Another Day in the Plus Column For Silver

25 July 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much for the first two hours and a bit once trading started at 6:00 p.m. EDT in New York on Tuesday evening.  Shortly after 8 a.m. China Standard Time on their Wednesday morning, it began to creep higher — and that lasted until 9 a.m. CST.  The price didn’t do much from that juncture until 1:30 p.m. CST — and then began to drift quietly higher, with the high tick coming around the 10 a.m. EDT morning gold fix in London…the low tick in the dollar index, actually.  It was then sold lower [as the dollar index ‘rallied’] until a few minutes after 1 p.m. in COMEX trading in New York — and chopped unevenly higher into the close from there.

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

Gold was closed on Wednesday afternoon in New York  at $1,425.30 spot, up $8.10 on the day.  Net volume was fairly decent at just over 239,500 contracts — and there was a bit over 79,000 contracts worth of roll-over/switch volume out of August and into future months.

Silver’s price path was a virtual carbon copy of gold’s…along with their respective low and high tick times as well, so I’ll pass on the play-by-play in this precious metal.

The low and high ticks were recorded by the CME Group as $16.35 and $16.68 in the September contract.

Silver finished the Wednesday session at $16.57 spot, up 20 cents from Tuesday’s close.  Net volume was fairly heavy at 79,000 contracts — and there was a hair over 6,300 contracts worth of roll-over/switch volume in this precious metal.

Platinum’s price path was guided in a similar manner as both silver and gold, except the rally that began at 1:30 p.m. CST on their Wednesday afternoon kept right on truckin’ until 1 p.m. in COMEX trading in New York.  It crept quietly sideways into the close from there.  Platinum ended the day at $876 spot, up 21 dollars from Tuesday.

Palladium was sold down 3 bucks — and back to the $1,500 spot mark by shortly before 10 a.m. China Standard Time on their Wednesday morning — and then traded flat until shortly before 2 p.m. CST.  A quiet and somewhat choppy price rally began from there — and that ended when the market closed at 5:00 p.m. EDT in New York.  Palladium finished higher by 18 dollars at $1,521 spot.

The dollar index closed very late on Tuesday afternoon in New York at 97.71 — and opened up 1 basis point once trading commenced at 7:45 p.m. EDT on Tuesday evening, which was 7:45 a.m. China Standard Time on their Wednesday morning.  It rallied a small handful of basis points from there — and then proceeded to trade somewhat unevenly sideways until the 97.81 high tick was set at 8:30 a.m. in London.  It began to head quietly and very unevenly lower from that point — and the 97.55 low tick of the day was set at 10:05 a.m. in New York, which turned out to be the respective highs in both gold and silver yesterday.  It proceeded to rally from there until about 3:35 p.m. EDT — and faded back below unchanged by a hair going into the 5:30 p.m. close…although its closing price was ‘adjusted’ later to show that it finished above unchanged.

The dollar index was closed at 97.73…according to the Bloomberg chart below…up 2 basis points on the day, even though the chart clearly shows that it closed down 3 basis points on the day.  It must be the new math that they’re using  these days.

Here’s the DXY chart, courtesy of BloombergClick 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…97.45…and the close on the DXY chart above, was 28 basis points on Wednesday.  Click to enlarge as well.

The gold shares jumped up a bit at the 9:30 open in New York on Wednesday morning — and their respective highs came at 10:05 a.m…which was the time that the dollar index hit its low tick of the day.  They were sold lower until around 12:10 p.m. EDT — and then crawled higher until 2:35 p.m.  They faded a hair into the 4:00 p.m. close of trading from there.  The HUI closed up 1.18 percent.

And except for the odd jiggle, the silver equities followed a very similar price path as their golden cousins.  However, they fared somewhat better from a price perspective, as Nick Laird’s Intraday Silver Sentiment Index closed up 2.22 percent on the day.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 11 gold and 90 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, the two largest short/issuers were Advantage and ADM, with 7 and 3 contracts.  The two largest of the three long/stoppers were JPMorgan and Advantage, as they picked up 7 and 3 contracts respectively.  All contracts, issued and stopped, involved their respective client accounts.

In silver, the three short/issuers were International F.C. Stone, ADM and Advantage…with 56, 25 and 9 contracts out of their respective client accounts.  The four long/stoppers were The CME Group, Advantage, ABN Amro and JPMorgan, as they stopped 61, 13, 10 and 6 contracts.  The CME Group stopped them for their own account — and the other contracts were for the other stoppers respective client accounts.

The 61 contracts stopped by the CME Group were immediately reissued as 61×5=305 one-thousand ounce COMEX mini silver contracts — and all were stopped by ADM.

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

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in July rose by 8 contracts leaving 16 still open, minus the 8 mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 2 gold contracts were actually posted for delivery today, so that means that 8+2=10 more gold contracts just got added to the July delivery month.  Silver o.i. in July declined by 43 contracts, leaving 113 still around, minus the 90 mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 51 silver contracts were actually posted for delivery today, so that means that 51-43=8 more silver contracts were just added to July deliveries.


For the second day in a row there was a withdrawal from GLD, as an authorized participant took out 33,973 troy ounces of gold.  There was another very decent deposit into SLV yesterday, as an a.p. added 1,684,800 troy ounces.

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

There was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  There was a tiny bit of paper activity, as 295 troy ounces was transferred from the Registered category — and into Eligible.  That happened at Brink’s, Inc. — and I won’t bother linking this.

There was very little activity in silver.  Nothing was reported received — and only 34,986 troy ounces were shipped out.  All the ‘out’ activity was at the International Depository Services of Delaware — and I won’t bother linking this, either.

And there was very little activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  Nothing was reported received — and only 10 kilobars were shipped out.  That happened over at Loomis International.  And, for obvious reasons, I won’t bother linking this, either.


The Thornbury Hoard is a hoard of 11,460 copper alloy Roman coins, mainly radiates and nummi, dating from 260 to 348 A.D., found in the back garden of Ken Allen in Thornbury, South Gloucestershire, England while digging a pond in March 2004. It was described as the “third largest of its kind” found in Great Britain.

The coins were in a coarse grey ware decorated pot measuring 40–50 cm (16–20 in) high—thought to have originated in Caldicot, Monmouthshire—which had been damaged in the ground.  Allen reported the find and took it to Bristol City Museum and Art Gallery where it was weighed in at 28.6 kg (63 lb), and “took two people to lift the bucket it had been collected in“. For the most part, the coins were readily identified after drying and chemical treatment.

At an inquest, the Coroner declared the hoard Treasure and a valuation committee subsequently valued it at £40,000.

The hoard was said to be the “third largest of its kind” and consisted of 11,449 copper alloy nummi and 11 copper alloy radiates, the earliest dating from during the reign of Gallienus in 260; the latest being struck in 348, during the Constantinian dynasty. However, the vast majority were minted in the 330s.  The find was compared in size and constitution to those of the Nether Compton (22,670 coins) and Bishopswood (17,548 coins) hoards, found in 1989 and 1895 respectively.   Click to enlarge.

I only have a tiny handful of commentaries/articles for you today…three, to be specific.


CRITICAL READS

Trump and Pelosi Surrender With Latest Deal — Bill Bonner

There may be only a remnant of fiscal conservatives left in Congress. But those few still there must have felt a sharp blade in their backs on Tuesday.

The deal they just agreed on was such an abject surrender… such a cowardly rejection of their conservative principles… it makes one wonder, “Why did Republicans agree to such a thing?”

Republicans themselves didn’t seem to know.

It’s a “compromise,” said David Perdue, R-GA.

No comment,” said Mitt Romney, R-UT.

The Pentagon may have had some setbacks in Korea, Vietnam, Iraq, and Afghanistan, but it sweeps the field in its most important fight – the battle for money.

Yes, Dear Reader, as expected, the White House and Congress struck a budget deal, proving that nothing will be allowed to get in the way of inflation. Not sequesters. Not debt ceilings. Not caution, prudence, nor good judgment.

This interesting and worthwhile commentary from Bill put in an appearance on the bonnerandpartners.com Internet site early on Wednesday morning EDT — and another link to it is here.


Robot Trading Will End in Disaster — Jim Rickards

Today, stock markets and other markets such as bonds and currencies can best be described as “automated automation.” Here’s what I mean.

There are two stages in stock investing. The first is coming up with a preferred allocation among stocks, cash, bonds, etc. This stage also includes deciding how much to put in index products or exchange-traded funds (ETFs, which are a kind of mini-index) and how much active management to use.

The second stage involves the actual buy and sell decisions — when to get out, when to get in and when to go to the sidelines with safe-haven assets such as Treasury notes or gold.

What investors may not realize is the extent to which both of these decisions are now left entirely to computers. I’m not talking about automated trade matching where I’m a buyer and you’re a seller and a computer matches our orders and executes the trade. That kind of trading has been around since the 1990s.

I’m talking about computers making the portfolio allocation and buy/sell decisions in the first place, based on algorithms, with no human involvement at all. This is now the norm.

This commentary from Jim was written on July 19, 2019…but didn’t show up in the public domain on the dailyreckoning.com Internet site until yesterday.  Another link to it is here.


Looking into Gold’s Future:  Nick Giamruno interview Jeff Thomas

The precious metals market is relatively stable at present, but how about in the midst of an economic crisis? As we get closer to the oncoming crisis, we might want to assess in advance how the market is likely to change. How might we change our present precious metals strategy in order to prepare for a metals market that could have a very different complexion than the present one?  We asked International Man feature writer and precious metals advisor, Jeff Thomas, to weigh in.

International Man: Recently, a noted precious metals prognosticator stated that the worst way for an individual to own physical gold is to hold bars, no matter if they are one ounce or ten ounce. He said the best way to hold physical gold is in coins. What’s your take on that?

Jeff Thomas: I’m familiar with that comment and its author. He’s an old-school gold guy, like me. He’d quite correct, if the question he’s answering is, “What form of gold will serve me best in a crisis?”

Generally speaking, I see two primary age groups of gold investors. One is the under-fifty people, who are focusing on gold primarily as a wealth builder. The over-fifty camp tends to focus on gold more as an insurance policy against an economic crisis.

This worthwhile Q&A session between Jeff and  Nick was posted on the internationalman.com Internet site on Wednesday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

While touring around Peachland on May 20…I was gobsmacked when I came across one of my subscribers who I knew lived in Okanagan country somewhere…but not here.  He grows cherries — and the first photo was taken from one of his orchards that overlooks Okanagan Lake.  This picture was taken looking more or less southeast towards Penticton.  The second photo was taken in his front yard.  It’s a hawthorn tree in full flower — and had to be a least 20 meters/65 feet tall…the biggest one I’d ever seen by far.  The last shot was taken on the way back to Merritt — and within a mile or so of the summit of B.C. Highway 97C/’The Connector’ — and the four large wind turbines are the focal point of the shot.  Click to enlarge.


The WRAP

The silver price continues to add to its gains every day, not by a lot, but a slow and steady rise — and I get the impression that this silver price rally is being as equally engineered as the price declines we’ve experienced in the past.  This is something that Ted has pointed out on a number of occasions, which I’d forgotten to mention.

Silver is not just overbought, it’s hugely overbought now — and a price decline [equally engineered] to ‘correct’ this overbought condition, wouldn’t surprised me in the slightest…nor should it you.  But whatever ‘correction’ is in the cards, it will only be a temporary setback.

But there’s still the possibility that the Commercial traders could get overrun…sans JPMorgan.  But if that does happen, it will be as Ted says…”the first time it has”.

Platinum is fast heading in the direction as well, particularly after Wednesday’s rather impressive rally — and I would suspect that this is a short covering rally…courtesy of the Managed Money traders.  Yesterday’s price activity won’t be in tomorrow’s Commitment of Traders Report, but I would think that they’re now long this market by a bit.

WTIC was closed below both its 50 and 200-day moving averages for the seventh trading day in a row yesterday.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and you can see these noted changes for yourself.  Click to enlarge.

And as I type this paragraph, the London/Zurich opens are less than a minute away — and I note that the gold price was sold quietly lower starting about an hour after trading began at 6:00 p.m. on Wednesday evening in New York — and that lasted until 11:30 a.m. China Standard Time on their Thursday morning. It traded flat from there until around 1:45 p.m. CST — and then began to head higher. At the moment, gold is down only $1.00 an ounce. Silver was also sold lower — and its current low tick was set shortly after 11 a.m. CST — and it has been creeping quietly higher since — and is down 7 cents at the moment. The platinum price didn’t do much until mid-morning trading in Shanghai — and at that juncture, it jumped a few dollars — and is up 3 bucks. Palladium traded a few dollars higher in Far East trading on their Thursday, but is up only a dollar as Zurich opens.

Net HFT gold volume is actually pretty light at a bit under 30,000 contracts — and there’s around 7,700 contracts worth of roll-over/switch volume out of August and into future months. But net HFT silver volume is already getting up there at just under 18,000 contracts — and there’s 1,806 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened down 5 basis points once trading commenced at 7:45 p.m. EDT in New York on Wednesday evening, which was 7:45 a.m. CST on their Thursday morning. It has tried to break above the unchanged mark on numerous occasions during Far East trading, but has failed on every attempt — and is down 2 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.


I’m certainly happy to see the precious metal equities doing well…particularly the silver ones.  And as I’ve pointed out a few times over the last week or so, it certainly appears that someone…or more than one someone…is accumulating these stocks.  They can continue to accumulate them for the next year or so — and I wouldn’t mind at all.


And as I post today’s efforts on the website at 4:02 a.m. EDT, I see that the gold price hasn’t done much in the first hour of London trading — and is down 70 cents. Silver is down 6 cents currently. Platinum is up 4 dollars, but palladium got smacked lower shortly after the Zurich open — and is down 3 dollars as the first hour of trading ends over there.

Gross gold volume is a bit over 63,000 contracts — and minus roll-over/switch volume, net HFT gold volume is pretty quiet at a bit under 42,000 contracts. Net HFT silver volume is just under 22,000 contracts — and there’s 2,000 contracts worth of roll-over/switch volume on top of that.

The dollar index has ticked a few basis points higher during the last hour — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, it’s up 3 basis points.

I’m done for another day — and I’ll see here again tomorrow.

Ed