21 August 2019 — Wednesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price didn’t do much of anything in morning trading in the Far East on their Tuesday, except the tiny bump up in mid-morning trading in Shanghai was all gone by 10 a.m. China Standard Time. From that point it traded flat until minutes after 1 p.m. CST — and then began to crawl quietly higher from there until shortly after 11:30 a.m. in London. It was sold down a bit until COMEX trading began at 8:20 a.m. in New York — and the tiny rally that ensued after that was capped and turned lower at the afternoon gold fix in London. The New York low was set about ten minutes after the London close — and from that juncture it crept quietly higher until 4 p.m. in the thinly-traded after-hours market. It didn’t do a thing after that.
The low and high ticks in gold were recorded as $1,497.00 and $1,512.70 in the October contract — and $1,503.00 and $1,518.80 in December.
Gold finished the Tuesday session in New York at $1,506.80 spot, up $11.70 from Monday’s close. Net volume was a bit on the heavier side, but not as much as one might expect at around 237,500 contracts. There was just under 10,500 contracts worth of roll-over/switch volume in this precious metal.
The price path for silver was managed in an identical fashion as gold’s in morning trading in the Far East on their Tuesday. But at noon CST it began to head quietly higher — and its price was capped at the $17 spot mark around 9:30 a.m. in London. It was sold a few pennies lower going into the COMEX open — and after that it rallied a bit until shortly after the afternoon gold fix. After that it wandered unevenly higher until the high of the day was set around 2 p.m. in after-hours trading. It was sold a few pennies lower into the 5 p.m. close from there.
The low and high ticks in silver were reported by the CME Group as $16.83 and $17.17 in the September contract.
The silver price closed in New York yesterday at $17.135 spot, up 30 cents on the day. Net volume was pretty quiet, which I was happy to see, at a bit under 45,000 contracts — and there was a hair over 28,000 contracts worth of roll-over/switch volume out of September and into future months…mostly December.
The platinum price didn’t do much until shortly after 1 p.m. CST — and then it popped up to its high tick of the day, which came at the 2:15 p.m. afternoon gold fix in Shanghai. It was sold unevenly lower from that point until the low tick was set a few minutes before noon in New York. It rallied into the 1:30 p.m. EDT COMEX close from there — and then was sold a few dollars lower until the market closed at 5:00 p.m. Platinum was closed at $847 spot, down 3 bucks from Monday.
Palladium didn’t do much of anything during most of the Far East trading session on their Tuesday, but began to head higher minutes before the afternoon gold fix in Shanghai. That quiet rally ended at 1 p.m. in New York — and about forty-five minutes later it was sold quietly lower until 5:00 p.m. EDT. Platinum finished the day at $1,473 spot, up 12 dollars on the day — and well of its high tick.
The dollar index closed very late on Monday afternoon in New York at 98.35 — and opened up 1 basis point once trading commenced around 7:45 p.m. on Monday evening, which was 7:45 a.m. China Standard Time on their Tuesday morning. It edged quietly lower from that juncture — and its low tick in Far East trading appeared to come at around 11:25 a.m. CST. It began to crawl very quietly and very unevenly higher until its 98.45 high tick was set at 9:45 a.m. in New York. It was mostly down hill from there until the 98.12 low tick was set around 2:10 p.m. EDT — and it chopped very quietly and somewhat erratically sideways until trading ended at 5:00 p.m. The dollar index finished the Tuesday session at 98.19…down 16 basis points from Monday’s close.
Once again there was no discernible correlation between what the currencies were doing — and what was happening with silver and gold prices.
Here’s the DXY chart…courtesy of Bloomberg as always. Click to enlarge.
And here’s the 6-month U.S. dollar index chart…thanks to the folks over at the stockcharts.com Internet site. The delta between its close…98.06…and the close on the DXY chart above, was 13 basis points on Tuesday. Click to enlarge as well.
The gold stocks gapped up about a percent at the open in New York on Tuesday morning — and then rallied quietly until the dollar index stopped falling around 2:10 p.m. EDT. Shortly after that they sold off a bit before trading quietly sideways until trading ended at 4:00 p.m. EDT. The HUI closed higher by 3.09 percent.
The silver equities also gapped up a bit at the open — and then chopped quietly sideways until 11 a.m. EDT. At that point the began to head higher — and their price path followed the price activity in the gold shares very closely. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 2.34 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, updated with Tuesday’s doji. Click to enlarge as well.
The CME Daily Delivery Report showed that 114 gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.
In gold, of the three short/issuers in total, the two largest were International F.C. Stone and Advantage, with 64 and 48 contracts out of their respective client accounts. There were six long/stoppers in total — and the four biggest were Australia’s Macquarie Futures with 54 contracts for its own account…JPMorgan with 28 for its client account… and Advantage and International F.C. Stone with 18 and 11 contracts for their respective client accounts as well.
In silver, the sole short/issuer was ADM — and Advantage and JPMorgan picked up 2 and 1 contracts for their respective client accounts.
The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Tuesday trading session showed that gold open interest in August rose by 133 contracts, leaving 894 still around, minus the 114 mentioned a couple of paragraphs ago. Monday’s Daily Delivery Report showed that 118 gold contracts were actually posted for delivery today, so that means that 133+118=251 more gold contracts just got added to August. Silver o.i. in August rose by 3 contracts, leaving 5 still open, minus the 3 contracts mentioned a few paragraphs ago. Monday’s Daily Delivery Report showed that zero silver contracts were posted for delivery today, so that means that 3 more silver contracts were just added to the August delivery month. And, without doubt, those are the same three contracts that are posted for delivery on Thursday as per the above Daily Delivery Report.
There was a deposit in GLD, as an authorized participant added 56,578 troy ounces. There were no reported changes in SLV.
In the other silver ETFs on Planet Earth on Tuesday, there was very chunky 4,281,597 troy ounces added to SIVR…along with 147,500 troy ounces of gold in all the gold ETFs…and that includes the 16,075 troy ounces deposited in the COMEX warehouses I mention two paragraphs further down.
There was a sales report from the U.S. Mint on Tuesday. They sold 3,000 troy ounces of gold eagles — 457,000 silver eagles — and 4,500 of those 5-ounce silver ‘America the Beautiful’ coins…22,500 troy ounces net.
There was some activity in gold over at the COMEX-approved depositories on Monday. There was 16,075.000 troy ounces/500 kilobars [SGE kilobar weight] received over at Brink’s, Inc. — and 160.750 troy ounces/5 kilobars [U.K./U.S. kilobar weight[ shipped out of Manfra, Tordella & Brookes, Inc. The link to this is here.
There was also activity in silver. There was one truckload…600,213 troy ounces…received at CNT — and that was all the ‘in’ activity there was. In the ‘out’ category, there was 641,013 troy ounces shipped out. The lion’s share, one truckload…600,013 troy ounces…departed Canada’s Scotiabank. Another 39,912 troy ounces left the Loomis International depository — and the remaining 1,968 troy ounces was shipped out of Delaware. The link to all this is here.
There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday. They reported received 500 of them — and shipped out 255. All this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Since the 20th of the month fell on a week day this month, the good folks over at The Central Bank of the Russian Federation updated their website with the July’s data. It showed that they added 300,000 troy ounces of gold to their reserves during the month. That brings their total reserves up to 71.3 million troy ounces/2,218 metric tonnes. Here’s Nick Laird’s most excellent chart, updated with that data. Click to enlarge.
I don’t have all that many stories/articles for you today.
The big event this week is the Federal Reserve meeting in Jackson Hole.
That is probably what is behind the rally of the last few days; big traders are front-running the Fed.
Everybody thinks the Fed largely controls the U.S. economy and stock market. And everybody thinks cutting rates is good for both. And everybody knows Jerome Powell is not going to disappoint them.
The only argument, led by the president of the U.S. himself, is over how much cutting the Fed should do. Here’s POTUS:
“The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well. If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!”
Gosh. Is it that simple?
All this time, we’ve thought of an economy as a complex organism… responding to billions of inputs – prices, culture, innovations, preferences, weather… everything.
This commentary from Bill showed up on the bonnerandpartners.com Internet site early on Tuesday morning EDT — and another link to it is here. Gregory Mannarino‘s 16-minute rant after the Tuesday market close is linked here. — and it’s definitely worth your time.
Goldman Sachs and JPMorgan Have Flagrantly Flaunted the Volcker Rule for Nine Years: Now It’s to Be Gutted by Federal Regulators
Two of Wall Street’s crony regulators announced today that they are going to “simplify” the Volcker Rule’s ban on proprietary trading at Wall Street banks, providing another big win for Wall Street and another big nightmare for Main Street.
The financial crash on Wall Street in 2008 was the deepest economic upheaval in the U.S. since the Great Depression. Millions of honest, hardworking Americans lost their jobs, and then their homes, as a result of the economic collapse. Many of these Americans have yet to fully recover financially after more than a decade has passed.
The promise of the Obama administration was that its Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law in 2010 would put an end to the reckless gambling casino on Wall Street that had brought on the collapse.
One of the key reforms of the Act was Section 619, commonly known as the Volcker Rule after former Federal Reserve Chairman, Paul Volcker, who headed President Obama’s Economic Recovery Advisory Board. Volcker correctly believed that the proprietary trading (making bets for the house) of the Wall Street banks dramatically deepened the financial crisis and forced the U.S. taxpayer and the Federal Reserve to bail them out with astronomical sums of money.
The Volcker Rule was meant to serve as a substitute for full restoration of the Glass-Steagall Act of 1933 which made it illegal for banks holding Federally-insured deposits to also speculate in stocks or own stock trading firms. The Glass-Steagall Act kept the U.S. financial system safe for 66 years until its repeal in 1999 under the Wall Street-friendly Clinton administration. It took just nine years after the repeal of the Glass-Steagall Act for Wall Street to blow itself up in a replay of 1929. Going into the crisis of 2008, the biggest speculating investment banks on Wall Street had merged with the largest Federally-insured commercial banks in the U.S. – a clear recipe for disaster which remains as dangerous today as it was in 2008.
This alarming, but entirely surprising commentary appeared on the wallstreetonparade.com Internet site on Monday sometime — and it’s something I found on the gata.org Internet site. Another link to it is here. Gregory Mannarino has something to say about this in a very short post headlined “MASSIVE Win For Wall St…We Lose” — and it’s worth reading. [This change doesn’t come into effect until January 1, 2020 – Ed]
The German government is getting ready to act to shore up Europe’s largest economy, preparing fiscal stimulus measures that could be triggered by a deep recession, according to two people with direct knowledge of the matter.
The program would be designed to bolster the domestic economy and consumer spending to prevent large-scale unemployment, said the people who asked not to be identified because the discussions are private. Similar to bonuses granted in the 2009 crisis to prod Germans to buy new cars, the government is studying incentives to improve energy efficiency of homes, promote short-term hiring and boost income through social welfare, the people said.
Signs are mounting that Germany’s rigid adherence to its balanced-budget policy is softening. On Sunday, Finance Minister Olaf Scholz suggested the government would aim to muster €50 billion (US$55 billion) of extra spending in case of an economic crisis. Last week, Chancellor Angela Merkel said the economy is “heading into a difficult phase” and that her government will react “depending on the situation.”
The hurdles for a stimulus program remain high. The government requires the lower house of parliament to declare a crisis so it can issue debt beyond the normal guidelines allowed during a recession. Without a sense of wide-spread malaise that approval could be difficult to justify, and Germany is still officially predicting an economic recovery before the end of the year.
This news item was posted on the bnnbloomberg.com Internet site on Monday sometime — and I found it in yesterday’s edition of the King Report. Another link to it is here.
Just days after Trump for the first time linked the ongoing Hong Kong protests with his assessment of the U.S.-China trade war, Beijing has issued an ultimatum to the White House: the United States should not link trade negotiations with China to the Hong Kong protests, denouncing such a move as a miscalculation.
In a short commentary published by Communist Party mouthpiece People’s Daily late on Monday, the author said that events in Hong Kong were the internal affairs of China, and linking them with trade negotiations was a “dirty” aim.
“Making a fuss about Hong Kong will not be helpful to economic and trade negotiations between China and the U.S.,” the commentary said. “They would be naive in thinking China would make concessions if they played the Hong Kong card” the oped cautioned.
Chinese diplomatic observers also said Beijing considered the worsening situation in Hong Kong a sovereignty issue and would be highly unlikely to cave to Washington’s pressure.
The remarks followed a statement by U.S. Vice-President Mike Pence on Monday which reiterated President Donald Trump’s demand to tie the largely stalled trade talks with Hong Kong’s deepening crisis, a day after hundreds of thousands of people marched peacefully in defiance of repeated intimidation from Beijing. In an address at the Detroit Economic Club on Monday, Pence said the Trump administration would continue to urge Beijing to resolve differences with the protesters peacefully and warned that it would be harder for Washington to make a trade deal with Beijing if there was violence in the former British territory. Separately, Mike Pompeo said that China should allow Hong Kong protesters the freedom to express themselves, in what China saw as clear interference in its own internal matters.
“Because of the trade war, the U.S. has lost the ability to impose additional pressure on China,” it said.
This Zero Hedge article appeared on their Internet site at 9:15 a.m. on Tuesday morning EDT — and I thank Larry Galearis for sending it along. Another link to it is here.
It’s always amusing to observe how U.S. think tanks, such as CIA outlet Stratfor, constantly celebrate success in undermining Russia via this strategy.
Hybrid War on Russia was engineered in 2014 on two fronts: ordering the Persian Gulf petro-poodles to crash the oil price while imposing sanctions after Russia opposed the coup – actually a color revolution – in Kiev. Hybrid War was engineered at a Deep State level as a tool to try to smash Russia’s outstanding recovery since Vladimir Putin was elected to the presidency in 2000. The undisguised Zbigniew “Grand Chessboard” Brzezinski-style goal with the Kiev coup was to draw Russia into an Afghan-style partisan war.
Of course, Russia suffered economically – but then slowly recovered, diversifying production and boosting its agricultural capacity. Yet hybrid warfare always ensures that once economic hardship is engineered, a government necessarily becomes unpopular. Then fakes and traitors are unleashed: Alexei Navalny in Russia, or “protests” in Hong Kong that the Deep State dreams would lead to an uprising in Beijing.
A small, radical nucleus of agents provocateurs in Hong Kong, using copycat methods from the Maidan in Kiev, sticks to a single-minded road map: force Beijing to commit a Tiananmen 2.0, thus elevating the all-out demonization of China to the next level.
The inevitable consequence, according to the privileged scenario, would be the “West”, as well as vast sectors of the Global South, boycotting the New Silk Roads, or Belt and Road Initiative, a complex, multi-layered strategy of economic integration that has expanded well beyond Eurasia.
This very worthwhile commentary by Pepe put in an appearance on thesaker.is Internet site on Tuesday morning sometime — and it comes to us courtesy of U.K. reader Tariq Khan. Another link to it is here.
There was a time when the merest mention of gold manipulation in “reputable” media was enough to have one branded a perpetual conspiracy theorist with a tinfoil farm out back. That was roughly coincident with a time when Libor, FX, mortgage, and bond market manipulation was also considered unthinkable, when High Frequency Traders were believed to “provide liquidity“, when the stock market was said to not be manipulated by the Fed, and when the ever-confused media, always eager to take “complicated” financial concepts at the face value set by a self-serving establishment, never dared to question anything.
All that changed last November when a former JPMorgan precious-metals trader admitted he engaged in a six-year spoofing scheme that defrauded investors in gold, silver, platinum, and palladium futures contracts. John Edmonds, then 36, pled guilty under seal in the District of Connecticut to commodities fraud, conspiracy to commit wire fraud, commodities price manipulation, and spoofing. As FBI Assistant Director in Charge Sweeney explained that “with his guilty plea, Edmonds admitted he intended to introduce materially false and misleading information into the commodities markets.”
“The Criminal Division is committed to prosecuting those who undermine the investing public’s trust in the integrity of our commodities markets through spoofing or any other illegal conduct.”
“By conspiring with his trading partners to place spoof orders, he blatantly attempted to profit off of an unfair market that he helped create. The FBI will continue to work with our partners to insure financial markets remain a level playing field for all investors.”
Then, one month ago, Corey Flaum, who worked as a trader at Bear Stearns and Bank of Nova Scotia, also admitted to precious metals manipulation, saying he placed thousands of bogus orders for futures contracts over a nine-year period.
Now it’s #3.
Christiaan Trunz, another former JPMorgan metals trader, pleaded guilty on Tuesday to conspiracy and to manipulating prices in the precious-metals market as part of the U.S. government’s continuing crackdown on bogus spoofing trades.
This worthwhile Zero Hedge article put in an appearance on their website at 1:35 p.m. EDT on Tuesday afternoon — and the first reader through the door with it was Jack Watts. Another link to it is here. There was an Financial Times article about this posted on the gata.org Internet site yesterday — and it’s headlined “Another JPMorgan trader confesses to metals market manipulation, implicates superiors“.
Swiss gold exports to the U.K. rose to the highest in six years, driven by a surge in demand for exchange-traded funds.
Switzerland shipped 90.7 tons of bullion to the U.K. in July, the most since September 2012, according to data on the website of Swiss Federal Customs Administration. That compares with just 7.4 tons in June.
Gold is heading to London because the city is a global center for precious metal storage and boasts a vast network of vaults within the M25 motorway that surrounds the metropolitan area. Rising gold prices are driving demand for investment products and the bullion that underlies those funds.
“The vast majority of ETFs have their vaults in London,” said Adrian Ash, research director at BullionVault Ltd.
Gold prices have surged to a six-year high, surpassing $1,500 an ounce, because of worries about weakening global economic growth and the fallout from the U.S.-China trade war. Holdings in bullion-backed ETFs now stand at the highest since March 2013.
The above five paragraphs are all there is to this brief 1-chart Bloomberg story that showed up on their Internet site at 6:28 a.m. PDT on Tuesday morning. I found it in a GATA dispatch — and another link to it is here.
Russia’s gold reserves rose by 9 tonnes in July, increasing the value of the bullion holdings by 1.64% to a hefty $101.923 billion (€92 billion), as of August 1.
Official figures show gold now accounts for 19.6% of the total reserves of the Russian Federation. July’s gold purchases brought the country’s gold reserves to a total of 2,217.68 tonnes (71.3 million ounces), and increased by 0.42% in one month, according to the latest data released by the Central Bank of Russia (CBR).
This is less than the 18 tons of the precious metal purchased in June, but still means Russia is on course for de-dollarization of its economy and remains committed to gold purchases due to U.S. sanctions.
From January to July, the regulator purchased a total of 105.75 tonnes of monetary gold. The biggest gold splurge came in February, when the nation’s gold reserves rose by more than 31 tonnes.
This brief photo-filled rt.com gold-related news item was posted on their website at 3:16 a.m. Moscow time on their Tuesday afternoon, which was 8:16 a.m. EDT in New York. I thank Jack Watts for pointing it out — and another link to it is here.
The PHOTOS and the FUNNIES
Less than a 2-minute drive from the Hope Aerodrome [YHE] is the Silver Skagit [mostly dirt/gravel] Road that leads up to Silver Lake Provincial Park, which is nestled in a stunning mountain setting at the north end of the Skagit Valley. Here’s the first three photos from that side trip. Click to enlarge.
“With regards to precious metals, there’s no price discovery whatsoever. The market is completely [rigged]. How can it be real if the [underlying] hard asset derives value from the derivative. Have you ever heard of such a thing in your entire life?” — Gregory Mannarino: August 18, 2019
I was more than happy to see both gold and silver up on the day…along with their associated equities…but it’s still a ‘wait and see’ game as far as the intentions of JPMorgan et al. One day’s worth of trading is not a trend.
However, with options and future expiry for the October delivery month coming up next week…particularly in silver…there’s still the possibility that ‘da boyz’ could whack the precious metals before then. It’s the ‘can they, or will they?’ that remains unknown. Both gold and silver still remain overbought — and miles above either of their respective 50 and 200-day moving averages.
Here are the 6-month charts for all four precious metals, plus copper and WTIC — and not to be forgotten once again is the fact that whatever price activity occurred after the COMEX close, doesn’t appear on their respective Tuesday dojis. Click to enlarge.
And as I type this paragraph, the London open is less than ten minutes away — and I see that quiet price pressure began in gold the moment that trading began at 6:00 p.m. EDT in New York on Tuesday evening — and that lasted until shortly after 11 a.m. China Standard Time on their Wednesday morning — and it then chopped rather aimlessly sideways until fifteen minutes before the London open. It was sold sharply lower at that juncture — and is down $7.20 the ounce currently. Ditto for silver — and it’s now down 13 cents. It was almost the same for platinum, as it’s lower by 4 bucks — and palladium is down 5 dollars as Zurich opens.
Net HFT gold volume is pretty light so far at a bit over 35,000 contracts — and there’s around 1,760 contracts worth of roll-over/switch volume out on top of that. Net HFT silver volume is around 7,000 contracts — and there’s already 1,952 contracts worth of roll-over/switch volume out of September and into future months…mostly December.
The dollar index opened down a couple of basis points once trading commenced at 7:45 p.m. EDT in New York on Tuesday evening, which was 7:45 a.m. China Standard Time on their Wednesday morning. It rallied back above unchanged for the next hour and a bit, before rolling over to its current 97.95 low tick of the day around 10:15 a.m. CST. It crept back into positive territory from there — and as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich, it’s up 7 basis points.
Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report. Just looking at the last five dojis of the current reporting week, I expect that there might be further improvements in the commercial net short positions in both precious metals…but not a lot.
However, having said that, we’ve had two big positive surprises in silver in the last two reporting weeks, so I plead mea culpa if I’m way off the mark. Ted is the real authority on the COT Report — and I know he’ll have something to say about it in his mid-week commentary to his paying subscribers this afternoon. I’ll ‘borrow’ a few sentences for my Friday missive.
And as I post today’s efforts on the website at 4:02 a.m. EDT, I note that the gold price is now down $10.50 an ounce — and silver is down 17 cents as the first hour of London trading ends. Palladium is now lower by 8 bucks…and palladium is down 4 dollars as the first hour of Zurich trading draws to a close.
Gross gold volume has jumped up to around 62,000 contracts — and minus roll-over/switch volume, net HFT gold volume is about 55,500 contracts. Net HFT silver volume is now up to a bit under 8,700 contracts — and there’s 2,754 contracts worth of roll-over/switch volume out of September — and into future months.
The dollar index made it up to the 98.30 mark…up 11 basis points…by a very few minutes after the 8 a.m. London open — and is off that by a bit now — and up 8 basis points as of 8:45 a.m. in London/9:45 a.m. in Zurich.
The Fed pow-wow at Jackson Hole gets underway tomorrow — and runs through until Friday. Without doubt there will be news that moves the equity and precious metal markets. It just remains to be seen in what directions they will be.
I’m done for the day — and I’ll see you here tomorrow.