Silver and Gold Prices Held in Check Once Again

04 April 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much in Far East trading on their Wednesday — and was up a couple of bucks by shortly after the noon silver fix in London.  It was sold lower from there — and back into the red by about four dollars by 9 a.m. in New York trading.  It struggled back to within a dollar of unchanged by 12:30 p.m. EDT — and from that point, it edged quietly lower until trading ended at 5:00 p.m.

Once again, the high and low ticks aren’t worth looking up.

Gold was closed on Wednesday in New York at $1,289.50 spot, down $2.60 from Tuesday’s close.  Net volume was nothing special at a bit over 183,000 contracts — and there was 8,200 contracts worth of roll-over/switch volume on top of that.

Silver was up a nickel or so by around noon in Shanghai on their Wednesday — and the price didn’t do much from that juncture until, like gold, it was sold lower beginning shortly after the noon silver fix in London.  ‘Da boyz’ guided the silver price in a similar manner from there…however, it managed to make it back above unchanged on its subsequent rally — and its post-12:30 p.m. sell-off still left it higher on the day by a few pennies.

Like for gold, the high and low price ticks in silver aren’t worth looking up, either.

Silver finished the Wednesday session at $15.105 spot, up 2 cents on the day.  Net volume was nothing out of the ordinary at a bit under 53,000 contracts — and there was 8,100 contracts worth of roll-over/switch volume in this precious metal.

Platinum followed a different drummer yesterday, as it began to head very unevenly higher starting the moment that trading began at 6:00 p.m. EDT in New York on Tuesday evening.  Its $868 high tick came shortly after 12:30 p.m. in COMEX trading in New York — and it was sold a few dollars lower into the COMEX close from there.  It traded pretty flat into the 5:00 p.m. close after that.  Platinum finished the day at $866 spot, up 17 dollars from Tuesday’s close.

Palladium didn’t do much in Far East trading on their Wednesday.  It jumped to its high of the day shortly after 10 a.m. in Zurich — and then was quickly sold down a few dollars on the day.  From there it chopped quietly sideways until shortly before 9 a.m. in New York — and at that point, some thoughtful soul engineered it down to its low of the day, which came around 10:30 a.m. EDT.  From that point  it crawled quietly higher into the close.  Palladium was closed at $1,388 spot, down 23 dollars on the day.

The dollar index closed very late on Tuesday afternoon in New York at 97.36 — and opened down 6 basis points when trading commenced at 7:44 p.m. EDT on Tuesday evening, which was 7:44 a.m. China Standard Time on their Wednesday morning.  It began to decline unevenly from there — and the 96.96 low tick was set at 10:48 a.m. BST in London.  It crawled a bit higher from there, but at 10:28 a.m. in New York, it began to head lower once again — and that tiny sell-off lasted until around 12:20 a.m. EDT.  From that juncture, it crawled quietly higher into the close, as the dollar index finished the Wednesday session in New York at 97.09….down 27 basis points from Tuesday.

This decline in the dollar index certainly wasn’t allowed to be reflected in precious metal prices yesterday.

Here is the DXY chart…courtesy of Bloomberg, as always.  Click to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of stockcharts.com — and the delta between its close…96.66…and the close on the DXY chart above, was 43 basis points on Wednesday.  Click to enlarge.

The gold stocks opened about unchanged — and then jumped to their respective highs of the day minutes after 10 a.m. EDT…which was the afternoon gold fix in London.  That rally ended almost as fast as it began — and the shares began to head very unevenly lower for the remainder of the Tuesday trading session.  The HUI closed down 0.21 percent.

The silver equities also opened about unchanged — and then rallied to their highs by around 10:25 a.m. in New York trading.  They hung in their pretty good until shortly after the COMEX close — and even though the silver price was fairly strong [at least relative to gold’s price]….they began to head sharply lower — and back into negative territory.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index finished the day down 0.79 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.

The CME Daily Delivery Report for Day 5 of April deliveries shows that 881 gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, of the five short/issuers in total, the only one that counted for anything was JPMorgan, as they issued 869 contracts out of their so-called ‘Client’ account.  Of the eight long/stoppers in total, the three largest were Citigroup and HSBC USA, picking up 441 and 167 contracts for their respective in-house/proprietary trading accounts.  In third spot was JPMorgan, stopping 132 contracts for their client account.

In silver, ADM and Advantage issued 1 contract each — and JPMorgan stopped both of them for their client account.

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 April declined by 73 contracts, leaving 1,262 still open, minus the 881 mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 131 gold contracts were actually posted for delivery today, so that means that 131-73=58 more gold contracts were just added to the April Delivery month.  Silver o.i. in April fell by 20 contracts, leaving 109 still around, minus the 2 contracts mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 20 silver contracts were actually posted for delivery today, so the change in open interest — and the deliveries match for a change.


For the third day in a row there was a withdrawal from GLD.  This time an authorized participant took out 122,769 troy ounces.  There were no reported changes in SLV.

There was no sales report from the U.S. Mint yesterday.

There was no physical movement in gold, either in or out, at the COMEX-approved depositories on the U.S. east coast on Tuesday.  But there was a paper transfer of 37,137 troy ounces from the Registered category — and back into Eligible over at JPMorgan.  I won’t bother linking this.

There was a decent amount of activity in silver.  Only 96,716 troy ounces were received — and all that ended up at Canada’s Scotiabank.  There was 1,217,677 troy ounces shipped out, with two truckloads of that amount…1,197,887 troy ounces…coming out of HSBC USA — and the remaining 19,789 troy ounces coming out of CNT.  The link to all this is here.

There was a bit of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They received 485 of them — and shipped out 200.  All of this occurred at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


Here are two charts that Nick Laird passed around on Tuesday.  They show gold and silver coin sales for The Perth Mint updated with March’s data.  During that month, they sold 32,757 gold bullion coins — and 935,819 silver bullion coins.  Click to enlarge for both.

It was another exceedingly quiet news day — and I only have a small handful of stories for you.


CRITICAL READS

U.S. Auto Sales Wrap Up Terrible First Quarter With Dismal March Numbers

Auto sales in the U.S. wrapped up an ugly first quarter with dismal results for the month of March as the buying frenzy from last year’s tax cuts wore off and the economy continues to decelerate. Of the sales data that was reported for the month, Honda was the only major automaker that didn’t see a year-over-year sales decline. Here’s how some of the bigger name manufacturers ended the month:

  • General Motors saw deliveries drop 7% for the quarter, with all four brands falling
  • Fiat Chrysler sales fell 7.3% (estimates were for a decline of 6.4%)
  • Jeep sales fell 11%, continuing the February trend of SUV demand drying up
  • Toyota sales fell 3.5%…and 5% for the first quarter
  • Nissan sales were down 5.3% in March, down 11.6% for the quarter
  • Ford sales were down 5% in March, according to industry data
  • Honda saw a 4.3% percent increase, as passenger car sales rose more than 4%.

The industry had a tough first quarter but with spring finally starting to show its face and continued strong economic indicators, such as a boost in housing sales, lower lending rates and a strong labor market, we are confident that new vehicle sales demand will strengthen going forward,” Fiat Chrysler’s U.S. head of sales, Reid Bigland, said — and maybe if he keeps repeating that, it will eventually come true…

This news story showed up on the Zero Hedge website at 8:51 a.m. EDT on Wednesday morning — and I thank Brad Robertson for sending it along.  Another link to it is here.


Class 8 Heavy Truck Orders Crash 66% in March

Among the latest dismal news about the strength of the U.S. economy, on Tuesday ACT Research released preliminary truck orders for March 2019 which showed that Class 8 truck orders collapsed an astounding 66%. The decline is being attributed to a 300,000+ vehicle backlog potentially prompting fleets to halt purchases in the near term, however it is also likely that concerns about the economic slowdown are also playing a major part in the latest collapse.

Specifically, March Class 8 net orders were just 15,700 units (16,000 SA; 192,000 SAAR), down 66% YoY from 49,600 a year ago and down 6.7% sequentially.

March marks the fourth consecutive month of orders meaningfully below the current rate of build,” said Steve Tam, vice president of ACT. During that four-month period, Class 8 orders have been booked at a 194,000 seasonally adjusted annual rate, or SAAR. This is down significantly from 489,000 SAAR for the same period a year earlier, Tam said.

Despite this latest collapse in the trucking market, ACT Research again tried to put a favorable spin on the latest dismal data: “Even though demand is a shadow of its former self, slowing order intake belies current conditions. Admittedly, economic and freight growth are slowing, but both are still growing. And in the context of retreat from record levels, it is no wonder truck buyers continue to pursue incremental profits, as evidenced by the number of unbuilt units in the backlog.”

This news comes on the back of a terrible January and February for heavy truck orders, which we discussed last month, when we noted that the exponential surge in transportation prices as a result of an acute scarcity of truck drivers sent trucking prices soaring last year, and led to a historic spike in Class 8 truck orders as supply had scrambled to keep up with demand ahead of the launch of Chinese tariffs in 2019. That was, until November, when Class 8 orders started their precipitous drop.

This news item appeared on the Zero Hedge website at 3:52 p.m. on Wednesday afternoon EDT — and another link to it is here.


Dig Deeper and the Picture Darkens” — ISM Services Survey Plunges to 19-Month Lows

After the “baffle ’em with bullshit” mixed picture on Manufacturing (ISM up, PMI down), all eyes were on Services for a signal of green shoots (which were just as mixed in February with ISM up and PMI down), BUT the signal was ugly!

  • U.S. Manufacturing PMI dropped to weakest since June 2017
  • U.S. Manufacturing ISM rebounded from Nov 2016 lows
  • US Services PMI dropped from 8-month highs
  • US Services ISM dropped to 56.1 from 59.7 to lowest since Aug 2017

So there you have it…no disagreement there — both ISM and PMI agree that services are slumping…

[W]e note that despite all the talk of global green shoots and a soaring stock market, private sector business confidence took a tumble in March, with the degree of optimism dipping to the lowest since September 2016.

This news item was posted on the Zero Hedge website at 10:03 a.m. on Wednesday morning EDT — and another link to it is here.


German Institute Cuts GDP Growth Forecast in Half to 0.8%

With European stocks surging to levels not seen since last August, the European economy continues to slump ever closer to recession.

One month after Germany avoided a technical recession by the skin of its teeth, when it just barely avoided posting two consecutive quarter of negative GDP growth…Click to enlarge.

… on Wednesday Germany’s leading economic institutes slashed their growth forecast for Europe’s biggest economy by 60%, to 0.8% from a previous estimate of 1.9% a source told Reuters.

The sharp revision reflects the scale of the slowdown in Germany, whose economy continues to tread recessionary waters and is facing headwinds from a slowing world economy, international trade disputes and the threat of Brexit.

Most of all, Germany is facing continued pain from the ongoing trade deterioration with its most important trading partner, China.

As Reuters adds, the institutes’ estimates feed into the government’s own growth projections which will be updated later this month. The government said in January it forecast growth of 1.0 percent this year.

To be sure, whereas German economic as recently as February was nothing short of abysmal…

This economic news story put in an appearance on the Zero Hedge website at 12:57 p.m. EDT on Wednesday afternoon — and another link to it is here.


U.S. Mint sells all 80,000 2019 Lowell National Historical Park 5-ounce silver bullion coins

The Philadelphia Mint will not be striking any additional 2019 Lowell National Historical Park 5-ounce silver bullion coins beyond the number already struck and sold.

During the first week of sales, the U.S. Mint’s authorized purchasers bought all 80,000 bullion coins offered. Sales of the Uncirculated version have been nearly as strong, with approximately 67 percent of that 20,000-coin offering sold.

Treasury Secretary Steven Mnuchin authorized a maximum of 100,000 coins for each of the five 2019 America the Beautiful 5-ounce silver quarter dollars — 80,000 of each bullion coin and 20,000 for each Uncirculated version.

Both versions are struck on the same dedicated press at the Philadelphia Mint, but only the Uncirculated version bears the facility’s P Mint mark. The same press is also being used to strike the 2019-P Apollo 11 50th Anniversary commemorative 5-ounce silver dollars.

This silver-related news item showed up on the coinworld.com Internet site on Wednesday — and another link to it is here.


Italy’s populists covet central bank and its gold

Italy’s ruling populists pushed ahead this week with efforts to seize control of the central bank and its gold reserves, stepping up their confrontation with a symbol of the country’s establishment.

With two laws targeting the Bank of Italy under debate in parliament, the campaign is the latest attack on Italy’s independent institutions by leaders of the governing coalition, which is led by the anti-establishment 5 Star Movement and the nativist League.

The parties depict the central bank as a symbol of a technocratic elite aloof from the needs of ordinary Italians. Hundreds of thousands of small individual investors lost billions of dollars after several Italian banks failed in recent years, causing widespread anger against the Bank of Italy and previous governments.

We need a change of course at the Bank of Italy if we think about what happened in the last years,” Deputy Prime Minister Luigi Di Maio, leader of the 5 Star Movement, said in February.

Lawmakers from 5 Star are asking Parliament to pass two draft laws that have ignited a national controversy over the independence of the Bank of Italy. While the fate of the bills is uncertain, the prolonged scrutiny is testing an institution whose credibility is crucial for the stability of the Italian economy.

One law would instruct the central banks owners, most of them private banks, to sell their shares to the Italian Treasury at prices from the 1930s.

Wow!  One wonders what the uproar would be in the U.S. if Trump or anyone else tried that with the U.S. Federal Reserve and their owner banks, such as JPMorgan and Citigroup?  This Wall Street Journal story from Wednesday is printed in the clear in its entirety in a GATA dispatch that Chris Powell filed from Hong Kong at noon on their Thursday…which was midnight EDT last night.  Another link to it is here — and it’s worth reading.


Ugandan importers now tasked to classify gold by country of origin

Companies and individuals importing gold for refining in Uganda for re-exportation, must classify its origin in an effort to stop the trade in conflict minerals. According to the Central Bank, the order is one of the efforts to understand the source of the country’s bulging gold exports.

Gold exports have expanded enormously since the opening of Africa Gold Refinery (AGR) in 2016. A year before, the country had only exported gold worth $35.7 million (Shillings 132 billion). It immediately jumped to $339.5 million (Shillings 1.2 trillion) when the refinery opened.

In the 12 months to February 2019, the country exported gold worth $549 million (Shs 2 trillion), according to BoU records. This is the first time the country has exported more gold than coffee, a key cash crop. However, a week ago, the Uganda police seized a gold consignment from Venezuela at the Gold Africa Refinery in Entebbe. The consignment has since been returned after Uganda’s attorney general William Byaruhanga said AGR had lawfully imported the gold. Venezuela is under USA sanctions.

The order also comes on the backdrop of a report by the United Nations which said that the U.N. had confirmed Kampala was a recipient of smuggled gold from the Democratic Republic of Congo (DRC), an accusation that has hang over Uganda’s neck for decades.

The December 2018 report by the United Nations Security Council Expert’s Group showed that it was not yet compulsory for importers to show the origin of their gold, fuelling trade in conflict minerals from countries like Democratic Republic of Congo and South Sudan.

This interesting gold-related news item appeared on the Ugandan website observer.ug Internet site on Tuesday sometime — and it’s something I picked up off the Sharp Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES

These two photos were taken on February 24 along Douglas Lake Road in the heart of the Thompson Plateau…northeast of Merritt.  The first is one I took alongside the road — and the second is of the Douglas Lake Cattle Company/Ranch…the largest ranch in Canada, with a somewhat tainted history…with a snow-covered and frozen-over Douglas Lake in the background.  Click to enlarge for both.

This last photo was taken on March 3 from the B.C. Highway 5…the Coquihalla…climbing up out of Merritt heading north towards Kamloops looking north east.  In the distant background, between the hills/mountains lies Nicola Lake.  Douglas Lake feeds into Nicola Lake via the Nicola River — and the Nicola River continues after that, through Merritt — and onto its meeting of the waters of the Thompson River at Spence’s BridgeClick to enlarge.


The WRAP

Gold and silver prices certainly didn’t do much yesterday…or rather, weren’t allowed to do much in the face of an obviously weaker dollar index.  Gold is still well below its 50-day moving average — and although silver was allowed to penetrate its 200-day moving average to the upside by a few pennies intraday for the second day in a row, it was closed a penny under it on Wednesday.

Here are the 6-month charts for the Big 6 commodities — and there’s no really much to see.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price began to crawl unevenly higher once trading began at 6:00 p.m. EDT in New York on Wednesday evening.  That continued until about 12:30 p.m. China Standard Time on their Thursday afternoon — and it hasn’t done much since.  At the moment, gold is up $3.10 an ounce.  Silver hasn’t done a thing during that same time period — and is sitting at unchanged currently.  Platinum continued to stair-step its way broadly higher in Far East trading — and is up 9 bucks at the moment.  The palladium price has been chopping very quietly and unevenly sideways throughout all of Far East trading as well — and is up a dollar as Zurich opens.

Net HFT gold volume is pretty light at 30,000 contracts — and there’s only 417 contracts worth of roll-over/switch volume on top of that.  Net HFT silver volume is incredibly light at only around 3,600 contracts, which I find hard to believe — and there’s 2,903 contracts worth of roll-over/switch volume in this precious metal.

The dollar index  opened down 5 basis points once trading began at 7:45 a.m. EDT in New York on Wednesday evening.  It has been chopping very quietly and erratically sideways since — and is down 4 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.


There’s not a lot going in silver and gold right now.  Things are just ‘consolidating’ after last week’s engineered price decline — and all eyes will be on tomorrow’s Commitment of Traders Report.

Ted posted a very important mid-week commentary on his website yesterday — and I’m certainly hoping that most of it will go up in the public domain in the very near future, like today or tomorrow for instance.  And when it does, it will be the headline and feature story in the following day’s column.

And as I post today’s missive on the website at 4:02 p.m. EDT, I note that the gold price was tapped a bit lower — and is up only $2.80 an ounce. Silver is still sitting at unchanged. Platinum spiked up a bit at the Zurich open — and is up 14 bucks currently. Palladium is up 2 dollars.

Gross gold volume is very light at a bit under 38,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is around 37,000 contracts. Silver’s net HFT volume is still puny at just over 4,800 contracts — and there’s 2,918 contracts worth of roll-over/switch volume on top of that.

The dollar index is trying to crawl higher, but making little headway — and is down 3 basis points as of 8:45 a.m. BST in London/9:45 a.m. CEST in Zurich.

That’s all I have for today — and I’ll see you here tomorrow.

Ed