Ted Butler: Wrong Whale

16 July 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price rally that began at 6:00 p.m. EDT in New York on Sunday evening, was sold lower within the first fifteen minutes of trading — and the Far East low came shortly before 11 a.m. China Standard Time on their Monday morning.  From that point it wandered sideways for the remainder of the Monday trading session — and although it managed to make it back above unchanged on a couple of occasions, neither was allowed to last for long.

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

Gold was closed at $1,413.60 spot on Monday, down $2.00 from Friday.  Net volume was slightly elevated at 224,000 contracts — and roll-over/switch volume out of August and into future months amounted to just under 20,000 contracts.

The silver price hit its Far East low minutes after 9 a.m. in morning trading in Shanghai on their Monday, but began to edge higher starting shortly before 2 p.m. CST on their Monday afternoon.  It crept quietly higher until a few minutes after 10 a.m. in London — then didn’t do much until about ten minutes after the 8:20 a.m. EDT COMEX open in New York.  It was sold down a bit over the next hour but then began to edge unevenly higher — and finished the day almost on its high tick…such as it was.

The low and high ticks in this precious metal were recorded by the CME Group as $15.185 and $15.43 in the September contract.

Silver finished the Monday session at $15.35 spot, up 15 cents on the day.  Net volume was pretty decent at a bit under 64,500 contracts — and there was 3,900 contract worth of roll-over/switch volume in this precious metal.

The platinum price didn’t do anything until minutes before 2 p.m. CST on their Monday afternoon — and began to head higher from there…making it up to the $845 spot mark by around 11:40 a.m. in New York.  Then an hour and a bit later, it was sold lower by five bucks — and then crept quietly sideways until trading ended at 5:00 p.m. EDT.  Platinum was closed at $841 spot, up 12 dollars on the day.

Palladium began to creep unevenly higher as soon as the market opened at 6:00 p.m. on Sunday eveningEDT — and that lasted until shortly after the 2:15 p.m. CST afternoon gold fix in Shanghai.  From that juncture it chopped very unevenly sideways in a ten dollar price band until the market closed at 5:00 p.m. in New York. Platinum was closed at $1,544 spot, up 20 bucks from Friday.

The dollar index closed very late on Friday afternoon in New York at 96.81 — and opened down 4 basis points once trading commenced at 6:30 p.m. EDT on Sunday evening, which was 6:30 a.m. China Standard Time on their Monday morning.  It crept a bit higher until about 11:30 a.m. CST — and then proceed to chop quietly and unevenly lower until the 96.75 low tick was set somewhere around 11:40 a.m. in London.   The ‘rally’ that commenced at that point lasted until around 11:45 a.m. in New York — and it edged quietly and very unevenly lower until trading ended at 5:30 p.m. EDT.

In most ways it would be fair to say that the currencies and precious metals were very closely linked yesterday, even though the changes in the currencies were of almost no significance.

The dollar index finished the Monday session at 96.93…up 12 basis points from Friday’s close.

Here’s the DXY chart from Bloomberg…as per usual.  Click to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…96.54…and the close on the DXY chart above, was 39 basis points on Monday.  Click to enlarge as well.

The gold stocks rallied a tiny bit at the open — and then turned lower within the first ten minutes, with the low tick of the day coming shortly before 11 a.m. in New York trading.  From that point, they began to edge very unevenly higher — and did make it back above unchanged by a hair by the 4:00 p.m. close.  The HUI finished higher by 0.16 percent…call it unchanged on the day.

The silver equities also began to head lower minutes after the markets opened at 9:30 a.m. in New York yesterday morning — and their respective lows were also set a few minutes before 11 a.m. EDT.  They rallied from there until a few minutes before 1 p.m. — and then were sold lower and back into negative territory by a bit.  But, like the gold shares, managed to eke out a close on the plus side.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index close up a razor-thin 0.10 percent…so call it unchanged as well.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, updated with Monday’s doji.  Click to enlarge as well.

As to why the silver equities didn’t perform better yesterday, consider how well the underlying metal did…I don’t know.  We’ve seen a lot of counterintuitive moves in the precious metals equities…in both directions…recently, so I’m not prepared to read anything into it.


The CME Daily Delivery Report showed that 19 gold and 122 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, there were two short/issuers in total, but the only one that mattered was Advantage, with 17 out of its client account.  The largest of the two long/stoppers was JPMorgan, with 17 contracts…16 for its client account, plus 1 for its in-house/proprietary trading account.

In silver, of the two short/issuers in total, the only one that mattered here was ABN Amro with 120 from its client account.  All four long/stoppers picked up decent amounts…HSBC USA with 36 contracts for its own account…Morgan Stanley stopped 36 contracts for its client account.  And in third and fourth place were JPMorgan and Advantage…stopping 27 and 23 contracts for their respective client accounts as well.

The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in July rose by 8 contracts, leaving 25 still open, minus the 19 mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 6 gold contracts were actually posted for delivery today, so that means that 8+6=14 more gold contacts just got added to the July delivery month.  Silver o.i. in July fell by 13 contracts.  Friday’s Daily Delivery Report showed that only 4 silver contracts were posted for delivery today, so that means that 13-4=9 silver contracts vanished from the July delivery month.


For the third day in a row, there were no reported changes in either GLD or SLV.

But the folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on insider their gold and silver ETFs as of the close of business on Friday — and this is what they had to report.  There was 3,553 troy ounces of gold added — and they also added 338,547 troy ounces of silver.

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

The only activity in gold over at the COMEX-approved depositories on Friday was 160.750 troy ounces/5 kilobars [U.K./U.S. kilobar weight] that was shipped out of Canada’s Scotiabank.  I won’t bother linking this.

It was just as quiet in silver, as only one good delivery bar…1,047 troy ounces…was shipped out of Delaware — and I won’t bother linking this activity, either.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, they didn’t receive a thing, but shipped out 312 of them.  That occurred at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


Here’s a chart that Nick passed around last Friday, that I just didn’t have room for in Saturday’s missive, so here it is now.  These are the daily delivers from the Shanghai Gold Exchange going back over the last six months — and as Nick pointed out in his covering e-mail, deliveries from the SGE during July are quite elevated.  I don’t know what that means or portends, but I thought it worth pointing out.  Click to enlarge.

I have a very decent number of stories/articles for you today.


CRITICAL READS

Manufacturing Employment Expectations Crash Despite Empire Fed Survey Rebound

After June’s plunge in regional Fed business surveys, July’s Empire Fed headline printed a better-than-expected +4.3 (exp +2.0) from -8.6 in June.

However, despite the pickup in the main index, details of the report show that the industry continues to struggle.

A gauge of current orders crept up, though more of the state’s factories said bookings were lower in July than higher.

And, both current and future expectations for employment tumbled, with the latter crashing to its weakest since January 2016…

Worse still, as Reuters Economist Jeoff Hall notes, the internals of the New York Fed Empire State Manufacturing Survey were less flattering than the headline. In fact, an ISM-like weighting of the components produced a PMI reading of 49.0 in July, up from 48.4 in June but still recessionary.

This tiny 1-chart Zero Hedge story was posted on their Internet site at 8:53 a.m. EDT yesterday — and it’s the first contribution of the day from Brad Robertson.  Another link to it is here.


Trump’s Tax Cut Tilted the U.S. Economy Further — Bill Bonner

The ancients discovered, perhaps 4,000 years ago, that if you wanted a building to stay up, you had to put it up straight. And for that, you needed a plumb line.

No mathematician, government, or genius PhD can improve on a plumb line. That is, they can’t make it any plumber or truer.

Modern, scientific engineering can’t make it more serviceable by inflating it by 2% in one direction or the other. Nor can they twist it to provide full employment for masons.

Things that are not “plumb” are inherently unstable. Gravity works on them like a campaign slogan on a weak mind.

But nothing is straight or true in the money world. And last week, things went even further askew.

In the U.S., the authorities try to hold off recession with more jackass policies. Neither normal interest rates nor normal, balanced budgets will be allowed.

The feds threw away their plumb line years ago. Now, they’re increasing their spending about four times faster than tax receipts.

This commentary from Bill showed up on the bonnerandparteners.com Internet site early on Monday morning EDT — and another link to it is here.


Jim Rogers Warns: “Worst Bear Market” is Coming

On a recent call with ETMarkets.com, no-nonsense economic guru Jim Rogers restated his concern that a bear market was on the way, and investors should be on the lookout for small signs to avoid another crisis like 2008.

Although Rogers could not give a timeline for the bear market to arrive, he did say that it will be the “worst in my lifetime,” a prediction he’s stuck by for a while now, and the key to spotting a market correction lies within smaller markets.

It has been over 10 years since we had a serious bear market in the United States. I would suspect by the end of this year or next year, it will start. These things always start small, where people are not looking and then they work to the major markets, and then you see them on the major news.

In 2007, Iceland went bankrupt but nobody noticed or cared. Then Ireland went bankrupt. Then a few weeks later, Bear Sterns went bankrupt and a few weeks later Northern Rock, the English Bank, went bankrupt. Then eventually Lehman brothers went bankrupt and by then, everybody knew there was a problem. But it had been there for over a year and it has always worked that way. It starts when we are not watching. It has already started. Latvia collapsed. Argentina, Venezuela, Turkey, some banks in India are having problems, Indonesia has started having problems. It has not made to evening news yet.

All these markets are small but until they make it to the big markets, people do not notice.”

This article from the ETMarkets.com Internet site was picked by Zero Hedge at 12:25 p.m. EDT on Monday afternoon — and I thank Brad Robertson for sharing it with us.  Another link to it is here.


Either the Dow Transports or the Baltic Dry index isn’t telling the truth

What’s up with transportation stocks? Or, really, what’s “down” with them?

Even as new all-time highs have been registered by broad-market U.S. indices such as the Dow Jones Industrial Average and the S&P 500 index the market’s transportation sector has lagged. The Dow Jones Transportation Average for example, is more than 6% below its April high, and more than 10% below its all-time high set in 2018.

Dow Theorists will immediately recognize the significance of this divergence: it sets up a potentially bearish “non-confirmation” which, if it continues, could turn this oldest of stock market timing systems negative on the major trend. To some, this recent divergence is eerily reminiscent of a similar divergence before the bursting of the internet bubble in early 2000: near the top of that bull market, in March 2000, the Dow Transports hit a then all-time high in May 1999, almost a year before the broad market.

This backdrop provides context for the extraordinary rally of the Baltic Dry Index, which reflects the cost of moving raw materials by ship. Many analysts pay close attention to this index, and it has many notable successes in presaging economic downturns, as detailed in a 2016 New Yorker article entitled “The Surprising Relevance of the Baltic Dry Index.”

I wrote about the Dow Transports and the Baltic Dry Index in late April, when both benchmarks were well-below their previous highs. Today, in contrast, the picture painted by the latter benchmark couldn’t be more different. In fact, the Baltic Dry Index has practically tripled since its low earlier this year, and is now higher than where it stood in the summer of 2018.

Which economic benchmark is painting a truer picture? There’s no way of knowing for sure, of course. But note that the Baltic Exchange in March altered how it calculated the Baltic Dry Index, and its alterations are controversial. The Exchange argues that the changes are necessary to better reflect the relative weights that various segments have in the global shipping market, but Bimco, the world’s largest international shipping association, believes that, because of the changes, the Index is no longer an accurate reflection of that market.

This article/commentary first appeared on the marketwatch.com Internet site, but was then reprinted on the hellenicshippingnews.com Internet site on Monday sometime.  The author takes a while to get to his point, which is why I’ve cut and paste so much from that article.  But there’s more.  I thank Brad Robertson for sending it our way — and another link to it is here.


Global Debt Hits $246 Trillion, 320% of GDP, as Developing Debt Hits All-Time High

According to the latest IIF Global Debt Monitor released today, debt around the globe hit $246 trillion in Q1 2019, rising by $3 trillion in the quarter, and outpacing the rate of growth of the global economy as total debt/GDP rose to 320%.

This was the second-highest dollar number on record after the first three months of 2018, though debt was higher in 2016 and 2017 as a share of world GDP. Total debt was broken down as follows:

  • Households: 60% of GDP
  • Non-financial corporates: 91% of GDP
  • Government 87% of GDP
  • Financial Corporations: 81% of GDP

And while the developed world has some more to go before regaining the prior all time leverage high, with borrowing led by the U.S. federal government and by global non-financial business, total debt in emerging markets hit a new all time high, thanks almost entirely to China, which has been on such a debt issuance rampage, it would make even Uncle Sam blush, as Chinese corporations owed the equivalent of more than 155% of GDP in March, or nearly $21 trillion, up from about 100% of GDP, or $5 trillion, two decades ago.

This article showed up on the Zero Hedge website at 6:30 p.m. on Monday evening EDT — and another link to it is here.


Britain Ramps Up Media War on Russia — Finian Cunningham

The British government appears to be more and more aping a Monty Python-type farce with each passing day. Soon the absurd ensemble will be complete if either Boris Johnson or Jeremy Hunt becomes the next prime minister.

This week the mandarins at the Ministry of Funny Walks ruled that two internationally respected Russian news media channels were banned from attending a global conference on “press freedom”.

RT and another Russia-based news outlet Sputnik were refused permission by the British government to participate in the Global Conference for Media Freedom, held in London.

A British Foreign Office spokesperson said: “We have not accredited RT or Sputnik because of their earlier role in spreading disinformation.”

The irony of it. The British government is peddling unsubstantiated accusations (more accurately, ridiculous slander) against Russian media which is then invoked as “justification” for censorship at a much-vaunted international conference supposedly dedicated to freedom of the press. You could hardly make the farce up. It’s a kind of cross between George Orwell and Monty Python.

That it is, dear reader.  This commentary from Finian put in an appearance on the strategic-culture.org Internet site on Sunday sometime — and I plucked it from a Zero Hedge article that Brad Robertson sent our way.  Another link to it is here.


E.U. Agrees to Sanction Turkey For Drilling in Cypriot Waters

A surprisingly muscular response beyond mere threatening rhetoric out of the European Union over Turkey’s violations of Cypriot territorial waters related to offshore drilling operations: the EU has agreed to bring financial and political sanctions against Turkey after repeat warnings of the past weeks.

European Union officials on Monday agreed political and financial sanctions against Turkey after Ankara went ahead with drilling operations off Cyprus despite repeated warnings, European diplomats said.” — AFP

The conclusions on Turkey have been adopted and they will be made public in the coming hours,” the E.U.’s foreign policy chief Federica Mogherini told reporters following a meeting of foreign ministers.

Last week the Turkish drilling vessel Yavuz sailed to an area off Cyprus’ east coast — the second to follow a first drilling vessel, Fatih, which had already been exploring in Cypriot waters. Notably, the vessels have been accompanied by the Turkish military, including drones, F-16 fighters, and warships.

Turkey’s actions and expansive claims inside Cyprus’ exclusive economic zone have been condemned by the U.S., European Union, and Egypt, with NATO officials recently signalling to Turkey that it was out of line.

Should the Turkish military attempt to enforce its drilling claims and run up against Cypriot and Greek vessels, it could spark a deadly encounter which would force the E.U. and NATO to finally weigh in more forcefully.

This news item put in an appearance on the Zero Hedge website at 4:14 p.m. on Monday afternoon EDT — and another link to it is here.


Turkey’s Erdogan Vows to “Significantly” Cut Rates as Trump Set to Roll Out Sanctions Over S-400 Purchase

On Sunday, Turkish President Recep Tayyip Erdogan – who last weekend fired the head of the central bank for not cutting rates fast enough, and who has now become the de facto head of the CBRT – promised “significantly lower interest rates by the end of the year“, Bloomberg reported.

We aim to reduce inflation to one digit by the end of this year,” Erdogan told journalists in Istanbul, according to the state-run Anadolu news agency. “As we achieve this, we will achieve our year-end interest rate target as well.” Of course, should interest rates drop to one digit, the USD/TRY will promptly collapse to two, as the rate differential between the lira and the dollar collapses, removing the main incentive to go long the lira at a time when the Turkish economy remains in crisis.

Having founded the economic school of Erdoganomics, according to which inflation can be achieved only by lowering rates, the Turkish president and his U.S. counterpart have quickly become kindered spirits when it comes to monetary policy. And just as Trump heaps pressure and insults on Fed Chair Powell, Erdogan has frequently accused the central bank of keeping borrowing costs too high. Last month, he complained that while the Fed was moving toward a rate cut, Turkey’s policy rate of 24% “is unacceptable.”

Meanwhile, even as Trump and Erdo may be BFFs when it comes to firing head of central banks, the U.S. president and his advisors have reportedly settled on a sanctions package to punish Turkey for receiving parts of a Russian S-400 missile defense system and plans to announce it in the coming days, Bloomberg wrote in a separate report.

According to Bloomberg, the administration “chose one of three sets of actions devised to inflict varying degrees of pain under the Countering America’s Adversaries Through Sanctions Act, the people said, without identifying which set had been chosen. The plan needs Trump’s approval.”

This story appeared on the Zero Hedge website at 11:21 p.m EDT on Sunday evening — and it’s the final contribution to today’s column from Brad Robertson.  Another link to it is here.


Texas Takes Another Step to Facilitate the Use of Its Gold Bullion Depository

Texas continues to take steps to make the state more friendly to gold and silver.

Earlier this week, the Texas Senate gave final approval to a pair of bills that that would exempt precious metals stored in the Texas Bullion Depository from certain taxes. By repealing taxes on gold and silver, the state will treat them more like money instead of commodities.

Rep. Giovanni Capriglione (R-Keller) introduced House Joint Resolution 95 (HJR95) on March 1. The resolution places a state constitutional amendment authorizing the legislature to “exempt from ad valorem taxation precious metal held in a precious metals depository located in this state,” on the November ballot. Ad valorem taxes are levied on personal property.

With Senate approval, the proposed amendment will now go before the voters in November.

House Bill 2859 (HB2859) is the enabling legislation for the amendment. Under the proposed law, “Precious metals are exempt from taxation if they are held in a commercial depository in this state.” If signed by Gov. Greg Abbott, the law will go into effect upon approval of the constitutional amendment.

It’s a wonderful idea, dear reader…let’s see if happens.  This interesting precious metals-related news item appeared on the lewrockwell.com Internet site yesterday sometime — and it’s the first of several articles that I found on the gata.org Internet site.  Another link to it is here.


Golden blunders: How a string of technical mishaps has hampered Canada’s junior gold miners

Junior gold-mining executive Scott Caldwell was in a jovial mood as he sat down for a national television interview in February, 2016.

Even though the price of gold bullion had tumbled by more than a third from its 2011 peak, and many of his competitors were struggling, his company was defying the odds.

Guyana Goldfields Inc. had managed to raise US$700-million from investors and put a high-grade gold mine into production in early 2016.

Mr. Caldwell, an avuncular mining engineer with a soothing tone, was happy to promote the company’s Aurora mine, located in a remote Guyanese rainforest, as a cash machine.

Indeed, at the prevailing gold price of US$1,200 an ounce, Guyana looked like a surefire winner.

A little less than US$800 an ounce [cost], US$400 an ounce margin,” he said during a segment on Business News Network (BNN). “Pretty easy to figure out how we’re going to do.”

The company’s share price soared as it ramped up production, and its market capitalization crested above $1.5-billion.

But last October, seemingly out of nowhere, the wheels came off. Guyana shed half its stock-market value in one trading session after the company raised doubts about the geology at Aurora.

A technical report, upon which the mine was built, had vastly overestimated the amount and grade of gold at Aurora. This past March, Guyana cut its reserves by more than 40 per cent, after releasing an updated study on the mine. Guyana’s chairman, Ren Marion, later admitted in an interview that some 1.5 million ounces of gold assumed by Guyana to be in the ground was “never there.”

This very long article put in an appearance on theglobeandmail.com Internet site on Saturday.  Virtually all of it is behind their subscription wall, but it’s posted in the clear in its entirety on the gata.org Internet site yesterday — and another link to it is here.


Venezuela defies sanctions to sell another $40 million in gold reserves

Venezuela sold about $40 million worth of gold last week, defying numerous U.S. sanctions that threaten to cut off Nicolas Maduro’s autocratic regime, according to people with knowledge of the matter.

The central bank sold nearly one ton of gold July 12, lowering Venezuela’s dollar reserves to a near three-decade low of $8.1 billion, the people said. While sanctions increasingly cut off Venezuela from the global financial system, Maduro has been selling gold to firms in places such as the United Arab Emirates and Turkey, reaching approximately 24 tons of gold in sales since the beginning of April.

A central bank press official didn’t immediately respond to requests for comment on the sales.

This tiny Bloomberg story was posted on their Internet site at 12:27 p.m. PDT on Monday afternoon — and I found it in a GATA dispatch.  Another link to it is here.


Ted Butler: Wrong Whale

[Here’s an amended excerpt from the weekly review sent to subscribers on Saturday, July 13…]

The 4 big concentrated silver longs, which I have been writing about for nearly a month, further reduced their net long position by 3882 contracts to 62,707 contracts. The only reporting category to have liquidated enough (or any real) number of contracts in the reporting week were managed money traders, proving conclusively that managed money traders held a significant percentage of the very strange concentrated net long position in COMEX silver. How else could I have expected managed money long liquidation by the 4 concentrated longs on Monday?

This is in direct conflict with the new article by Alasdair Macleod, of which many of you asked my opinion. As I think most of you know, it is not my custom to critique others’ work, as that strikes me as unprofessional. Let everyone present what they wish to present. But there is enough factually incorrect in Macleod’s article that it would be a disservice not to address those very serious errors.

Since I’ve been writing about the highly unusual and unprecedented concentrated long position in COMEX silver futures for weeks, I thought at first Alasdair picked it up from me (certainly, I didn’t pick it up from him). Macleod holds, among other things, that the concentrated long position is mostly (or exclusively held) by commercials and not managed money traders. That’s false on its face.

I, along with Ted, had quite a number of readers send me that ‘Whale’ story by Alasdair…asking my opinion. And as I explained to all of them, I was horrified by the many obvious errors in it, so there was no way I was going to dignify it by posting it in my column, because I would have had to trash it in my comments.  But Ted did it on his own.  His comments were posted on the silverseek.com Internet site at 12:35 p.m. MDT on Monday afternoon — and another link to it is here.


The PHOTOS and the FUNNIES

Here are four photos that I took from the small airport [YMB] in Merritt.  All of the town, including the airport, is west of where I was standing.  The first shot is looking mostly south…the second, northeast — and third, due north.  You can see the wind sock on the north end of the runway on the far left of the third photo. All three photos were taken within 30-odd meters of each other.  That’s how varied the landscape is around here. The last shot is of an airplane on the tarmac…C-GSWY…a Piper PA-31 Turbo Navajo…built in 1970.  I took this photo on May 12 — and according to the folks over at flightaware.com…it’s still sitting there.  It’s also for sale for US$148,000.  A bargain, but the air frame is pushing 50 years old. Click to enlarge.


The WRAP

Asking liberals where wages and prices come from is like asking six-year-olds where babies come from.” — Thomas Sowell


I’m not prepared to read much into yesterday’s price action in either silver or gold.  I certainly sensed that ‘da boyz’ were present in the market at the open in New York on Sunday evening — and also again on both occasions when the gold price attempted to rally much above unchanged.  But with light summer trading volume yesterday, it only required a soft touch.

Here are the 6-month charts for the Big 6 commodities.  I note that silver, platinum and copper have been on the rise by a bit during the last five trading days, but that’s happening because the Managed Money traders are covering short positions and going long.  It’s the very act of them doing that, or being tricked into doing that, that is causing their respective prices to rise…nothing else.  Click to enlarge.

And as I type this paragraph, the London open is less than a minute away — and I note that, like on Sunday, gold rallied a bit at the 6:00 p.m. open in New York on Monday evening, but was sold lower almost immediately, with the current low tick coming shortly after 9 a.m. China Standard Time on their Tuesday morning.  It rallied back to a dollar above unchanged by 2 p.m. CST, but has been sold lower since — and is down $1.00 the ounce as London opens.  Silver’s price path was mostly similar to gold’s, but it wasn’t touched at 2 p.m. CST — and it’s up 5 cents.  Platinum had the same down/up move as gold in morning trading in Shanghai — and it’s up a dollar currently.  It was the same for palladium, at least up until shortly after 1 p.m. CST — and then it got hit pretty hard — and is down 8 dollars as Zurich opens.

Net HFT gold volume is a bit under 42,000 contracts — and there’s only 1,156 contracts worth of roll-over/switch volume out of August and into future months.  Net HFT silver volume is already very healthy at around 15,500 contracts — and there’s only 693 contracts worth of roll-over/switch volume on top of that.

The dollar index opened down 1 whole basis point once trading commenced at 7:45 p.m. EST on Monday evening, which was 7:45 a.m. China Standard Time on their Tuesday morning.  It has been inching very quietly and unevenly higher since — and is up 7 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.


Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and I may have something to say about what may be in it in my Wednesday missive, once I’ve had a chance to see how the trading action is today.

Other than that, there’s nothing going on out there right now, as it appears that the “summer doldrums” are upon us.  But I’m perfectly aware of the fact that silver and gold prices could erupt at any moment, not withstanding what the COT Report has to say.


And as I post today’s missive on the website at 4:02 a.m. EDT, I see that the gold price has ticked a bit higher — and is up 10 cents an ounce at the end of the first hour of London trading — and silver is up 7 cents. Platinum is back at unchanged, but palladium’s tiny rally going into the Zurich open was snuffed out shortly after that — and it’s now down 13 dollars as the first hour Zurich trading ends.

Gross gold volume is about 52,500 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is just under 49,000 contracts. Net HFT silver volume continues to sail higher at around 18,800 contracts — and there’s still only 765 contracts worth of roll-over/switch volume in that precious metal.

The dollar index has been ticking higher ever since the 2:15 p.m. CST afternoon gold fix in Shanghai — and is now up 14 basis points as of 8:45 a.m. in London/9:45 a.m. in Zurich.

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

Ed