Astronomical Volumes in Gold & Silver Yesterday

21 June 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price traded flat for the first two hours once trading commenced at 6:00 p.m. EDT in New York on Wednesday evening — and then began to take flight at 8 a.m. China Standard Time on their Thursday morning.  That rally [most likely short covering] was capped and sold a bit lower starting shortly after 9 a.m. China Standard Time on their Thursday morning.  The price wasn’t allowed to do much from there — and it was forced to chop quietly sideways until the 10 a.m. EDT afternoon gold fix in London.  It crept quietly higher from there until the 1:30 p.m. COMEX close — and then didn’t do much of anything after that.

The low and high ticks were reported by the CME Group as $1,361.30 and $1,397.70 in the August contract.

Gold was closed at $1,387.90 spot, up $28.00 on the day — and I can hardly believe that I’m typing such a number!  Net volume was absolutely astronomical at 521,000 contracts, which is the biggest net volume number that I can remember seeing — and there was a bit over 24,200 contracts worth of roll-over/switch volume on top of that.

The silver price stair-stepped its way higher in price until at, or shortly after, the 2:15 p.m. afternoon gold fix in Shanghai — and then crawled quietly and very unsteadily higher until noon in New York.  It struggled higher from there until the 1:30 p.m. EDT COMEX close — and was sold down a bit in after-hours trading.

The low and high ticks in this precious metal were recorded as $15.12 and $15.52 in the July contract.

Silver was closed in New York on Thursday at $15.385 spot, up 25.5 cents from Wednesday.  Net volume was also a screamer at a bit over 141,200 contracts — and roll-over/switch volume out of July and into future months was also over the moon at 64,000 contracts.

The platinum price rallied quietly and very unevenly higher in both Far East and Zurich trading on their respective Thursdays — and its high tick of the day came at the COMEX open in New York.  ‘Da boyz’ were waiting.  The low tick was set around 1 p.m. EDT — and it rallied a couple of dollars into the 1:30 p.m. COMEX close from that point — and didn’t do much after that.  Platinum was closed at $805 spot, down 5 bucks on the day — and about 17 dollars off its high tick.

Palladium was up five bucks or so by the afternoon gold fix in Shanghai — and then really took off.  But it was capped the moment it broke above the $1,500 spot mark — and it was forced to chop quietly sideways until shortly after 10 a.m. in Zurich.  It rallied about fifteen dollars more at that point, but minutes after 11 a.m. CEST, it was capped — and turned back to the $1,500 spot mark — and traded around that price until around 9:30 a.m. in New York.  JPMorgan et al showed up in force at that juncture — and it was sold lower until shortly before noon EDT.  It rallied until 2 p.m. in after-hours trading, but was sold a bit lower shortly after that — and it didn’t do a lot going into the 5:00 p.m. EDT close from there.  ‘Da boyz’ closed palladium at $1,465 spot, down 19 dollars from Wednesday — and about 50 bucks off its high tick of the day in Zurich.

The dollar index closed very late on Wednesday afternoon in New York at 97.12 — and opened up 6 basis points once trading commenced at 7:45 p.m. EDT on Wednesday evening, which was 7:45 a.m. China Standard Time on their Thursday morning.  It was all unevenly down hill from there until precisely 8:00 a.m. EDT in New York.  The 96.57 low tick was set at that point — and from there, it chopped quietly higher until precisely 11:30 a.m. EDT.  It faded a bit from there going into the 5:30 p.m. close — and the dollar index finished the Thursday session at 96.63…down 49 basis points from its close on Wednesday.

Although the declining dollar index certainly contributed to the positive price action in the precious metals yesterday, it was mostly a paper affair on the COMEX.

Here’s the DXY chart, courtesy of BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of the good folks over at the stockcharts.com Internet site.  The delta between its close…96.14…and the close on the DXY chart above, was 49 basis points on Thursday.  Click to enlarge as well. [Note: I had an issue with the delta on Wednesday — and it proved to be my own damn fault, a fact that reader Paul Wood kindly pointed out.]  Click to enlarge.

The gold stocks gapped up almost 4.5 percent when trading commenced at 9:30 a.m. EDT in New York on Thursday.  They rallied until 2 p.m., but then were sold lower by a bit until 2:30 p.m. — and crept a tiny bit higher into the close from there.  The HUI finished up by 5.02 percent.

In most respects, the silver equities rallied in a similar manner, complete with the down/up price activity that began at exactly 2:00 p.m. EDT in New York trading.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 5.65 percent.  Click to enlarge.

And here’s the 1-year Silver Sentiment/Silver 7 Index chart, updated with Wednesday’s doji — and it’s a goody!  Click to enlarge as well.

And while it’s on my mind, here’s Nick’s chart that shows how everything precious metal-related has been performing month-to-date.  This is the same chart that I post in every Saturday missive — and will again tomorrow, but it’s worth a look now as well.  Click to enlarge.

The CME Daily Delivery Report for the Thursday trading session showed that 86 gold and 35 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

In gold, the two short/issuers were Advantage and ADM with 45 and 41 contracts.  The three long/stoppers were Advantage, JPMorgan and Bank of America Securities…picking up 52, 28 and 6 contracts.  All contracts, both issued and stopped, involved their respective client accounts.

In silver, the two short/issuers were HSBC USA, with 32 contracts out of its house account — and the other 3 contracts were issued by Advantage out of its client account.  There were four long/stoppers in total — and the three biggest were Advantage, Morgan Stanley and JPMorgan, picking up 16, 11 and 7 contracts for their respective client accounts.

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 June fell by 63 contracts, leaving 235 still open, minus the 86 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 85 gold contracts were actually posted for delivery today, so that means that 85-63=22 more gold contracts were just added to the June delivery month.  Silver o.i. in June rose by another 103 contracts, leaving 136 still around, minus the 35 contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that zero silver contracts were posted for delivery today, so that means the obvious…that 103 more silver contracts were just added to June.

The other eye-opening data from last night’s Preliminary Report was that total gold open interest exploded by 43,170 contracts.  That number will be lower by a bit when the final numbers are posted later this morning EDT, but that’s still a mind-boggling number.  On the other hand, the total open interest in silver fell by 2,164 contracts.  That was a surprise, as I was expecting a big increase in open interest in silver as well, but it just didn’t happen.  I don’t know what to make of that — and it will certainly be something that I ask Ted about when I talk to him this afternoon.


There were no reported changes in GLD yesterday, but an authorized participant, most likely JPMorgan, added 749,129 troy ounces of silver to SLV.

In my chat with Ted yesterday, he said that volume in GLD was very heavy [17.4 million shares] — and very heavy in SLV as well…13.5 million shares…so it’s an absolute certainty that both these ETFs are owned huge quantities of physical metal that simply aren’t available — and I would suspect that most of the authorized participants in both, are now shorting the shares in lieu of depositing physical metal.

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

There was no physical gold movement reported over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  The only activity there was, was 1,207 troy ounces that was moved from the Registered category — and back into Eligible over at Canada’s Scotiabank.  I won’t bother linking this.

But it was a very big day in silver, as 1,896,121 troy ounces were received — and another 1,244,661 troy ounces were shipped out.  In the ‘in’ category, there were two truckloads…1,198,584 troy ounces…received at CNT — and another truckload…597,808 troy ounces…was dropped off at JPMorgan.  The remaining 99,728 troy ounces ended up at Delaware.  In the ‘out’ category, there was 743,520 troy ounces shipped out of Brink’s, Inc…394,178 troy ounces from CNT…102,924 troy ounces from JPMorgan — and the remaining 4,038 troy ounces departed Delaware.  The link to all this action is here.

For a change, there was very decent activity over at the COMEX-approved gold kilobar depositories in Hong on their Wednesday.  They received 1,600 of them — and shipped out 800.  All of this activity was at Brink’s, Inc. as per usual — and the link to that is here.


Since yesterday was the 20th of the month — and it fell on a week day, the folks over at The Central Bank of the Russian Federation updated their website with May’s data.  It showed that they added 200,000 troy ounces/6.2 metric tonnes of gold to their reserves during that month.

This brings their total reserves held, up to the 70.4 million troy ounce/2,190 metric tonne mark — and here’s Nick’s most excellent chart, updated with May’s data.  Click to enlarge.

It should be pointed out that there was a story about a month ago that Russia’s banks were going to be buying gold at a discount going forward, in order to encourage more exports.  This may or may not signal the end of the accumulation cycle for Russia’s central bank.  If you check the chart above, you’ll notice that they have bought less gold in each of the last three months.  It’s certainly too soon to make a definitive statement to that effect, but it’s a trend worth watching — and I certainly will be.

I have an average number of stories for you today.


CRITICAL READS

The Financial World’s Most Popular Delusion — Bill Bonner

We find it breathtaking… puzzling… and amusing…

…that people now take for granted things that we used to take for absurd. Things that couldn’t be true for one minute they believe to be eternal truths.

We have in mind the popular belief that the feds can make us richer by diddling interest rates.

The president of the USA believes it. Politico reports:

We have people on the Fed that really weren’t – they’re not my people, but they certainly didn’t listen to me because they made a big mistake. They raised interest rates far too fast,” Trump said, despite having appointed four of the five current members of the board. He has vowed to only install new members of the board who support rate cuts, but his last two picks withdrew from consideration after backlash from Congress.

Not only does Mr. Trump think the Fed should rig the credit market, he also thinks he knows what the interest rates should be.

Investors must believe it, too. They bid up stocks on Wednesday, largely because they think that both the Fed and the European Central Bank (not to mention the world’s other major central banks… all of which are headed in the same direction) will cut interest rates before the end of the year.

The Dow now stands close to a new all-time high.

This commentary from Bill, filed from Dubai, was posted on the bonnerandpartners.com Internet site very early on Thursday morning EDT — and another link to it is here.


The Three-Headed Investment Bandit — Dennis Miller

There is a three-headed investment bandit lurking in the weeds looking to steal your wealth. Savvy investors must deal with them – all at the same time.

First up is the safety bandit. If you invest in stocks and bonds, they can default or go down in value, robbing wealth from your nest egg.

Second is the income bandit. Retirees need income to pay the bills. If the income bandit robs you of income, you must withdraw principle to pay the bills and your wealth decreases.

Even if you invest safely, and earn good income, the biggest bandit is the inflation bandit. It’s a stealth robber, operating in the background, hoping not to be noticed. If your income and asset appreciation does not beat inflation, your wealth has been stolen – and probably lost forever.

During the Carter years, the inflation bandit came out in the open. For the five-year period 1977-1981, accumulated inflation was 60%. If an investor bought a five-year 6% FDIC insured CD, the inflation bandit still robbed around 40% of the investor’s wealth. I saw this happen to my parents. They handled the income and safety bandit while inflation clobbered them.

This commentary from Dennis was posted on his website on Thursday morning sometime — and another link to it is here.


Frustrated‘ Trump Sours on Venezuela Regime Change After Bolton ‘Got Played

President Trump has reportedly cooled on regime change in Venezuela, and thinks national security adviser John Bolton “got played” along with the director for Latin American Policy, Mauricio Claver-Carone, following an unsuccessful attempt at a coup by opposition leader Juan Guaidó, according to the Washington Post (citing their ever-anonymous sources).

A frustrated Trump believed that national security adviser John Bolton and his director for Latin American policy, Mauricio Claver-Carone, “got played” by both the opposition and key Maduro officials, two senior administration officials said. As the president “chewed out the staff” in a meeting shortly after the April 30 failure, in the words of one former Trump official involved in Venezuela policy, he mused that he might need to get on the phone himself to get something done.” — WaPo

The Post‘s report was vigorously disputed by National Security Council spokesman Garrett Marquis, who said “Not only is this patently false, but once more the Washington Post traffics in fairy tales rather than the truth.”

According to the former official, Trump has thought of Venezuela “as low-hanging fruit” on which he could “get a win and tout it as a major foreign policy victory.”

Five or six months later . . . it’s not coming together,” said the Post‘s alleged source.

According to the report, Trump has barely mentioned Venezuela lately – ignoring it during a closed-door meeting on Wednesday with campaign donors at his Doral golf club in Florida.

Trump’s Twitter account, which once provided regular saber-rattling on Venezuela, has largely gone silent on the subject.

This story, which is certainly worth reading, if you have the interest that is, put in an appearance  on the Zero Hedge website at 4:45 p.m. EDT on Thursday afternoon — and another link to it is here.


Sanctions cost European economies $240 billion while Russia lost $50 billion – Putin

Western economic restrictions have deprived the Russian economy of $50 billion, but the European Union has been hit harder, losing $240 billion since 2014, according Russian President Vladimir Putin.

Other countries also felt the impact of anti-Russian sanctions, Putin said as he answered citizens’ questions during the annual Direct Line Q&A session in Moscow on Thursday. The U.S., which does not have the biggest trade turnover with Russia, has lost $17 billion due to sanctions, while Japan lost $27 billion.

It affects the jobs in these countries, including the European Union. They lose our market,” the Russian president stated.

Putin added that the West is unlikely to significantly change its attitude toward Russia anytime soon, so Russia must strengthen its economy to secure its “place under the sun.”

Russia has managed to benefit from Western economic pressure, according to the president, as the country started phasing out imports and replacing them with domestically made products, even in sectors in which it did not have any experience.

President Putin’s statement came just before the European Union extended economic sanctions against Russia for another year. The decision was announced on Thursday.

This news item put in an appearance on the rt.com Internet site at 10:47 a.m. Moscow time on their Thursday morning, which was 3:47 a.m. in Washington — EDT plus 7 hours.  I thank Swedish reader Patrik Ekdahl for pointing it out – and another link to it is here.


Global Negative Yielding Debt Hits Record $12.3 Trillion

Somewhere, SocGen’s permabearish strategist Albert Edwards is dancing a jig, as every day that passes bring us every closer to his trademark “Ice Age.”

One week after the universe of negative yielding debt regained its prior high of $11.7 trillion, overnight – thanks to the dovish capitulations by both the ECB and Fed – the notional value of global sovereign debt with a minus yield sign jumped to $12.3 trillion, a new all time high.  Click to enlarge.

The collapse in yields started on Tuesday morning when Mario Draghi said that the central bank might also trim rates and resume its bond-buying should inflation continue to languish well below its 2% target (recently European 5Y5Y forwards hit an all time low but have since rebounded following Draghi’s comments).

The dovish comments sent another jolt through fixed income markets and pushed another $714bn worth of bonds into sub-zero yield territory on Tuesday. The market value of bonds trading at negative yields — once thought to be economic lunacy — to a fresh record of $12.3TN, according to Bloomberg surpassing the last peak in 2016. The average yield of the global bond market is now just 1.76 per cent, down from 2.51 per cent in November last year.

This news item showed up on the Zero Hedge website at 11:00 a.m. EDT on Thursday morning — and I thank Brad Robertson for sending it along.  Another link to it is here.


You’ll soon find out’ if U.S. will strike Iran — Trump

U.S. President Donald Trump has not ruled out an air strike against Iran in retaliation for the shooting down of a U.S. Navy drone. The U.S. military insists the drone was over international waters, but Iran says this is false.

The robot aircraft was shot down by an Iranian missile on Thursday morning local time (1135 GMT on Wednesday), the U.S. Central Command (CENTCOM) confirmed, but said the Iranian reports that the drone was in its airspace were “false.”

This was an unprovoked attack on a U.S. surveillance asset in international airspace,” said Captain Bill Urban, CENTCOM spokesman.

Asked if the U.S. was considering a retaliatory strike, Trump told reporters at the White House, “You’ll soon find out.”

I have a feeling… that it was a mistake made by somebody who shouldn’t have been doing what they did,” Trump said about the incident.

I find it hard to believe that it was intentional,” he added. “It could have been somebody who was loose and stupid.”

This news item was posted on the rt.com Internet site at 4:21 p.m. Moscow time on their Thursday afternoon, which was 9:21 a.m. in Washington — EDT plus 7 hours.  It was updated about thirty minutes later.  I thank Patrik Ekdahl for his second contribution to today’s column — and another link to it is here.  There was a follow-on story from Zero Hedge headlined “Iran Releases Video of Drone-Downing, Trump Warns “You’ll Soon Find Out” if U.S. Will Attack“.  There there was this 1-paragraph marketwatch.com story from 11:44 p.m. last night in Washington…”U.S. calls off airstrikes against Iran at last minute: report“.  George Whyte sent me that one.


Preparing for dollar doomsday? Russia adds 6 more tonnes of gold to its coffers in May

The Central Bank of Russia (CBR) has purchased 200,000 troy ounces (6 tons) of gold in May, boosting bullion reserves to 2,190 tonnes.

Russia increased its gold reserves by 0.3 percent in one month from May 1 to June 1, the central bank reported on Thursday. In May, the regulator held some 2,183 tonnes of the precious metal.

Moscow has been actively beefing up bullion reserves in order to reduce reliance on the U.S. dollar and to diversify its foreign exchange reserves. Russia’s international reserves are highly liquid foreign assets comprising stocks of monetary gold, foreign currencies and Special Drawing Right (SDR) assets, which are at the disposal of the Central Bank of Russia and the government.

In the first five months of this year, Russia added 78 tons of gold to its coffers, increasing the precious metal’s share in its international reserves by 3.7 percent. Last year, the CBR bought some 274 tons of gold.

I think what Russia is doing, or other central banks are recognizing, is that they need to increase their gold reserves because of the impending dollar crisis,” CEO of Euro Pacific Capital Peter Schiff told RT in May.

This brief story put in an appearance on the rt.com Internet site on 3:24 p.m. Moscow time on their Thursday afternoon, which was 8:24 a.m. EDT in Washington — EDT plus 7 hours.  I picked it off the Sharps Pixley website — and another link to it is here.


Chinese Exports of Rare Earth Minerals Drop Like a Rock Amid Escalating Trade War With U.S.

Earlier, officials from the Pentagon and the U.S. Department of Commerce indicated that they were looking to make deals with other rare earth producers worldwide in a bid to reduce the U.S. reliance on Chinese supplies of the strategic minerals.

China’s exports of a group of seventeen rare-earth elements have dropped a whopping 16 per cent, from 4,329 metric tonnes to 3,640 metric tonnes, between April and May, fresh customs data cited by the South China Morning Post has revealed.

May’s dip means rare earths exports have declined by a total of 7.2 percent in the first five months of 2019 compared to the same period in 2018, reaching 19,265 tonnes.”

The U.S. and other countries around the world are highly dependent on Chinese-mined rare earths, with the Asian country producing 120,000 tonnes, or 70 percent of the world total of the minerals, in 2018, according to U.S. Geological Survey figures. For comparison, the U.S., which depends on imports for nearly 80 percent of its rare earth supplies, mined just 15,000 tonnes of the minerals during the same period.

This article was posted on the sputniknews.com Internet site back on June 10…and I thank Doug Clark for sending it along.  Another link to it is here.


Australia: Gold breaks $2,000 an ounce barrier for the first time

Australian gold producers entered new territory yesterday with the price of the precious metal fetching more than $2,000 dollars an ounce in local currency for the first time.

Investors sent gold stocks flying yesterday as it pierced through the psychologically significant threshold.

The U.S. Federal Reserve Bank on Wednesday signalled it would consider lowering interest rates this year in response to slow economic growth and possible repercussions from the escalating US-China trade dispute.

Michael McCarthy, chief market strategist at CMC Markets Asia Pacific, said the higher run had broken through important technical resistance levels.

Throw in a weakening U.S. dollar, we’ve got every reason to expect a good performance from gold,” he said.

This gold-related news item appeared on The Western Australian website on Wednesday “down under” — and I found it on the Sharps Pixley website.  Another link to it is here.


The Fifth Wave: A new Central Bank Gold Agreement? — Ronan Manly

For practically twenty years now since September 1999, a cartel of central banks in Europe have been running a coordinated scheme in the gold market. Officially known as the Central Bank Gold Agreements (CBGAs), the agreements have taken the shape of rolling five-year periods (CBGA1, CBGA2, CBGA3 and CBGA4) in which the central bank syndicate members claim to coordinate their physical gold sales for the altruistic ‘benefit’ of helping the wider gold market and limiting gold sales.

While taken at face value by the mainstream financial media and the World Gold Council (WGC) as a set of agreements to remove uncertainty from the market and put a floor under the gold price, there has never been any investigation from the same media and WGC as to:

  • whether the gold sales which the central banks claim to be planning in each five year period have already taken place with the planned sales merely being book squaring exercises;
  • whether the CBGA agreements might be a ‘hidden in plain sight’ way to re-distribute gold holdings among the world’s central banks as global monetary power has shifted east;
  • whether the CBGA agreements might be a ‘hidden in plain sight’ mechanism to use western central bank (G10) gold holdings as partial payments in Saudi ‘gold for oil’ transactions;
  • whether the CBGAs are a gold pool mechanism to firefight physical gold bar shortages at LBMA bullion banks.

With the first CBGA having covered September 1999 to September 2004, the second from September 2004 to September 2009, and the third from September 2009 to September 2014, there are only another three months left to run in the fourth and current agreement which began in September 2014.

This very long chart-filled commentary from Ronan, which I must admit that I haven’t had time to read, was posted on the Singapore-based bullionstar.com Internet site at 3:26 p.m. SGT [Singapore Time] on their Thursday afternoon, which was 2:26 a.m. on Thursday morning in New York…EDT plus 13 hours.  I found it on the gata.org Internet site — and another link to it is here.


The PHOTOS and the FUNNIES

Here are the last two photos taken on our way from Penticton back to Merritt on April 28.  The first is a general shot over Okanagan Lake from just off B.C. Highway 97…looking mostly north.  The barren rock on the far shore was the result of wildfire/firestorm that engulfed that area back in 2003 — and in the center-left of the shot is the town of Peachland.  That’s where I took photo number 2…looking back over the lake in the direction that we had just come.  The last photo is one that I took of a female, or 1-year old male rufous hummingbird that showed up at my feeder on May 1.  Click to enlarge.


The WRAP

So what is government? Very simply, it is an agency of coercion. Of course, there are other agencies of coercion – such as the Mafia. So to be more precise, government is the agency of coercion that has flags in front of its offices.” — Harry Browne


As happy as I was to see higher price in both gold and silver on Thursday, the fact of the matter is that JPMorgan et al were at battle stations as short sellers of both first and last resort during the entire trading session yesterday.  If it hadn’t have been for them, gold would have been several hundred dollars per ounce higher — and silver would have risen $25 rather than 25 cents.

The paper volumes that ‘da boyz’ through at the precious metal prices was absolute immense — and that is continuing without a break in Far East trading on their Friday.  The sole purpose of this is to cap these rallies as quickly as they can before the trickle of money into this sector become a flood that totally over runs them.

The gold price is now well into overbought territory — and silver is fast approaching it.  Both platinum and palladium were crushed — and both were closed well off their highs — and down on the day.  Copper was closed off its highs as well — and WTIC caught a bid on the Iran news.

Here are the 6-month charts for the Big 6 commodities — and you can see these changes for yourself.  Click to enlarge.

And as I type this paragraph, the London/Zurich opens are a minute or so away — and I see that the gold price powered sharply higher above the $1,400 spot mark until 10 a.m. China Standard Time on their Friday morning.  It was capped at that juncture — and then sold lower into the 10:15 a.m. morning gold fix in Shanghai.  It then traded quietly sideways until around 1:40 p.m. CST — and then was sold sharply lower — and it’s only up $4.80 the ounce currently — and back below $1,400 spot.  It was the same general price action in silver, except ‘da boyz’ have silver back below unchanged…down 7 cents at the moment.  Platinum was up 7 bucks by around 12:30 p.m. CST — and it’s been sold lower as well — and it’s now down a dollar on the day.  Palladium was up 12 dollars at one point — and it’s now down 6 dollars on the day.

Net HFT gold volume is sky high already at approximately 146,000 contracts — and there’s only 2,549 contracts worth of roll-over/switch volume in this precious metal.  Net HFT silver volume is already a monstrous at a bit over 31,000 contracts — and there’s a hair under 9,000 contracts worth of roll-over/switch volume out of July and into future months.

There’s no doubt that JPMorgan et al are out to kill these rallies in silver and gold stone-cold dead…at least temporarily — and we may have seen the top of this current price rally for the moment.

The dollar index opened down 2 basis points once trading commenced at 7:45 p.m. EDT on Thursday evening, which was 7:45 a.m. China Standard Time on their Friday morning.  It traded quietly sideways until around 9:30 a.m. CST — and then began to head lower.  Those ‘gentle hands’ showed up at exactly 10:00 p.m. CST — and that was its current low tick of the day.  The ramp job in the dollar commenced at that point — and it has been heading higher since.  And as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich, the index is now up 6 basis points.

There’s nothing currency related about all this price action in the precious metals, it’s strictly the usual tango between the Managed Money traders buying hand over fist — and the commercial traders going short against them…the same old, same old.


This afternoon, around 3:30 p.m. EDT, we get the latest and greatest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday — and it goes without saying that they’re very much “yesterday’s news” because of the off-the-charts volume that have showed up in both gold and silver since the Tuesday cut-off.

This is what silver analyst Ted Butler had to say about what might be in today’s report — and I borrowed it from his mid-week commentary to his paying subscribers on Wednesday…

“[I]t sure looks like there has been continued managed money buying and commercial selling in both COMEX gold and silver futures through Tuesday’s cutoff for Friday’s COT report. Gold prices rallied during the reporting week by as much as $30 and finished at new 14-month closing highs yesterday, while silver rose as much as 30 cents during the reporting week and re-penetrated its 50 and 200-day moving averages to the upside (although the 100 day moving average has yet to be penetrated).

Therefore, it would be surprising if there weren’t further significant increases in managed money buying and commercial selling. How much? I’d guess a minimum of 30,000 net contracts in gold and 10,000 in silver and hopefully not more than 40,000 in gold and 15,000 in silver. While I am intently aware of the many bullish factors promising higher gold (and silver) prices in place, it’s hard to argue that the principle driver of the higher prices to this point is not the same driver witnessed time and time again, namely, managed money buying.

It boggles the mind as to what the COT Report would show if it were generated at the COMEX close on Thursday…or at the London open this morning.


And as I post today’s column on the website at 4:02 a.m. EDT, I note that the sell-offs in both gold and silver are continuing as the first hour of London trading ends. Gold is now down $3.50 from Thursday’s close — and silver is down 22 cents — and all of Thursday’s gains in this precious metal have vanished. Platinum is down 4 dollars — and palladium by 9.

Gross gold volume is coming up on 178,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is about 171,000 contracts. Net HFT silver volume is around 37,000 contracts — and there’s already 10,600 contracts worth of roll-over/switch volume out of July and into future months. The volume numbers are changing so fast, that it’s hard to keep up, so these net and gross numbers are approximates.

The dollar index turned lower around 7:45 a.m. in London/8:45 a.m. in Zurich — and is down 6 basis points as of 8:45 a.m. BST in London/9:45 a.m. CEST in Zurich. My comments on the dollar index a few paragraphs ago, still stand. This current price activity has zero to do with the currencies.

Today’s price activity since 10 a.m. in Shanghai certainly has the appearance of the commercial traders about to harvest the Managed Money traders for fun, profit and price management purposes once again. I’ll know more by the close of COMEX trading this afternoon in New York.

That’s it for yet another day.  Enjoy the first official day of summer if you live in the Northern Hemisphere — and your first day of winter, if your reading these words from south of it.

Have a good weekend — and I’ll see you here tomorrow.

Ed