03 September 2019 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price blasted skywards the moment that trading began at 6:00 p.m. EDT on Sunday evening in New York — and was up at least 15 bucks within minutes. ‘Da boyz; showed up at that juncture — and had it back to the unchanged mark by around 8:30 a.m. in London. It crawled very unevenly higher until minutes before 1 p.m. — and moments later, the market closed.
The high and low ticks were recorded by the CME Group as $1,536.60 and $1,521.70 in the October contract — and $1,544.50 and $1,528.00 in December.
Gold finished the Labour Day holiday shortened session at $1,528.50 spot, up $8.90 from Friday’s close. I got home so late yesterday that I wasn’t able to pick up the volume figures for the Monday trading session from the CME’s website before the market opened for the Tuesday trading session at 6:00 p.m. EDT yesterday evening. So that data will be lumped together into the Tuesday session, which I’ll have for you tomorrow.
JPMorgan et al. handled the silver price in a similar manner as the gold price after its spike up in New York on Sunday evening. Its low tick was set a minute or two before 10 a.m. in Shanghai on their Monday morning, which it was forced to revisit around 8:40 a.m. in London. It rallied into the noon BST silver fix over there — and then was sold a bit lower into the 1:00 p.m. EDT close.
The high and low ticks in this precious metal were reported as $18.685 and $18.365 in the December contract…a 32 cent intraday move.
Silver was closed on Monday at $18.43 spot, up 9 cents from Friday. I don’t have silver’s Monday volume numbers for the same reason I don’t have gold’s.
Platinum was up by 5 bucks or so by 7 a.m. China Standard Time on their Monday morning — and from there didn’t do much of anything until a few minutes before 11 a.m. in Zurich. It was sold back below unchanged by a dollar or so in very short order after that — and it chopped very unevenly sideways until trading ended at 1:00 p.m. EDT. Platinum was closed at $929 spot, down 2 dollars on the day.
Palladium’s spike higher at the 6:00 p.m. open in New York was hammered flat within minutes — and from that point it began to creep very quietly higher, with the high of the day coming at the Zurich open on their Monday morning. It was sold quietly lower until 9 a.m. EDT, but was back above unchanged by a dollar or two a couple of hours later — and it didn’t do much of anything after that. Palladium finished the Monday session at $1,518 spot, up a dollar from Friday’s close.
The dollar index closed very late on Friday afternoon in New York at 98.51…and finished the Monday session at 98.92…up 41 basis points from Friday’s close. I don’t have a chart for you on this…as I wasn’t back in Merritt when the Tuesday trading day commenced around 7:45 p.m. EDT in New York on Monday evening.
Even though the dollar index had a very decent ‘rally’ on Monday, it certainly didn’t prevent silver and gold from closing higher as well.
With the U.S. closed for the Labour Day long weekend, I don’t have any charts or data of any kind that would normally appear in this spot. Things will return to normal with tomorrow’s column.
Here are four charts that Nick Laird passed around on the weekend. The first two show show U.S. Mint Gold and Silver coins sales, updated with August’s data. The gold sales include both gold eagle and gold buffalo sales. For the month, the mint sold 7,500 troy ounces of gold coins in total. You can tell at a glance just how abysmal sales have been for the last while. Click to enlarge.
And here the U.S. silver coin mint sales chart, updated with August’s numbers as well. This data includes sales of both silver eagles — and the 5-ounce ‘American the Beautiful’ coin. The mint, in aggregate, sold 1,040,000 troy ounces of silver in those two forms during August. Click to enlarge.
And here are the same two charts for The Perth Mint…updated with August’s sales data as well. They sold 21,766 troy ounces of gold coins, plus 1.17 million troy ounces of silver coins. Click to enlarge for both.
I have an average number of stories/articles/commentary for you that arrived in my in-box while I was out of town on the weekend.
Today is Labor Day.
Most of the world pays homage to its sweating, busing, trucking classes, its poor huddled masses… yearning for a cushier seat and a better deal… on May 1.
But President Grover Cleveland chose the first Monday in September.
Of great interest to people in America on Labor Day – as indicated by the newspaper headlines – is how much the laborers earn.
No one – or almost no one – writing in the editorial pages works at McDonald’s or earns the minimum wage. But practically every one of them has an opinion about how much people with low wages should earn.
A “living wage” is what they say they want. Thirty thousand dollars a year is the amount we’ve seen discussed.
Of course, a national living wage is absurd. It costs far more to live in Manhattan than it does in the Ozarks. And it is far less expensive to live with Mom and Dad than to have a place of one’s own.
But we are not so much concerned with the practical details as with the theory.
This commentary from Bill was posted on the bonnerandpartners.com Internet site early on Monday morning EDT — and another link to it is here.
The new tariffs are a sharp escalation in the bruising trade war, and could cost households $800 a year.
The move is the first phase of U.S. President Donald Trump’s latest plan to place 15% duties on $300bn of Chinese imports by the end of the year.
In response, Beijing began to introduce measures targeting $75bn worth of U.S. goods.
The measures included a 5% tariff on U.S. crude oil, the first time fuel has been hit in the trade battle between the world’s two largest economies.
What was initially a dispute over China’s allegedly unfair trade practices is increasingly seen as a geopolitical power struggle.
Which is exactly what it is, dear reader. This news item was posted on the bbc.com Internet site on Monday morning BST sometime — and it’s the first of two in a row from Swedish reader Patrik Ekdahl. Another link to it is here. The Zero Hedge spin on this, courtesy of Brad Robertson, is headlined “U.S. Slaps New Tariffs on China; One Minute Later China Retaliates”
In an official bulletin issued on Sunday, the government said that it was necessary to adopt “a series of extraordinary measures to ensure the normal functioning of the economy, to sustain the level of activity and employment and protect the consumers“.
The central bank said the measures were intended to “maintain currency stability“.
It also said that while individuals can continue to buy U.S. dollars, they will need to seek permission to purchase more than US$10,000 (£8,223.50) a month.
The measures will apply until the end of this year.
Argentina has been struggling with a financial crisis, which was exacerbated by the president’s defeat in a recent primary poll.
The peso fell to a record low last month after the vote showed that the business-friendly government of President Mauricio Macri is likely to be ousted in elections in October.
This interesting commentary appeared on the bbc.com Internet site on Monday morning BST sometime — and I thank Patrik Ekdahl for pointing it out. Another link to it is here.
Bankers in Denmark aren’t finding much love in the country’s halls of power.
On Monday, the central bank roundly rejected finance industry entreaties to ease the burden of negative interest rates. At the same time, the Danish minister in charge of financial legislation said he thinks banks “clearly” face a challenge in proving they deserve people’s trust after multiple scandals.
Simon Kollerup, the business minister, says he doesn’t “have a problem with financial companies earning money.” But after Danske Bank’s Estonian laundromat affair and a separate scandal in which the lender overcharged retail investors, the minister says that “one of the most important tasks” facing bankers today is “to restore confidence.” He wants to make sure banks “live up to their social responsibilities. There have been too many examples where they haven’t done so.”
The scandals at Danske, Denmark’s biggest bank, have already cost many of its former top executives their jobs, and triggered multiple criminal investigations. Meanwhile, investors have turned their backs on the bank, driving its stock down more than 30% this year after losses of almost 50% in 2018.
But Denmark’s long-term negative interest rates may prove a bigger blow to the financial industry than its bad reputation. The central bank, which uses monetary policy to keep the krone pegged to the euro, first cut its main rate below zero in mid-2012. One lender now predicts up to eight more years of life below zero.
A few Danish banks have recently started passing on the cost of negative interest rates to their richest depositors, though the step remains controversial and Danske has guaranteed its retail clients they won’t be affected.
This Bloomberg article appeared on their website at 4:30 p.m. Pacific Daylight Time on Monday afternoon — and I thank Patrik Ekdahl for dropping it in my in-box in the very wee hours of Tuesday morning EDT. Another link to it is here.
The developed world is on the brink of a financial, economic, social and political crisis — Donald Amstad…Aberdeen Standard Investments
Developed economies are at a crisis point, the powers of unconventional monetary policy are exhausted, and markets are just beginning to wake up to this. That’s the sobering assessment on the current state of the global economy delivered by Donald Amstad from Aberdeen Standard Investments
His view is that when developed markets finally crack, there will be serious implications for every asset class and economy. However, those economies where monetary policy remains relatively ‘normal’ will be those best placed to respond. In his view, the emerging markets have more levers to pull when compared to developed markets, where the money printing taps have been turned on and interest rate settings are near zero.
The irony is that during the Asian crisis it was the IMF and central bankers from developed markets that convinced the emerging market governments not to print money and ‘take their medicine.’ Amstad says that this was a cathartic process for these economies, and they are now looking on in bewilderment as the West has resorts to money printing of an unprecedented scale.
“In the emerging world, economic and monetary policy is broadly orthodox. It is the West that is running unorthodox economic and monetary policy and it is the West, ironically, that is now on the cliff edge.”
“If they do come out with another bout of QE then banks are going to go bust, pension funds are going to go bust, insurance companies are going to go bust. And if it pushes the stock market back up again, then the 99.9% are probably not going to tolerate more handouts. That leads to social and political instability.”
“I am very worried about the West. I think it is verging on catastrophe — and what is interesting of course, is that the markets are just beginning to wake up to this.”
This extremely worthwhile 18-minute commentary from Amstad is a must watch in my opinion. It was posted on the youtube.com Internet site on August 27 sometime — and my thanks go out to Roy Stephens for sharing it with us. Another link to it is here.
As regular readers of my missives will know, I enthusiastically recommend the concept of internationalisation – the diversification into multiple jurisdictions to avoid being the possession of any one government.
Recently, I was asked if this didn’t make an individual the possession of several governments, instead of just one, and the answer is no.
Most all governments understand that, if they don’t have total control of you, it’s unwise to squeeze you too hard. If, for example, you were to live multi-nationally – that is, if you lived as a guest or part- time resident in one or more countries – you’d actually be treated better than those who are citizens. In order to attract you, the local government would very likely offer you tax breaks plus benefits the average citizen does not receive.
They’re not equally generous to their own citizens, because they don’t have to be. They already own them.
If you were to fully diversify yourself – have a passport from one country, live in another, gain your income in a third and do your banking in a fourth – you’d have even greater ownership of yourself.
If you were to create an ability to physically live in multiple countries each year, you’d be in the catbird seat, as you could avoid becoming a casualty in any one country.
This interesting commentary from Jeff put in an appearance on the internationalman.com Internet site on Monday — and another link to it is here.
After 18 years of war in Afghanistan– America’s longest – U.S. and Taliban negotiators are said to be close to an agreement that may see the withdrawal of many of the 14,000 U.S. soldiers in that remote nation.
That’s the official version. President Donald Trump keeps changing his mind about the number of U.S. troops to be withdrawn. The latest version from the White House has 5,000 U.S. troops remaining in Afghanistan as a permanent garrison to guard the major air bases at Bagram and Kandahar and protect the U.S.-installed puppet Afghan government in Kabul.
Without U.S. troops to defend it, the Afghan regime of Ashraf Ghani would be swept away in days. Even Trump has admitted this. Keeping the Ghani regime safe in Kabul would at least provide a fig leaf to claim the US-backed government was still in charge.
The pro-war right in Washington is crying to high heaven at this prospect. Senators and congressmen who never heard a shot fired in anger are ready to fight to the last 18-year-old American soldier — and keep the trillion-dollar war sputtering on.
To date, 2,426 American soldiers have been killed in combat in Afghanistan, with some 20,000 wounded, many of them permanently maimed. Thousands of U.S.-paid mercenaries and foreign troops dragooned into this conflict have been killed or wounded. Heavy Afghan civilian casualties, mostly caused by air strikes, are covered up by U.S. occupation authorities. Without 24/7 US air support, American forces would have long ago been driven from Afghanistan, as were their British and Soviet predecessors.
This very worthwhile commentary from Eric showed up on the unz.com Internet site on Saturday — and it comes to us courtesy of Larry Galearis. Another link to it is here.
Indian custom officials have seized 1,197.7 kg of smuggled gold in the April-June quarter, an increase of 23.2% compared with the same period a year ago, a government official said on Monday.
The illegal trade could rise further in coming months as India, the world’s second biggest gold consumer, raised an import tax on gold by 2.5 percentage points to 12.5% in July’s federal budget, effectively increasing smugglers’ margins, industry officials told Reuters.
“The duty difference has been encouraging people to smuggle in gold from the Middle-East,” an official with the Directorate of Revenue Intelligence (DRI), who declined to be named, said.
Gold smuggling has also boosted illegal forex transactions used to finance smuggled gold, the official said.
Gold smuggling has been rife since 2013 when India raised import duties on the metal to 10% in an effort to curb demand to reduce the country’s current account deficit.
This gold-related Reuters story, filed from Mumbai, appeared on their Internet site at 4:50 a.m. EDT on Monday morning — and it’s something that I found over at Sharps Pixley. Another link to it is here.
Investors are going for gold in a big way. Inflows into bullion-backed exchange-traded funds topped 100 tonnes in August to hit the highest since February 2013 as the trade war worsened, risk assets took a knock, and central banks signaled looser monetary policy.
Holdings rose 101.9 tons, bringing total known assets to 2,453.4 tons as of Friday, according to data compiled by Bloomberg. It was the third straight monthly increase after the addition of a combined 154.1 tons in June and July. Click to enlarge.
Bullion’s been on a tear, gaining 19% this year, as the global outlook worsened on the stand-off between the U.S. and China. Central bank-buying has provided another layer of support, and Goldman Sachs Group Inc. says prices are likely to advance further as official purchases continue and demand for ETFs rises.
This tiny 1-chart Bloomberg article put in an appearance on their Internet site at 9:05 p.m. PDT on Sunday evening — and was updated about four hours later. The ‘though police’ at Bloomberg have now changed the headline to read…”Investors Rush Into Gold” I found it in a GATA dispatch — and another link to it is here.
The PHOTOS and the FUNNIES
Here are three shots that I took in from the parking lot of a local wine and dine place in Merritt on June 16. The broken rock retaining wall behind the establishment was a perfect spot for Mom yellow-bellied marmot to raise her young ones. She had two — and one of them appears in the second photo. The third shot, about twenty meters/65 feet from the first two, is of a patch of blanket flower…with a side of yarrow on the left. Click to enlarge for all three.
The dollar index ‘rally’ on Monday obviously had little if any influence on precious metal prices…as both gold and silver closed higher on the day. But it should be equally obvious that ‘da boyz’ are still ever vigilant, as they showed up in force at the 6:00 p.m. open in New York on Sunday evening. If they hadn’t…then precious metal prices would have been at the moon by now — and the Big 8 commercial traders…sans JPMorgan…would have been looking bankruptcy in the eye.
With the U.S. shut for Labour Day yesterday, there are no 6-month charts from the folks over at the stockcharts.com Internet site.
And as I type this paragraph, the London open is less than a minute away — and I note that both gold and silver were sold lower the moment that trading began at 6:00 p.m. EDT in New York on Monday evening. Their respective lows were printed just minutes after 11 a.m. China Standard Time on their Tuesday morning — and they have been struggling quietly higher since. Both are off their current 2 p.m. CST high ticks by a by a bit, with gold down $2.70 the ounce — and silver is now back at unchanged as London opens. Platinum has been struggling to rally — and is in the plus column by 5 bucks at the moment. Palladium has been doing the same — and is higher by 2 dollars as Zurich opens.
Gross gold volume for Monday and Tuesday combined is around 202,000 contracts — and minus roll-over/switch volume, net HFT gold volume is 179,500 contracts. Net HFT silver volume for Monday and Tuesday combined is a bit over 53,000 contracts — and there’s 1,456 contracts worth of roll-over/switch volume on top of that.
The dollar index closed at 98.92 at 5:30 p.m. EDT on Monday afternoon — and opened up 16 basis points once trading commenced at around 7:45 p.m. EDT on Monday evening in New York. The current 99.33 high tick was set a minute or so before 11 a.m. in Shanghai — and it has edged unevenly lower since — and is currently up 38 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.
As I mentioned at the close of Saturday’s missive, because of the long weekend, I was going to keep today’s column as short as I could make it — and I am. I’m not staying up for another hour to report on the first hour of London and Zurich trading — and will end it here at 3:05 a.m. EDT. Yesterday was a very long driving day — and I’m off to bed. But tomorrow’s column will be back to normal — and I’ll see you here then.