It Was a Wild One in All Markets on Thursday

02 August 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold quietly and unevenly lower almost from the moment that trading began at 6:00 p.m. EDT on Wednesday evening — and the low tick of the day [$1,400 spot] came at 9:20 a.m. in New York on Thursday morning.  It began to head sharply higher from there — and then really took off a very few minutes before the 1:30 p.m. EDT COMEX close.  That rally ran into ‘something’ around 2 p.m…but it continued to creep higher from there until the market closed at 5:00 p.m.

The low and high ticks in the October contract were reported as $1,406.30 and $1,447.00 — and in the December contract, those numbers were $1,412.10 and $1,453.20.  In both months, plus in the spot month, the intraday move was over $40.

Gold finished the Thursday session at $1,445.10 spot, up $31.70 from Wednesday’s close — and certainly would have closed significantly higher than that, if allowed.  Net volume in October and December combined was past Jupiter at something over 587,000 contracts — and there was just under 16,500 contracts worth of roll-over/switch volume on top of that.  ‘Da boyz’ haven’t given up yet.

The engineered price decline in silver was far more pronounced in Far East and London trading on their respective Thursdays — and the low tick in this precious metal was set a minute or so before 1 p.m. BST in London, which was a minute or so before 8 a.m. in New York.  After that, the price action in silver was very much the same as it was for gold, except ‘da boyz’ turned the price a bit lower starting a minute before 3:30 p.m. in after-hours trading.

The low and high ticks in silver were recorded as $15.935 and $16.405 in the September contract.

Silver was closed at $16.295 spot, up 6.5 cents on the day.  Net volume was sky high once again at just under 113,000 contracts, as ‘da boyz’ were there as short sellers of last resort once again.  Roll-over/switch volume out of September and into future months was 11,000 contracts.

The platinum price was sold unevenly lower starting at 8 a.m. China Standard Time on their Thursday morning — and the low tick in this precious metal was set shortly after 9 a.m. in New York.  From that juncture, it chopped a bit higher until around 3 p.m. in the thinly-traded after-hours market — and didn’t do much after that.  Platinum finished the Thursday session at $851 spot, down 11 bucks from Wednesday’s close.

The palladium price was down ten dollars by 2 p.m. in Zurich/8 a.m. in New York when JPMorgan et al dropped the hammer.  The low tick was set shortly before the Zurich close at a bit under the $1,390 spot mark, but it recovered a bit — and closed back above $1,400 spot at $1,406 spot…down 94 bucks on the day — and down almost $110 the ounce at its low tick.  Ain’t free markets just grand?

The dollar index closed very late on Wednesday afternoon in New York at the 98.52 mark — and opened up 8 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 rallied quickly to the 98.90 mark — and held around that level until minutes before 9:15 a.m. in New York.  Then down it went until a very few minutes before the 1:30 p.m. EDT COMEX close.  At that point, the decline became far more precipitous — and the usual ‘gentle hands’ appeared at the 98.27 mark, a minute or two before 2 p.m. EDT…the dollar’s low tick of the day.  It bounced a bit higher from there, but then crept unevenly lower until trading ended at 5:30 p.m. EDT.  The dollar index finished the day at 98.37…down 15 basis points from Wednesday’s close — and would have obviously closed far lower, if it had been allowed to trade freely.

I would suspect that Trump’s new tariffs on China may have played a roll in the dollar index decline yesterday.

Here’s the DXY chart, courtesy of Bloomberg, as usual.  Click 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…98.14…and the close on the DXY chart above, was 23 basis points on Thursday.  Click to enlarge as well.

The gold stocks gapped down a bit at the open in New York on Thursday morning, but began to head unevenly higher immediately.  Most of the gains that mattered were in by around 2:25 p.m. EDT — and they edged equally unevenly higher into the 4:00 p.m. close of trading from there.  The HUI finished higher by 5.29 percent, reversing almost all of Wednesday’s losses in the process.

The price path for the silver equities was virtually the same as it was for the gold shares.  But because silver wasn’t allowed above the unchanged mark by much, they didn’t perform quite as well.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 3.75 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report for Day 3 of August deliveries, showed that 221 gold and 66 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

In gold, of the five short/issuers in total, the two largest were ABN Amro and Advantage with 88 and 59 contracts out of their respective client accounts.  There were eight long/stoppers — and the two biggest by far were Citigroup with 107 for its own account — and JPMorgan with 62 for its client account.

In silver, the two short/issuers were ABN Amro and Advantage, with 41 and 25 contracts from their respective client accounts.  There were four long/stoppers in total…JPMorgan, ABN Amro, Advantage and Macquarie Futures.  The first three stopped 31, 16 and 11 contracts for their respective client accounts — and Macquarie picked up 8 contracts for its own account.

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 August declined by 2,992 contracts, leaving 3,559 still open, minus the 221 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 2,773 gold contracts were actually posted for delivery today, so that means that 2,992-2,773=219 more gold contracts vanished from the August delivery month.  Silver o.i. in August dropped by 128 contracts, leaving 425 still around, minus the 66 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 188 silver contracts were actually posted for delivery today, so that means that 188-128=60 more silver contracts just got added to August.


There was a fairly decent deposit into GLD yesterday, as an authorized participant added 141,473 troy ounces.  There were no reported changes in SLV.

But in the other ETFs, mutual funds and depositories, there was 523,512 troy ounces of silver added to Deutsche Bank’s XAD6 silver mutual fund.

There was a tiny sales report from the U.S. Mint on Thursday.  They sold 16,000 silver eagles — and another 6,000 of those ‘American the Beautiful’ 5-ounce silver coins…a net 30,000 troy ounces of silver.

There was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  But there was some paper activity, as 151,533 troy ounces was transferred from the Eligible category — and into Registered…no doubt scheduled for August delivery.  Virtually all of that amount was transferred over at HSBC USA.  Here’s the link to that.

And there was no in/out movement in silver, either.  The only activity there was, was of the paper variety as well, as 54,728 troy ounces was transferred from the Registered category — and back into Eligible.  I won’t bother linking this.

The only activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday was the 10 kilobars received over at Brink’s, Inc.  Nothing was reported shipped out — and I won’t bother linking this, either.


Here’s a chart that showed up in my Tuesday column, which you’re more than familiar with, but I’m posting it again to make a point about something that I’ve noticed but not mentioned — and for reasons that escape me at the moment.  It was my chat with Ted on the phone that jogged my memory on this.

It’s the 2-year chart from Nick that shows all the silver deposited in all known depositories, mutual funds and ETFs.   Please note that over the last eight weeks that there have been huge deposits every week…with no exceptions.  This chart is updated as of the close of business yesterday…August 1 — and now includes that monster 12.6 million troy ounces deposited in SIVR on Tuesday.

Checking the total ounces deposited…the scale on the left-hand side of this chart…my back-of-the-envelope calculation shows that roughly 85 million troy ounces has been added to all these know silver ETFs, depositories and mutual funds over the last 8+ weeks…mostly by this new big buyer that Ted discovered.  This silver is obviously not being purchased in the open market, because it just doesn’t exist — and would have blown the price to Pluto by now…in a free market.  Obviously someone with lots of silver of their own is supplying it.  So that event hasn’t been allowed to happen…at least not yet.  Click to enlarge.

I have a very decent number of stories for you again today, including a new commentary from Ted Butler.


CRITICAL READS

Yesterday’s Interest Rate Cut Was the Biggest Mistake in Federal Reserve History — Bill Bonner

It was the unkindest cut of all.

Yesterday, the Federal Reserve whittled down its key lending rate by 25 basis points, in what was probably the biggest mistake in Fed history.

As you know, the Fed only makes mistakes.

It was set up in 1913 as a backstop for the banking system… to provide emergency funding for otherwise solvent banks.

But in the Great Depression, 10,000 banks went under anyway. And now, the Fed aims for full employment, ever-rising stock prices, recession-free growth, the reelection of all politicians, the enduring admiration of the press, and the love of the common people.

By the way, it is also charged with maintaining the integrity of America’s money. But only by undermining the dollar at a near-constant rate of 2% per year, it says, can it achieve its other goals.
Thus, its mission is confused and doomed from the get-go. There is no reason to think that a group of PhD hacks could ever create a single job, let alone millions of them.

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


Epic Rant by Gregory Mannarino: Critical Market Updates..Plus!

Greg tees off on the Fed meeting — and the markets in general, in this 12-minute youtube.com video from early on Thursday morning, before the tariffs against China were announced.  He pretty much nails it…taking no prisoners — and telling it exactly the way it is.  Watching it is good for the soul…a Howard Beale moment if there ever was one…at least it was for me — and I thank Brad Robertson for sending it along.


The Situation is Crazy” – U.S. Manufacturing PMI Plunges to 10-Year Lows

With China, Europe, and Japan Manufacturing PMIs are all signaling contraction, U.S. Manufacturing PMI dropped to its weakest since September 2009 (at 50.4 vs 50.6 prior) and ISM Manufacturing tumbled to 51.2 – the lowest since Aug 2016.  Click to enlarge.

While manufacturing makes up only about 11% of the U.S. economy, the risk is that further weakness will extend to service providers and prompt those companies to reduce investment and limit hiring, endangering the record-long expansion.

Under the hood PMI is really ugly with employment contracting fore the first time since June 2013 and output expectations plunge to record lows; and ISM employment and prices paid plunged even if respondents claim prices are soaring because of tariffs (as new orders rebounded modestly).

Chris Williamson, Chief Business Economist at IHS Markit said:

U.S. manufacturing has entered into its sharpest downturn since 2009, suggesting the goods-producing sector is on course to act as a significant drag on the economy in the third quarter. The deterioration in the survey’s output index is indicative of manufacturing production declining at an annualised rate in excess of 3%.”

This chart-filled news item appeared on the Zero Hedge website at 10:05 a.m. EDT on Thursday morning — and another link to it is here.


Stocks, Yuan, Bond Yields Crash as Trump Unleashes New China Tariffs

Just as investors thought it was safe to buy-the f**king-dip after Powell’s plunge, President Trump steals the jam out of their donut/doughnut by announcing new China tariffs…

… on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country

In a series of tweets, Trump laid out the state of the China trade deal… in a word – terrible…

And just like that – the gains were gone…

This chart-filled Zero Hedge article was posted on their Internet site at 1:34 p.m. on Thursday afternoon EDT — and it comes to us courtesy of Brad as well.  Another link to it is here.  In a very related article is this Bloomberg story headlined “Trump Ratchets Up Trade War With New Tariffs on Chinese Imports” — and I thank Swedish reader Patrik Ekdahl for that one.


Prospective Fed nominee Shelton says global economy in ‘very dangerous situation’ like 1930s

Likely Federal Reserve nominee Judy Shelton compared the current situation involving the U.S. central bank and its global counterparts to the 1930s as the world struggled through the Great Depression.

Shelton referred to the central banks lowering rates and devaluing their respective currencies to undercut competitors. The Fed lowered its benchmark interest rate by a quarter percentage point Wednesday, and others, including the European Central Bank and Bank of Japan, have stated their intentions to loosen monetary policy as well.

Monetary policy nowadays is “not causing any growth to be stimulated but it is having an effect in currency markets, and we’re in a very dangerous situation,” Shelton told CNBC’s Rick Santelli during a “Squawk on the Street” interview. “It’s not unlike the 1930s when you had beggar-thy-neighbor competitive depreciations.”

In the 1930s, as the world was struggling through the depression, multiple countries adopted the beggar-thy-neighbor approach in an effort to boost exports and lower imports. The U.S. has taken to identifying countries publicly that it believes are manipulating currencies.

Shelton said the main target now for global central banks is the U.S. dollar, which has been rising through the year.

Asked whether she thought the U.S. should not be lowering rates just to keep up with other countries, she said “it would be nice to be virtuous in a vacuum, but I don’t think we have that luxury.”

This article was posted on the cnbc.com Internet site at 10:47 a.m. EDT on Thursday morning — and I found it in this morning’s edition of the King Report.  Another link to it is here.


The Donald Means MABA: The Great Fiscal Miscreant Will Make America Broke Again — David Stockman

You couldn’t have timed that better. The Donald managed to hold on to a “2” in Friday’s GDP report, but it was entirely due to a boom in government spending.

We’d call it a kind of stick save that came, ironically, the very day Trump is planning to sign a $1.7 trillion budget abomination. The deal negotiated with Pelosi and Chuckles Schumer, and voted against by a large majority of House Republicans, shit-cans the decade-old discretionary spending caps and permits unlimited Federal borrowing through June 2021.

So who needs Hillary? Or even Barry!

As it happened, the 2.035% seasonally adjusted annualized growth rate for Q2 made it over the hump by a smidgen on the strength of an aberrant 0.85% contribution to GDP growth from the government sector (federal, state and local).

The latter figure compares to a 0.24% average contribution from the government sector during the Donald’s first nine quarters in office. So if you merely adjust for the excess contribution (0.61%) from government, you would have had an even more punkish 1.43% headline GDP growth rate this a.m.

Then again, it is only through the miracle of Keynesian GDP accounting that economic waste on defense and domestic pork barrels or extractions from taxpayers to fund bureaucrats’ wages and other purchases count as “growth”. Self-evidently, when the state becomes corpulent like at present, it undermines prosperity and the rudiments of real wealth gains.

This longish, but worthwhile commentary/rant from David appeared on the lewrockwell.com Internet site on Thursday — and I thank Brad Robertson for this third offering in today’s column.  Another link to it is here.


America’s Collapse: An Economy Based on Plunder — Paul Craig Roberts

Capitalists have claimed responsibility for America’s past economic success.  Let’s begin by setting the record straight. American success had little to do with capitalism. This is not to say that the U.S. would have had more success with something like Soviet central planning.

Prior to 1900 when the frontier was closed, America’s success was a multi-century long success based on the plunder of a pristine environment and abundant natural resources. Individuals and companies were capitalized simply by occupying the land and using the resources present.

As the population grew and resources were depleted, the per capita resource endowment declined.

America got a second wind from World War I, which devastated European powers and permitted the emergence of the U.S. as a budding world power.  World War II finished off Europe and put economic and financial supremacy in Washington’s hands.  The U.S. dollar seized the world reserve currency role from the British pound, enabling the U.S. to pay its bills by printing money.  The world currency role of the dollar, more than nuclear weapons, has been the source of American power. Russia has equal or greater nuclear weapons power, but it is the dollar not the ruble that is the currency in which international payments are settled.

The world currency role made the U.S. the financial hegemon.  This power together with the IMF and  World Bank enabled the U.S. to plunder foreign resources the way vanishing American resources had been plundered.

This very worthwhile commentary from Paul put in an appearance on his Internet site on Thursday — and it’s definitely worth reading.  I thank Larry Galearis for pointing it out — and another link to it is here.


Siemens Is Latest Casualty of Europe’s Economic Slowdown

German industrial giant Siemens AG became the latest casualty of Europe’s economic slowdown, warning a sharp deterioration in some markets hurt quarterly profit and has put financial goals at risk.

The shares dropped as much as 5.9% on Thursday, the most in more than three years, after the region’s largest engineering company reported a disappointing set of results, joining ArcelorMittal, Rheinmetall AG and BMW AG in providing evidence of the gathering storm.

The earnings are a sign that a deepening slump in the global car industry and a more general economic malaise are reaching further into corporate Europe. Until now, Siemens was able to rely on its digital industries division supplying factories with equipment to automate to make up for a protracted decline in the power and gas sector. In the latest quarter, even orders and sales at that unit dropped.

It is difficult to reconcile owning Siemens for its world-class automation, software franchise when this is driving negative earnings,” Morgan Stanley analyst Ben Uglow wrote in a note.

Manufacturing in the euro area shrank for a sixth month at the start of the third quarter, dragged down by Germany’s worst slump in seven years. The downbeat figures come in the wake of reports showing slower economic growth in France, Spain and the euro area, with Italy stagnating. While part of the weakness is linked to troubles in the automotive industry, a continued downturn could spell more trouble.

This Bloomberg article was sent to us by Swedish reader Patrik Ekdahl.  It appeared on their website at 10:00 p.m. PDT on Wednesday evening — and was updated about six hours later.  Another link to it is here.


Central Bank Hunger for Gold Lifts Demand to Three-Year High

Central banks continued to load up on gold in the first half, helping push total bullion demand to a three-year high, according to the World Gold Council.

Nations added 374.1 tons in the first six months as Russia and China kept building reserves and Poland made a massive purchase. The trend is expected to continue, with a recent survey of central banks showing 54% of respondents expect global holdings to climb in the next 12 months.

Central banks around the world have added to reserves as economic growth slows, trade and geopolitical tensions rise, and authorities seek to diversify away from the dollar. Gold rallied to a six-year high in July, as expectations for lower U.S. interest rates and concerns about the economy boosted bullion’s appeal.

Nations have expanded gold holdings by about 14% since 2009, and the hoard is now valued at roughly $1.6 trillion.

Poland bought 100 tons in the second quarter, the most by a central bank since India’s purchase in 2009, the WGC said in a report Thursday. Poland’s addition followed a smaller purchase last year. Countries like Russia and China are regular buyers, but that’s aided by a mining industry that Poland doesn’t have, said Alistair Hewitt, director of market intelligence at the council.

Poland’s buying isn’t just opportunistic,” he said. “It is supported by the same underlying motivation that many central banks share, which is as a store of value, diversification and, in some instances, to protect themselves from political risk.”

This gold-related Bloomberg news item showed up on their website at 9:00 p.m. PDT on Wednesday evening — and was updated about three hours later.  I found it in a GATA dispatch — and another link to it is here.


Desperate to cut emissions, auto makers drive rhodium to 11-year high

The price of rhodium, a precious metal used to curb harmful emissions from vehicle engines, has rocketed to its highest since 2008 as tightening environmental regulation compels auto makers to buy more just as supply looks set to stagnate.

Rhodium has leaped from $615 an ounce in mid-2016 to $3,565 an ounce this month, shooting up by more than $1,000 since mid-February alone.

Within this year we might well see $4,000,” said Mitsubishi analyst Jonathan Butler, adding that rising demand would likely tip the market into deficit.

That’s not to say we wouldn’t see a pullback potentially to $3,000 — this is a volatile metal — but it does have good long-term prospects,” he said.

The only reason that palladium isn’t at that price as well, is because there’s a futures market in it — and JPMorgan et al control its price that way.  No such futures market exists in rhodium…yet.  This Reuters story, filed from London, put in an appearance on their Internet site back on July 19 — and I thank Australian reader Garry Robinson for sending it our way.  Another link to it is here.


Ted Butler: Position Limits

The newly-installed chairman of the CFTC, Dr. Heath Tarbert, in office for only two weeks, submitted an op-ed to Fox Business News the other day, in which he laid out his goals for the agency. Dr. Tarbert comes to the agency with an impressive educational and professional background and as a Republican nominee, I had assumed he would continue in trying to lighten the regulatory burdens on the big guns in the financial industry. Instead, I came away with a very different take upon reading his opinion piece.

Here’s the key passage – “[T]he CFTC must issue long-awaited rules to limit derivatives positions that help unscrupulous traders corner commodity markets.  The trick will be making sure these rules do not strip those markets of the flexibility needed to perform their fundamental risk-management functions.”

I’d be lying if I said Tarbert’s words didn’t resonate with me. It wasn’t that long ago that I had complained to the public integrity section of the FBI/DOJ about the CFTC’s failure to do its job when it came to JPMorgan and silver. Position limits were a non-issue while JPMorgan came to completely dominate the silver market – selling short in unlimited amounts and acquiring almost all the available physical silver in the world. Nevertheless, one must not become so jaded to not recognize clear evidence of someone trying to do the right thing.

Chairman Tarbert’s words about position limits come at a noteworthy time. In the 35 years I have followed silver, there has always been a large concentrated short position in COMEX silver futures. That’s why I alleged the silver price was manipulated. There was never a legitimate economic reason for the large short position. Had position limits been enacted, it would have eliminated the concentrated short position, allowing the price to rise. But while the large and uneconomic short position still exists in COMEX silver futures, it has recently been joined by a large concentrated long position. The one big difference between the very large concentrated short and long positions in COMEX silver futures is that only the long position seems economically justified. When the price of anything becomes extremely depressed, it makes a lot of sense for market participants to buy that asset and makes no sense for market participants to sell short that asset.

The price of silver is the only commodity down nearly 70% from price peaks of both 8 years and 39 years ago. It is the only metal where primary miners can barely make a profit at current prices. Relative to other precious metals, particularly gold, silver is priced at such depressed levels so as to defy a reasonable explanation. In such circumstances it makes sense for large buyers to appear and absolutely no economic sense for there to be large short sellers. The only possible reason for large short sellers to exist in a commodity that is depressed in price is to depress the price further. Thus, should the new chairman of the CFTC mean business about enacting legitimate position limits, I hope he sees the difference between a large position that makes economic sense and one that doesn’t. The concentrated long position has not driven prices to unreasonably high levels, while the short position has depressed the price.

This latest public offering from Ted is definitely worth reading.  It showed up on the silverseek.com Internet site at 2:42 p.m. MDT on Thursday afternoon — and another link to it is here.


The PHOTOS and the FUNNIES

Here are two more mountain bluebird photos from our junket east of Kamloops on May 25…the same two that graced yesterday’s column, but from much closer up.  There was just enough sun poking through the overcast at that point to give them some eye glint, which is crucial in taking a photo of a bird with a black eye and/or a dark head.  Then very shortly after that…about five minutes or so…we ran across this small flock of migrating American goldfinches — and these shots were as close as I could get — and I had to crop the hell out of them to get them as large as they appear here.  I would have given my eye teeth for Canon’s 500mm/f4 telephoto lens at that time, but at US$9,000…that’s a little out of my league.  Click to enlarge.


The WRAP

What a day yesterday!  The new tariffs on China came as a big negative surprise…as did the PMI numbers — and away went gold and silver to the upside.  But, once again, it was the price action after the COMEX close in gold, silver and platinum that was eye-opener…particularly gold.

I would suspect that the vast majority of this price action had to do with paper positioning in the COMEX futures market — and had virtually nothing to do with actual world supply and demand.  That’s certainly true of palladium — and WTIC.

There’s no question that there are forces going on underneath the surface of the precious metal markets in particular — and all commodities in general, that we just aren’t privy to.  I consider the price action since gold broke above the $1,400 spot mark, to be some sort of financial precursor of things to come — and I’ll leave it at that.

But make no mistake about it, JPMorgan et al are shorting these rallies in silver and gold with ever greater ferocity.  It’s now within the realm of possibility that one of the smaller traders in the Big 8 category will be forced to cut and run, as their paper losses are mounting at an alarming rate, especially after yesterday’s price action.  This was something that Ted mentioned on the phone yesterday.

Here are the 6-month charts for the four precious metals, plus copper and WTIC.  And, like for Wednesday’s charts in Thursday’s column, the price action that occurred after the COMEX close on Thursday is not reflected in the price dojis in gold, silver and platinum charts in today’s column, either.  However, the engineered price declines in palladium and WTIC are obvious for all to see, as virtually all of the [paper] price action that mattered occurred during the COMEX trading session yesterday.  Click to enlarge.

And as I type this paragraph, the London/Zurich opens are less than a minute away — and I note that ‘da boyz’ have been busy trying to take away all of Thursday’s gains in silver and gold. Gold was sold lower until around noon in Shanghai — and has been edging quietly higher since, but is still down $11.30 as London opens. They have taken back all of Thursday’s gains in silver, plus a bunch more, as it’s down 17 cents currently. Platinum has been chopping unevenly sideways since trading began at 6:00 p.m. EDT in New York on Thursday evening — and it’s down a buck at the moment. Palladium has been clawing back part of its engineered price decline from yesterday — and is currently up 13 dollars as Zurich opens.

Net HFT gold volume in October and December combined is very heavy at a bit over 106,000 contracts — and there’s only 1,945 contracts worth of roll-over/switch volume in this precious metal. Ditto for silver, as net HFT volume is already up to around 19,300 contracts — and there’s 2,662 contracts worth of roll-over/switch volume out of September and into future months.

The dollar index opened up 4 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 has been struggling around the unchanged mark through all of Far East trading — and is currently down 2 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.


Today, around 3:30 p.m. EDT, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday.  And it should come as no great surprise that the data in it is basically meaningless in virtually all respects because of the events since Tuesday’s cut-off.  But I know for sure that Ted will be closely examining the changes in concentration of the Big 4 traders in silver — and now that I understand what he’s recently uncovered, I will be as well.

I had an e-mail from a reader yesterday asking for my updated list of precious metal equities that I own, so I thought I’d post it in today’s missive as well.

As I mentioned last week, I increased by position in Alexco Resources by fifty percent…doubled my position in First Majestic Silver — and nearly doubled my position in Pan American Silver.  I also added two new companies to my portfolio…Impact Silver and MAG Silver.  I’m “all in” even more now!


And as I post today’s missive on the website at 4:02 a.m. EDT, I see that gold has rallied a bit more in the first hour of London trading — and is only down $6.20 the ounce, but ‘da boyz’ still have silver down 17 cents. They also began to work over both platinum and palladium during the first hour of Zurich trading. The former is now down 6 bucks — and they have the latter down 1 as the first hour of Zurich trading ends.

Gross gold volume in October and December combined is a bit over 133,000 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is now up to around 129,000 contracts. Net HFT silver volume is a bit under 23,500 contracts — and there’s 2,794 contracts worth of roll-over/switch volume out of September and into future months.

The dollar index continues to quietly slide — and is down 9 basis points as of 8:45 a.m. in London/9:45 a.m. in Zurich.

That’s it for another day.  Today, at 8:30 a.m., we get the latest job numbers and, without doubt, the precious metals will ‘react’ to that news.  And with that in mind, I have no idea what today’s trading action will bring in the precious metals…but another wild and crazy price session wouldn’t surprise me in the slightest.  All we can do is watch from the sidelines — and hope that the guys in the white hats win the day.

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

Ed