30 April 2019 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
With the small traders having to decide whether or not to roll over sell their May precious metal futures contracts before the COMEX close on Monday, ‘da boyz’ wanted them to make the decision as easy as possible, as they began Ted’s “midnight move” in gold around 11 a.m. China Standard Time on their Monday morning. There was bit of rally between the noon silver fix in London — and 8:30 a.m. in New York, but that didn’t matter. The low tick of the day appeared to come at 9:45 a.m. EDT — and it wandered a few dollars higher into the 5:00 p.m. close from there.
Despite the appearance of the Kitco chart below, gold traded in about an eight dollar price range on Monday, so the high and low ticks aren’t worth looking up.
Gold was closed in New York yesterday at $1,279.40 spot, down $6.50 from Friday. Net volume was nothing special at just under 202,000 contracts — and roll-over/switch volume was only around 8,200 contracts on top of that.
Since the May delivery month in silver starts on Wednesday, the powers-that-be really went after that precious metal, selling it lower by 7 cents in the first hour of trading once it began at 6:00 p.m. EDT in New York on Sunday evening. Like for gold, the real “midnight move” began around noon CST on their Monday — and from that juncture, the price was sold lower until the 10 a.m. EST afternoon gold fix in London. It began to edge a tiny bit higher from there, but that was interrupted by two quick and vicious down/up price spikes between noon and 1 p.m. in New York. The price recovered almost instantaneously in both — and the silver price didn’t do much after that.
The high and low ticks in this precious metal were recorded by the CME Group as $15.035 and $14.82 in the May contract.
Silver was closed on Monday at $14.885 spot, down 21.5 cents from Friday. Net volume was pretty light at around 45,700 contracts, with most of that volume in July, which is the new front month for silver. Roll-over/switch volume out of May and into future months was a hair over 20,000 contracts.
The platinum price didn’t do much in Far East and Zurich trading on their respective Monday’s. That state of affairs lasted until shortly before the 9:30 a.m. EDT open of the equity market in New York. At that point it was sold lower until shortly before the Zurich close. It rallied back to within three dollars of unchanged by 1 p.m…but wasn’t allowed to do much after that. Platinum was closed at $893 spot, down 4 bucks from Friday.
Like platinum, palladium didn’t do much in Far East and Zurich trading — and was down about 4 bucks by minutes before 9 a.m. in New York. Then the hammer went down — and virtually all the price damage was done by a few minutes before noon EDT. The low down/up tick came a very few minutes before the COMEX close — and it traded flat from there until trading ended at 5:00 p.m. in New York. Palladium was closed down $95 on the day — and was down about $105 at its low tick.
Like the price action in the other three precious metals, there was nothing free market about that engineered price decline.
The dollar index closed very late on Friday afternoon in New York at 98.01 — and opened up 3 basis points once trading commenced at 6:46 p.m. EDT on Sunday evening. It traded quietly and unevenly sideways from there until the 98.10 high tick was set at 10:10 a.m. in New York. It began to slide from there until 3:50 p.m. EDT — and didn’t do much of anything after that. The dollar index closed on Monday at 97.86…down 15 basis points from last Friday.
It was yet another day where what was happening in the precious metals bore no resemblance at all with what was going on in the currencies. It was, as always, what was happening in the COMEX paper markets that mattered. If ‘da boyz’ want precious metal price to go lower, it’s irrelevant as to what the currencies are, or are not doing.
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…97.58…and the close on the DXY chart above, was 28 basis points on Monday. Click to enlarge as well.
The gold stocks were down the better part of two percent by 10 a.m. EDT in New York trading — and they continued to edge quietly lower from there until 3 p.m. They then crawled higher by a bit into the 4:00 p.m. close. The HUI closed down 2.54 percent.
The silver equities opened down hard on Monday morning in New York — and all their losses were in by a minute or so before 10 a.m. EDT. From that juncture, they crawled unevenly sideways for the remainder of the Monday trading session. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 2.46 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index, updated with Monday’s doji. Click to enlarge as well.
The CME Daily Delivery Report for First Day Notice for May showed that 50 gold and 859 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.
In gold, the largest of the two short/issuers was Morgan Stanley, with 48 contracts out of its client account. Of the four long/stoppers, the biggest three were JPMorgan, Marex Spectron and ABN Amro, as they picked up 29, 10 and 8 contracts for their respective client accounts.
In silver, of the six short/issuers in total, the three largest were JPMorgan, ADM and ABN Amro, as they issued 528, 139 and 104 contracts out of their respective client accounts. There were eleven long/stoppers in total — and the three largest were HSBC USA with 270 for its own account…JPMorgan, with 254 contracts…147 for its client account and 107 for its own account, plus Standard General with 134 contracts for its own account as well.
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 201 contracts, leaving zero left. Friday’s Daily Delivery Report showed that those 201 gold contracts are out for delivery today. Silver o.i. in April is zero, as the last silver contract was delivered on Monday. April deliveries are done in both precious metals.
Total gold contracts issued/reissued in April totalled 7,149 — and that number in silver was 775.
Gold open interest in May dropped by 347 contracts, leaving just 224 still around, minus the 50 contracts mentioned a few paragraphs ago. Silver open interest in May crashed by a further 9,564 contracts, leaving only 4,203 left, minus the 859 mentioned a few paragraphs ago.
There were no reported changes in either GLD or SLV on Monday.
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, April 26 — and here is what they had to report. Their gold ETF declined by 4,252 troy ounces — and their silver ETF shed 37,777 troy ounces.
There was a sales report from the U.S. Mint yesterday. They sold 1,000 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — 2,600 one-ounce platinum eagles — and 569,000 silver eagles.
And still no Q4 financial statements or 2019 annual report from the Royal Canadian Mint.
The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday was 69,365 troy ounces that was shipped out of JPMorgan. Nothing was reported received. A link to this is here.
It was even less busy in silver, as only 21,913 troy ounces were received — and 31,753 troy ounces were shipped out. All of the ‘in’ activity was at the International Depository Services of Delaware. In the ‘out’ category, there was 24,868 troy ounces shipped out of CNT — and 6,884 troy ounces departed Delaware. The link to this is here.
There was considerably more activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday. They received 1,000 of them — and shipped out 5,300. All this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here are the usual two charts that Nick sends around on the weekend. They show the amount of gold and silver in all know depositories, mutual funds and ETFs as of the close of business on Friday, April 26. For the reporting week, there was a net 221,00 troy ounces of gold shipped out — and in silver it was the opposite, as 979,000 troy ounces were received on a net basis. Click to enlarge for both charts.
I have a very decent number of stories for you today.
CRITICAL READS
The Wall Gave Way, and We Fell… — Bill Bonner
The tax cut didn’t really cut the cost of government. It simply shifted it to debt… and onto the public and into the future. And now the future is coming into view. Spending is going down. Tax-cut savings have already been spent. The economy is slowing.
The idea of returning money to corporations – who got most of the tax cut – was that they would invest in new factories and new sources of wealth producing (including training and new technology). This “stimulus” would thus reverberate through the economy in new jobs and more output.
Instead, corporations took the EZ money… and took the EZ way forward. They bought their own shares, thus creating little real growth on Main Street… but contributing to a fake boom on Wall Street.
This was just the latest installment of the whole, sordid “financialization” story.
It causes businesses to forsake their real mission – satisfying customers by adding real wealth to the economy – in favor of EZ-money gimmicks and scams.
This commentary by Bill appeared on the bonnerandpartners.com Internet site early on Monday morning EDT — and another link to it is here.
All That’s Missing Is a Black Swan — Jeff Thomas
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” — Ludwig von Mises
The Federal Reserve chart above only goes back to 1970, but its message is clear, nevertheless. The velocity of money has dropped below that which was necessary to maintain a productive economy in 2009 and has never recovered.
The velocity of money can be defined as, “the rate at which money circulates or is exchanged in an economy in a given period.” It’s generally measured as a ratio of gross national product (GNP) to a country’s total money supply.
No money turnover… no economy.
But, if that’s so – if the chart is correct and the money turnover is by far the lowest since 1970 – why did the economy recover after 2010 and why are we in a bull market? Surely, the quantitative easing programme initiated by the Fed corrected the problem and happy days are here again.
This interesting commentary from Jeff was posted on the internationalman.com Internet site on Monday morning EDT — and another link to it is here.
The Bigger the Boom, the Bigger the Bust — Peter Schiff
During the New Orleans Investment Conference, Peter Schiff participated in a panel discussion with Ben Hunt and Mike Larson. They talked about bubbles, booms and busts.
Hunt called it the “bubble of everything.” But he said the “gravitational force” created by all of the assets central banks have purchased over the last year have changed the “bubble-popping process.” That makes it hard to predict when things will actually start to deflate. He said it will take something the undermines the market confidence that central banks can bail us out. Hunt said inflation was possibly the pin that could prick the bubble.
Larson called it the “über-bubble,” and he said he already sees some of the background concerns that have been simmering for a long time are starting to “bubble over.” (Pun intended.) He said the last two bubbles were high in amplitude, but limited to certain parts of the economy (dot-coms and housing). The current bubble isn’t as high in amplitude, but it’s broader-based. We see bubbles in stocks, high-yield bonds, housing (again), and commercial real estate, along with a lot of other assets you don’t hear as much about – such as art and comic books.
“I think the process of unwinding this is already beginning.”
Peter focused in on the cause of the bubbles.
“When you see rampant, wide-scale bad decisions, generally a central banker is behind it, and they have made a bad decision to create too much money and to artificially manipulate interest rates down.”
The embedded video clip of this panel discussion runs for just under 42 minutes. This article put in an appearance on the Zero Hedge website at 6:35 p.m. on Monday evening EDT — and another link to it is here.
JPMorgan: We Are Fast Approaching the Point Where Banks Run Out of Liquidity
Last week we first noted that something unexpected has been going on in overnight funding markets: ever since March 20, the Effective Fed Funds rate has been trading above the IOER…[The interest rate on excess reserves – Ed] . This was unexpected for the simple reason that it is not supposed to happen by definition.
As a reminder, ever since the financial crisis, in order to push the effective fed funds rate above zero at a time of trillions in excess reserves, the Fed was compelled to create a corridor system for the fed funds rate which was bound on the bottom and top by two specific rates controlled by the Federal Reserve: the corridor “floor” was the overnight reverse repurchase rate (ON-RRP) which usually coincides with the lower bound of the fed funds rate, while on top, the effective fed funds rate is bound by the rate the Fed pays on Excess Reserves (IOER), i.e., the corridor “ceiling.”
Or at least that’s the theory. In practice, the effective FF tends to occasionally diverge from this corridor, and when it does, it prompts fears that the Fed is losing control over the most important instrument available to it: the price of money, which is set via the fed funds rate. And ever since March 20, this fear is front and center because as shown in the chart below, starting on March 20, the effective Fed Funds rate rose above the IOER first by just 1 basis point, and then, last Friday spiked as much as 4 bps above IOER.
One day later, PrismFP picked up on this topic and elaborated on the third, and most notable point, concluding that “there has been a dollar funding/shortage issue brewing under our nose for months; it is just coming to fruition now because we are noticing the DXY breaking out higher. In other words, with FHLB’s selling less FF’s, participants are forced to pay a higher rate to find funds, and that drives rate differentials towards the Dollar.”
Now it’s the turn of everyone’s JPMorgan contrarian, Nick Panigirtzoglou – the author of the popular “Flows and Liquidity” report, and a lone skeptical voice amid an otherwise permabullish landscape dominated by Marko Kolanovic – to warn that despite some $1.4 trillion in excess reserves sloshing around, “the liquidity conditions in the U.S. banking system are perhaps close to decade lows” which in turn is manifesting itself in the breakout of the effective Fed Funds rate above the IOER, which as Morgan Stanley suggested last week, the Fed may have no choice but to cut by another 5 bps at the next Fed meeting just to “normalize” the fed funds rate and restore some temporary control to the most important interest rate in the world.
This persistent move higher in is raising questions about whether reserves – which as a reminder have been shrinking rapidly ever since the Fed started to roll-off its massive balance sheet in late 2017 — “are close to or in tight territory“, which also explains why the Fed recently reversed aggressively on its prior “autopilot” posture vis-à-vis the balance sheet and unexpectedly informed markets that the shrinkage would end in September.
This very long, chart-filled — and heavy reading commentary appeared on the Zero Hedge website at 5:05 a.m. EDT on Monday morning — and I thank Brad Robertson for his second offering in today’s column. Another link to it is here.
The Fed is looking at a new program that could be another version of ‘quantitative easing’
Federal Reserve officials are considering a new program that would allow banks to exchange Treasurys for reserves, a move aimed at ensuring liquidity during difficult times that also would help the central bank decrease the size of its nearly $4 trillion balance sheet.
The so-called standing repo facility is in its early discussion phases. Respected St. Louis Fed economists David Andolfatto and Jane Ihrig have authored two papers on the plan, which they say would ease the regulatory burden for banks that feel pressured into holding ultra-safe assets.
In some quarters, the idea is viewed as a natural extension of current Fed policy. Others, though, think it in essence could be a repackaged form of quantitative easing and thus yet another iteration of the Fed’s decade-long tinkering in financial markets.
The idea comes as central bank policymakers look for ways to cut the bond holdings on its balance sheet without being disruptive to markets.
“This is a bad idea for the markets. We need to know if the markets can function on their own,” said Christopher Whalen, head of Whalen Global Advisors and publisher of the Institutional Risk Analyst blog. “Every time they try to fine-tune this thing they get it wrong.”
Whalen said the Fed now faces an intensifying danger of being a perpetual liquidity provider, rather than just the lender of last resort that had traditionally been its function before the crisis.
How quickly the Fed might take up the idea is uncertain. Ireland said he expects the central bank likely wouldn’t act until it became necessary, for fear of “unintended consequences.”
Like the previous Zero Hedge/JPMorgan story, this news item is on the longish side as well. It was posted on the cnbc.com Internet site at 2:29 p.m. EDT on Monday afternoon — and I plucked it from a GATA dispatch yesterday evening. Another link to it is here.
Trump’s Crusaders March to War — Eric Margolis
The world is still reeling in horror from the deadly Sri Lanka bombings that may have been the work of Islamic State madmen. Poor Sri Lanka has suffered so much after three decades of civil war and communal strife. We weep for this beautiful and once gentle nation.
But behind the horror in Sri Lanka, a huge crisis was building up of which the world has so far taken insufficient notice: renewed tensions in the oil-producing Gulf. This is the latest attempt by the United States to crush Iran’s independent-minded government and return it to American tutelage.
The Trump administration has demanded that the principal importers of 1.2 billion barrels of Iranian oil halt purchases almost immediately. This imperial diktat includes China, South Korea, Turkey, India and Japan. The comprehensive embargo is very close to an all-out act of war. In 1941, America’s cut-off of oil to Japan provoked the attack on Pearl Harbor.
The oil embargo not only violates international law, it sets the US on a collision course with some of its most important allies and vassal states. Brazen threats against Iran by Trump’s two main enforcers, National Security advisor John Bolton and Secretary of State Mike Pompeo, have reinforced America’s unfortunate image as an imperial power that threatens war against disobedient satraps and independent-minded nations.
This rather brief, but very worthwhile commentary from Eric showed up on the unz.com Internet site on Saturday sometime — and I thank Larry Galearis for pointing it out. Another link to it is here.
IMF’s Lagarde Laments “Highly Mysterious” Low Inflation, Says “Everybody” Would Like it to be Higher
Without skipping a beat, IMF Director Christine Lagarde left President Xi’s Belt and Road initiative conference and traveled to sunny southern California to make an appearance at the Milken Institute Conference, where she sat for an interview with former WSJ editor-in-chief (now editor-at-large) Gerry Baker.
Given that Friday’s surprisingly robust (at least on the surface) GDP print has revived speculation among some economists about ‘divergence’ between the U.S. and the global economy, Baker led with a question about whether Q1 GDP had impacted the view on US growth over at the IMF.
While the surprisingly large number will “certainly lead us to reassess our forecast for growth in the U.S.,” which could in turn boost the global economy, Lagarde cautioned that one strong GDP print doesn’t make a trend, and that the global economy remains mired in what she called a “delicate moment.” She added that the inflation conundrum wasn’t unique to the U.S.; Germany has experienced a similar phenomenon. But central banks weren’t wrong to raise rates, Lagarde said, citing their ‘mandate’ to maintain stable prices (though of course they also have another implicit and even more important mandate to ensure the continued growth of asset prices).
“I wouldn’t say that they got it wrong. They have a mandate. The mandate is price stability and the number that has been set for decades now has been at or below 2%.”
Indeed, although “everybody” would like a little more inflation (and by ‘everybody’, we assume Lagarde means a handful of economists, because most working people are already struggling to process the inflation in health-care costs, tuition, rent and other necessities that have hammered the standard of living in the developed world), Lagarde pushed back against those who have been pushing to change the central bank’s target rate.
This longish news item was posted on the Zero Hedge website at 3:50 p.m. EDT on Monday afternoon — and I thank reader Tim Lyon for sending it our way. Another link to it is here.
China’s “Neutron Bomb” Returns: Bad Loans Surge Most in 3 Years
The last time we did a closer look at China’s bad debt, a topic that has been particularly sensitive for an economy whose financial sector is now over $40 trillion, was in late 2015 when CLSA stumbled on what we then dubbed China’s “neutron bomb“: Chinese banks’ bad debts ratio could be as high 8.1% a whopping 6 times higher than the official 1.5% NPL level reported by China’s banking regulator!
So if one very conservatively assumes that loans are about half of China’s total asset base of $35 trillion (realistically 60-70%), and applies an 8% NPL to this number instead of the official 1.5% NPL estimate, the capital shortfall is a staggering $1.1 trillion.
Our conclusion back in 2015 was that “while China has been injecting incremental liquidity into the system and stubbornly getting no results for it leading experts everywhere to wonder just where all this money is going, the real reason for the lack of a credit impulse is that banks have been quietly soaking up the funds not to lend them out, but to plug a gargantuan, $1 trillion, solvency shortfall which amounts to 10% of China’s GDP!”
This is another longish Zero Hedge news item. It showed up on their Internet site at 2:14 p.m. EDT on Monday afternoon — and I thank Brad Robertson for this one. Another link to it is here.
World’s Monetary Reserves and the End of an Era — Hugo Salinas Price
We had been observing the evolution of the total of Central Bank Monetary Reserves for several years, and noted a peak on August 2, 2014, when these Reserves reached a maximum of the equivalent of $12.032 Trillion dollars, according to Bloomberg.
As of April, 2019, a review of Central Bank Monetary Reserves, according to Bloomberg, yields some interesting information.
In August 2014, the dollar amount of CB Monetary Reserves was, as we just said, $12.032 Trillion dollars, and as of April 19, 2019, CB Monetary Reserves had fallen by $479 Billion dollars, to $11.553 Trillion dollars.
The prime cause of the increase in CB Monetary Reserves has been, since 1971, the trade deficit of the USA; in 1971, gold ceased to be calculated as the component of monetary reserves. Since 1971, dollars flow out of the U.S., in payment of imports not covered by sufficient exports, to balance the trade account.
Oddly enough, though the total dollar amount of U.S. trade deficits, from August 2014 to February 2019 amounted to an astonishing $3.603 Trillion U.S. Dollars (according to the U.S. Census Bureau) paid out by the US, in payment of imports not covered by income from exports, not only did the total of Monetary Reserves held by Central Banks not increase by one penny, but they actually declined by $479 Billion!
The explosive growth of CB Monetary Reserves that began in 1971 concluded in 2014, after which, not even the weight of a $3.603 Trillion US Trade Deficit caused any increase at all in CB Monetary Reserves, which actually declined (!) by $479 Billion dollars as of April 19, 2019.
I submit that a change of this enormous magnitude cannot possibly be the result of “market forces”. I have to attribute this great change, to deliberate decisions on the part of the great exporting powers of the world, to stem the growth of their CB Monetary Reserves.
This interesting commentary from Hugo appeared on the plata.com.mx Internet site on Monday sometime — and I found it on the gata.org Internet site. Another link to it is here.
Boom Bust host Commissioner Bart Chilton dies at age 58
With great sorrow, we announce that our beloved colleague Bart Chilton has passed away after a sudden illness.
Our friend Bart brought a unique combination of passion for business and extensive experience in the sphere of finance to his role as host of signature financial show, Boom Bust, elevating the content and profile to a new level, making it one of the most popular programs on RT America.
His trademark show opening, “Let’s go!” was a perfect expression of his enthusiasm and drive to constantly do more, and learn more.
Since the first day he walked into our newsroom – tall, with a distinctive white mane, trademark cowboy boots, and his enchanting smile – Bart started making friends. We soon felt that he belonged with us. He became a member of our team, and a part of us.
Bart always seemed to project a strong, quiet sense of dignity, and treated every person he met with respect, no matter what their position, status or age. He was one of those people who won hearts without saying a word.
After having a day to think about this rt.com story, as it showed up on the gata.org Internet site late on Sunday evening, I get the sense the reason that he was so candid in that interview he gave some time ago about JPMorgan’s role in the silver price manipulation scheme, was rooted in the fact that he knew his days were numbered — and he just wanted to set the record straight. For that we should thank him — and another link to this sad news item is here. There was a story about this in the Financial Times of London headlined “Chilton’s support for ‘little guy,’ opposition to silver manipulation, noted by FT” — and another on CNBC headlined “Bart Chilton, former CFTC commissioner and high-frequency trading critic, is dead at 58“. Both these stories came from GATA dispatches as well.
U.K. shipping gold direct to China and Azerbaijan — Lawrie Williams
London and the U.K. remains at the centre of the world’s gold trade – at least for now. Primarily it imports newly produced gold from a number of primary gold producers and then either holds it in vaults, or ships much of it to Switzerland for re-refining and onward delivery to the world’s primary consumer markets. But interestingly the latest gold export figures out of the U.K. show an export proportion directly to mainland China which, perhaps, is a counter to comparatively weak February export figures for Switzerland into China.
Regarding the gold import figures there are few surprises. Most of the major sources of the gold imports are significant gold mining nations or from countries like Switzerland, Japan and Hong Kong which have largish internal gold trading markets.
The major anomalies, though, come in the U.K.’s gold export figures for February, although the overall figure is quite low (well below the import figure) but this could relate to accounting periods and shipment dates. Nonetheless the biggest destination for U.K. gold exports that month was mainland China which took in 14.9 tonnes. That might be seen as surprising, but ties in with Chinese gold import figures overall and also with relatively high Shanghai Gold Exchange gold withdrawal figures in March.
Perhaps an even bigger surprise though was the volume of gold exports to tiny Azerbaijan. While exports of 8 tonnes may not be particularly significant in a global context, in the case of Azerbaijan it is a HUGE amount and could signify a big reboot for that country’s gold reserves. In recent years Azerbaijan has reported gold reserves of zero tonnes to the IMF, but does have a past history of holding gold. Back in 2016 it reportedly held 30.2 tonnes of gold but appears to have liquidated all these by 2017. Maybe the imports from the U.K. mean that the Azerbaijani central bank may have turned back to holding some gold in its Forex reserve holdings, particularly as it is technically within the Russian sphere of influence and Russia has been the biggest expander of gold reserves over the past several years.
This worthwhile commentary from Lawrie was posted on the Sharps Pixley website on Monday sometime — and another link to it is here.
The vast gold hoards held by Germany’s population — Ronan Manly
While the Chinese and Indian populations are well known for their insatiable appetite for importing, buying and hoarding physical gold, there is one market in the West that does likewise but which flies under the radar slightly, garnering less attention than China and India. That gold market is Germany.
Although German citizens are known for their fondness for holding gold, the vast size of the German population’s gold holdings was clarified recently in a newly published survey commissioned by Reisebank, a bank active in the German precious metals market.
The survey, conducted by the Research Center for Financial Services (CFIN) on behalf of Reisebank, found that German adults currently own a staggering 8,918 tonnes of gold, worth about €330 billion at current Euro gold prices. Note, this figure is gold held by private citizens in Germany and does not include the gold reserves of the German central bank, the Bundesbank, which amount to an additional 3,370 tonnes.
Of the 8918 tonnes of gold held by the German population, CFIN data says that 4,925 tonnes (or 55% of the total) is held in the form of physical gold bars and gold coins, with 3,993 tonnes held in the form of gold jewellery.
With a total population of around 82 million, of which 69 million are over the age of 18, the CFIN survey found that an impressive 38% of German adults own physical investment gold in the form of gold bars or gold coins (26 million people), 61.5% of the adult population own gold jewellery (45 million people), while 14.5% of German’s adult citizens own gold ETF and similar unitised products e.g. Xetra gold and Euwax gold products (about 10 million people).
The CFIN research centre, which is connected to Steinbeis University in Berlin, has been conducting these surveys of German gold holding habits for the last 10 years and has so far conducted six of these surveys.
This somewhat longish commentary from Ronan put in an appearance on the Singapore-based bullionstar.com Internet site on their Sunday sometime — and I plucked it from a GATA dispatch. Another link to it is here.
The PHOTOS and the FUNNIES
I’m interrupting my photo sequence through the inter-mountain country of British Columbia, to bring you these two photos that reader John Decamps of Souris, Manitoba sent my way yesterday. The wild turkey became locally extinct in western Canada sometime after the turn of the 20th century, but were reintroduced in southern Manitoba back in the mid 1950s. To say that they “have gone forth and multiplied” since then, would be a serious understatement.
This female is sitting on 22 eggs…and counting?…just 50 feet from his front door. I thought that these two photos he sent me were worth sharing. The photo of the male is one that I took off the Internet. Click to enlarge.
The WRAP
As I mentioned at the top of today’s column, with the remaining small traders that weren’t standing for May delivery tomorrow, ‘da boyz’ wanted to help them along in the decision to sell their May contracts, rather than roll them over by the close of COMEX trading on Monday. How successful they were won’t be known for sure until we see the COT Report on Friday.
The only moving average of importance that was penetrated on Monday was that silver was hauled back — and closed below, its 200-day moving average…which it was only above by a dime.
Here are the 6-month charts for all four precious metals, plus copper and WTIC — and the silver doji for Monday should be noted. Click to enlarge.
And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price edged quietly higher until shortly after 1 p.m. China Standard Time on their Tuesday afternoon, but has turned a bit lower since. It’s currently up only $2.80 the ounce. Silver was up all of 4 cents by a few minutes before 2 p.m. CST — and it has been turned lower as well — and is only up 2 cents at the moment. Platinum was up 4 bucks by shortly before 9 a.m. CST — and it has been crawling quietly sideways, but is only up 2 dollars now. Palladium was up almost ten dollars by 6:30 a.m. EDT in New York on Monday evening — and it has also traded quietly sideways since, but was sold lower in the last few minutes — and is up 5 dollars as Zurich opens.
Net HFT gold volume is pretty light…coming up on 36,500 contracts — and there’s only 515 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is 9,100 contracts — and all of that is in the new front month for silver, which is July. There’s a tiny 159 contracts worth of roll-over/switch volume on top of that.
The dollar index opened about unchanged when trading commenced at 7:44 p.m. EDT in New York on Monday evening, which was 7:44 a.m. CST in Shanghai on their Tuesday morning. It edged very unevenly lower from there until around 1:05 p.m. CST — and it was back above unchanged by a bit by minutes after 2 p.m. CST. It has drifted a bit lower since — and is sitting back at unchanged as of 7:45 a.m. in London/8:45 a.m. in Zurich.
The latest FOMC meeting gets started today — and ‘The Word’ will come down on Wednesday at 2 p.m. EDT…thirty minutes after the COMEX close. And as I mentioned in my Saturday missive, I believe, I’m expecting some ‘reaction’ from the precious metals. But whether it will be up or down, remains to be seen. If you read that JPMorgan story, or the CNBC story in today’s Critical Reads section, you’ll note that the banking system is having a wee bit of a liquidity issue at the moment.
And as I post today’s column on the website, I note that gold is up a bit during the first hour of London trading…at $3.60 the ounce — and silver is up 4 cents. Platinum is up 3 bucks, but palladium, after being down over 5 dollars at the open, is now back up to 3 dollars higher on the day as the first hour of Zurich trading draws to a close.
Gross gold volume is coming up on 48,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is around 44,500 contracts. Net HFT silver volume is around 11,300 contracts — and there’s only 196 contracts worth of roll-over/switch volume in that precious metal.
The dollar index is now down 8 basis points as of 8:45 a.m. BST in London…9:45 a.m. CEST in Zurich.
Today, at the close of COMEX trading at 1:30 p.m. EDT, is the cut-off for this Friday’s Commitment of Traders Report — and I may or may not make a educated guess on what it might show, depending on the remainder of Tuesday’s trading action.
That’s it for another day — and I’ll see you here tomorrow.
Ed