Gold & Silver Rallies Capped on Sunday Evening in New York

07 May 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price rally at the 6:00 p.m. EDT open in New York on Sunday evening was capped and turned lower about thirty minutes later.  From that point it crept quietly lower, with the low tick of the day…such as it was…coming a few minutes after the 9:30 a.m. EDT open of the equity markets in New York on Monday morning.  The price crept quietly higher until a minute or so before the 1:30 p.m. EDT COMEX close — and was sold a dollar or so lower until trading ended at 5:00 p.m.

The high and low ticks certainly aren’t worth looking up once again.

Gold was closed at $1,280.60 spot, up $2.10 on the day.  Net volume was certainly elevated at just over 231,500 contracts — and there was 13,500 contracts worth of roll-over/switch volume in this precious metal.

Silver’s tiny rally on Sunday evening in New York — and back above its 200-day moving average by a nickel, met the same fate.  But a few minutes before 1 p.m. BST in London, the price was turned sharply lower, with silver’s low tick coming around 8:50 a.m. in New York.  It edged quietly and unevenly higher until around 3:30 p.m. or so in the thinly-traded after-hours market — and it was sold a penny or two lower into the 5:00 p.m. close from there.

The high and low ticks in this precious metal were recorded by the CME Group as $14.99 and $14.77 in the July contract.

Silver was closed on Monday at $14.865 spot, down 3.5 cents from Friday.  Net volume was elevated as well at a hair over 62,000 contracts — and there was 2,794 contracts of roll-over/switch volume on top of that.

The platinum price was hammered lower as soon as trading commenced at 6:00 p.m. in New York on Sunday evening — and the low tick was set shortly after 9 a.m. China Standard Time on their Monday morning.  It made it back to almost the unchanged mark by around 10:20 a.m. in Zurich trading, but was sold lower until around 9:15 a.m. in New York.  Its subsequent rally ended at the COMEX close and, like silver and gold, was sold a bit lower in after-hours trading.  Platinum finished the day at $874 spot, up 4 dollars from Friday’s close.

Palladium was forced to follow a somewhat similar price path as platinum…but only in the early going.  Its high came around 11:40 a.m. in Zurich — and it was quietly sold lower until a vicious down/up spike occurred at precisely noon in New York.  From that juncture it crawled higher until around 3:30 p.m. in after-hours trading — and it was closed at $1,322 spot, down another 26 bucks from Friday.

The dollar index closed very late on Friday afternoon in New York at 97.48 — and opened  down 4 basis points once trading commenced around 6:40 p.m. EDT in New York on Sunday evening.  It crept unevenly higher until a minute or so after 9 a.m. in New York on Monday morning — and was up around the 97.70 mark at that time.  It began to head lower immediately — and the 97.48 low tick was set around 1:15 p.m. EDT.  It crawled unsteadily higher into the close from there.  The dollar index finished the Monday session at 97.52…up 4 basis points from Friday.

The folks at Bloomberg are still having issues, as their DXY chart is still not displaying the current intraday data properly, so I had to borrow the intraday chart from the folks over at the ino.com Internet site.  You’ve seen it before, but it’s been a while.

And here’s the 6-month U.S. dollar index chart, courtesy of  the stockcharts.com Internet site — and the delta between its close…97.27… and Bloomberg‘s close, was 25 basis points on Monday.  Click to enlarge.

The gold stocks opened down a bit — and then were up to their ‘highs’ of the day by a minute or so after 11 a.m. in New York trading.  They then chopped very unsteadily lower until 1 p.m. EDT — and didn’t do much of anything after that.  The HUI closed down 0.40 percent, even though the gold price managed to close in positive territory.

The silver equities opened down a bit more than the gold shares — and barely made it back into positive territory in late morning trading New York.  From 11 a.m. onwards they chopped unevenly lower until around 3:15 p.m. — and they edged a hair higher into the close from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down another 0.93 percent.  Click to enlarge.

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 showed that 6 gold and 150 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, Advantage and ADM issued 4 and 2 contacts — and the two long/stoppers were JPMorgan and Advantage, with 4 and 2 contacts.  All contracts issued and stopped involved their respective client accounts.

The two short/issuers in silver were International F.C. Stone and Advantage, with 133 and 17 contracts out of their respective client accounts.  There were four long/stoppers into total — and the largest was JPMorgan, picking up 93 contracts in total…63 for its clients — and 30 for its own account.  In second spot was Advantage with 36 for its client account — and in third place was Standard General with 17 contracts for its in-house/proprietary trading account.

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 May fell by 7 contracts, leaving 129 left, minus the 6 contracts mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 13 gold contracts were actually posted for delivery today, so that means that 13-7=6 more gold contracts were just added to the May delivery month.  Silver o.i. in May dropped by 50 contracts, leaving 621 still open, minus the 150 mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 76 silver contracts were actually posted for delivery today, so that means that 76-50=26 more silver contracts were just added to May.


For the third day in a row, there was a withdrawal from GLD, as an authorized participant took out 37,761 troy ounces.  And also, for the third day in a row, there was a deposit in SLV, as an authorized participant added 890,160 troy ounces.

There has now been 4,603,025 troy ounces of silver added to SLV so far in May — and 226,574 troy ounces of gold removed from GLD since the first of the month.

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, May 3 — and this is what they had to report.  Both ETFs increased by smallish amounts…their gold ETF by 7,139 troy ounces — and their silver ETF by 5,466 troy ounces.

Ted mentioned in his column on Saturday — and to me on the phone yesterday, that JPMorgan is most certainly behind all this counterintuitive activity that we’ve been witnessing in SLV during the last three business days.

There was no sales report from the U.S. Mint on Monday.

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday was 11,726 troy ounces that was shipped out by HSBC USA.  The link to that is here.

There was some activity in silver, as one smallish truckload…557,619 troy ounces…was received over at the International Depository Services of Delaware.  The only ‘out’ activity was 21,934 troy ounces that departed Delaware.  There was also a tiny paper transfer of 5,238 troy ounces from the Eligible category — and into Registered.  That happened at CNT — and I would suspect that it is out for delivery in May.  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 Friday.  There were 207 reported received — and 107 shipped out.  Except for the 7 kilobars received over at Loomis International, the remaining activity, both in and out, was at Brink’s, Inc.  The link to all this, in troy ounces, is here.


Here are the usual two charts from Nick, which you should be more than familiar with by now.  They show the amount of gold and silver in all know depositories, mutual funds and ETFs as of the close of business on Friday, May 3 — and the differences between the two over the last three months, couldn’t be more starkClick to enlarge for both.

I don’t have much in the way of stories for you today.


CRITICAL READS

Stocks Ramp to Session High as Chinese Trade Delegation Confirms U.S. Trip

In what may be the most jaw-dropping case of market-wide BTFD observed in years, the S&P has successfully recouped almost all of its losses, and after sliding 2.4% overnight, it was down less than 0.4% just before 3 p.m., with the latest upside catalyst coming from CNBC which, citing sources familiar, reported that, as speculated overnight by the Chinese press, the Chinese delegation will travel to the U.S. this week for trade talks despite this weekend’s snub by President Trump which upended negotiations by threatening new tariffs on Sunday,

That said, there were some changes, and according to the report, China would send a smaller delegation than the 100-person group originally planned. More importantly, it remains unclear if Vice Premier Liu He would still helm this smaller group, because as we described this morning, his presence is the signal from China whether Trump managed to derail trade talks with his tweet, and if the team was traveling to Washington “with an eye toward sealing a deal” or merely to keep up appearances.

While the Beijing team was set to start talks with American negotiators on Wednesday, it remains unclear if the talks will still start Wednesday.

While the news clearly pushed risk to new session highs, the broader market was already ramping all day, and as we showed earlier, the Dow Jones was just 60 points lower after starting the session some 500 points in the red, while the Russell 2000 was on the verge of going green, where the Transports already were.

Wow, the ramp job in the equity markets in the U.S. certainly worked like a charm yesterday.  This Zero Hedge article was posted on their website at 3:05 p.m. EDT on Monday afternoon — and another link to it is here.  Then there was this ZH story at 5:03 p.m. EDT headlined “Markets Re-Plunge As Lighthizer Confirms Tariff-Hikes After China Reneges On Promises“.


Fed’s QE Unwind Continues at Full Speed in April

In April, total assets on the Fed’s balance sheet fell by $46 billion, as of the balance sheet for the week ended May 1, released Thursday afternoon. This drop reduced the assets to $3,890 billion, the lowest since November 2013. Since the beginning of the “balance sheet normalization” process, the Fed has shed $580 billion. Since peak-QE in January 2015, the Fed has shed $625 billion:

According to the Fed’s old “balance sheet normalization” plan, which was still on autopilot in April, the QE-unwind would shed “up to” $30 billion in Treasuries and “up to” $20 billion in mortgage-backed securities (MBS) a month for a total of “up to” $50 billion a month, depending on the amounts of bonds that mature that month.

The Fed doesn’t actually sell its Treasury securities but allows them to “roll off” without replacement when they mature at mid-month or at the end of the month.

This 4-chart article from Wolf appeared on the wolfstreet.com Internet site last Friday — and it comes to us courtesy of Richard Saler.  Another link to it is here.


Any U.S. action in Venezuela would be lawful“: Pompeo drums up invasion option after failed coup

As Mike Pompeo prepares to meet Russian Foreign Minister Sergey Lavrov to discuss the crisis in Venezuela, the U.S. secretary of state said bluntly that President Donald Trump has a “full range” of powers to intervene at will”.

Speaking on ABC’s ‘This Week’ on Sunday, Pompeo elaborated on the oft-repeated line that “all options are on the table” when it comes to intervening militarily in Venezuela.

The president has his full range of Article 2 authorities and I’m very confident that any action we took in Venezuela would be lawful,” Pompeo stated when asked if President Trump could intervene in the country’s power struggle without congressional approval. Under Article 2 of the U.S. Constitution, the president acts as commander in chief of the country’s armed forces.

Pompeo also warned Russia against supporting its Latin American ally. “The Russians need to get out,” he told ABC. “Every country that is interfering with the Venezuelan people’s right to restore their own democracy needs to leave.”

What sort of bulls hit is this, dear reader?  If you ever wanted to watch a border-line psychopathic personality type in action, Mr. Pompeo is a good case study.  I thank Larry Galearis for pointing this out — and this news item was posted on the rt.com Internet site at 2:59 p.m. Moscow time on their Sunday afternoon, which was 7:59 a.m. in Washington — EDT plus 7 hours.  Another link to it it here.  Paul Craig Roberts had something to say about this guy in a commentary headlined “The U.S. Desperately Needs a New Secretary of State” — and I thank Larry for this one as well.


E.U. vows to trade with Iran, denounces U.S. decision not to extend waivers to purchase Tehran’s crude

A year after President Trump unilaterally withdrew from the Iran Nuclear Deal, its European signatories, who still honor the agreement, have expressed concern over the U.S. decision not to extend waivers on oil trade with Tehran.

We … take note with regret and concern of the decision by the United States not to extend waivers with regards to trade in oil with Iran,” France, Germany, the U.K. and E.U.’s representative said in a statement.

The trio said they remain “committed to working on the preservation and maintenance of financial channels and exports for Iran.”

The Europeans reminded Washington that the Iran nuclear agreement, officially called the Joint Comprehensive Plan of Action (JCPoA) remains a “crucial element” of the global nuclear non-proliferation regime and therefore is “essential” to European security. Iran, they said, continues to be in full compliance with the agreement’s terms which limits the country’s nuclear research, noting that the International Atomic Energy Agency (IAEA) attested to that fact in 14 of their reports.

After Washington re-imposed sanctions on Tehran in November last year, the U.S. government granted eight countries six-months waivers to keep buying Iranian crude. Those waivers expired on May 1 and now those buying Iranian oil are under threat of U.S. sanctions.

Well — and finally, these clowns in the E.U. have grown some gonads.  This news item showed up on the rt.com Internet site very early on Sunday morning Moscow time — and I thank George Whyte for sending it along.  Another link to it is here.  The Zero Hedge spin on this from Monday is headlined “Europe Vows to Continue Buying Iranian Oil as U.S. Revokes Export Waivers” — and I thank Brad Robertson for that one.


Lavrov set to meet with Venezuelan F.M. after failed coup attempt in Caracas

The Venezuelan foreign minister is heading to Moscow for a meeting with his Russian counterpart, Sergey Lavrov. The top diplomats are set to discuss recent developments after a failed coup attempt in Caracas.

The talks between Jorge Arreaza and Sergey Lavrov are expected to begin on Sunday after the Venezuelan minister arrives in Moscow. During the rare face-to-face discussion, they will seek a solution to the bitter political crisis that is crippling the Latin American nation, according to the Russian Foreign Ministry.

Arreaza and Lavrov will also discuss “options for international mediation efforts to facilitate dialogue between the government and the opposition.” Finally, their meeting will touch upon trade, investment and military cooperation.

The meeting comes at a troubled time for Venezuela, which recently saw a massive effort by U.S.-backed opposition leader Juan Guaido to remove President Nicolas Maduro from power. During violent clashes in and around Caracas, Guaido called for an uprising against the government, but the army and security forces remained loyal to President Maduro.

This is another rt.com story courtesy of George Whyte.  This one put in an appearance on the rt.com Internet site as well…7:25 a.m. Moscow time on Sunday, which was 12:25 a.m. on Sunday morning EDT.  Another link to it is here.


Chinese banks quietly lower daily limit on foreign-currency cash withdrawals

From late last year, the “scrutiny benchmark” for U.S. dollar withdrawals was cut to US$3,000 from US$5,000, according to an official at the Bank of Communications, who requested anonymity. Meanwhile, banks were required to keep a “watch list” monitoring clients who made frequent foreign exchange withdrawals, said the official.

Previously, any withdrawals of US$5,000 or more in a single transaction required proof of need, such as an airline ticket for overseas travel or a health certificate for overseas medical care.

That limit has been quietly lowered to US$3,000, bankers confirmed, without wishing to be identified.

China’s currency is non-convertible on the foreign exchange markets because the country keeps its capital account closed. That allows the central bank’s currency regulator to maintain the yuan’s exchange rate within a tight range, and to stem capital flight.

This story put in an appearance on the South China Morning Post last Friday — and I found it in Monday’s edition of the King Report.  Another link to it is here.  Then there was also this story on the yuantalks.com Internet site yesterday…”PBOC cut reserve requirement ratio for small banks, to release 280 billion funding” — and I found that in yesterday’s edition of the King Report.


U.S. Mint platinum bullion coin mintage of 40,000 sells out in April

The West Point Mint will strike no more 2019 American Eagle 1-ounce platinum bullion coins, although authorized purchasers acquired all of the remaining available coins in April.

The U.S. Mint limited overall platinum bullion coin output to 40,000 coins, with initial production of 30,000 pieces. Once the initial allotment was purchased, the remaining 10,000 coins were struck and released for sale.

The coins first went on sale Jan. 7. During the month of January, the U.S. Mint recorded sales of 27,100 of the $100 platinum coins. Another 2,400 coins were recorded sold during the month of February, 4,000 in March, and the final 6,500 coins in April.

This article appeared on the coinworld.com Internet site on Monday sometime — and another link to it is here.


Estonia has a single gold bar in its vault…but cannot sell it

The only gold ingot Estonia’s central bank has in storage is not pure enough for financial operations and is more suitable as a museum piece, the bank has revealed.

The piece of gold weighs 11 kilograms and is valued at around €500,000, the head of the financial market division of the Bank of Estonia, Fabio Filipozzi, told Terevisioon, according to Estonian Public Broadcasting (ERR). The gold bar is 97 years old – three years younger than the bank, which celebrated its 100th anniversary on Friday.

The rest of the country’s gold reserves amount to 256 kilograms, but it is stored in foreign banks, and in the US in particular. The tradition stems from the first half of the last century, before World War II began, when the country decided to transfer the precious metal to keep it safe.

Tallinn sold most of its gold reserves in the 1990s and invested money in other liquid assets, such as bonds and equities, according to the bank official.

Estonia’s gold reserves are the second lowest among European countries, behind Albania by 1.35 tons, according to Trading Economics website data.

The above five paragraphs are all there is to this brief gold-related news item that showed up on the rt.com Internet site on Sunday at 10:21 a.m. Moscow time.  That was 3:21 a.m. in Washington — EDT plus 7 hours.  I thank George Whyte for sharing it with us — and another link to it is here.


Gold Bar Imports by India in March Skyrocketed 49%

The most recent trade statistics published by the Gem & Jewellery Export Promotion Council (GJEPC) in India suggests considerable surge in gold bar imports by the country during the previous fiscal year. Meantime, the gold imports edged higher in March 2019 ahead of the wedding season and festive demand in the country.

India’s gold bar imports totaled INR 54,805.95 Crores in April ‘18-March ‘19, higher by 49.2% when compared with the imports of INR 36,703.62 Crores during the previous fiscal year. In dollar terms, the imports were valued at $7,870.96 Million, as compared with $5,692.85 a year before.

The gold bar imports by the country recorded notable jump in March this year. The monthly import statistics suggest that total gold bar imports by the country during the month amounted to INR 4,453.98 (US$ 641.05). In rupee terms, the gold bar imports were up by more than 19%. The imports in dollar terms stood higher by nearly 12% to total $641.05 Million. The country’s gold bar imports during March 2018 were valued at Rs 3,734.98 crores (USD 574.44 Million), GJEPC data said.

Meantime, silver bar imports declined sharply during the fiscal year ending March 31, 2019. The imports dropped by nearly 30% from $53.86 Million in April ‘17-March ‘18 to $37.82 in April ‘18-March ‘19. Also, monthly imports registered a decline of over 10% from $2.06 Million to $1.85 Million.

The official import numbers for India won’t be published for another week.  The above four paragraphs are all there is to this gold-related new story that was posted on the scrapregister.com Internet site on Monday — and I found it on the Sharps Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES

After driving through the inclement weather on the north shore of the South Thompson River we arrived to sunny skies at Chase, B.C...a really cute place in a picturesque location, except for the fact that main-line CPR runs right through the center of the town — and the trains run 24/7.  The first photo is evidence of that — and the cut in the rock above and behind the train is the Trans-Canada Highway.  The second shot is of Little Shuswap Lake in Chase — and it’s at this point it drains west and forms the South Thompson River.  The lake level is shockingly low…many, many feet below what it should be…I would guess 1.5 meters/4-5 feet or so.  The last photo is of the South Thompson River about 5 kilometers/3 miles west of Chase…looking west at sunset.  My daughter and I are still trying to figure out what animal made the two perfectly concentric circular patterns in the sand of the river’s flood plain in the foreground, as they aren’t human tracks.  Click to enlarge for all.


The WRAP

The rallies in both silver and gold at the 6:00 p.m. EDT open in New York on Sunday evening were dealt with in the usual manner by ‘da boyz’ as this…’care and maintenance’ routine continues.  Only platinum was allowed to close higher on the day.

Silver, which had been sitting right at its 200-day moving average, was hauled down well below it intraday, but closed only 6 cents below it by the time that COMEX trading ended.

As I mentioned at the top of today’s column, net volumes in both gold and silver were a bit higher than normal for an ‘average’ day — and that’s entirely due to the fact that volumes in both were very heavy in New York on Sunday evening, as it took a decent amount of paper for JPMorgan et al to put out the budding rallies in those two precious metals.  After that, volumes were nothing out of the ordinary — and no new intraday or closing lows were set, nor any moving averages broken, during the COMEX trading session on Monday.

Here are the 6-month charts for the Big 6 commodities…except for the price action in silver, there’s not much to see…although there certainly were some price machinations in both copper and WTIC.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price rallied a few dollars without much conviction during morning trading in the Far East — and was turned lower around 12:30 p.m. CST in Shanghai — and is up only 80 cents an ounce. Silver hasn’t been allowed to much — and it’s up a penny currently. Platinum and palladium are unevenly higher in Far East trading — and both are up 8 bucks as Zurich opens.

Net HFT gold volume is around 37,500 contracts — and there’s only 295 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is already about 11,700 contracts — and there’s only a piddling 65 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened up 2 basis points once trading commenced at 7:44 p.m. EDT in New York on Sunday evening, which was 7:44 a.m. China Standard Time on their Tuesday morning. It began to head lower immediately, but stopped declining around 1 p.m. CST — and began to head higher shortly after the 2:15 p.m. CST afternoon gold fix in Shanghai. It’s down 9 basis points [according to Bloomberg] as of 7:45 a.m. BST in London, 8:45 a.m. CEST in Zurich.


Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders report, plus the companion Bank Participation Report — and unless we have a huge move in either silver or gold today, I won’t be commenting on what may or may not be in that report.  There was just too much going during the reporting week — and I’ll leave it up to Ted to stick his neck out…if he wishes to do so, that is…as we were both taken aback by the huge [and totally unexpected] increase in the commercial net short position in gold during the last reporting week.

And as I post today’s column on the website at 4:02 a.m. EDT, I see that gold began to tick higher just minutes before the London open, but since the dollar index began to tick higher during the first hour of London trading, it only up $1.20 at the moment. Silver, which was up 3 cents, is now back at unchanged. Platinum is only up 6 bucks now — and palladium by 8.

Gross gold volume is now up to a bit over 51,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is about 47,300 contracts. Net HFT silver volume is 14,000 contracts — and there’s only 177 contracts of roll-over/switch volume on top of that.

The dollar index is up a tiny bit since the London/Zurich opens — and is down only 4 basis points as of 8:45 a.m. BST/9:45 a.m. CEST.

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

Ed