28 March 2019 — Thursday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price was up about two dollars by shortly before 11 a.m. China Standard Time on their Wednesday morning, but from that point, it was sold lower until the London open — and was up about three bucks by 10 a.m. GMT. From there it drifted sideways until shortly before 1 p.m. GMT/8 a.m. EDT — and it was carefully sold lower from there, including a 7 dollar smack-down shortly after the equity markets opened in New York. It gained about half of that back by the afternoon gold fix in London — and was then sold unevenly lower for the remainder of the Wednesday trading session.
The high and low ticks certainly aren’t worth looking up.
Gold was closed in New York yesterday at $1,309.10 spot, down $6.10 from Tuesday. Net volume was was impossible to calculate with any degree of accuracy, but was only several thousand contracts at most. However, roll-over/switch volume out of April and into future months was enormous at something way over 206,500 contracts. On these last two roll-over days of the month…Wednesday and today…both these numbers may be out by quite a bit — and are guesstimates.
Silver was up 4 cents by shortly before 10 a.m. CST on their Wednesday morning — and Ted’s “midnight move” began at that juncture. Like gold, silver was sold lower until the London open — and then for all intents and purposes it was guided on an almost identical path as gold for the rest of the day.
The high and low ticks in this precious metal were reported by the CME Group as $15.475 and $15.27 in the May contract.
Silver was closed on Wednesday afternoon in New York at $15.26 spot, down 14 cents on the day. Net volume was nothing out of the ordinary at a bit over 55,000 contracts — and there was 4,165 contracts worth of roll-over/switch volume in this precious metal.
Platinum was up 4 dollars by around 9 a.m. China Standard Time on their Wednesday morning — and from that point it chopped quietly sideways until shortly before 9 a.m. in New York. Then it took off to the upside from there, only to get hammered lower…like both silver and gold…shortly after the equity markets opened in New York yesterday morning. It made a tiny rally attempt going into the COMEX close, but that was all taken back very shortly after that — and from that juncture, the price didn’t do much until trading ended at 5:00 p.m. EDT. Platinum was closed at $851 spot, down 5 dollars from Tuesday — and at least 17 bucks off its high tick of the day.
Palladium didn’t do much in Far East trading, but was up a handful of dollars shortly before the Zurich open, but that was all taken back by the time the open rolled around. Less than an hour later, the bids got pulled — and the price was dropped just below the $1,500 spot mark. From there it traded pretty flat until a few minutes after the equity markets opened in New York on their Wednesday morning. Then the spoofing and dirty tricks started — and at its low, palladium was down about $108…the biggest one-day move in any precious metal price that I can remember over the last twenty years. The price recovered a bit from there — and then didn’t do much for the rest of the day. Palladium was closed down at $1,430 spot, down 92 bucks. ‘Da boyz’ were serious yesterday.
The dollar index closed very late on Tuesday afternoon in New York at 96.74 — and opened up 1 whole basis point once trading began at 7:45 a.m. EDT in New York on Tuesday evening, which was 7:45 a.m. China Standard Time on their Wednesday morning It began to head higher from there — and during the day it made three unsuccessful attempt to break above the 95.00 mark — and it finished the day at 96.77…up 3 basis points from Tuesday’s close.
As you can see from the chart below, there was no corresponding dollar index move at around 9:40 a.m. in New York yesterday to account for the smack-downs in all four precious metals that occurred at that point. Yesterday’s price moves in the precious metal were all COMEX futures market positioning once again.
Here’s the DXY chart from Bloomberg. Click to enlarge.
And here’s the 6-month U.S. dollar index chart, courtesy of stockcharts.com — and the delta between its close…96.28…and the close on the DXY chart above, was 49 basis points on Wednesday. Click to enlarge as well.
The gold stocks opened unchanged — and spiked into positive territory by a bit until ‘da boyz’ lowered the boom on gold and silver prices about ten minutes later. By shortly before the afternoon gold fix in London, the shares were down a percent and change. They chopped quietly sideways until shortly after 1 p.m. in New York trading — and then sank quietly and unevenly lower until trading ended at 4:00 p.m. EDT. The HUI was closed lower by 1.47 percent.
Except for some minor variations, the silver equities followed a mostly similar path as the gold shares, except Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 2.13 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, updated with Wednesday’s doji. Click to enlarge as well.
The price smashes in all four precious metals shortly after the markets opened in New York on Wednesday morning were certainly designed to have a negative impact on their respective share prices — and they were successful, as the precious metal equities were all in the green at 9:40 a.m. EDT when the engineered smash-downs were commenced.
The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Friday. That’s not surprising since the remaining March deliveries in both precious metals will be completed today. The only deliveries scheduled for Friday are in copper and palladium. The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Wednesday trading session showed that gold open interest in March fell by 1 contract, leaving zero left. Tuesday’s Daily Delivery Report showed that 1 silver contract was posted for delivery today. Silver o.i. in March dropped by 40 contracts, leaving zero contracts left as well. Tuesday’s Daily Delivery Report showed that 40 silver contracts were actually posted for delivery today. Deliveries in both metals are now complete for the month.
Total open interest in gold for April cratered by 41,086 contracts, leaving 61,173 still open. Silver o.i. for April declined by 100 contracts, leaving 667 still around. Both these numbers [especially gold] will take a huge hit when Thursday’s Preliminary Report goes up on the CME’s website around midnight tonight.
There were no reported changes in either GLD or SLV on Wednesday.
The folks over at the shortsqueeze.com internet site updated their short position data for GLD and SLV on Monday…for positions held at the close of trading on Friday, March 15 — and this is what they had to report. The short position in SLV fell from 10,467,900 shares/troy ounces, down 9,84,700 shares/troy ounces, which is a decline of 603,200 shares/troy ounce, or 5.8 percent. The short position in GLD rose from 1,550,100 troy ounces, up to 1,657,950 troy ounces, which is an increase of 7.0 percent.
There was no sales report from the U.S. Mint.
The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday was 500.000 troy ounces that was received at HSBC USA. An even number such as this certainly represents 50 ten-ounce gold bars. I won’t bother linking this.
It was far busier in physical silver, as 1,199,007 troy ounces…two truckloads…was reported received — and only 112,281 troy was shipped out. In the ‘in’ category, there was one truckload…599,847 troy ounces…that was received at CNT — and the other truckload…599,159 troy ounces…was dropped of at Canada’s Scotiabank. All of the ‘out’ activity was at CNT as well.
There was also big movement in paper silver, as 4,341,915 troy ounces was transferred from the Registered category — and back into Eligible….3,620,000 troy ounces at Brink’s, Inc. — and 721,915 troy ounces at CNT. Ted is of the opinion that this is silver that JPMorgan took delivery of in March — and it’s being held there because JPMorgan’s own silver vault may already be full. The reason for the transfer from the Registered category — and back into Eligible was simply to save on storage fees. The link to all this silver activity, both physical and paper, is here.
There was almost no movement at all over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday. Nothing was reported received — and only 2 were shipped out. This happened at Brink’s, Inc. — and I won’t bother linking this tiny amount.
Here are the last of the charts that Nick passed around on the weekend. They show the total gold and silver inventories of all know depositories, mutual funds and ETFs as of the close of business on Friday, March 22. During that reporting week, they added 153,000 troy ounces of gold — and 255,000 troy ounces of silver. Click to enlarge for both charts.
It was a very quiet news day yesterday — and I only have a small handful of stories for you.
The U.S. Securities and Exchange Commission agreed to pay a total of $50 million to a pair of whistleblowers who provided information that helped the agency win a $267 million settlement with JPMorgan Chase & Co. over claims that the bank failed to inform wealthy clients of conflicts of interest in managing their money.
One of the informants will get $37 million, the third-biggest payout in the history of the SEC’s whistleblower program, the agency said in a statement Tuesday. The SEC didn’t name the company involved or the people getting the awards, citing federal law that protects confidentiality.
Labaton Sucharow, a law firm that represents one of the whistleblowers, disclosed the link to the JPMorgan case after the SEC’s announcement.
“Blowing the whistle is rarely easy, and it certainly hasn’t been for my client, but this historic SEC whistleblower award and related enforcement action reaffirms that doing the right thing pays,” Jordan Thomas, the whistleblower lawyer, said in a statement. Thomas said his client is a JPMorgan executive.
In December 2015, JPMorgan agreed to pay more than $300 million to the SEC and to the Commodity Futures Trading Commission. JPMorgan admitted disclosure failures from 2008 to 2013 related to two units that manage money — its securities subsidiary and its nationally chartered bank — as part of the SEC settlement.
Another licensing fee for JPMorgan, just part of the tribute that they must pay to run their business. Jamie will pay it out of petty cash. This Bloomberg story put in an appearance on their website at 8:43 a.m. on Tuesday morning EDT — and was updated about three hours after that. I found it in a GATA dispatch that Chris Powell filed from Hong Kong on their Wednesday afternoon. Another link to it is here.
Days after Vladimir Putin sent military planes and 100 troops to an airport near Caracas over the weekend, on Wednesday President Trump warned Russia against involvement in the Latin American nation, telling reporters in the Oval Office that “Russia has to get out” amid U.S. efforts to back opposition leader Juan Guaido.
Trump was meeting with Fabiana Rosales, the wife of Juan Guaido, who has been recognized as the legitimate leader of Venezuela by the U.S. and various western nations, even as both Russia and China still endorse only the regime of Maduro.
Asked if he’d communicated that message to Russia through one of his representatives, Trump said “they know very well.”
Moments before Trump spoke, V.P. Mike Pence called on Russian President Putin to cease talks with Maduro and said Russia’s military move was “an unwelcome provocation“, clearly failing to grasp the absurdity of what has become a soft U.S.-backed presidential coup (and one which based on reported on the ground has lost most of its recent momentum).
To underscore that the U.S. still hasn’t given up imposing control in the country with the world’s biggest oil reserves, Trump said “all options are on the table,” language he has repeatedly used when asked whether he’s considering U.S. military intervention against Maduro.
This Zero Hedge article appeared on their Internet site at 2:27 p.m. EDT on Wednesday afternoon — and another link to it is here. There was also a companion piece to this story from the rt.com Internet site. It’s headlined “Russia must get out of Venezuela, all options open – Trump” — and I thank Swedish reader Patrik Ekdahl for sending that one our way.
Update (5:40 pm ET): Nearly three hours after the voting began, the results of the indicative vote are finally in, and it looks like MPs rejected every single alternative to May’s Brexit deal that was included on the ballot.
That’s right, not a single option received enough votes to pass by a simple majority. So much for the hopes expressed by Oliver Letwin, the mastermind behind the vote, who had said it would at least help narrow the options down…but that didn’t stop him from proposing that Parliament should vote again on Monday to “reconsider these matters.”
For what it’s worth, a proposal to keep the U.K. in the customs union and a plan for a second “confirmatory” referendum on May’s deal came the closest.
The fact that MPs have no idea what they want has never been more clear. We wonder if this will make May’s “back me then sack me” offer any more attractive to intransigent Brexiteers, and, possibly the opposition?
Earlier, the speaker announced the results of the “statutory instrument” vote. And as was expected, Brexit is officially *not* happening on March 29.
This Zero Hedge new item was posted on their Internet site at 6:15 p.m. EDT on Wednesday evening — and another link to it is here.
You know it’s bad when…
For the first time since October 2016, German 10Y bond yields have tumbled below Japanese 10Y bond yields…Click to enlarge.
Meanwhile, the U.S. yield curve continues to crash (3m Bill to 18m Bill)…Click to enlarge.
As Saxo’s Steen Jakobsen notes, this indicator has been shown (in academic papers) to have highest tracking for future Fed path.
The whole world is turning Japanese…and American stock markets just refuse to see it. Click to enlarge.
This brief 3-chart Zero Hedge piece showed up on their website at 10:18 a.m. on Wednesday morning EDT — and I thank Brad Robertson for this one. Another link to the hard copy is here.
The final demise of South Africa’s gold industry came a step nearer on Wednesday with the announcement that Sibanye Gold Ltd. won’t extend the life of Driefontein, once the biggest mine on the continent.
Last year the mine, more than 2 miles (3,200 meters) deep, produced about 300,000 ounces of gold, just a fifth of its peak output two decades ago. Now Sibanye will wind down Driefontein’s operations within 10 years, with plans to cut thousands of jobs as it shuts unprofitable shafts.
South Africa’s gold industry employs just over 100,000 people, less than a fifth of the number that used to drive the apartheid economy. With most of the nation’s gold operations unprofitable, more job cuts are inevitable. Moreover, the geological challenges faced by the world’s deepest mines saw fatalities at Sibanye’s gold operations soar last year.
“Driefontein used to be the heartbeat of mining, but that was many many years ago,” said Rene Hochreiter, an analyst at Noah Capital Markets Ltd. in Johannesburg. “Below 3,000 meters you are not going to make money and you probably end up killing a lot of people.”
Sibanye Chief Executive Officer Neal Froneman said the investment climate in South Africa isn’t “conducive” to spending billions of rand to deepen Driefontein further and extend its life.
This gold-related Bloomberg article was posted on their Internet site at 11:49 p.m. Pacific Daylight Time on Tuesday night — and I found it on the gata.org Internet site. Chris Powell’s headlined to this story read “Indifferent to price suppression, South Africa remains a rich country insisting on being poor” — and that’s pretty much the case. Another link to it is here.
The PHOTOS and the FUNNIES
The first photo was taken on December 9 on the trip back from Tulameen — and this is a shot from on high overlooking the Tulameen River as it flows towards Princeton — and empties into the Similkameen River at the the town. The waters of both end up in the Columbia River system at some point. Note the Kettle Valley Railway track bed/Trans Canada Trail on the left side of the river. Click to enlarge.
This second shot is from a week later. This was taken from the Trans-Canada Highway about a mile/2 kilometers north of Spence’s Bridge looking east across the Thompson River. Note the Nicola River flowing into it on the left-hand side of the shot. B.C. Highway 8 [and the Nicola River] in the middle leads to Merritt…a 69 kilometer drive. The Kettle Valley Railway track bed is in this shot somewhere and, like Highway 8, ends up at Merritt, Tulameen and Princeton if you travel along it far enough. Click to enlarge.
Yesterday’s price action in all four precious metals was all COMEX-related gaming as March deliveries end — and April delivers begin in gold. It’s all completely illegal, of course…but when has that ever mattered to the CFTC.
Palladium really got it in the neck — and as I said about a week ago, it appeared that ‘da boyz’ were out to break the palladium price to the downside — and they certainly got a good start yesterday. But, as always, yesterday’s price action in this precious metal was all COMEX futures market positioning as well — and had nothing to do with supply and demand.
Here are the 6-month charts for all four precious metals, plus copper and WTIC. There’s nothing much to see except to note that palladium was closed a dollar or so below its 50-day moving average on Wednesday. Click to enlarge.
Today, at the close of COMEX trading, the remaining contract holders in the April delivery month for gold that aren’t standing for delivery, have to either roll or sell these contracts. And looking at the gaming in the COMEX futures market yesterday, it certainly appears like ‘da boyz’ are encouraging as many of those traders to sell, rather than roll over their remaining April contracts into future delivery months.
First Day Notice for April deliveries in gold should be up on the CME’s website by around 10 p.m. EDT this evening — and I’ll have all that for you in tomorrow’s column.
But once that event passes, I’m not sure what will happen to precious metal prices going forward. I’m expecting higher, but JPMorgan et al still have an iron grip on their respective prices.
With month end and quarter end up on us…let the gaming being…both today — and on Friday, as various and sundry entities attempt to gussy up their portfolios. This is what the Thursday morning edition of the King Report had to say about it…”Today should contain the peak intensity of Q1 performance gaming. The usual suspects want to push stocks higher to close out Q1 with a good report card. Barring unexpected negative news, manipulators will make a concerted effort to boost stocks, especially late in the European and U.S. sessions.”
“The are no markets anymore…only interventions.”
And as I post today’s column on the website at 4:02 a.m. EDT, the London/Zurich opens are less than ten minutes away — and I see that the gold price didn’t do much until around 9 a.m. CST in Shanghai, but it was rolled over at that point — and the current low was set at precisely 10:00 a.m. over there. It bounced off that low — and has been crawling unsteadily higher since. It’s down 40 cents the ounce at the moment. The silver price was managed in exactly the same manner — and it’s down a penny currently. The platinum price traded sideways to up a few dollars by just after 12 o’clock noon China Standard Time on their Thursday. It has been in rally mode since — and is up 8 bucks. Palladium was down 14 dollars by 12 o’clock noon CST — and has been moving very unsteadily higher since, but was rolled over like the other three precious metals once the dollar index began to ‘rally’ — and is down 10 bucks as Zurich opens.
Gross gold volume is 62,500 contracts — and minus roll-over/switch volume, net HFT gold volume is just over 42,500 contracts, with all of that in the new front month for gold, which is June. Net HFT silver volume is around 10,500 contracts — and there’s only 336 contracts worth of roll-over/switch volume in that precious metal.
The dollar index opened up about 18 basis points the moment that trading began at 7:45 p.m. EDT in New York on Thursday evening, which was 7:45 a.m. CST on their Thursday morning. It crept quietly and unevenly lower from that point until 2:46 p.m. in Shanghai — and has ‘rallied’ off that current low rather smartly — and is up 15 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.
That’s it for yet another day — and I’ll see you here tomorrow.