21 September 2018 — Friday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price really didn’t do much on Thursday, which is certainly amazing considering how badly the dollar index got hammered in the early going. It traded flat until around 9 a.m. China Standard Time on their Thursday morning — and by 11 a.m. CST, it was up a couple of bucks and change. — and from there traded sideways for a bit, before healing lower starting a few minutes before 1 p.m. CST on their Thursday afternoon. The low tick of the day came at 9 a.m. in London — and it began to head a bit higher starting right at the noon silver fix. It ran into ‘opposition’ almost the moment that COMEX trading began in New York — and the rally ended with the high tick of the day being set at the afternoon gold fix, which was right at gold’s 50-day moving average. It was sold lower from there until 11:45 a.m. EDT. From there it crawled higher into the 1:30 p.m. EDT COMEX close. It was sold a bit lower over the next hour, before edging a bit higher into the close.
Despite all the words in the previous paragraph, the low and high ticks aren’t worth looking up for the third day running.
Gold finished the Thursday session in New York at $1,206.90 spot, up $3.20 on the day. Net volume was nothing special once again at a bit over 223,000 contracts — and roll-over/switch volume amounted to 9,900 contracts on top of that.
The silver price also traded flat until 9 a.m. China Standard Time — and it really wanted to sail from there, but was obviously capped a few minutes after 10 a.m. CST as the price appeared to go ‘no ask’. At that point, it very briefly broke above its 20-day moving average [in the December contract] by two cents. It was hauled lower immediately — and then, also like gold, it was sold down hard starting at the London open. The price pattern from there was similar in most respects to gold’s for the remainder of the New York trading session.
The high and low ticks in this precious metal were reported by the CME Group as $14.385 and $14.21 in the December contract.
Silver was closed at $14.305 spot, up 8 cents from Wednesday. Not surprisingly, net volume was pretty heavy at 83,300 contracts — and roll-over/switch volume in this precious metal was only 1,579 contracts. It’s taking a fair amount of paper silver these days to keep it below its 20-day moving average — and this has been going on most of the week.
Platinum was up a few dollars in Far East trading, but was sold down to its low tick of the day starting at 10 a.m. CEST in Zurich trading. The low tick of the day was set about an hour later — and it chopped unevenly higher from there until about 3:30 p.m. in the thinly-traded after-hours market in New York. And it should be very obvious from the the saw-tooth price pattern, that its rally was being actively managed. Platinum was closed on the Thursday at $833 spot, up 11 bucks.
Palladium was up 6 dollars by 10 a.m. in Zurich and, like platinum, it was then sold down a tiny bit to its low tick of the day. Its quiet rally after that ran into ‘something’ about 10:30 a.m. in New York — and it was sold lower until noon EDT. It gained some of that back by 1 p.m. — and traded ruler flat from there until trading ended at 5:00 p.m. EDT. Palladium finished the Thursday session at $1,049 spot, up 16 bucks.
It was yet another trading day where palladium [and platinum] would have close materially higher, if allowed. The same can be said of silver and gold as well.
The dollar index closed very late on Wednesday afternoon in New York at 94.55 — and then proceeded to trade flat for the first ninety minutes or so after trading recommenced at 6:00 p.m. EDT on Wednesday evening. It then headed lower — and was down 10 basis points by 11 a.m. China Standard Time on their Thursday morning. It rallied a very small handful of basis points until a few minutes before 1 p.m. CST — and then began to head lower from there. That decline accelerated minutes after 12 o’clock noon in London — and it appeared that the usual ‘gentle hands’ showed up just minutes after the COMEX open in New York. The 93.83 low tick was set at that juncture. The ensuing ‘rally’ lasted until precisely noon EDT — and it headed lower from there, making it back almost to its low of the day 3:30 p.m. From that point it inched higher into the close. The dollar index finished the Thursday session in New York at 93.91…down 64 basis points from Wednesday’s close.
Once again it was more than obvious that JPMorgan et al didn’t allow precious metal prices to reflect that fact.
And here’s the 6-month U.S. dollar index chart. The dollar index is down about 300 basis points since mid August, but you’d never know it by looking at the gold and silver price charts in The Wrap section of today’s column.
The gold stocks gapped up a percent at the open in New York on Thursday morning, but immediately after that began to head lower. Their collective lows were set a few minute before noon EDT — and they rallied quietly but unsteadily higher for the remainder of the day, closing down 0.14 percent. Call it unchanged.
With a minor variation in the first thirty minutes of trading on Thursday morning, the silver equities followed their golden brethren like a shadow — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index also closed unchanged…up 0.01 percent. Click to enlarge if necessary.
And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index. Click to enlarge as well.
The CME Daily Delivery Report showed that zero gold and 28 silver contracts were posted for delivery today within the COMEX-approved depositories on Monday. In silver, the only short/issuer that mattered was Advantage with 27 from its client account. The two long/stoppers were JPMorgan and ADM with 18 and 10 contracts for their respective client accounts. The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Thursday trading session showed that gold open interest in September remained unchanged at 17 contracts. Wednesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today. Silver o.i. in September fell by 297 contracts, leaving 983 still open. Wednesday’s Daily Delivery Report showed that 707 silver contracts were actually posted for delivery today, so that means that another 707-297=410 silver contracts were added to the September delivery month.
For the third day in a row there were no reported changes in either GLD or SLV.
There was no sales report from the U.S. Mint, either.
There was no in/out activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.
It was certainly more interesting in silver. There was 697,117 troy ounces received — and all of that [much more than a truck load] went into HSBC USA’s warehouse. There was 534,719 troy ounces shipped out…303,900 from CNT — and the remaining 230,819 troy ounces departed Brink’s, Inc. But the real eye-opener was the 6,700,703 troy ounces that was transferred from Registered category — and back into Eligible over at CNT. The link to all this activity is here.
There was some decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday. They reported receiving exactly 5,000 of them — and shipped out only 125. All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Since yesterday was the 20th of the month — and it fell on a weekday, the good folks over at The Central Bank of the Russian Federation updated their website with their August data — and they reported adding 1 million troy ounces/31.1 metric tonnes of gold to their reserve during that month. That brings their total declared gold holdings up to an even 2,000 metric tonnes/64.3 million troy ounces.
The 800,000 troy ounces that Russia’s central bank purchased in July, plus the million ounces they bought in August, is far in excess of the amount of gold that they actually mined during those two months.
Where might this extra gold be coming from, you ask? Well, there are only two possible places: They’re either buying it on the open market, or they have been purchasing far more of their domestic gold production than they’ve been reporting, but are just now moving it into ‘official’ reserves.
With all that money they have laying around after dumping just oodles of U.S. treasuries in recent months, that’s certainly what I’d be doing with it.
Here’s Nick Lairds’ most excellent chart updated with August’s data. Click to enlarge.
Another day where I don’t have all that many stories for you, but I do have a Cohen/Batchelor interview today.
The papers are full of fire and brimstone concerning Supreme Court nominee Brett Kavanaugh… and what happened in a boozy bedroom long ago.
The New York Times calls it “an explosive charge”…
It was 36 years ago. The accusation: There was a party, alcohol. A 17-year-old boy was drunk and started groping a 15-year-old girl, pinning her down and covering her mouth so she couldn’t scream. Today, she doesn’t remember some of the details. He insists it didn’t happen at all.
Poor Christine Blasey Ford – the accuser – decided to do her public duty. Why she thought the Senate should know about Mr. Kavanaugh as a 17-year-old is not clear.
But she set off an uproar… at least, a Washington-style uproar, circa 2018.
We’ve never met Mr. Kavanaugh. Nor have we followed his career or parsed his legal decisions. But we’ve been in a bedroom more than once. And we were once 17 years old.
And if every public servant were disqualified on the basis of what he got up to in high school, Washington would be empty.
This very worthwhile commentary by Bill put in an appearance on the bonnerandpartners.com Internet site very early on Thursday morning — and another link to it is here.
Chuck Butler’s recent Dow Theory Letter article (behind paywall), “Central Bank Frustrations” was an eye-opener. Chuck removes any illusions about “trusting” central bankers. He quotes former Fed Chairman Ben Bernanke:
“Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.”
Soon after, the housing market crashed due to subprime loans.
Fed Chairman Bernanke called this “collateral damage”.
Chuck supplies facts and lets us arrive at our own conclusions:
“So, let’s look at the Fed’s track record, shall we? Did you know that in 105 years, the Fed has never accurately forecast a recession?”
This commentary by Dennis appeared on his Internet site on Thursday morning — and another link to it is here.
Tales of the New Cold War: 1 & 2: What Vladimir Putin is not — John Batchelor interviews Stephen F. Cohen
Part 1: This is an important podcast that covers the very recent Syrian event involving the shoot down of the Russian military plane by a Syrian S-200 anti air missile late Monday. And John Batchelor opens the discussion with this news item. While Putin did say the shoot down was the “result of a series of tragic events and chance circumstances”, he also said that the investigations would continue and there would be no retaliatory reaction. But there would be changes made in how the Syrian air defences would respond in future and that these changes “would be noticed”. He also corrected the much stronger accusations of the Syrians and his own military that Israel had caused the tragedy. For Professor Cohen this was a reminder that every day is fraught with danger in this New Cold War and every day the American mainstream media is filled with anti Putin vilification – the NYTimes and Washington Post, for example, recently published eight stories like this in one day. And this process has now been institutionalized in the MSM. This institution can thus be broken down into 8 different aspects: Putin as the usurper of Yeltsin, Putin as despot, Putin as a Stalinist, Putin as organizer of a kleptocracy, Putin kills people who threaten him (because he is ex-KGB and still a thug), Putin as a fascist, white supremacist, Putin as the foreign aggressor, and Putin as hostile to America. Each of these is given detailed inspection and discussion from the historical perspective by both pundits.
But most of these aspects is soundly defeated by historical facts; most are preposterous (and overwhelmingly dependent for credibility on the naivety and ignorance of the American public. L.) Briefly it was Yeltsin who was the enemy of a fledgling democracy and Putin reclaimed that process when he was legally appointed to his position; Putin was anti-Stalin (built Wall of Grief) and Putin reigned in the oligarchs and did not help the worst of them. (Putin has actually made it illegal for any Russian corporation that would put profits ahead of hurting the Russian people. L.)
Part 2: The list and discussion continues with Putin as a kleptocracy was more a Yeltsin creation, and Putin slowly took back what Yeltsin privatized, enough, as Cohen explains, to save his people. The relationship is still uneasy and Putin is still watchful for abuses, but Russia has grown and recovered and the people hold Putin responsible for that Russian recovery and their salvation. But here Batchelor makes a very fine point that American society is a much more the highly developed kleptocracy than Russia (and the people also know who is responsible for the decline. – L.) Next, Putin was an ex-KGB analyst – which is no more evil than a CIA specialist – and Cohen considers this history as “turning him into a European man”. Cohen considers the accusation that Putin is a fascist and white supremacist is ludicrous. Putin is the successful leader of the most multi-ethnic nations of the world and, as Cohen states, a master race worldview would be impossible politically for a modern Russian leader. However, the view that Putin is anti-American. is at least now true. Is Putin aggressive? His whole pattern of dealing with provocation by the West has been reactive, not aggressive. His main critics accuse him of not being aggressive enough – as, for example, dealing with the latest incident of the loss of his plane in Syria.
It is sometimes frustrating to listen to a historian of the calibre of Stephen F. Cohen and a learned pundit like John Batchelor spend so little time on a single event like the shoot down of a Russian plane that could have caused a war. But as an historian’s discussion they are more focused on the series of events leading up to the event than any single isolated news event. But the Syrian situation is very complicated for the Russian leader. Has Putin been damaged politically and geopolitically from his overly generous (perhaps) reasonableness with Israel and even U.S. adversaries?
What are his options given the podcast discussion? Putin has stated that there will be an appropriate response that will be quite noticeable in the air defence area in Syria. At a guess this means bolstering the quality of Syrian air defences – perhaps with the addition of S-300 anti-air systems that would provide the means to 1) avoid a similar event, 2) provide deniability for the Russian Israeli “lobby”(a.k.a. – fifth column group) to claim Putin’s actions are anti-Israeli, and 3) provide a more “aggressive” reaction for his own war party adherents who accuse him of being too non aggressive. He has additional problems, as every time Israel, or the U.S., or other U.S. satrap allies open fire on Syrians and Russians– how much provocation can he ignore when his own ally is attacked? Is the agreement with Turkey to delay (?) the attack on Idlib also a ploy to avoid a direct military confrontation with the U.S. that might lead to war? Does his lack of aggression suggest weakness to Washington thereby encouraging an escalation of provocations? Or does it mean he should stall as much as he can to hope for a change in diplomacy with Washington? These are serious questions that surely must plague the Russian leader, and the background history is certainly vital for understanding the scope and complexity of Syria. I urge readers to also listen to the podcast as much of the events of the U.S. MSM institution confusions are discussed in much greater detail.
This 2-part audio interview showed up on the audioboom.com Internet site on Tuesday — and I thank Larry Galearis for his always excellent executive summary, plus his own read on the situation at the end. Each part is twenty minutes long. The link to Part 1 is in the headline — and here. And the link to Part 2 is here. If I remember, this will be posted in Saturday’s column as well, if you don’t have time for it just now.
The provocations that Putin invites are now escalating. Peter Ford, former British ambassador to Syria, points out that Washington has quickly taken advantage of Putin’s hesitancy in Syria to escalate the pretexts on which Washington will launch a military attack on the Syrian forces. Formerly Washington’s pretext was to be a false flag “chemical attack” that would be blamed on Syria. Washington’s new pretext precludes the liberation of Idlib as Washington has declared that any attempted liberation of the province from Washington’s terrorist allies will result in a U.S. military attack on Syria. Indeed, even a refugee flow whether or not caused by a Syrian attack is deemed to be a “humanitarian issue” that justifies a U.S. military attack on Syria. President Trump’s Special Envoy for Syria, James Jeffrey, just announced that the United States will not tolerate an attack, period.
Clearly, the Syrian/Russian liberation of Idlib from Washington’s terrorists cannot now happen, unless Putin is willing to establish such air superiority over Syria, backed up by Russian weapons, that the U.S. would be incapable of launching an attack. Washington’s escalation of its provocations means that Putin would have to accept the risk of destroying any US attack forces that were sufficiently reckless to test the defenses.
Another puzzle is Putin’s decision to pacify Erdogan by substituting a demilitarized zone in Idlib instead of liberating the province. How did Putin and Erdogan reach the fantasy conclusion that the US and its terrorist allies in Idlib province would cooperate with their demilitarization plan? Has Russian foreign policy dissolved into self-delusion?
We are watching unfold my concern that the acceptance of provocations results in more provocations and that the provocations escalate in their danger. What will Putin do now? If he backs down again, he can expect a yet more dangerous provocation until the only choice becomes surrender or nuclear war.
This brief, but very worthwhile commentary by Paul was posted on his website on Thursday sometime — and it’s courtesy of Larry Galearis as well. Another link to it is here.
U.S. Secretary of State Michael Pompeo called Wednesday for a new round of talks with North Korea with the goal of ridding the North of nuclear weapons by the end of Donald Trump’s first term, saying he was heartened by progress made at a summit this week between the two Koreas.
In a statement, Pompeo said the U.S. welcomed Kim Jong Un’s promise to dismantle a missile test site — under the eye of international inspectors — and move to shutter North Korea’s main Yongbyon nuclear production site if the U.S. takes what the North calls “corresponding measures.”
Pompeo signaled that reciprocation may be coming.
“On the basis of these important commitments, the United States is prepared to engage immediately in negotiations to transform U.S.-DPRK relations,” Pompeo said, referring to North Korea by its formal name, the Democratic People’s Republic of Korea.
Pompeo invited North Korean Foreign Minister Ri Yong Ho to meet him in New York next week on the sidelines of the United Nations General Assembly and for North Korean officials to meet his envoy for the issue, Stephen Biegun, starting a process toward denuclearization by 2021 and a “lasting and stable peace regime on the Korean Peninsula.”
That’s language that both sides have used to describe a treaty to end the Korean War, which was never formally declared over. North Korea has sought such an accord, but the U.S. has been reluctant to do so for fear it would add to pressure to remove the thousands of American troops
Of course, dear reader, that would be the ultimate goal at the end of this peace/reunification process. This Bloomberg story, was posted on their Internet site at 9:07 p.m. Denver time on Wednesday evening, but was updated 24 hours later, complete with a new headline. The old one read “North Korea agrees to dismantle a key missile test site under the watch of international inspectors“. Another link to it is here.
In its latest interim outlook released Thursday, the OECD has projected global growth to settle at 3.7 percent in both 2018 and 2019. That level sits just below levels recorded prior to the financial crisis ten years ago.
The recently appointed chief economist of the OECD, Laurence Boone, told CNBC‘s Charlotte Reed on Thursday that the world economy on the whole was “hitting a plateau” and there was evidence of increased divergence between different economies.
Boone highlighted rising protectionism, emerging market vulnerability, politics, and finance as four main risks behind the tapering off in growth rates.
The OECD report has called for a gradual normalization of monetary policy but said it should be at a varying degree across different economies.
Speaking to CNBC, Boone said the normalization of policy in the United States was pushing the dollar upwards and creating a drag on emerging market economies.
These guys are a bit behind the times, as global growth peaked years ago. This article showed up on the cnbc.com Internet site very early on Thursday morning EDT — and I thank Swedish reader Patrik Ekdahl for pointing it out. Another link to it is here.
Central banks’ demand for gold reached a three year high, rising 8% during the first half of 2018 compared to the same period last year, according to a World Gold Council market update on central bank buying activity released today.
Data reveals that 2018 H1 marks the strongest year for central bank gold buying since 2015 – a total of 193.3 tonnes of gold have been added to central bank reserves so far, compared to 178.6 tonnes during the same period in 2017.
Emerging market central banks have played a key role, with Russia, Turkey and Kazakhstan accounting for 86% of central bank purchases in the first half of 2018.
An IMF Financial Statistics Report reveals that Egypt recently bought gold for the first time since 1978, and that India, Indonesia, Thailand and the Philippines have re-entered the gold market after years-long absences. And Bloomberg reported that the Bank of Mongolia has purchased 12.2 tonnes of gold so far this year.
The World Gold Council believes that many emerging market central banks are turning their attention to gold as after years of exposure to the U.S. dollar, and as a natural currency hedge against other reserve currencies.
This gold-related news item is worth a few minutes of year time. It put in an appearance on the mining.com Internet site early on Thursday afternoon EDT — and my thanks go out to Mark Barooshian for sending it our way. Another link to it is here.
There is compelling new proof of a silver (and gold) price manipulation. The evidence connects the investment bank JP Morgan Chase, the dominant force in world commodity trading, the U.S. Commodity Futures Trading Commission (CFTC), the primary commodity regulator, and the U.S. Treasury Department, the arranger of every conceivable bailout.
This week, I received a copy of a letter, dated October 8, sent from the CFTC to a California Congressman, Gary G. Miller. It discussed allegations of a silver market manipulation because of the data in the monthly Bank Participation Report. The data in that report for August showed that one or two U.S. banks held a massive short position in COMEX silver futures of 33,805 contracts, or more than 169 million ounces. This is equal to 25% of annual world mine production, and was up more than five-fold from the prior month’s report. After this position was established, silver prices fell more than 50%, in spite of a widespread shortage in retail forms of investment silver. Never before had there been a such a large concentrated position in any market, including every manipulation case in the CFTC’s history. Concentration and manipulation go hand in hand. You can’t have one without the other.
The letter was sent to me by a reader who had the foresight to write to his Congressman. Of course, the CFTC denied that a silver manipulation existed, as they always have. This proves that the Commission responds much quicker to a member of Congress than it does to hundreds of ordinary citizens and investors. In the future, should you decide to write to the CFTC, be sure to do so through your elected representatives.
What was remarkable (and disturbing) about the letter was that it strongly confirms an analysis I presented in an article dated September 2, titled, “Fact Versus Speculation”. In that article, I speculated that the shocking increase in the silver short position by one or two U.S. banks was related to the takeover of Bear Stearns by JP Morgan in March.
This must read commentary by Ted was posted on the investmentrarities.com Internet site back on 10 November 2008. Several or my subscribers have asked how Ted knows that JPMorgan took over the silver short position of Bear Stearns way back then. The answer lies in this commentary, plus in the embedded and hyperlinked article mention just above. Another link to this very worthwhile commentary is here.
The PHOTOS and the FUNNIES
Today’s critter is “Glaucus atlanticus“…a species of sea slug, a pelagic aeolid nudibranch, a shell-less gastropod mollusk in the family Glaucidae. They float upside down by using the surface tension of the water to stay up, where they are carried along by the winds and ocean currents. Humans handling the slug may receive a very painful and potentially dangerous sting. Click to enlarge.
It was another day where JPMorgan was at battle stations keeping gold below its 50-day moving average — and silver below its 20-day. They were successful, but they left no room for error — and in morning trading in the Far East on their Friday, silver punched above its 20-day moving average by a few more pennies, before being hauled lower. How long they’re prepared to keep this up remains to be seen, but the walls, ceiling and floor are closing in from all directions.
Here are the 6-month charts for all four precious metals and, once again, I provide the 6-month silver chart showing its 20 and 50-day moving averages, so you can see how fine a line that JPMorgan is actually walking. Platinum is heading towards overbought territory, but palladium is already hugely overbought — and would actually be even more overbought than that if the powers-that-be weren’t holding it back. The ‘click to enlarge‘ feature helps with the first four only.
And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price traded mostly sideways during the first two hours after it began at 6:00 p.m. EDT on Thursday evening in New York. It spiked up to its 50-day moving average briefly around 10:20 a.m. CST on their Friday morning, but was sold down from there — and has been chopping quietly sideways since. At the moment, gold is up $1.90 an ounce. Silver crawled unsteadily higher — and was up a dime by shortly before 2 p.m. CST on their Friday afternoon — and obviously above its 20-day moving average. It has been sold lower since — and is up only 4 cents currently. Platinum and palladium didn’t do much in Far East trading. The former is up a dollar — and the latter is down 2 bucks as Zurich opens.
Gross gold volume is coming up on 43,500 contracts — and net of what little roll-over/switch volume there is, net HFT gold volume is 41,000 contracts. Net HFT silver volume is about 16,800 contracts — and there’s only 391 contracts worth of roll-over/switch volume in that precious metal.
The dollar index traded virtually ruler flat until precisely 2:00 p.m. CST — and began to edge a bit higher at that juncture — and twenty minutes before the London open, it’s now up 5 basis points.
Today, around 3:30 p.m. EDT, we get the latest and greatest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday. As I mentioned in this space yesterday, the above charts for both silver and gold indicates that any changes will be immaterial, although there will certainly be short covering/long buying by the brain-dead/moving average-following Managed Money traders in both platinum and palladium…especially the latter.
I’m off to bed, as I have an early-morning meeting today — and I want to be fully awake for it, so I’m signing off an hour earlier than normal.
Have a good weekend — and I’ll see you here tomorrow.