15 November 2019 — Friday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price was sold down a few dollars once trading began at 6:00 p.m. EST in New York on Wednesday evening. From that point it crept higher until 9 a.m. in London. It was capped and turned sideways at that juncture — and that lasted until the 10 a.m. EST afternoon gold fix. It was sold a bit lower from there, but less than an hour later it began to rally a bit before getting capped shortly before noon in New York. It was sold quietly and unevenly lower until 4 p.m. in after-hours trading — and didn’t do much after that.
Once again, the low and high ticks aren’t worth looking up.
Gold was closed on Thursday afternoon in New York at $1,471.20 spot, up $7.80 from Wednesday. Net volume was a bit on the heavier side at a bit over 264,000 contracts — and there was a hair under 54,000 contracts worth of roll-over/switch volume out of December and into future months.
The silver price was managed in an almost identical manner as it was for gold…including all the major price inflection points mentioned above, so I’ll pass on the play-by-play. But it is worth mentioning that silver traded above the $17 spot mark on a number of occasions on Thursday, but wasn’t allow to stay above that price for long…although it did close right on it in the spot month.
The low and high ticks in silver aren’t really worth looking up, either.
Silver was closed at $17.00 spot, right on the button…up 5.5 cents from Wednesday. Net volume was slightly elevated at a bit under 65,000 contracts — and there was 14,500 contracts worth of roll-over/switch volume out of December and into future months in this precious metal.
If you check the Kitco gold and silver charts above…particularly the gold chart…you’ll notice that there have been rather smallish price ‘events’ at 2 p.m. EST in after-hours trading in New York. That has occurred in both precious metals for the last three trading days. I’m not sure what should be read into this, if anything, but it is an anomaly that I’ve not seen before.
The platinum price was sold lower in early morning trading in the Far East on their Thursday, but began to head higher about 10:40 a.m. China Standard Time. That lasted until around 10:30 a.m. in Zurich trading, but it was capped and turned a bit lower at that point. Then shortly before 2 p.m. CET/8 a.m. EST, it was sold down to its low of the day, which came around 9:15 a.m. in New York. It began to head sharply higher about ten minutes before the 11 a.m. EST Zurich close — and that rally was obviously capped less than thirty minutes later. It was sold a bit lower shortly after that — and from around 12:45 p.m. EST onwards, it traded sideways into the 5:00 p.m. close of trading. Platinum was closed at $880 spot, up 6 bucks from Wednesday.
Palladium traded flat until minutes before 11 a.m. CST on their Thursday morning. It began to chop unevenly higher from that juncture and, like platinum, was capped and turned lower around 10:30 a.m. in Zurich. That sell-off lasted until the 10 a.m. EST afternoon gold fix in London — and it rallied from there until the 1:30 p.m. COMEX close — and it didn’t do much of anything after that. Palladium was closed at $1,714 spot, up 28 dollars from Wednesday, but 28 bucks off its 10:30 a.m. Zurich high tick, which Kitco recorded as $1,742 spot.
The dollar index closed very late on Wednesday afternoon in New York at 98.37 — and opened down about 3 basis points once trading commenced around 7:45 p.m. EST on Wednesday evening, which was 8:45 a.m. China Standard Time on their Thursday morning. From that point it proceeded to warder quietly sideways a handful of basis points either side of unchanged — and that state of affairs lasted until 10:20 a.m. in New York. Then down it went. The 98.11 low tick of the day was set a minute or so before 2 p.m. EST — it rose and fell another handful of basis points between then and the close of trading at 5:30 p.m. The dollar index finished the Thursday session at 98.16…down 21 basis points from Wednesday’s close.
The rallies in gold and silver in New York began once the 10 a.m. afternoon gold fix was done for the day — and both metals were capped and turned sideways or lower, long before the 2 p.m. EST low tick was printed. So if there was correlation between the currencies and precious metal prices, it was more by good luck, than anything else. There was little correlation at all in Far East and London trading yesterday.
Here’s the DXY chart from Bloomberg as per usual. Click 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…98.02…and the close on the DXY chart above, was 14 basis points on Thursday. Click to enlarge as well.
The gold stocks jumped about 1.5 percent in the first fifteen minutes of trading in New York on Thursday morning…but were back at unchanged by around 10:50 a.m. EST. They rallied until precisely noon when the gold price was capped — and then were sold quietly and unevenly lower until the markets closed at 4:00 p.m. The HUI closed higher by 0.87 percent.
The price activity in the silver equities was very similar, except their respective highs were in around 12:15 a.m. in New York trading — and their decline at that point was more precipitous than it was for the gold shares. The actually dipped into negative territory around 3:35 p.m. EST…but recovered a bit by the end of the trading day. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up by 0.41 percent…which is certainly better than the alternative. Click to enlarge.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart, updated with Thursday’s doji. Click to enlarge as well.
The three usual laggards in the Silver 7 Index…Peñoles, Buenaventura and Hecla…certainly lived up to their reputations on Thursday, as all three closed lower on the day. First Majestic Silver was the Silver 7 star, closing higher by 2.48 percent.
The CME Daily Delivery Report showed that 44 gold and 9 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.
In gold, there were three short/issuers in total, but the only two that mattered were Advantage and ADM, with 34 and 9 contracts. There were also three long/stoppers…Advantage with 18, JPMorgan with 17 — and ADM picking up 9 contracts. All transactions, both issued and stopped, involved their respective client accounts.
In silver, for the second day in a row it was ADM issuing all 9 contracts — and stopping them all as well.
The link to yesterday’s Issuers and Stoppers Report is here.
The Preliminary Report for the Thursday trading session showed that gold open interest in November fell by 166 contracts, leaving 91 still open, minus the 44 mentioned a few short paragraphs ago. Wednesday’s Daily Delivery Report showed that 207 gold contracts were actually posted for delivery today, so that means that 207-166=41 more gold contracts just got added to the November delivery month. Silver o.i. in November rose by 2 contracts, leaving 9 still around, minus the 9 mentioned a few paragraphs ago. Wednesday’s Daily Delivery Report showed that 7 silver contracts were actually posted for delivery today, so that means that 2+7=9 more silver contracts just got added to November.
There were no reported changes in either GLD or SLV on Thursday.
In other gold and silver ETFs on Planet Earth on Thursday…net of activity on the COMEX — and in GLD & SLV…there was a net 107,590 troy ounces removed in gold…an in silver, there was a net 90,482 troy ounces withdrawn.
There was no sales report from the U.S. Mint.
There was a tiny bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday. Nothing was reported received — and only 321 troy ounces was shipped out…257 troy ounces from Loomis International — and 64.300 troy ounces/2 kilobar [U.K./U.S. kilobar weight] departed Canada’s Scotiabank. I won’t bother linking this amount.
It was a bit busier in silver. The only ‘in’ activity was one truckload…603,570 troy ounces…that was received in the Eligible category at CNT. Once received, the whole shipment was immediately transferred to the Registered category. There was 96,544 troy ounces shipped out…80,667 from Loomis International…14,940 troy ounces from Brink’s, Inc…and 936 troy ounces [one good delivery bar] departed Delaware. There was also an additional paper transfer of 19,325 from the Eligible category and into Registered over at Delaware. The link to all this is here.
There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday. They reported receiving 838 of them — and nothing was shipped out. This activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here are the usual two 2-year charts that Nick passes around on the weekend, which I didn’t have room for until now. They show the physical gold and silver that are held in all known depositories, mutual funds and ETFs — and updated with their holdings as of the close of business, a week ago today…Friday, November 8.
During that reporting week, there was a net 317,000 troy ounces of gold withdrawn, but in silver, there was a net 2,989,000 troy ounces added. Click to enlarge for both.
I have an average number of stories/articles for you today.
Serious auto-loan delinquencies – auto loans that are 90 days or more past due – in the third quarter of 2019, after an amazing trajectory, reached a historic high of $62 billion, according to data from the New York Fed today:
This $62 billion of seriously delinquent loan balances are what auto lenders, particularly those that specialize in subprime auto loans, such as Santander Consumer USA, Credit Acceptance Corporation, and many smaller specialized lenders are now trying to deal with. If they cannot cure the delinquency, they’re hiring specialized companies that repossess the vehicles to be sold at auction. The difference between the loan balance and the proceeds from the auction, plus the costs involved, are what a lender loses on the deal.
The repo business, however, is booming.
This 3-chart news item showed up on the wolfstreet.com Internet site on Tuesday sometime — and I thank Dennis Miller for sharing it with us. Another link to it is here. Gregory Mannarino‘s market close rant for Thursday is linked here.
The Fed Has Created the Big Lie for Congress on its Repo Loans while the New York Fed Blocks Freedom of Information Requests
Yesterday Federal Reserve Chairman Jerome Powell testified before the Joint Economic Committee of Congress. Only one Congressman, Kenny Marchant (R-TX), had the courage to ask Powell about the Fed’s intervention in the repo loan market beginning on September 17. Since that time the Fed has been pumping hundreds of billions of dollars each week (that the New York Fed creates electronically out of thin air) into its 24 primary dealers on Wall Street. These primary dealers are not commercial banks that might be inclined to use the funds to make loans to local businesses or to consumers to buy a house and help their local economies. No, 23 of the 24 primary dealers are stock brokerage firms and investment banks that engage in leveraged bets in the stock, bond, commodities, and derivatives markets. The 24th is a foreign bank. (See primary dealer list below.)
There is nothing in the legislation that created the Fed, the Federal Reserve Act, that allows it to be the lender-of-last-resort to the trading houses on Wall Street. The Fed’s Discount Window, which is legally allowed to make emergency or seasonal loans, is restricted by law to just deposit-taking banks – not Wall Street trading houses.
And yet, bailing out Wall Street is exactly what the Fed has been doing since September 17 of this year and what it did secretly to the tune of $29 trillion during the financial crisis from December 2007 to the middle of 2010. The Fed does have some leeway in an emergency situation but that has to be brief and defined. The Fed has announced that it’s planning to keep its current money spigot to Wall Street flowing into at least January of next year. But according to Powell’s testimony to Congress yesterday, there’s no pressing crisis on Wall Street. Powell stated that “The core of the financial sector appears resilient, with leverage low and funding risk limited relative to the levels of recent decades.”
Powell knows that it’s a fallacy to say that leverage is low on Wall Street. It’s only low if one ignores the hundreds of trillions of notional (face amount) derivatives residing at the mega Wall Street banks.
This longish, but worthwhile commentary was posted on the wallstreetonparade.com Internet site on Thursday sometime — and I found it on the gata.org Internet site. Another link to it is here.
After a month of constant verbal gymnastics (and diarrhea from financial pundit sycophants who can’t think creatively or originally and merely parrot their echo chamber in hopes of likes/retweets) by the Fed that the recent launch of $60 billion in T-Bill purchases is anything but QE (whatever you do, don’t call it “QE 4”, just call it “NOT QE” please), one bank finally had the guts to say what was so obvious to anyone who isn’t challenged by simple logic: the Fed’s “NOT QE” is really “QE.”
In a note warning that the Fed’s latest purchase program – whether one calls it QE or NOT QE – will have big, potentially catastrophic costs, Bank of America’s Ralph Axel writes that in the aftermath of the Fed’s new program of T-bill purchases to increase the amount of reserves in the banking system, the Fed made an effort to repeatedly inform markets that this is not a new round of quantitative easing, and yet as the BofA strategist notes, “in important ways it is similar.”
But is it QE? Well, in his October FOMC press conference, Fed Chair Powell said “our T-bill purchases should not be confused with the large-scale asset purchase program that we deployed after the financial crisis. In contrast, purchasing Tbills should not materially affect demand and supply for longer-term securities or financial conditions more broadly.” Chair Powell gives a succinct definition of QE as having two basic elements: (1) supporting longer-term security prices, and (2) easing financial conditions.
Here’s the problem: as we have said since the beginning, and as Bank of America now writes, “the Fed’s T-bill purchase program delivers on both fronts and is therefore similar to QE,” with one exception – the element of forward guidance.
It is, however, BofA’s conclusion that we found most alarming: as Axel writes, in his parting words:
“some have argued, including former NY Fed President William Dudley, that the last financial crisis was in part fueled by the Fed’s reluctance to tighten financial conditions as housing markets showed early signs of froth. It seems the Fed’s abundant-reserve regime may carry a new set of risks by supporting increased interconnectedness and overly easy policy (expanding balance sheet during an economic expansion) to maintain funding conditions that may short-circuit the market’s ability to accurately price the supply and demand for leverage as asset prices rise.”
In retrospect, we understand why the Fed is terrified of calling the latest QE by its true name: one mistake, and not only will it be the last QE the Fed will ever do, but it could also finally finish what the 2008 financial crisis failed to achieve, only this time the Fed will be powerless to do anything but sit and watch.
This long 1-chart commentary put in an appearance on the Zero Hedge website at 2:43 p.m. on Thursday afternoon EDT — and another link to it is here.
Fed Braces For Year End Repo Turmoil: Announces $55 Billion in 28, 42-Day Repos to Flood System With Cash
Just moments after we reported that according to Bank of America, the U.S. financial system’s reliance on repos could “short-circuit the market’s ability to accurately price the supply and demand for leverage as asset prices rise“, and implicitly, facilitate the next financial crisis because “the Fed has entered unchartered territory of monetary policy that may stretch beyond its dual mandate“, the Fed confirmed just how reliant both it, and the entire U.S. financial system is on the repo market, when it released its latest term repo schedule, one which for the first time included 28 and 42-day repos which would mature into the new, 2020 year, yet which amount to just a total of $55 billion collectively, an amount which we fear will be far too little to meet year-end liquidity demands, and represents just the first shot in the Fed’s scramble to flood the system with year-end liquidity. Meanwhile, the New York Fed is maintaining its $120BN in overnight repos indefinitely.
Indicatively, this is just how “temporary” the Fed’s overnight repos…Click to enlarge.
… and term repos have become: Click to enlarge.
Appropriately, the Fed admitted that it is starting to freak out about year-end liquidity just minutes after we published a scathing critique of the Fed’s “repo regime” by BofA…
When the time comes for the Fed to unwind its “temporary” repos, we hope it will be more successful then when it tried to “renormalize” monetary policy, which lasted for a few months and then the Fed admitted defeat in a dramatic U-turn, and is now cutting rates instead.
This worthwhile article from the Zero Hedge Internet site was posted there at 3:38 p.m. EST on Thursday afternoon — and another link to it is here.
The stock market is hitting new high after new high. But the economy is slipping.
Wall Street and the rich flourish; Main Street and the middle classes fall behind. Capitalists get rich; the proletariat gets nothing. That has been the main story line in the U.S. for the last 30 years.
Pretax corporate profits – the actual earnings of America’s biggest businesses – have gone nowhere since 2012. But the Dow is up by more than 100%.
Battle of the Billionaires
A big story in the papers lately is that arch-capitalist Michael Bloomberg may enter the Democratic race. If so, the election of 2020 could turn into a Battle of the Billionaires. Trump vs. Bloomberg.
But they have more in common than just money. They’re both New Yorkers. And both believe in the power of Big Government to make the world a better place.
But today, we focus on the money – on Wall Street, not Main Street. More specifically, we look at the rich. Not with our mouths open, drooling in envy, struck dumb by their private jets and gaudy mansions. Nor in a spirit of revulsion or revenge.
We have nothing against them. Nor do we particularly admire them.
This interesting commentary from Bill appeared on the bonnerandpartners.com Internet site early on Thursday morning EST — and another link to it is here.
Global debt hit a fresh record above $250 trillion in the first half of 2019, with China and the U.S. accounting for more than 60% of new borrowing, the Institute of International Finance said.
Borrowing by governments, households and non-financial business now accounts for more than 240% of the world’s gross domestic product, and it’s growing faster than the global economy, the Washington-based IIF said in a report published Thursday.
In developed countries, it’s governments that account for the bulk of borrowing over the past decade, the IIF said. In emerging markets, companies have taken the lead — but more than half of corporate debt in those countries is likely held by state-owned businesses.
The report cited limits and risks attached to debt-fueled economic growth. It said that emerging markets that have increasingly relied on foreign-currency borrowing — including Turkey, Mexico and Chile — may be exposed to risks if growth slows further.
This brief 1-chart Bloomberg article was posted on their website at 9:20 a.m. Pacific Standard Time on Thursday morning — and I found it embedded in a GATA dispatch yesterday. Another link to it is here.
As dollars dry up, global finance is growing increasingly dependent on opaque currency trading to keep cash flowing.
Banks and other short-term dollar borrowers are becoming ever more reliant on the $3.2 trillion-a-day foreign exchange swap market, data shows, leaving them dangerously exposed should U.S. lenders stop feeding the system, even if only temporarily.
Swaps users had a scare in September, when the U.S. Federal Reserve had to pump cash into markets as rates in the $2.2 trillion U.S. “repo” market spiked and spilled into FX swap markets, sending the premium to borrow dollars shooting higher.
“It affected us in the FX swaps market a great deal. There was a lot of panic around, spreads widening, increased volatility,” said James Topham, a Forex forwards trader at Canadian bank BMO, adding that on Sept. 16 “unusually large and persistent” dollar borrowing was evident from clients.
Such reminders of potential disruptions to the “plumbing” of money markets, best exemplified during the 2008 financial crisis, have regulators on guard for anything that could trigger a repeat.
This Reuters story, filed from London, put in an appearance on their website at 12:40 a.m. EDT on Thursday morning — and I found it on the gata.org Internet site. Another link to it is here.
In 2008, I began investing in foreign currency. The Fed created trillions of dollars out of thin air, high inflation was sure to follow.
With the help of friend Chuck Butler, I bought FDIC insured foreign currency Certificates of Deposit (CD) through Everbank. I also bought Exchange Traded Funds (ETF) and sent money offshore; investing in stocks and bonds denominated in non-US currencies.
Let the Carter year inflation games begin. I was NOT going to allow the government to destroy our life savings.
In 2008, total government debt was under $9 trillion. The U.S. Debt Clock tells us it has skyrocketed to over $23 trillion, $186,576 for every taxpayer in the U.S.
The investments were earning interest and dividends; we could be patient. Despite record government spending and the Fed creation of $4 trillion out of thin air, the anticipated inflation never came.
Inflation occurs when the world no longer wants to hold your currency and dumps it like a hot potato.
Argentina experienced horrendous inflation, destroying much of the wealth of the country. Despite paying double-digit interest rates, no one wanted Argentine money.
What about parity? Why didn’t investors leave the dollar when interest rates dropped and the Fed printed trillions?
This interesting commentary from Dennis showed up on his Internet site on Thursday morning sometime — and another link to it is here.
These are the folks who just came to power:
They are all members of some kind of Fascist “Christian” cult.
Trump loves this. He called it a “significant moment for democracy in the Western Hemisphere” and then he proceeded to threaten two more Latin American states by saying “these events send a strong signal to the illegitimate regimes in Venezuela and Nicaragua that democracy and the will of the people will always prevail. We are now one step closer to a completely democratic, prosperous, and free Western Hemisphere”.
In fact, he has a very good point. What this latest coup signals to all patriotic Latin Americans who want to see their continent free from U.S. oppression is this: if you want to openly defy the diktats of the Empire, make absolutely sure the commanders of your armed forces are loyal to you. Furthermore, you should never forget that the most powerful weapon of the Empire is not its bloated and mostly clueless military force, but its ability to use corruption to obtain by the printing press what they cannot seize by brute force.
So far, Venezuela, Cuba and Nicaragua have been successful in their resistance against Uncle Shmuel. Likewise, there seems to be an internal (and covert) “hidden patriotic opposition” inside the Brazilian military (at least according to my Brazilian contacts) which might limit the damage done by the impeachment of Dilma Rousseff and the coup against Lula da Silva (for example, the Brazilian military has declared that they will not allow Brazil or Brazilian forces to be used in an attack against Venezuela).
This rather brief commentary from The Saker put in an appearance on his Internet site on Tuesday — and I thank Larry Galearis for sending it along. Another link to it is here.
The biggest former Yugoslav republic is following Hungary and Poland, where officials boosted gold reserves in 2018 to create a bulwark against crisis. Central Bank Governor Jorgovanka Tabakovic, a member of Vucic’s Progressive Party, said the October 9-11 purchases raised the bank’s gold holdings to 10% of total reserves and made good on a suggestion from the president in May.
“We have completed gold purchase transactions and Serbia is safer today with 30.4 tonnes of gold worth around €1.3 billion ($1.4 billion),” Tabakovic told reporters in Belgrade Thursday. “For now, we have no plans to buy more.”
The acquisition is the latest in a series of moves by Serbia to shore up its financial stability by changing the structure of its foreign debt and increasing the share of dinars and euros, Tabakovic said. The central bank paid €395 million ($434.3 million) for the gold, $1,503 an ounce, the governor said.
This gold-related Bloomberg news item was posted on their Internet site at 6:11 a.m. PST on Thursday morning — and I found it it in a GATA dispatch yesterday morning. Another link to it is here.
The PHOTOS and the FUNNIES
Stepping back from the edge of the bench/plateau just a few kilometers north of Ashcroft on July 14…the first photo shows the field of freshly cut alfalfa my vehicle is parked on, with the Thompson River valley/canyon as a background…complete with the CN rail yard. Turning the camera around 180 degrees shows that the year’s first cut is underway. If this land wasn’t irrigated it would be sagebrush, bunch grass and rattlesnakes like the hills/mountains around it. The third photo shows the freshly-cut alfalfa being cut up for silage. These flat benches/plateaus all along the river are remnants of the lake bed that existed here after the last ice age more than ten thousand years ago. Since that time, the river has carved out what you see here. Click to enlarge.
The Thursday trading session certainly appeared to be of the ‘care and maintenance’ variety — as the rallies in gold, silver, platinum weren’t allowed to get far, regardless of what time of day they occurred. Of course palladium is in a world of its own — and within certain broad parameters, it’s allowed to trade somewhat more freely…its leash being far longer than it is for either silver or gold. But it’s still on a leash.
Here are the 6-month charts for the four precious metals, plus copper and WTIC. The precious metals were all allowed to close higher on the day. But copper was closed back below its 50-day moving average…it’s fifth consecutive down day in a row. And for the eighth day in a row, WTIC was prevented from closing above its 200-day moving average.
Don’t forget that there are no markets anymore…only interventions…and that applies to the commodities complex as well.
And as I type this paragraph, the London/Zurich opens are less than a minute away — and I see that both gold and silver have been sold steadily but rather indiscriminately lower since trading began at 6:00 p.m. EST in New York on Thursday evening. Gold is currently down $7.30 an ounce — and silver is down 15 cents as London opens. Platinum chopped quietly sideways until shortly after 1:30 p.m. China Standard Time on their Friday afternoon. It was stair-stepped lower in price from there — and is currently down 4 dollars. Palladium was up 10 bucks by 1:30 p.m. CST and, like platinum, ‘da boyz’ showed up at that juncture — and now have it down 5 bucks as Zurich opens.
Net HFT gold volume is pretty heavy already at around 54,500 contracts — and there are 2,946 contracts worth of roll-over/switch volume out of December and into future months. Net HFT silver volume isn’t exactly light either at contracts — and there are only 378 contracts worth of roll-over/switch volume in that precious metal.
The dollar index opened down 1 basis point at 98.15 once trading commenced around 7:45 p.m. EST on Thursday evening in New York, which was 8:45 a.m. China Standard Time on their Friday morning. Its low tick, such as it was, came at noon in Shanghai — and it has been creeping very quietly higher since — and is up 2 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich. Basically the dollar index is doing nothing.
I spoke with Ted at length [and took extensive notes] about this new “Pledged” category that appeared under the HSBC USA banner in the COMEX warehouse stocks…linked here for reference. This is not something new, as he’d been involved with this sort of thing a long time ago, but at the brokerage level…not on the COMEX warehouse level. It involves warehouse warrants/receipts that have been deposited as collateral for a margin position, which may or may not involve gold. He said the number doesn’t really tell you much, because it doesn’t specify whether it’s the bank’s position, or a position held by a customer. He said that it’s not a big deal in the grand scheme of things…”much ado about nothing” most likely — and his biggest concern was that the usual Internet commentators on this would go on about it like they did for the Eligible vs. Registered categories in the past, which has now [thankfully] been abandoned…and the EFP [Exchange for Physical] numbers that they’re going on about now.
So what Ronan Manly found on the CME’s website about “Pledged” gold was absolutely correct — and here’s the quote that was in his article in Thursday’s column…”Performance Bonds, also known as margins, are deposits held at CME Clearing to ensure that clearing members can meet their obligations to their customers and to CME Clearing.”
Nothing more should be read into it than that, at least for the moment.
Today, around 3:30 p.m. EST, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday — and it should be a goody.
Here’s what silver analyst Ted Butler had to say about it in his mid-week commentary for his paying subscribers on Tuesday “As far as what Friday’s new COT report will indicate, I will be shocked if there isn’t very substantial managed money selling and commercial buying in both gold and silver…Even more than the substantial overall positioning changes I expect to be reported, what I believe will be even more important will be the details involving, among other things, what JPMorgan may have done relative to the other large commercial shorts, how many new short positions were added by the managed money traders — and what, if anything, the big concentrated longs may have done….One thing to keep in mind when viewing the new COT report is that any substantial short covering by the 7 big shorts in gold and silver will indicate that these shorts were bought back at realized losses for the first time ever.”
And as I post today’s missive on the website at 4:02 a.m. EST, the first hour of London/Zurich trading has ended. I note that gold and silver both ticked a bit higher in price in London — gold is down $4.70 the ounce — and silver is down 13 cents. Platinum is down only 3 dollars now — but palladium is still down 5 bucks.
Gross gold volume is around 72,500 contracts — and minus current roll-over/switch volume, net HFT gold volume is 65,500 contracts. Net HFT silver volume is a bit over 20,000 contracts — and there’s still only 468 contracts worth of roll-over/switch volume out of December and into future months.
The dollar index has given back what tiny gains it had — and is sitting back at unchanged as of 8:45 a.m. in London/9:45 a.m. in Zurich. It’s still doing nothing.
Since today is Friday, it will be interesting to see what ‘da boyz’ have in store for all the markets, as the there is no price discovery allowed in anything anymore.
I hope you have a great weekend — and I’ll see you here tomorrow with all the COT details.