Just a Short One Today…

05 July 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


With the U.S. closed for the Independence Day holiday, the precious metals were all sold lower starting in afternoon trading in the Far East — and again in trading in London and Zurich.  None were allowed to close in positive territory by the time trading ended at 5:00 p.m. BST/6:00 p.m. CEST.


Gold finished the Thursday trading session at $1,414.90 spot, down $3.30 from Wednesday’s close.  Net volume was, not unexpectedly, very light at a bit over 112,500 contracts — and there was 6,200 contracts worth of roll-over/switch volume out of August and into future months.

Silver was closed at $15.245 spot, down 3 cents on the day.  Net HFT silver volume was only 15,600 contracts — and there was 551 contracts worth of roll-over/switch volume in this precious metal.

Platinum was closed at $832 spot, down 7 dollars on the day.

And palladium was closed down 9 bucks on the day at $1,546 spot.

The dollar index closed very late on Wednesday afternoon in New York at 96.77 — and opened down 5 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.  The ‘action’ on Thursday isn’t worth mentioning — and the 96.81 high tick…if you wish to dignify it with that name, came minutes after 9:30 a.m. EDT…which was minutes after 2 p.m. BST in London.  From there it sank back to a few basis points below unchanged — and that’s where it closed.  The dollar index finished the Thursday session at 96.77…unchanged from  Wednesday’s close.

Here’s the DXY chart from BloombergClick to enlarge.

With everything shut tight in New York and Washington, there are no reports on anything from anywhere.


Here are two charts that Nick Laird passed around late on Wednesday evening.

They show The Perth Mint’s gold and silver bullion coin sales, updated with June’s data.  During that month they sold 19,449 troy ounces of gold bullion coins — and 344,474 troy ounces of silver bullion coins.  Click to enlarge for both.

I only have four stories/articles for you today.


CRITICAL READS

The Founders Warned Us About the Evolution of Power — Bill Bonner

Many of the founders of the American Republic were readers and scholars. “I can’t live without books,” said Jefferson.

He, Monroe, Madison, Adams, and others were much more aware of Roman history than our leaders today. Most had studied Latin and/or Greek.

In the same year that the Declaration of Independence was adopted, Edward Gibbon published the first volume of his masterpiece, The History of the Decline and Fall of the Roman Empire.

The Founding Fathers were well aware of the transition – natural, and perhaps inevitable – from republic to empire. They had studied it in the Roman example. They had seen how it drew power into a few hands… and corrupted them.

They tried to prevent it from happening in the New World, putting in place limits… circuit breakers… and checks and balances… to keep the government from becoming too big, too ambitious, or too powerful.

Even then, they were doubtful that it would stick. “We give you a republic…” Benjamin Franklin wrote to posterity, “if you can keep it.

This commentary from Bill, which is definitely worth reading, appeared on the bonnerandpartners.com Internet site early on Thursday morning EDT — and another link to it is here.


British Marines Seize Oil Tanker Headed For Syria In “Aggressive” Operation

A huge development Thursday regarding enforcement of Iran sanctions and the West’s economic war on both Damascus and Tehran: British Royal Marines seized an oil tanker in Gibraltar off Spain’s southern coast while it was en route to Syria in what’s being called an unprecedented and aggressive move to enforce E.U. sanctions.

As critics of the West’s sanctions policy on Syria are noting: the European Union has for years allowed advanced weaponry to flow into the hands of anti-Assad jihadists, but it will act swiftly to block vital oil access to the war-torn and starved population.

According to Reuters:

The Grace 1 tanker was impounded in the British territory at the mouth of the Mediterranean Sea, after sailing around Africa from the Gulf. Shipping data reviewed by Reuters suggests it had been loaded with Iranian oil off the coast of Iran, although its documents say the oil is from neighboring Iraq.

Reports say Gibraltar authorities (Gibraltar is a British Overseas Territory) acted on E.U. sanctions that have been in place for years against Syria; however one E.U. sanctions and legal expert told Reuters: “This is the first time that the E.U. has done something so public and so aggressive. I imagine it was also coordinated in some manner with the U.S. given that NATO member forces have been involved.”

This Zero Hedge article showed up on their website at 10:10 a.m. on Thursday morning EDT — and I thank Brad Robertson for pointing it out.  Another link to it is here.  There’s also a story about this posted on the checkpointasia.net Internet site.  It’s headlined “U.K. Now Enforcing a Naval Blockade of Syria to Starve It of Oil” — and comes courtesy of Larry Galearis.  A naval blockade is an act of war…but what does that matter in this day and age, as International law means nothing to the West now?


Russia’s central bank lowered gold purchase price to encourage exports — governor

Russia’s central bank has been buying gold on the domestic market at less than the industry benchmark to encourage Russian producers to export more of the metal, the governor told Reuters.

Russia has overtaken China to become the world’s fifth largest official sector holder of gold, as Western sanctions drove buying by its central bank to record highs in 2018.

But the central bank added a discount on May 1 to its purchase price, which was previously based on the daily London Bullion Market Association (LBMA) gold price. Market players had expected purchases to continue at last year’s pace.

We introduced discounts for the purchase of gold because we saw that vendors were selling gold mainly to the central bank,” Governor Elvira Nabiullina said in the interview, which was cleared for publication on Wednesday.

The discount aligns domestic conditions with external ones and motivates gold producers to sell to export too,” she said.

Sell gold for what???  More U.S. dollars???  I’m still more than curious as to this sudden change of heart by Russia’s central bank about adding to their gold reserves.  This is the second story on this issue in the last month…this article being the latest.  Their gold purchases have fallen ever month this year so far — and we’ll find on July 20th how much gold they purchased in June, if any.  This Reuters article, filed from Moscow, showed up on their Internet site on July 3 sometime — and it’s something I found in a GATA dispatch.   Another link to it is here.


The PHOTOS and the FUNNIES

Here are three photos of a mother greater roadrunner and her almost full-grown young one…begging to be fed.  Reader Bruce Brantley from Albuquerque sent these shots along about a week ago — and I certainly thought they were worth sharing.  Click to enlarge.


The WRAP

The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations.” – Thomas Jefferson


There was no reason whatsoever for the precious metals to be sold lower yesterday, as there was nothing going on in the currency markets.   And, if anything, gold and silver should have been up on the day after the seizure of that oil tanker off Gibraltar.

And as I type this paragraph, the London open is less than a minute away — and I see that the gold price roared to life the moment that trading began at 6:00 p.m. EDT in New York on Thursday evening, but was capped an hour later — and before the markets opened in the Far East on their Friday. It was sold lower for a while and, like on Thursday afternoon over there, the price pressure began anew around 1:40 p.m. China Standard Time on their Friday — and it’s currently down $1.30 the ounce. The price pattern for silver was virtually identical, complete with the 1:40 p.m. CST sell-off — and silver is down 6 cents at the moment. Platinum didn’t do much in Far East trading — and it’s up a buck. But palladium, after trading unevenly sideways for most of the Far East session, began to head higher shortly after 1 p.m. CST — and it’s now up 3 dollars an ounce as Zurich opens.

Net HFT gold volume is around 65,500 contracts — and there’s only a tiny 500 contracts worth of roll-over/switch volume out of August and into future months. These figures are net of Thursday’s numbers. Net HFT silver volume is 9,500 contracts — and there’s also only 500 contracts worth of roll-over/switch volume in this precious metal. These are net of Thursday’s numbers too.

The dollar index opened down 5 basis points once trading commenced at 7:45 p.m. in New York on Thursday evening. It has been creeping unsteadily higher since — and is up 6 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.


The jobs report at 8:30 a.m. EDT this morning is some importance — and we’ll find out at that point how the precious metals react, or are allowed to react, to that news.

Further on this subject, I lifted the following from this morning’s edition of the King Report — and you can read into it whatever you wish…”The whisper number for June NFP dropped to 120k on Wednesday.  The ugly ADP Employment Change for June inflamed hopes that the Fed will be forced to cut rates in July and two more times later in 2019.

The worst aspect of the ADP Employment Change for June is small business cut 23k jobs.  Small businesses tend to be the first to act when the business and employments cycles change.

David Rosenberg @EconguyRosie: “The small business sector leads the cycle and employment here has plunged 61k in the past two months. Haven’t seen this in over 9 years; same decline we saw in Feb-March of 2008 when the consensus was calling for a soft landing.  This isn’t a repeat of 2016…

Will the BLS’s hokey Birth/Death Model (small biz jobs) still show good job growth?  112k last June.


And as I post today’s column on the website at 4:03 a.m. EDT, I note that the gold price hasn’t done much of anything during the first hour of London trading — and is currently down a $1.30 an ounce. Silver had a bit of an up/down move — and is now down 7 cents the ounce. Platinum is now down 3 dollars an ounce — and palladium is up 2 bucks as the first hour of Zurich trading ends.

Gross gold volume is about 69,000 contracts — and minus what very little roll-over/switch volume there is, net HFT gold volume is 67,700 contracts. Net HFT silver volume is around 11,800 contracts — and there’s 515 contracts worth of roll-over/switch volume on top of that. All these numbers are net of Thursday’s volumes.

The dollar index has been ticking very quietly higher in the last hour — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, it’s up 10 basis points.

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

Ed