17 May 2019 — Friday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price traded flat until the 2:15 p.m. afternoon gold fix in Shanghai on their Thursday afternoon — and then crept higher by a couple of dollars until precisely 9:00 a.m. BST in London, because I was watching. ‘Da Boyz’ showed up at that point, with the real down-side price pressure coming at 8:30 a.m. in New York. The low tick of the day was set around 10:35 a.m. EDT — and it crawled higher into the COMEX close. From there, it traded sideways until trading ended at 5:00 p.m. EDT.
The high and low ticks in this precious metal were reported by the CME Group as $1,299.30 and $1,284.20 in the June contract.
Gold was closed in New York on Thursday at $1,286.40 spot, down $9.70 from Wednesday — and back below its 50-day moving average. Net volume was very decent at around 246,500 contracts. There was a hair under 37,000 contracts worth of roll-over/switch volume on top of that.
The silver price traded very quietly and unevenly sideways in all of Far East and most of London trading on their respective Thursday’s and, like in gold, JPMorgan et al showed up in force at 8:30 a.m. in New York. Most of the price damage was done by noon EDT, but they picked away at it from there by a bit — and the low tick was set in the thinly-traded after-hours market. It rallied a bit for an hour between 3 and 4 p.m. EDT — and then traded flat into the close from there.
The high and low ticks in this precious metal were recorded by the CME Group as $14.825 and $14.515 in the July contract.
Silver was close in New York on Thursday at $14.525 spot, down 24 cents on the day — and at a new low for this engineered price decline going all the way back to early December of 2018. Net HFT silver volume was pretty heavy at just over 65,000 contracts — and there was a bit over 4,600 contracts worth of roll-over/switch volume on top of that.
Platinum didn’t do much in Far East trading on their Thursday — and opened about unchanged in Zurich. It rallied a few dollars during the next hour, but less than an hour after that, the price decline began in that precious metal as well, with the low tick coming at 1:00 p.m. in New York. It traded quietly sideways in the very thinly-traded after-hours market, before popping higher by a few dollars around 4:00 p.m. EDT. It traded flat into the 5:00 p.m. close from there. Platinum was closed on Thursday in New York at $833 spot, down another 11 dollars — and also at a new low for this engineered price decline.
The palladium price traded very unevenly sideways in both Shanghai and Zurich yesterday. But once Zurich closed at 11 a.m. EDT, it was sold lower until 1 p.m. in New York. It ticked a few dollars higher into the 5:00 p.m. close from there. Platinum finished the Thursday session at $1,316 spot, down 7 dollars from Wednesday’s close.
The dollar index closed very late on Wednesday afternoon in New York at 97.57 — and opened down 3 basis points once trading commenced at 7:44 p.m. EDT on Wednesday evening, which was 7:44 a.m. CST on their Thursday morning. It then proceeded to trade pretty much ruler flat until around 9:15 a.m. in London. It edged lower from that juncture — and the 97.44 low tick of the day was set at a minute or so after 10 a.m. BST. A ‘rally’ began at that point — and the 97.88 high tick was set a minute or so before 3:00 p.m. EDT in New York — and it edged a few basis points lower into the close from there. The dollar index finished the Thursday session at 97.86…up 29 basis points from Wednesday’s close.
If you can find any direct correlation between what was happening in the currencies — and what was going on in each of the precious metals yesterday, I’d love to hear from you. This was another COMEX paper affair, nothing else — and I have more to say about this in The Wrap.
Here’s the DXY chart, courtesy of Bloomberg. Click to enlarge.
And here’s the 1-year U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site. The delta between its close…97.68…and the close on the DXY chart above, was 18 basis points on Thursday. Click to enlarge as well.
The gold stocks began to head lower the moment that trading began at 9:30 a.m. in New York on Monday morning, with their respective lows coming around 11:20 a.m. EDT. They rallied very erratically from there by a bit until the markets closed at 4:00 p.m. — and the HUI closed lower by 1.37 percent.
In most respects that mattered, the trading pattern in the silver equities was the same as it was for the gold shares…except their lows of the day came around 2:40 p.m. in New York. They rallied a bit into the close from there. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.80 percent. It could have been far worse. Click to enlarge if necessary.
And here’s Nick 1-year Silver Sentiment/Silver 7 Index chart updated with Thursday’s doji. Click to enlarge as well.
The CME Daily Delivery Report showed that 2 gold and 15 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.
In gold, the lone short/issuer was Advantage — and the lone long/stopper was JPMorgan. Both transactions involved their respective client accounts.
In silver, the two short/issuers were International F.C. Stone and Advantage, with 10 and 5 contracts out of their respective client accounts. Of the four long/stoppers in total, the two largest were JPMorgan, as they picked up 10 contracts in total…9 for clients — and one for its own account. Advantage stopped 3 contracts.
The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Thursday trading session showed that gold open interest in May dropped by 54 contracts, leaving 69 left, minus the 2 contracts mentioned a few short paragraphs ago. Wednesday’s Daily Delivery Report showed that 55 gold contracts were actually posted for delivery today, so that means that 55-54=1 more gold contract was added to May. Silver o.i. in May actually rose by 55 contracts, leaving 353 still open, minus the 15 contracts mentioned a few paragraphs ago. Wednesday’s Daily Delivery Report showed that only 4 silver contracts were actually posted for delivery today, so that means that 55+4=59 more silver contracts were added to the May delivery month.
There were no reported changes in either GLD or SLV on Thursday.
And there was no sales report from the U.S. Mint, either.
The only in/out movement in gold over at the COMEX-approved depositories on Wednesday was 514.400 troy ounces/16 kilobars [U.K./U.S. kilobar weight] that was shipped out out of Canada’s Scotiabank. I won’t bother linking this amount.
It was busier in silver. Nothing was reported received, but 1,073,733 troy ounces was shipped out. There was one truckload…599,864 troy ounces…that departed Brink’s, Inc. — and 404,550 troy ounces was shipped out of Canada’s Scotiabank. The remaining 69,318 troy ounces left the CNT depository. The link to this activity is here.
There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday, as 2,000 were reported received — and 10 were shipped out. All this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
The Hoxne Hoard is the largest hoard of late Roman silver and gold discovered in Britain, and the largest collection of gold and silver coins of the fourth and fifth centuries found anywhere within the Roman Empire. It was found by Eric Lawes, a metal detectorist in the village of Hoxne in Suffolk, England in 1992. The hoard consists of 14,865 Roman gold, silver, and bronze coins and approximately 200 items of silver tableware and gold jewellery. The objects are now in the British Museum in London, where the most important pieces and a selection of the rest are on permanent display. In 1993, the Treasure Valuation Committee valued the hoard at £1.75 million (roughly equivalent to £3.5 million in 2018).
The hoard was buried in an oak box or small chest filled with items in precious metal, sorted mostly by type, with some in smaller wooden boxes and others in bags or wrapped in fabric. Remnants of the chest and fittings, such as hinges and locks, were recovered in the excavation. The coins of the hoard date it after A.D. 407, which coincides with the end of Britain as a Roman province. The owners and reasons for burial of the hoard are unknown, but it was carefully packed and the contents appear consistent with what a single very wealthy family might have owned. It is likely that the hoard represents only a part of the wealth of its owner, given the lack of large silver serving vessels and of some of the most common types of jewellery.
The Hoxne Hoard contains several rare and important objects, such as a gold body-chain and silver-gilt pepper-pots (piperatoria), including the Empress pepper pot. The hoard is also of particular archaeological significance because it was excavated by professional archaeologists with the items largely undisturbed and intact. The find helped to improve the relationship between metal detectorists and archaeologists, and influenced a change in English law regarding finds of treasure.
I have an average number of stories for you today.
Subprime Bites: Auto-Loan Delinquencies Spike to Q3 2009 Level, Despite Strongest Labor Market in Years — Wolf Richter
Serious auto-loan delinquencies – 90 days or more past due – jumped to 4.69% of outstanding auto loans and leases in the first quarter of 2019, according to New York Fed data. This put the auto-loan delinquency rate at the highest level since Q4 2010 and merely 58 basis points below the peak during the Great Recession in Q4 2010 (5.27%)…
These souring auto loans are going to impact banks and specialized lenders along with the real economy – the automakers and auto dealers and the industries that support them.
This is what the banks are looking at.
The dollars are big. In Q1, total outstanding balances of auto loans and leases rose by 4% from a year ago to $1.28 trillion (this amount by the New York Fed is slightly higher than the amount reported by the Federal Reserve Board of Governors as part of its consumer credit data). Over the past decades, since in Q1 2009, total auto loans and leases outstanding have risen by 65%.
But the number of auto-loan accounts has risen only 34% over the decade, to 113.9 million accounts in Q1 2019. In other words, what caused much of the increase in the auto-loan balances is the ballooning amount financed with each new loan and longer loan terms that causes those loans to stay on the books longer.
This article from Wolf put in an appearance on his Internet site on Wednesday sometime — and I thank Richard Saler for pointing it out. Another link to it is here.
Wall Street continued its recovery yesterday, the Dow rising 116 points.
Investors believe – as we do – that the trade war will blow over… or at least calm down into tweety skirmishes. The Donald himself is already backing off, calling it only a “squabble.”
The Trump administration also signaled that it would not step up its trade war with Europe (over autos)… and that it was ready to back away from steel and aluminum tariffs, too.
And faced with a collapsing stock market, there is little doubt – Trump will retreat… and turn his guns on the Fed.
But only the old-timers bother to worry about a stock collapse.
Three times, the Dow has tried to beat its October 2018 high of 26,800. And three times, it has failed. This “triple top” formation is a bad sign. It foretells a bear market, they say.
The latest news from Reuters shows Main Street weakening too — and the Atlanta Fed is now predicting a big drop in GDP growth.
But nobody pays any attention to old-timers… or to warning signs… anymore. That’s what financialization is all about – separating the real world from the financial world… and allowing fantasy and fake money to replace facts and real earnings.
This worthwhile commentary from Bill put in an appearance on the bonnerandpartners.com Internet site early on Thursday morning EDT — and another link to it is here.
How do baby boomers protect their life savings from the ravages of inflation? Our recent interview with Chuck Butler got the attention of many readers. We reviewed how gold and foreign currencies performed during the high inflation Carter years. During a five-year period beginning 1/1/77, we experienced almost 60% inflation. That destroyed a lot of wealth held by seniors and savers. We concluded:
Preservation of capital (not losing money) is no longer the entire goal. We must preserve the buying power of our life savings!
Our handy Inflation calculator confirms the market didn’t offer much inflation protection at all. Just to keep up with inflation, the S&P should have climbed to $165.29.Readers asked about the stock market. One might think that the stock market would also rise with inflation. On January 1, 1977, the S&P 500 was $103.80. Five years later it closed at $117.30.
The Department of Energy historical gas pump prices reports the 1977 average pump price of $.62/gal more than doubled, rising to $1.31 over the next five years. The oil industry had no problem staying ahead of inflation. Their profits were so high, Congress instituted a “Windfall Profits Tax”. Of course, the consumer never saw a dime, the money went into the treasury to support government spending.
Our interview with Chuck discussed how metals and various currencies help offset inflation. Readers asked for more, what stocks and industries historically perform well in a high inflationary environment?
This commentary from Dennis was posted on his Internet site on Thursday morning sometime — and another link to it is here.
Global air freight volumes are falling at some of the fastest rates since the end of the great recession in a warning sign that recessionary forces are building in the world economy.
Freight indicators are available with a much shorter lag than most macroeconomic statistics, which makes them a good barometer of the economy’s health. It carries some of the highest-value cargo and reacts quickly to changes in demand, making it a good leading indicator for freight movements and the economy in general.
Freight volumes are now declining at major airports around the world in a signal the global manufacturing and distribution system is under growing stress.
Hong Kong International Airport, the busiest cargo hub in the world, reported volume down 7% for the three months between February and April compared with the same period a year earlier.
London’s Heathrow Airport reported volume down by more than 3% over the same period, and growth rates have been sliding for almost two years.
In North America at Memphis International Airport, the busiest hub in the United States, volume was up by 1 percent in January-March, but that was a marked slowdown from 5% growth in May-July 2018.
This Reuters story, filed from London, showed up on their Internet site back on May 10 — and I plucked it from a Zero Hedge story from Thursday afternoon. Another link to it is here. There was a ZH story on this issue headlined ““Significant Slowdown” Spooks Maersk at Mediterranean’s Third Largest Port” — and the comes courtesy of Brad Robertson.
The Trump administration plans to delay auto tariffs by up to six months, stopping itself for now from widening global trade disputes, four sources told CNBC.
The White House faces a Saturday deadline to decide whether to slap duties on car and auto part imports over national security concerns. After Saturday, the administration would have another 180 days to come to a decision as long as it is negotiating with its counterparts.
President Donald Trump sees the tariffs as a way to gain leverage over trading partners such as the European Union and Japan during ongoing talks. But the president risks sparking fresh global trade clashes if he goes through with car duties. The European Union, for example, has already prepared a list of retaliatory duties to implement if Trump targets autos.
Stocks gained back their their losses Wednesday following news of the administration’s plans, which were confirmed by a source briefed on the talks, an administration official and two foreign officials. Shares of automakers such as Ford and General Motors jumped.
This news story appeared on the cnbc.com internet site at 10:18 a.m. EDT on Wednesday morning — and I found it in Wednesday’s edition of the King Report. Another link to it is here.
A federal SWAT team breached the Venezuelan embassy in D.C. on Thursday morning, in a move the Maduro government has condemned as a violation of the Vienna Convention, which protects a nation’s embassy as sovereign territory.
The four remaining “Embassy Collective” activists who were remaining from among dozens of anti-war protesters who had been holed up in the embassy for the prior few weeks were arrested, according to local accounts.
The group had been defending the embassy since April 10 from what they described as a hostile and illegal potential takeover from pro-Guaido opposition supporters camped outside. The Maduro-supporting collective had the blessing of Venezuelan diplomatic authorities.
Subsequently, Carlos Vecchio – the Guaidó-appointed ambassador – tweeted his congratulations that the embassy had been “liberated,” further thanking the “Venezuelan diaspora” for helping.
The vocal anti-war group Code Pink had formed a core of the group which D.C. police and the Secret Service had reportedly considered as illegal squatters.
The raid was likely on orders from the highest levels of the State Department, given the U.S. only recognizes Juan Guaido’s opposition movement as the sole legitimate authority in Venezuela, even though it has no power domestically, but is a kind of government-in-exile.
This Zero Hedge news item appeared on their website at 2:50 p.m. on Thursday afternoon EDT — and another link to it is here. Then there was with Venezuela-related Zero Hedge article headlined “U.S. Suspends All Passenger and Cargo Flights To Venezuela” — and I thank Brad Robertson for that one.
The European Commission (E.C.) said in a statement Thursday that it had fined five banks €1.07 billion (US$1.2 billion) for taking part in cartels.
“In two settlement decisions, the European Commission has fined five banks for taking part in two cartels in the Spot Foreign Exchange market for 11 currencies — Euro, British Pound, Japanese Yen, Swiss Franc, U.S., Canadian, New Zealand and Australian Dollars, and Danish, Swedish and Norwegian crowns“, the European Commission said.
The first decision (“Forex — Three Way Banana Split” cartel) imposes a total fine of some €811 million on Barclays, The Royal Bank of Scotland (RBS), Citigroup, and JPMorgan. The second decision (“Forex- Essex Express” cartel) imposes a total fine of nearly €258 million Barclays, RBS, and MUFG Bank (formerly Bank of Tokyo-Mitsubishi).
According to Brussels, the banks formed those cartels in order to influence 11 different currencies, including the euro, U.S. dollar, pound sterling, Japanese yen, Swiss franc, and others.
More licensing fees for these banks. This news item showed up on the sputniknews.com Internet site at 1:13 p.m. Moscow time on Thursday afternoon, which was 6:13 a.m. in New York — EDT plus 7 hours. It was updated about twenty minutes later. The first reader through the door with this story yesterday morning was Steward Naylor — and another link to it is here.
Saudi Arabia on Thursday blamed Iran for ordering an attack early this week on two Aramco pipeline booster stations, a strike that was intended as part of a broader sabotage campaign to disrupt world oil supplies, according to Saudi Energy Minister Khalid al-Falih.
The drone attacks came one day after a string of attacks on two Saudi oil tankers and two other vessels in the Strait of Hormuz, and caused the temporary closure of a vital east-west pipeline traversing the kingdom, since reopened.
Prince Khalid Bin Salman, the vice minister for defense and brother of the crown prince MbS, described Yemen’s Houthis – which were believed to have launched the drone attack – of being used as an “Iranian” tool advancing Tehran’s aggression and hegemony in the region.
Since 2015 Saudi coalition jets have been waging a brutal bombing campaign over Yemen to roll back the country’s Shia Houthi rebels, the latter which have occasionally launched missile and drone attacks against sensitive sites in the kingdom, at times even reaching Riyadh’s international airport with ballistic missiles.
U.S. and Saudi investigators further blamed Iran for a “sabotage attack” on several Saudi and international tankers off a UAE port near the Strait of Hormuz on Sunday.
Of course this is all bulls hit. This Zero Hedge story was posted on their website at 9:45 a.m. EDT on Thursday morning — and I thank Brad Robertson for sending it our way. Another link to it is here.
Gold’s true-value potential is being held back by market “abuse,” which is why the metal is trading at relatively depressed prices, said Max Keiser, host of the Keiser Report.
Keiser cited the tremendous amount of paper gold in the market as the main problem, as this creates opportunities for short sellers to prevent prices from moving to the upside.
During the trading of gold futures, or paper gold, Keiser said that “there’s a huge gap between when they’re supposed to reconcile these trades and when they actually do, and in that gap there’s a lot of abuse, and that abuse comes with banging the price of gold down in ways that do not reflect the genuine price discovery between buyers and sellers.”
Keiser said that when tracked against historical U.S. debt accumulation, gold should be trading around $2,900 an ounce today if no market manipulation were to occur.
I don’t know how Max knows that gold should be trading at $2,800 per ounce, but I wouldn’t complain if it was. This 11-minute long interview was posted on the kitco.com Internet site at 10:55 a.m. EDT on Thursday — and I found it in a GATA dispatch yesterday. Another link to the interview is here.
India’s gold imports spiked by 54% to $3.97 billion in April from $2.58 billion in the same month last year, according to latest data release from the Ministry of Commerce.
The rise in imports by the world’s second-biggest consumer of the precious metal was driven by strong demand during wedding season along with fall in prices which prompted purchases.
After recording negative growth for three consecutive months – October, November and December 2018 – gold imports grew 38.16% to $2.31 billion in January 2019. It again contracted by 10.8% to $2.58 billion in February.
In March 2019, gold imports grew by 31.22 % to $3.27 billion.
This very brief gold-related news item, filed from Mumbai, appeared on the scrapregister.com Internet site on Thursday sometime — and I found it on the Sharps Pixley website. Another link to it is here.
The PHOTOS and the FUNNIES
These two photos were taken a bit further down super-scenic B.C. Highway 5A on the way back to Merritt. The very late afternoon sun was casting long shadows at that time of day. I took both these photos from the side of the highway and at exactly the same spot — and close up against a barbed-wire fence. The first photo is looking generally NNE — and the second mostly SE. The water in the second shot is the south end of the ‘lake’ you can see in the first photo. Click to enlarge for both.
With gold now back below its 50-day moving average, I’ll bring up the possibility once again that JPMorgan et al still have gold’s 200-day moving average in their sights. That’s about 31 dollars away — and it can be assumed that if they go for it, the price low at the bottom of that engineered price decline will be somewhat below it. But by how much, I don’t know.
Also in gold, in my conversation with Ted yesterday, we were talking about how the brain-dead/moving average-following Managed Money had their faces ripped off covering shorts and going long on Monday’s penetration of gold’s 50-day moving average — and how they got their faces ripped off again yesterday, puking up those recently-purchased longs and resetting short positions. How much of their clients money they lost during the last four trading days is something that Ted might touch on his weekly review on Saturday.
Silver is back to a closing price not seen since the COMEX close on Monday, December 3, 2018. Ted’s of the opinion…and who am I to argue…that ‘Da Boyz’ are using this current price smash in gold to further reduce their collective short positions in silver. It’s also a distinct possibility that JPMorgan was adding more long positions during yesterday’s engineered price decline. They were probably making up for the long positions they had to sell to cap silver’s price rally on Monday.
They may have done the same in gold as well, but none of this will be known with any degree of certainty until next Friday’s COT Report.
It should be noted that the price pressure in platinum continues — and was closed a few dollars above its 200-day moving average on Thursday. It’s pretty much a given that JPMorgan et al will be gunning for that moving average as well. As a matter of fact, as I type this paragraph, that event appears to have occurred shortly after trading began in New York on Thursday evening. I expect the pounding in this precious metal to continue.
If you remember — and you’re forgiven if you don’t…in last Saturday’s ‘Days to Cover‘ Report, the Big 4 short holders in platinum were short 83 percent of the short position held by the Big 8 traders…of which includes the Big 4 traders. That’s grotesque! And in the ‘Bank Participation Report’ on Saturday, it showed that 5 U.S. banks had increased their short position in platinum by 60 percent during April — and that they also held 60 percent of the entire short position in platinum held by all 25 banks in the world that were net short platinum in the COMEX futures market. So it’s a given the JPMorgan is the absolute king short in platinum.
Moving along, copper made it back to its 200-day moving average on an intraday basis yesterday, but was hauled back down to close below it by a few pennies. WTIC is back above both its 50 and 200-day moving averages by a bit.
Here are the 6-month charts for the Big 6 commodities — and you can check out “all of the above” for yourself. Click to enlarge.
And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price crept quietly sideways until shortly after 12 o’clock noon in Shanghai on their Friday morning — and then it began to creep quietly higher. Currently, it’s up $1.70 cents the ounce. Silver was sold a few pennies lower about an hour after trading began in New York at 6:00 p.m. EDT in New York on Thursday evening — and then was bounced of its Thursday low tick of the day [$14.49 spot] multiple times, but no Managed Money traders were prepared to go further short — and that was as low as they could get it — and it’s down 2 cents at the moment. Platinum was sold lower starting at 8 a.m. CST — and it has been chopping unevenly and quietly sideways since — and is down 5 dollars as the Zurich open looms. ‘Da boyz’ have palladium lower by 11 bucks as Zurich opens.
Net HFT gold volume is coming up on 36,000 contracts — and there’s only 1,508 contracts worth of roll-over/switch volume out of June and into future months on top of that. Net HFT silver volume is very close to 12,000 contracts — and there are 1,044 contracts worth of roll-over/switch volume in this precious metal.
The dollar index opened down 3 basis points once trading commenced around 7:44 p.m. EDT in New York on Thursday evening, which was 7:44 a.m. CST on their Friday morning. It poked its nose above unchanged around 8:30 a.m. CST — and has been creeping nervously lower since — and is down 6 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.
Today, around 3:30 p.m. EDT, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday. Ted is not looking forward to how big and bad the increase in the commercial net short position in gold will be — and I’m now fearful as well. Silver is another matter, as Ted isn’t sure — and neither am I. Were bracing for an increase, but hoping for a positive surprise.
And as I post today’s column on the website at 4:02 a.m. EDT, I see that the gold price was sold lower once trading began in London — and it’s down 80 cents at the moment. Silver is down 4 cents — and has set a new low for this move down by a couple of pennies. Platinum is down 7 bucks, but was down 9 earlier — and now back below its 200-day moving average. JPMorgan et al continue to kick the snot out of palladium — and they have it down 17 dollars as the first hour of Zurich trading ends.
Gross gold volume is now up to 54,000 contracts — and minus roll-over/switch volume out of June and into future months, net HFT gold volume is a bit over 45,000 contracts. Net HFT silver volume is a hair under 15,000 contracts — and there’s 1,156 contracts worth of roll-over/switch volume on top of that.
The dollar index hasn’t done much in the last hour — and it’s current low tick [such as it is] was set at the London open. 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 tomorrow with the latest COT data…warts and all.
Have a good weekend.