02 April 2019 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price traded very unevenly sideways once trading began at 6:00 p.m. EDT in New York on Sunday evening. That lasted until exactly 2:00 p.m. China Standard Time on their Monday afternoon — and Ted’s “midnight move” began at that juncture. That lasted until shortly after the London open — and the it crawled unsteadily higher until 1:00 p.m. BST/8:00 a.m. EDT. A bit of a rally began at that point but, like Friday, it was capped a few minutes after 9 a.m. in New York — and once the afternoon gold fix was in at 10:00 a.m. EDT, the engineered price decline began — and the gold price was closed almost on its low tick of the day.
Since gold traded within a ten dollar price range yesterday, the high and low ticks aren’t worth looking up.
Gold was closed on Monday at $1,287.30 spot, down $4.70 on the day. Net volume was not exactly light at 232,000 contracts — and there was a bit under 7,000 contracts worth of roll-over/switch volume on top of that.
The price action was almost exactly the same in silver, including the 2 p.m. China Standard Time sell-off going into the London open. After that it didn’t do much of anything — and silver’s low price of the day came somewhere around the noon BST silver fix. Its subsequent rally was also capped a few minutes after 9 a.m. in New York — and then it was sold lower until shortly before 3 p.m. in the thinly-traded after-hours market — and it didn’t do much of anything after that.
The low and high ticks in this precious metal aren’t worth looking up, either…but here they are anyway…$15.03 and $15.19 in the May contract.
Silver was closed yesterday at $15.075 spot, down 1.5 cents on the day. Net volume was a bit elevated at around 57,300 contracts — and there was a hair over 10,000 contracts worth of roll-over/switch volume in this precious metal. Silver broke above its 200-day moving average briefly intraday, but was obviously closed below it.
Platinum was up five bucks by around 2:20 p.m. CST on their Monday afternoon — and from that juncture, it was sold down to its low tick of the day, which came shortly before 1 p.m. CEST in Zurich. It’s subsequent rally met the same fate as gold and silver — and it was sold quietly lower into the COMEX close — and didn’t do a lot after that. Platinum was closed on Monday at $848 spot, up a dollar from Friday.
Palladium traded unevenly sideways until, like for platinum, was sold lower starting shortly before 2 p.m. CST on their Monday afternoon. It chopped mostly sideways from there until shortly before 1 p.m. in Zurich — and was down around 10 bucks at that point. Most of the gains in the ensuing rally were in by shortly after 11:30 a.m. in New York when it broke above the $1,400 spot mark — and from there it was forced to trade sideways until the market closed at 5:00 p.m. EDT. Palladium finished the Monday session at $1,401 spot, up 37 bucks but, like most days, would have closed higher, if allowed, which it obviously wasn’t.
The dollar index closed very late on Friday afternoon at 97.28 — and opened down 10 basis points once trading began at 6:54 p.m. EDT on Sunday evening in New York, which was 6:54 a.m. China Standard Time on their Monday morning. From that point it began to creep quietly lower — and its 97.03 low tick came at 9:30 a.m. in London. From there it chopped quietly sideways until 9:54 a.m. in New York. It jumped higher at that point — and by 10:20 was back at the unchanged mark. It chopped nervously sideways from that point until 4:55 p.m. EDT — and it jumped up a bunch more basis points going into the close. The dollar index finished the Monday session at 97.23….down 5 basis points from Friday’s close…no matter what the Bloomberg chart shows below.
If you can see any correlation between what the currencies were doing vs. the price activity in the precious metals, I’d love to hear from you. This was strictly a GLOBEX/COMEX paper affair once again.
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 the stockcharts.com Internet site — and the delta between its close…96.80…and the close on the DXY chart above was 43 basis points on Monday. Click to enlarge.
The gold stocks opened unchanged — and hit their respective highs, such as they were, at the afternoon gold fix in London. From there they were sold quietly lower until shortly after 3 p.m. in New York trading — and they rallied a bit into the close from there. The HUI closed down 2.12 percent.
The price path of the silver equities was virtually identical to that of the gold shares, except Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 2.44 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart updated with Monday’s doji. Click to enlarge as well.
I certainly wasn’t happy about the declines in the precious metal shares yesterday, as they seemed out of all proportion to the small declines in their underlying precious metals, particularly the silver equities.
The CME Daily Delivery Report for Day 3 of April deliveries showed that 1,131 gold and 121 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.
In gold, there were eight short/issuers in total, but the only two that really mattered were HSBC USA and Scotia Capital [Scotiabank]…with 577 and 420 contracts out of their respective in-house/proprietary trading accounts. In very distant third place was JPMorgan, with 59 contracts out of its client account. There were nine long/stoppers in total — and the three biggest were Citigroup and Morgan Stanley, with 601 and 274 contracts for their own accounts. In third spot was JPMorgan, stopping 156 contracts for its client account.
In silver, there were four short/issuers out of their respective client accounts, with no real standouts. Of the six long/stoppers, JPMorgan picked up 93 for its client account — and both Morgan Stanley and Marex Spectron picked up 11 contracts each for their respective client accounts.
The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Monday trading session showed that gold open interest in April fell by 356 contracts, leaving 2,454 still around, minus the 1,131 mentioned a few paragraphs ago. Friday’s Daily Delivery Report showed that 823 gold contracts were actually posted for delivery today, so that means that 823-356=467 more gold contracts just got added to the April delivery month. Silver o.i. in April dropped by 375 contracts, leaving 197 still open, minus the 121 mentioned a few short paragraphs ago. Friday’s Daily Delivery Report showed that 413 silver contracts were actually posted for delivery today, so that means that 413-375=38 more silver contracts were added to April.
Not surprisingly, after last week’s big engineered price decline in gold, there was a huge withdrawal from GLD, as an authorized participant took out 368,314 troy ounces…a bit over 11 tonnes. But there were no reported change in SLV.
The 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 business on Friday, March 29 — and this is what they had to report. The amount of gold in their gold ETF fell by 3,666 troy ounces — and their silver ETF shed 96,903 troy ounces.
The U.S. Mint had a smallish sales report to start off the month of April. They sold 1,500 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — 100 platinum eagles — and 263,000 silver eagles.
There was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.
There was a bit more activity in silver, as one truckload…600,256 troy ounces…was received at Canada’s Scotiabank — and that was all in the ‘in’ activity there was. There was only 2,935 troy ounces shipped out…3 good delivery bars…two out of Brink’s, Inc. — and one out of Delaware. There was also a paper transfer of 1,998,850 troy ounces from the Eligible category — and into Registered over at CNT. The link to all that is here.
There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday. They reported receiving 559 of them — and shipped out 1,085. All this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here are some gold-related charts that Nick Laird passed around on the weekend. I don’t normally post them — and I don’t know why. But there’s no better time to start then now. The first chart shows the net imports and exports into the European Union [E.U.] countries…updated with January’s data.
It shows that during the month, the E.U. countries imported 120.8 tonnes — and exported 76.9 tonnes. This is a 5-year chart. Click to enlarge.
This next chart shows the E.U. countries that received gold, plus the associated tonnage — and the second shows the E.U. countries that shipped out gold…plus the associated tonnage as well. It’s obvious from this chart that the U.K. is the main player in the E.U. gold market. Click to enlarge for both.
It was another fairly quiet news day on Monday — and a very quiet weekend for news as well.
U.S. President Donald Trump said on Friday that the Federal Reserve made a mistake by raising interest rates and blamed the central bank for hurting the U.S. economy and stock market.
“Had the Fed not mistakenly raised interest rates, especially since there is very little inflation, and had they not done the ridiculously timed quantitative tightening, the 3.0 percent GDP, and Stock Market, would have both been much higher & World Markets would be in a better place!,” Trump tweeted.
The remarks were part of a new attack the White House has launched against the independent central bank in their unusual public split. The Fed’s Board of Governors did not immediately comment.
No fewer than five Fed officials this week have touted the underlying strength of the American economy and argued a recent spate of weak data on business activity is more likely to prove fleeting than lasting. None said they currently back a rate cut.
Prior administrations have taken care not to comment on Fed policy, but Trump has railed repeatedly against the U.S. central bank’s rate hikes. Friday’s comments were uniquely specific about the course of action now favored by the president.
I would also suspect that Trump is also looking down the road to the 2020 election as well. This Reuters story, co-filed from Washington and New York, was posted on their Internet site on Friday afternoon EDT — and I found it embedded in a GATA dispatch on Saturday. Another link to it is here.
After January’s much-heralded rebounded from December’s “well it can’t be real” plunge, retail sales were expected to continue the rebound in February (albeit at a slower pace) but they did not – disappointing gravely.
Against expectations of a 0.2% rise, headline retail sales dropped 0.2% MoM in February (exaggerated by strong upward revisions) and core retail sales (ex-auto and gas) tumbled 0.6% MoM…Click to enlarge.
Sales in the “control group” subset, which some analysts view as a cleaner gauge of underlying consumer demand, also fell 0.2%, missing estimates for a gain, after an upwardly revised 1.7% increase in the prior month. The measure excludes food services, car dealers, building-materials stores and gasoline stations.
As Bloomberg notes, the report suggests consumer spending will be limited as a growth driver in the first quarter, with pressure points also including smaller-than-expected tax refunds and global economic weakness that may be weighing on jobs. At the same time, rising wages, a stock-market rally and steady interest rates are likely to be pillars for consumption in coming months.
But, but, but… White House chief economic adviser Larry Kudlow said Friday that the “underlying economy” isn’t slowing.
This Zero Hedge news item appeared on their Internet site at 8:38 a.m. EDT on Monday morning — and I thank Brad Robertson for sending it along. Another link to it is here.
Of course the truth is that things have been rocky for the retail industry for quite a few years, but the numbers are telling us that this crisis is really starting to accelerate.
According to Challenger, Gray & Christmas, retail layoffs were up a whopping 92 percent in January and February compared to the same period a year ago. The following comes from NBC News…
“More than 41,000 people have lost their jobs in the retail industry so far this year — a 92 percent spike in layoffs since the same time last year, according to a new report.
And the layoffs continue to mount, with JCPenney announcing this week it would be closing 18 stores in addition to three previously announced closures, as part of a “standard annual review.””
Yes, competition from Internet commerce is hurting the traditional retail industry, but it certainly doesn’t explain a 92 percent increase.
And very few retailers have been able to avoid this downsizing trend. At this point, even the largest retailer in the entire country has begun “quietly closing stores”…Walmart is closing at least 11 U.S. stores across eight states.
For decades, Wal-Mart has been expanding extremely aggressively. They have plenty of cash, and so the only way that it would make sense for them to close stores is if they anticipated that we are heading into a recession.
This story was posted on the Zero Hedge website at 5:20 p.m. on Monday afternoon EDT — and another link to it is here.
Max interviews Nomi Prins of NomiPrins.com and author of ‘Collusion: How Central Bankers Rigged the World’, and they discuss indications from the U.S. central bank that negative interest rates may be on the cards in the event of a downturn.
This video interview begins at the 14:25 minute mark — and runs for about thirteen minutes. I thank Jim Gullo for pointing it out.
In his most recent media appearance, Peter Schiff blasts the mainstream financial media and Fed policies, which he believes to be inflating the “biggest bubble yet“. Schiff appeared on the Quoth the Raven Podcast on Sunday and spent an hour and a half explaining his case as to why the United States is heading to a currency crisis.
Schiff led off talking about why he doesn’t get any mainstream financial media attention anymore, partly responding to recent comments by CNBC contributor Guy Adami that Schiff was “bad for TV“.
“They abruptly cancelled my appearance a day before I was supposed to go on,” he said of a scheduled interview with Rick Santelli on CNBC. “They haven’t tried to book me since. Obviously Santelli’s team didn’t get the memo that Peter Schiff’s not allowed on.”
“I think they want to shield the audience from my perspective,” he continued. “Maybe they think they’re doing their audience a favor by keeping me off the air.”
We all know Peter’s position on everything financial and monetary, as it’s about the same as most pundits, including mine. I’m only posting this story to show the active censorship of anyone who dares speak the truth while being interviewed by the main stream media. This happened to GATA’s Chris Powell in Hong Kong just now, when CNBC Asia cancelled their scheduled interview as well. This Zero Hedge article showed up on their Internet site at 3:26 p.m. on Monday afternoon EDT — and another link to it is here.
Almost daily, someone (often a European or North American) comments to me that the world is falling apart. The government is becoming dictatorial, the people are becoming more socialistic and political correctness is no longer an option, it’s a mandate and you’d better get on board.
This trend is not by any means imagined, but it would be incorrect to say that “the world is falling apart.” If we spend time travelling the world, what we see is that parts of it (primarily the former “free world”) is unquestionably in a state of political, economic, social and moral decline.
The good news is that many other parts of the world are impacted less; others are hardly affected at all and, in still other cases, countries are thriving.
What’s often missed, due to myopia, is that, in any era, there are always some countries that are burning out at the same time as others are on the rise.
Cultures and nations pass through cycles, much like the sine waves above. Any nation that undergoes a social, political and economic collapse ends up hitting the skids and staying there for a while. Often, the spoiled, complacent generation is unable to affect a recovery. However, the next generation learns to recognize that the only way that they can move ahead is to get out and work. Be ambitious, be self-reliant, act responsibly and, eventually, you’ll improve your life.
This interesting commentary from Jeff put in an appearance on the internationalman.com Internet site on Monday morning EDT — and another link to it is here.
Russia’s gross international reserves (GIR), including gold, continue to creep upwards and reached $487.1bn as of March 22 – enough to cover Russia’s external debt dollar for dollar in cash. Click to enlarge.
In February during his state of the nation speech President Vladimir Putin boasted that for the first time Russia has enough money in its reserves to cover all its external debt with cash.
At the end of the last quarter of 2018 Russia had an external debt of $453.7bn and the debt has been falling steadily over the twelve months as the government makes use of the windfall from rising oil prices and falling expenditures to pay off more debt early.
Russia already had one of the lowest levels of debt of any major country in the world. While most western countries have debt to GDP ratios well over the Maastricht rules recommended maximum of 60% (and some like Italy are well over 100%), Russia’s debt to GDP ratio has been hovering around 15% for years. At the start of 2016 Russia’s external debt was $520bn and it rose to a high of $537bn in the third quarter of 2017, but it began to taper off quickly as 2018 got underway.
This interesting commentary showed up on the intellinews.com Internet site on Sunday sometime — and I found it on the gata.org Internet site. Another link to it is here.
Now is the time of year that the major independent precious metals consultants start to publish their annual assessments of the global gold sector, First out of the blocks this year is London-based consultancy, Metals Focus (which also supplies much of the data for the World Gold Council’s analyses), which launched its 2019 Gold Focus publication today in Singapore. There will be a London presentation on April 2nd.
Some regional consultancies like Surbiton Associates in Australia have already come up with their figure as they have a much smaller universe to follow, but it is always interesting to compare the global consultancies’ assessment with the more focused local ones. In the case of Surbiton’s estimate of Australia’s 2018 gold output, the Metals Focus estimate tallies quite well, but falls short, in Russia’s case of the production figure put forward by that nation’s Finance Ministry which puts Russian gold output far closer to that of Australia. Certainly should the Chinese output falls continue at the current rate and Australia and/or Russia’s output continue to grow at current levels, either, or both, could surpass China as the world’ No.1 gold producer inside around three years!
What will continue to attract comment from analysts dwelling on the above figures is the ever-continuing distance away of ‘peak gold’ which we have been told by some has already been visited upon us. Assuming the Metals Focus figures are accurate this is still not the case with global gold output continuing to increase, albeit at a low rate. We expect the competing analyses from the other major independent precious metals consultancies – notably GFMS, also in London and the CPM Group in New York – to confirm this situation. There is arguably still sufficient new production in the pipeline to keep output growing at this kind of level for a couple of years yet.
This longish commentary by Lawrie appeared on the Sharps Pixley website on Monday sometime — and another link to it is here.
The PHOTOS and the FUNNIES
Monday’s price action in gold, silver and platinum was almost a carbon copy of what ‘da boyz’ did to these same precious metals on Friday — and that’s easy to see if you check the Kitco charts at the top of today’s column. The only outlier was palladium — and although I believe its price was capped in New York trading, at least it wasn’t smashed lower…and for a loss on the day…after the afternoon gold fix in London.
As I mentioned earlier, silver spent a brief period of time above its 200-day moving average during COMEX trading in New York on Monday. But Ted said that it didn’t last long enough, or go high enough in price to entice much, if any, Managed Money buying and, for the second day in a row, it was carefully closed below it.
It should also be noted that copper made a new intraday high for the year to date yesterday, but it was hauled back and closed down on the day as well. WTIC rallied and closed right at its 200-day moving average.
Here are the 6-month charts for the Big 6 commodities. Click to enlarge.
Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and also the monthly Bank Participation Report. If nothing blows up before the COMEX trading session ends at 1:30 p.m. EDT…which I wish it would…then we’ll find out how much short covering JPMorgan et al were able to pull off last week, plus how badly the Managed Money traders got their clock’s cleaned.
I missed the data for the London open, because I just wasn’t paying attention, so as I post today’s column on the website at 4:02 a.m. EDT, I see that the gold price chopped unevenly sideways throughout most of Far East trading on their Tuesday. That lasted until the 2:15 p.m. afternoon gold fix in Shanghai — and the gold price was sold a bit lower from there — and as the first hour of London/Zurich trading ends, gold is down $1.70 an ounce. Ditto for silver — and it’s down 5 cents the ounce. It was the same for platinum — and it’s been trending lower since the afternoon gold fix in Shanghai as well — and it’s down 5 bucks. Palladium was up 8 dollars within the first hour of trading once New York open on Monday evening. But by 1 p.m. CST on their Monday afternoon, it was down 7 dollars. It has struggled back a bit from there, but was rolled over in the last few minutes — and is back to down 8 bucks the ounce as the first hour of Zurich trading draws to a close.
Gross gold volume is around 55,500 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is just over 54,000 contracts…which is pretty healthy this time of day, considering the price activity. Net HFT silver volume is getting up there at around 11,700 contracts — and there’s 1,643 contracts worth of roll-over/switch volume in this precious metal.
The dollar index opened up 10 basis points the moment that trading began at 7:44 p.m. EDT in New York on Monday evening, which was 7:44 a.m. China Standard Time on their Tuesday morning. It’s current low tick of the day was set at 1:42 p.m. CST — and it has been edging quietly higher since — and is currently up 21 basis points as of 8:45 a.m. GMT in London/9:45 a.m. CEST in Zurich.
That’s all I have for today — and I’ll see you here tomorrow.