Record Volumes in Gold & Silver Yesterday

09 January 2020 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price took off higher on the ‘war’ news the moment that trading began at 6:00 p.m. EST in New York on Tuesday evening.  The price was capped and turned lower around 8:20 a.m. China Standard Time on their Wednesday morning.  That sell-off lasted until 11:00 a.m. CST — and the price edged a bit higher until 3 a.m. over there.  ‘Da Boyz’ reappeared — and it was sold mostly steadily lower until minutes after 2:45 p.m. in after-hours trading in New York.  Its rally attempt after that wasn’t allowed to get far.

The high and low ticks in gold were recorded by the CME Group as $1,613.30 and $1,553.40 in the February contract…an intraday move of sixty bucks.

Gold was closed in New York on Wednesday at $1,556.00 spot, down $18.20 from Tuesday.  Net volume was pretty much the highest number I’ve ever seen at a bit over 740,500 contracts — and there was a bit under 82,000 contracts worth of roll-over/switch volume on top of that.  JPMorgan et al. were certainly busy.

The price action in silver was about the same, except its rally was much more anemic — and there were some obvious price shenanigans going on at precisely 9:00 a.m. CST in Shanghai on their Wednesday morning.  ‘Da boyz’ showed up in silver at 3 p.m. CST as well — and you know the rest.

The high and low ticks in silver were reported as $18.895 and $18.085 spot in the March contract…and intraday move of 81 cents.

Silver was closed in New York yesterday at $18.07 spot, down 30.5 cents on the day.  Net volume was the highest I can recall seeing at a bit under 172,000 contracts — and there was about 9,500 contracts worth of roll-over/switch volume in this precious metal.  Wow!

Platinum also rallied a tad on the Middle East news, but was sold quietly back to unchanged by 3 p.m. CST on their Wednesday afternoon.  From there it was sold lower until around 10:30 a.m. in Zurich — and the ensuing rally from that juncture was stepped on shortly before 9 a.m. in New York.  About thirty minutes later it was sold down pretty hard — and the $950 spot low tick was set a few minutes before 2 p.m. in after-hours trading.  It wasn’t allowed to do much after that.  Platinum was closed at $951 spot, down 18 bucks on the day.

After a down/up dip of some size in morning trading in the Far East, palladium traded ruler flat from noon until 2 p.m. in Shanghai — and at that point a rally began that lasted for almost the entire rest of the Wednesday trading session.  Palladium finished the day at $2,092 spot, up 59 dollars on the day, but 27 bucks off its Kitco-reported $2,119 spot high tick.

The dollar index closed very late on Tuesday afternoon in New York at 97.01 — and then opened down about 17 basis points once trading commenced around 7:45 p.m. EST on Tuesday evening…which was 8:45 a.m. China Standard Time on their Wednesday morning.  From that point it crept very quietly and somewhat unevenly higher until around 4:55 p.m. in New York on Wednesday afternoon.  It declined a couple of basis points from there going into the 5:30 p.m. close in New York.  The dollar index finished the Wednesday session at 97.30…up 29 basis points from its close on Tuesday.

If there was any correlation between the currencies and the precious metals on Wednesday, it was only because the powers-that-be made it so starting at 3 p.m. China Standard Time when then began to lean on silver and gold prices for the second time.

Here’s the DXY chart for Wednesday, 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…97.00…and the close on the DXY chart above, was 30 basis points on Wednesday.  Click to enlarge as well.

Not surprisingly, the gold shares were sold lower the moment that trading began at 9:30 a.m. in New York — and except for a couple of rather feeble rally attempts before 1 p.m. EST, continued lower until around 2:50 p.m.  They edged a bit higher into the close from there.  The HUI closed down a chunky 4.18 percent.

The silver equities got hit in an almost identical fashion as the gold stocks — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 4.50 percent.  Click to enlarge if necessary.

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

The two worst performers were Coeur Mining and First Majestic Silver.  The former dropped 8.71 percent — and the latter by 6.44 percent.  Peñoles, surprisingly, close up 1.83 percent.

In my Tuesday column I made a comment about Coeur Mining when it got hammered for a 10 percent loss on Monday — and said there was no news that I could see.  But it turned out there was.  ‘Robert in Denver’ informed me that “On my Think or Swim platform on Live News – for CDE – “Coeur Mining Cut to Sell from Neutral by Roth Capital””  It appears that Roth Capital has a rather dubious past — and if you want to read more about this firm’s rather clouded history, the link is here.


The CME Daily Delivery Report showed that 151 gold and 23 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, there were four short/issuers in total, with the three largest being JPMorgan, Advantage and R.J. O’Brien…with 95, 42 and 12 contracts — and all from their respective client accounts.  There were seven long/stoppers in total.  The three biggest were JPMorgan, Advantage and Marex Spectron, with 88, 26 and 11 contracts — and all of these involved their respective client accounts as well.  Tied in fourth place were Morgan Stanley and Scotia Capital/Scotiabank with 10 contracts apiece.

In silver, the two short/issuers were Advantage and ADM, with 20 and 3 contracts from their respective client accounts.  The only long/stopper that mattered was Canada’s Scotia Capital/Scotiabank with 19 contracts for its own account.  Advantage was in second spot with 3 contracts for its client account.

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 January rose by 123 contracts, leaving 180 still open, minus the 151 mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 28 gold contracts were actually posted for delivery today, so that means that 123+28=151 more gold contracts just got added to January deliveries.  Based on this number, it’s an excellent bet that those are the same 151 contracts that are out for delivery on Friday as per the above Daily Delivery Report.  Silver o.i. in January rose by 16 contracts, leaving 32 still around, minus the 23 mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 8 silver contracts were actually posted for delivery today, so that means that 16+8=24 more silver contracts were added to the January delivery month.


There was a pretty big withdrawal from GLD on Wednesday, as an authorized participant took out 301,290 troy ounces.  There were no reported changes in SLV.

In other gold and silver ETFs on Planet Earth on Wednesday…minus COMEX, GLD &SLV activity…there was a net 76,768 troy ounces of gold added — and net 11,074 troy ounces of silver was added as well.

Not surprisingly, there was nothing from the U.S. Mint.

The only activity in gold over at the COMEX-approved depositories on Tuesday was 964.500 troy ounces/30 kilobars [U.K./U.S. kilobar weight] that departed Canada’s Scotiabank.  I won’t bother linking this.

There was some activity in silver.  The ‘in’ activity consisted of one truckload…600,102 troy ounces…that was dropped off at Brink’s Inc. — and they shipped out 226,440 troy ounces as well.  The only other activity in silver was 18,046 troy ounces that departed CNT.  The link to this is here.

It was far from quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They received a whopping 8,301 kilobars — and shipped out 75.  All of this activity occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are two more charts that Nick passed around on Monday that I’ve had no room for until today.  They show gold and silver imports into India, updated with November’s numbers.  During that month they imported 62.26 tonnes/2.00 million troy ounces of gold — and 163.56 tonnes/5.26 million troy ounces of silverClick to enlarge for both.

Once again, I have a very decent number of stories/commentaries for you.


CRITICAL READS

Fed’s Balance Sheet Explodes by $413 Billion in 119 Days

On September 4, 2019, the assets on the balance sheet of the Federal Reserve stood at $3.761 trillion. As of January 1, that figure is $4,173,626,000,000. That’s an increase of $413 billion in just the past 119 days and the Fed does not seem inclined to turn off its money spigot to Wall Street anytime soon. At the rate the Fed is now going, its balance sheet is likely to eclipse the $4.5 trillion all-time high it reached in 2015 as a result of the unprecedented sums it funneled to Wall Street following the epic financial crash in 2008 and its three rounds of quantitative easing (QE) to keep interest rates low to appease Wall Street’s trading houses and their trillions of dollars in interest-rate derivative bets.

When Jamie Dimon, Chairman and CEO of JPMorgan Chase, testified to the Senate Banking Committee on June 13, 2012 about billions of dollars in derivative losses at his federally-insured bank, he had this to say about the major dangers facing his bank – the largest bank in the U.S. “There are two major risks that J.P. Morgan faced: dramatically rising interest rates and a global type of credit crisis. Those are the two biggest risks we face,” Dimon stated.

The Fed, through its open money spigot and trading arm – the New York Fed – has been a Fairy Godmother to Jamie Dimon. It has kept short-term interest rates at historic lows since 2008 and postponed the inevitable global financial crisis long enough to allow Jamie Dimon and his pals on Wall Street to become billionaires. The flip side of Jamie Dimon’s wish list has been to impoverish millions of retirees who have seen their interest income on Treasury notes and Certificates of Deposits cut in half for more than a decade and to fuel an unprecedented corporate debt bubble in the U.S. as a result of that cheap money.

This worthwhile article was posted on the wallstreetonparade.com Internet site on Wednesday sometime — and I found it on the gata.org Internet late on Wednesday morning PST.  Another link to it is hereGregory Mannarino‘s post-market close commentary for Wednesday is linked here.


Top Repo Expert Warns Fed is Now Trapped: “It Will Take Pain to Wean the Repo Market Off Easy Cash

Yesterday we reported that with the Fed’s first oversubscribed term repo in three weeks, coupled with a surge in amount of overnight repo submission, indicated that the funding situation in the repo market had again deteriorated sharply, which was odd since we are now two weeks into the new year and further away from the time when the repo market was supposedly in distress due to the year-end funding constraints.

Indeed, something appears amiss, because as Curvature Securities’ Scott Skyrm writes in his daily Repo Market Commentary note, “the total overnight and term Fed RP operations on Friday were greater than on year end! On year-end, the Fed had pumped a total of $255.95 billion into the market verses $258.9 billion on Friday.”

The problem with the broken repo market and the Fed’s respective Repo operations, similar to the problem observed with QE and the Fed’s balance sheet in general over the past decade, is that the market had gotten addicted to the easy Fed liquidity unleashed in September (via temporary repo ops), and then again in October (via permanent T-Bill purchases).

As Skyrm writes, “it’s easy to see how the Repo market can get addicted to easy cash from the Fed when the stop-out rates for the RP operations are 1.55% – behind the offered side of the market.”

But, as the repo strategist adds, as the Fed keeps injecting cash, the market gets used to it.

The problem is that stopping RP ops could spark another repo market crisis, especially with $259BN in liquidity pumped currently – more than at year end – via Repo. It also means that the Fed is now unilaterally blowing a market bubble with its repo and “NOT QE” injections, and yet the longer it does so the more impossible it becomes for the Fed to extricate itself from the liquidity pathway without causing a crash.

Or stated simply, the longer the Fed avoids pulling the repo liquidity band-aid, the bigger the market fall when (if) it finally does. The question then becomes whether Powell can keep pushing on the repo string until the November election, because a market crash in the months preceding it, especially since it will be of the Fed’s own doing, will result in a very angry president.

This 2-chart article was posted on the Zero Hedge website at 10:25 p.m. on Wednesday night EST — and another link to it is here.


Mark Carney: Central Banks Have ‘Much Less Ammunition‘ to Fight Recessions Than They Used to

Bank of England Governor Mark Carney said central banks might not be able to fight off a sharp economic downturn because their monetary policy arsenals are still depleted from the global financial crisis a decade ago, the Financial Times reported.

It’s generally true that there’s much less ammunition for all the major central banks than they previously had and I’m of the opinion that this situation will persist for some time,” Carney told the newspaper in an interview published on Tuesday.

If there were to be a deeper downturn, (that requires) more stimulus than a conventional recession, then it’s not clear that monetary policy would have sufficient space.”

The BoE has raised interest rates to just 0.75 per cent, a fraction above their emergency financial crisis levels. The U.S. Federal Reserve, which unlike most other central banks raised borrowing costs in recent years, cut them three times in 2019.

Carney, formerly the head of the Bank of Canada, has previously raised concerns about the risk of a global liquidity trap, in which central banks lose their ability to influence the economy because demand is too weak.

A man with a keen grasp of the obvious.  This Reuters story was picked up by the huffingtonpost.ca Internet site at 10:09 a.m. EST on Wednesday morning — and I thank Roy Stephens for sharing it with us.  Another link to it is here.


Europe’s Factories Headed Into 2020 With Less Hope for Jobs

Europe’s manufacturers headed into the new year on a downbeat note, with expectations for both export orders and employment weakening at the end of a rough 2019.

The latest sentiment figures from the European Commission came just hours after Germany reported an unexpected drop in manufacturing orders. That’s a volatile figure, but it adds to signs that Europe’s largest economy is still struggling to overcome its worst industrial downturn in a decade.  Click to enlarge.

The decline in factory employment expectations is a worrying development if it persists.

Manufacturing, particularly in Germany, is struggling to exit a more than year old slump as it deals with uncertainties including the U.S.-China trade war and the U.K.’s planned exit from the European Union. The bigger risk for the economy is that — as the Bundesbank predicts — the industrial weakness will bleed into the wider economy through 2020.

This Bloomberg story was originally headlined ‘German factory orders tumble again, with rebound looking elusive‘.  It put in an appearance on their Internet site at 11:07 p.m. PST on Tuesday night — and was updated about three hours later.  I thank Swedish reader Patrik Ekdahl for pointing it out — and another link to it is here.  A parallel story to this is the ZH article headlined “German Car Production Crashes to 23 Year Low” — and I thank Brad Robertson for that one.


Erdogan & Putin Launch TurkStream Gas Pipeline to Europe, Defying U.S.

While the media and the world’s attention has been on the rapidly advancing Nord Stream 2 Russia-Germany natural gas pipeline and Washington’s attempts to stop it, another controversial pipeline to the south — also under U.S. sanctions — has gone online Wednesday.

Russian President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan attended the ceremonial launching of the much-anticipated offshore pipeline TurkStream, which will supply Russian gas to Turkey and southern Europe.

Also in attendance were Serbia’s President Aleksandar Vucic and Bulgarian Prime Minister Boyko Borissovalso, given the 930km pipeline with a total capacity of 31.5 billion cubic meters cuts from Russia straight across the width of the Black Sea into northern Turkey, and northwest across neighboring Bulgaria and into Serbia.

Southeast Europe has lately struggled with severe gas shortages during crucial winter periods, also amid struggling to put vital energy infrastructure in place.

Addressing this energy opening to southern Europe, which Turkey has hailed as the “Silk road of the energy world,” Russia’s Putin said the following during formal remarks:

The supply of Russian gas through TurkStream will undoubtedly be of great importance not only for the economy of Turkey and the Black Sea region, but will also have a positive impact on the development of many South European countries, and will contribute to improving the energy security of Europe in general.”

Putin’s remarks were a further nod to Europe’s attempts at creating “energy diversity” and independence at a moment E.U. leaders such as Germany’s Merkel have simultaneously slammed the Trump administration for “interference” in European energy affairs.

This Zero Hedge story showed up on their website at 3:45 p.m. EST on Wednesday afternoon — and it comes to us courtesy of Brad Robertson.  Another link to it is here.


Tehran Plane Crash Appears to Be “A Shoot-down Event,” Experts Say

A group of aerospace experts said Wednesday that Ukrainian International Airlines flight 752, which seemingly dropped out of the sky minutes after takeoff last night in Tehran, was likely shot out of the sky.

According to a report cited by the Independent, analysts should start from the assumption that the plane, which had 176 people on board, none of whom survived, crashed as the result of a “shootdown.” While others insisted that it’s still too early to jump to conclusions, the OPS group, an aviation risk monitoring group, said photos from the crash site clearly show projectile holes in the plane’s fuselage and wing.

We would recommend the starting assumption to be that this was a shootdown event, similar to MH17 – until there is clear evidence to the contrary,” highlighting photos of the crash site which they said “show obvious projectile holes in the fuselage and a wing section.”

The Boeing Co. 737-800 single-aisle jet crashed two minutes after takeoff from Tehran’s Imam Khomeini International Airport while en route to Kiev.

As we reported earlier, Iran has said it has no plans to hand over the black box from the crash to Boeing, citing the state of relations with the U.S.

Qassem Biniaz, a spokesman for Iran’s Road and Transportation Ministry, claims the pilots “lost control of the plane” after a fire broke out in one of the plane’s engines. Whatever led the Iranians to this conclusion is unclear. Though the plane is a predecessor to the Boeing 737 Max 8, which has been grounded for 10 months following the Lion Air crash in 2018, it actually has a sterling safety record.

Doesn’t it seem far more likely that a misfiring of Iran’s defense system might have brought down the plane?

Well, dear reader, the jury is very much out on this event at the moment, so we’ll have to wait and see.  However, it does look rather suspicious under the circumstances that existed when it fell out of the sky.  This Zero Hedge story was posted on their Internet site at 1:46 p.m. EST on Wednesday afternoon — and I thank Brad Robertson for this one.  Another link to it is here.


Satellite Images Reveal Damage of Iranian Strike on Iraqi Air Base

National Public Radio (NPR) has published one of the first satellite images showing the damage from the Iranian missile strike at the Ain Assad Air Base located in Al Anbar Governorate of western Iraq, which hosts U.S. and British troops.

The images, taken by Planet Labs and shared with NPR via the Middlebury Institute of International Studies at Monterey, show at least five sites on the base heavily damaged from the Iranian missile strike on Tuesday night.

David Schmerler, an analyst with the Middlebury Institute, told NPR that the high high-resolution satellite images of the base taken after the attack showed at least five damaged structures. “Some of the locations struck look like the missiles hit dead center,” Schmerler said.

As we noted on Wednesday, Iran has taken President Trump’s playbook in Syria: launch missiles and purposely miss their intended targets.

Iran has superior missile technology that can hit whatever they want – this could be in an attempt to save face as a public relations event for its citizens while attempting to de-escalate the situation and avoid war.

The live situation was optically quite dramatic, but the important thing to focus on is the no-human-casualty dimension, which gives ample space to de-escalate the situation,” said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers.

The Trump factor is the random factor, but what’s visible is that no one wants war, and that’s what markets are focusing on.”

This very interesting satellite photo-filled Zero Hedge news item appeared on their Internet site at 6:25 p.m. EST on Wednesday evening — and another link to it is here.


First Impression — Andrei Maryanov

From what I gather so far, it seems that Iran went for “capability demonstration” strikes on U.S. bases in Iraq. Considering the fact that statements about Iranian missile forces getting into battle mode were made publicly at least 24 hours in advance, that gave ample time for U.S. personnel to “take cover”. It will take some time before actual information on the damage will trickle down into public domain, but one fact is absolutely clear. Bernhard of MOA is spot on with his assessment:
The message from Iran is thus: “We can attack all your bases and you can do nothing to prevent that.”

Exactly. Moreover, and that is extremely important, if to believe a number of sources, not only the Al Assad base:

An American commando housed aboard the Iraqi base in Irbil said the threat was now over, but told Military Times that the al-Asad air base was hit hard. “One [missile] apparently hit just off the airfield in Irbil and Asad is getting punished,” the source said. “Waves coming in five-minute intervals of 4-5 missiles at the airfield.”

And rumor has it that salvos were not only by intermediate range ballistic missiles but cruise missiles too. Apart from obvious and well justified statement of the simple operational fact that Iran can reach anywhere in the region, it is also clear that American Air Defense is not going to be any factor in case of a larger (hopefully not) conflict and the U.S. military for the first time in its post-WW II history finds itself in uncharted territory of its rear and staging areas being merely fat and prestigious targets.

This rather brief commentary from Andrei was posted on the smoothiex12.blogspot.com Internet site on Wednesday morning sometime — and another link to it is hereThe Saker also has an opinion in an article headlined “Round one is over – an initial assessment“.  Both these commentaries come courtesy of Larry Galearis.


Iran hit ‘obvious’ targets to avoid spiral of war – Chris Hedges

U.S. President Donald Trump addressed Iran’s latest missile attacks on U.S. airbases and Canada is moving military personnel out of Iraq amid escalating tensions. Russia Today’s Paula Slier and RT America’s Alex Mihailovich report. Then Chris Hedges, the Pulitzer Prize-winning host of “On Contact” and former Middle East Bureau Chief for The New York Times, comments on the escalation.

The entire video interview lasts for 17:34 minutes, but the interview starts at the 6:30 minute mark — and that’s where I have it set to begin when you hit the ‘Play’ button on this youtube.com video.  I thank Roy Stephens for sending it our way.


The State of the Iranian Crisis — Paul Craig Roberts

Readers are asking my take on the Iranian retaliation and Trump’s response.  I think a deal might have been arranged between Washington and Tehran via a third party. The Iranian attack resulted in no U.S. casualties.  Thus, it serves  both Iran’s purpose of retaliating and Trump’s purpose of interpreting the Iranian retaliation to be, in effect, a stand down.  Possibly Trump will apply “crippling sanctions” as a cover for withdrawal from most of the Middle East.  Iran wants the U.S. out, and Trump’s original intention was to withdraw before Russiagate forced him to stay. Thus, both Trump and Iran have a common interest in U.S. withdrawal. Although the Iranian missiles killed no one, they did demonstrate to Israel that the Iranian missiles have pin point accuracy.  As Israel is a small land area, the accuracy of Iranian missiles possibly has changed Israel’s mind about provoking a war.  If Israel also stands down, perhaps the crisis is over.

On the other hand, the neoconservatives will be unhappy.  They see chaos in Iran as a way of spreading instability into the Russian Federation.  The military/security complex will be unhappy as U.S. withdrawal would downsize their profits. U.S. oil interests will be unhappy to lose the Iraqi oil.

This very brief but worthwhile commentary from Paul put in an appearance on his website on Wednesday sometime — and another link to it is herePepe Escobar has a short commentary on this issue as well.  It’s headlined “Trump to De-Escalate: Intel Source” — and is linked here.  Both of these commentaries were brought to my attention by Larry Galearis.


In War, Revenge Will Always Lead to Destruction — Bill Bonner

..[F]ree money is a scam. The longer it goes on, the more scammy the whole society becomes, the more unjust it seems… and the more citizens demand radical reforms.

The new money, so far, has gone mostly to Deep State hustlers in Washington and on Wall Street… and into the pockets of the rich.

In 1965, the top 10% of the population got 35% of national income. Last year, it got 50%. Why? The rich buy stocks and bonds. Then, the Fed – using its new money – buys their assets from them at higher prices.

This leaves 90% of the population feeling left out and cheated. They grouse… and then they vote for “conservatives” who promise to Make America Great Again… or “liberals” who promise to right the wrongs of capitalism.

But America won’t be made great again until the real wrongs – perpetual war and perpetual fake-money inflation – are corrected.

And these wrongs are not committed by capitalists… or by the Chinese, Mexicans… or Iranians.

They are committed by central planners at the Fed and the politicians, bureaucrats, lobbyists, cronies, and other Deep Staters who enable them.

And they won’t stop until the whole thing blows up.

This rather longish commentary from Bill showed up on the bonnerandpartners.com Internet site on Wednesday morning sometime — and another link to it is here.


Perth Mint’s December gold sales hit 3-year peak

The Perth Mint’s gold product sales in December rose 45% from the previous month and to their highest in more than three years, the refiner said on Wednesday.

Sales of gold coins and minted bars in December climbed to 78,912 ounces – their highest since October 2016, and surged about 170% from the same month last year, the mint said in a blog post.

Meanwhile, silver sales in December were at 1,361,723 ounces, rising 32.5% from November and about 97% from a year ago.

This tiny precious metal-related news item from Reuters was picked up by the nasdaq.com Internet site on Wednesday sometime — and I found it on the Sharps Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES

Today’s photo sequence starts where I left off in Sicamous in yesterday’s column.  These three photos are from along the beach area — and parking is definitely at a premium around here in the summer time.  Click to enlarge.


The WRAP

JPMorgan et al. put in a real show of force during the Wednesday trading session in the Far East.  I haven’t seen these sorts of trading volume in either gold or silver since the night that Donald Trump was elected president.  On that evening, gold rallied around 50 bucks — and if you remember, that entire gain was gone a few short hours later.  Their modus operandi appeared to be the same on both these occasions.

Here are the 6-month charts for the four precious metals, plus copper and WTIC — and the damage inflicted in both gold and silver is more than obvious.  Platinum got hit as well, but it’s had worse days than that in the past.  Palladium continues on its merry way higher, but it too is now well into overbought territory — and it remains to be seen when, not if, ‘da boyz’ hammer its price lower.  Copper closed up a couple of pennies, but WTIC got hammered into the dirt…down almost 5 percent on the day.  Click to enlarge.

And as I type this paragraph, the London open is less than a minute away — and I note that the gold price, although up a dollar or so in morning trading in the Far East, really didn’t do much of anything until shortly after 1 p.m. China Standard Time on their Thursday afternoon. A very decent amount of price pressure appeared — and it’s currently down $11.50 the ounce…5 bucks or so off its current low tick. The price ‘action’ in silver has been similar, but the sell-off in afternoon trading in the Far East has been somewhat more aggressive — and is down 19 cents as London opens, but about 22 cents off its current Kitco-recorded low tick of the day. Platinum was up 9 bucks or so by around 9:45 a.m. in Shanghai, but has been sold lower since — and is now down 3 dollars. Palladium traded flat until about 8:40 a.m. CST — and then really began to soar. It’s price was capped about an hour later — and after getting sold down a bit — and then chopping sideways, ‘da boyz’ got out the long knives. At its Kitco-recorded high tick this morning, palladium touched $2,153 spot, but as Zurich opens, they have palladium down 30 bucks — and 89 dollars off its earlier high tick.

Net HFT gold volume is already up to about 101,500 contracts — and there’s about 5,500 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is very heavy as well…coming up on 34,000 contracts — and there’s 631 contracts worth of roll-over/switch volume on top of that.

The dollar index opened down about 2 basis points at 97.28 once trading commenced around 7:45 p.m. EST in New York on Wednesday evening, which was 8:45 a.m. China Standard Time on their Thursday morning. It has been chopping very quietly and very unevenly sideways since then — and as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, it’s down 4 basis points.


It’s obvious that all this price/volume action we’ve been seeing over these last few days is all paper related in the GLOBEX/COMEX trading system — and has nothing to do with supply/demand issues either.

Tomorrow we get the latest Commitment of Traders Report and companion Bank Participation Report. It’s most unfortunate that yesterday’s trading data won’t be in either one, as Wednesday’s price action occurred the day after the cut-off for these reports.

The afternoon price action in the Far East bears all the hallmarks of ‘da boyz’ trying to engineer the precious metal prices lower, but it’s way too soon to tell if that’s that’s in our future or not, or how bad it will be if it is.  But it will be interesting to see what the landscape looks like by the time the afternoon gold fix is set in London later today.

And as I’ve mentioned before, Ted is of the opinion that if this outcome does finally manifest itself, then it will be the last one before we head higher. Even then, the Managed Money traders may not sell all that much, leaving the Big 7/8 silver shorts still in a big financial hole, which Ted put at around $4.9 billion dollars as of the close of trading yesterday.


And as I post today’s missive on the website at 4:02 a.m. EST, I see that gold and silver prices haven’t done much as the first hour of London trading draws to a close. Gold is down $9.60 the ounce — and silver by 21 cents. Platinum is now back at unchanged, but palladium has rallied a decent amount in the last hour — and is down only 18 bucks as the first hour of Zurich trading ends.

Gross gold volume is very heavy at around 134,000 contracts — and minus current roll-over/switch volume, net HFT gold volume is about 120,500 contracts. Net HFT silver volume continues to climb steadily — and currently sits a bit under 37,500 contracts — and there’s still only 685 contracts worth of roll-over/switch volume on top of that.

The dollar index hasn’t done much in the last hour — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, it’s now up 2 basis point on the day. Nothing to to see here.

That’s all I have for today, which is more than enough — and I’ll see you here on Friday.

Ed