16 May 2019 — Thursday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price was guided a few dollars lower staring around 9 a.m. China Standard Time on their Wednesday morning — and the low tick of the day, such as it was, came at the London open. It crawled quietly and unevenly higher from there — and both attempts to break above the $1,300 spot mark between 8 and 9 a.m. in New York, were easily turned aside. The gold price was turned a bit lower from that point — and then didn’t do much for the remainder of the Wednesday session.
The low and high ticks certainly aren’t worth looking up.
Gold was closed on Wednesday at $1,296.10 spot, down 20 cents on the day and, in most respects, its price path on Wednesday was almost a carbon copy of the price path it was forced to follow on Tuesday. Despite the quiet price action, net volume [like on Tuesday] was fairly decent at a bit over 223,000 contracts — and there was 25,000 contracts worth of roll-over/switch volume on top of that.
Like for gold, silver’s low, such as it was, came at the London open as well — and it then crept higher until at, or shortly before, the morning gold fix in London. About thirty minutes after that, the price was headed lower — and that tiny sell-off lasted until around 11:25 a.m. in New York. It edged a few pennies higher going into the 1:30 p.m. EDT COMEX close — and didn’t do much after that.
The low and high ticks aren’t worth looking up in this precious metal, either.
Silver was closed at $14.765 spot, up half a cent on the day. If you look, you’ll see that ‘da boyz’ have closed silver within two cents of the same price for the last three trading sessions in a row. This certainly isn’t by chance. Net HFT gold volume was pretty light at a bit over 41,000 contracts — and there was 2,478 contracts worth of roll-over/switch volume in that precious metal.
The platinum price edged sideways in morning trading in the Far East on their Wednesday — and Ted’s “midnight move” in this precious metal began very shortly after 12 o’clock noon CST. Its low tick was set either side of the Zurich close. it crept a few dollars higher from there into the 1:30 p.m. COMEX close — and went back to trading flat until trading ended at 5:00 p.m. EDT in New York. Platinum was closed at $844 spot, down 9 dollars from Tuesday — and at a new low for this engineered price decline.
The palladium price was sold quietly and unevenly lower until the Zurich open — and then ‘da boyz’ got serious. The low tick came around 9:15 a.m. in New York — and it began to tick higher from there. Then the market appeared to go “no ask” once the afternoon gold fix in London was done for the day. But a short seller of last resort appeared minutes later, not only capping the price, but driving it down twenty bucks or so in the process. It gained half of that back by around 2:40 p.m. in the very thinly-traded after-hours market — and was sold down a few dollars going into the 5:00 p.m. EDT close. Palladium was closed at $1,323 spot, up 4 bucks on the day, but off its high tick by about 10. How high it would have closed if free markets had been allowed to prevail, would be anyone’s guess.
The dollar index closed very late on Tuesday afternoon in New York at 97.53 — and opened unchanged once trading began at 7:44 p.m. EDT on Tuesday evening, which was 7:44 a.m. China Standard Time on their Wednesday morning. From that juncture, it really didn’t do much — and sank to its 97.44 low tick a few minutes before 10 a.m. BST in London. It began to rally from there — and the 97.70 high tick came at the afternoon gold fix in London. Then down it went. That waterfall decline ended at a few minutes before 10:30 a.m. in New York — and it edged quietly and unevenly higher until around 3:25 p.m. EDT — and crept a few basis lower until trading ended at 5:30 p.m. EDT. The dollar index finished the day at 97.57…up 4 basis points from Tuesday’s close.
Here’s the DXY chart, courtesy of Bloomberg. Click to enlarge.
And here’s the 6-month U.S. dollar index chart — and that’s courtesy of the folks over at the stockcharts.com Internet site. The delta between its close…97.32…and the close on the DXY chart above, was 25 basis points on Wednesday. Click to enlarge as well.
The gold stocks opened up less than one percent and then sank quietly and very unevenly lower for the entire New York trading session — and the HUI closed down 0.18 percent.
The price pattern for the silver equities was mostly the same, except their price path yesterday was even more erratic than their golden brethren. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 0.17 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index, updated with Wednesday’s doji. Click to enlarge as well.
At least there was nobody activity shorting the precious metal shares on Wednesday.
The CME Daily Delivery Report showed that 55 gold and 4 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.
In gold, the three short/issuers were JPMorgan, Advantage and ADM, with 39, 11 and 5 contracts respectively. Of the four long/stoppers in total, the three biggest were JPMorgan, Advantage and Morgan Stanley, with 33, 17 and 4 contracts respectively. All contracts, both issued and stopped, involved their respective client accounts.
In silver, the two short/issuers were ADM and Advantage, with 3 and 1 contracts. JPMorgan and Advantage stopped 2 contracts each. And, like in gold, all contracts both issued and stopped, involved their respective client accounts.
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 May rose by 2 contracts, leaving 123 still around, minus the 55 mentioned a few paragraphs ago. Tuesday’s Daily Delivery Report showed that only 1 gold contract was actually posted for delivery today, so that means that 2+1=3 more gold contacts were added to May. Silver o.i. in May rose by 3 contracts, leaving 298 still open, minus the 4 contracts mentioned a few paragraphs ago. Tuesday’s Daily Delivery Report showed that zero silver contacts were posted for delivery today, so that means that 3 silver contracts just got added to the May delivery month.
There was a withdrawal of 103,833 troy ounces of gold from GLD on Wednesday. This amount is within two troy ounces of the amount that was reported deposited in GLD on Monday. What that was all about is something that I’m no position to even speculate on. Over at SLV, an a.p. took out 1,030,557 troy ounces of silver.
There was a tiny sales report from the U.S. Mint on Wednesday. They sold 500 troy ounces of gold eagles — and 500 one-ounce 24K gold buffaloes.
There was a tiny amount of in/out movement in gold over at the COMEX-approved depositories on Tuesday. There was 8,234 troy ounces shipped out of Brink’s, Inc. — and there was 289.350 troy ounces/9 kilobars [U.K./U.S. kilobar weight] shipped out of Canada’s Scotiabank. The link to that is here.
There wasn’t much going on in silver. There was 168,373 troy ounces received — and all of that ended up at Loomis International. There was a total of 169,441 troy ounces shipped out involving three different depositories. The two largest were HSBC USA and Scotiabank, with 100,021 troy ounces shipped out of the former — and 68,352 troy ounces shipped out of the latter. The link to this, plus a bit more, is here.
There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday. They reported receiving 1,150 of them — and shipped out only 54. Except for 150 kilobars that were received at Loomis International, the remainder of the in/out activity was at Brink’s, Inc. The link to that, in troy ounces, is here.
The Hallaton Treasure, the largest hoard of British Iron Age coins, was discovered in 2000 near Hallaton in southeast Leicestershire, England, by volunteers from the Hallaton Fieldwork Group. The initial find was made by Ken Wallace on 19 November 2000, when he found about 130 coins with a metal detector.
Along with local community archaeologists, the University of Leicester Archaeological Services (ULAS) excavated what turned out to be one of the most important Iron Age excavations and community archaeology projects in Britain.
The hoard includes over 5,000 silver and gold coins, a silver-gilt Roman parade helmet, jewellery, and other objects. Most of the items date to around the time of the Roman Conquest of Britain in the 1st century A.D. Of the coins from the site, 4,835 can be attributed to the local tribe, the Corieltauvi. This find more than doubled the total number of Corieltauvian coins previously recorded. A silver Roman coin from the hoard has been dated by local museums to 211 B.C., and is the oldest Roman coin found in Britain.
Some archaeologists have however speculated that it found its way into Britain before the Roman conquest in 43 A.D. and is evidence of exchange through trade or diplomacy. The site of the treasure proved to be an internationally important ritual site dating mostly to the generations before and after the Roman Conquest. Archaeologists believe that the site is a type of open air shrine that is the first of its kind to have been discovered in the U.K. It was located on a hilltop in the Welland valley and was probably enclosed by a ditch and palisade. There is only one photo. Click to enlarge.
I don’t have much in the way of stories/articles for you today.
What if China isn’t half so desperate for a deal as the president believes?
Are we in for an extended siege of economic trench warfare?
Today we explore possibilities… and their implications.
We first direct our gaze to Wall Street.
Investors came crouching from their shelters this morning… as if expecting an aftershock to the quake that drove them underground yesterday.
With Monday’s 617-point battering — piling atop last week’s losses — three months of stock market gains have vanished into the ether.
The S&P 500 endured its 15th-largest decline in history yesterday. It has shed $1.1 trillion since May 5 alone.
This commentary from Jim was written on Tuesday sometime — and it showed up on the dailyreckoning.com Internet site on Wednesday morning. Another link to it is here.
The nice thing about Donald Trump is that he is “honest.” Even when he is lying. He’s a performance artist for whom truth and lies are more or less the same thing. It’s the show that is true – the ratings… the base… the gross revenues.
In order for a show to have wide appeal, in politics as in professional wrasslin’, the theme has to be simple: good versus evil, black versus white, us versus them. Truth, nuance, and ambiguity have no place in it.
Dig down into the numbers, the theories, and the details, and the good versus evil narrative gets mucky, murky, and messed-up. But why bother?
Yesterday, we noted that even people who call themselves conservatives have stopped digging. They are now willing to let the feds tell them who they can and can’t do business with, and on what terms.
This was confirmed later in the day, when Dear Readers wrote to tell us what an idiot we were for doubting our president and his trade war with China. Many still believe that the U.S. president can – by edict – make us better off.
This commentary by Bill was posted on the bonnerandpartners.com Internet site on Monday morning EDT — and another link to it is here.
With the trade war between the U.S. and China re-escalating once more, investors are again casting frightened glances at declining global trade volumes, which as Bloomberg writes today, “threaten to upend the global economy’s much-anticipated rebound and could even throw its decade-long expansion into doubt if the conflict spirals out of control.”
“Just as tentative signs appeared that a recovery is taking hold, trade tensions have re-emerged as a credible and significant threat to the business cycle,” said Morgan Stanley’s chief economist, Chetan Ahya, highlighting a “serious impact on corporate confidence” from the tariff feud. Click to enlarge.
To be sure, even before the latest trade war round, global growth and trade were already suffering, confirmed most recently by last night’s dismal China economic data, which showed industrial output, retail sales and investment all sliding in April by more than economists forecast.
A similar deterioration was observed in the U.S., where retail sales unexpectedly declined in April while factory production fell for the third time in four months. Meanwhile, over in Europe even though Germany’s economy emerged from stagnation to grow by 0.4% in the first quarter, “the outlook remains fragile amid a manufacturing slump that will be challenged anew by the trade war.” As a result, investor confidence in Europe’s largest economy unexpectedly weakened this month for the first time since October.
“The world economy has been in a significant slowdown for a period,’’ said James Bevan, chief investment officer at CCLA Investment Management. “People just have to wake up and look at the trade data.’’
This 2-chart Zero Hedge news item put in an appearance on their Internet site at 11:30 a.m. EDT on Wednesday morning — and I thank Brad Robertson for sending it along. Another link to it is here.
Fox News host Tucker Carlson blasted National Security Advisor John Bolton for his apparent love of violent global conflict, saying that for him war with Iran would be like “Christmas, Thanksgiving and his birthday” in one.
“Mercifully John Bolton doesn’t command the military,” Carlson said bitingly – however, the question of how strong his influence on President Donald Trump’s foreign policy remains.
Bolton has been consistent in his drive to push the U.S. into a violent conflict with the Islamic Republic, even penning a rather blunt op-ed in The New York Times entitled ‘To Stop Iran’s Bomb, Bomb Iran’ in 2015. Although President Trump was elected in part based on his turn-away from the traditional neo-con interventionist outlook, his national security advisor pick has been as hawkish as ever since assuming office last year.
“How is a war with Iran in America’s interests in any way?” Carlson asked, a pertinent question given a NYT report recently claimed Bolton ordered a plan to send 120,000 troops to the Middle East in order to “check” Iran’s influence. While Trump has since refuted the report, calling it “fake news,” he added that if it came to such a plan, “we’d send a hell of a lot more troops than that.” He did say that, “hopefully,” this will not be needed.
Tucker on Tuesday was joined by retired army colonel Douglas Macgregor, who called the situation a “manufactured crisis,” noting that Iran actually serves as an ally in the main regional conflict against Islamic State (I.S., formerly ISIS).
This news item from rt.com Internet site, which contains the 4:36 minute Tucker/Macgregor interview, was posted on their website at 2:13 p.m. Moscow time on Wednesday — 7:13 a.m. EDT in Washington. It was updated ten minutes later. I thank Larry Galearis for sending it our way — and another link to it is here.
A U.K. military commander was rebuked by the U.S. Central Command for questioning Washington’s claims that Iran poses an increased threat. Gen. Ghika, a senior figure in the anti-ISIS coalition, said none was evident in Iraq or Syria.
The awkward exchange on Tuesday came as the U.S. is trying to rally its allies to confront Tehran over an unspecified threat to American interests in the Middle East.
Despite the beat of the war drum, even the U.S.’s closest allies remain skeptical about the narrative furthered by Iran hawks in Washington like U.S. National Security Advisor John Bolton and U.S. Secretary of State Mike Pompeo. One of the doubters is British Army Maj. Gen. Christopher Ghika, a deputy head of the U.S.-led coalition created to fight the terrorist group Islamic State.
“There’s been no increased threat from Iranian-backed forces in Iraq and Syria,” Gen. Ghika said on Tuesday during a video briefing from Iraq. “We’re aware of that presence, clearly. And we monitor them along with a whole range of others because that’s the environment we’re in.”
There is a large number of Shia militias operating in Iraq and Syria, some with the backing of the Iranian government. They were involved in fighting against radical Sunni groups, including I.S., in the past few years, but the degree of control that Tehran has over the fighters is questionable.
Washington cited the existence of those groups as one of the reasons why Iran poses a danger to the U.S. and should be contained. The U.S. has some 5,000 troops deployed in Iraq with the consent of its government as part of the coalition effort, as well as some 2,000 troops stationed in Syria illegally.
This story showed up on the rt.com Internet site at 7:12 a.m. Moscow time on their Wednesday morning — which was 12:12 a.m. in Washington — EDT plus 7 hours. It was updated about three and a half hours later. I thank Larry Galearis for pointing it out — and another link to it is here.
The schism between the United States and Europe over Iran bears the hallmarks of their friction over Iraq prior to the 2003 U.S.-led invasion. Their current dispute is mainly over means not ends, but could have major implications for transatlantic relations and the Middle East.
Both the U.S. and the E.U. would like to see the Ayatollahs’ Iran contained and constrained, preferably under new leadership – just as they wanted to see Saddam Hussein’s Iraq before 2003 – but as in the past, they disagree on how to go about it. To put it simply, it is a dispute over “carrots or sticks” – or whether to bring Iran to its senses or bring it to its knees.
The Europeans want to compel the Islamic Republic to change its behaviour using trade and investments in accordance with the Joint Comprehensive Plan of Action (JCPOA), while the U.S. wants to coerce it into a much more debilitating deal through tough sanctions and the threat of force.
But to paraphrase Mohamed ElBaradei, the former director of the International Atomic Energy Agency (IAEA), Iran is no “donkey” to be managed with carrots and sticks. It is a defiant regional power that demands a U.S. U-turn on sanctions, an apology, and respect.
As the crisis deepens, the disagreements between the U.S. and Europe are also worsening in tone and substance.
This worthwhile commentary appeared on the aljazeera.com Internet site on Wednesday morning sometime — and I thank George Whyte for sending it along. Another link to it is here.
In probably the most significant sign so far that we could be headed for yet another major war in the Middle East, multiple European allies of the United States are rapidly pulling their forces from Iraq and the Persian Gulf region on fears they could get unwillingly sucked into confrontation with Iran.
Tehran isn’t backing down the U.S. escalation ladder either, given moments ago Iran’s Revolutionary Guard commander, Major General Hossein Salami, said via the Reuters newswire:
“We are on the cusp of a full scale confrontation with the enemy.”
Iran’s Minister of Defense Amir Hatami also vowed Wednesday, “We will defeat the American-Zionist front,” according to the Islamic Republic News Agency (IRNA). This follows on the heels of the U.S. State Department’s dramatic ordering of an evacuation of all non-essential diplomatic personnel and their families from the American embassy in Baghdad, citing an “imminent” threat.
The USS Abraham Lincoln carrier group makes its way through the lengthy Suez Canal en route to the Persian Gulf.
As of Wednesday morning the countries of Spain, Germany, and the Netherlands have suspended military support operations in Iraq, citing rising U.S.-Iran tensions. And further a top Iraqi diplomat told reporters at a press conference in Moscow that “Iraq is a sovereign nation. We will not let [the U.S.] use our territory for any military operations against Iran.”
Previously on Tuesday Spain was the first to announce that it ordered its military frigate, the Méndez Núñez, which has 215 sailors on board, out of a USS Abraham Lincoln carrier strike group currently en route to the Persian Gulf, citing “it will not enter into any other type of mission” in the Persian Gulf region, according to the Spanish Minister of Defense.
This news item was posted on the Zero Hedge website at 3:10 p.m. EDT on Wednesday afternoon — and George Whyte, Larry Galearis and Brad Robertson all contributed to this story. It’s worth reading — and another link to it is here.
We Have The Power To End Gold Price Suppression — Mark O’Byrne interviews GATA’s Chris Powell [Part 2]
– “Over the long term, justice, fairness and decency will prevail … that is the history of mankind…as seen in the ascent of man … things tend to get better over the long term …”
– CALL To ACTION: Precious metals suppression is only possible if gold buyers and investors give their money & energy to Wall Street and keep money in banks and in proxy gold such as ETF gold, digital gold and even gold mining shares. End this for once and for all by selling proxy gold and taking delivery of your bullion or owning coins and bars in fully allocated and fully segregated storage.
– The price suppression of gold and other natural resources has “real world consequences for the majority of the people on this planet …”
This worthwhile 32:26 minute video interview [Part 2] between Goldcore’s Mark O’Byrne and GATA’s secretary/treasurer Chris Powell showed up on the goldcore.com Internet site on Wednesday morning BST — and another link to it is here.
The PHOTOS and the FUNNIES
About ten minutes or so after taking the last two shots from yesterday’s photo selection, we were back on super-scenic B.C. Highway 5A — and back on the road to Merritt. My daughter spotted this small herd of female mule deer — and they were a good 300 meters/1,000 feet away. They weren’t paying us any attention at all. So after snapping the first photo, I shouted at them — and that woke them up. Minutes later they were on their way to greener pastures — and that 4-strand barbed wire fence in their path of retreat was no obstacle. I didn’t try to crop these shots any tighter, as lens resolution becomes an issue on objects this far away. Click to enlarge.
[B]ut the complete control that speculative derivatives positioning has on price has become so glaring so as to become almost irrefutable. Yet shockingly, all seem to see it except those most responsible for doing something about it. Here’s something I would ask you to think about. You hear me going on and on about how the price discovery process is all screwed up because the COMEX futures market in gold and silver is dominated by speculators (in the form of managed money technical funds) on one side versus speculators (in the form of banks) on the other side. So large is this purely speculative paper trade that it sets the price for all gold and silver throughout the world. Because there is little to no actual participation by actual users or producers (miners) in COMEX futures trading, there is little to no legitimate hedging going on – which is the prime reason why congress authorized futures trading in the U.S.
Yet here is a speech just given by the chairman of the CFTC, extolling the virtues of the risk transfer mechanism of futures trading. But I don’t know what risk transfer mechanism he is referring to, since there is no legitimate hedging going on by actual gold and silver producers or users on the COMEX. Is he referring to the money consistently taken by the banks from the technical funds as the transfer of risk? Is that what he means by risk transfer? Is he looking at the same markets that I am looking at?
This is a really basic point that the CFTC refuses to even address, namely, how can markets completely dominated by speculators on both sides of the market come close to meeting the meaning of why regulated futures trading is allowed? With no real users or producers hedging in COMEX gold and silver, what legitimate risk transfer is occurring? Even though this is hardly a trick question, I doubt any answer will be forthcoming from the chairman or the agency. — Silver analyst Ted Butler: 11 May 2019
It was a very quiet day for silver and gold on Wednesday, but it should be carefully noted that gold was prevented from breaking above the $1,300 spot mark twice yesterday morning in New York. The other thing I noticed was that silver has now been closed below its 200-day moving average for twenty-five consecutive trading days…five weeks. Platinum was closed at a new low for this engineered price decline yesterday as well. I also see that WTIC closed back above its 50-day moving average by a bit for the second day in a row.
Here are the 6-month charts for the Big 6 commodities — and the the above changes should be noted. 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 certainly hasn’t done much in Thursday trading in the Far East — and it’s up 10 cents currently. Ditto for silver — and it’s sitting at unchanged. It’s about the same for platinum — and it’s down a buck at the moment. Palladium as sold lower staring the moment that trading began at 6:00 p.m. EDT in New York on Wednesday evening — and it has been crawling quietly and unevenly sideways since 9 a.m. CST in Shanghai. It’s down 6 dollars as Zurich opens.
Net HFT gold volume is very light at just under 28,000 contracts — and there’s a tiny 857 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is extremely light as well, at a hair over 5,800 contracts — and there’s only 233 contracts worth of roll-over/switch volume on top of that.
The dollar index opened down 3 basis points once trading commenced at 7:44 a.m. in New York on Wednesday evening, which was 7:44 a.m. China Standard Time on their Thursday morning. It has been comatose since — and is down 4 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.
In this space yesterday I made two contradictory statements — and I didn’t catch this when I was editing, but Ted did when he read it yesterday morning, so I wish to set the record straight here. At one point in The Wrap I stated that Friday’s COT Report…”will certainly show an increase in the commercial net short positions in both gold and silver.” Then a handful of paragraphs later I stated that…”I shan’t bother with an estimate on silver as it’s just not possible to tell, but would tickled pink if it came in at unchanged.” I’m hoping for the latter based on the five dojis during the trading week, but afraid it could turn out to be the former.
And as I post today’s missive on the website at 4:02 a.m. EDT, I note that all four precious metals began to trend higher just before the London/Zurich opens. At the moment, gold is up $1.80 the ounce — and silver is now up 2 cents. Platinum is up 3 dollars — and palladium is back at unchanged as the first hour of London/Zurich trading draws to a close.
Gross gold volume is coming up on 41,000 contracts now — and minus roll-over/switch volume, net HFT gold volume is 36,000 contracts. Net HFT silver volume is a bit over 7,100 contracts — and there’s 298 contracts worth or roll-over/switch volume in that precious metal.
The dollar index continues to do nothing…trading quietly sideways…and as of 8:45 a.m. in London/9:45 a.m. in Zurich, it’s down 4 basis points.
That’s all I have for today — and I’ll see you here again tomorrow.