume was nothing special at a bit over 47,500 contracts — and there was a hair under 6,000 contracts worth of roll-over/switch volume in this precious metal.
Platinum was up 4 bucks by minutes before 8 a.m. China Standard Time on their Tuesday morning — and that proved to be its high of the day. It was then sold lower until a few minutes before 11 a.m. over there — and at that point it chopped very quietly sideways until around 9 a.m. in COMEX trading in New York. It rallied into positive territory by a bit from there, but under obvious ‘resistance’ — and it was sold back to the unchanged mark by the COMEX close. It didn’t do much of anything after that. Platinum finished the Tuesday session in New York at $956 spot…unchanged from Monday’s close.
Palladium was also up a few dollars by shortly after 8 a.m. CST on their Tuesday morning, but was then sold quietly and very unevenly lower until shortly before 1 p.m. CET in Zurich/8 a.m. EDT in New York. The ‘long knives’ came out at that juncture — and the low tick of the day appeared to come at precisely noon EDT. It rallied a bit over the next hour, before edging quietly sideways until trading ended at 5:00 p.m. Palladium was closed at $1,522 spot, down 31 dollars from Monday. At its low of the day, it was down 39 bucks.
The dollar index closed very late on Monday afternoon in New York at 96.57 — and opened down 7 basis points once trading began at 7:45 p.m. EDT on Monday evening/7:45 a.m. CST on their Tuesday morning. The index chopped quietly and unevenly sideways, but with a slight positive bias starting at 12:05 p.m. CST — and by 9:42 a.m. in London, it was up 11 basis points. From there it was sold to its 96.45 low tick by 11:10 a.m. BST. From that juncture it began to head unsteadily higher, with the 96.85 high tick coming at around 4:18 p.m. EDT in New York — and it traded flat from there into the 5:15 p.m. close. The dollar index finished the Tuesday session at 96.74…up 17 basis points from Monday’s close.
You can blame the price declines in the precious metals to the dollar index if you wish. But the fact of the matter remains that these engineered price declines we saw yesterday, began a long time before there was any move of substance in the currencies.
Here is the DXY chart from Bloomberg, so you can see it for yourself. Click to enlarge.
Here’s the 6-month U.S. dollar index chart, courtesy of stockcharts.com — and the delta between its close…96.22…and the close on the DXY chart above, was 52 basis points on Tuesday.
The gold stocks gapped down a percent and a bit at the 9:30 a.m. EDT open of the equity markets in New York yesterday morning — and their respective lows came a minute or so after 10 a.m. EDT…which was probably the moment of the afternoon gold fix in London. From that point, the shares crawled steadily but unevenly higher for the remainder of the Tuesday session, as the HUI managed to close in the green to the tune of 0.42 percent.
It was the same price activity for the silver equities, except their gap down at the open was a tad more substantial than what happened with their golden brethren, so they didn’t quite make it back into positive territory by the close. However, Nick Laird’s Intraday Silver Sentiment/Silver 7 Index finished down only 0.13 percent, so call it unchanged. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, complete with Tuesday’s doji. Click to enlarge as well.
Considering the engineered price decline/bear raid in the precious metals yesterday by ‘da boyz’…I consider the price activity in their underlying equities to be a very positive indicator of things to come.
The CME Daily Delivery Report showed that 1 gold and 40 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.
In gold, ADM issued the lone contract — and it was stopped by JPMorgan for its client account.
In silver, the two short/issuers were Advantage and ADM, with 30 and 10 contracts out of their respective client accounts. The lone long/stopper was the CME Group — and they immediately reissued them as 40×5=200 one-thousand ounce COMEX mini silver contracts. ADM picked up 199 of them — and Advantage stopped the remaining contract.
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 dropped by 11 contract, leaving 1 contract still around, minus the 1 mentioned a few paragraphs ago. Monday’s Daily Delivery Report showed that 11 gold contracts were posted for delivery today, so the change in open interest and deliveries match — and once that lone remaining gold contract is delivered tomorrow, gold deliveries for March will be done. Silver o.i. in March fell by 4 contracts, leaving 40 left — and those 40 contracts are out for delivery on Thursday as 200 mini silver contracts. Monday’s Daily Delivery report showed that 4 silver contracts were posted for delivery today…so after Thursday, March deliveries in silver will be done as well.
For the month of March, there were 396 gold contracts issued/reissued and stopped — and that number in silver was 5,424.
There was an addition to GLD on Tuesday, as an authorized participant added 103,891 troy ounces. There were no reported changes in SLV.
There was another tiny sales report from the U.S. Mint yesterday. They sold 500 troy ounces of gold eagles — and 500 one-ounce platinum eagles.
There was also a tiny bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday. It was in Canada actually, as Scotiabank shipped out 2,057.600 troy ounces/64 kilobars [U.K./U.S. kilobar weight]. Nothing was reported received anywhere. There was also a paper transfer of 1,207 troy ounces from the Eligible category — and into Registered. That happened at Scotiabank as well. The link to all this is here.
It was far busier in silver, as 1,600,153 troy ounces were received, but only 57,348 troy ounces were shipped out. In the ‘in’ category, there was 999,851 troy ounces dropped off at Scotiabank — and the remaining amount, one truck load…600,301 troy ounces…ended up at CNT. There were three different depositories involved in the ‘out’ activity — and I’m not going to bother itemizing them. If you wish to check for yourself, the link to ‘all of the above’ is here.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday, they reported receiving 2,000 of them — and shipped out only 25. All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here are two more charts that Nick passed around on the weekend. They show the amount of gold and silver imported into India during January. During that month they imported 55.71 tonnes of gold — and a very chunky 713.39 tonnes of silver. Here are those two charts, updated with those data points. Click to enlarge for both.
I have an average number of stories for you today.
After a hope-filled rebound in February, Conference Board Consumer Confidence tumbled in March with Present Situation plunging to 11-month lows. Click to enlarge.
Consumer confidence in March fell to 124.1 vs 131.4 in prior month (that is below the forecast range 125.44 to 136.5 from 57 estimates)
- Present situation confidence fell to 160.6 vs 172.8 last month
- Consumer confidence expectations fell to 99.8 vs 103.8 last month
This is the biggest monthly collapse in ‘Present Situation’ since October 2008 to its lowest since April 2018…Click to enlarge.
Most notable is the plunge in the Labor Differential – (Jobs Plentiful – Jabs Hard to Get) which tumbled from 34.3 to 28.3 – the biggest drop since Feb 2009.
This Zero Hedge news item showed up on their website at 10:09 a.m. on Tuesday afternoon EDT — and I thank Brad Robertson for sending it our way. Another link to it is here.
After February’s explosive surge in Housing Starts, expectations are for some giveback in March (in Permits too), but the reversion was considerably bigger than expected (and revisions did not help).
- Housing Starts tumbled 8.7% MoM in March and the February 18.7% gain was revised down to +11.7% MoM.
- Building Permits slid 1.6% MoM in March and February’s modest 1.4% gain was revised to a 0.7% drop.
Biggest drop in starts in 8 months…Click to enlarge.
This is the biggest YoY drop in total housing starts (-9.9%) since Sept 2016…
This is another Zero Hedge article courtesy of Brad Robertson. It put in an appearance on their website at 8:39 a.m. EDT on Tuesday morning — and another link to it is here.
…the yield curve inverted…
…the feds’ monthly deficit hit a new record…
…the trade deficit hit a new annual record…
…the Fed said the economy was weaker than expected… so it said it would lay off the rate increases…
…home sales are falling to new lows… with the sales/population ratio at a record low…
…and still, the stock market refuses to fall apart.
In the meantime – which could be months… or even years – we watch, we wait, and we wonder what the hell is going on.
This worthwhile commentary from Bill was posted on the bonnerandpartners.com Internet site early on Tuesday morning EDT — and another link to it is here.
The good doctor and I had a 22-minute chat this past Sunday about the state of the world’s economies and their associated financial sytems. It happened on all-talk radio WAAM 1600 out of Ann Arbor, Michigan. We also spent some time discussing the precious metals.
Last month, the national debt surpassed $22 trillion — or nearly $180,000 per taxpayer. That figure will roughly double within three decades, since spending on Social Security, Medicare and Medicaid will balloon as America’s population ages.
Such stratospheric debt levels will be completely untenable — it’d be like saddling every taxpayer with an additional mortgage on top of his or her existing housing, credit card and student loans. The lion’s share of tax revenue would go toward interest on the debt, leaving little for safety net programs, the military or core government functions. By 2050, the federal government will spend more on interest payments than Social Security, health care or national defense.
If our elected leaders had been responsible, they would have reformed entitlement programs long ago and eliminated pointless tax breaks to balance the budget. Unfortunately, it’s too late for a “grand bargain” now.
Dramatically hiking taxes, or drastically cutting Social Security and Medicare benefits in the late 2020s or early 2030s when entitlement trust funds run dry, would send the economy into a depression. Ignoring the debt and indefinitely printing more money, as proponents of “modern monetary theory” effectively advocate, would lead to uncontrolled hyperinflation.
Our leaders have dug us into a hole. And the best way out is a “soft” default on the national debt.
This very interesting commentary/opinion piece appeared on the foxbusiness.com Internet site back on March 19 — and I found it embedded in a GATA dispatch that Chris Powell filed from Hong Kong on their Wednesday afternoon. Another link to it is here.
“The Special Counsel’s investigation did not find that the Trump campaign or anyone associated with it conspired or coordinated with Russia … to influence the 2016 U.S. presidential campaign.”
So stated Attorney General William Barr in his Sunday letter to Congress summarizing the principal findings of the Mueller report.
On the charge of collusion with Russia, not guilty on all counts.
After two years of hearing from haters in politics and the media that President Donald Trump was “Putin’s poodle,” an agent of the Kremlin, guilty of treason, an illegitimate president who would leave the White House in handcuffs and end his days in prison, we learn the truth.
It was all a bright, shining lie.
As you may have figured out over the years, dear reader, I try to stay as far away from the internal politics of the U.S. [or any country, for that matter] as I can — and I’ve remained silent on this particular issue, but must speak my opinion now. I’ve known since Day 1 that this was another blatant move by the Deep State to remove a democratically elected U.S. President from office. They had Kennedy assassinated — and then forced Nixon out. Then they tried the same thing with Trump — and it failed. It was, as Pat Buchanan so succinctly put it in the above commentary…”A Bright, Shining Lie“. I thank Phil Manuel for bringing his commentary to my attention — and another link to it is here.
The Battle of Britain (1940) was one of the most famous and important conflicts in history. The Battle of Brexit is proving no less decisive even if the weapons are financial and political, not kinetic.
The U.K. joined the European Communities in 1973 and that membership was ratified by a U.K. referendum in 1975. Membership divided the right and left in U.K. politics in the late 1970s and 1980s with the left initially opposing membership.
Over time, the left began to favor the concept and it was the right, led by Margaret Thatcher, that voiced opposition. In 1993, the European Communities transformed into the European Union, E.U., as a result of the Maastricht Treaty. The U.K. was a full member of the E.U. and seemed set to remain a member indefinitely.
While the U.K. joined the E.U., it did not join the eurozone of countries that adopted the euro as a common currency. The U.K. rejected the eurozone and maintained its currency as the pound sterling (GBP). Given the size of the U.K. economy (fifth-largest in the world), this made for an awkward relationship with other major E.U. members including Germany, France and Italy, which all adopted the euro.
Yet the economic benefits of E.U. membership, including free trade and the “passport” concept (a business licensed in one member country can expand throughout the E.U. with minimal registration requirements) were undeniable. Both the E.U. and U.K. prospered as a result.
Still, opposition to E.U. membership never disappeared in U.K. politics. The right’s concerns were transferred from the Tories to a new U.K. Independence Party (UKIP), which grew in popularity from the 2010s forward. Despite UKIP, Euroskeptics remained a force in Tory politics.
This very interesting and very worthwhile commentary by Jim put in an appearance on the dailyreckoning.com Internet site on Tuesday sometime — and another link to it is here.
France signed 15 business contracts with China worth billions of euros on Monday, including a multi-plane order with Airbus and a €1 billion contract for EDF to build an offshore wind farm in China, the French presidency said.
A 300 plane order from China for Airbus planes is worth about €30 billion euros ($33.94 billion), a French presidency official said.
“We are close to €30 billion on the Airbus deal alone,” the official said.
France’s Fives and China National Building Materials Group signed a €1 billion deal to cooperate on energy savings in developing countries. CMA-CGM and China State Shipbulding Corporation signed €1.2 billion deal to build 10 containers.
This story appeared on the france24.com Internet site at 7:13 p.m. CEST on Monday evening over there — and I thank Roy Stephens for sharing it with us. Another link to it is here.
U.S. President Donald Trump’s recognition of the disputed Golan Heights as Israeli territory is “an act of brigandry,” former Labour Party M.P. George Galloway told RT. Trump’s declaration has been condemned in the Arab world.
Trump on Monday signed a declaration recognizing Israel’s sovereignty over the Golan Heights, seized from Syria during the 1967 Six-Day War – a move that Israeli Prime Minister Benjamin Netanyahu called “historic justice” and a “diplomatic victory.” This is despite the U.N. declaring Israel’s occupation of the heights “null and void,” and the Arab League calling it “completely beyond international law.”
Galloway called Trump’s declaration “an act of brigandry which will send a clear message to the entire world that the U.S. cares nothing for international law, for treaties, just force.”
Crucially to Israel, the Golan Heights is one of only three sources of freshwater feeding the arid Jewish state. Perhaps more crucially to Israeli and American interests, the region also sits on top of sizable oil reserves, discovered in 2015. U.S. oil company Genie, through its Israeli subsidiary, was given exclusive exploration rights to drill the occupied territory, and until now has been held up by the small matter of the land being illegally occupied under international law.
“The U.S. will underwrite any Israeli crime as long as its imperial interests in the Arab world are furthered,” Galloway told RT. “The oil reserves in the Golan are already being stolen in absolute violation of international law but for the further enrichment of western businessmen.”
This news item showed up on the Zero Hedge website at 8:56 p.m. Moscow Time on their Monday evening — and was updated about eighteen hours later. I thank Roy Stephens for this story as well — and another link to it is here.
China’s local government debt a major risk as Beijing allows more borrowings to boost growth, says renown academic
China is unlikely to be the centre for the next financial crisis but the increase in local government debt as Beijing allows more borrowings to bolster growth will be a major risk, warned a renowned academic in capital markets in the country.
Professor Wu Xiaoqiu, vice-president of Renmin University of China, said the level of local government debt…which has risen four-fold since 2018…was close to a “boiling point”.
To arrest a slowing economy, the central government is not only allowing the regions to sell more debt to fund local development, but also granting permission to a few places to sell these bonds to retail investors in a pilot scheme that could further unlock billions of dollars in savings.
Wu said while there were risks in the level of corporate loans, they were not as serious as those for local government debt.
“High debt needs high fiscal revenue and high economic growth, but China’s economic growth has slowed from 10 per cent to 6 per cent. If local government debt continues to increase in the same way, the cost of debt will exceed the fiscal income local governments receives – this means it will be difficult to sustain,” said Wu during a media briefing at the Boao Forum for Asia on Tuesday.
No! Really? Ya think!!! This Wu character is really pulling his punches, as if he said something against the central government about their level of debt creation, he would probably disappear under mysterious circumstances. This ‘news’ item put in an appearance on the South China Morning Post at 8:00 p.m. CST on their Tuesday morning, which was 8:00 a.m. in Washington — EDT plus 12 hours. I thank Bill Moomau for pointing it out — and another link to it is here.
February sales of the Mint’s gold coins and gold bars reached 19,524 ounces, posting declines of 37.4% from January and 26.3% from February 2018.
Year to date gold sales at 50,713 ounces are down 20.3% from the 63,647 ounces sold during the first two months of last year.
The Perth Mint’s February sales of silver coins and silvers bars combined to 584,310 ounces, registering drops of 29.5% from January and 41.2% from February of last year.
Silver sales stack to 1,413,164 ounces in the first two months of 2019 for a drop of 31.4% from the 2,060,315 ounces sold during the same period in 2018.
This news item was posted on the coinnews.net Internet site on Monday sometime — and I found it on the Sharps Pixley website yesterday afternoon. Another link to it is here.
Join Mike Maloney as he reviews why the #1 asset in his own portfolio is silver bullion. Which as you’ll see from this video, is selling for not much more than the cost to get it out of the dirt it comes from.
This very interesting 7:03 minute video presentation from Mike appeared on the goldsilver.com Internet site on Tuesday sometime — and the first person through the door with it yesterday was Harold Jacobsen.
The PHOTOS and the FUNNIES
Here are the last two shots from the Tulameen area. The first one below is of the core of the downtown business district at the peak of Friday’s rush hour — and the second is from far down Otter Lake looking back at what little you can see of the ‘town’ through the trees. The Kettle Valley Railway/Trans Canada Trail runs along the edge of the lake on the far left side of this photo. Click to enlarge for both.
Well, ‘da boyz’ were certainly out and about on Tuesday, starting their “Midnight Moves” in gold early in morning trading in the Far East. It’s a given that they don’t want any positive price excitement going into First Day Notice for April gold deliveries on Thursday evening. But what happens after that, is anyone’s guess.
Gold didn’t get sold low enough yesterday to break it back below its 50-day moving average — and the silver price is still being forced to languish below its. Other than that, the ‘care and maintenance’ continues.
Below are the 6-month charts for the Big 6 commodities — and except for the above mentioned points — and palladium’s price ‘decline’…there’s not a lot to see. Click to enlarge.
Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report. Just eye-balling the above charts for both gold and silver, I was of the same opinion as Ted, that we certainly expect to see an increase in the commercial net short position in gold, as that precious metal broke above — and closed above its 50-day moving average during the reporting week. As to how bad the damage might be, I’m not in a position to say. Ted has his mid-week commentary for this paying subscribers this afternoon — and if he has something to say on this issue, I’ll ‘borrow’ a sentence or two for my Friday missive.
I’m not about to hazard a guess as to what the silver numbers might be in this Friday’s COT Report.
Much to my embarrassment/consternation, I found out yesterday evening that the U.K. and Europe don’t go on British Summer Time [BST] — and Central European Summer Time [CEST] until this Sunday…three weeks after North America goes on Daylight Saving Time…not the usual two weeks. I have reader Angus MacLean to thank for that information. In his e-mail to me, he stated the following: “BST doesn’t start until next Sunday – the 31st. We were forced to change the traditional post-21st March DST date, to the last Sunday in March to co-ordinate with the E.U.’s practice. (Another good reason to Leave — or it would have been…). All the best…Angus“.
So armed with that information, I won’t be staying up the extra hour…until 5:00 a.m. EDT…to wait to report on the first hour of London/Zurich trading, but will be posting the column on my website a few minutes after the London open, which is 4:00 a.m. EDT. That will continue for the rest of this week.
And, having said all that…
As I post today’s column on the website at 4:02 a.m. EDT, I note that the gold price crawled quietly higher by a few dollars until around 10:45 a.m. China Standard Time on their Wednesday morning, but two hour later it was was sold back to around changed — and it edged quietly sideways until 3 p.m. CST. At that point it was turned lower — and is now down $1.90 at the moment. Silver’s four cent ‘rally’ lasted for less than two hours once trading began at 6:00 p.m. EDT on Tuesday evening in New York. From that juncture, it was sold quietly and unevenly lower — and it’s currently down 6 cents. The platinum price stair-stepped its way higher in Far East trading — and it’s up 3 dollars at the moment. Ditto for palladium, as it was up 8 bucks at the afternoon gold fix in Shanghai, but it was then sold sharply lower about thirty minutes before the Zurich open — and from up 8 bucks, it’s now back at unchanged as Zurich opens.
Gross gold volume is pretty heavy at a bit over 69,500 contracts, but almost all of that is roll-over/switch volume out of April — and into future months. Net HFT gold volume, minus all that switch volume is a piddling 11,200 contracts or so. Net HFT silver volume is fairly heavy at around 10,500 contracts — and there’s only 522 contracts worth of roll-over/switch volume in that precious metal.
The dollar index opened unchanged the moment that trading began at 7:45 p.m. EDT in New York on Tuesday evening — and was up 16 basis points by minutes before 11 a.m. CST on their Wednesday morning. It has chopped mostly sideways since, but has begun to head higher in the last thirty minutes or so — and as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is higher by 22 basis points.
There’s no doubt in my mind that ‘da boyz’ are using this dollar ‘rally’ to push precious metal prices lower to entice the remaining April contracts holders that aren’t standing for delivery, to sell…rather than roll their contracts over into future months.
As I pointed on in my Tuesday missive, all the large traders that aren’t standing for gold deliveries next month, have to roll or sell their remaining April contracts before the 1:30 p.m. EDT COMEX close today, so roll-over/switch volume will be pretty enormous once again.
That’s all I have this time — and I’ll see you here tomorrow.