24 March 2020 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price spiked higher and above $1,500 spot the moment that trading commenced at 6:00 p.m. EDT in New York on Sunday evening. ‘Da boyz’ appeared immediately — and had it at its low tick of the day less than an hour later. It rallied back to around the unchanged mark by 9 a.m. China Standard Time on their Monday morning — and from there it was sold quietly lower until 3 p.m. CST. It crept quietly higher once more until the noon silver fix in London — and then jumped higher by a whole bunch of dollars. The price was capped less than fifteen minutes later — and it traded quietly and unevenly sideways until 9:30 a.m. in New York. From that juncture it rallied steadily higher until twenty minutes after the 1:30 p.m. COMEX close. The buyer disappeared, or the price was capped at that point — and it was sold quietly and unevenly lower until the market closed at 5:00 p.m. EDT.
The low and highs in gold were reported as $1,484.60 and $1,569.30 in the April contract…an intraday move of about 85 bucks.
Gold finished the Monday trading session in New York at $1,551.20 spot, up $52.40 from Friday’s close…but around 14 dollars off its Kitco-recorded high tick of the day. Net HFT gold volume was not overly heavy, all things considered, at 247,500 contracts — but there was a monstrous 116,000 contracts worth of roll-over/switch volume out of April and into future months.
And up until the 8:20 a.m. COMEX open in New York on Monday morning, the price action in silver was almost the same as it was for gold. After its London silver fix rally was capped at that point, it traded very unevenly sideways until shortly before noon in New York. It began to head higher from there but, like gold, ran into ‘something’ at 1:50 p.m. in after-hours trading. It was sold down a bit from that juncture, but began to head higher starting around 3:15 p.m. — and rallied quietly until trading ended at 5:00 p.m. EDT.
The low and high ticks in silver were recorded by the CME Group as $12.29 and $13.305 in the May contract…an intraday move of a bit over a dollar.
Silver finished the day at $13.27 spot, up 68 cents from its Friday close. Net volume was fairly decent at 65,000 contracts — and there was a bit under 11,000 contracts worth of roll-over/switch volume in this precious metal.
The platinum price was hammered over twenty bucks lower at the 6:00 p.m. open in New York on Sunday evening, but it came roaring back — and was up about 15 bucks by shortly after 11 a.m. China Standard Time on their Monday morning. It traded very unevenly lower until the dollar index fell out of bed at 8 a.m. EDT — and it, like silver and gold, jumped higher as the dollar index crashed. It was again sold very unevenly lower until around noon in New York — and then away it went to the upside…with obvious interference every step of the way. It had a brief spike higher starting around 3:40 p.m. in after-hours trading, but ‘da boyz’ were there to pound that into the dirt in very short order. Platinum was closed late on Monday afternoon in New York at $640 spot, up 32 dollars on the day, but 12 bucks off its Kitco-recorded high tick of the day.
Palladium’s price spike at 6:00 p.m. in New York on Sunday evening was pounded into the dirt almost right away but, generally speaking, it traded in a similar fashion as platinum after that, except its New York low came shortly before 9:30 a.m. EDT. It chopped very unevenly higher from there until the market closed at 5:00 p.m. Palladium finished the Monday session at $1,665 spot…up $133 on the day. Palladium had an intraday trading range of $265 on Monday.
Using end-of-day gold and silver prices on Monday, the gold/silver ratio worked out to 117 to 1.
The dollar index closed very late on Friday afternoon in New York at $102.82 — and opened down about 46 basis points once trading commenced around 6:30 p.m. EDT on Sunday evening, which was 6:30 a.m. China Standard Time on their Monday morning. It’s 10.98 high tick was set minutes after that — and the wild ride continued from there. It fell down to the 101.84 mark by 2:26 p.m. CET — and then ‘rallied’ back to its Friday close by 11:48 a.m. in London. Ten minutes later it crashed, literally — and was saved at the 101.65 mark by the usual ‘gentle hands’ about 8:25 a.m. in New York. It then chopped and flopped around until 10:50 a.m. EDT — and another ‘rally’ began at that juncture. That last until around 12:35 p.m. — and it traded very unevenly sideways to a bit lower until the Monday trading session ended at 5:30 p.m. in New York.
The dollar index was marked-to-close at 102.49…down 33 basis points from Friday.
The currency market is in total chaos and, like the rest of the markets out there, there is no true price discovery left, as the powers-that-be are moving heaven and earth to keep their fiat currency game alive.
If there was any correlation between the dollar index and the precious metals on Monday, it was purely coincidental.
Here’s the DXY chart for Monday, courtesy of Bloomberg. Click to enlarge.
And here’s the 6-month U.S. dollar index chart, courtesy of the fine folks over at the stockcharts.com Internet site. The delta between its close…103.24…and the close on the DXY chart above, was 71 basis points above the spot month close on the DXY chart above on Monday. Wow! Click to enlarge as well.
The gold shares gapped up at the open — and then proceeded to chop very unevenly higher until around 3:40 p.m. in New York trading. Then, for no reason that made any sense to me, there was a wave of selling going into the 4:00 p.m. EDT close — and the stocks gave back about a third of their gains. The HUI closed higher by only 6.86 percent.
The silver equities traded in a similar manner, complete with the sell-off that began at 3:35 p.m. in New York trading. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up only 7.82 percent. Click to enlarge if necessary.
It should be noted that Peñoles didn’t trade on Monday, so Nick Laird’s Intraday Silver Sentiment/Silver 7 Index actually closed higher by 9.11 percent yesterday.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, updated with Monday’s doji. Click to enlarge as well.
Of course there weren’t any real dogs to speak of as far as the silver equities were concerned. The star of the day was Pan American Silver, up 16.23 percent — and SSR Mining only closed higher by 3.06 percent.
The CME Daily Delivery Report showed that 21 gold and 59 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.
In gold, the three short/issuers were Advantage with 11 contracts — and ADM and Morgan Stanley, with 5 contracts each. All were from their respective client accounts. There were three long/stoppers — and the two biggest were ADM and Advantage, with 15 and 4 contracts. These were for their respective client accounts as well.
In silver, the two short/issuers were Scotia Capital/Scotiabank and JPMorgan, with 53 and 6 contracts — and all from their respective in-house/proprietary trading accounts. Of the three long/stoppers in total, the two biggest were the CME Group and JPMorgan…the former with 54 for their own account — and the latter with four contracts for their client account. The CME Group immediately reissued all their contracts as 54×5=270 one-thousand troy ounce Micro Futures contracts. The three long/stoppers for them were Morgan Stanley, ADM and Advantage, with 203, 45 and 22 contracts — and all were for their respective client accounts.
The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Monday trading session showed that gold open interest in March declined by 230 contracts, leaving 31 still open, minus the 21 mentioned a few days ago. Friday’s Daily Delivery Report showed that 260 gold contracts were actually posted for delivery today, so that means that 260-230=30 more gold contracts were added to the March delivery month. Silver o.i. in March dropped by 63 contracts, leaving 124 still around, minus the 59 mentioned a few paragraphs ago. Friday’s Daily Delivery Report showed that 55 silver contracts were actually posted for delivery today, so that means that 63-55=8 silver contracts vanished from March.
During gold’s big price rise on Monday, total gold open interest in Monday’s Preliminary Report showed an increase of 10,421 contract. But in silver, it showed that total silver o.i. fell by 769 contracts. Both will get have minor adjustments by the time the final numbers are posted on the CME’s website later this morning EDT.
There was a whopping big deposit into GLD on Monday, as an authorized participant added 508,000 troy ounces. There was another very big deposit into SLV once again, as an a.p. put in 2,332,100 troy ounces.
In other gold and silver ETFs on Planet Earth on Monday, net of any COMEX and GLD & SLV activity, there was a net 92,162 troy ounces of gold added…but in silver, there was a net 10,662 troy ounces of silver withdrawn.
U.S. Mint sales have exploded this month. They reported selling another 36,500 troy ounces of gold eagles — 1,000 one ounce 24K gold buffaloes — and 1,650,000 silver eagles yesterday. I would suspect that with numbers like these, they were probably running the stamping machines full blast on the weekend as well.
The mint has sold more gold and silver bullion coins in March so far than they had in both January and February combined.
Botswana subscriber Bill Stavely sent me this information about the shortage of South African gold Krugerrands yesterday. The Gold Reef City Mint in South Africa posted this notice on their website: “Due to a Kruger Rand Stock Shortage – we cannot issue a price list at this time. We are hoping stock will be available by Thursday this week.” I have more stories about the shortages of physical precious metals in the Critical Reads section below.
There was certainly activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday. They reported receiving 84,211 troy ounces — and shipped out 6,086 troy ounces. The lion’s share of the ‘in’ activity was 80,377.500 troy ounces/2,500 kilobars [SGE kilobar weight] delivered to the International Depository Services of Delaware. The rest…3,833.503 troy ounces…which included 55 kilobars [U.K./U.S. kilobar weight] was dropped off at Canada’s Scotiabank. Most of the ‘out’ activity was at the International Depository Services of Delaware…4,787.180 troy ounces/180 kilobars [SGE kilobar weight]. The remaining 299 troy ounces departed Delaware. There was also some paper activity…5,005 troy ounces…that was transferred from the Eligible category and into Registered over at Brink’s, Inc. The link to all this is here.
There was some activity in silver, as 106,654 troy ounces was received — and all of that was dropped off at Canada’s Scotiabank. There was 922,614 troy ounces shipped out. Almost all of the ‘out’ activity involved Scotiabank and Loomis International, with 600,291 troy ounces out of the former — and 300,196 troy ounces out of the latter. The remainder…20,126 troy ounces and 2,006 troy ounces…was shipped out of HSBC USA and Delaware respectively. There was a lot of paper activity, as 2,409,816 troy ounces…four truck loads…was transferred from the Eligible category and into Registered over at Scotiabank…undoubtedly for March delivery. The remaining 73,760 troy ounces made the opposite trip over at Delaware. The link to this is here.
There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday. They reported receiving 1,065 of them — and shipped out 65. All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here are the usual two charts that Nick passes around on Friday evening that I didn’t have room for in Saturday’s missive, because I had the updated Russian gold reserves chart instead…so here they are now. They show the amount of physical gold and silver in all known depositories, mutual funds and ETFs, as of the close of business on Friday, March 20. During the reporting week there was a net 994,000 troy ounces of gold removed, but a net 13.7 million troy ounces was added.
Except for Ted and myself, I haven’t noticed one single solitary so-called precious metal ‘analyst’ mention this dichotomy. Click to enlarge for both.
I have a lot of stories/article/videos for you today.
Goldman Sachs Group Inc poured more than $1 billion into two of its prime money-market portfolios this week due to heavy investor withdrawals, according to a filing with the U.S. securities regulator.
The Wall Street bank purchased $722.4 million in assets from its Goldman Sachs Financial Square Money Market Fund and $301.2 million from its Goldman Sachs Fund Square Prime Obligations Fund.
Its support came as markets had another violently volatile week over concerns about the coronavirus pandemic, and represents an extraordinary move in the staid money-market fund industry.
Goldman, which disclosed the moves on Friday in a filing with the U.S. Securities and Exchange Commission, did not have an immediate comment.
The bank repurchased securities from its two funds on Thursday after investors withdrew a net $8.1 billion from them during a four-day stretch, according to the disclosure.
Industry-wide, investors pulled tens of billions of dollars from prime money-market funds, which buy top-rated corporate debt. Although they are among the tamest investment vehicles, they can be riskier than portfolios that rely more on U.S. government bonds.
Either buy it themselves, or ‘break the buck’ if they sold the underlying securities in the open market. This Reuters article appeared on their Internet site early on Saturday afternoon EDT — and I found it on the gata.org Internet site. Another link to it is here.
The global rush for dollars that’s been roiling the $6.6 trillion a day foreign-exchange market has showcased a missing piece of financial-safety architecture that world policy makers never addressed in the aftermath of the 2008 crisis.
The financial system’s reliance on one keystone currency proved to be an amplifier of shocks more than a decade ago. Yet since then, the greenback’s role has climbed even further as borrowers outside of America ramped up dollar-denominated debt. That’s again adding an enormous layer of stress on markets.
“It’s precisely what the global economy does not need at this moment,” Alexander Wolf, head of Asia investment strategy at JPMorgan Private Bank and a former U.S. diplomat in China, said of a strong dollar. “It tightens financial conditions, make servicing dollar debt more expensive, and can cause pass-through inflation just when that is not needed.”
As often occurs during bouts of extreme currency fluctuation, there’s been speculation about something akin to the 1985 Plaza Accord that sought to rein in a runaway dollar. Observers discount that possibility now. But one of the key takeaways from the current episode may be that one important currency finds itself burnished: China’s yuan.
This Bloomberg article was posted on their website at 5:00 p.m. PDT on Sunday morning — and was updated about 11 hours later. I found it embedded in a GATA dispatch — and another link to it is here.
Above is the chart that has the Federal Reserve and its Wall Street money funnel (a.k.a. New York Fed) chewing on their worry beads and rapidly rolling out their alphabet soup of Wall Street bailout programs in a replay of their playbook during the 2007-2010 Wall Street collapse.
While Fed and Treasury officials have been repeatedly assuring Americans that these Wall Street behemoth banks have plenty of capital, they’ve actually been bleeding their common equity capital faster than a snow cone in July. In just the past five weeks, from the close of trading on Friday, February 14 through the close of trading on Friday, March 20, five of the largest Wall Street banks have lost an average of 45 percent of their common equity capital.
Adding to the embarrassment for the Federal Reserve, Citigroup, the bank it propped up with $2.5 trillion in secret cumulative loans the last time around, is once again leading the herd with losses in its common equity capital. Citigroup’s market capitalization has lost a stunning 51.7 percent in just the past five weeks. And we are certainly in the early innings of this bank rout.
Morgan Stanley, which was second in line behind Citigroup at the Fed’s trough in the last financial crisis, receiving $2.04 trillion cumulative in secret revolving loans, has lost 46.9 percent of its common equity capital in just the past five weeks.
Just last week alone, the five Wall Street behemoths listed in the chart above lost a combined $154.45 billion in common equity capital.
This commentary put in an appearance on the wallstreetonparade.com Internet site on Saturday — and it’s another article I found on the gata.org Internet site. Another link to it is here.
Coming into Monday, the Fed had a problem: it had already used up half of its entire emergency $700BN QE5 announced last weekend. Click to enlarge.
Which, together with the plunge in stocks, is why at 8 a.m. on Monday, just as we expected – given the political cover they have been provided – The Fed unveiled an unprecedented expansion to its mandate, announcing open-ended QE which also gave it the mandate to buy corporate bonds (in the primary and secondary market) to unclog the frozen corporate bond market as we just one step away from a full Fed nationalization of the market (only Fed stock purchases remain now).
As noted elsewhere, the Fed’s new credit facilities carry limits on paying dividends and making stock buybacks for firms that defer interest payments, but have no explicit restrictions preventing beneficiaries from laying off workers.
Additionally, in addition to Treasuries, The Fed will buy Agency Commercial MBS all in unlimited size.
The Fed will buy Treasuries and agency mortgage-backed securities “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy,” and will also buy agency commercial mortgage-backed securities, according to a statement.
The Fed also said it will support “the flow of credit to employers, consumers and businesses by establishing new programs that, taken together, will provide up to $300 billion in new financing.” It will be backed by $30 billion from the Treasury’s Exchange Stabilization Fund.
Coincidentally, this unprecedented action takes place just hours after real estate billionaire Tom Barrack (and friend of Trump) said the U.S. commercial-mortgage market is on the brink of collapse and predicted a “domino effect” of catastrophic economic consequences if banks and government don’t take prompt action to keep borrowers from defaulting.
This Zero Hedge news item put in an appearance on their website at 12:28 p.m. on Monday afternoon EDT — and the first person through the door with this story was Swedish reader Patrik Ekdahl — and another link to it is here. In a directly related story mentioned just above, is this Bloomberg article headlined “Real Estate Billionaire Barrack Says Commercial Mortgages on Brink of Collapse” — and that comes to us courtesy of Patrik as well.
At the same time as the Federal Reserve announced open-ended QE, which also included purchases of corporate bonds and loans in both the primary (as the ECB does now) and directly in the secondary market (a new twist), as well as expanding its municipal bond purchases while also reactivating the old Lehman-era favorite, TALF facility, the N.Y. Fed announced the specific details of what the Fed’s unprecedented QEternity would look like, and they were a doozy.
In short, every single day, the Fed will purchase $75BN in Treasurys and an additional $50BN in BMS, for a total of $125BN every day, or an unprecedented $625BN for the week, or more than the Fed’s entire QE2 which was just over $500BN in purchases over 7 months.
And since the Fed is purchasing securities across the entire curve, it will take no less than 7 separate operations every single day to purchase the full amount every day as per the following schedule.
Adding to this unprecedented expansion in QE the already purchased $375BN in TSYs/MBS since the resumption of QE, means that starting Friday the 13th, and ending this coming Friday, the Fed will have purchased just over $1 trillion in Treasurys and MBS securities!
And visually, the Fed’s takeover of the market will look as follows: Click to enlarge.
This Zero Hedge news item showed up on their Internet site at 9:00 a.m. EDT on Monday morning — and I thank Brad Robertson for sharing it with us. Another link to it is here. Here is a very related ZH headline that reads “Kashkari Says Fed Has “Infinite” Amount of Cash: “We Create it Electronically”” — and that comes courtesy of Brad as well.
Now that helicopter money has finally arrived, and bizarrely has brought with it that blast-from-the-past idiocy that is the trillion-dollar coin – which does nothing more than remind the population that money, like any other consensus construct, is just an illusion and depends on “faith and credit” and an increasingly grotesque one at that reliant on such “in your face” gimmicks as minting platinum coins to bailout the world – the discussions of what the monetary endgame (with even deflation god Albert Edwards admitting that his iconic “Ice Age” is about to melt under the red-hot heat of paradropped cash) will look like have begun in earnest.
Doing it part to kindle this debate, no pun intended, are Deutsche Bank strateigst Oliver Harvey and Robin Winkler who have published a report covering the two aspects of the helicopter money debate. And since we are confident that readers can find the happy ending version on countless other pro-paradrop forums, typically those run by socialist “island-dwelling traders” who have never actually traded (and their drug-delivery skills it turns out were also dismal) and who have no concept of how money or credit actually works, we will focus on the one that captures accurately what will happen on short notice: hyperinflation.
So for everyone curious what the hyper-inflationary endgame looks like, here it is, courtesy of DB’s Oliver Harvey…
“It should worry us that policymakers and academics think providing massive stimulus is the solution. This is because policymakers appear to be attempting to shift demand back to where it was a couple of months ago, at the same time as holding supply fixed. To put it another way, if the government tries to keep spending at levels before lock-downs began, while at the same time keeping lock-downs in place, there will be simply more money chasing after significantly fewer goods and services. The result of this will be inflation, and a lot of it.
This might seem like an absurd argument given that market inflation expectations – the price of inflation linked bonds – have fallen since the crisis began. But, it is perfectly consistent to say that even though this crisis ultimately originated with a supply shock, the market has up until now expected demand to fall somewhat more in response. What matters is that at present supply is inelastic – unlike in traditional Keynesian formulations – because while the government might be handing out $100 dollar bills it won’t be allowing workers to work regular days, restarting flights or reopening factories until the virus subsides.
What would be disastrous is if governments embarked on New Deal style spending program via monetary financing at a time when it is imposing stringent supply constraints on the economy. The result may be hyperinflation, and end up doing more harm to people’s living standards than nothing at all.
A good hedge would be to buy gold, as well as inflation linked bonds in the U.S. and Euro Area, which are currently trading at all time lows.”
Imagine if the congress approved a measure to form a public-private partnership between the US Treasury and the Federal Reserve. Can you imagine that?
Now imagine if a panicky and ill-informed Congress gave the Fed a blank check to bail out all of its crooked crony corporate and Wall Street friends, allowing the Fed to provide more than $4.5 trillion to underwater corporations that ripped off Mom and Pop investors by selling them bonds that were used to goose their stock prices so fat-cat CEOs could make off like bandits. Imagine if all that red ink from private actors was piled onto the national debt pushing long-term interest rates into the stratosphere while crushing small businesses, households and ordinary working people.
Now try to imagine the impact this would have on the nation’s future. Imagine if the Central Bank was given the green-light to devour the Treasury, control the country’s “purse strings”, and use nation’s taxing authority to shore up its trillions in ultra-risky leveraged bets, its opaque financially-engineered Ponzi-instruments, and its massive speculative debts that have gone pear-shaped leaving a gaping black hole on its balance sheet?
Well, you won’t have to imagine this scenario for much longer, because the reality is nearly at hand. You see, the traitorous, dumb-sh*t nincompoops in Congress are just a hair’s-breadth away from abdicating congress’s crucial power of the purse, which is not only their greatest strength, but also allows the congress to reign in abuses of executive power by controlling the flow of funding.
The power of the purse is the supreme power of government which is why the founders entrusted it to the people’s elected representatives in congress. Now these imbeciles are deciding whether to hand over that authority to a privately-owned banking cartel that has greatly expanded the chasm between rich and poor, incentivized destructive speculation on an industrial scale, and repeatedly inflated behemoth asset-price bubbles that have inevitably blown up sending stocks and the real economy into free-fall. The idea of merging the Fed and the Treasury first appeared in its raw form in an article by former Fed chairman Ben Bernanke and Janet Yellen in the Financial Times. Here’s a short excerpt from the piece…
Well, Gregory Mannarino may have a valid point in his rantings. This very interesting and worthwhile commentary/opinion piece by Mike Whitney put in an appearance on the unz.com Internet site on Sunday sometime — and I thank Roy Stephens for sharing it with us. Another link to it is here.
Even before the novel coronavirus appeared, many American families were falling behind on student loans, auto loans, credit cards and other payments. America’s debt overhead was pricing its labor and industry out of world markets. A debt crisis was inevitable eventually, but covid-19 has made it immediate.
Massive social distancing, with its accompanying job losses, stock dives and huge bailouts to corporations, raises the threat of a depression. But it doesn’t have to be this way. History offers us another alternative in such situations: a debt jubilee. This slate-cleaning, balance-restoring step recognizes the fundamental truth that when debts grow too large to be paid without reducing debtors to poverty, the way to hold society together and restore balance is simply to cancel the bad debts.
The word “Jubilee” comes from the Hebrew word for “trumpet” — yobel. In Mosaic Law, it was blown every 50 years to signal the Year of the Lord, in which personal debts were to be canceled. The alternative, the prophet Isaiah warned, was for smallholders to forfeit their lands to creditors: “Woe to you who add house to house and join field to field till no space is left and you live alone in the land.” When Jesus delivered his first sermon, the Gospel of Luke describes him as unrolling the scroll of Isaiah and announcing that he had come to proclaim the Year of the Lord, the Jubilee Year.
Until recently, historians doubted that a debt jubilee would have been possible in practice, or that such proclamations could have been enforced. But Assyriologists have found that from the beginning of recorded history in the Near East, it was normal for new rulers to proclaim a debt amnesty upon taking the throne. Instead of blowing a trumpet, the ruler “raised the sacred torch” to signal the amnesty.
It is now understood that these rulers were not being utopian or idealistic in forgiving debts. The alternative would have been for debtors to fall into bondage. Kingdoms would have lost their labor force, since so many would be working off debts to their creditors. Many debtors would have run away (much as Greeks emigrated en masse after their recent debt crisis), and communities would have been prone to attack from without.
This opinion piece was put in an appearance on The Washington Post‘s website on Saturday afternoon EDT — and I found it on the gata.org Internet site. Another link to it is here.
Emirates, the world’s largest long-haul airline, will suspend all of its passenger operations this week, in the latest concession to the coronavirus pandemic that has devastated global travel.
Flights to all destinations will cease from March 25, Dubai-based Emirates said Sunday in an email. Cargo service will remain in operations, the company said.
“We cannot viably operate passenger services until countries re-open their borders, and travel confidence returns,” Chairman and Chief Executive Officer Ahmed bin Saeed Al Maktoum said in a memo to employees seen by Bloomberg. “Some of our competitors, or even our supply chain partners, may not survive this crisis.”
The airline’s announcement came a few hours before the United Arab Emirates’ General Civil Aviation Authority said it will halt all inbound and outbound passenger flights for two weeks. The U.A.E. is also home to Flydubai, Abu Dhabi’s Etihad Airways and Air Arabia, the Middle East’s largest discount carrier.
With its fleet of all wide-body aircraft, the Emirates has turned Dubai into a hub for global travel, typically operating more than 500 flights a day. That mission, which has fed the city’s growth since Emirates was founded in the mid-1980s, is now under assault by the coronavirus pandemic.
This Bloomberg story was posted on their Internet site at 6:45 a.m. PDT on Sunday morning — and was updated about thirty hours later. I thank Patrik Ekdahl for his final contribution to today’s column — and another link to it is here.
The stock market has never fallen so fast, so hard… Nor has the government (including its central bank) ever undertaken such a massive “rescue.” What’s behind it?
Here at the Diary, we’ve been watching the wild, hothouse growth for at least 20 years, wondering how it would end.
Not trusting our own hunches and guesses, our researchers developed a Doom Index to try to give us a better idea of when the fruit was ripe.
In April of last year, the Doom Index hit “8” – indicating that it was heavy on the vine.
For the next eight months, it waited to be plucked. Then, along came the C virus.
The coronavirus was a surprise to everyone. But it didn’t cause the rot we see today; it merely set it off.
This longish, but very interesting commentary from Bill showed up on the bonnerandpartner.com Internet site on Monday sometime — and another link to it is here.
Gold’s one-day dollar surge is one for the record books. But as bullion deliveries hit a snag and mining operations slow, the precious metal may soon see prices rally to new heights.
On Monday, the most-active April gold futures contract GCJ20, 1.429% rallied by $83, or 5.6%, to settle at $1,567.60 an ounce. The one-day dollar gain for the metal was the largest ever, based on data going back to November 1984, according to Dow Jones Market Data.
The move for the metal followed the Federal Reserve’s decision Monday to unleash its balance sheet and purchase an unlimited amount of Treasurys and securities tied to residential and commercial mortgages to ward off a credit crunch, a process known as “quantitative easing” that aims to pump liquidity into frozen financial markets.
Unlimited quantitative easing is a “huge signal, another part of upcoming trillions of new debt monetization,” said Peter Spina, president and chief executive officer at GoldSeek.com. “Many on Wall Street are waking up after the shock” of declines in recent weeks.
“The endless QE to trillions in global liquidity programs are all in gold’s favor among the general turmoil,” he told MarketWatch. “Gold is returning back to its function as a global currency.”
This gold-related news item was posted on the marketwatch.com Internet sit at 4:57 p.m. on Monday afternoon EDT — and I plucked it from a story on the gata.org Internet site. Another link to it is here.
Traders have reported a growing global shortage of gold bars, as the coronavirus outbreak both disrupts supply and stokes demand, with one business comparing the frenzied buying of the yellow metal with the consumer rush for toilet roll.
Retail investors in Europe and the U.S. have bought up gold and silver bars and coins over the past two weeks in an effort to protect their money from the collapse in global stock prices and many currencies.
But Europe’s largest gold refineries have struggled to keep up because of the region’s widening shutdown. Valcambi, Pamp and Argor-Heraeus are all based in the Swiss region of Ticino, near the border with Italy. Local authorities announced in recent days that production in the area was to be temporarily halted.
The gold price hit a seven-year high on March 9 of more than $1,700 a troy ounce as the deepening economic impact of the coronavirus outbreak sent investors scurrying for haven assets. But gold has since been swept up in the selling frenzy, with some investors needing to offload their holdings to free up cash, pushing the price down to about $1,530 on Monday afternoon.
Most of the selling has been in gold futures or exchange traded funds backed by the metal. During the same period, retail demand for physical gold bars has surged.
Retailers have already reported shortages and delays of up to 15 days on shipments. Markus Krall, chief executive of German precious metals retailer Degussa, said it was struggling to meet customer appetite for gold bars and coins and had to turn to the wholesale markets. Demand is running at up to five times the normal daily amount, he said.
“We are being creative to find new sources but what is driving it all are the measures by authorities to stop coronavirus. This is so unpredictable,” added Mr Krall.
This story appeared on the ft.com Internet site on Monday sometime — and I found it embedded in a GATA dispatch. Another link to it is here.
Three of the world’s largest gold refineries said on Monday they had suspended production in Switzerland for at least a week after local authorities ordered the closure of non-essential industry to curtail the spread of the coronavirus.
The refineries – Valcambi, Argor-Heraeus and PAMP – are in the Swiss canton of Ticino bordering Italy, where the virus has killed more than 5,000 people in Europe’s worst outbreak.
Switzerland is a global hub for precious metals refining. The three refineries between them process around 1,500 tonnes of gold a year in Ticino – a third of total global annual supply – as well as other precious metals such as silver.
Valcambi and PAMP said they would suspend operations until March 29. Argor said it would do so until April 5.
The Ticino local government order, issued on Friday, is in force until March 29.
The above five paragraphs are all there is to this rather brief Reuters article. Filed from London, it showed up on their Internet site at 4:10 a.m. EST on Monday morning — and I picked it up off the gata.org Internet site. Another link to the hard copy is here.
The Russian Central Bank has just published its latest gold reserve information showing it has added some 400,000 ounces (12.44 tonnes) of gold to its reserves in February. This is double the amount it added in January when it was thought the nation might be cutting back its gold purchases this year. However this latest purchase suggests that the nation may still be on the path to adding perhaps somewhere between 100 and 200 tonnes in the full year – perhaps a similar increase to that reported last year of around 158 tonnes.
The addition takes its gold reserves to around 2,292 tonnes – only around 144 tonnes less than the world’s fourth biggest national gold holder – France. At this latest month’s rate of increase Russia could match, or even overtake, the French holding within the next year.
Russia has been able to build its gold reserves substantially over the past few years while reducing its U.S. dollar related holdings down to an absolute minimum. As we reported last month this is due to fears that the U.S. might impose financial sanctions and freezing Russia’s dollar assets. The U.S. has shown its willingness to conduct financial warfare of this type against other states it feels are hostile to it (like North Korea and Iran), but Russia reckons now that it won’t be worth the U.S. making this kind of move against it if there is little in the way of U.S. related assets to attack.
Whether Russia can keep up its current rate of gold reserve purchases for the foreseeable future given the enormous fall in the oil price – oil and gas are the nation’s biggest export earners – remains to be seen. So next month’s announcement on gold reserve increases, if any, from the nation’s central bank will be awaited with particular interest. However the oil price fall is partly self-inflicted with Russia’s decision not cut oil deliveries in the light of a global over-supply situation, which in part may well be aimed at putting U.S. shale oil producers out of business by making their operations uneconomic.
Overall though, the Russian central bank policy of increasing its gold reserves virtually every month for more than 10 years now, looks to be paying off well, particularly if pundits predictions for the gold price to take off as the world dives into recession come about. In any case it will probably have been a better choice for a nation’s reserves than the Swiss National Bank’s purchases of equities which will have crashed in value enormously over the past couple of weeks.
This worthwhile commentary from Lawrie appeared on the Sharps Pixley website on Saturday sometime — and another link to it is here.
India’s jewelry industry has come to a standstill as the government locked down much of the country to try and stem the spread of the coronavirus.
Titan Co., the nation’s biggest jeweler by market value, has shut stores until March 29, it said in a statement. The company has also closed its manufacturing units for the week and will review the situation at the end of the period, it said.
Demand in India, the world’s second-biggest gold consumer, has already tumbled amid record domestic prices and a slowing economy. Prime Minister Narendra Modi and state leaders over the weekend imposed an almost-complete lock-down as cases of coronavirus spiked, a move that will probably further hurt growth that’s already set to slow to an 11-year low.
Concerns about the virus have seen the local gem and jewelry sector come to a standstill with virtually no footfall in stores and many jewelers shutting shops located in malls and shopping complexes, according to the All India Gem and Jewellery Domestic Council. The industry is seeking an extension for repayment of loans and a reduction in the import tax on gold to 4% from the current 12.5%, it said.
This tiny Bloomberg article was posted on their website at 3:03 a.m. PDT on Monday morning — and it’s another gold-related news item that I found on the gata.org Internet site. Another link to the hard copy is here.
The global pandemic has shut down several mining jurisdictions around the world, taking off a large chunk of silver production, this according to Keith Neumeyer, CEO of First Majestic Silver.
“In 2018, we produced, as a global industry, 855 million ounces of silver. So far, we’ve had Peru come offline, with 145 million ounces, we’ve had Chile come offline with 42 million ounces, we’ve had Argentina come offline with 26.5 million ounces. That’s a total of 213.5 million ounces that has now been shut down,” Neumeyer told Kitco News.
This 18-minute video interview with Keith was posted on the kitco.com Internet site on Monday sometime — and I thank Roy Stephens for sending it our way. Another link to it is here — and it’s certainly worth your while.
The PHOTOS and the FUNNIES
With the light of September 1 fading fast — and the sky even more threatening, we stopped very briefly at the Mount Robson visitor’s center — and I took this one photo of the mountain from their deck before it began to pour. The rain didn’t last long — and I took the opportunity of driving down a short piece of paved road that crossed the Fraser River near the center and B.C. Highway 16/The Yellowhead — and I took one photo in each direction from the bridge that spanned it. As it tumbles out of the mountains from its source just north of Lake Louise, it runs narrow, fast and deep until it hits the Robson Valley. It then widens out –and proceeds to meander across the flat terrain just past the town of McBride which he had just visited a few hours earlier — and then on through Prince George. Click to enlarge.
“[I]f the plunge wasn’t due to widespread physical selling on either a wholesale or retail basis, then what the heck was behind the historic sell-off?
The answer and only answer is the same one I have advanced for decades, namely, paper positioning on the COMEX sets the price. Most remarkably, the data proving that paper positioning dictates price is presented weekly by the same federal regulator, the CFTC that is also charged with the responsibility of making sure large paper speculation don’t manipulate prices. Yet week after week, the Commitments of Traders (COT) indicates paper trading artificially sets the price. The report this week was no exception.
Let me just stop here for a moment to make a point I may not have made explicitly enough up until now. The dreadful coronavirus that is proving to be so devastating in health, economic and financial terms to just about everyone has had, as far as I can tell, no real direct effect for the price plunge in silver. Instead, the developing crisis has been used by key insiders, certainly including JPMorgan, as a convenient excuse and cover story to put the finishing touches on a sell-off for their own selfish benefit. Peoples’ thought processes are completely distorted as a result of the current crisis and what do the crooks on the COMEX do, but exploit it to their benefit at the expense of others. This makes the selling of securities by senior politicians ahead of others seem mild in comparison. I’m not sure I could make a more serious allegation, than feathering one’s own nest to the detriment of others, but there it is.” — Silver analyst Ted Butler: 21 March 2020
So the Fed has decided to go Wiemar for the moment — and that was certainly reflected in precious metal prices on Monday. This is an ongoing and unfolding situation right now — and we’ll just see how it plays out. I also note that all four rallied smartly in the early going in Far East trading, but all were capped and turned lower by the proxies of JPMorgan et al. at various times during morning trading in Shanghai.
Here are the 6-month charts for the four precious metals, plus copper and WTIC. Gold blasted above — and then closed well above its 200-day moving average yesterday. The Managed Money traders may have been active in that precious metal to a certain extent. But the other three PMs are still light years below any moving average that matters, so the Managed Money traders were sitting on their hands regarding those. I note that copper was closed at a new low for this move down — and WTIC closed higher by a bit. Click to enlarge.
Before I get into other things, I thought I’d post another stockcharts.com graph that I’ve featured before. It’s the BKX banking index — and it set a new low for this move down again on Monday. A lot of this free money that the Fed is handing out is going to keep them liquid, if not solvent. Click to enlarge.
The March delivery month has four days left, as Wednesday’s deliveries have already been posted by the CME Group further up in this column. There’s not a lot of contracts left to go…but the number of new gold contacts being added to March deliveries continues to grow every day.
All the large traders that aren’t standing for delivery in April gold or silver, have to roll or sell their April contracts by the close of COMEX trading this coming Friday — and the rest have to be out by the close of COMEX trading on Monday.
Roll-over/switch volume…which was monstrous yesterday, will become even more so as First Day Notice for April deliveries draws closer. The biggest volume day of the month should be on Friday when the big boys are the most active.
And as I post today’s column on the website at 4:03 a.m. EDT, the London/Zurich opens are less than a minute away — and I note that all four precious metals began to head higher, to sharply higher, the moment that trading began at 6:00 p.m. EDT in New York on Monday evening. All ran into ‘something’ in mid-to-late morning trading in the Far East…so it’s obvious that ‘da boyz’ were out and about. Gold has jumped higher in the last few minutes — and is up $42.70 the ounce now — but silver is up only 42 cents as London opens. Platinum is higher by 22 dollars — and palladium by 110 as Zurich opens. All four are creeping back to their former highs that were set in morning trading in Shanghai.
Gross gold volume is around 128,000 contracts — and minus pretty heavy current roll-over/switch volume out of April and into future months, net HFT gold volume is just under 63,000 contracts…which is not too bad considering the price action. Net HFT silver volume is pretty chunky though, at a bit over 27,500 contracts — and there’s 5,000 contracts worth of roll-over/switch volume in this precious metal.
The dollar index opened down about 35 basis points once trading commenced around 7:45 p.m. EDT in New York on Monday evening, which was 7:45 a.m. China Standard Time on their Tuesday morning. It was generally down hill from that point in a very broad range — and the current 101.28 low tick was set around 2:55 p.m. CST. It hasn’t done much since — and as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is down 97 basis points.
Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and I shan’t be making any kind of prediction until I see what Tuesday’s doji looks like on the above six charts. Of course Ted will have something to say about it in his mid-week commentary on Wednesday — and I’ll be more than interested in what that is.
I hope your Tuesday goes well — and I’ll see you here tomorrow.